Loading...
HomeMy WebLinkAbout05-0050 PNC BANK, NATIONAL ASSOCIATION, Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : NO. OS ~.sO LANDIS, INC., STEVEN J. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants Cc"uLL I~ : CONFESSION OF JUDGMENT : CIVIL ACTION - LAW CONFESSION OF JUDGMENT Pursuant to the authority contained in the warrant of attorney, the original or a copy of which is attached to the complaint filed in this action, I appear for the Defendant and confess judgment in favor of the Plaintiff and against Defendant as follows: Loan A: Loan B: a. b. Principal Interest to December 22, 2004 (Interest continues to accrue at the rate of the Bank's prime rate plus 16%) Environmental Reports Search Fee Residential Appraisal Commercial Real Estate Appraisals Equipment Appraisals Attorney's Commission c. d. e. f. g. h. Subtotal a. b. Principal Interest to December 22, 2004 (Interest continues to accrue at the rate of 20%) Attorney's Commission c. Subtotal $576,557J2 $ 7,094.85 $ 4,800.00 $ 390.00 $ 275.00 $ 3,700.00 $ 4,000.00 $ 58.365.22 $106,693.25 $ 1,244.76 $ 10,793.80 $655,182.39 $118,731.81 Loan C: a. b. Principal Interest to December 22, 2004 (Interest continues to accrue at the rate of 20%) Late Charges Attorney's Commission $112,137.01 $ 1,414.84 c. d. $ 92.12 $ 11.355.19 Subtotal $124,999.16 Total Due for Loan A, Loan B and Loan C: $898,913.36, plus additional interest, prepayment fees and costs from the date of the Complaint. Respectfully submitted, SAIDIS, SHUFF, FLOWER & LIND SA Y Date: December 28, 2004 By: Ge' frey huff, Esquire Su re Court ID #24848 2109 Market Street Camp Hill, PA 17011 (717) 737-3405 Attorney for Plaintiff ( ~i -.-1 ~< r--> c:> .;,;;;) "'" <- -~ Z I .r,;;- ~ ~;!1 c:. -O~:4 ::0 ~1' C~C) ~i: =n ;::20 ~2~m qJ :< :no- :::;: o c:> PNC BANK, NATIONAL ASSOCIATION, Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : NO. OS- - SC> c.w.{ /8<-L LANDIS, INC., STEVEN J. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants CONFESSION OF JUDGMENT : CIVIL ACTION - LAW COMPLAINT FOR CONFESSION OF JUDGMENT UNDER RULE 2951 I. The name and address of the Plaintiff is PNC Bank, National Association, 4242 Carlisle Pike, Camp Hill, Pennsylvania 17011. 2. The name and last known address of the Defendant Landis, Inc. ("Defendant Landis") is Woodcraft Drive, P.O. Box 186, Mount Holly Springs, Pennsylvania 17065. 3. The names and last known address of the Defendants Steven 1. Capuano and Kimberly 1. Capuano ("Defendants Capuano") is 1229 Blossom Terrace, Boiling Springs, Pennsylvania 17007. (Defendant Landis and Defendants Capuano are hereinafter collectively referred to as the "Defendants"). 4 Defendants executed and delivered to Plaintiff a Forbearance Agreement (the "Forbearance Agreement") in connection with the following loans: a. A loan in the original principal amount of One Hundred Twenty-Five Thousand and 00/100 Dollars ($125,000.00) ("Loan A"). b. A loan in the original principal amount of One Hundred Twenty Thousand and 00/]00 Dollars ($]20,000.00) ("Loan B"). c. A loan in the original principal amount of One Hundred Twenty Thousand and 00/100 Dollars ($120,000.00) ("Loan C"). A true and correct photostatic reproduction of the original Forbearance Agreement is attached hereto as Exhibit "A" and made a part hereof. 5 Defendants executed and delivered to Plaintiff a Modification and Amendment of Forbearance Agreement dated May 4, 2004 (the "Modification and Amendment of Forbearance Agreement") in connection with the Loans and Forbearance Agreement. A copy of the Modification and Amendment of Forbearance Agreement is attached hereto as Exhibit "B" and made a part hereof. 6 Defendants are in default of Defendants' obligations to make payment to Plaintiff as required in the Forbearance Agreement and Plaintiff has demanded payment in full of all outstanding amounts as provided in the Forbearance Agreement. A copy of Plaintiffs demand is attached hereto as Exhibit "C" and made a part hereof. 7. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 8. There has not been any assignment of the Forbearance Agreement or the Modification and Amendment of Forbearance Agreement. 9. Judgment has not been entered on the Forbearance Agreement or the Modification and Amendment of Forbearance Agreement in any jurisdiction. 10. The amount due to Plaintiff as a result of Defendants' default is as follows: Loan A: a. b. Principal Interest to December 22, 2004 (Interest continues to accrue at $576,557.32 $ 7,094.85 Loan B: Loan C: c. d. the rate of the Bank's prime rate plus 16%) Environmental Reports Search Fee Residential Appraisal Commercial Real Estate Appraisals Equipment Appraisals Attorney's Commission e. f. g. h. Subtotal a. b. Principal Interest to December 22, 2004 (Interest continues to accrue at the rate of 20%) Attorney's Commission c. Subtotal a. b. Principal Interest to December 22, 2004 (Interest continues to accrue at the rate of 20%) Late Charges Attorney's Commission c. d. Subtotal Total Due for Loan A, Loan B and Loan C: $ 4,800.00 $ 390.00 $ 275.00 $ 3,700.00 $ 4,000.00 $ 58.365.22 $106,693.25 $ 1,244.76 $ 10.793.80 $112,137.01 $ 1,414.84 $ 92.12 $ 11J55.19 $655,182.39 $118,731.81 $124,999.16 $898,913.36 WHEREFORE, Plaintiff, PNC Bank, National Association, demands judgment against the Defendants Landis, Inc., Steven 1. Capuano and Kimberly 1. Capuano, in the amount of Eight Hundred Ninety-Eight Thousand Nine Hundred Thirteen and 36/100 Dollars ($898,913.36), plus interest at the rate provided for in each note, through the date of payment, including on and after the date of entry of judgment on this Complaint, prepayment fees and costs. Respectfully submitted, SAIDIS, SHUFF, FLOWER & LINDSAY Date: December 28, 2004 /~7// By: // /;// Ge<l ". e f, Esquire Su e Court ID #24848 2109 Market Street Camp Hill, P A 17011 (717) 737-3405 Attorney for Plaintiff " FORBEARANCE AGREEMENT THIS AGREEMENT is made as of September 25, 2003, by and among LANDIS, INC. (the "Company") and STEVEN J. CAPUANO and KIMBERLY L. CAPUANO Gointly and severally, the "Capuanos"), and PNC BANK, NATIONAL ASSOCIATION ("Bank"), with the acknowledgment and consent of JOSEPH V. CAPUANO and NANCY P. CAPUANO. Recitals R-t The Company and the Capuanos are referred to in this Agreement jointly and severally as the "Obligors". The Obligors have executed and delivered to the Bank (or a predecessor which is now known by the Bank's name as set forth above), one or more promissory notes, letter agreements, loan agreements, security agreements, mortgages, pledge agreements, collateral assignments, guaranty agreements, and other agreements, instruments, certificates and documents, some or all of which are more fully described on attached Exhibit "A", which is made a part of this Agreement (collectively, as amended, supplemented and/or restated from time to time, and whether or not specifically described in Exhibit "A", the "Loan Documents"), which evidence or secure some or all of the Obligors' obligations to the Bank for one or more loans or other extensions of credit, or other direct or indirect indebtedness to the Bank, including specifically without limiting the general nature and effect of this provision the loans and line of credit described in Section 1 of this Agreement and in Exhibit "A" to this Agreement (collectively, the "Obligations"), the collateral and security for which (collectively, the "Collateral") is more particularly described in the Loan Documents. R-2. The Obligors are in default of their obligations under the Loan Documents for failure to comply with certain material covenants and agreements contained therein. 1 LKhl b,l (Cilll R-3. The Obligors have requested Bank to forbear from exercising its rights and remedies against the Obligors and the Collateral and their respective other property, and to provide the Obligors with additional time to pay the Obligations while the Obligors continue to make regular, scheduled payments of the Obligations. R-4. Bank has agreed to the Obligors' requests, subject to the provisions of this Agreement. Al!J'eement NOW THEREFORE, in consideration of the foregoing Recitals, which are an integral part of this Agreement, and of the agreements hereinafter set forth, and intending to be legally bound, the Obligors and Bank agree as follows: La. The principal amount outstanding under the Line of Credit (as defined in Exhibit "A") as of the date hereof is $579,930.83. The availability of advances under the Line of Credit has been, and is hereby, terminated, and the Company shall not be entitled to receive, and the Bank shall not be obligated to make, any additional advances under the Line of Credit. The interest rate payable on the principal amount outstanding at any time under the Line of Credit shall be a rate of interest per annum at all times equal to six percent (6%) over the Index (as defined in the Promissory Note for the Line of Credit). The Company shall make monthly payments of principal and interest on the Line of Credit in the amount of $5,578.89 on the date of each month as provided in the Promissory Note for the Line of Credit. 2 b. The principal amount outstanding under the $306,500 Loan (as defined in Exhibit "A") as of the date hereof is $1,462.71. The Company shall make payment in full of the $306,500 Loan on October 4,2003. c. The principal amount outstanding under the $120,000 Loan (as defined in Exhibit "A") as of the date hereof is $107,427.75. The interest rate payable on the principal amount of the $120,000 Loan outstanding at any time shall be thirteen percent (13%) per annum. The Company shal1 make monthly payments of principal and interest on the $120,000 Loan in the amount of $1,246.82 on the date of each month as provided in the Promissory Note for the $120,000 Loan. d. The principal amount outstanding under the $88,000 Loan (as defined in Exhibit "A") as of the date hereof is $13,918.45. The interest rate payable on the principal amount of the $88,000 Loan outstanidng at any time shall be thirteen percent (13%) per annum. The Company shall make monthly payments of principal and interest on the $88,000 Loan in the amount of $1,785.41 on the date of each month as provided in the Promissory Note for the $88,000 Loan. e. The principal amount outstanding under the Capuano Loan (as defined in Exhibit "A") as of the date hereof is $112,898.21. The interest rate payable on the principal amount of the Capuano Loan outstanding at any time shall be fourteen percent (14%) per annum. The Capuanos shall make monthly payments of principal and interest on the Capuano Loan in the amount of $1,393.66 on the date of each month as provided in the Promissory Note for the Capuano Loan. f. On April I, 2004, the entire outstanding amount of the Obligations, including all of the outstanding principal, all of the accrued and unpaid interest, all of the 3 prepayment charges that are payable under the Promissory Notes for the $88,000 Loan, the $120,000 Loan and the Capuano Loan as a result of prepayment of the principal amount outstanding thereunder prior to the maturity dates of such Loans as provided in such Promissory Notes, and any and all other sums due or payable under or in connection with the Obligations and/or the Loan Documents, shall be due and payable in full, without notice or demand, or setoff, counterclaim or deduction of any nature. 2. Simultaneously with execution of this Agreement, the Obligors shall (a) pay to Bank a non-refundable forbearance fee of $4,350.00, which the Obligors acknowledge and agree has been fully earned by Bank, (b) reimburse the Bank for $190.00 paid by the Bank for lien searches with respect to the Company's and Capuanos' real and personal property, and (c) payor reimburse Bank for the fees and costs of the Bank's attorneys incurred or paid by Bank as a result of the Obligors' defaults of their obligations to Bank, including without limitation for the preparation, negotiation and implementation of this Agreement. 3. The Obligors shall cooperate with the Bank in obtaining any appraisals or environmental assessments or investigations, including without limitation providing access to the Collateral by the Bank and its employees, agents and representatives and providing interviews with the Bank and its employees, agents and representatives, and shall: a. Immediately upon demand therefor, payor reimburse the Bank for the appraisals that will be obtained by Bank with respect to the Collateral; b. Immediately upon demand therefor, pay or reimburse the Bank for any environmental assessments or investigations obtained by the Bank with respect to any of the Collateral. 4 4. Simultaneously with execution of this Agreement, as additional collateral and security for the Obligations (which shall also be included in the definition of "Collateral" as provided in this Agreement), the Obligors shall deliver to the Bank all titles to all of the Company's vehicles that were not encumbered by other creditors as of August 22, 2003, and such completed and signed documentation as may be necessary or incidental for the Bank's encumbrance to be noted on all such vehicle titles. 5. Simultaneously with execution of this Agreement, as additional collateral and security for the Obligations (which shall also be included in the definition of "Collateral" as provided in this Agreement) the Capuanos shall execute and deliver to the Bank, in recordable form, the Bank's formes) of mortgages to be recorded as liens against the real property occupied by the Company and identified as the tax parcel nos. 40-31-2187-052, 40-31-2187-053 and40-31- 2187-053A, Woodcraft Drive, Mt. Holly Springs, and against the Capuanos' residence known as 1229 Blossom Terrance, in Monroe Township, Cumberland County (tax parcel no. 22-12-0348- 182). 6. The Company shall close its deposit account currently maintained with the Bank by October 31, 2003. If the Company does not close its deposit account by that time, the Bank sball have the right to close the account without notice to the Company. 7. If the Capuanos do not close any such deposit account, the Bank sball have the right to close any such deposit account without notice to the Capuanos or either of them. The Caupanos shall immediately close any deposit account currently maintained with the Bank by either or both of them. In addition, the Capuanos hereby authorize the Bank to, and the Bank shall have the right to and sball, terminate and close the unsecured consumer line of credit made available by the Bank to the Capuanos or either of them. 5 8. Bank agrees, without waiving any existing default of the Obligors or any declaration of any existing default of the Obligors, or any demand for payment of all or any part of the Obligors' indebtedness to Bank, or any acceleration of the Obligors' indebtedness to Bank, or any of Bank's rights or remedies against the Obligors or the Collateral or the Obligors' respective other property, to forbear from proceeding against the Obligors and the Collateral and the Obligors' respective other property until the occurrence of a default of any of the Obligors' obligations to Bank under this Agreement, on or after the date of this Agreement. However, notwithstanding the preceding sentence, the Company's failure to comply with the Tangible Net Worth covenant and the Debt Service Coverage Ratio covenant contained in any of the Loan Documents shall not constitute default under this Agreement. 9.a. The Obligors hereby reaffIrm, affIrm, ratify and confirm the Obligors' absolute and unconditional liability to make all payments and to observe and perform all of the duties, obligations and other agreements of the Obligors under or in connection with the Obligations and the Loan Documents, subject only to any express modification contained in this Agreement. Except as expressly set forth herein, nothing contained in this Agreement releases, limits, or otherwise affects in any way or at any time the liability of any of the Obligors for or with respect to any of the Obligors' obligations and agreements under or in connection with the Obligations or the Loan Documents. This Agreement does not evidence or represent in any way new indebtedness or satisfaction of any of the Obligations. All provisions of the Loan Documents remain in full force and effect, enforceable by the Bank in accordance with the provisions of each of them, except as expressly modified hereby, including without limitation any provisions for confession of judgment, waiver of the right to trial 6 by jury or venue or forum selection contained in any of the Loan Documents. Nothing contained in this Agreement waives or should be construed as a waiver of any of the Bank's rights and remedies under the Loan Documents, or at law or in equity. b. The Obligors hereby acknowledge, agree and affirm that (i) the Obligors are absolutely and unconditionally liable to the Bank under any guaranty agreement executed in favor of the Bank by any of the Obligors (each, a "Guaranty"), which Guaranty is a guarantee of payment, and not merely collectibility, of the Obligations under the Loan Documents, (ii) the Obligors' liability to the Bank under any such Guaranty and with respect to the Obligations and the Loan Documents is primary and direct, and (iii) the Obligors have no defenses, setoffs or other claims with respect to the Obligations or the Loan Documents or any such Guaranty. c. All of the provisions of the Loan Documents, as modified hereby, are incorporated herein by reference and made a part hereof as if set forth in full herein, and all of the provisions of this Agreement are incorporated into the Loan Documents and made a part thereof as if set forth in full therein. The provisions of this Agreement are and will be deemed to be supplemental to, and not in derogation of, the provisions of the Loan Documents, whenever possible. However, if there is any conflict or inconsistency between or among the provisions of the Loan Documents, and this Agreement, the provision(s) determined by Bank in its sole discretion to be applicable will govern and control the resolution of any such conflict or inconsistency, and the Obligors agree to be bound by Bank's determination. 7 10. Bank's agreements contained herein are conditioned upon and subject to the following representations, warranties, covenants and agreements of the Obligors: a None of the Collateral has been or will at any time be used in any manner so as to cause any contamination of the environment or any environmentally threatening condition in violation of, or which may require remediation under, any applicable law, regulation, rule, ordinance, requirement, restriction, covenant, order or decree. b. None of the Collateral has been or will at any time be used in violation of any law, regulation, ordinance, requirement, restriction, covenant, order or decree which may result in forfeiture of any of the Collateral. c. The Company is not entitled to and shall not make, and none of the Obligors are entitled to or shall receive, any payment of any debt or obligation owed by the Company to any of the Obligors, except payments of rent for the Company's occupancy of the business premises. The Company shall not make any payment of any Subordinated Debt as defined and otherwise provided in the Subordination Agreement dated July 6, 2001, among Joseph V. Capuano, the Company and the Bank. The Company shall not pay any dividend or make any other distribution on the Company's stock except in compliance with the Loan Documents. d. The Obligors shall furnish or cause to be furnished to the Bank, not later than forty- five (45) days after the end of each of the Company's fiscal quarters, financial statements for each such quarter, including detailed schedules of accounts receivable aging and accounts payable aging, all in form and content satisfactory to the Bank. In addition, the Obligors will furnish or cause to be furnished to the Bank such information and statements, lists of assets and liabilities, inventory schedules, 8 budgets, forecasts, tax returns, and other reports with respect to the Company and the Company's business operations, and with respect to the Capuanos' financial condition, as Bank may request from time to time. e. In addition to all liens upon and rights of setoff against the money, securities or other property of any of the Obligors given to the Bank by law, the Bank shall have, with respect to the Obligors' obligations to the Bank under the Loan Documents and this Agreement and to the extent pennitted by law, a contractuaI possessory security interest in and a contractual right of setoff against, and the Obligors' hereby assign, convey, deliver, pledge and transfer to the Bank all of the Obligors' right, title and interest in and to, all deposits, moneys, securities and other property of any of the Obligors now or hereafter in the possession of or on deposit with, or in transit to, the Bank whether held in a general or special account or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts to the extent excluded by law. Every such security interest and right of setoff may be exercised without demand upon or notice to such of the Obligors. Every such right of setoff shall be deemed to have been exercised hereunder without any action of the Bank, although the Bank may enter such setoff on its books and records at a later time. 11. The occurrence of anyone or more of the following is a default under this Agreement: a The Obligors' failure to make any payment required under the provisions of any of the Loan Documents or this Agreement on or before the due date, on or after the date of this Agreement; 9 b. The Obligors' failure to observe or perform each and every one of the provisions on the Obligors' part to be observed or performed under this Agreement, or under any of the Loan Documents (except with respect to compliance with the financial covenants as provided in Section 8), on or after the date of this Agreement; c. If any representation, warranty, or financial statement or presentation of any of the Obligors at any time made to Bank in connection with the Obligations is determined by Bank to be materially incorrect or misleading, including without limitation any financial statements provided by any of the Obligors to Bank in accordance with the Loan Documents or this Agreement. 12. Upon the occurrence of any default, Bank may immediately and without notice or demand (a) at its option, increase each interest rate payable on the Obligations as provided in this Agreement by five percent (5%), and (b) exercise or proceed to enforce any or all of the rights or remedies available to Bank at law or in equity or under this Agreement, the Loan Documents, or some, any or all of them. Bank may exercise or proceed to enforce Bank's rights and remedies independently or cumulatively, concurrently or successively, against the Obligors, or the Collateral, or any other property of the Obligors, in connection with all of the Obligations, at any time or times and in any order as Bank may elect. Failure of Bank to exercise any right or remedy as provided herein at any time will not constitute a waiver of any such remedy or preclude the Bank from the subsequent exercise of any such remedy. 13. The Obligors each agrees that a default under any of the Loan Documents, this Agreement, or under any other agreement or document evidencing or securing any other indebtedness or obligation of any of the Obligors to Bank, on or after the date of this Agreement, is a default under all of the Loan Documents, this Agreement and all such other agreements and 10 documents. The Obligors each agrees that all of the Collateral is intended to be and is collateral and security for the entire amount of the Obligations, whether or not any particular Collateral is specifically identified as Collateral for any particular Obligations in the Loan Documents, and that all of the Collateral is intended to and will continue as collateral and security for the entire amount of the Obligations until all of the Obligations are paid in full, notwithstanding payment in full of the $88,000 Loan, the $306,500 Loan, the $120,000 Loan, the Line of Credit and/or the Capuano Loan before payment in full of all of the Obligations, and the Obligors hereby confirm and reaffirm the Bank's security interest, and hereby grant to the Bank a security interest, in and to all of the Collateral. The Obligors agree that all of the provisions of all of the Loan Documents, as modified by this Agreement, will remain in full and force and effect and be and remain applicable to all of the outstanding Obligations until all of the Obligations are paid in full, notwithstanding payment in full of the $88,000 Loan, the $306,500 Loan, the $120,000 Loan, the Line of Credit and/or the Capuano Loan before payment in full of all of the Obligations. 14. The Obligors, for themselves and any person or entity claiming by, through, from or under any of them, including without limitation their respective heirs, personal representatives, predecessors, successors and assigns, and their respective parent corporations, subsidiaries and affiliates, and the stockholders, directors, officers, employees, agents and attorneys of any of them, hereby release and agree to indemnify, defend and hold harmless Bank:, its predecessors, successors and assigns, and its and their respective parent corporations, subsidiaries and affiliates, and the stockholders, directors, officers, employees, agents and attorneys of any of them (collectively, the "Indemnified Parties") harmless for, against and from any and all liability of any nature whatsoever, including without limitation any demands, claims, suits, proceedings or actions of any nature whatsoever, and any damages, losses, costs, expenses and fees (including attorneys' fees) or other 11 liabilities of any nature whatsoever, ansmg at any time before, on or after the date of this Agreement as a result of or in connection with any actions or inactions of any of the Indemnified Parties, whether intentional or negligent, which occurred on or prior to the date of this Agreement. lbis provision will survive any expiration or termination of this Agreement, whether by payment in full of the Obligations and all other sums due under or in connection therewith, or otherwise. 15. The Obligors will execute and/or deliver to Bank such additional documents, agreements or materials, or will take such further action, as Bank may reasonably request at any time and from time to time to give effect to the purposes or provisions of this Agreement. 16. All documents, agreements and materials of any nature whatsoever required at any time to be executed or delivered to Bank in connection with any of the obligations of the Obligors to Bank under this Agreement will be in form and substance satisfactory to Bank in Bank's sole discretion. 17. No modification of any provision of this Agreement shall be effective unless in writing and signed by all of the parties. 18. If at any time or times Bank believes it to be necessary or desirable to refer any aspect of the administration of this Agreement, or the enforcement of any provision of this Agreement, to any attorney, the Obligors will be liable to payor reimburse Bank for all reasonable attorneys' fees and costs incurred or paid by Bank as a result of such referral, which fees and costs will be due when incurred and payable immediately upon demand therefor. 19. Time is of the essence of the Obligors' obligations under this Agreement. 20. The provisions of this Agreement are severable and the invalidity or unenforceability of any provision will not affect or impair the remaining provisions, which shall remain in full force and effect. 12 21. 1bis Agreement shall be interpreted and construed under the laws of the Commonwealth of Pennsylvania The Obligors shall only bring an action in, and the Obligors otherwise consent to the jurisdiction of, the Court of Common Pleas of Cumberland County, Pennsylvania, and the United States District Court for the Middle District of Pennsylvania, over all matters arising from or related to the Loan Documents and/or this Agreement. The Obligors and the Bank agree that any dispute or controversy between or among the Obligors or any of them and Bank would not lend itself to resolution or determination in trial by jury. Therefore, the Obligors and Bank each hereby voluntarily, knowingly and understandingly waives the right to trial by jury in any action or proceeding with respect to any dispute or controversy which may arise between or among them under or in connection with the Obligations, the Loan Documents or this Agreement and the subject matter of this Agreement. 22. 1bis Agreement shall inure to the benefit of Bank, its successors and assigns, and all obligations of the Company and the Capuanos shall bind all of the Obligors and their respective heirs, personal representatives, successors and assigns. 23. The Obligors each acknowledges and agrees that each of the Obligors has had the opportunity to consult with an attorney or attorneys prior to execution of this Agreement, and the Obligors have consulted with an attorney or attorneys, or have waived and hereby acknowledge the waiver of the opportunity to do so, and the Obligors have executed this Agreement voluntarily, knowingly and understandingly. 24. The Obligors hereby voluntarily, intelligently and knowingly empower the Prothonotary or any attorney of any court of record to appear for the Obligors and to confess judgment for all amounts due or payable under this Agreement, with or without filing a complaint, including without limitation the entire balance of principal due or payable, late 1.3 charges, interest, expenses and fees, costs of suit and attorneys' fees equal to ten percent (10%) ofthe total of all such amounts, and the Obligors hereby release all errors or defects in any such action and the entry of any such judgment, and waive all laws exempting real or personal property from execution. 25. This Agreement may be executed in any number of counterparts, which will constitute one and the same Agreement. The Obligors each agrees that Bank is entitled to rely on a facsimile transmission of this Agreement containing the signatures of any of the Obligors and executed notary acknowledgements for the Obligors. However, the Obligors further agree to send the Bank the originally signed and notarized Agreement by nationally recognized overnight courier service on the date on which the facsimile transmission is sent to Bank. IN WITNESS WHEREOF, the Obligors and Bank have executed this Agreement as of the By: EVEN J. CAPUANO ~ ERL L.CAPUANO date first written above. ATTEST: By: /! . riY'iCIc,,^) S RET Y i , PNC BANK, NATIONAL ASSOCIATION By: ~Q,,- -Q 14 ACKNOWLEDGMENT AND CONSENT The undersigned, JOSEPH V. CAPUANO and NANCY P. CAPUANO, jointly and severally, hereby consent to the execution of this Agreement by LANDIS, INC., and STEVEN J. CAPUANO and KIMBERLY L. CAPUANO, and acknowledge and agree to the terms and conditions of this Agreement, and the undersigned hereby reaffirm, ratify, confirm and agree that all of the provisions of any of the Loan Documents to which either of the undersigned is a party, or both of the undersigned areparties, are unchanged and in full force and effect, enforceable by the Bank as provided therein, or at law or in equity. Without limiting the general nature and effect of the preceding paragraph, the undersigned specifically acknowledge that this Agreement and this Acknowledgment and Consent constitute written notice from the Bank of the occurrence of an Event of Default under the Loan Documents as provided in Section 3 of the Subordination Agreement dated July 6, 2001, among Joseph V. Capuano, the Company and the Bank, and therefore that the Company is no longer entitled to and shall not make, and Joseph V. Capuano is no longer entitled to and shall not receive, payments of the Subordinated Debt as defined and otherwise provided in such Subordination Agreement. WITNESS: By: vvJJ 7 By: By: By: NANCY P. CAPUANO 16 EXlllBIT "A" TO FORBEARANCE AGREEMENT DATED SEPTEMBER 25, 2003 The "Loan Documents" that are the subject of this Agreement include, but are not limited to, the following (as any of them have previously been amended, modified or otherwise supplemented or restated): Loan to Landis, Inc., in the original principal amount of $88,000, made as of May 3, 1999; Obligor/Obligation Number 30944824-601138578 (the "$88,000 Loan") Corporate Resolution to Borrow Promissory Note Disclosure for Confession of Judgment Business Loan Agreement Security Agreement (Motor Vehicles) Commercial Security Agreement Commercial Guaranty of Steven J. Capuano Disclosure for Confession of Judgment for Steven J. Capuano Loan to Landis, Inc., in the original principal amount of $306,500, made as of November 26, 1997; Obligor/Obligation Number 30944824-600719907 (the "$306,500 Loan") Corporate Resolution to Borrow Promissory Note Disclosure for Confession of Judgment Business Loan Agreement Commercial Security Agreement Power of Attorney Commercial Guaranty of Steven J. Capuano and Kimberly 1. Capuano Disclosure for Confession of Judgment for Steven 1. Capuano and Kimberly 1. Capuano Subordination Agreement of Joseph V. Capuano Loan to Landis, Inc., in the original principal amount of $120,000, made as of April 26, 1999; Obligor/Obligation Number 3094824-601147466 (the "$120,000 Loan") Corporate Resolution to Borrow Promissory Note Disclosure for Confession of Judgment Business Loan Agreement Commercial Guaranty of Steven 1. Capuano Disclosure for Confession of Judgment for Steven J. Capuano Open-End Mortgage from Joseph V. Capuano and Nancy P. Capuano (Tax parcel no. 40-31-2187-052, Woodcraft Drive, Mt. Holly Springs) 17 Line of Credit to Landis, Inc., in the modified original principal amount of 5580,000, made as of May 25, 1999; Obligor/Obligation Number 30944824-601138518 (the "Line of Credit") Promissory Note in the original principal amount of$125,000 Business Loan Agreement Commercial Security Agreement Commercial Guaranty of Steven 1. Capuano Disclosure for Confession of Judgment Amendment to Loan Documents dated July 6, 2001, increasing line of credit amount to $500,000 Subordination Agreement from Joseph C. Capuano dated July 6, 2001 Second Amendment to Loan Documents dated April 30,2002, increasing line of credit amount to $580,000 Loan to Steven J. Capuano and Kimberly L. Capuano in the original principal amount of 5120,000 made as of September 14, 2000; Obligor/Obligation Number 30944834-601549745 (the "Capuano Loan") . Promissory Note Disclosures for Confession of Judgment Corporate Resolution to Guarantee Commercial Guaranty of Landis, Inc. Open-End Mortgage (Tax parcel nos. 401-31-2187-053 and 40-31-2187-053A, Woodcraft Drive, Mt. Holly Springs) 18 COMMONWEALTH OF PENNSYLVANIA . \ .' COUNTY ml Ll nt ~'€ll(ljl :SS On the 25"' day of September, 2003, before me personally came STEVEN J. CAPUANO, who being duly sworn, did acknowledge himselfto be the President of LANDIS, INC., and that he as such officer, being authorized to do so, executed the foregoing instrument on behalf of said corporation for the purposes therein contained. In testimony whereof, I have hereunto subscribed my name. IN WITNESS WHEREOF, I hereunto set SEAL) NOTARW.SfN. WENDYS. ~ NlllIIyNla 1.IlIIIWAl8nTwp., OI,Nll.4c:a.. My CornIIlabi EJqne MIy 10, 21m' My commission expires: COMMONWEf-TH OF PENNSYL V ~ COUNTY OFlLl nd~t~J1A : SS On the 25"' day of September, 2003, before me personally came STEVEN J. CAPUANO and KIMBERLY 1. CAPUANO, known to me (or satisfactorily proven) to be the persons whose names are subscribed to the within instrument, and lcknowledged that they executed the same for ",,-=_m,onW=t 1AJi1~ iOw-m~) 1.':;1' o..\.lii IICJfAM.SE/IL WEJI1( S.U1EI~A :7N1c u..MIn~:' CaIftr MwCM...' . -, ...,to.D1I My Commission Expires: COMMONWE~ OF PENNSYLVANIA COUNTY OLLU,tl t>L {[cflL On the 25"' day of September, 2003, before me personally came JOSEPH V. CAPUANO ami NMJIT P. CM'UMIO, known to me (or satisfactorily proven) to be the persons whose names are subscribed to the within instrument, and acknowledged that they executed the same for the purposes therein contained. '"\ : SS li , otary Public NO'IMlnLSE/IL W9f1fs.a E IO,=NiIc LcMWMlnTwp~Q..U. Ccutr My Cl.,.., I . I El;*wMIJ10. 2007 ...... My Commission Expires: 19 MODIFICATION Al"ffi AMENDMENT OF FORBEARANCE AGREEMENT THIS AGREEMENT is made as of May 4, 2004, by and among PNC BANK, NATIONAL ASSOCIATION ("Bank"), and LANDIS, INe. (the "Company"), and STEVEN J. CAPUANO and KIMBERLY 1. CAPUANO Gointly and severally, the "Capuanos"), with the acknowledgment and consent of JOSEPH V. CAPUANO. RECITALS R-1. The Company and the Capuanos are referred to in this Agreement jointly and severally as the "Obligors". The Obligors executed and delivered to the Bank a Forbearance Agreement dated September 25, 2003 (the "Forbearance Agreement"). R-2. The term of the Forbearance Agreement expired, and the indebtedness owed by the Obligors to the Bank as provided in the Forbearance Agreement was due and payable in full, on April I, 2004. R-' The Obligors have requested the Bank to extend the term of the Forbearance Agreement, to which the Bank has agreed subject to the terms and conditions of this Agreement. AGREEMENT NOW THEREFORE, in consideration of the Recitals, which are an integral part of this Agreement, and of the agreements hereinafter set forth, and intending to be legally bound, the Obligors and the Bank agree as follows: 1. The Obligors' indebtedness and obligations to the Bank (collectively the "Obligations") shall be paid in accordance with the agreements and docu,ments that evidence and secure the Obligations (collectively, the "Loan Documents"), and with the Forbearance Agreement, and with the following provisions: a. The principal amount outstanding under the Line of Credit (as defined in Exhibit "A") as of the date hereof is $577,908.34. The availability of advances under the Line of Credit has been, and is hereby, terminated, and the Company shall not be entitled to receive, and the Bank shall not be obligated to make, any additional advances under the Line of Credit. The interest rate payable on the principal amount outstanding at any time under the Line of Credit shall be a rate of interest per annum at all times equal to eleven and one- tenths percent (1 LlO%) over the Index (as defmed in the Promissory Note for the Line of Credit). The Company shall make monthly payments of principal and interest on the Line of Credit in the amount of $7,652.57, which have been calculated according to a 20-year 1 LfA)),[ 'IJ II amortization schedule, on the date of each month as provided in the Promissory Note for the Line of Credit Upon the occurrence of any default under this Agreement, at the Bank's option, without notice to the Obligors, the interest rate payable on the Line of Credit may be increased to a rate of interest per annum at all times equal to sixteen percent (16%) over the Index (as defined in the Promissory Note for the Line of Credit). b. The principal amount outstanding under the $120,000 Loan (as defined in Exhibit "A") as of the date hereof is $107,045.99. The interest rate payable on the principal amount of the $120,000 Loan outstanding at any time shall be eighteen and one-tenths percent (18.10%) per annum. The Company shall make monthly payments of principal and interest on the $120,000 Loan in the amount of $1,660.30, which have been calculated according to a 20-year amortization schedule, on the date of each month as provided in the Promissory Note for the $120,000 Loan. Upon the occurrence of any default under this Agreement at the Bank's option, without notice to the Obligors, the interest rate payable on the $120,000 Loan may be increased to twenty percent (20%) per annum. c. The principal amount outstanding under the $88,000 Loan (as defined in Exhibit "A") as of the dare hereof is $3,922.43. The interest rate payable on the principal amount of the $88,000 Loan outstanding at any time shall be eighteen and one-tenths percent (18.10%) per annum. The Company shall make monthly payments of principal and interest on the $88,000 Loan in the amount of $1,785.41 on the date of each month as provided in the Promissory Note for the $88,000 Loan. Upon the occurrence of any default under this Agreement at the Bank's option, without notice to the Obligors, the interest rate payable on the $88,000 Loan may be increased to twenty percent (20%) per annum. d. The principal amount outstanding under the Capuano Loan (as defined in Exhibit "A") as of the date hereof is $112,755.66. The interest rate payable on the principal amount of the Capuano Loan outstanding at any time shall be nineteen and one-tenths percent (19.10%) per annum. The Capuanos shall make monthly payments of principal and interest on the Capuano Loan in the amount of $1,836.19, which have been calculated according to a 20-year amortization schedule, on the date of each month as provided in the Promissory Note for the Capuano Loan. Upon the occurrence of any default under this Agreement at the Bank's option, without notice to the Obligors, the interest rate payable on the Capuano Loan may be increased to twenty percent (20%) per annum. e. On June 3, 2004, the entire outstanding amount of the $88,000 Loan, and on August I, 2004, the entire outstanding amount of the other Obligations, including all of the principal, all of the accrued and unpaid interest, all of the prepayment charges that are payable under the Promissory Notes for the $88,000 Loan, the $120,000 Loan and the Capuano Loan as a result of prepayment of the principal amount outstanding thereunder prior to the maturity dates of such Loans as provided in such Promissory Notes, and any and all other sums due or payable under or in connection with the Obligations and/or the Loan Documents, shall be due and payable in full, without notice or demand, or setoff, counterclaim or deduction of any nature. 2 2. Simultaneously with execution of this Agreement, the Obligors shall (a) pay to Bank: a non-refundable forbearance fee of $1 ,907.00, which the Obligors acknowledge and agree has been fully earned by Bank, and (b) payor reimburse Bank for the fees and costs of the Bank's attorneys incurred or paid by Bank as a result of the Obligors' defaults of their obligations to Bank, including without limitation for the preparation, negotiation and implementation of this Agreement. 3. Simultaneously with execution of this Agreement, as additional collateral and security for the Obligations (which shall also be included in the definition of "Collateral" as provided in the Forbearance Agreement), the Obligors shall deliver to the Bank all titles to all of the Company's equipment and vehicles that are not encumbered by other creditors, and such completed and signed documentation as may be necessary or incidental for the Bank's encumbrance to be noted on all such vehicle titles. 4. Simultaneously with execution of this Agreement. as additional collateral and security for the Obligations (which shall also be included in the definition of "Collateral" as provided in the Forbearance Agreement), the Capuanos shall execute and deliver to the Bank, in recordable form, the Bank's form of Mongage Modification Agreement to be recorded for the purpose of extending the Bank's mortgage lien currently in effect against the real property occupied by the Company and identified as tax parcel nos. 40-31-2187-053 and 40-31-2187-053A, Woodcraft Drive, Mt. Holly Springs, to include tax parcel no. 40-31-2187-052, Woodcraft Drive, Mt. Holly Springs. 5. Bank: agrees, without waiving any existing default of the Obligors or any declaration of any existing default of the Obligors, or any demand for payment of all or any part of the Obligors' indebtedness to Bank, or any acceleration of the Obligors' indebtedness to Bank, or any of Bank's rights or remedies against the Obligors or the Collateral (such term as used in this Agreement having the same definition as such term has in the Forbearance Agreement) or the Obligors' respective other property, to forbear from proceeding against the Obligors and the Collateral and the Obligors' respective other property until the occurrence of a default of any of the Obligors' obligations to Bank under this Agreement. on Or after the date of this Agreement. However, notwithstanding the preceding sentence, the Company's failure to comply with the annual clean-up provision for the Line of Credit and with the Tangible Net Worth covenant and the Debt Service Coverage Ratio covenant contained in any of the Loan Documents shall not constitute default under this Agreement. 6. The Obligors shall furnish or cause to be furnished to the Bank: a. Not later than forty-five (45) days after the end of each of the Company's fiscal quarters, financial statements for each such quarter, including detailed schedules of accounts receivable aging and accounts payable aging, all in form and content satisfactory to the Bank. 3 b. Not later than thirty (30) days after the end of each month, financial statements for each such month, including detailed schedules of accounts receivable aging, all in form and content satisfactory to the Bank. c. Not later than April 30, 2004, a copy of the Capuanos' signed federal income tax return, as filed, including all schedules, statements, forms and attachments. d. In addition, the Obligors will furnish or cause to be furnished to the Bank such information and statements, lists of assets and liabilities, inventory schedules, budgets, forecasts, tax returns, and other reports with respect to the Company and the Company's business operations, and with respect to the Capuanos' financial condition, as Bank may request from time to time. 7. a The Obligors hereby reaffirm, affirm, ratifY and confirm the Obligors' absolute and unconditional liability to make all payments and to observe and perform all of the duties, obligations and other agreements of the Obligors under or in connection with the Obligations, the Loan Documents and the Forbearance Agreement, subject only to any express modification contained in this Agreement. Except as expressly set forth herein, nothing contained in this Agreement releases, limits, or otherwise affects in any way or at any time the liability of any of the Obligors for or with respect to any of the Obligors' obligations and agreements under or in connection with the Obligations, the Loan Documents or the Forbearance Agreement. This Agreement does not evidence or represent in any way new indebtedness or satisfaction of any of the Obligations. All provisions of the Loan Documents and the Forbearance Agreement remain in full force and effect, enforceable by the Bank in accordance with the provisions of each of them, except as expressly modified hereby, including without limitation any provisions for confession of judgment, waiver of the right to trial by jury or venue or forum selection contained in any of the Loan Documents or the Forbearance Agreement. Nothing contained in this Agreement waives or should be construed as a waiver of any of the Bank's rights and remedies under the Loan Documents or the Forbearance Agreement, or at law or in equity. b. The Obligors hereby acknowledge, agree and affirm that (i) the Obligors are absolutely and unconditionally liable to the Bank under any guaranty agreement executed in favor of the Bank by any of the Obligors (each, a "Guaranty"), which Guaranty is a guarantee of payment. and not merely collectibiliry, of the Obligations under the Loan Documents and the Forbearance Agreement, (ii) the Obligors' liabiliry to the Bank under any such Guaranry and with respect to the Obligations. the Loan Documents, the Forbearance Agreement and this Agreement is primary and direct, and (iii) the Obligors have no defenses, setoffs or other claims with respect to the Obligations, the Loan Documents, the Forbearance Agreement or this Agreement, or any such Guaranty. c. All of the provisions of the Loan Documents and the Forbearance Agreement, as modified hereby, are incorporated herein by reference and made a part hereof as if set forth in full herein, and all of the provisions of this Agreement are incorporated into 4 the Loan Documents and the Forbearance Agreement and made a part thereof as if set forth in full therein. The provisions of this Agreement are and will be deemed to be supplemental to, and not in derogation of, the provisions of the Loan Documents and the Forbearance Agreement, whenever possible. However, if there is any conflict or inconsistency between or among the provisions of the Loan Documents and/or the Forbearance Agreement, and this Agreement, the provision(s) determined by Bank in its sole discretion to be applicable will govern and control the resolution of any such conflict or inconsistency, and the Obligors agree to be bound by Bank's determination. 8. The occurrence of anyone or more of the following is a default under this Agreement: a The Obligors' failure to make any payment required under the provisions of any of the Loan Documents, the Forbearance Agreement or this Agreement on or before the due date, on or after the date of this Agreement; b. The Obligors' failure to observe or perform each and every one of the provisions on the Obligors' part to be observed or performed under this Agreement, or under any of the Loan Documents (except with respect to compliance with the financial covenants as provided in Section 8 and with respect to the annual clean-up provision for the Line of Credit), or the Forbearance Agreement on or after the date of this Agreement; c. If any representation, warranty, or financial statement or presentation of any of the Obligors at any time made to Bank in connection with the Obligations is determined by Bank to be materially incorrect or misleading, including without limitation any financial statements provided by any of the Obligors to Bank in accordance with the Loan Documents, the Forbearance Agreement or this Agreement. 9. The Obligors each agrees that a default under any of the Loan Documents, the Forbearance Agreement, this Agreement, or under any other agreement or document evidencing or securing any other indebtedness or obligation of any of the Obligors to Bank, on or after the date of this Agreement, is a default under all of the Loan Documents, the F orb~arance Agreement, this Agreement and all such other agreements and documents. The Obligors each agrees that all of the Collateral is intended to be and is collateral and security for the entire amount of the Obligations, whether or not any particular Collateral is specifically identified as Collateral for any particular Obligations in the Loan Documents or the Forbearance Agreement, and that all of the Collateral is intended to and "ill continue as collateral and security for the entire amount of the Obligations until all of the Obligations are paid in full, notwithstanding payment in full of the $88,000 Loan, the $306,500 Loan, the $120,000 Loan, the Line of Credit and/or the Capuano Loan before payment in full of all of the Obligations, and the Obligors hereby confirm and reaffirm the Bank's security interest, and hereby grant to the Bank a security interest, in and to all of the Collateral. The Obligors agree that all of the provisions of all of the Loan Documents and the Forbearance Agreement, as modified by this Agreement, will remain in full and force and effect and be and remain applicable to all of the outstanding Obligations until all of the Obligations are paid in full, 5 notwithstanding payment in full of the $88,000 Loan, the $306,500 Loan, the $120,000 Loan, the Line of Credit and/or the Capuano Loan before payment in full of all of the Obligations. 10. The Obligors, for themselves and any person or entity claiming by, through, from or under any of them, including without limitation their respective heirs, personal representatives, predecessors, successors and assigns, and their respective parent corporations, subsidiaries and affiliates, and the stockholders, directors, officers, employees, agents and attorneys of any of them, hereby release and agree to indemnify, defend and hold harmless Bank, its predecessors, successors and assigns, and its and their respective parent corporations, subsidiaries and affiliates, and the stockholders, directors, officers, employees, agents and attorneys of any of them (collectively, the "Indemnified Parties") harmless for, against and from any and all liability of any nature whatsoever, including without limitation any demands, claims, suits, proceedings or actions of any nature whatsoever, and any damages, losses. costs, expenses and fees (including attorneys' fees) or other liabilities of any nature whatsoever, arising at any time before, on or after the date of this Agreement as a result of or in connection with any actions or inactions of any of the Indemnified Parties, whether intentional or negligent, which occurred on or prior to the date of this Agreement. Tbis provision will survive any expiration or termination of this Agreement, whether by payment in full of the Obligations and all other sums due under or in connection therewith, or otherwise. 11. Toe Obligors will execute and/or deliver to Bank such additional documents, agreements or materials, or will take such further action, as Bank may reasonably request at any time and from time to time to give effect to the purposes or provisions of this Agreement. 12. All documents, agreements and materials of any nature whatsoever required at any time to be executed or delivered to Bank in connection with any of the obligations of the Obligors to Bank under this Agreement will be in form and substance satisfactory to Bank in Bank's sole discretion. 13. No modification of any provision of this Agreement shall be effective unless in writing and signed by all of the parties. 14. If at any time or times Bank believes it to be necessary or desirable to refer any aspect of the administration of this Agreement, or the enforcement of any provision of this Agreement, to any attorney, the Obligors will be liable to payor reimburse Bank for all reasonable attorneys' fees and costs incurred or paid by Bank as a result of such referral, which fees and costs will be due when incurred and payable immediately upon demand therefor. 15. Time is of the essence of the Obligors' obligations under this Agreement. 16. The provisions of this Agreement are severable and the invalidity or unenforceability of any provision will not affect or impair the remaining provisions. which shall remain in full force and effect. 6 17. This Agreement shall be interpreted and construed under the laws of the Commonwealth of Pennsylvania. The Obligors shall only bring an action in, and the Obligors otherwise consent to the jurisdiction of, the Court of Common Pleas of Cumberland County, Pennsylvania, and the United States District Court for the Middle District of Pennsylvania, over all matters arising from or related to the Loan Documents, the Forbearance Agreement and/or this Agreement. The Obligors and the Bank agree that any dispute or controversy between or among the Obligors or any of them and Bank would not lend itself to resolution or determination in trial by jury. Therefore, the Obligors and Bank each hereby voluntarily, knowingly and understandingly waives the right to trial by jury in any action or proceeding with respect to any dispute or controversy which may arise between or among them under or in connection with the Obligations, the Loan Documents, the Forbearance Agreement or this Agreement and the subject matter of this Agreement. 18. This Agreement shall inure to the benefit of Bank, its successors and assigns, and all obligations of the Company and the Capuanos shall bind all of the Obligors and their respective heirs, personal representatives, successors and assigns. 19. The Obligors each acknowledges and agrees that each of the Obligors has had the opportunity to consult with an attorney or attorneys prior to execution of this Agreement, and the Obligors have consulted with an attorney or attorneys, or have waived and hereby acknowledge the waiver of the opportunity to do so, and the Obligors have executed this Agreement voluntarily, knowingly and understandingly. 20. This Agreement may be executed in any number of counterparts, which will constitute one and the same Agreement. The Obligors each agrees that Bank is entitled to rely on a facsimile transmission of this Agreement containing the signatures of any of the Obligors and executed notary acknowledgements for the Obligors. However, the Obligors further agree to send the Bank the originally signed and notarized Agreement by nationally recognized overnight courier service on the date on which the facsimile transmission is sent to Banlc IN WITNESS date fIrst written a REOF, the Obligors and Bank have execut 7 o By: By: BrYd ~~. ~ .J KIMBERLtL.CAP ANO PNC BANK, NATIONAL ASSOCIATION By: r~ ~' Q ERIC D. KlUMMEL VICE PRESIDENT 8 ACKNOWLEDGMENT AND CONSENT The undersigned, JOSEPH V. CAPUANO hereby consents to the execution of this Agreement by LANDIS, INC., and STEVEN J. CAPUANO and KIMBERLY 1. CAPUANO, and acknowledges and agrees to the terms and conditions of this Agreement, and the undersigned hereby reaffirms, ratifies, confirms and agrees that all of the provisions of any of the Loan Documents to which the undersigned is a party are unchanged and in full force and effect, enforceable by the Bank as provided therein, or at law or in equity. Without limiting the general nature and effect of the preceding paragraph, the undersigned specifically acknowledges that this Agreement and this Acknowledgment at).d Consent constitute wrinen notice from the Bank of the occurrence of an Event of Default under the Loan Documents as provided in Section 3 of the Subordination Agreement dated July 6, 2001, among Joseph V. Capuano, the Company and the Bank, and therefore that the CJmpany is no longer entitled to and shall not make, and Joseph V. Capuano is no longer entitled to and shall not receive, payments of the Subordinated Debt as defined and otherwise provided in such Subordination Agreement. By: DA IE: May 4, 2004 9 ,," .' EXHIBIT "A" TO MODIFICATION AND AMENDMENT OF FORBEARANCE AGREEMENT DATED MAY 4, 2004 The "Loan Documents" that are the subject of this Agreement include, but are not limited to, the following (as any of them have previously been amended, modified or otherwise supplemented or restated): LoaD to Landis, Inc., in the original principal amount ofS88,000, made as of May 3,1999; Obligor/Obligation Number 30944824-601138578 (the "S88,000 Loan") Corporate Resolution to Borrow Promissory Note Disclosure for Confession of Judgment Business Loan Agreement Security Agreement (Iv10tor Vehicles) Commercial Security Agreement Commercial Guaranty of Steven J. Capuano Disclosure for Confession of Judgment for Steven J. Capuano Loan to Landis, Inc., in the original principal amount of SI20,000, made as of April 26, 1999; Obligor/Obligation Number 3094824-601147466 (the "$120,000 Loan") Corporate Resolution to Borrow Promissory Note Disclosure for Confession of Judgment Business Loan Agreement Commercial Guaranty of Steven 1. Capuano Disclosure for Confession of Judgment for Steven 1. Capuano Open-End Mortgage from Joseph V. Capuano and Nancy P. Capuaao (Tax parcel no. 40-31-2187-052, Woodcraft Drive, Mt Holly Springs) Line of Credit to Landis, Inc., in the modified original principal amount of 5580,000, made as of May 25, 1999; Obligor/Obligation Number 30944824-601138518 (the "Line of Credit") Promissory Note in the original principal amount of$125,000 Business Loan Agreement Commercial Security Agreement Commercial Guaranty of Steven J. Capuano Disclosure for Confession of Judgment 10 ~- ...... Amendment to Loan Documents dated July 6, 2001, increasing line of credit amount to $500,000 . Subordination Agreement from Joseph C. Capuano dated July 6, 2001 Second Amendment to Loan Documents dated April 30, 2002, increasing line of credit amount to $580,000 Loan to Steven J. Capuano and Kimberly L. Capuano in the original principal amount of $120,000 made as of September 14, 2000; Obligor/Obligation Number 30944834-601549745 (the "Capuano Loan") Promissory Note Disclosures for Confession of Judgment Corporate Resolution to Guarantee Commercia! Guaranty of Landis, Inc. Open-End Mortgage (Tax parcel nos. 401-31-2187-05J and 40-31-21 87-053A, Woodcraft Drive, Mt. Holly Springs) 11 PNC BANK, NATIONAL ASSOC.IATION 4242 Carlisle Pike Camp Hill, PA 17011 E-mail: eric.krimmel@Dncbank.com Eric D. Krimmel Vice President (717) 730-2492 Tel (717) 730-2373 Fax o PNCBAN< Via Rel!Ular and Certified Mail August 9. 2004 Steven J. Capuano, President Landis, Inc. Woodcraft Drive P.O. Box 196 Ml. Holly Springs, P A 17065 Mr. Steven J. Capuano Mrs. Kimberly L Capuano 1229 Blossom Terrace Boiling Springs, P A 17007 In reo Landis, Inc. Obligor/Obligation Nos.: 30944824-601138518 (5580,000 Line of Credit Loan) 30944824-601147466 (5120,000 Loan) Steven J. and Kimberly L. Capuano Obligor/Obligation Nos.: 30944834-601549745 (S120,000 Loan) Dear Landis, Inc.: near Mr. and Mrs. Capuano: As you know, you are obligated to PNC Bank, National Association ("PNC") for the above-referenced loan accounts (the "Loans"), as evidenced by certain Promissory Notes, Commercial Guaranties, a Forbearance Agreement, and other related loan documents (the "Loan Documents"). As you also know, you are in default under the Loans and Loan Documents for your failure to payoff the above- referenced loan accounts on August 1.2004. As a result of this Event of Default, all liabilities and obligations under the Loans and Loan Documents have been accelerated and all liabilities and obligations under the Loans and Loan Documents are immediately due and payable to PNC. In addition. pursuant to the terms of the Loan Documents you are hereby notified, that effective this date, PNC has exercised its right to increase the interest rates on the Loans to the default rates as follows: Existine Interest Rate Default Rate Landis. Inc. 30944824-601138518 30944824-601147466 PNC Bank's prime rate + 11.10 18.10% PNC Bank's prime rate + 16.00% 20.00% Steven J. and Kimberlv L CaDuano 30944834-601549745 19.10% 20.00% A member of The PNC Financial Serv,iccs Group 4242 Carlisle Pike Camp Hill Pennsylvania 17011 [1-h/ bl ('. Steven J. Capuano, President Landis, Inc. August 9, 2004 Page 2 Please be advised that unless payment in full is immediately delivered to PNC Bank, National Association at 4242 Carlisle Pike, Camp Hill, PA 17011, in the form of a cashiers check or money order, PNC may take all action it deems appropriate to collect the above sums due and owing, preserve, protect and enforce its rights under the Loans and Loan Documents. This letter shall not be deemed to constitute a waiver of any outstanding defaults or Events of Default, nor shall it obligate PNC, or be construed to require PNC, to waive any defaults. whether now existing or which may occur after the date of this letter, nor shall it limit PNC's rights to exercise all of its rights and remedies under the Loan Documents with you, including any notes, security agreements or other loan documents executed in connection therewith, all of which rights PNC expressly reserves. Very truly yours, PNC Bank, National Association ~Q~ Eric D. Krinunel Vice President Certified Mail Nos.: 7002 0460 0000 9754 8954 7002 0460 0000 9754 8961 cc: Geoffrey S. Shuff, Esquire ~ PNC BANK, NATIONAL ASSOCIATION, Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : NO. LANDIS, INC., STEVEN 1. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants CONFESSION OF JUDGMENT : CIVIL ACTION - LAW VERIFICATION I, Eric Krimmel, Vice President, for PNC Bank, National Association, being authorized to do so on behalf of PNC Bank, National Association, hereby verifY that the statements made in the foregoing pleading are true and correct to the best of my information, knowledge and belief. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. PNC BANK, NATIONAL ASSOCIATION Date: ILlu /0 '-t By: [:_ e." -Q Eric Krimmel Vice President 0 -w. ~-, ~ 7d - n C::J 0 ~ -..0 L,;;t -n 8 ~ c., '- -l Vi 7.~'''' T-n ~: P"l:;:::" - D ",P1 R (;:; ~ I -~::,CJ ..- g~ -u '...-' ~ -0 ~ :;:..."" () Ft ...';' ;;jcn .~-- ~:.:-i IlJ c; .. " ~ -F -< r:~ :iJ ~ 0 --< PNC BANK, NATIONAL ASSOCIATION, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : NO. O~- 50 C.IUtll~ v. LANDIS, INC., STEVEN J. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants : CONFESSION OF JUDGMENT : CIVIL ACTION - LAW PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Please enter the appearance on behalf of Plaintiff, PNC Bank, National Association. Papers may be served at the address set forth below. Geoffrey S. Shuff, Esquire SAIDIS, SHUFF, FLOWER & LINDSAY 2109 Market Street, Camp Hill, P A 17011 (717) 737-3405 (fax) 737-3407 Respectfully submitted, Date: December 28, 2004 SAlOIS, SHUFF, FLOWER & LINDSAY By ",""kZ!:.,'i" "S\jpreme Court ID #24848 2109 Market Street Camp Hill, PA 17011 (717) 737-3405 Attorney for Plaintiff ~ = c.n c.- r; ( ~ -<. \ ~ ". :;I~ o 'n -' iF,:n r;: -Of, , ?JY Oc ..-{ ~...;~ ~:b ~Z?+l 'Q _A dO :-.< - - .. o - PNC BANK, NATIONAL ASSOCIATION, Plaintiff v. : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : NO. OS - ~D Ciu~L~""\ LANDIS, INC., STEVEN J. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants : CONFESSION OF JUDGMENT : CIVIL ACTION - LAW AFFIDAVIT OF NON-MILITARY SERVICE TO THE PROTHONOTARY: I do certifY, to the best of my knowledge, that the Defendants, Landis, Inc., Steven J. Capuano and Kimberly 1. Capuano, in the above-captioned action are not presently on active or nonactive military status. Respectfully submitted, SAID IS, SHUFF, FLOWER & LINDSAY Date: December 28, 2004 By: G Su me Co ID #24848 2109 Market Street Camp Hill, P A 17011 (717) 737-3405 Attorney for Plaintiff (") \:::"", \> ~:;:.J ..~ ...., s "" <- ~ o 01 -:! :1-...,., rnF -i) rn :,.09 ".).0 g~\ ~~I :P' -':J ::<. \ x;- ......., =1' C) PNC BANK, NATIONAL ASSOCIATION, Plaintiff v. : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : NO. OS" - 5"b Cw~L~~ LANDIS, INC., STEVEN 1. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants : CONFESSION OF JUDGMENT : CIVIL ACTION - LAW CERTIFICATE OF ADDRESSES I hereby certifY that the precise address of Plaintiff, PNC Bank, National Association, is 4242 Carlisle Pike, Camp Hill, Pennsylvania 17011; that the last known address of the Defendant, Landis, Inc., is Woodcraft Drive, P.O. Box 186, Mount Holly Springs, Pennsylvania 17065; and that the last known address of the Defendants, Steven 1. Capuano and Kimberly 1. Capuano, is 1229 Blossom Terrace, Boiling Springs, Pennsylvania 17007. Respectfully submitted, SAlOIS, SHUFF, FLOWER & LINDSAY Date: December 28, 2004 By: Geo e uff, squire Supreme Court I #24848 2109 Market S eet Camp Hill, PA 17011 (717)737-3405 Attorney for Plaintiff ~ ~ <J' c.:- -.... ~~ \ .{:- q, -' ~1:!J '::0 ~J -':,1, Do. .:::?~\ ~;~"' "'"''') '~~'7n '9\ d-S :~, .."". ::r~ - -- .. o - PNC BANK, NATIONAL ASSOCIATION, Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : NO. OS - ~D Cr~,L ~~ LANDIS, INC., STEVEN J. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants : CONFESSION OF JUDGMENT : CIVIL ACTION - LAW NOTICES IN CONNECTION WITH JUDGMENTS BY CONFESSION REQUIRED BY 42 Pa. C.S.A. S 2737.1 (Act 105 of2000) To: Landis, Inc., Steven J. Capuano and Kimberly 1. Capuano Pursuant to 42 Pa. C.S. S 2737.1. please take notice that the Plaintiff in this matter has entered a judgment by confession against you in the amount of$898,913.36. You are entitled to file a petition to "strike" or "open" the judgment. In order to do so, you must promptly file a petition with the Court of Common Pleas of Cumberland County, Pennsylvania, as required by Rule 2959 of the Pennsylvania Rules of Civil Procedure. You will file a petition by leaving it with the courts or Prothonotary at the courthouse in Carlisle, Cumberland County, Pennsylvania. A petition is a formal statement of your reasons for challenging the judgment. You must include the names of the parties at the top of the first page and the case number, which is shown above. The petition must state your reasons for challenging the judgment is a separate numbered paragraphs. You have to sign the petition and include a sworn statement at the end of the document verifying that the facts you state in the petition are true and accurate. You will waive any defenses and objections not included in your petition to strike or open. You must therefore make every effort to raise all possible issues and defenses in your petition to strike or open in order to avoid waiving any claims. If you elect to file a petition, it must meet the requirements of Rule 2959 of the Rules of Civil Procedure. A full copy of Rule 2959 is attached to this Notice. You may also have to comply with local rules of procedure in effect in the county where the judgment was entered. If you do not file a petition challenging the judgment, the Plaintiff may take steps to collect on the judgment by asking the Sheriff to seize your assets. You may have other rights available to you other than as set forth in this notice. You should take this paper to your lawyer at once. If you do not have a lawyer, go to or telephone the office set forth below. This office can provide you with information about hiring a lawyer. If you cannot afford to hire a lawyer, this office may be able to provide you with information about agencies that may offer legal services to eligible persons at a reduced fee or no fee. Cumberland County Bar Association 32 South Bedford Street Carlisle, P A 17013 (717) 249-3166 or 1-800-990-9108 Corporations may be unable to represent themselves in court. If the defendants include a corporation, the corporation must appear through an attorney if it intends to challenge the judgment. You may receive other papers and notices regarding the judgment. Those other papers do not negate or override this Notice. Likewise, this Notice is not intended to and does not negate any of the notices or information obtained in other papers that may be served upon you. We reiterate that you are required to act promptly if you wish to seek relief from the judgment. Under certain circumstances, you have only 30 days in which to file a petition after papers are served on you. Even if the 30 day rule does not apply, you must act promptly in order to protect your interests. Failing to act in a timely marmer will render you unable to challenge the judgment at a later time. Pursuant to 40 Pa. C.S.A. Section 2737.1, if you have been incorrectly identified and had a confession or judgment entered against you, you are entitled to costs and reasonable attorney fees as determined by the court. Respectfully submitted, SAlOIS, SHUFF, FLOWER & LINDSAY Date: December 28, 2004 By: 1)/;'1 ~~Pl.d; E,",ire pr}'me Court ID #24848 2 9 Market Street Camp Hill, PA 17011 (717) 737-3405 Attorney for Plaintiff PennsvIvania Rule of Civil Procedure 2959 - Strikinl! off Judl!ment (a)(l) Relief from a judgment by confession shall be sought by petition. Except as provided in subparagraph (2), all grounds for relief whether to strike off the judgment or to open it must be asserted in a single petition. The petition may be filed in the county in which the judgment was originally entered, in any county to which the judgment has been transferred or in any other county in which the sheriff has received a writ of execution directed to the sheriff to enforce the judgment. (2) The ground that the waiver of the due process rights of notice and hearing was not voluntary, intelligent and knowing shall be raised only (i) in support of a further request for a stay of execution where the court has not stayed execution despite the timely filing of a petition for relief from the judgment and the presentation of prima facie evidence of a defense; and (ii) as provided by Pennsylvania Rule of Civil Procedure 2958.3 or Rule 2973.3. (3) If written notice is served upon the petitioner pursuant to Rule 2956.1(c)(2) or Rule 2973.1 ( c), the petition shall be filed within thirty days after such service. Unless the defendant can demonstrate that there were compelling reasons for the delay, a petition not timely filed shall be denied. (b) If the petition states prima facie grounds for relief the court shall issue a rule to show cause and may grant a stay of proceedings. After being served with a copy of the petition the plaintiff shall file an answer on or before the return day of the rule. The retum day of the rule shall be fixed by the court by local rule or special order. (c) A party waives all defenses and objections which are not included in the petition or answer. (d) The petition and the rule to show cause and the answer shall be served as provided in Rule 440. (e) The court shall dispose of the rule on petition and answer, and on any testimony, depositions, admissions and other evidence. The court for cause shown may stay proceedings on the petition insofar as it seeks to open the judgment pending disposition of the application to strike off the judgment. If evidence is produced which in a jury trial would require the issues to be submitted to the jury the court shall open the judgment. (f) The lien of the judgment or of any levy or attachment shall be preserved while the proceedings to strike off or open the judgment are pending. .-' c.:) V ~,., (.- !':: ..-,,- c~. -): '.2. \ s:~ G, .-\ :1: -<1_ 0'F: -ot;:'; "::'.J\.t'" c)"j :::~ -'f \ .\...--,\, [;...~r) ";;:,rn v .-.\ -'-'" ""J ~ T'" .:}:: - - .. o - PNC BANK, NATIONAL ASSOCIATION, Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : NO. DS; ~ .to CL>~L ~~ LANDIS, INC, STEVEN J. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants : CONFESSION OF JUDGMENT : CIVIL ACTION - LAW To: Landis, Inc., Steven J. Capuano and Kimberly 1. Capuano, Defendants You are hereby notified that on , ):::u) 'f ' 200( judgment by confession was entered against you in the sum of$898,913.36 in the above-captioned case. k. / /^I IN DATE: YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, P A 17013 (717) 249-3166 or 1-800-990-9108 I hereby certifY that the following are the addresses of the defendants stated in the certificate of residence: Landis, Inc. Woodcraft Drive P.O. Box 186 Mount Holly Springs, P A 17065 Steven J. Capuano 1229 Blossom Terrace Boiling Springs, P A 17007 Kimberly 1. Capuano 1229 Blossom Terrace Boiling Springs, P A 17007 A, Landis, Inc., Steven 1. Capuano and Kimberly L. Capuano, Demandado(s) Por este medio sea avisado que en el dia de de 2004, un fallo par admision fue registrado contra usted por la conti dad de $898,913.36 del caso antes escrito. Fecha: el dia de de 2004 Protonotario LLEVE ESTA DEMANDA A UN ABODAGO IMMEDIATAMENTE. SI NO TIENE ABOGADO 0 SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, V A Y A EN PERSONA A LLAME POR TELEFONO A LA OFICINA CUY A DIRECCION SE ENCUENTRA ESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. Cumberland County Bar Association 32 South Bedford Street Carlisle, P A 17013 (717) 249-3166 or 1-800-990-9108 Por este medio certifico que 10 siguiente es la direccion del demandado dicho en el certificado de residencia: Landis, Inc. Woodcraft Drive P.O. Box 186 Mount Holly Springs, P A 17065 Steven J. Capuano 1229 Blossom Terrace Boiling Springs, P A 17007 Kimberly L. Capuano 1229 Blossom Terrace Boiling Springs, P A 17007 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL V ANIA- CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, : DOCKET NO. 05-50 CIVIL TERM Plaintiff v. : CONFESSION OF JUDGMENT LANDIS, INC., STEVEN 1. CAPUANO AND KIMBERLY 1. CAPUANO, Defendants : PREVIOUSLY ASSIGNED TO: N/A PRAECIPE TO THE PROTHONOTARY: Please mark the judgment entered in the above-captioned action satisfied. Respectfully submitted, SAIDIS, SHUFF, FLOWER & LINDSAY Date: November 14,2005 By: ..--., // I uff, Esquire eme ourt ID #24848 2109 M ket Street Camp Hill, PA 17011 (717) 737-3405 Attorneys for Plaintiff, PNC Bank, National Association !"~ ) ") ~"l- 'I L'~ , c;:) C.) C:J CJ