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Home My WebLink About13-5205 2013 SEP -4 AM 1,T; , a CUMBERLAND COUNTY PENNSYLVANIA HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042 -1140 (717) 274 -3644 METRO BANK f /k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW vs. ! No. 1 - 5aa5 RICHARD E. PHELAN and LINDA L. PHELAN, his wife, Individually and Jointly, Defendants CONFESSION OF JUDGMENT Pursuant to the authority contained in the Warrant of Attorney, a copy of which is attached to the Complaint filed in this action, I appear for the Defendants and confess judgment in favor of the Plaintiff and against Defendants as follows: Principal Sum Due - $ 91,163.73 Interest to 8/17/2013 - 565.75 Late Fees 8/17/2013 - 1,536.39 Attorney's Commission (10% of unpaid principal i and interest) - 9,172.95 Total - $ 102,438.82 Plus all future accruing interest after August 17, 2013 and after entry of judgment until $46-00 PrJ 04 MAW �ag5a.3y paid in full at the contract rate ($16.173862 per diem), additional late fees as may accrue after August 17, 2013 at the contract rate, costs of maintaining and preserving Plaintiff's collateral, additional and reasonable attorney's fees as may be incurred and costs of suit. HENRY BEAVF.IR LLP By: ARC A. HES I.D. #55774 Attorney for Defendants Prothonotary - 2 - y HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042 -1140 (717) 274 -3644 METRO BANK f /k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW vs. No. I � ' � O(v �lTee m RICHARD E. PHELAN and LINDA L. PHELAN, his wife, Individually and Jointly, Defendants COMPLAINT CONFESSION OF JUDGMENT Plaintiff files this Complaint pursuant to Pa. R.C.P. No. 2951(b) for judgment by confession and avers the following: 1. The Plaintiff is Metro Bank f /k/a Commerce Bank / Harrisburg, N.A., with an office located at 3801 Paxton Street, Harrisburg, Pennsylvania 17111. 2. The Defendants, Richard E. Phelan and Linda L. Phelan, his wife, individually and jointly, are adult individuals last known to reside at 735 South Hanover Street, Carlisle, Cumberland County, Pennsylvania 17013. 3. Attached hereto as Exhibit "A" collectively is a Promissory Note in the original principal amount of One Hundred Fifty Thousand Dollars ($150,000.00) dated, executed and delivered to Plaintiff by Gingerbread Man, Inc. on January 4, 2007 and a Change in Terms Agreement in the amount of Two Hundred Twenty -Five Thousand Dollars ($225,000.00) dated, executed and delivered to Plaintiff by Gingerbread Man, Inc. on June 21, 2007 (collectively the "Note "). The liability of Gingerbread Man, Inc. under the Note was unconditionally guaranteed by Defendants pursuant to the terms of their Commercial Guarantees, true and correct copies of which are attached hereto and incorporated herein as Exhibit "B" and upon which judgment is being confessed herein. 4. The Guaranty has not been assigned. 5. Judgment has not been entered on the Guaranty in any jurisdiction. 6. Default was made by the Defendants in their failure to make the payment of the installment due on the Note on July 4, 2013, as well as in its failure to meet demand for payment in full of the same, whereby the entire sum is in default and immediately due and payable. 7. As a consequence of the foregoing and pursuant to the Warrant of Attorney in the Guaranty, Defendants are liable to Plaintiff as follows: Principal Sum Due - $ 91,163.73 Interest to 8/17/2013 - 565.75 Late Fees 8/17/2013 - 1,536.39 Attorney's Commission (10% of unpaid principal and interest) - 9,172.95 Total - $ 102,438.82 Plus all future accruing interest after August 17, 2013 and after entry of judgment until paid in full at the contract rate ($16.173862 per diem), additional late fees as may - 2 - accrue after August 17, 2013 at the contract rate, costs of maintaining and preserving Plaintiff's collateral, additional and reasonable attorney's fees as may be incurred and costs of suit. 8. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. WHEREFORE, Plaintiff demands judgment in the sum of: Principal Sum Due - $ 91,163.73 Interest to 8/17/2013 - 565.75 Late Fees 8/17/2013 - 1,536.39 Attorney's Commission (10% of unpaid principal and interest) - 9,172.95 Total - $ 102,438.82 Plus all future accruing interest after August 17, 2013 and after entry of judgment until paid in full at the contract rate ($16.173862 per diem), additional late fees as may accrue after August 17, 2013 at the contract rate, costs of maintaining and preserving Plaintiff's collateral, additional and reasonable attorney's fees as may be incurred and costs of suit, as authorized by the Warrant of Attorney appearing in the Note. HEN LLP By: MAR A. HESS I.D. #55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042 -1140 (717) 274 -3644 Attorney for Plaintiff - 3 - 3 ::::::::. L ..::.:.........._.........A. cs unf.::.:.-::::::::..::. Qf:.Cdr.........ln..�...ab.:::. nci a l ....................._.Ln n..Da ®.............Ma rt ....._.... : _.._.. : ..L an;;. o..::.::.:..:.:.::: �a( I::: 1:< C�!........................_....:.::: �c.:..:....::..........................................._.. .............I —........._....:. Prr ...._ ....... .............._....._........................ t............................ tU._.. tY.....:.......:.....:...........:_..:...:...:..:.:............._..................... ........__............._....:,. . % i? .... ............................................. ............................... .......................................................................:..::::-:::.-:::::.:::.:::.-.: ::.::::.::::.::::..- .:::::.:.:- ::::::::::::::::.- .- :.::.:. : :... ..................:.:;;;•,: ... >:'::: .•;.:'..;::.;;:. References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "• has been omitted due to text length limitations. Borrower: Gingerbread Man, Inc Lender: COMMERCE BANK /HARRISBURG N.A. 114 East Allen Street COMMERCIAL BUSINESS DEPARTMENT Mechanicsburg, PA 17055 3801 PAXTON STREET HARRISBURG, PA 17111 (717) 975 -5630 Principal Amount: $ 150,000.00 Date of Note: January 4, 2007 PROMISE TO PAY. Gingerbread Man, Inc ( "Borrower ") promises to pay to COMMERCE BANK /HARRISBURG N.A. ( "Lender "), or order, in lawful money of the United States of America, the principal amount of One Hundred Fifty Thousand & 00 /100 Dollars ($150,000.00), together with interest on the unpaid principal balance from January 4, 2007, until paid in full. PAYMENT. Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan in accordance with the following payment schedule: 60 monthly consecutive principal and interest payments in the initial amount of $1,793.66 each, beginning February 4, 2007, with interest calculated on the unpaid principal balances at an interest rate of 7.560% per annum; 59 monthly consecutive principal and interest payments in the initial amount of $1,867.35 each, beginning February 4, 2012, with interest calculated on the unpaid principal balances at an interest rate based on the Prime Rate as published in the Money Rate Section of the Wall Street Journal. If a range of rates is published, the highest will be used. (currently 8.250 %), plus a margin of 1.000 percentage points, resulting in an initial interest rate of 9.250 %; and one principal and interest payment of $1,867.01 on January 4, 2017, with interest calculated on the unpaid principal balances at an interest rate based on the Prime Rate as published In the Money Rate Section of the Wall Street Journal. If a range of rates is published, the highest will be used. (currently 8.250 %), plus a margin of 1.000 percentage points, resulting in an initial interest rate of 9,250 %. This estimated final payment is based on the assumption that all payments will be made exactly as scheduled and that the Index does not change; the actual final payment will be for all principal and accrued interest not yet paid, together with any other unpaid amounts under this Note. Unless otherwise agreed or required by applicable law, .payments will be applied first to any accrued unpaid interest; then to principal; then to any unpaid collection costs; and then to any late charges.. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. VARIABLE INTEREST RATE. The interest - rate on this Note is subject to change from time to time based on changes in an independent index which is the Prime Rate as published in the Money Rate Section of the Wall Street Journal. If a range of rates is published, the highest will be used. (the "Index "). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each daily. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 8.250% per annum. The interest rate or rates to be applied to the unpaid principal balance during this Note will be the rate or rates set forth herein in the "Payment" section. Notwithstanding any other provision of this Note, after the first payment stream, the interest rate for each subsequent payment stream will be effective as of the last payment date of the just- ending payment stream. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. Whenever increases occur in the interest rate, Lender, at its option, may do one or more of the following: (A) increase Borrower's j payments to ensure Borrower's loan will pay off by its original final maturity date, (B) increase Borrower's payments to cover accruing interest, i t (C) increase the number of Borrower's payments, and (D) continue Borrower's payments at the same amount and increase Borrower's final payment. PREPAYMENT PENALTY. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Upon prepayment of this Note, Lender is entitled to the following prepayment penalty: Prepayment of any amount of the principal sum shall be subject to a penalty charge of 5% during the first year of amortization and declining 1 % per year thereafter to par. Except for the foregoing, Borrower may pay all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full ", "without recourse ", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: COMMERCE BANK /HARRISBURG N.A., LOAN SERVICING, PO BOX 4999 HARRISBURG, PA 17111-0999. I LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding a 2.000 percentage point margin ( "Default Rate Margin "). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default. After maturity, or after this Note would have matured had there been no default, the Default Rate Margin will continue to apply to the final interest rate described in this Note. If judgment is entered in connection with this Note, interest will continue to accrue after the date of judgment at the rate in effect at the time judgment is entered. However, in no event will the ! interest rate exceed the maximum interest rate limitations under applicable law. DEFAULT. Each of the following shall constitute an event of default ( "Event of Default ") under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false EXHIBIT PROMISSORY NOTE Loan No: 3452788 (Continued) Page 2 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. 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 evidenced by this Note. 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 this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes ail reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law, declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Note has been accepted by Lender in the Commonwealth of Pennsylvania. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts. COLLATERAL. Borrower acknowledges this Note is secured by A first lien priority security interest in all business assets, including Liquor License Number R18753 and a pledge of 10,000 shares of Gingerbread Man, Inc. corporate stock. POST CLOSING COMPLIANCE. Borrower agrees to execute, re- execute, cause a Guarantor(s) or other third party(ies) involved in the loan transaction to execute and /or re- execute and to deliver to Lender or its legal counsel, as may be deemed appropriate, any document or instrument signed in connection with the Loan which was incorrectly drafted and /or signed, as well as any document or instrument which should have been signed at or prior to the closing of the Loan, but which was not so signed and delivered. Borrower agrees to comply with any written request by Lender within ten (10) days after receipt by Borrower of such request. Failure to Borrower to so comply shall, at the option of Lender, upon notice to Borrower, constitute an event of default under the Loan. OPTION TO DECLARE LOAN DUE. Although the repayment of the loan evidenced by this instrument has been designed as if it were to extend for the term established in the "Payment" section, hereinabove outlined, Borrower understands that Lender expressly reserves the right and option, exercisable at its discretion, to declare the entire unpaid principal balance under this Promissory Note together with all interest which shall have accrued thereon to be due and payable on the fifth (5th) anniversary of the date of this Promissory Note and on each succeeding Five (5) year anniversary of that date during the term hereof, hereinafter referred to as "Loan Call Date ". In the event that Lender desires to exercise its option to declare the Loan due, it shall deliver written notice thereof by regular first class mail to Borrower's last known address 90 days prior to the Loan Call Date. In the event that Lender desires to exercise its option to declare the Loan due, it shall deliver written notice thereof by hand delivery, nationally recognized overnight courier or regular first class mail to Borrower's last known address at least 90 days prior to the Loan Call Date. Borrower shall, on or before the Loan Call Date immediately following such notice, repay the entire principal balance due under the Promissory Note together with all unpaid interest which shall have accrued thereon as well as any other sums which may then be due under the Promissory Note or any other document constituting a part of the within loan transaction. Notice provided by first class mail to Borrower's last known address shall be deemed to have been delivered when deposited in the mail. REQUIRED DEPOSIT ACCOUNT. All deposit accounts of Borrower and Guarantor to be maintained with Commerce Bank . NEGOTIATE NEW FIXED RATE. Upon expiration of initial Fixed Rate period Borrower shall have the option to elect a new fixed rate as offered by Lender, if a new fixed rate is not negotiated interest rate shall be the New York Prime plus 1 .00% to float. COMMITMENT LETTER COMPLIANCE.. This loan is contingent upon Borrower's compliance with all of the terms and conditions in the commitment letter issued by Lender to Borrower on or about December 26, 2006. Upon breach of any term of condition therein Lender shall have the right to declare this loan in default and demand payment in full of the principal balance remaining unpaid, together with all interest, which shall have accrued thereon. COLLATERALIZED /CROSS DEFAULTED. Thi n is Cross Collateralized /Cross Defaulted with ali 3r loans for Borrower and Guarantors. CIIrrrFSSnR INTFRFSTS The terms of this Note shall be bindino uoon Borrower, and upon Borrower's heirs. oersonal representatives. PROMISSORY NOTE Loan No: 3452788 (Continued) Page 3 successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if we report any inaccurate information about your account(s) to a consumer reporting agency. Your written notice describing the specific inaccuracy(ies) should be sent to us at the following address: COMMERCE BANK /HARRISBURG N.A. LOAN SERVICING 3801 PAXTON STREET HARRISBURG, PA 17111. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY.OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10 %) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFF!C!ENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. _ THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A s SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: GINGERBREAD MAN, INC j < _ By: (Seal) By , r (Seal) Lindh L. Phelan, President of Gingerbread Man, Inc Richard E. Phelan, Treasurer /Secretary of Gingerbread Man, Inc LASER PR0 Ending, V,, 5.20.0 — CP . --d Fn anc iJ SPlu,ia . In 1991. 2001. All Rog— Aea — -PA H- 1NAPPSVLPWINICR%LPL1020.FC TR -21718 PR -18 r DISCLO._ JRE FOR CONFESSION OF J. JGMENT .....' >:PcfT1G1 ° 1: >';:`' ": Login D '':1:''.':.:. :;: ......:r...,..,., .:... :'.'p :.:`. ,.:: ::`.` "':... ::. :... Uli<:'`.....:�}fflC @Y' f�i":> }?.:. : ...t ® :::. .. Maturity . >.:: ::: LnRt1 Nb CatE 1 Coll A GGQ .... ..... 5750.UQQ Od.:..:i..04..2Q07.. D "t.04..207.. ...... .3452.7.88. »: >s's' :. .:s .. . References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "* * *" has been omitted due to text length limitations. Declarant: Gingerbread Man, Inc ( Lender: COMMERCE BANK /HARRISBURG N.A. 114 East Allen Street COMMERCIAL BUSINESS DEPARTMENT Mechanicsburg, PA 17055 3801 PAXTON STREET HARRISBURG, PA 17111 (717) 975 -5630 DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGNED IS EXECUTING ON BEHALF OF DECLARANT, THIS i DAY OF �J 20—c�p A PROMISSORY NOTE FOR $150,000.00 OBLIGATING DECLARANT TO REPAY THAT AMOUNT. A. THE UNDERSIGNED UNDERSTANDS THAT THE NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DECLARANT UNDER THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE UNDERSIGNED EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT GA ST DECL RANT BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. INITIALS: i3i'' B. THE UNDERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER.ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECLARANT'S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE UNDERSIGNED EXPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN ANY MANNER PMITTED APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING DECLARANT ANY ADVANCE NOTICE. INITIALS: :.:>'<:.::::? C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE UNDERSIGNED REPRESENTS THAT: INITIALS 1. DECLARANT WAS REPRESENTED BY DECLARANT'S OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE \� NOTE. 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE TO DECLARANT'S ATTENTION. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: 4 GINGERBREAD MAN INC By Y ::. ; ISeal) LPhelan, President�of Gingerbread Man, Inc BY . Linda V l Seal) Richard E. Phelan, Treasurer /Secretary of Gingerbread Man, Inc �.,HANGE IN TERMS AGREEMENT Principal Loan` Date Maurlty Loan No fan i Cofl Account O#flcer lntttals; . . 5.22;5,fl00 <01 04.20(07 01 -0;4 2017:: 3452788 00 21:01 References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "' has been omitted due to text length limitations. Borrower: Gingerbread Man, Inc Lender: COMMERCE BANK /HARRISBURG N.A. 114 East Allen Street COMMERCIAL BUSINESS DEPARTMENT Mechanicsburg, PA 17055 3801 PAXTON STREET HARRISBURG, PA 17111 (717) 975 -5630 Principal Amount: $225,000.00 Date of Agreement: June 21, 2007 DESCRIPTION OF CHANGE IN TERMS. To increase the loan amount from $150,000.00 to $225,000.00 and add Phelaro, Inc. ( "Guarantor ") as a Corporate Guarantor. Concurrent with the signing of this Agreement, the Guarantor shall execute a Guaranty Agreement and related documents, as required by Bank. PAYMENT. Borrower will pay this loan in accordance with the following payment schedule: 55 monthly consecutive principal and interest payments in the initial amount of $2,769.26 each, beginning July 4, 2007, with interest calculated on the unpaid principal balances at an interest rate of 7.560% per annum; 59 monthly consecutive principal and interest payments in the initial amount of $2,883.01 each, beginning February 4, 2012, with interest calculated on the unpaid principal balances at an interest rate based on the Prime Rate as published in the Money Rate Section of the Wall Street Journal (currently 8.250 %), plus a margin of 1.000 percentage points, resulting in an initial interest rate of 9.250 %; and one principal and interest payment of $2,882.96 on January 4, 2017, with interest calculated on the unpaid principal balances at an interest rate based on the Prime Rate as published in the Money Rate Section of the Wall Street - Journal (currently 8.250 %), plus a margin of 1.000 percentage points, resulting in an initial interest rate of 9.250 %. This estimated final payment is based on the assumption that all payments will be made exactly as scheduled and that the Index does not change; the actual final payment will be for all principal and accrued interest not yet paid, together with any other unpaid amounts on this loan. VARIABLE INTEREST RATE. The interest rate on this loan is subject to change from time to time based on changes in an independent index which is the Prime Rate as published in the Money Rate Section of the Wall Street Journal (the "Index "). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each daily. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 8.250% per annum. The interest rate or rates to be applied to the unpaid principal balance during this loan will be the rate or rates set forth herein in the "Payment" section. Notwithstanding any other provision of this Agreement, after the first payment stream, the interest rate for each subsequent payment stream will be effective as of the last payment date of the just- ending payment stream. NOTICE: Under no circumstances will the interest rate on this loan be more than the maximum rate allowed by applicable law. Whenever increases occur in the interest rate, Lender, at its option, may do one or more of the following: (A) increase Borrower's payments to ensure Borrower's loan will pay off by its original final maturity date, (B) increase Borrower's payments to cover accruing interest, (C) increase the number of Borrower's payments, and (D) continue Borrower's payments at the same amount and increase Borrower's final payment. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non - signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions. 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. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER: GINGFRB[IEAD MAN, INC Ri C Ll. (Seal) By: (� By : (Seal) Lin a L. Phelan, President of Ginger read Man, Inc chard E. Phelan, Treasure► /Secretary of Gingerbread Man, Inc Los[F V90 lennn0. Ve 5 36 OO.OU euv H-1d F..n�c�r� so��,�e�,. �� 1 ?'1. 1W]. Ru • * , k+* ,} J N,e Fi,LVl1D2O is TH -2171E P-6 �q t C 0 IVICJ N k FW, l ) UUMMERUAL GUAHAN 1 11 ) - - -- — 6:: X011 ........................... ACCO, 41f........................................ .....,.:..................._... ............... Motu. rt�.........:.................t �nnn::. l�En.............:..:..::::::::::. �. a.....(.........................................:.::.::..:::.:.......................................:...:::::::::::::::. :: :............................ _... ....Princt al ........................ Ln�................._.........._................... Y..........................._.... ............................... .......... p ........... .............:::.:::::::::..::. is>? a> 5:`::::>»>>:>>: 3:: >: >i:::: >s >:'::a:: >s: >?:: >::::: .........-._ 1 ......... ............................... References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or to Any item above containing " has been omitted due to text length limitations. Borrower: Gingerbread Man, Inc Lender: COMMERCE BANK /HARRISBURG N.A. 114 East Allen Street COMMERCIAL BUSINESS DEPARTMENT Mechanicsburg, PA 17055 3801 PAXTON STREET HARRISBURG, PA 17111 (717) 975 -5630 t Guarantor: Richard E. Phelan LJ 0 735 South Hanover Street Carlisle, PA 17013 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order, on demand, in legal tender of the United States of America, in same -day funds, without set -off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word "Indebtedness" as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, arising from any and all debts, liabilities and obligations of every nature.or form, now existing or hereafter arising or acquired, that Borrower I individually or collectively or interchangeably with others, owes or will owe Lender. "Indebtedness" includes, without limitation, loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection apreements or foreign currency exchange agreements or commodity price protection agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future advances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non - negotiable instrument or writing; originated by Lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative., This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. i Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any j notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. Foy= thispurpo §e andwiTtSiout limitation; LFie term "riew Indet�fedrlg's " does''nat'PnE uI 7tLr the 1r(debtedress ^v�hich- at=the= dime -vf °notice- o ° - revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, "new Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation; incurred under a commitment that became binding before revocation; any renewals, extensions, substitutions, and.modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor of termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars ($0.00), shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the Indebtedn ass remains unpaid and even though the Indebtedness may from time to time be zero dollars ($0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or' otherwise to extend additional credit to Borrower; (6) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and ( to assign o r transfer this EXHIBIT COMMERCIAL GUARANTY Loan No: 3452788 (Continued) Page 2 Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of'any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. G UARANTOR'S FINANCI AL-- STATEM3ENTS Guarantoragrees •to fur with `foliowin - .____,..._z_,...;,..�.:.•:... _.T: Annual Statements. As soon as available, but in no event later than one - hundred - twenty (120) days after the end of each fiscal year, Guarantor's balance sheet and income statement for the year ended, prepared by Guarantor. Tax Returns. As soon as available, but in no event later than one - hundred - twenty (120) days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by Guarantor. All financial reports required to be provided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true and correct. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any "one action" or "anti- deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after--.Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public. policy. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor 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. Guarantor authorizes Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these accounts to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Bcr:rower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in name of Guarantor, from time to time to file fin- 'ng statements and continuation statements and to execute documents and to take such der actions as Lender deems necessary or approp ? to perfect, preserve and enforce its rights under this Guarantv. COMMERCIAL GUARANTY( .Loan No: 3452788 (Continued) Page 3 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty 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. At uineys' Fees; Expenses. Guarantor 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 Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's 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. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to 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 Guaranty has been accepted by Lender in the Commonwealth of Pennsylvania. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (including Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the . warranties, representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, .a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, 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 Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty 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, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty 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 Guaranty 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 Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, 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. _. Success6rs :and "Assigns. =The terms :,of this Guaranty .shall be .binding ..upon Guarantor, ind ` upon - - Gua'rantor.'s ` heirs, _personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. 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 Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Gingerbread Man, Inc and includes all co- signers and co- makers signing the Note and all their successors and assigns. GAAP. The word "GAAP" means generally accepted accounting principles. Guarantor. The word "Guarantor" means everyone signing this Guaranty, including without limitation Richard E. Phelan, and in each case, anv sinner's successors and assigns. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "Lender" means COMMERCE BANK /HARRISBURG N.A., its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and /or credit agreements evidencing Borrower's loan obligations in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promissory notes or credit agreements. 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. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE COMMERCIAL GUARANTY Loan No: 3452788 (Continued) Page 4 PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10 %) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY ". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JANUARY 4, 2007. THIS GUAfiANTY IS GIVEN -UNDER SEAL AND'IT S IINTEN QED THAT :HIS GUARANTY AND- S HA C ON- STIT UTE`ANO - E - Fi e:; OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: X �1 (Seal) Richard E. Phelan INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA 1 i } ) SS COUNTY OF J ) 4 _ da of 20 before me �JI L '�w. On this, the Y the undersigned Notary Public, person Ily appeared Richard E. Phelan, known to me (.or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he or she executed the same for the purposes therein contained. In witness whereof, I hereunto set my hand and official seal. Nota� la Seal Cassie L. Owen, Notary Public Camp Hill Boro, Cumberland County Notary Public in and for the State of My Commission Expires Mar. 12, 2007 Member, Pennsylvania ASS0Q2DQr Of Notaries USER 1A0 Lene:.V, Vm. 5.03.0O.00n C.A H.—d Finer W Solutions, Inc. —7. 3001. ne %.d. AF H:NWIN<AA5ILAWIN%CFAL E10 -FC TA 21718 PA 10 i DISCM- JRE FOR CONFESSION OF J�.. )GMENT >..:::: :.:::: >aoon D�xe::.;: >: >: M�turtf .....:..:... ..Lo�n.�F.t�:;:::;:::::;.::. >:: :CatLJ�oll ;::: >::: : ..: flcnourti {]# #rCeF It1i�t�f5 ::: Prrnci �t .... .:::..:.................. ............................... Y..... ............................... . ......................................................................::::::::..::::::.:....................................... .:::.::::::::::::.:.::::::..:.: 3 .... ::: <::..:: References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "* * *" has been omitted due to text length limitations. Borrower: Gingerbread Man, Inc Lender: COMMERCE BANK /HARRISBURG N.A. 114 East Allen Street COMMERCIAL BUSINESS DEPARTMENT Mechanicsburg, PA 17055 3801 PAXTON STREET HARRISBURG, PA 17111 (717) 975 -5630 Declarant: Richard E. Phelan 735 South Hanover Street Carlisle, PA 17013 DISCLOSURE FOR CONFESSION OF JUDGMENT I AM EXECUTING, THIS 4 DAY OF 20a, A GUARANTY OF A PROMISSORY NOTE FOR $150,000.00 OBLIGATING ME TO REPAY THAT AMOUNT. A. I UNDERSTAND THAT THE GUARANTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST ME UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S ENTERING UDGMENT AGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. INITIALS: B. 1 FURTHER UNDERSTAND THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, I AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN Y MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING ME ANY ADVANCE NOTICE. INITIALS: C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, I REPRESENT THAT: INITIALS 1. 1 WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY. -, 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION'IN THE GUARANTY TO MY ATTENTION. D. I CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN I INITIALED AND SIGNED IT; AND THAT I RECEIVED A COPY AT THE TIME OF SIGNING. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. D CLARANT: X Richard E. Phelan LASER PRO L.ndr 9 V— 5.33.00.— Cop,. Harland Fine —W Solutions, Inc. 1997, 2007. All Rig— Reserved. - PA H: \WINAPPS \LPWIN \CFIILPLW30.FC TR -21718 PR -18 ( COMMERCIAL GUARANTY Prrndrpa! Loan Date : Niatur�iy Loan No < .. eal[ 7 Cal[ Amount tJlfflt �r . ...... Fs .. ...........::::::::::::::.-:::::::....:...............................::.::......:::::::.:::::::::::::::::::::: :....................:::::::::: - :::::: ................. . s2 ::;.;: >:.... :. .................... References in the shaded area are for Lender's use and do not limit the applicability of this document to any particular loan or item. Any item above containing "'" has been omitted due to text length limitations. Borrower: Gingerbread Man, Inc ( Lender: COMMERCE BANK /HARRISBURG N.A. 114 East Allen Street COMMERCIAL BUSINESS DEPARTMENT Mechanicsburg, PA 17055 3801 PAXTON STREET HARRISBURG, PA 17111 (717) 975 -5630 Guarantor: Linda L. Phelan 735 South Hanover Street Carlisle, PA 17013 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order, on demand, in legal tender of the United States of America, in same -day funds, without set -off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word "Indebtedness" as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others, owes or will owe Lender. "Indebtedness" includes, without limitation, loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection apreements or foreign currency exchange agreements or commodity price protection agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future advances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non - negotiable instrument or writing; originated by Lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE ANY INDEBTEDN DIM REMA NINGAND SUCCEEDIING NDEBT DN SS EV N WHEN ALL R OR PART AOFO GU THE OUTSTANDING NDEBTEDN SSMAY BE F A R ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. `For `this purpose and vvifliout (imitatibti" the term "new_ Indebtedness" does not include - the Indebtedness which at the time of - notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, "new Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation; incurred under a commitment that became binding before revocation; any renewals, extensions, substitutions, and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars ($0.00), shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars ($0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (e) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this COMMERCIAL GUARANTY Loan No: 3452788 (Continued1l Page 2 Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. -GUARANTOR'S FlRrfaNClAt STATEMENTS. Guarsntor agcecs a ru-sici - witrt she followin g_ . _ .... r. _...- ... Annual Statements. As soon as available, but in no event later than one- hundred - twenty (120) days after the end of each fiscal year, Guarantor's balance sheet and income statement for the year ended, prepared by Guarantor. Tax Returns. As soon as available, but in no event later than one - hundred - twenty (120) days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by Guarantor. All financial reports required to be provided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true and correct. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any "one action" or "anti- deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's .commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor 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. Guarantor authorizes Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these accounts to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guarantv and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in ' -name of Guarantor, from time to time to file fir, - ng statements and continuation statements and to execute documents and to take suct 'ter actions as Lender deems necessary or appro�. _e to perfect, preserve and enforce its rights „-Ha, fh;� r;,,, COMMERCIAL GUARANTY Loan No: 3452788 (Continued) Page 3 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty 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. Guarantor 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 Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's 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. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to 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 Guaranty has been accepted by Lender in the Commonwealth of Pennsylvania. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (including Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shall be given in writing, and, excapt for revocation notices by Guarantor, 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 Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty 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, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty 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 Guaranty 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 Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, 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. "Succss�rs- -a»:d `Assigns ; -The terrris; ..of..this, Guaranty shall be binding upon Guarantor, and upon -- Guarantor's _,heirs; - personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. 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 Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: . Borrower. The word "Borrower" means Gingerbread Man, Inc and includes all co- signers and co- makers signing the Note and all their successors and assigns. GAAP. The word "GAAP" means generally accepted accounting principles. Guarantor. The word "Guarantor" means everyone signing this Guaranty, including without limitation Linda L. Phelan, and in each case, any signer's successors and assigns. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "Lender" means COMMERCE BANK /HARRISBURG N.A., its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and /or credit agreements evidencing Borrower's loan obligations in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promissory notes or credit agreements. 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. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE COMMERCIAL GUARANTY Loan No: 3452788 1 (Continued) Page 4 PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10 %) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT, THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY ". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JANUARY 4, 2007. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND- G! 1ALL- GONST.ITUTE AND-HAV€ THE- EFFECT- _ -.. OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: X (Seal) Linda L. Phelan INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA ) ) SS COUNTY OF On this, the 1 day of _, 20 before me _ N _ the undersigned Notary Public, person Ily appeared Linda L. Phelan, khown to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he or she executed the same for the purposes therein contained. In witness whereof Notarial Seal Cassie L. Owen, Notary Public Camp Hill Boro, Cumberland County My Commission Expires Mar. 12, 2007 Notary Public in and for the State of Member, Pennsylvania Association Of Notaries LASER PPO Len g. V.. 5.33.=0 C.P Ne.lenE F'n 6.1 SPW Lion F, Inc. 1997. 2007. All PgN ReesveE PA N: 1WINACP51LMlN \CFI \LPL \E20 FC TA -217111 18 p _ }, I DISCLO, JRE FOR CONFESSION OF J',. -)GMENT MEMO ......... Y ..:.:::.:::................................................................... CatE:: l> Cotl ::::::.., :.................A. GO. ltt' tt ..................Qf�tC. ®Y;:;: ;:;;: ;: :;;::. ............. ............................... �r►tttals... ...... References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing " * * *" has been omitted due to text length limitations. Borrower: Gingerbread Man, Inc 1 Lender: COMMERCE BANK /HARRISBURG N.A. 114 East Allen Street COMMERCIAL BUSINESS DEPARTMENT Mechanicsburg, PA 17055 3801 PAXTON STREET HARRISBURG, PA 17111 (717) 975 -5630 Declarant: Linda L. Phelan 735 South Hanover Street Carlisle, PA 17013 DISCLOSURE FOR CONFESSION OF JUDGMENT I AM EXECUTING, THIS DAY OF 2001, A GUARANTY OF A PROMISSORY NOTE FOR $150,000.00 OBLIGATING ME TO REPAY THAT AMOUNT. A. I UNDERSTAND THAT THE GUARANTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST ME UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND 1 EXPRESSLY AGREE AND CONSENT TO LENDER'S EMING JUDGMENT AGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. INITIALS: F z B. I FURTHER UNDERSTAND THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, I AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGME TyN1Y MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING ME ANY ADVANCE NOTICE. INITIALS . ... w ;;;;:: <;::`:: C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, I REPRESENT THAT: INITIALS 1. 1 WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY. 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY TO MY ATTENTION. D. I CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN 1 INITIALED AND SIGNED IT; AND THAT I RECEIVED A COPY AT THE TIME OF SIGNING. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: X (Seal) Linda L. Phelan ` LASER PRO Lending, V- 5.33.00.000 Cap,. Hel-d Financial 9olutione, Inc. 1997, 2007. All Right. R--d. - PA HAW1NAPPSkLPWlNtCFh1- PL1030.FC TR -31718 PR -18 I ILEO 2013 SEP —4 P ?1 12 1 CUMBERLAND COUNTY PENNSYLVANIA HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042 -1140 (717) 274 -3644 METRO BANK f /k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK / HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW vs. No. 13 - 5o2d ci o / �rn� RICHARD E. PHELAN and LINDA L. PHELAN, his wife, Individually and Jointly, Defendants AFFIDAVIT COMMONWEALTH OF PENNSYLVANIA: ss. COUNTY OF DAUPHIN David M. Chajkowski, Vice President, of Metro Bank, being duly sworn according t to law, deposes and says that he has authority to sign this Affidavit on behalf of Metro Bank and that the facts set forth in the foregoing Complaint are true and correct to the best of his knowledge, information and belief; and that the copies of the Promissory Note and Change .in Terms Agreement, collectively Exhibit "A ", and Commercial i Guaranty, Exhibit "B, ", attached to the Complaint, are true and correct copies of the originals which are held in the files of the Plaintiff and which were executed and delivered by the Defendants to Plaintiff. METRO BANK B y� Y• David M. Chajkowski Vice President Sworn to and subscribed to before me this 2g* day of AIAQLIJt , 2013. COMMONWEA OF PENN SYLVANIA Notarial Seal Rachel Solomon, Notary Public Swatara Twp., Dauphin County My Commission Expires Feb. 7, 2016 *ota P I IC MEMBER, PENNBV6VANIA AR50GIATION OF NOTARIES i i i i i f I - 2 - f- OF T HE PROTHQP�0 2013 SEP - 4 pn E2. CUMBERLAND COUNTY PENNSYLVANIA HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042 -1140 (717) 274 -3644 METRO BANK f /k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK / HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION LAW vs. No. I3- 0 ,1vil - � RICHARD E. PHELAN and LINDA L. PHELAN, his wife, Individually and Jointly, ~ Defendants AFFIDAVIT AS TO NON - MILITARY SERVICE AND CERTIFICATION OF LAST KNOWN ADDRESS OF DEFENDANTS AND PLAINTIFF COMMONWEALTH OF PENNSYLVANIA ss. COUNTY OF DAUPHIN Before me the undersigned authority, personally appeared David M. Chajkowski, Vice President, of Metro Bank, who being duly sworn according to law, deposes and says that upon reasonable investigation to the best of his knowledge and belief the Defendant is not in the active Military or Naval Service of the United States of America and that the last known address of said Defendant s is as follows: 735 South Hanover Street, Carlisle, Pennsylvania 17013. The address of the above Plaintiff is 3801 Paxton Street, Harrisburg, Pennsylvania 17111. METRO BANK By: David M. Chajkowski Vice President Sworn to and subscribed to before me this 2,w' day of &QW f , 2013. COMMONWEALTH OF PENNSYLVANIA Notarial Seal Rachel Solomon, Notary Public Swatara Twp., Dauphin county M commla810l9 DOW" D. 7 2014 ^ EM .1. N. IMANIA CIATiON OP NOTARIES *Ntary *Pulvli i i 2 - 2 013 SEp -4 � : t . OFFICE OF THE PROTHONOTARY UP�iBC �S CUMBER COURT OF LAND COUNTY PENNSYLVANIA F � �SYLV�,f�1�� TO: Richard E. Phelan 735 South Hanover Street Carlisle, PA 17013 METRO BANK f /k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW vs. No. 13 .5ab5 Civil ew RICHARD E. PHELAN and LINDA L. PHELAN, his wife, Individually and Jointly, Defendants NOTICE Pursuant; to Pa. R.C.P. Rule 236 please be advised that judgment by confession in the above proceeding was entered against you on 2013, in the amount of: Principal Sum Due - $ 91,163.73 Interest to 8/17/2013 - 565.75 Late Fees 8/17/2013 - 1,536.39 Attorney's Commission (10% of unpaid principal and interest) - 9.172.95 Total - $ 102,438.82 Plus all future accruing interest after August 17, 2013 and after entry of judgment until paid in full at the contract rate ($16.173862 per diem), additional late fees as may accrue after August 17, 2013 at the contract rate, costs of maintaining and preserving Plaintiff's collateral, additional and reasonable attorney's fees as may be incurred and costs of suit. Copies of all documents filed a attarAed h o. AO Prothonotary lJ tQ1CJ i14�i j OFFICE OF THE PROTHONOTARY COURT OF COMMON PLEAS CU MBERLAND COUNTY CUMBERLAND COUNTY, PENNSYLVANIA PENNSYLVANIA TO: Linda L. Phelan 735 South Hanover Street Carlisle, PA 17013 METRO BANK f /k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW vs. No. t3 -5x05 " 'ITerm RICHARD E. PHELAN and LINDA L. PHELAN, his wife, Individually and,Jointly, Defendants NOTICE Pursuant'to Pa.R.C.P. Rule 236 please be advised that judgment by confession in the above proceeding was entered against you on , 2013, in the amount of: Principal Sum Due - $ 91,163.73 Interest to 8/17/2013 - 565.75 Late Fees 8/17/2013 - 1,536.39 Attorney's Commission (10% of unpaid principal and interest) - 9.172.95 Total - $ 102,438.82 Plus all future accruing interest after August 17, 2013 and after entry of judgment until paid in full at the contract rate ($16.173862 per diem), additional late fees as may accrue after August 17, 2013 at the contract rate, costs of maintaining and preserving Plaintiff's collateral, additional and reasonable attorney's fees as may be incurred and costs of suit. Copies of all documents filed are attached eretsq-,. Prothonotary i 1 i 20l3 SEP - 4 AM fb� 4 8 CUMBERLAND COUNTY PENNSYLVANIA HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042 -1140 (717) 274 -3644 METRO BANK f /k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW VS. No. 1 3- &'J i� (P � RICHARD E. PHELAN and LINDA L. PHELAN, his wife, Individually and Jointly, Defendants PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY OF SAID COUNTY: Sir, please enter the appearance of Marc A. Hess, of the law firm of Henry & Beaver LLP, whose address is 937 Willow Street, P.O. Box 1140, Lebanon, Pennsylvania 17042 -1140 as attorney for Metro Bank, the Plaintiff in the above - captioned case. Dated: 2013 M C A. HESS I.D. #55774 Attorney for Plaintiff HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 METRO BANK f/k/a COMMERCE : IN THE COURT OF COMMON PLEAS BANK / HARRISBURG, N.A., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : CIVIL ACTION - LAW vs. RICHARD E. PHELAN and. LINDA L. PHELAN, his wife, Individually and Jointly, Defendants : No. 13-5205 Civil Term PRAECIPE TO THE PROTHONOTARY: Please satisfy the Confessed Judgment entered to the above term and action. number. DATE: , 2014 HE By: 41If 11,41111b640.,_ afieniuMMAble / ARM. AR A. HE S I.D. #55774 Attorney for Plaintiff ER