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Home My WebLink About14-5018 MAGNOLIA PORTFOLIO, LLC, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA C7 V. CIVIL ACTION - LAW �C_— mas G& C ASSOCIATES and : NO. JULIE A. CASSIDY, 0 `. Defendants T'C' 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 defendants and confess judgment in favor of the plaintiff and against the defendants, plus interest at a per diem rate of $282.84 and costs from the date of judgment and costs of collection, as follows: (a) Unpaid Principal $1,272,786.88 (b) Unpaid Interest $ 214,941.64 (c) Late Charges $ 10,483.10 (d) Attorneys' Fees $ 9,048.70 TOTAL 1.507,260.32 RHOADS & SINON LLP By: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants G & C Associates and Julie A. Cassidy for purposes of confession of judgment; Attorneys for Plaintiff Magnolia Portfolio, LLC for all other purposes ilk�40 4k o qs�, 960145.2 Stephanie E. DiVittore,Esquire Attorney I.D.No. 85906 20,14 AUG 26 A H a I: 31 Kathryn D. Sallie,Esquire Attorney I.D.No. 108116 CUMBERLAND COUNTY RHOADS& SINON LLP PENNSYLVANIA One South Market Square P.O.Box 1146 Harrisburg,PA 17108-1146 (717)233-5731 Attorneys for Plaintiff MAGNOLIA PORTFOLIO, LLC, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA V. CIVIL ACTION - LAW G& C ASSOCIATES and NO. • JULIE A. CASSIDY, Defendants COMPLAINT IN CONFESSION OF JUDGMENT NOW COMES Plaintiff Magnolia Portfolio, LLC, by and through its attorneys. Rhoads & Sinon LLP, and files the within Complaint in Confession of Judgment, stating as follows: 1. Plaintiff Magnolia Portfolio, LLC ("the Lender"), is a Delaware limited liability company with its principal place of business at 4675 Macarthur Court, Suite 1550, Newport Beach, California 92660. 2. Defendant G & C Associates ("Borrower") is a Pennsylvania partnership with its principal place of business at 18 Log Cabin Road, Newville, Cumberland County, Pennsylvania 17421. 3. Defendant Julie A. Cassidy is an adult, married individual with an address of 18 Log Cabin Road, Newville, Cumberland County, Pennsylvania 17421. 960145.2 4. Defendant Julie A. Cassidy, and Michael Cassidy, are the general partners of G & C Associates. 5. On or about June 30, 2010, Orrstown Bank extended a loan in the original principal amount of$1.486,500 to the Borrower [Orrstown Loan No. 714819025] (the "Loan") secured by that certain Mortgage dated June 30, 2010 in favor of Orrstown Bank (the "Mortgage"). (Copies of the Loan Agreement and Mortgage are attached hereto as Exhibits "A" and "B" and incorporated herein by reference). 6. The Borrower also executed and delivered a Promissory Note dated June 30, 2010 to Orrstown Bank evidencing its obligation to repay the Loan (the "Note"). (A copy of the Note is attached hereto as Exhibit"C" and incorporated herein by reference). 7. Defendant Julie A. Cassidy (the "Guarantors") guaranteed the Loan, evidenced by the Guaranty and Suretyship Agreements executed June 30, 2007. (Copies of the Guaranty and Suretyship Agreements are attached hereto as Exhibit "D" and incorporated herein by reference). Michael Cassidy also executed a guaranty. Michael Cassidy is now deceased. 8. The Lender is successor by assignment to Orrstown Bank, as on or about February 5, 2013, Orrstown Bank assigned all of its right, title and interest in the Business Loan Agreement, Note, Mortgage and Guaranties to Magnolia Portfolio, LLC, now referenced as Loan No. 104188-001. (Copies of the Assignments are attached hereto as Exhibit "E" and incorporated herein by reference). 9. Pursuant to the terms of the Note, Borrower was obligated to make repayment as follows: 960145.2 3. Repayment (a) Commencing on July 30, 2010 and continuing on the thirtieth (30 ) day of each month thereafter, the Maker shall pay to the Lender Three Hundred (300) consecutive monthly installment payments of principal and interest. The initial monthly payment shall be $8,689.93. (b) Notwithstanding any other provision of this Note to the contrary. the Lender shall have the right, in its sole and absolute discretion, to demand payment in full of the entire unpaid balance of principal and all accrued and unpaid interest and all other sums due and owing under this Note, by not less than ninety (90) days prior written notice, provided that, if no such demand is made, this Note shall be due and payable in full Three Hundred (300) months from the date hereof. (Exhibit C—Note, p. 1). 10. An Event of Default has occurred under the terms of the Note, as the Borrower has failed to make a payment when due. (Exhibit C—Note). 11. Pursuant to the terms of the Note, "Lender shall have the right, in its sole and absolute discretion, to demand payment in full of the entire unpaid balance of principal and all accrued and unpaid interest. . . ." (Exhibit C—Note). 12. On March 30, 2012, Orrstown Bank notified the Borrower and the Guarantors (collectively, the "Obligors") of their default and demanded payment in full. (A copy of the Demand Notice is attached hereto as Exhibit "F" and incorporated herein by reference). 13. The Note also grants the Lender the right to its attorneys' fees, costs and expenses incurred in collecting such amounts due and owing. (Exhibit C -Note). 14. The Note and Commercial Guaranty contain confession of judgment provisions which empower any attorney of any court of record to appear for and enter judgment against the Obligors and in favor of the Lender, upon default by the Borrowers. (Exhibit C —Note; Exhibit D—Guaranties). 960145.2 15. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 16. Except as set forth above, the Business Loan Agreement, Mortgage, Note and Guaranty and Suretyship Agreements have not been assigned by the Lender. 17. The Obligors continue to be in default under the terms of the written agreements set forth herein. 18. Judgment has not been entered previously on the warrants of attorney contained in the Note or Guaranty in any jurisdiction. 19. The actual amounts due and payable to the Lender under the Note as of July 29, 2014 are itemized as follows: (a) Unpaid Principal $1,272,786.88 (b) Unpaid Interest $ 214,941.64 (c) Late Charges $ 10,483.10 (d) Attorneys' Fees $ 9,048.70 TOTAL 1,507,260.32 960145.2 WHEREFORE Plaintiff Magnolia Portfolio, LLC demands judgment in its favor and against Defendants G & C Associates and Julie A. Cassidy in the amount of $1,507,260.32 together with accruing interest at a per diem rate of $282.84, costs of suit, attorneys' fees, and such other charges as authorized by the warrants contained in the Note. Respectfully submitted, RHOADS & SINON LLP By: V Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Magnolia Portfolio, LLC 960145.2 VERIFICATION Ann Hempfling hereby deposes and says, subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities, that she is the Asset Manager for Sabal Financial Group, L.P., servicing agent for Magnolia Portfolio, LLC, that she makes this verification as such officer by its authority, and that the facts set forth in the foregoing Complaint in Confession of Judgment are true and correct to the best of her knowledge, information and belief. 4- �Ie "Iz Date Hem fli g, nager Sabal Financial M.P. EXHIBIT A LOAN AGREEMENT THIS LOAN AGREEMENT is made as of June 'Q , 2010, by and between G & C ASSOCIATES, a Pennsylvania partnership (the `Borrower") and ORRSTOWN BANK (the "Lender''). RECITALS Certain of the terms and words used in these Recitals, and in the following Agreements, are defined in Section 1.1 of this Loan Agreement for a $1,486,500 Term Loan to refinance certain indebtedness of the Borrower owing to Orrstown Bank. AGREEMENTS NOW, THEREFORE, in consideration of the premises, the respective representations, covenants and agreements hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.1. Definitions. Certain terms used in this Loan Agreement are defined in this Section or are defined by reference to one of the other Loan Documents and, when and if used herein, such terms shall have the meanings given to them by the language employed in this Section defining such terms or by the language employed in such other Loan Document defining such terms,unless the context clearly indicates otherwise. "Act of Bankruptcy" means the filing of a petition in bankruptcy under the Bankruptcy Code, or the commencement of a proceeding under any other applicable law concerning insolvency, reorganization or bankruptcy, dissolution or liquidation, by or against the Borrower, as debtor, or if the. Borrower shall make an. assignment for the benefit of creditors, or the Borrower, by any act or omission, shall indicate its consent to, _approval of or acquiescence in any petition, application or proceeding for the appointment of a receiver, trustee or custodian for it or any substantial part of its assets. "Advance" means each loan or advance of funds under a Loan at such time as such loan or advance is made or is outstanding. "Authorized Representative" means such person at the time designated to act on behalf of a Person by a written certificate furnished to the Lender containing the specimen signature of such person and signed on behalf of the Person by an other Authorized Representative of the Person. Such certificate may designate an alternate or alternates. i "Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C. §§ 101 et se4., and all future acts supplemental thereto or amendatory thereof. "Borrower"means G& C Associates, a partnership organized and existing under the laws of the Commonwealth,its successors and assigns. "Business Day" means any day other than (i) a Saturday or Sunday, (ii) a legal holiday, (iii) any day on which banking institutions in the Commonwealth are authorized or required by law or executive order to close, or (iv) for purposes of the definition of LIBOR, a day on which dealings are not carried on in the London Interbank market. "Cash Management Services Agreement " means an agreement between the Lender and the Borrower pursuant to which the Lender provides cash management services to the Borrower, together with any and all Supplements thereto. "Closing Date" means June , 2010, the date of the execution and delivery of this Loan Agreement and such other Loan Documents as the Lender reasonably may require. "Code" means the Internal Revenue Code of 1986, as amended, and all regulations promulgated thereunder. 3: I: "Collateral" means all of the tangible and intangible assets and property rights and benefits with respect to which the Borrower or other Loan Party has granted security interests or g other Encumbrances to or for the direct or indirect benefit of the Lender or has assigned as security or otherwise pledged to or for the direct or indirect benefit of the Lender pursuant to the Loan Documents. "Commonwealth"means the Commonwealth of Pennsylvania. 6 "Contract Rate" means either Wall Street Journal PrimeImus the applicable margin specified by the terms and conditions of the applicable Note. 11 ll "Debt Service Coverage Ratio" has the meaning given to that term in Sectio N� "Depository Account" means the depository account in the name of the Borrower, established and maintained with the Lender. "Encumbrance" means any mortgage, pledge, lien, security interest, charge or other encumbrance. "Environmental Indemnification Agreements" means the several Environmental Indemnification Agreements of even date herewith by and among G & C Associates, the Borrower and the Lender, on the one hand, and by and among Julie A. Cassidy and Michael J. i s t -2 - r Cassidy, the Borrower and the Lender, on the otherhand, with respect to each Mortgaged Property,together with any and all Supplements thereto. "Environmental Requirement" means any federal, state or local law, rule, regulation, judgment, decree, injunction or other agreement or restriction, whether public or private (including but not limited to any condition or requirement imposed by any insurer or surety company), now existing or hereafter created, issued or enacted and all amendments thereto, modifications thereof and substitutions therefor, which in any way pertains to human health, safety or welfare, Hazardous Materials, Hazardous Materials Contamination or the environment (including but not limited to ground, air, water or noise pollution or contamination, and underground or above ground tanks) and shall include without limitation, the Resource Conservation .and Recovery Act (the Solid Waste Disposal Act), 42 U.S.C. § 6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq. ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"); the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.; and the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. "Event of Default" and "Events of Default" shall have the meanings given to such terms in Section 11.1 hereof. "Fixed Rate Portion" means that portion of the principal amount outstanding from time to time under the Term Loan on which interest shall accrue at a fixed rate as specified in the Term Loan.Note. "Force Majeure" means and includes, without limitation, the following: acts of God; strikes; lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States or of the Commonwealth or any of their departments, agencies or officials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; fire; hurricanes; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery, transmission pipes or canals; partial or entire failure of utilities; acts of war; acts of terrorism; or any other cause or event not reasonably within the control of the person so affected, it being agreed that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the person so affected and such person shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is, in the judgment of such person, unfavorable to it. i "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified F Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be approved by a significant x -3 - i k segment of the accounting profession, which are applicable to the circumstances as of the date of determination, consistently applied. "Government Acts" shall have the meaning given to such term in Section 10.1 hereof. "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any court or arbitrator. "Guarantees" means the several Guaranty and Suretyship Agreements of even date herewith made, respectively, by each of the Guarantors for the benefit of the Lender, together with any and all Supplements thereto. "Guarantors" means, respectively, G & C Associates, a Pennsylvania partnership, its successors and assigns, and Julie A. Cassidy and Michael J. Cassidy, and their respective heirs and assigns. "Hazardous Materials" means any and all hazardous or toxic substances, wastes or materials which, because of their quantity, concentration, or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard or nuisance to human health, safety or welfare or to the environment when used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled, including without limitation, any substance, waste or material which is or contains asbestos, radon, polychlorinated biphenyls, urea I formaldehyde, explosives,radioactive materials or petroleum products. i "Hazardous Materials Contamination" means the contamination (whether presently existing or occurring after the Closing Date) of the improvements, facilities, soil, ground water, air or other elements on, in or constituting a part of, any Mortgaged Property by Hazardous Materials, or the contamination of the buildings, facilities, soil, ground water, air or other elements on, in or constituting a part of, any other property as a result of Hazardous Materials at any time(whether before or after the Closing Date) emanating from any Mortgaged Property. 3 "Indebtedness" means (i) all obligations for borrowed money, (ii) all obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations upon which interest charges are customarily paid.or accrued, (iv) all trade payables, (v) all obligations under conditional sale or other title retention agreements relating to property purchased, (vi) all obligations issued or assumed as the deferred purchase price of property or services (excluding trade payables incurred and paid in the ordinary course of business), (vii) the aggregate amount required in accordance with GAAP to be capitalized under leases as lessee, (viii) all obligations actual or contingent, in respect of letters of credit or banker's acceptances, (ix) all obligations in respect of interest rate hedging or similar agreements, and (x) all other obligations properly treated as a liability in accordance with generally accepted accounting principles. -4 "Lender" means Orrstown Bank, a state chartered bank organized and existing under the laws of the Commonwealth and its successors and assigns. "Loan" shall mean the Term Loan,as the context shall require. "Loan Agreement" means this Loan Agreement, together with any and all Supplements hereto. "Loan Documents" means this Loan Agreement, the Note, the Mortgage, the Security Agreement, the Guarantees, and any and all other documents which the Borrower or any other Loan Parry or their representatives, have executed and delivered, or may hereafter execute and deliver, to evidence or secure the Borrower's obligations under the Loan, together with any and all Supplements thereto. "Loan Party"means the Borrower or any Guarantor. "Mail" means United States first class mail, postage prepaid, certified, return receipt requested. "Mortgaged Property"has the meaning given to such term in the respective Mortgage. "Mortgage"means the mortgage placed on record in Cumberland County, Pennsylvania, collateralizing the Note. "Net Available Balance" means, subject to the Lender's policies pursuant to Federal Reserve Board Regulation CC (12 CFR Part 229) regarding availability of funds, on any Business Day, the end-of-day balance of the Depository Account, making allowance for checks that are presented for payment, incoming and/or outgoing wire transfers, new and maturing investments, and any other debit or credit activity. "Note" shall mean the Term Loan Note, as the context shall require. "Participant"has the meaning given to that term in Section 14.6. "Penalty Rate" means the rate per annum which is equal to the applicable Contract Rate Plus 3%per annum, f "Permitted Encumbrances" means (i) Encumbrances in favor of the Lender; (ii) other Encumbrances incidental to the conduct of business or the ownership of property and assets which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not materially impair the use thereof in the operation of business (including, without limitation, deposits, pledges or liens to secure the performance of bids, { tenders, contract's leases, public or statutory obligations,. surety or appeal bonds or other deposits, pledges or liens of a like nature given by Borrower in the ordinary course of business, -5 - and mechanic's, materialmen's, warehousemen's, carriers', landlord's or other like liens arising in the ordinary course of business with respect to obligations which are not overdue for a period longer than thirty (30) days or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with generally accepted accounting principles); (iii) liens for taxes or other governmental charges which are not delinquent or which are being contested in good faith and for which a reserve shall have been established in accordance with generally accepted accounting principles; (iv) any judgment lien stayed by appeal or, if not stayed by appeal, the judgment lien is not material and is covered by insurance maintained by Borrower and within policy limits; and (v) title exceptions identified in the attorney's title opinion required pursuant to Section 7.1(b) approved by the Lender. "Person" or "person" means any individual, firm, association, corporation, limited liability company,trust,partnership,public body or other entity. "Security Agreement" means the Security Agreement of even date herewith, by and between the Borrower and the Lender,together with any and all Supplements thereto. "Supplement" or"Supplements"means any and all extensions, renewals, modifications, amendments, supplements and substitutions. "Taxes" means all taxes, water rents, sewer rents, assessments and other governmental or municipal or public or private dues, charges and levies and any prior liens (including federal tax liens) for the Taxes which are or may be levied, imposed or assessed upon any Mortgaged Property or any part thereof, or any leases pertaining thereto, or upon the rents,issues, income or profits thereof, whether any or all of the aforementioned be levied directly or indirectly or as excise taxes or as income taxes. "Term Loan"means the Loan described in Article IV. "Term Loan Note" means a promissory note made by the Borrower and delivered to and for the benefit of the Lender, evidencing the Borrower's obligation to repay outstanding Advances under the Term Loan, and any and all Supplements thereto. "UCC" means the Uniform Commercial Code as in effect in the Commonwealth at the relevant time. i "Variable Rate Portion"means that portion of the principal amount outstanding from time to time under the Term Loan on which interest shall accrue at a variable rate as specified in the Term Loan Note. i F SECTION 1.2. Accounting Terms. Unless specifically provided otherwise, all accounting terms have the definitions given them in accordance with GAAP as applied to the applicable person on a. consistent basis by its accountants in the preparation of its previous g annual financial statements. -b- {p4 I SECTION 1.3. Rules of Construction. The words "hereof'. "herein", "hereunder", "hereto",and other words of similar import refer to this Loan Agreement in its entirety. The terms "agree" and "agreements" contained herein are intended to include and mean "covenant" and "covenants". References to Articles, Sections, and other subdivisions of this Loan Agreement are to the designated Articles, Sections, and other subdivisions of this Loan Agreement as originally executed. The headings of this Loan Agreement are for convenience only and shall not define or Emit the provisions hereof. All references made (a) in the neuter, masculine or feminine gender shall be deemed to have been made in all such genders, and(b) in the singular or plural number shall.be deemed to have been made,respectively, in the plural or singular number as well. ARTICLE II EFFECTIVE DATE OF LOAN AGREEMENT; DURATION OF TERM SECTION 2.1. Effective Date of Loan Agreement; Duration of Term. This Loan Agreement shall become effective on the Closing Date and shall continue in full force and effect, and shall not expire, until (a) all of the Borrower's obligations under the Loan Documents have been fully performed and satisfied, and (b) in the event that an Act of Bankruptcy has occurred either(i) a final order has been issued holding that the Lender is not required to return any funds it has received from the Borrower, or(ii) all statutes of limitation relating to Section 547 of the Bankruptcy Code have expired.o ARTICLE III Reserved ' s ARTICLE IV TERM LOAN SECTION 4.1. Term Loan. The Lender agrees, subject to the terms and conditions g contained in this Loan Agreement, to make the Term Loan to the Borrower at the Closing in an aggregate principal amount of up to $1,486,500.00 to refinance on the Closing Date. $ outstanding on borrowings from SECTION 4.2. Repayment and Interest. All Advances under the Term Loan shall be evidenced by and shall be repaid with interest at the applicable Contract Rate in accordance with - 7- the provisions of the Term Loan Note, the terms and conditions of which are incorporated herein by reference. The date and amount of each payment made by the Borrower shall be recorded by the Lender on the books and records of the Lender, but any failure to record such dates or amounts shall not relieve the Borrower of its duties to pay under the Loan Documents. All repayments shall be credited to the balances due under the Term Loan in accordance with the normal and customary practices of the Lender. Interest accrued under the Term Loan shall be computed on outstanding balances as reflected on the Lender's books and records. ARTICLE V ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO THE LOANS SECTION 5.1. Obligations Absolute. The obligations of the Borrower under this Loan Agreement shall be paid strictly in accordance with the terms of this Loan Agreement, under any and all circumstances whatsoever; including, without limitation, the following circumstances: (a) any invalidity or unenforceability of any Loan Document, or any other agreement or instrument related thereto or the transactions contemplated by this Loan Agreement; (b) any amendment or waiver of, or any consent to or departure from, the terms of any Loan.Document or any of the transactions contemplated by this Loan Agreement; (c) the existence of any claim, set-off, defense or other right which the Borrower may have at any time against the Lender or any other Person, whether in connection with this Loan Agreement, or any unrelated transaction; (d) any statement or any other document presented under this Loan Agreement proving to be forged, fraudulent, invalid or insufficient in any respect, or any statement therein being untrue or inaccurate in any respect whatsoever; (e) the surrender or impairment of any security for the performance or observance of any of the agreements or terms of this Loan Agreement; or (f) any other circumstance, happening or omission whatsoever, whether or not similar to any of the foregoing. The Borrower understands and agrees that no payment under any other agreement will release it from liability hereunder unless the Lender has been indefeasibly paid in full. SECTION 5.2. Fees and Expenses. (a) The Borrower agrees to pay to the Lender a commitment fee of $ 00.00 in consideration for Lender's commitment to make the Loans. a (b) The Borrower shall pay, or provide for the payment of, all fees, commissions, costs, charges, taxes and other expenses incurred by the Lender and by any of its agents, employees and representatives in connection with (i) making the Loans available to the t Borrower, (ii) the documentation and consummation of the transactions contemplated by the Loan Documents, including (without limitation), in all such cases, fees and expenses of the Lender's legal counsel, Borrower's counsel, fees and charges for surveys; title reports and title insurance, hazard, liability and other insurance, bond premiums, brokerage fees and commissions, mortgage taxes, transfer taxes and all filing and recording fees, charges, costs and taxes and appraisal fees, and (iii) the administration of the Loan Documents and the enforcement of all rights and remedies of the Lender thereunder, in all cases whether now payable or hereafter arising or becoming payable. In no event, however, shall any income taxes or franchise taxes of the Lender, measured by income, or taxes in lieu of such income taxes or franchise taxes be required to be paid by the Borrower. The provisions of this Section shall survive the expiration and termination of this Loan Agreement, SECTION 5.3. Lender's Right to Cure or Avoid Defaults Under Documents. The Lender, in its sole and absolute discretion, without any request therefor from the Borrower, and without waiving any of its rights hereunder, may (but shall have no obligation to do so) elect to cure or avoid any default by the Borrower under the Loan Documents by advancing or paying to any person any amount then due and owing by the Borrower to such person, for the account of the Borrower. The Lender shall provide the Borrower with notice prior to making any advance to cure or avoid a default by the Borrower under the Loan Documents; provided, however, that(a) no such prior notice shall be required it in the judgment of the Lender exercised in good faith, the delay attendant thereto could result in the impairment of any of the Collateral; (b) the Lender shall provide notice to the Borrower promptly following the making of any such advance if prior notice had not been given, and (c) any failure to provide any notice described in this sentence shall not result in the Lender suffering or incurring any liability or penalty, and the Lender shall accrue interest on the amount of such advance at the highest Penalty Rate then in effect. Any such advances made by the Lender to cure or avoid a default under the Loan Documents shall be deemed to be advances made by the Lender to the Borrower and shall be part of the Borrower's obligations under and secured by the Loan Documents. The Borrower hereby irrevocably and unconditionally authorizes the making of such advances, and promises and agrees to repay such advances in accordance with the provisions of Section 12.9 of this Loan Agreement. ' SECTION 5.4. Late Payments. In the event any payment required to be made by the Borrower in accordance with the provisions of this Loan Agreement or any Note is not paid within 30 days from the date on which the same is due and payable, such payment in default shall continue as an obligation of the Borrower, and such payment in default and the entire unpaid balance of all amounts owing hereunder shall bear interest, from the date on which the payment was due until such payment in default is paid in full, at a rate which is at all times equal to the Penalty Rate. In addition, the Borrower shall pay (a) a late charge in an amount equal to six percent (6%) of the amount of any payment which is made more than 15 days after the date on which the same is due and payable, and (b) all costs of collection, including reasonable attorneys' fees, if this Loan Agreement is referred.to an attorney for collection after default by the Borrower. SECTION 5.5. Increased Costs Due to Change in Law. If any change in any law, regulation or official directive of any international, federal, state or local governmental authority (whether or not having the force of law) or in the interpretation thereof by any court or c administrative agency or compliance by the Lender with any lawful request, law, regulation or directive from any applicable fiscal or monetary authority (whether.or not having the force of 3 law)shall either: i 4 -9 - $i 3 (a) impose, modify or render applicable any reserve, special deposit or similar requirement against any Loan or require the inclusion of any Loan in any analysis of minimum capital requirements or capital adequacy; or (b) subject the Lender to any tax with respect to any Loan or any amount payable under this Loan Agreement (other than a tax on the overall net income of the Lender) imposed by the United States of America or any state of the United States; or (c) impose on the Lender any other condition regarding this Loan Agreement, and the result of any such event shall be: (i) to increase the cost to the Lender of issuing or maintaining any Loan or any renewal thereof or of making, funding or maintaining the whole or any part of any Loan (which increase in cost shall be determined by the Lender's reasonable allocation of the aggregate of such cost increases resulting from such events); or (ii) to reduce. the amount of any sum received or receivable by the Lender under this Loan Agreement or to require the Lender to make any payment or forego any interest; or (iii) to reduce the rate of return on the Lender's capital as a result of making any Loan available and/or any renewals of any Loan (which reduction shall be determined by the Lender taking into consideration the Lender's policies concerning capital adequacy); then and in each such case, upon demand by the Lender, the Borrower shall pay to the Lender, from time to time as specified by the Lender, additional amounts which shall be sufficient to compensate the Lender for such increased cost, reduction, payment or foregone interest, together with interest on each such amount from the date demanded until payment in full thereof at the applicable Contract. Rate. A certificate as to each such increased cost, reduction, payment or foregone interest as a result of any such event, submitted in good faith by the Lender to the fr Borrower, shall be.conclusive evidence of such additional amounts to be paid by the Borrower l and the basis therefor, absent manifest error as to the amount thereof. 3 SECTION 5.6. Computation. All payments of interest, fees and other charges under this Loan Agreement shall be computed on the basis of a 360-day year factor applied to the actual number of days elapsed. i SECTION 5.7. Payment Procedure. All payments made by or on behalf of the Borrower under this Loan Agreement shall be made to the Lender in lawful money of the United r States of America at the time of payment and in immediately available funds at the Lender's offices at 77 East King Street, Shippensburg, Pennsylvania 17257, before 12:00 noon,prevailing Shippensburg, Pennsylvania time on the date when due. Lender shall have the right to i - 10- automatically debit Borrower's deposit accounts maintained with the Lender on the dates when such payments are due for the amounts then due. Any failure or delay by the Lender to timely make any such debit shall not relieve Borrower of its duties to pay under the Loan Documents. SECTION 5.8. Business Days. If the date for any payment hereunder is a day which is not a Business Day, then for all purposes of this Loan Agreement the payment then due shall be made on the next following Business Day, and such extension of time shall in each case be included in any computation of payments of interest. ARTICLE VI REPRESENTATIONS AND WARRANTIES SECTION 6.1. Representations and Warranties. The Borrower makes the following representations and warranties to induce the Lender to enter into this Loan Agreement and to make the Loans available to the Borrower, all of which shall be true, complete and correct as of the date of this Loan Agreement and the date of each Advance under the Loans, unless otherwise specifically provided: (a) Authority. The Borrower is a partnership, validly existing under the laws of the Commonwealth; has the power to enter into this Loan Agreement and the other Loan Documents entered into by it and the transactions contemplated hereunder and thereunder and to carry out its obligations hereunder and thereunder; by proper action has duly authorized the execution and delivery of.this Loan Agreement and each of the other Loan Documents executed and delivered by it; and is not in default under any of the provisions of the laws of the Commonwealth. f (b) Binding Agreements. This Loan Agreement and the other Loan Documents to which the Borrower is a party have been duly and properly authorized, executed, sealed and delivered by the Borrower, constitute valid and legally binding obligations of the Borrower, and are fully enforceable against the Borrower in accordance with their respective terms;provided, however, that the enforceability and binding nature of this Loan Agreement and the other Loan Documents are subject to bankruptcy, insolvency, reorganization and other state and federal laws affecting the enforcement of creditors' rights generally, and, to the extent that certain remedies under such instruments require, or may require, enforcement by a court of equity, such principles of equity as a court having jurisdiction may impose. i (c) Authorizations and Filings. No authorization, consent, approval, license, exemption or other action by, and no registration, qualification, designation, declaration or filing with any Governmental Authority is or will be necessary of advisable in connection with the execution of this Loan Agreement or any other Loan Document to which the Borrower is a party, consummation of the transactions herein or therein contemplated or performance of or compliance with the terms and conditions hereof or thereof,by the Borrower. i i; t - 11 i t (d) Litigation. There are no proceedings pending or, to the knowledge of the Borrower, threatened in writing before any court or administrative agency which may affect the authority of the Borrower to enter into this Loan Agreement or the other Loan Documents to which it is a party, or which, if adversely determined, would materially adversely affect the business, prospects or financial condition of the Borrower or its ability to fulfill its obligations under this Loan Agreement and the other Loan Documents to which it is a party. (e) No Conflicting_A,ereements Laws Etc. The execution, delivery and performance by the Borrower of this Loan Agreement and the other Loan Documents to which it is a party, or any other document required to be delivered hereby by the Borrower, do not constitute a violation or breach of or a default under its articles of incorporation or by-laws or any existing mortgage, indenture, contract, instrument or agreement binding on the Borrower or affecting its property, or any provision of law or order of any court binding upon the Borrower. (f) Financial Statements. All balance sheets, profit and loss statements and other financial information heretofore furnished to the Lender by the Borrower are true, correct and complete and present fairly the financial condition and results of operation of the Borrower, as at the date thereof and for the periods covered thereby, including contingent liabilities of every kind, in accordance with GAAP, which financial condition has not materially adversely changed since the date of the most recently dated balance sheet of the Borrower heretofore furnished to the Lender. i 3t (g) No Defaults, The Borrower is not in default under, or in violation of, nor will the execution, delivery or performance of this Loan Agreement, or the other Loan Documents to which it is a party, constitute a default under or violation of, any term of any agreement, ordinance, resolution, decree, bond, note, indenture, order or judgment to which the Borrower is subject or is a party, which default would be reasonably expected to have a material adverse effect on(i) the financial condition, operations, business, prospects or properties of the Borrower, (ii) the ability of the Borrower to perform its obligations under this Loan Agreement or any other Loan i Document to which it is a party, or(iii) the ability of the Lender to enforce this Loan Agreement and the other Loan Documents. The operations of the Borrower comply in all material respects with all laws, ordinances and regulations applicable to it and all permits,licenses, accreditations and or approvals,governmental or otherwise, necessary or appropriate for it to engage in its business as presently conducted and presently contemplated,have been obtained and are in full force and effect. (h) No Onerous Agreements. The Borrower is not a party to or bound by, nor are any of the properties or assets owned by it or used in the conduct of its business affected by, any agreement, ordinance, resolution, decree, bond,note,indenture, order or judgment, or subject to any charter or other restriction, which materially and adversely affects its business, assets or condition, financial or otherwise. 1 (i) Title to Assets. The Borrower has good and marketable title to all of its assets free and clear of all Encumbrances, except Permitted Encumbrances, and will defend such title against the claims and demands of all Persons. (j) Taxes. The Borrower has filed all returns and reports that are required to be filed by it in connection with any federal, state or local tax, duty or charge levied, assessed or imposed upon it or its property or withheld by it, including unemployment, social security and similar taxes, and all such taxes have been either paid or adequate reserves or other provisions have been made therefor. (k) No Margin Stock Purchases. No part of the proceeds of the Loan will be used directly or indirectly for the purpose of purchasing or carrying,or for payment in full or in part of Indebtedness which was incurred for the purpose of purchasing or carrying, any margin stock as such term is defined by Regulation U of the Board of Governors of the Federal Reserve System. (1) Employee Benefit Plans. Each employee benefit plan as to which the Borrower may have any liability complies in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), including minimum funding requirements, and (i) no Prohibited Transaction (as defined under Section 406 of ERISA) has occurred with respect to any such plan, (ii).no Reportable Event (as defined under Section 404 of ERISA)has occurred with respect to any such plan, (iii) the Borrower has not withdrawn from any such plan or initiated steps to do so, and(iv)no steps have been taken to terminate any such plan. (m) Solvency. As of the date hereof and after giving effect to the transactions contemplated by this Loan Agreement and the other Loan Documents,the Borrower's assets exceed its liabilities and the Borrower is and will be able to pay its debts as they mature. (n) Full Disclosure. All information heretofore furnished by the Borrower to the Lender in writing for purposes of or in connection with this Loan Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Borrower to the Lender will be, true and accurate in all material respects on the date as of which such information is stated or certified.. (o) No Misrepresentation No representation or warranty of the Borrower contained in this Loan Agreement or in any of the other Loan Documents contains a misstatement of a material fact or omits to state a material fact necessary to be stated in order to make the statements made not misleading in light of the circumstances under which they were made. ARTICLE VII CONDITIONS TO CLOSING i SECTION 7.1. Conditions to Closing. The obligation of the Lender to execute and deliver the Loan Documents and to make the Loan available to the Borrower shall be subject to the fulfillment of the following conditions precedent: z 3 -13 r (a) Delivery of Loan Documents. The Borrower shall have duly executed and delivered to the Lender all Loan Documents required by the Lender, all of which shall be in form and substance reasonably satisfactory to the Lender and its counsel. (c) UCC Searches. The Borrower shall have furnished to the Lender UCC, judgment and tax lien search reports (together with copies of all UCC-Is and UCC-3s identified therein), with respect to the Borrower and each Mortgagor showing that the Collateral is free from all liens and encumbrances(except Permitted Encumbrances). (d) insurance. The Borrower shall have furnished to the Lender evidence that the Borrower has insurance covering such risks under such limits as shall be reasonably required by the Lender. (e) Taxes and Assessments. The Borrower shall have furnished to the Lender evidence that all installments of general real estate taxes, special taxes or assessments, service charges, water and sewer charges, private maintenance charges, and other prior lien charges by whatever name called,then due and payable,have been paid in full as of the Closing Date. (f) Appraisals. The Borrower, at its expense,shall have delivered to the Lender an appraisal of each Mortgaged Property, in form and content acceptable to the Lender and conforming in all respects to applicable regulatory requirements relating to real estate lending and to the appraisal standards of the Lender.. (g) Payment of Costs by Borrower. The Borrower shall have paid all closing costs, recording fees and taxes, search and inspection fees and expenses, the reasonable fees and expenses of the Lender's counsel (and of counsel to each of the Lender's participants,if any) and all other costs and expenses incurred by the Borrower and by the Lender(and by each of the Lender's participants)in connection with preparation for and closing of the Loans. (h) No Adverse Change. No material adverse change shall have Occurred in the business, assets, operations, financial condition or business prospects of the Borrower or with respect to any of the Collateral. (i) Environmental Due Diligence The Bank shall have conducted a due diligence investigation. of each Mortgaged Property and determined, upon the basis thereof, that there is no Hazardous Materials Contamination with respect to either. Mortgaged Property. Depending upon the results of the investigation, the Lender shall have the right to require such further inspections, reports, security, representations or requirements as it, in its sole discretion, deems appropriate to protect its interests, and may modify the terms and conditions upon which the Lender would continue to be willing. to make the Loans available. The Lender shall have no obligation to accept any Mortgaged Property as Collateral, or to make any of the Loans available, if any Mortgaged Property is affected by Hazardous Materials Contamination. i - 14 (j) Flood Area Certificate The Lender shall have received certification,in form and substance acceptable to the Lender, that each Mortgaged Property is not located in an"area of special flood hazard" as that term is defined in the National Flood Insurance Act of 1968 (as amended and supplemented by the Flood Disaster Protection Act of 1973). ARTICLE VIII AFFIRMATIVE COVENANTS OF THE BORROWER SECTION 8. 1. Affirmative Covenants of the Borrower. Until the termination of this Loan Agreement, unless the prior written consent to do otherwise is obtained from the Lender, the Borrower will: (a) Financial Statements. Furnish to the Lender, as soon as available, but in no event later than the time specified: (i) annual financial statements of the Borrower prepared in accordance with GAAP, within one hundred twenty (120) days after the expiration of each of the Borrower's fiscal years, which financial statements shall be audited by a certified public accountant acceptable to.the Lender; (ii) quarterly company prepared financial statements of the Borrower, certified by the Borrower's chief financial officer, within thirty(30) days after the expiration of each of the.Borrower's fiscal quarters; (iii) annual budgets and forecasts of the Borrower, certified by the Borrower's chief financial officer, within thirty (30) days after the expiration of the preceding fiscal year;: (iv) annual federal income tax returns, together with all schedules thereto, of Commercial Realty Investments, within thirty (30) days of when timely filed; and (v) personal financial statements and annual- federal income tax returns, together with all schedules thereto, for each of Julie A. Cassidy and Michael J. Cassidy, within one hundred twenty (120) days after each calendar year end or, in the case of federal income tax returns, if an extension is filed, within thirty(30)days of any extension date, together with evidence of filing. (b) Other Information. Furnish to the Lender with reasonable promptness, such information, reports or statements as Lender may from time to time reasonably request. (c) Taxes and Claims. Pay and discharge or cause to be paid and discharged all Taxes prior to the date on which penalties attach thereto, and .all lawful claims which, if unpaid, might became a lien or charge upon any of the Collateral. The Borrower shall have the 3 I f 15 - � right to contest the validity of any tax, assessment, charge, levy or claim, by timely and appropriate proceedings, provided that the Borrower shall (i) give the Lender written notice of its intention to contest, (ii) diligently prosecute such contest, (iii) at all times effectively stay or prevent any official or judicial sale of the Collateral or any part thereof by reason of nonpayment of any such tax, assessment, charge, levy or claim, and (iv) establish reasonable reserves for such liabilities being contested if the Lender reasonably determines such reserves to be necessary. (d) Compliance with Laws. Comply with all applicable federal, state and local laws, rules and regulation and, without limiting the foregoing, obtain and maintain all permits, licenses, approvals and accreditations, governmental or otherwise, necessary or appropriate to engage in its business as presently conducted, subject to the Borrower's right to contest the validity or applicability of any of the foregoing, at its sole cost and expense, in good faith and by appropriate and diligent proceedings. (e) Books, Records and Inspections. Maintain appropriate books and records with respect to the Collateral and its businesses, and permit access by the Lender and its authorized representatives and employees to such books and records at the principal office of the Borrower during normal business hours, and to make inspections of the Collateral at reasonable times. The Lender shall have no obligation to make any such inspections nor any responsibility to the Borrower or any other Person for any deficiency,whether or not discovered by the Lender. (f) Existence. Maintain its existence as a partnership. (g) Insurance. Maintain or cause to be maintained insurance with companies reasonably acceptable to the Lender in such amounts and against such risks as the Lender reasonably may require, naming Lender as an additional insured, mortgagee or loss payee, as the case may be. (h) Deposit Accounts. Maintain its primary deposit relationship and cash management services with the Lender. (i) Notices. Furnish to the Lender prompt written notice if. (i) any indebtedness of the Borrower is declared or shall become due and payable prior to its stated maturity, or called and not paid when due; (ii) a default shall have occurred under any note or the holder of any such note, or other evidence of indebtedness, certificate or security evidencing any such indebtedness or any obligee with respect to any other indebtedness of the Borrower has the right to declare any such indebtedness due and payable prior to its stated maturity, (iii) there shall occur and be continuing an Event of Default; (iv) any material adverse change in the business, operations, condition (financial or otherwise) or prospects of the Borrower shall occur; (v) a proceeding by or before any Governmental Authority against or affecting the. Borrower shall be commenced or threatened which; if adversely decided, would have a material adverse effect on the business, operations; condition(financial or otherwise) or prospects of the Borrower or on its ability to perform its obligations under the Loan Documents; or (vi) any Hazardous s. - 16 - Materials or Hazardous Materials Contamination shall exist on either Mortgaged Property or any non-compliance with an applicable Environmental Requirement shall occur. 0) Further Assurance and Power of Attorney. Execute from time to time such other and further documents, including but not limited to promissory notes, security agreements, mortgages, financing statements, continuation statements, and the like which, in the opinion of the Lender or the Lender's counsel, may be reasonably necessary to perfect, confirm establish, reestablish, continue, or complete the Borrower's agreements under the Loan Documents, the security interests and other liens in the property of the Borrower intended to be granted to the Lender pursuant to the Loan Documents, and the purposes and intentions of this Loan Agreement, it being the .intention of the Borrower to provide hereby a full and absolute warranty of further assurance to the Lender, provided that the Borrower shall not be obligated under this Section to execute any document that could effect an amendment or modification of any term or condition of this Loan Agreement or any other Loan Document. If the Borrower fails to execute any document requested by the Lender to establish, reestablish, continue, complete, confirm or perfect any security interest or other lien in any property of the Borrower or collect any amount payable thereon, the Borrower hereby appoints the Lender or any officer of the Lender as its attorney in fact for purposes of executing such documents in its name,place and stead, which power of attorney shall be considered as coupled with an interest and irrevocable. ARTICLE IX NEGATIVE COVENANTS OF THE BORROWER SECTION 9.1. Negative Covenants of the Borrower. Until the termination of this Loan Agreement, without the prior written consent of the Lender, the Borrower will not, directly or indirectly: (a) Create Encumbrances. Create, incur, assume or suffer to exist any , Encumbrance of any kind upon the Collateral, whether now owned or hereafter acquired, except for Permitted Encumbrances. (b) Additional Indebtedness. Incur, or permit to exist, any Indebtedness for 3 borrowed money, except: (i) the Loans, (ii) other borrowings from the Lender made in the Lender's sole discretion; (iii) the Subordinated Debt; (iv) trade payables incurred in the ordinary course of business; and (v) deferred taxes; provided, however, that the ;incurrence of Indebtedness permitted to be incurred under this Section shall not release Borrower from complying with the covenants set.forth in Sections 9.1(1) and (in). (c). Combinations. Enter into any merger or consolidation, acquire any other business or substantially all of its assets, sell or lease or otherwise dispose of all or any substantial part of its assets; other than sales in the ordinary course of business, or liquidate or discontinue its normal operations with intention to liquidate. - 17- t z (d) Loans and Investments. Lend or advance money, credit or property to or invest in (by capital contribution, loan; purchase or otherwise) any firm, corporation, or other person. (e) Guarantees. Assume, endorse, be or become liable for or guarantee the obligations of any person or entity without the Lender's prior written consent, which shall not be unreasonably withheld, except the endorsement of negotiable instruments for deposit or collection in the ordinary course of business. (f) Dividends. Distributions and Transfers. Make distributions of its assets or income to its stockholders in redemption of any shares of its capital stock; pay dividends or make other distributions in respect of shares of its capital stock in any calendar year in excess of $800.,000 plus the amount required to fimd S corporation income taxes incurred by the Borrower's stockholders (provided,however,that the payment of dividends or other distributions permitted under this Section shall not release Borrower from complying Adth the covenants set forth in. Sections 9.1(1) and (m)); alter or amend its capital structure; or allow the transfer of ownership of any such shares. (g) Impairment of Collateral. Permit anything to be done that may impair the value of the Collateral. (h) Changes in Business. Make or permit to be made any material change in, the nature, character, name or conduct of its. business as conducted on the Closing Date, including the creation or acquisition of any subsidiary. (i) BankruptcX. File a petition in bankruptcy or permit a creditor to file an involuntary proceeding under any bankruptcy law against it. (j) Subordinated Debt. Directly or indirectly make payments of interest or principal on any part of the Subordinated Debt, cancel, set off or otherwise discharge any debt to the obligee of any Subordinated Debt, or transfer any other consideration in payment or discharge of any part of the Subordinated Debt,if an Event of Default shall have occurred and the Borrower shall have received written notice from the Lender that the Borrower is then prohibited from making any such payments, or pledge or transfer any collateral for any Subordinated Debt, or otherwise take or permit any action prejudicial to or inconsistent with the Lender's priority position over the obligee of any Subordinated Debt. (k) Prepayments of Indebtedness. Prepay or obligate itself to prepay, in whole or in part, any Indebtedness other than Indebtedness owing to the Lender. k (1) Receivables. Sell, assign, transfer or dispose of any of its accounts or notes E receivable,with or without recourse. Y (m) Management. Make any change in its management. - 18 - i ARTICLE X INDEMNIFICATION SECTION 10.1. Indemnification Under Loan Documents. In addition to all amounts payable hereunder, to the extent permitted by law, the Borrower hereby protects, indemnifies and holds harmless the Lender from and against, and hereby agrees to defend the Lender against, any and all claims, damages, losses, liabilities, costs or expenses whatsoever which the Lender may, at any time, sustain or incur by reason of or in consequence of or arising out of making the Loan available to or for the account of the Borrower, it being the intention of the parties that this Loan Agreement shall be construed and applied to protect and indemnify the Lender against any and all risks involved in making the Loan available to or for the account of the Borrower, all of which risks are hereby assumed by the Borrower including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful,of any present or future de jure or de facto government or governmental authority (all such acts or omissions, herein called "Government Acts"). Notwithstanding anything to the contrary herein contained, the Borrower shall have no obligation to indemnify the Lender from and against any liability incurred by the Lender arising solely out of the gross negligence or willful misconduct of the Lender. Nothing in this Section 10.1 is intended to limit the Borrower's repayment obligations under the Loan Documents. The provisions of this Section 10.1 shall survive the.termination of the Loan Documents. ARTICLE XI EVENTS OF DEFAULT AND REMEDIES SECTION 11.1. Events of Default Defined. The following shall be '"Events of Default" under this Loan Agreement, and the term "Event of Default" shall mean, whenever it is used in this Loan Agreement, any one or more of the following events: (a) Any representation or warranty made herein or any statement or representation made in any certificate, report or opinion (including legal opinions), financial statement or other instrument furnished in connection with this Loan Agreement or any of the other Loan Documents, proves to have been incorrect, false or misleading in any material respect when made; or (b) [Reserved]. (c) The Borrower fails to duly and promptly perform, comply with or observe any other term, covenant, condition or agreement contained in this Loan Agreement or any of the other Loan Documents, which failure remains unremedied for thirty (30) calendar days after ? written notice thereof shall have been given to the Borrower by the Lender; provided, however, if such failure be such that it cannot be corrected.within thirty(30) calendar days, it shall not be an Event of Default if, in the reasonable opinion of the Lender, the. Borrower is taking appropriate corrective action to cure the failure and if such failure will not impair the ability of i - 19- the Borrower to pay or perform its obligations under the Loan Documents. CBorrower grants to Bank the cross-c lateralization of all other collateral granted in any other Loans between Bank and Borrower; or (d) An Act of Bankruptcy occurs with respect to Borrower or Borrower becomes generally unable to pay its debts as they become due; provided, however, if an involuntary proceeding with respect to an Act of Bankruptcy is filed or commenced against the Borrower, the same shall not constitute an Event of Default if such proceeding is dismissed within ninety(90) calendar days from the date of such Act of Bankruptcy; or (e) An "event of default" or "Event of Default" occurs under any of the other Loan Documents (subject to such notice and the expiration of such grace or cure periods as may be provided for therein); or (f) Any judgment against the Borrower or any execution or attachment is levied against the Collateral or any part thereof, and such judgment, execution or attachment is not set aside, discharged, bonded against, or stayed within thirty (30) calendar days after the same is levied; or (g) The Borrower fails to comply with any requirement of any Governmental Authority having jurisdiction over the Mortgaged Properties or the Borrower's business activities within the time required by such Governmental Authority, or any proceeding is commenced or action taken to enforce any remedy for a violation of any requirement of a Governmental Authority or any restrictive covenant affecting the Mortgaged Properties or the Borrower's business activities or any part thereof, provided, however, such failure shall not be an Event of Default if it would not reasonably be expected to have a material adverse effect on (i) the financial condition, operations or business, prospects or properties of the Borrower, (ii) the ability of the Borrower to perform its obligations under any Loan Document to which it is a party,or(iii)the ability of the Lender the enforce the Loan Documents, and further provided that the Borrower is diligently contesting such requirement in good faith; or (h) Any amendment to any of the Loan Documents shall have been made by the Borrower without the prior written consent of the Lender; or (i) Notwithstanding the provisions of Section 12.5 hereof; if any material provision of this Loan Agreement at any time for any reason ceases to be valid and binding on the Borrower, or is declared to be null and void, or the validity or enforceability thereof is contested by the Borrower or any governmental agency or authority, or the Borrower denies that it has any or further liability or obligation under this Loan Agreement or any of the other Loan Documents;or i (j) If any state, federal, municipal or other governmental law, order, rule or regulation prohibits the Borrower from making any payment required by any Loan Document or would penalize the Lender if the Borrower makes such payment;or -20 - f (k) A breach by the Borrower of, or a demand for payment under, the terms, covenants or conditions of any agreements, loans or other transactions of the Borrower with the Lender, as the same may be amended, extended or refinanced from time to time, subject to such notice and the expiration of any applicable grace or cure period as may be required thereunder; or (1) Any obligation, other than an obligation arising under any of the Loan Documents, of the Borrower, whether as principal, guarantor, surety or other obligor, for the payment of Indebtedness, (i) shall become or shall be declared due and payable prior.to the expressed maturity thereof; (ii) shall not be paid when due or within any grace period for the payment thereof, or (iii) any holder of any such obligation shall have the right to declare such obligation due and payable prior to the expressed maturity thereof. SECTION 11.2. Remedies on Default. Whenever any Event of Default referred to in Section 11.1 hereof occurs, the Lender may take any one or more of the following remedial steps: (a) The Lender, at its option, may declare all amounts payable under this Loan Agreement and the other Loan Documents to be immediately due and payable, whereupon the same shall become immediately due and payable, by written notice to that effect given to the Borrower, without protest, presentment, or further notice or demand, all of which are expressly waived by the Borrower. Upon such declaration by the Lender, payment of all amounts due under this Loan Agreement and the other Loan Documents shall be made immediately by the Borrower and the Borrower hereby promises to pay such amounts immediately to the Lender. Upon payment in full of all of the obligations of the Borrower under the Loan Documents, whether contingent or otherwise, but only upon the expiration of this Loan Agreement, any remaining surplus of such funds held by the Lender as a result of payment pursuant to this Section 1.1.2(a) shall be retumed to the Borrower, unless otherwise agreed by the Borrower and the Lender. (b) The .Lender may take whatever action at law or in equity may appear necessary or desirable to collect the payments and other amounts then due and thereafter to become due or to enforce performance and observance of all of the obligations of the.Borrower under the Loan Documents, including, without limitation, any obligation, agreement or covenant of the Borrower under this Loan Agreement or the other Loan Documents. (c) The Lender, with or without resort to judicial process,may take such steps as the Lender deems appropriate to protect the Collateral from depredation or injury, including (without limitation) employment of watchmen or other protective services, and any expenses j incurred by the Lender in taking such :steps shall be paid by the Borrower to the Lender as provided in Section 12.9 hereof. i i. -21 - (d) The Lender may enter upon the Mortgaged Properties for the purpose of causing the obligations of the Borrower under the Loan Documents hereunder to be fulfilled, and for such purposes the Borrower hereby appoints the Lender as its lawful attorney-in-fact; with full power of delegation and substitution, to act for such purpose in the Borrower's names, and to perform any act and to execute and deliver all documents and instruments as may be appropriate for such purposes, it being specifically agreed that this power of attorney is a power coupled with an interest which cannot be revoked; and it is further agreed that any disbursement of funds for such purposes shall be deemed disbursements pursuant to this Loan Agreement and secured by the Collateral, and if it shall be necessary for the Lender to disburse amounts in order to accomplish such purposes, the Borrower agrees to reimburse the Lender for the amount of such excess together with interest thereon as provided in Section 12.9 hereof, and authorizes the Lender to apply funds received from the sale or rental of any portions of the Collateral to the payment of such amounts before the same are applied for any other purpose. Any action taken by the Lender hereunder may, in the Lender's sole discretion, be thereafter terminated or changed, and this Loan Agreement or any action taken hereunder shall in no way be construed as imposing any obligation upon the Lender to act or continue to act on the Borrower's behalf or to fulfill any obligation of the Borrower in connection with the Collateral. E (e) The Lender may proceed under the UCC (or under the Uniform Commercial Code of any other jurisdiction in which any Collateral may be located from time to ° time) as to all or any part of the Collateral, and in conjunction therewith exercise all of the rights, remedies and powers of a secured party under the UCC(or under the Uniform Commercial Code of any other jurisdiction in which any Collateral may be located from. time to time), including, without limitation, taking possession of the Collateral for the obligations of the Borrower under the Loan Documents without judicial process pursuant to Section 9-503 of the UCC. Upon the occurrence of any Event of Default hereunder, the Borrower shall assemble all of the security for the obligations of the Borrower under the Loan Documents, and make the same available to the 4 Lender. Any notification required by Section 9-504 of the UCC shall be deemed reasonably and i properly given if Mailed by the Lender to the Borrower at the address specified in Section 12.1 hereof at least 10 days before any sale or other disposition of the Collateral, or any portion thereof. Disposition of the Collateral, or any portion thereof, shall be deemed commercially reasonable if made pursuant to a public offering advertised at least twice in a newspaper of general circulation in the community in which the property is located. i (f) The Lender may exercise any and all remedies available to it under any of the other Loan Documents. f No action taken pursuant to this Section shall relieve the Borrower from any of its obligations under the Loan Documents, all of which shall survive any such action, and the Lender may take whatever action at law or in equity as may appear necessary and desirable to collect the payments and other amounts then due and thereafter to become due or to enforce the performance and observance of such obligations. Any amounts collected pursuant to action taken under this Section shall be paid over to the Lender and applied to the obligations of the Borrower under the Loan Documents. f 22 - SECTION 11.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Lender is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Loan Agreement or any of the other Loan Documents or now or hereafter existing at law or in equity or by statute.No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof,but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Lender to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. SECTION 11.4. Agreement to Pay Attorneys' Fees and Expenses. In the event the Borrower defaults under any of the provisions of this Loan Agreement, and the Lender employs attorneys or incurs other expenses for the collection of amounts due hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Borrower herein contained, the Borrower agrees that it will on demand therefor pay to the Lender the reasonable fees of such attorneys and such other expenses so incurred by the Lender. SECTION 11.5. Waiver of Event of Default: No Additional Waiver Implied by One Waiver. The Lender in its sole discretion may waive an Event of Default. In the event any agreement contained in this Loan Agreement or any other Loan Document is breached by the Borrower and thereafter waived (expressly or impliedly) by the Lender, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach. hereunder. Any forbearance (expressly or impliedly) by the Lender to demand payment for any amounts payable hereunder shall be limited to the particular payment for which the Lender forebears demand for payment and will not be deemed a forbearance to demand any other amount payable hereunder. ARTICLE XII MISCELLANEOUS SECTION 12.1. Notices. Except as. otherwise provided in this Loan Agreement, all notices, demands, requests, consents, approvals, certificates or other communications required under this Loan Agreement to be in writing shall be sufficiently given and shall be deemed to have been properly given (i) if delivered by hand, when written confirmation of delivery is received by the sender, (ii) three days after the same is Mailed, or (iii) if sent by overnight courier, 24 hours after delivery to such overnight courier, addressed to the person to whom any such notice, demand, request, approval, certificate or other communication is to be given, at the appropriate address for the Principal Office of such person designated below: d J Borrower: G&C Associates 18 Log Cabin Road d -23 - Newville,PA 17241 Attn: Michael J.•Cassidy ' with a copy to: Adam R. Schellhase, Esquire ' Salzmann Hughes, P.C. ' 79 St. Paul Drive ' Chambersburg, PA 17201 Lender Orrstown Bank 77 East King Street Shippensburg;PA' 17257 Attn: ' Any person listed'above may, by notice:given ihereunder, designate any further or different addresses to which subsequent coriimunications-shall be sent. SECTION.12:2. Prior Agreements Cancelled. -This Loan Agreement completely.and fully:supersedes all other prior agreements, bothwritten and'oral, between the Lender and the Borrower relating to the'matters set:forth herein and therein. SECTION 12.3. Filing: The security interests of the Lender contemplated by this Loan Agreement and the other' Loan. Documents shall be perfected by"the -filing 'of financing statements which fully comply with the UCC among.the land records maintained by the Offices Of the Recorder of Deeds,in'and,for Cumberland,County and Franklin County,Pennsylvania with respect to fixtures and in-the DeparCmerit of'Staie of the Commonwealth with respect to all other Collateral a security interest in which-maybe perfected by filing in such office: 'The parties farther agree that all necessary continuation statements shall,be filed-within,the time prescribed by the UCC in order to continue such security ihterests'.If, atariy tirire, any of the information. contained in any financing statement filed.in connection with the security interests created by this Loan Agreement or the other Loan Documents,'including'without limitation, the description Of any Collateral,.shall change in such manner as to cause such financing statement to become misleading' `in any"material respect or as may impair the perfection•of the security interests interided.tb be created"by this 'Loan Agreemer&br""tlie other Loan Documents, then the:Borrower hereby authorises and directs:the`Lender to prepare an'amendment to such financing statements as maybe necessary to continue the perfection of1he security interests-intended to be created by this Loan Agreement or'the other,Loan Documents;iand'file the same in any office where such amendment:is required to be filed' o, continuethe perfection of the'security interests 'intended to be created thereby.. The Borrower shall pay-all'costs and expenses,incurred by the Lender in connection with this'paragtaph SECTION 12.4.. Binding Effect.`-This'Loan'Agreement.shall inure to the benefit of and shall be'binding upon the Lender,the Borrower and their respective successors and assigns- _24- for carrying out the intention of the parties to, or facilitating the performance of, this Loan Agreement. SECTION 1.2.9. Right to Perform_ Advances by Lender. If the Borrower fails to make or cause to be made any payment, or fails to perform, observe or comply with any of its obligations under the Loan Documents, the Lender, without notice to the Borrower and without waiving any default or releasing the Borrower from any of such obligations, and without being under any obligation to do so, may make such payment or perform any of the obligations of the Borrower under the Loan Documents for the account of the Borrower, and may enter upon the Mortgaged Properties or any part thereof for that purpose and take all such action thereon as the Lender may consider necessary or appropriate for such purpose. All amounts so paid by the Lender and all costs, fees and reasonable expenses incurred by the Lender in connection with such payment or performance (including, without limitation, reasonable attorneys` fees and expenses) shall be immediately due and payable by the Borrower as additional payments, together with interest thereon from the date the same are paid or incurred at the highest Penalty Rate then available under this Loan Agreement until the same are paid in full by the Borrower. SECTION 12.10. Amendments.Changes and Modifications. This Loan Agreement may not be amended, changed, modified, altered or terminated except by a written instrument executed by the Lender and the Borrower. SECTION 12.11. Execution of Counterparts. This Loan Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 12.12. Law Governing Construction of Agreement. This Loan Agreement is prepared and entered into with the intention that the laws of the Commonwealth shall govern its construction. i SECTION 12.13. Effective Date. This Loan Agreement has been dated as of the date above written.solely for the purpose of convenience of reference and shall become effective upon its execution and delivery, on the Closing Date, by the parties hereto. All representations and warranties set forth herein shall be deemed to have been made on the Closing Date. SECTION 12.14. Conflicting Agreements. Whenever any duty or obligation is imposed upon the Borrower pursuant to the terms of any of the Loan Documents to which the Borrower is not a party, such duty or obligation shall be binding upon the Borrower to the same extent as if the Borrower were a party to such Loan Document,and the Borrower agrees to perform all of its duties and responsibilities thereunder. IN WITNESS WHEREOF, each of the parties hereto have caused this Loan Agreement to be executed under seal in its respective name and on its respective behalf by its duly authorized officer;all being done as of the day and year first above written. r -26 - BORROWER-- G ORROWER:G& C ASSOCIATES By: Michael J. as P er By: A. Cassidy,Partner LENDER: ORRSTOWN BANK By. Name/Title CoM�nt�c tai Co�� o �;cc� 3 'r -27 - i EXHIBIT B OPEN-END MORTGAGE AND SECURITY AGREEMENT This Open-End Mortgage and Security Agreement(the "Mortgage")is made as ofJune3O , 2010,by and between G&C ASSOCIATES, a Pennsylvania partnership, (hereinafter referred to as "Mortgagors"),and ORRSTOWN BANK(the "Mortgagee"). THIS MORTGAGE SECURES FUTURE ADVANCES INCLUDING ADVANCES FOR THE PROTECTION OF THE MORTGAGED PROPERTY OR THE LIEN OF THE MORTGAGE AND ADVANCES FOR EXPENSES INCURRED BY THE MORTGAGEE BY REASON OF DEFAULT. RECITALS Certain of the terms and conditions used in these Recitals and in this Mortgage are defined in Article I of that certain Loan Agreement of even date herewith by and between G & C ASSOCIATES, a Pennsylvania partnership (the "Borrower'') and the Mortgagee (as the same may hereafter be amended, extended, renewed, or supplemented from time to time, and including all replacements thereof,the"Loan Agreement''). Capitalized terms used herein but not defined herein shall have the meanings given to them in the Loan Agreement. The Mortgagee has agreed to make.a$1,486,500.00 Term Loan to the Borrower pursuant to the Loan Agreement As an inducement to the Mortgagee to make the Loan available to the Borrower, the Mortgagor has offered to grant to the Mortgagee a mortgage lien against the Mortgaged Property (hereinafter defined). As used in this Mortgage, the defined term "Obligations" shall mean: (a) any and all of the obligations arising under the Loan Agreement and the other Loan Documents, (b) any and all sums advanced by the Mortgagee to preserve or protect the Mortgaged Property and the value of the Mortgaged Property or to preserve, protect, or perfect the Mortgagee's mortgage lien and security interest in the Mortgaged Property, (c) any and all sums advanced,to be advanced,or which may be advanced by the Mortgagee pursuant to or under authorizations contained in this Mortgage and/or any other Loan Document, even if and to the extent such sums may exceed the stag principal amount of the any Note or all of the Notes in the aggregate, (d) in the event of any proceeding to enforce the collection of the Obligations, or any of them, after default, the expenses of retaking, holding, preparing for sale, selling or otherwise disposing of or realizing on any or all of the Mortgaged Property or of any exercise by the Mortgagee of the Mortgagee's rights upon an Event of Default, together with reasonable attorney's fees, expenses of collection,and court costs as provided in the. Loan Documents, and (e) any other indebtedness or liability of the Borrower to the Mortgagee, whether direct or indirect, joint or several, absolute or contingent, contemplated or uncontemplated,now existing or hereafter arising. - 2- GRANT NOW, THEREFORE, in consideration of said Obligations and to secure the payment, performance and observance thereof and in consideration of the further sum of One Dollar(S 1.00) unto it in hand well and truly paid by the Mortgagee at and before the sealing and delivery hereof, and intending to be legally bound hereby,the Mortgagors,by these presents, do grant, bargain, sell, alien, mortgage, demise, release, convey, assign, transfer, set over, give and confirm unto the Mortgagee,its successors and assigns: All those certain tracts or parcels of land situate in Shippensburg Township, Franklin County and Cumberland County, Pennsylvania, as more particularly bounded and described in Exhibit "A" attached hereto and by this reference made a part hereof(hereinafter, collectively, the "Land") together with the entire interest of the Mortgagors in and to all of the buildings, structures, improvements, and replacements of any nature whatsoever now standing, or at any time hereafter constructed or placed upon the Land(the "Improvements") TOGETHER WITH all and singular the public and private streets, lanes, alleys, passages, ways, rights, liberties, privileges, hereditaments and appurtenances whatsoever providing access, ingress, egress and regress from public streets in and to the Land and the Improvements thereto belonging or in any way appertaining, and the reversion or reversions, remainder and remainders,income,rents,issues and profits thereof, and all the estate,right,title, interest,property, claim and demand whatsoever of the Mortgagors relating to the Land and Improvements, in law and equity, or otherwise,in and to the same. f AND TOGETHER WITH all easements, rights of way, privileges, and appurtenances thereunto belonging or in any way appurtenant, and all of the right,title,interest, estate, or claim of the Mortgagors in or to the waters, water courses, all riparian rights, liberties, privileges, hereditaments and appurtenances adjoining, or adjacent to the Land, (all of which,together with the t .Land and Improvements, shall be collectively hereinafter referred to as the"Real Property",whether 3 now existing or hereafter acquired. t AND TOGETHER WITH allplantequipment, apparatus, machinery, s, appliances, furniture, furnishings, fixtures and other chattels and personal property and replacements thereof, and now or at any time hereafter affixed or attached to, incorporated in,placed upon, or in any way used in connection with the current or future utilization, enjoyment, occupation, or operation of the Real Property as well as all building and construction materials and supplies of every kind, nature and description owned by the Mortgagors and located on, at, or about the Real Property, whether or not yet incorporated into any building, structure, or improvement,or located elsewhere and not as yet delivered to the Real Property, which are intended to be used for the purpose of -3 - p r" erecting, renovating, restoring, or repairing any building, structure, or improvement on the Real Property(hereafter collectively, the "Fixtures"), all of which the Mortgagors declare to be fixtures and permanent additions to the Real Property. AND .TOGETHER WITH all rights, benefits, profits, rents, and monies payable under, by reason of, or with respect to any restrictive covenants, easements, agreements applicable to adjoining lands, or contracts of sale with respect thereto, and all proceeds and products thereof,with the right to: (a)collect any sums of money at any time payable to the Mortgagors in consequence of such rights and benefits, including the release, modification, or amendment thereof, for application to the Obligations, and (b) utilize any collection or enforcement rights or remedies to collect the same which may be available to the Mortgagors under law. AND ALSO TOGETHER WITH: (a) all of the proceeds of the voluntary or involuntary conversion of the Real Property or any part of the aforementioned Real Property into cash or liquidated claims, whether by way of condemnation, insured casualty, judgment or otherwise, as well as a security interest which is hereby granted to the Mortgagee in the same, (b) all rents, profits, and benefits, including any deposits of tenants to secure payment of the same and performance of the terms and conditions of any oral or written lease, with respect to the'leasing of all or any portion of the Real Property, with'the right to collect such rents,profits, and benefits at. any time for application to the Obligations and to utilize any collection or enforcement rights or remedies which may be available to the Mortgagors under law or any written lease;but without any duty or obligation to perform on behalf of the Mortgagors any of the Mortgagors' duties or obligations_to any lessee, (c) all revenues and profits, accounts receivable', insurance payments or proceeds and all other sources whatsoever and the proceeds thereof, and contract rights,.including any deposits of purchasers to secure payment of the contract price and performance of the terms and conditions of any contract of sale for the Real Property, with the right to collect the same at any time for application to the Obligations and to utilize any collection or enforcement rights or remedies which may be available tdthe Mortgagors under law or any contract of sale, but,without any duty or obligation to perform on behalf of the Mortgagors any of the Mortgagors' duties 'or obligations'to any purchaser of the Real Property and (d) all other property or interests in property now owned or hereafter acquired by Mortgagor which now or: hereafter may come into the possession, custody or control of the Mortgagee in any way or for any purpose (whether safekeeping, deposit, custody, pledge, transmission, collection or otherwise) including, without limitation, "deposit accounts" as defined in the Uniform Commercial Code as in effect in the R Commonwealth of Pennsylvania(all hereinafter collectively the"Personalty"). r t All of the aforementioned Real Property, Fixtures, Personalty and other rights and benefits and all other property described in.the above stated granting clauses of this Mortgage are hereafter ; referred to collectively as the Mortgaged.Property.(the"Mortgaged`Property"). ' j TO HAVE AND TO HOLD the Mortgaged Property to the. Mortgagee, and the Mortgagee's successorsand assigns to and for the proper use and behalf,of the Mortgagee and.its 1 -4- t 1 conditions, representations and warranties of this Mortgage. All representations, warranties and covenants of Mortgagors contained therein shall survive the closing of the transactions contemplated by the aforesaid Recitals and shall remain continuing obligations,representations and warranties of Mortgagors during any time any Obligation remains outstanding or unsatisfied. Section 2.3 - Taxes and Expenses. The Mortgagors shall pay and discharge, when and as the same come due, all taxes of every kind and nature, real and personal; all general and special assessments and levies; all water, sewer and other utility charges, rents, and assessments; and any and all other public charges, dues, levies, impositions, or assessments of a like or different nature, imposed upon or assessed against the Mortgaged Property or the rents, issues, income or profits thereof, and which are or may become liens against the same, as well as any ground rent to which the Real Property may be subject, and the Mortgagors shall not permit to exist any lien or security interest for taxes, assessments, levies, fees, ground rents and public charges other than (a) Iiens for taxes, assessments, levies, fees, rents, ground rents, and public charges not yet delinquent, and(b)liens and security interests which the Mortgagee has specifically and in writing consented to the existence of and with respect to which the Mortgagors have paid currently all sums secured thereby. The Mortgagors shall,upon the request of the Mortgagee deliver to the Mortgagee receipts evidencing the payment of all such taxes, assessments, levies, fees, rents, ground rents, and public charges imposed upon or assessed against the Mortgaged Property, or the revenues, rents, issues, income, or profits thereof, as well as the payment of the hereinbefore listed senior or superior liens, encumbrances and security interests and any other lien with respect to which the Mortgagee may have consented. Notwithstanding the foregoing, nothing contained herein shall be interpreted to require the Mortgagee to pay any such tax, assessment, levy,fee,rent, ground rent,or public charge so long as Mortgagors are contesting its validity in good faith by appropriate proceedings, notice thereof is promptly provided to the Mortgagee and the lien of the Mortgagee, in the sole opinion of the Mortgagee,will not be impaired by said proceedings. Section 2.4-Insurance. (a) The Mortgagors shall keep or require any lessee to keep such insurance coverages as are specified in the Loan Agreement. (b) The Mortgagors shall promptly give written notice of any casualty affecting the value of the Mortgaged Property to the Mortgagee. Mortgagee may make proof of loss if not promptly done by Mortgagors: Any adjustment of a proof of loss shall require written consent of Mortgagee. The proceeds of all insurance on the Mortgaged Property shall be applied as follows: (i) The Mortgagors may, if the Mortgaged Property is totally destroyed by fire, flood, windstorm or other casualty so as to render the Mortgaged Property unsuitable for Mortgagors' continued use, have the option of not replacing, restoring or repairing the damage, but in lieu of such replacement, restoration or repair, apply the full b a — 7— } i proceeds of such insurance on the Mortgaged Property toward the prepayment of the amounts secured hereby (any excess proceeds to be paid to Mortgagors); or (ii) If the Mortgagors do not elect to prepay the amounts secured hereby in full as provided in subparagraph (i) above, or if the Mortgaged Property is not totally destroyed, the proceeds of all such insurance shall be held by the Mortgagee in a separate insurance loss account until such time as Mortgagors shall have delivered to Mortgagee for its approval and to its satisfaction, sufficient plans, specifications, and contracts containing a detailed breakdown of the costs to replace, restore or repair the damage. Thereafter, the Mortgagee will, upon delivery to it of a certificate of the Mortgagors setting forth the costs theretofore incurred or paid, subject to Mortgagee's inspection and acceptance of the replacement, restoration, or repair of the damage, apply so much as may be necessary of the proceeds of such insurance toward the payment of the costs of such replacement, restoration or repair. If said proceeds are not sufficient to pay in fall the costs of such replacement, restoration or repair, the Mortgagors will nonetheless complete or cause to be completed the work thereof and will pay such excess cost prior to requesting Mortgagee to apply any of the proceeds of such insurance to the cost of such replacement, restoration or repair. Any balance of said proceeds of insurance remaining after the payment of all costs of such replacement, restoration or repair shall be applied toward the prepayment of the amounts secured hereby. If said amounts shall have been paid in full, any further balance of said proceeds of insurance shall be paid to the Mortgagors. All policies of insurance contemplated by this Mortgage, and all renewals thereof, are hereby assigned to Mortgagee as additional security for the Obligations hereby secured, and Mortgagors hereby agree that, if an Event of Default hereunder shall have occurred and be continuing, any amounts available thereunder upon cancellation or termination of any such policies or renewals, whether in the form of return of premiums or otherwise, shall be payable to Mortgagee as assignee. thereof. If Mortgagee becomes the owner of the Mortgaged Property, or any part thereof, by foreclosure or otherwise, such policies, including all right, title and interest of Mortgagors thereunder, shall become the absolute property of Mortgagee. { - 8 - � Section 2.5 - Escrow. In the event the Mortgagors shall not have timely paid, or cause to have been paid, any tax or insurance premium as provided by Sections 2.3 and 2.4, respectively,the Mortgagee may,upon prior written notice to the Mortgagors,require the deposit by the Mortgagors with the Mortgagee of amounts sufficient to discharge the obligations of the Mortgagors for: (a) the payment of taxes, assessments, levies, fees, rents, and other public charges imposed upon or assessed against the Mortgaged Property or the revenues, rents, issues, income, or profits thereof, as provided in Section 2.3; or(b)the payment of the premiums for fire, casualty,and other hazard insurance and flood insurance, as provided by Section 2.4; for the purpose of providing a fund to assure the payment of the aforesaid expenses when and as they come due. The determination of the amounts so payable and the times such amounts are to be deposited with the Mortgagee shall be made by the Mortgagee in its sole and absolute discretion. Such amounts shall be applied to the payment of the obligations in respect to which such amounts were deposited or, at the option of the Mortgagee, to the payment of such obligations in such order of priority as the Mortgagee shall be applied to the payment of the obligations in respect to which such amounts were deposited or, at the option of the Mortgagee, to the payment of such obligations in such order of priority as the Mortgagee shall determine, on or before the date they become delinquent. If the Mortgagee determines prior to the due date of any of the aforementioned obligations that the amount then on deposit shall be insufficient for the payment of such obligations in full, the Mortgagors, within ten (10) calendar days after demand, shall deposit the amount of the deficiency with the Mortgagee. The contrary notwithstanding, the Mortgagee shall retain the right under the provisions of this Mortgage to pay any such amount and to add the amount so paid together with interest at the Penalty Rate provided in the Term Loan Note. In the event any other payment required to be made by the Mortgagors under any of the Loan Documents should be insufficient,the r amounts held in escrow may be applied by the Mortgagee to such amounts. t Section 2.6 - Advancements. If the Mortgagors should fail to perform any of the covenants contained in this Mortgage or to protect or preserve the Mortgaged Property or the status and priority of the lien and security interest of this Mortgage, the Mortgagee, without notice, may make advances to perform the same on behalf of the Mortgagors or to protect or preserve the Mortgaged Property or the status and priority of the lien and security interest of this Mortgage, and all sums so advanced shall immediately upon advancement become a lien and security interest upon the Mortgaged Property and shall be secured by this Mortgage. The Mortgagors shall repay on demand all sums so advanced on the Mortgagors' behalf, plus any reasonable expenses or costs incurred by the Mortgagee, including reasonable attorneys' fees, with interest thereon at the.Penalty Rate provided for in the Loan Agreement. The provisions of this Section shall not be construed to prevent the institution of foreclosure or other rights and remedies of the Mortgagee in the event of a default by the Mortgagors. The contrary notwithstanding, the authorization contained in this Section shall impose no duty or obligation on the Mortgagee to perform any action or make any advancement on behalf of the Mortgagors and is for the sole benefit and protection of the { Mortgagee. Section 2.7 -Condition and Use of Improvements. The Mortgagors shall not at any time abandon the Mortgaged Pro e Property,nor commit any waste on the Mortgaged Property,nor make i -9 - f V any change in the use of the Mortgaged Property. The Mortgagors shall at all times maintain and keep the Mortgaged -Property in good operating order and 'condition,'ordinary wear and tear excepted, and will promptly make, from time to time,all repairs,renewals,replacements, additions, and improvements in connection therewith which are needed or desirable. 'The Mortgagors shall fully and strictly comply with all statutes, ordinances, rules, regulations, or laws affecting the Mortgaged Property or the use thereof. The Improvements shall not be removed,'demolished or substantially altered, nor shall any non-obsolete Fixtures be removed therefrom, without the prior written consent of the Mortgagee, except where appropriate replacements, free of superior title, liens, security interests, or claims, are immediately made of a value at least equal to the value of the Fixtures removed. The Mortgagors shall permit the Mortgagee; or its agents or employees, at all reasonable times to enter and inspect the Mortgaged Property. Section 2.8-Title to Real Property; Liens. The Mortgagors shall at all times during the term of this Mortgage maintain, good and marketable fee simple title to the Mortgaged Property free and clear of any and all liens, charges, restrictions; encumbrances, security interests and adverse claims whatsoever, excepting Permitted Encumbrances. Section 2.9 - Transfer or Encumbrance. Title to all or any portion of the Mortgaged Property shall not be acquired by any person, individual, partnership, association or corporation, other than the Mortgagors, by voluntary or involuntary conveyance, transfer, grant or assignment, by operation of law, or in any other manner, or become encumbered or charged with a lien or security interest of any kind or variety, whether voluntary or involuntary, including any mechanic's or materialmen's lien or judgment lien, seniorjunior or of equal priority to the lien and security interest of this Mortgage. The contrary notwithstanding, in the event that the ownership of the Mortgaged Property becomes vested in a person,individual,partnership; association,or corporation other than the Mortgagors, the Mortgagee may, without notice to the Mortgagors, deal with such i successor or successors in interest with reference to this Mortgage and the indebtedness secured by it in the same manner as'with the Mortgagors, and any,extension of the time of the indebtedness or any other modifications of the tem"i.s of the indebtedness at the'instance of the then owner of the Mortgaged Property shall not relieve the Mortgagors of the Mortgagors' liability on the Obligations hereby secured or from the performance of any the covenants and agreements contained herein or anof the covenants terms conditions Y , , provisions, representations.or warranties contained in the Loan Documents to which Mortgagors are parties,whether the eictension'or.modification be made with or without the consent of the Mortgagors. 3 Section 2.10 - Condemnation. The Mortgagors; immediately upon obtaining knowledge of the institution of any proceedings for the condemnation of the Real Property or any portion thereof shall notify,the.Mortgagee of the pendency of such proceedings. The Mortgagee t may participate in any such proceedings and theMortgagors from time to time shall deliver to the Mortgagee all instruments requested by it to permit such participation.. In the event of such 3 condemnation proceedings,the award.or compensation payable is hereby assigned and shall be paid to the Mortgagee as its interests may appear'for,application to and"reduction of the Obligations as ' provided in this Mortgage. The Mortgagee shall be under no obligation to question the amount of - 10- established or intended to be established by this Mortgage, except and only to the extent the Mortgagee may have specifically and in writing consented to the existence of a senior lien or security interest. Section 2.15 - Security Agreement. Mortgagors grant a security interest to Mortgagee in the Fixtures and Personalty. This Mortgage shall constitute a security agreement from the Mortgagors to the Mortgagee under the Uniform Commercial Code as in effect in the Commonwealth of Pennsylvania, as amended. The Mortgagors do hereby appoint the Mortgagee as the Mortgagors' attorney-in-fact for the purpose of filing with the local and central filing offices such financing or continuation statements as may be reasonably required in the Mortgagee's sole opinion to perfect or continue as perfected the security interest created by this Mortgage. The power of attorney hereby given by the Mortgagors to the Mortgagee shall be deemed to be a power of attorney coupled with an interest. ARTICLE III EVENTS OF DEFAULT The occurrence of any of the following events shall constitute events of default (hereafter, "Events of Default") under this Mortgage and shall entitle the Mortgagee to exercise all rights and remedies provided by applicable laws or as otherwise set forth in Article N of this Mortgage: Section 3.1 - Failure to Pay. The failure of Mortgagors to make any payment whatsoever required under this Mortgage when such payment is due. Section 3.2 - Failure to Perform. The failure of Mortgagors, after thirty (30) days written notice thereof, to perform or observe any of the terms, covenants, conditions and provisions in this Mortgage;provided,however, if such failure be such that it cannot be corrected within thirty (30) days, it shall not be an Event of Default if, in the reasonable opinion of the Mortgagee, the Mortgagors.are taking appropriate corrective action to cure the failure and if such failure will not impair the ability of the Mortgagors to perform or observe any such terms, covenants, conditions or provisions. Section 3.3 - Insolvency or Bankruptcy. An Act of Bankruptcy(hereinafter defined) shall occur with respect to Mortgagors;provided,however, if a proceeding with respect to an Act of Bankruptcy is filed or commenced against Mortgagors, the same shall not constitute an Event of Default if such proceeding is dismissed within ninety (90) days from the date of such Act of Bankruptcy. The term "Act of Bankruptcy," as used herein, shall mean the filing of a petition in bankruptcy under the United State Bankruptcy Code, 11 U.S.C. § 101 et sea., and all future acts supplemental thereto or amendatory thereof, or the commencement of a proceeding under any other # applicable law concerning insolvency,reorganization or bankruptcy,by or against the Mortgagors. - 12- Section 3.4 - Failure to Perform Under Other LoanDocuments. The occurrence of an Event of Default as defined in any other Loan Document, subject to the giving of such notice and the expiration of such cure period,if any,as may be required therein. Section 3.5 - Unauthorized Transfer. The transfer, conveyance or other disposition Of title to,possession of or equitable interest in the Mortgaged Property or any portion thereof. Section 3.6 - Default Under Liens. The occurrence of a material default under any document or instrument creating a lien or security interest in the Mortgaged Property, whether senior or superior,junior,or of equal priority to the lien and security interest of this Mortgage. Section 3.7 Cross Default. The breach by Mortgagors of, or a demand for payment under,the terms, covenants or conditions of any agreements, loans or other transactions of the Mortgagors with the Mortgagee, subject to such notice and any applicable grace or cure period as may be required thereunder. Section 3.8—Notice Limiting Indebtedness Secured. The Mortgagors or any other obligor or guarantor of any of the Obligations shall deliver or cause to be delivered to the Mortgagee a notice pursuant to 42 Pa. C.S. §8143 electing to limit the indebtedness secured by this Mortgage. ARTICLE IV d RIGHTS ON EVENT OF DEFAULT Section 4.1 - Acceleration: Judemen • Foreclosure. Upon the occurrence of an Event of Default, and at all times thereafter: (a) Mortgagee shall have the right to accelerate all Obligations pursuant to the terms of the Loan Documents and to enforce its rights under this Mortgage and the other Loan Documents by exercising such remedies as are available to Mortgagee under applicable law, either by suit or in equity or action at law, or both, whether for specific performance of any provision contained in this Mortgage or any of the other Loan Documents or in aid of the exercise of any power granted in this Mortgage or the other Loan g Documents. x (b) Mortgagee shall have the right to obtain judgment for the Obligations (including all costs and expenses of collection and suit, including any bankruptcy or insolvency proceeding affecting Mortgagors, and reasonable attorneys' fees incurred in connection with any of the foregoing), together with interest on such judgment { - 13 - F { at the Penalty Rate provided in the Term Loan Note, until payment in full is received by Mortgagee and Mortgagee shall have the right to obtain execution upon the Mortgaged Property on account of such judgment. (c) Mortgagee shall have the right to institute an action of mortgage foreclosure against the Mortgaged Property or take such other action for realization on the security intended to be provided under this Mortgage as applicable law or the provisions of the Loan Documents may allow. Section 4.2-Collection of Income. Upon the occurrence of an Event of Default and at all times thereafter, Mortgagee may, at any time without notice, either in person, by agent or by a receiver appointed by a court, and without regard to the adequacy of any security for the Obligations, enter upon the. Mortgaged Property and, with or without taking possession of the Mortgaged Property, and with or without legal action, collect all rents, income, receipts, revenues, security deposits, escrow accounts, reserves, issues, profits, awards, and payments of any kind payable under leases or otherwise arising from the Mortgaged Property(collectively, the "Income") (which terms shall also include amounts determined by Mortgagee as fair rental value for use and occupation of the Mortgaged Property by any person,including Mortgagors) and,after deducting all costs of collection and administration expense including attorneys' fees and reasonable reserves, apply the net Income to any of the Obligations in such order and amounts as Mortgagee in its sole discretion may determine, or any of the following in such order and amounts as Mortgagee in its sole discretion may elect: the payment of any sums due, or accumulation of necessary reserves in connection with (a) the preservation and protection of the validity and priority of the lien of this Mortgage; (b) the preservation and protection of the Mortgaged Property; (c) compliance with legal requirements; and (d) fulfilling any obligations of Mortgagors or any other obligor or guarantor under the Permitted Encumbrances,leases for all or a part of the Mortgaged Property,this Mortgage or the other Loan Documents. Mortgagee shall not be accountable for more monies than it actually receives from. the Mortgaged Property nor shall it be liable for failure to collect the Income. Mortgagee shall have the right to determine the method of collection and the extent to which enforcement of collection of Income shall be prosecuted and Mortgagee's judgment shall be deemed conclusive and reasonable. Section 4.3 - Possession. Upon the occurrence of an Event of Default and at all times thereafter, Mortgagee may, with or without legal action, take possession and control of the Mortgaged Property to the exclusion of Mortgagors and all others excepting only those claiming under Permitted Encumbrances. Mortgagee shall have the authority while so in possession to insure (at Mortgagors' expense) against all risks by reason of having taken such possession and Mortgagors will transfer and deliver to the Mortgagee all policies of insurance upon the Mortgaged Property not theretofore transferred and delivered to the Mortgage. FOR THE PURPOSE OF OBTAINING POSSESSION OF THE MORTGAGED PROPERTY UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, MORTGAGORS HEREBY I - 14- AUTHORIZE AND EMPOWER ANY ATTORNEY OF ANY COURT OF RECORD IN THE COAJAIONWEALTH OF PENNSYLVANIA OR ELSEWHERE AS ATTORNEY FOR MORTGAGORS AND ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGORS. TO SIGN AN AGREEMENT FOR ENTERING IN ANY COMIPETENT COURT AN AMICABLE ACTION IN EJECTMENT FOR POSSESSION OF THE MORTGAGED PROPERTY AND TO APPEAR FOR AND CONFESS JUDGMENT AGAI ST MORTGAGORS, AND ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGORS IN FAVOR OF MORTGAGEE FOR RECOVERY BY MORTGAGEE OF POSSESSION THEREOF, FOR WHICH THIS MORTGAGE OR A COPY THEREOF VERIFIED BY AFFIDAVIT. SHALL BE SUFFICIENT WARRANT,• AND THEREUPON A WRIT OF POSSESSION MAY BEWEDIATELY ISSUE FOR POSSESSION OF THE MORTGAGED PROPERTY. WITHOUT ANY PRIOR )FRIT OR PROCEEDING WHATSOEVER AND WITHOUT ANY STAY OF EXECUTION. IF FOR ANY REASON ' AFTER SUCH ACTION HAS BEEN COMMENCED IT SHALL BE DISCONTINUED OR POSSESSION OF THE MORTGAGED PROPERTY SHALL REMAIN IN OR BE RESTORED TO MORTGAGORS,MORTGAGEE SHALL HAVE THE RIGHT FOR THE f SA,NIE EVENT OF DEFAULT OR ANY SUBSEQUENT EVENT OF DEFAULT TO BRING ONE OR MORE FURTHER AMICABLE ACTIONS AS ABOVE PROVIDED TO RECOVER POSSESSION OF THE MORTGAGED PROPERTY. MORTGAGEE MAY K BRING AN AAHCABLE ACTION IN EJECTMENT BEFORE OR AFTER THE INSTITUTION OF PROCEEDINGS TO FORECLOSE THIS MORTGAGE OR TO ENFORCE ANY LOAN DOCUMENT OR AFTER ENTRY OF JUDGMENT THEREON OR ON ANY LOAN DOCUMENT, OR AFTER A SHERIFF'S SALE OF THE MORTGAGED PROPERTY IN WHICH MORTGAGEE IS THE SUCCESSFUL BIDDER IT BEING THE UNDERSTANDING OF THE PARTIES THAT THE AUTHORIZATION TO PURSUE SUCH PROCEEDINGS FOR OBTARgING POSSESSION IS AN ESSENTIAL PART OF THE REMEDIES FOR ENFORCEMENT OF THIS MORTGAGE i AND THE OTHER LOAN DOCUMENTS AND .SHALL SURVIVE ANY EXECUTION SALE TO MORTGAGEE. BY AGREEING THAT MORTGAGEE MAY CONFESS JUDGMENT HEREUNDER MORTGAGORS, FOR THEMSELVES AND ANY OTHER PERSONS OR ENTITIES NOW OR HEREAFTER IN POSSESSION OF ALL OR ANY PART OF THE MORTGAGED PROPERTY. WANE THE RIGHT TO NOTICE IN A PRIOR JUDICIAL PROCEEDING TO DETERMINE THEIR RIGHTS AND LIABILITIES AND THE OPPORTUNITY TO RAISE ANY DEFENSE SET OFF, COUNTERCLAIM OR OTHER CLAIM AGAINST SUCH ACTION BY MORTGAGEE. Section 4.4 - Repossession. Upon the occurrence of an Event of Default and at all times thereafter, Mortgagee shall have the right to-take possession of any portion of the Mortgaged Property constituting fixtures or other personal property subject to the Uniform Commercial Code as in effect in the Commonwealth.of Pennsylvania, as amended, and any records pertaining thereto. Mortgagee shall have the right to use, operate, manage, lease or otherwise control the Mortgaged = 15 - i Property in any lawful manner and, in its sole discretion but without any obligation to do so, insure, maintain, repair, renovate, alter or remove such Mortgaged Property; use, in connection with any assembly, use or disposition of such Mortgaged Property, any trade mark, trade name, trade style, copyright,brand, patent right or technical process used or utilized by Mortgagors; sell or otherwise dispose of all or any of such Mortgaged Property at any public or private sale at any time or times without advertisement or demand upon or notice to Mortgagors, all of which are expressly waived to the extent permitted by law, with the right of Mortgagee or its nominee to become purchaser at any sale(unless prohibited by statute) free from any equity of redemption and from all other claims, and after deducting all legal and other expenses for maintaining or selling such Mortgaged Property, and all attorneys' fees, legal or other expenses for collection, sale and delivery; apply the remaining proceeds of any sale to pay(or hold as a reserve against)the Obligations and exercise all rights and remedies of a secured party under the Uniform Commercial Code or any other applicable law. Section 4.5-Appointment of Receiver. Upon the occurrence of an Event of Default and at all times thereafter, Mortgagee may, without notice, obtain appointment of a receiver for the Mortgaged Property without regard to the adequacy of any security for the Obligations. Section 4.6 - Actions Prior to Acceleration. Mortgagee shall have the right, from time to time, to bring an appropriate action or actions to recover any sums required to be paid by mortgagors under the terms of this Mortgage, as they become due, without regard to whether or not the Obligations shall be due and payable in full, and without prejudice to the right of Mortgagee thereafter to bring an action of mortgage foreclosure, or any other action, for any Event of Default by Mortgagors existing at the time the earlier action was commenced. Section 4.7 -No Marshalling. Any of the Mortgaged Property sold pursuant to any writ of execution issued on a judgment obtained on the Obligations or pursuant to any other judicial proceedings relating to the Loan Documents or this Mortgage, may be sold in one parcel, as an entirety, or in such parcels, and in such manner or order as Mortgagee, in its sole discretion,:may elect. Section 4.8 - Right of Set Off. Mortgagee shall have the right to set off all or any part of any amount due by Mortgagors to Mortgagee under, this Mortgage or otherwise, against any indebtedness, liabilities or obligations owing by Mortgagee for any reason and in any capacity to Mortgagors, including any obligation to disburse to Mortgagors or their designees any funds or other property on deposit with or otherwise in the possession, control or custody of Mortgagee. Section 4.9 - Waivers of Defects and Exemptions. Except as to compliance by the Mortgagee with the prior notice provisions and the expiration of the cure periods expressly provided for herein or as expressly provided in the applicable Loan Documents, the Mortgagors hereby waive and release all errors, defects and imperfections whatsoever of a procedural nature in the entering of any judgment or any process or proceedings arising out of this Mortgage. Mortgagors also waive the benefit of any laws which now or hereafter might authorize the stay of E i - 16- 3 any execution to be issued or any judgment recovered hereunder or the exemption of the Mortgaged Property from levy or sale thereunder. Section 4.10 -Rights and Remedies Cumulative. (a) All rights and remedies of Mortgagee as provided in this Mortgage and the other Loan Documents shall be cumulative and concurrent,may be pursued separately, successively or together against the Mortgagors, the Mortgaged Property, any other party obligated under any Loan Document, or any or all of them, at the sole discretion of Mortgagee and may be exercised as often as occasion therefor shall arise. The failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof (b) Any failure by Mortgagee to insist upon strict performance by Mortgagors of any of the terms and provisions of this Mortgage or the other Loan Documents shall not be deemed to be a waiver of any of the terms or provisions of this Mortgage or the other Loan Documents and Mortgagee shall have the right thereafter to insist upon strict performance by Mortgagors of any and all of them. ARTICLE V MISCELLANEOUS 3 Section 5.1 - Costs and Expenses. If the Mortgagee becomes a party to any suit or proceeding affecting the Mortgaged Property, title thereto, the lien created by this Mortgage or Mortgagee's interest therein, or in the event of the commencement of any bankruptcy or insolvency proceedings involving Mortgagors, or if Mortgagee engages counsel to collect or to enforce F performance of the Obligations, or if, after an Event of Default, Mortgagee incurs any other costs and expenses in perfecting, protecting or enforcing its rights hereunder or in responding to any request of Mortgagors for any consent,waiver, approval,modification or release in connection with this Mortgage or the Mortgaged Property, Mortgagee's reasonable counsel fees, and all other costs and expenses paid or incurred by Mortgagee, including reasonable fees of appraisers, accountants, consultants, and other professionals,title insurance premiums,title reports and work charges, filing fees, and mortgage,mortgage registration, transfer, stamp and other excise taxes,whether or not an Event of Default shall have occurred, shall be paid to Mortgagee, on demand, with interest at the Penalty Rate provided in the Term Loan Note and until paid they shall be deemed to be part of the Obligations secured by this Mortgage. Section 5.2 - Indemni . Mortgagors shall indemnify, defend and hold Mortgagee harmless from and against any claims, expenses, demands, losses, costs, fines or liabilities of any { kind(including those involving death, personal injury or property damage and including reasonable attorneys' fees and costs) arising from or in any way related to the failure of Mortgagors to comply with, or the failure of the Mortgaged Property to be kept in compliance with all applicable laws including, without limitation, Environmental Laws or Regulations, leases and the Permitted 3 - 17- i 1 f 4 Encumbrances, except that Mortgagors shall have no obligation to indemnify, defend or hold Mortgagee harmless hereunder from or against any claim, expense, demand, loss, cost, fine or liability resulting solely from or against any claim, expense, demand, loss, cost, fine or liability resulting solely from Mortgagee's gross negligence or willful misconduct. The indemnification of Mortgagors under this section shall survive the release or termination of this Mortgage and shall remain effective notwithstanding any foreclosure of this Mortgage or other execution against the Mortgaged Property or acceptance of a deed in lieu of foreclosure. The indemnification agreement of Mortgagors under this section is specifically excepted from any limitation of liability provision contained in this or any other Loan Document. Section 5.3 - Communications. All notices demands, requests, approvals, certificates or other communications required under this Mortgage shall be given in the manner provided therefore in Section 12.1 of the Loan Agreement. Section 5.4 - Covenant Running with the Land. Any act or agreement specified herein to be done or performed by Mortgagors shall be construed as a covenant running with the land and shall be binding upon Mortgagors and their successors and assigns as if each had personally made such agreement. Section 5.5 -Amendment. Any amendment,modification, consent or waiver which may be hereafter requested by Mortgagors or otherwise required must be in writing and signed by both Mortgagors and Mortgagee. Section 5.6-Applicable Law: This Mortgage shall be governed by and construed in accordance with the laws of the. Commonwealth of Pennsylvania. Whenever possible, each provision of this Mortgage shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Mortgage shall be prohibited by, or invalid under, applicable law, such provision shall be ineffective to the extent of such prohibition and invalidity without invalidating the remaining provisions of this Mortgage. Nothing contained in this Mortgage or in any other Loan Document shall require Mortgagors to pay, or Mortgagee to accept, interest in an amount which would subject Mortgagee to penalty under applicable law. Section 5.7 - Construction. Whenever used in this Mortgage, unless the context clearly indicates a contrary intent: g (a) The word "Affiliate" shall mean, with .respect to a specified person, any other person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. The word "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by ° contract or otherwise. 1 - 18 - F (b) The word "Mortgagors" shall mean the persons who execute this Mortgage and any subsequent fee owner of the Mortgaged Property and their respective heirs, executors, administrators,personal representatives, successors and assigns; (c) The word "Mortgagee" shall mean, collectively, the entity listed as Mortgagee hereinabove, its successors and assigns, or any subsequent holder of this Mortgage; (d) The word "person" shall mean individual, corporation, limited liability company,partnership or unincorporated association; (e) The use of any gender shall include all genders; (f) The singular number shall include the plural and the plural the singular as the context may require; (g) The word "including" shall mean "including but not limited to" or "including without limitation" as the context may require. Section 5.8 -Joint and Several Liability. If.Mortgagors,or any successor or grantee of Mortgagors, shall be more than one person, all Obligations of Mortgagors under this Mortgage shall be joint and several and shall bind and affect all persons who are defined as "Mortgagors" as fully as though all of them were specifically named herein wherever the word "Mortgagors" is used. Section 5.9 - Headings. The headings of sections have been included in this Mortgage for convenience of reference only and shall not be considered in interpreting this Mortgage.. Section 5.10 - Severability. If any provision of this Mortgage shall be held for any reason to be invalid, illegal or unenforceable, such impairment shall not affect any other provision of this Mortgage. Section 5.11 - Recei ttoof Copy. Mortgagors acknowledge receipt of a conformed copy of this Mortgage. t Section 5.12 -Waivers. The Mortgagee may at any time or from time to time waive all or any rights under this Mortgage or any other Loan Document,but any waiver or indulgence by the Mortgagee at any time or from time to time shall not constitute, unless specifically so expressed i - 19- by the Mortgagee in writing, a future waiver of performance or exact performance by the Mortgagee. Section 5.1.3 -Third Party Beneficiary. No person shall have third party beneficiary rights as a result of this Mortgage. Section 5.14 - Incorporation by Reference. The terms, conditions and provisions of the Loan Documents are incorporated by reference in this Mortgage to the same extent as if set forth in full in this Mortgage. Should any of the terms, conditions and provisions of the Loan Documents conflict with the terms, conditions and provisions of this Mortgage,the Mortgagee shall select which of the terms, covenants and conditions shall govern and control. Section 5.15—Waiver of Jury Trial. (a) The Mortgagors and Mortgagee hereby waive trial by jury in any action or proceeding to which the Mortgagors and the Mortgagee may be parties, arising out of or in any way pertaining to this Mortgage or any of the other Loan Documents to which the Mortgagors are parties. It is agreed and understood that this waiver constitutes a waiver of trial by jury of all claims against all parties to such actions or proceedings who are parties to the Loan Documents. (b) This waiver is knowingly, willingly and voluntarily made by the Mortgagors, and the Mortgagors hereby represent that no representations of fact or opinion have been made by an individual to induce this waiver of trail by jury or to in any way modify or nullify its effect. The Mortgagors further represent that it they have been represented in the signing of this Mortgage and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel. IN WITNESS WHEREOF,the Mortgagors, intending to be legally bound hereby,have duly executed this Mortgage with the specific intention of creating an instrument under seal as of the date first written above. MORTGAGOR: G& C ASSOC ES July . Cassidy, artner Mic Lel J. Cas 1 er F - 20 - F i 3 ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA SS: COUNTY OF On this; the � day of June, 2010, before me personally appeared JULIE A. CASSIDY and MICHAEL J. CASSIDY, known to me (or satisfactorily proven) to be the persons who executed the within instrument, and did acknowledge that they did so for the purposes therein contained. IN WITNESS WHEREOF,I hereunto set my hand and official seal. COMMONWEALTH OF PENNSYLVANIA Notarial Seal Emily C.Myers,Notary Public Chambersburg Boro,Franklin County Public My Commssion E�ires Dec.19,2011 Member,pennsylvapga Association of Notaries My Commission Expires: �jz (SEAL) I i S j${ i S r i E t CER'T'IFICATE OF MORTGAGEE'S ADDRESS It is hereby certified that the address of the Mortgagee and person entitled to interest on this Mortgage is: Orrstown Bank 77 East King Street Shippensburg,PA 17257 Attn: Documentation Revi w Officer i 5 Exhibit A 802 Ritner Hiahway: All that certain lot or piece of ground situate in Shippensburg Township, County of Cumberland, Commonwealth of Pennsylvania, bounded and limited as follows: Being the same real estate conveyed by deed of Theda J. Horner et al., dated June 4, 1984, and recorded June 6, 1984, in the Cumberland County Recorder's Office at Book 30S,Page, 423, to G& C Associates, a partnership. Being Tax.Parcel #36-33-1871-003. Hallwood HeijZhts Subdivision: All that certain lots or pieces of ground situate in Shippensburg .Borough, County of Cumberland, Commonwealth of Pennsylvania,bounded and limited as follows: 1. Hollar Avenue.30ac, Shippensburg,Borough of Shippensburg-Parcel#32-34-2413-315 ;Lot#42 Hallwood Heights West; PB 92-107. 2. 302 Hollar Avenue.30ac, Shippensburg,Borough of Shippensburg-Parcel#32-34-2413- 318 Lot#45 Hallwood Heights West;PB 92-107. 3. 411 Scott Drive.33ac, Shippensburg,Borough of Shippensburg-Parcel#32-34-2413- 298 Lot#26 Ph 2 Hallwood Heights;PB 70-54. 4. 409 Scott Drive.28ac, Shippensburg,Borough of Shippensburg—Parcel#32-34-2413- 299 Lot#26 Ph 2 Hallwood Heights;PB 70-54.. Being part of the same real estate conveyed by deed of The West End Land Company of Shippensburg, a Pennsylvania Corporation, dated October 15, 1992, and recorded October 16, 1992,. in the Cumberland County Recorder's Office at Book Y35, Page; 12, to G&C Associates, a partnership. P Mountain View Development: All that certain lots or pieces of ground situate in Shippensburg Township and Southampton Township, County of Cumberland, Commonwealth of Pennsylvania, t bounded and limited as follows: 5. Residual Acreage 26.44 off Baltimore Road, Shippensburg, Shippensburg Twp (Deed Ref: 36-L-809)Parcel#36-35-2385-125,Plan Ref. 94-70 known as Lot# 1. 6. Commerce Drive .66ac, Shippensburg; Shippensburg Twp (Deed Ref: 36-L-809) Parcel# 36-35-2386-010,Plan Ref 93-63 known as Lot#9. 7_ Pin Oak Lane.21 ac, Shippensburg, Shippensburg Twp (Deed Ref. 36-L-809)Parcel#36- 35-2385-083,Plan Ref: 16-28 known as Lot#2—Sec N. 8. Pin Oak Lane.28ac, Shippensburg, Shippensburg Twp (Deed Ref. 36-L-809)Parcel#36- 35-2385-084,Plan Ref 16-28 known as Lot#4—Sec N. 9. Pin Oak Lane .27ac, Shippensburg, Shippensburg Twp (Deed Ref 36-L-809)Parcel#36- 35-2385-085,Plan Ref. 16-28 known as Lot#7—Sec M. 10. Pin Oak Lane.27ac; Shippensburg, Shippensburg Twp (Deed Ref: 36-L-809)Parcel# 36- 35-2385-086,Plan Ref: 16-28 known as Lot#5—Sec M. 1 11. Pin Oak Lane.27ac, Shippensburg, Shippensburg Twp(Deed Ref: 36-L-809)Parcel#3.6- 35-2385-087,Plan Ref: 16-28 known as Lot#3—Sec M. 12. Rear Baltimore Road 1.97ac, Shippensburg, Shippensburg Twp (Deed Ref: 36-L-809) Parcel#36-35-2385-132,Plan Ref. 93-60 known as Lot# 1A. t - Exhibit A (continued) 13. Chestnut Drive .68ac, Shippensburg, Southamption Twp (Deed Ref: 36-L-809) Parcel# 39-35-2383-023,Plan Ref 73-35 known as Lot#27A Phase P-1. 14. 373 Baltimore Road 2.91ac, Shippensburg, Shippensburg Twp (Deed Ref. 36-L-809 & a small portion of 207-991) Parcel# 36-35-2386-013, Plan Ref. 200740665 known as Lot# 5 (Dollar Tree.Store). Being part of the same real estate conveyed by deed of B. Jean Rhine et al., dated September 16, 1998, and recorded September 17, 1998, in the Cumberland County Recorder's Office at Book 207,Page 991,to G&C Associates, a partnership. Being part of the same real estate conveyed by deed of Galen S. Asper and Jeannette A. Asper, dated July 30, 1992, and recorded August 13, 1992, in the Cumberland County Recorder's Office at Book L36, Page 809, to G&C Associates, a partnership. t S r t ROBERT P. ZIEGLER RECORDER OF DEEDS CUMBERLAND COUN'T'Y 1 COURTHOUSE SQUARE CARLISLE, PA 17013 717-240-6370 - a 3 _ Instrument Number-201019043 Recorded On 7/15/2010 At 10:15:13 AM 'Total Pages-25 *Instrument Type-MORTGAGE Invoice Number-59152 User ID-KW *Mortgagor-G & C ASSOC *Mortgagee- ORRSTOWN BANK *Customer-SALZMAN'N *FEES STATE WRIT TAX $0.50 Certification Page STATE JCS/ACCESS TO $23.50 JUSTICE DO NOT DETACH RECORDING FEES — $51.50 RECORDER OF DEEDS part now THIS page is PARCEL CERTIFICATION $150. 00 P g P t FEES of this Iegal document. AFFORDABLE ROUSING $11.50 COUNTY ARCHIVES FEE $2.00 ' r ROD ARCHIVES FEE $3.00 j TOTAL PAID $242.00 i S I Certify this to be recorded in Cumberland County PA i D1F,Cy ,o , o Q z / y ° RECORDER O D EDS r7so Information denoted by an asterisk may change during the verification process and may not be reflected on this page. 00211P EXHIBIT C Chambersburg,Pennsylvania $1,486,500.00 June 30, 2010 TERM LOAN NOTE FOR VALUE RECEIVED, the undersigned G & C ASSOCIATES, a Pennsylvania Partnership (the "Maker"), promises to pay to the order of ORRSTOWN BANK (the "Lender") at its offices located at 77 East King Street, Shippensburg,Pennsylvania 17257 or at such other places as the Lender may from time to time designate, the principal sum of ONE MILLION FOUR HUNDRED EIGHTY-SIX THOUSAND FIVE HUNDRED DOLLARS ($1,486,500.00), lawful money of the United States of America, advanced by the Lender to the Maker pursuant to the terms of the Term Loan under that certain Loan Agreement dated of even date herewith by and between the Maker and the Lender (as the same may be amended, supplemented or otherwise modified from time to time. the "Agreement"), together with interest thereon payable at the rate or rates hereinafter specified and any and all other sums which may be owing to the Lender by the Maker pursuant to this Note. The following terms shall apply to this Note: 1. Interest Rate. Commencing on the date of this Note and continuing for a period of twenty-five(25)years,interest shall accrue at a variable rate of interest equal to Prime as reported in the Wall Street Journal plus one percent(I%)with a floor of Five and 00/100 percent(5.00%). 2. Calculation of Interest. Interest accruing for any period shall be calculated by multiplying the unpaid principal balance of this Note by the applicable rate of interest and by multiplying the product thereof by a factor equal to the number of days in such period divided by three hundred sixty (360). 3. Repayment. (a) Commencing on July 30, 2010 and continuing on the thirtieth (30th) day of each month thereafter, the Maker shall pay to the Lender Three Hundred (300) consecutive monthly installment payments of principal and interest. The initial monthly payment shall be $8,689.93. (b) Notwithstanding any other provision of this Note to the contrary, the Lender shall have the right, in its sole and absolute discretion,to demand payment in full.of the entire unpaid balance of principal and all accrued and unpaid interest and all other sums due and owing under this Note,by not less than ninety(90)days prior written notice,provided that,if no such demand is made, this Note shall be due and payable in full Three Hundred (300) months from the date hereof. 4. Late Payment Charge. If any payment due hereunder is received by the Holder more than fifteen (15) calendar days after its due date, the Maker shall pay a late payment charge equal to five percent (5%) of the amount then due. 1 1 i 5. Application of Payments. All payments made hereunder shall be applied first to late payment charges or other sums owed to the Holder, next to accrued interest, and then to principal and otherwise in such other order or proportion as the Holder,in the Holder's sole and absolute discretion, may elect from time to time. 6. Prepayment.The Maker may prepay this Note,in whole or in part at any time or from time to time. Subject to Section 5 of this Note, any such partial prepayment shall be applied to principal in reverse order of maturity and shall not be taken or construed as a substitution for regularly scheduled payments. 7. Collateral. This Note is secured by the Mortgages, the Security Agreement, and the Assignment of Rents and Leases,the provisions of which are incorporated into this Note by reference. 8. Default and Default Interest Rate. Upon an Event of Default and for so long as the Event of Default is continuing, the Holder, in the Holder's sole discretion and without notice or demand, may raise the rate of interest accruing on the unpaid principal balance to the Penalty Rate, independent of whether the Holder elects to accelerate the unpaid principal balance as a result of such Event of Default. Such interest shall continue to accrue despite any legal moratorium on payment or any delay in payment ordered or permitted by any court assuming jurisdiction. The Penalty Rate shall be that as specified in the Loan Agreement. 9. Acceleration. Upon an.Event of Default, the principal amount outstanding on this Note,together with interest, charges, fees or other sums shall, at the option of the Holder, or as otherwise provided in the Agreement, without notice or demand, become immediately due and payable. 10. Confession of Judgment. UPON AN EVENT OF DEFAULT, THE MAKER AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES TO APPEAR ON BEHALF OF THE MAKER IN ANY COURT IN ONE O.R. MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST THE MAKER, WITHOUT PRIOR NOTICE OR OPPORTUNITY OF THE MAKER FOR PRIOR HEARING,IN FAVOR OF THE HOLDER OF THIS NOTE IN THE FULL AMOUNT DUE ON THIS NOTE (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL PENALTIES, FEES AND COSTS) PLUS REASONABLE ATTORNEYS' FEES AND COURT COSTS. THE MAKER WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR RULE OF COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON THE MAKER ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION OR GARNISHMENT, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT. IF A COPY OF THIS NOTE, VERIFIED BY AN OFFICIAL OR AN OFFICER OF THE HOLDER, SHALL BE FILED IN ANY 2 PROCEEDING OR ACTION WHEREIN JUDGMENT IS TO BE CONFESSED, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL HEREOF AND SUCH VERIFIED COPIES SHALL BE SUFFICIENT WARRANT FOR ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR AND CONFESS JUDGMENT AGAINST MAKER AS PROVIDED HEREIN. JUDGMENT MAY BE CONFESSED FROM TIME TO TIME UNDER THE AFORESAID POWERS AND NO SINGLE EXERCISE IN THE AFORESAID POWERS TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT SUCH EXERCISE SHALL BE HELD BY ANY SUCH COURT TO BE INVALID, VOIDABLE OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME, AND IN THE SAME OR DIFFERENT JURISDICTIONS, AS, AFTER AND AS THE HOLDER SHALL ELECT, UNTIL SUCH TIME AS THE HOLDER SHALL HAVE RECEIVED PAYMENT INT FULL OF ALL SUMS DUE HEREUNDER,TOGETHER WITH INTEREST, COSTS AND FEES. 11. Interest Rate after Judgment. If judgment is entered against Maker on this Note, the amount of the judgment entered(which may include principal,interest;fees and costs)shall bear interest at the above described Penalty Rate,to be determined on the date of the entry of the judgment. 12. Expenses of Collection. Should this Note be referred to an attorney for collection, whether or not judgment has been confessed or suit has been filed, the Maker shall pay all of the Holder's reasonable costs, fees (including,but not limited to,reasonable attorneys'fees) and expenses resulting from such referral. 13. Subsequent Holders. In the event that any Holder of this Note transfers this Note for value,the Maker agrees that no subsequent Holder of this Note shall be subject to any claims or defenses which the Maker may have against a prior Holder, all of which are waived as to the subsequent Holder, and that all subsequent Holders shall have all of the rights of a Holder in due course with respect to the Maker even though the subsequent Holder may not qualify,under applicable law, absent this paragraph, as a Holder in due course. 14. Holder. As used in this Note, the term Holder shall refer to the Lender, and to any other person. if any, who is in possession of this Note and to whom this Note has been indorsed, whether to order, to bearer or in blank. 15. Waiver of Defects. The Maker hereby waives and releases all errors, defects and imperfections of a procedural nature in any proceedings instituted by the Holder hereunder, as well as all benefits that might accrue to the Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from garnishment, attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment. The Maker agrees that any real estate that may be levied upon pursuant to any writ of execution issued on any judgment by virtue hereof, may be sold, in whole or in part, in any order desired by the Holder. i i 3 16. Waiver of Protest. The Maker, and all parties to this Note, whether maker, endorser or guarantor, waive presentment, notice of dishonor and protest. 17. Extensions of Maturity.. All parties to this Note, whether maker, indorser or guarantor, agree that the maturity of this Note, or the time of any payment due hereunder, may be extended by the Holder in writing at any time or from time to time without releasing, discharging or affecting the liability of such party. 18. Notices. Any notice or demand required or permitted by or in connection with this Note shall be given in the manner specified in the Agreement for the giving of notices under the Agreement. Notwithstanding anything to the contrary, all notices and demands for payment from the Holder actually received in writing by the Maker shall be considered to be effective upon the receipt thereof by the Maker regardless of the procedure or method utilized to accomplish delivery thereof to the Maker. 19. Assignability. This Note may be assigned by the Lender or any Holder as permitted by law. The Lender or Holder shall notify the Maker, as soon as practicable, of the assignment, but any failure to so notify shall not in any manner affect the obligations of the Maker to make any and all payments required hereunder. 20. Binding_Nature. This Note shall inure to the benefit of and be enforceable by the Lender and the Lender's successors and assigns and any other person to whom the Lender may grant an interest in the Maker's obligations to the Lender, and shall be binding and enforceable against the Maker and the Maker's personal representatives, successors and assigns. f 21. Invalidity of any Part. If any provision or part of any provision of this Note shall for any reason be held invalid, illegal of unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Note and this Note shall be construed as if such invalid, illegal or unenforceable provision or part thereof had never been contained herein, but only to the extent of its invalidity, illegality or unenforceability. 22. Choice of Law.This Note shall be governed, construed and interpreted strictly in accordance with the laws of the Commonwealth of Pennsylvania. 23. Capitalized Terms. Capitalized terms, unless otherwise defined herein, shall 3 have the meanings attributed thereto in the Agreement, unless the context clearly requires a I different meaning. i r S d 3 4 F f 1 { IN WITNESS WHEREOF, the Maker has executed this Note specifically intending this Note to constitute an instrument under seal. MAKER: G & C ASSOCIATES By: K4ic ael ' , artner c By. A (irlU Juli A. Cassidy,Partner 5 I DISCLOSURE FOR CONFESSION OF JUDGMENT Declarant: G &C Associates Lender: Orrstown Bank DISCLOSURE FOR CONFESSION OF JUDGMENT THE DECLARANT IS EXECUTING AS OF JUINTE- � 2010, THE FOLLOWING INSTRUMENT(THE"INTSTRUMENT"): S 1,486,500.00 TERM LOAN NOTE A. THE DECLARANT UNDERSTANDS THAT THE INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE INSTRUMENT, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE INSTRUMENT, 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 INSTRUMENT, THE DECLARANT IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE DECLARANT EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT AGAINST DECLARANT BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. B. THE DECLARANT 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 INSTRUMENT 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 INSTRUMENT, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE DECLARANT IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE DECLARANT EXPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN ANY MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING DECLARANT ANY ADVANCE NOTICE. a C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE DECLARANT REPRESENTS THAT: INITIALS DECLARANT WAS REPRESENTED BY DECLARANT'S OWN DE INDENT LEGAL COUNSEL IN CONNECTION WITH THE INSTRUMENT. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE O SS ON OF JUDGMENT PROVISION IN THE INSTRUMENT TO DECLARANT'S ATTE TION. 3. DECLARANT'S ANNUAL INCOME EXCEEDS $10,000. THIS ISCLOSURE 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: G&C ASSOCIATES Michael silly, artner By: Ju 1e . Cassi y,P er x -2 - EXI.....'JIBIT-D GUARAINI TTY AND SURETYSHIP AGREEMENT THIS GUARANTY AND SURETYSHIP AGREEMENT is made as of June 30, 2010 by JULIE A. CASSIDY(the"Guarantor"), in favor of ORRSTOWN BANK(the"Lender'). RECITALS Pursuant to and in accordance with that certain Loan Agreement of even date herewith (the"Loan Agreement") by and between G & C ASSOCIATES, a Pennsylvania Partnership (the "Borrower"), and the Lender, the Lender has agreed to make a $1,486,500.00 Term Loan ("Loan") to the Borrower. All capitalized terms not otherwise defined herein shall have the meanings attributed thereto in the Loan Agreement. As an inducement to the Lender to make the Loan, the Guarantor has offered to execute and deliver this Agreement to the Lender. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Guarantor, and intending to be legally bound hereby, the Guarantor hereby agrees as follows: SECTION 1. Guaranty. The Guarantor hereby irrevocably and unconditionally guarantees to the Lender and agrees to act as surety to the Lender for (a) the full and prompt payment when due, whether by acceleration or otherwise, and at all times thereafter of the Loan, (b) the full and prompt performance of all of the obligations of the Borrower under the Loan Documents, and (c) the full and prompt payment and performance of any other indebtedness or liability of the Borrower to the Lender, whether direct or indirect, joint or several, absolute or contingent, contemplated or uncontemplated, now existing or hereafter arising (collectively, the "Liabilities"), whether accruing before or after any bankruptcy or insolvency case or proceeding involving the Borrower, any other guarantor, or any other Person, and, if interest on any portion of such obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, including such interest as would have accrued on any such portion of such obligations if such case or proceeding had not commenced, and further agree to pay all expenses (including reasonable attorneys' fees and legal expenses) paid or incurred by the Lender in endeavoring to collect the Liabilities,or any part thereof, and in enforcing this Agreement. In any action or proceeding involving any state corporate law, or any state or Federal bankruptcy, insolvency, reorganization or any other law affecting the rights of creditors generally, if the obligations of the Guarantor under this Agreement would otherwise be held or determined by a final and non-appealable order of a court of competent jurisdiction to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under this Agreement, then,notwithstanding any other provision hereof to the contrary, the amount of the Guarantor's liability only, without any fin-ther action by such Guarantor or any other Person, shall be automatically limited and reduced to the highest amount which is valid and enforceable as determined in such action or proceeding pursuant to such final and non-appealable order. r Guarantor agrees that, in the event of the dissolution, bankruptcy or insolvency of Borrower or any other guarantor or the inability or failure of Borrower or any other guarantor to pay its debts as they become due, or an assignment by Borrower or any other guarantor under any bankruptcy, insolvency or similar laws, and if such event shall occur at a time when any of the Liabilities may not then be due and payable, the Guarantor will pay to the Lender forthwith the full amount which would be payable hereunder by the Guarantor as if all liabilities were then due and payable. This Agreement shall constitute an absolute and unconditional guaranty of payment and performance (and not of collection) and the absolute and unconditional undertaking by the Guarantor with respect to the payment and performance of the Liabilities. This Agreement shall remain in full force and effect (notwithstanding, without limitation, the dissolution of the Guarantor). The liability of the Guarantor hereunder shall be direct and may be enforced without the Lender being required to resort to any other right,remedy or security. The Lender may, from time to time at its discretion and without notice to the Guarantor, take any or all of the following actions (a)retain or obtain a lien upon or a security interest in any property to secure any of the Liabilities or any obligation hereunder, by the grant thereof from the Borrower or any guarantor, or other owner thereof; (b) retain or obtain the primary or secondary obligation of any obligor or obligors,in addition to the Guarantor, with respect to any of the Liabilities; (c) extend or renew for one or more periods (regardless of whether longer than the original period), alter or exchange any of the Liabilities, or release or compromise any obligation of the Guarantor hereunder or any obligation of any nature of any other obligor with respect to any of the Liabilities; (d) release or fail to perfect or maintain perfection of its lien upon or security interest in., or impair, surrender, release or permit any substitution or exchange for, all or any part of any property securing any of the Liabilities or any obligation hereunder, or extend or renew for one or more periods(regardless of whether longer than the original period) or release, compromise, alter or exchange any obligations of any nature of any obligor with u respect to any such property; and (e) upon an Event of Default (hereinafter defined) resort to Guarantor for payment of any of the Liabilities, regardless of whether the Lender shall have resorted to any other Person or any property securing any of the Liabilities or any obligation i hereunder or shall have proceeded against any other obligor primarily or secondarily obligated with respect to any of the Liabilities (all of the actions referred to in this paragraph being hereby ` expressly waived by Guarantor). SECTION II. Guarantor's Obli--ation Unconditional. Guarantor's obligations hereunder are independent in respect of any other Person, and the Lender may enforce any of its rights hereunder independently of any other right or remedy that it may at any time hold with respect to the Liabilities or any security or other guaranty therefor; provided that no double recovery of the same amount.shall be permitted, Such obligations shall be absolute and unconditional, shall not be subject to any counterclaim, set off, deduction, diminution, abatement, recoupment, suspension, deferment, reduction or defense (other than full and strict compliance by the Guarantor with its obligations hereunder), whether based upon any claim that the Borrower or -2 - i any guarantor, or any other Person may have against the Lender or any other Person or otherwise, and shall remain in full force and effect without regard to, and shall not be released; discharged or in any way affected by, any circumstance or condition whatsoever(whether or not the Guarantor or any other Person shall have any knowledge or notice thereof) including, without limitation: A. any amendment, modification, addition, deletion, supplement or renewal to or of or other change in the Liabilities or any Loan Document or any of the agreements referred to in any thereof, or any other instrument or agreement applicable to any Loan Document or any of the parties to such agreements, or to the Collateral, or any assignment, mortgage or transfer thereof or of any interest therein, or any furnishing or acceptance of additional security for, guaranty of or right of offset with respect to, any of the Liabilities; or the failure of any security or the failure of the Lender to perfect or insure any interest in any collateral; B. any failure, omission or delay on the part of the Borrower or any guarantor to conform or comply with any term of any instrument or agreement referred to in clause A above; C. any waiver, consent, extension, indulgence, compromise, release or other action or inaction under or in respect of any instrument, agreement, guaranty, right of offset or security referred to in clause A above or any obligation or liability of the Borrower or any guarantor, or the Lender, or any exercise or non-exercise by the Lender of any right, remedy, power or privilege under or in respect of any such instrument, agreement, guaranty, right of offset or security or any such obligation or liability,• D. any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or similar proceeding with respect to the Borrower or any guarantor,the Lender or any other Person or any of their respective properties or creditors, or any action taken by any trustee, receiver or court in any such proceeding; E. any limitation on the liability or obligations of any Person under any Loan Document, the Liabilities, any collateral security for the Liabilities, any other guaranty of the Liabilities or any discharge, termination, cancellation, frustration, irregularity, invalidity or unenforceability, in whole or in part, of any of the foregoing or any other agreement, instrument, guaranty or security referred to in clause A above or any term of any thereof; F. any defect in the title, compliance with specifications, conditions, design, operation or fitness for use of, or any damage to or loss or destruction of, or any interruption or cessation in the use of any Collateral by the Borrower, Guarantor or any other Person for any reason whatsoever (including, without limitation, any -3 - governmental prohibition or restriction, condemnation, requisition, seizure or any other act on the part of any governmental or military authority, or any act of God or of the public enemy) regardless of the duration thereof (even though such duration would otherwise constitute a frustration of a .lease), whether or not resulting from accident and whether or not without fault on the part of Guarantor or any other Person; G. any merger or consolidation of Borrower into or with any other Person or any sale, lease or transfer of any of the assets of Borrower or any guarantor to any other Person: H. any change in the ownership of any of the shares of capital stock of the Borrower or any structural change in the Borrower; I. any loan to or other transaction between the Lender and Borrower or any guarantor; or J. any other occurrence or circumstance whatsoever, whether similar or dissimilar to the foregoing, and any other circumstance that might otherwise constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or that might otherwise limit recourse against the Guarantor. The obligations of the Guarantor set forth herein constitute the full recourse obligations of the Guarantor enforceable against it to the full extent of all of its assets and properties, notwithstanding any provision of the Loan Documents or any other document or agreement to the contrary. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Liabilities and notice of or proof of reliance by the Lender upon this Agreement or acceptance of this Agreement, and the Liabilities shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Agreement. Guarantor unconditionally waives, to the extent permitted by law: (a) acceptance of this Agreement and proof of reliance by the Lender hereon; (b) notice of any of the matters referred to in clauses A through J above, or any right to consent or assent to any thereof; (c) all notices that may be required by statute, rule of law or otherwise, now or hereafter in effect, to preserve intact any rights against Guarantor, including, without limitation, any demand, presentment,protest, proof or notice of nonpayment under any Loan Document and notice of default or any failure on the part of the Borrower or any guarantor to perform and comply with any covenant, agreement, term or condition of any Loan Document; (d) any right to enforcement, assertion or exercise against the Borrower of any right, power,.privilege or remedy conferred in any Loan Document or otherwise; (e) any requirement of diligence on the part of any Person; (f) any requirement of the Lender to take any action whatsoever, to exhaust any remedies or to mitigate the damages resulting from a default by any Person under any Loan Document; (g)any notice of any sale,transfer or other disposition by any Person of any right under, title to or interest in any Loan Document; or any Collateral; and (h) S -4- i any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge, release or defense of a guarantor or surety, or that might otherwise limit recourse against such Guarantor. Guarantor agrees that this Agreement shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of itself or the Borrower or any guarantor, is rescinded or must be otherwise restored by the Lender whether as a result of any proceedings in bankruptcy or reorganization. Guarantor further agrees that, without limiting the generality of this Agreement, if an Event of Default shall have occurred and be continuing and the Lender is prevented by applicable law from exercising its remedies under the Loan Documents, the Lender shall be entitled to receive hereunder from Guarantor,upon demand therefor, the sums which would have otherwise been due from the Borrower had such remedies been exercised. SECTION III. Waiver of Subrogation. Guarantor hereby irrevocably waives any claim or other rights, which it may now or hereafter acquire against the Borrower or any guarantor by virtue of any payments made by Guarantor hereunder. SECTION IV. Reasonableness and Effect of Waivers. Guarantor warrants and agrees that each of the waivers set forth in the Agreement is made with 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 of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by law. SECTION V. Representations and Warranties of Guarantor. As of the date hereof, Guarantor makes the representations and warranties set forth in this Section V to the Lender. A.. Sui Juris. The Guarantor is sui juris. B. Authorization: No Conflict. The execution, delivery and performance by Guarantor of the Loan Documents to which she is or is to be a party, and the consummation of the transactions contemplated thereby,.do not and will not cause or constitute a violation of any provision of law or regulation or result in the creation of any lien, charge or encumbrance upon any of the properties, revenues, or assets of the Guarantor pursuant to, any indenture or other agreement or instrument to which the Guarantor is a party or by which the Guarantor or Guarantor's property may be bound or affected; no authorization, consent, approval (including any exchange control approval), license or other action by, and no notice to or filing or registration with, any governmental authority, agency or regulatory body or any other third party is required for the due execution, delivery and performance by Guarantor of the Loan Documents. - 5 - C. Enforceability, etc. Each Loan Document to which the Guarantor is or is to be a party constitutes its legal, valid and binding obligation, enforceable against Guarantor in accordance with the terms thereof, except as such enforceability may be limited by applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and by general equitable principles. D. Litigation. There is no action, proceeding or investigation pending or threatened to which Guarantor is or is to be a party in which Guarantor is challenging or intends to challenge the validity of the Loan Documents or any action taken or to be taken pursuant to the Loan Documents, and there is no action, proceeding or investigation pending or threatened to which Guarantor is or is to be a parry which, if adversely determined, would have a material adverse effect on (i) the financial condition, operations or business, prospects or property of Guarantor taken as a whole, (ii) the ability of Guarantor to perform Guarantor's obligations hereunder or under any other Loan Document to which Guarantor is a party or (iii) the ability of the Lender to enforce this Agreement or any Loan Document. E. Taxes. Guarantor has filed or caused to be filed all United States Federal and all other material tax returns that are required to be filed by Guarantor, and has paid or caused to be paid all taxes shown to be due and payable on such returns or on any assessment received by Guarantor to the extent that such taxes have become due and payable except to the extent that taxes due, but unpaid, are being contested in good faith by Guarantor by appropriate action or proceeding and, to the extent (if any) that such taxes are not due and payable, Guarantor has established or caused to be established reserves that are adequate for the payment thereof in accordance with generally accepted accounting principles. i F. Investment. CompanyAct. Guarantor is not an "investment company" or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. G. public Utility Holding Company. Guarantor is not subject to regulation as a "holding company," an "affiliate" of a "holding company," or a "subsidiary company" or a "holding company", within the meaning of the Public Utility Holding Company Act of 1935; as amended. ' H. Solvency. The consummation by Guarantor of the transactions contemplated by the Loan Documents to which Guarantor is, or is to be, a party does not and will not render Guarantor insolvent, nor have the transactions contemplated by the Loan Documents to which Guarantor is, or is to be, a party been entered into by the Guarantor in contemplation of Guarantor's insolvency; the value of Guarantor's assets and properties at fair valuation and at their then present fair salable value is and, after such transactions, will be greater than Guarantor's total liabilities, including contingent liabilities, as they become due; the property remaining in Guarantor's hands was not and will not be an unreasonably small amount of capital. x -6 - i 4 SECTION VI. Event of Default. The occurrence of any of the following events shall constitute events of default("Events of Default") under this Agreement and shall entitle the Lender to exercise all rights and remedies provided by applicable laws or otherwise set forth in this Agreement: A. The occurrence of an Event of Default as defined in any other Loan Document, subject to the giving of such notice and the expiration of such cure period, if any, as may be required therein. B. An Act of Bankruptcy (hereinafter defined) shall occur with respect to Guarantor; provided, however, if a proceeding with respect to an Act of Bankruptcy is filed or commenced against Guarantor, the same shall not constitute an Event of Default if such proceeding is dismissed within ninety (90) days from the date of such Act of Bankruptcy. The term "Act of Bankruptcy," as used herein, shall mean the filing of a petition in bankruptcy under the United States Bankruptcy Code, 11 U.S.C. §101 et, seq., and all future acts supplemental thereto or amendatory thereof, or the commencement of a proceeding under any other applicable law concerning insolvency, reorganization or bankruptcy,by or against the Guarantor. C. A representation or warranty made by Guarantor herein, in any of the other Loan Documents to which Guarantor is a. party, if any, or in any certificate, report or opinion (including legal opinions), financial statements or other instrument furnished by or on behalf of Guarantor in connection with this Agreement or the other Loan Documents, is proven to have been incorrect,false or misleading in any material respect. D. Any obligation of Guarantor, whether as principal, Guarantor, surety or other obligor, for the payment of any indebtedness or operating leases, (i) shall become or shall be declared due and payable prior to the expressed maturity thereof, or (ii) shall not be paid when due or within any grace period for the payment thereof,or(iii) any holder of any such obligation shall have the right to declare such obligation due and payable prior to the expressed maturity thereof. E. The occurrence of a default under any other indebtedness owed by Guarantor or any affiliate of Guarantor to the Lender, whether now existing or hereafter created, whether secured or unsecured, subject to the giving of such notice and the expiration of such cure period, if any, as may be required thereunder. SECTION VII. Confession of Judgm GUARANTOR DOES HEREBY EMPOWER ANY ATTORNEY OF ANY COURT OF RECORD WITHIN THE UNITED STATES UPON THE OCCURRENCE OF AN EVENT OF DEFAULT TO APPEAR FOR THE GUARANTOR AND, WITH OR WITHOUT DECLARATION FILED, CONFESS. JUDGMENT AGAINST THE GUARANTOR. AND IN FAVOR OF THE LENDER, ITS SUCCESSORS AND ASSIGNS, FOR SUCH SLIMS AS SHALL HAVE BECOME DUE UNDER THIS d AGREEMENT, BY ACCELERATION OR OTHERWISE, WITH COSTS OF SUIT AND AN ATTORNEYS' COMMISSION FOR COLLECTION,AND FORTHWITH ISSUE.A WRIT OR Y 7 } { i a °r WRITS OF EXECUTION THEREON, WITH RELEASE OF ALL ERRORS, AND WITHOUT STAY OF EXECUTION, AND INQUISITION AND EXTENSION UPON AND LEVY ON REAL ESTATE ARE HEREBY EXPRESSLY WAIVED, AND CONDEMNATION AGREED TO, AND EXEMPTION OF ANY AND ALL LAND FROM LEVY OR SALE BY VIRTUE OF ANY EXEMPTION NOW IN FORCE OR WHICH MAY HEREAFTER BE ENACTED IS ALSO EXPRESSLY WAIVED BY THE GUARANTOR. IF A COPY OF THIS AGREEMENT, VERIFIED BY AFFIDAVIT OF THE LENDER, OR SOMEONE ON THE LENDER'S BEHALF, SHALL HAVE BEEN FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS AGREEMENT AS A WARRANT OF ATTORNEY. THE ENTRY OF JUDGMENT UNDER THE FOREGOING WARRANT SHALL NOT EXHAUST THE WARRANT, BUT SUCCESSIVE JUDGMENTS MAY BE ENTERED THEREUNDER FROM TIME TO TIME AS OFTEN AS AN EVENT OF DEFAULT OCCURS. THE LENDER MAY FORTHWITH ISSUE A WRIT OR WRITS OF EXECUTION FOR THE AMOUNT OF ANY JUDGMENT AND COSTS WITHOUT LEAVE OF COURT. GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT. GUARANTOR HEREBY FREELY, KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO THIS CONFESSION OF JUDGMENT PROVISION. SECTION VIII. Transfer by the Lender. The Lender may, from time to time, whether before or after any discontinuance of this Agreement, at its sole discretion and without notice to or consent of the Guarantor, assign or transfer any or all of the Liabilities or any interest therein; and, notwithstanding any such assignment or transfer or any subsequent assignment or transfer thereof, such Liabilities shall be and remain Liabilities for the purposes of this Agreement, and $ each and every immediate and successive assignee or transferee of any of the Liabilities or of i any interest therein shall, to the extent of such assignee's or transferee's interest in the 3 Liabilities, be entitled to the benefits of this Agreement to the same extent as if such assignee or transferee were the Lender. SECTION IX. No Waiver by the Lender. No delay in the exercise of any right or a remedy shall operate as a waiver thereof, and no single or partial exercise of any other right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy; nor shall any modification or waiver of any of the provisions of this Agreement be binding upon the Lender except as expressly set forth in a writing duly signed and delivered on its behalf. No action permitted hereunder shall in any way affect or impair the Lender's rights or Guarantor's obligations under this Agreement. For the purposes of the Agreement, Liabilities shall include all of the obligations described in the definition thereof, notwithstanding any right or power of Guarantor or anyone else to assert any claim or defense as to the invalidity or enforceability of any such obligation, and no such claim or defense shall affect or impair the obligations of Guarantor hereunder. Guarantor's obligations under this Agreement shall be absolute and unconditional irrespective of any circumstance, whatsoever which might constitute i 4 j 3 8 3 j A } 3 i a legal or equitable discharge or defense of such Guarantor. Guarantor hereby acknowledges that there are no conditions to the effectiveness of this Agreement. SECTION X. Heirs and Assigns. All obligations under this Agreement shall be binding upon Guarantor and upon Guarantor's heirs and assigns; provided, however, that this provision should not constitute any right of Guarantor to assign Guarantor's rights or obligations under this Agreement or the other Loan Documents. All references herein to Guarantor shall be deemed to include any successor or successors, whether immediate or remote, to such Person. SECTION XI. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Agreement shall be prohibited by or invalid thereunder, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. SECTION XII. Submission to Jurisdiction. Each party hereto may bring suit to enforce any claim arising from or relating to this Agreement or any other Loan Document in any appropriate court in Franklin or Cumberland Counties, Pennsylvania at the discretion of the Lender and with respect to any such claim, Guarantor hereby irrevocably: (a) submits to the jurisdiction of such courts; and (b) consents to the service of process out of said courts by mailing a copy thereof, by registered mail, postage prepaid, to the Guarantor at its address specified in Schedule I attached hereto and incorporated herein by reference, and agrees that such service, to the fullest extent permitted by law: (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding; and (ii) shall be taken and held to be valid personal service upon and personal delivery to it. Guarantor irrevocably waives, to the fullest extent permitted by law: (A) any claim, or any objection, that it now or hereafter may have, that venue is not proper with respect to any such suit, action or proceeding brought in such a court including, without limitation, any claim that any such suit, action or proceeding brought in such court has been brought in an inconvenient forum; and(B) any claim that Guarantor is not subject to personal jurisdiction or service of process in such forum. Nothing herein contained shall preclude the Lender from bringing an action or proceeding in respect hereof in any other state or Federal court within the United States having subject matter jurisdiction with respect to such action and personal jurisdiction over the parties to such action. Guarantor agrees that a final judgment in any action or proceeding in a state or Federal court within the United States may be enforced in any other jurisdiction by suit on the judgment or in any manner provided by law. SECTION XIII. Jury Trial. GUARANTOR WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY RELATED DOCUMENT OR UNDER ANY AMENDMENT., INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED -9 - DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. SECTION XIV. Notices. All notices, demands, requests, consents, approvals, and other instruments hereunder shall be in writing and shall be deemed to have been properly given if given in the manner provided in Loan Agreement to the address specified in Schedule I hereto. SECTION XV. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. SECTION XVI. JOINT AND SEVERAL. The Liabilities are the joint and several obligations of Guarantor and each other guarantor of the Loan. IN WITNESS WHEREOF, the Guarantor has caused this Agreement to be executed and delivered as of the date first above written. Julie A. Cassidy - 10- SCHEDULE I ADDRESSES Guarantor Julie A. Cassidy 18 Log Cabin Road Newville, PA 17241 DISCLOSURE FOR CONFESSION OF JUDGMENT Declarant: Julie A. Cassidy Lender: Orrstown Bank DISCLOSURE FOR CONFESSION OF JUDGMENT THE DECLARANT IS EXECUTING AS OF JUNE 30' 2010, THE FOLLOWING INSTRUMENT (THE "INSTRUMENT"): 1,486,500.00 GUARANTY AND SURETYSHIP AGREEMENT A. THE DECLARANT UNDERSTANDS THAT THE INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE INSTRUMENT, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE INSTRUMENT, 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 INSTRUMENT, THE DECLARANT IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE DECLARANT EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT AGAINST DECLARANT BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. B. THE DECLARANT FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE NOTICE ORA HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE INSTRUMENT 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 INSTRUMENT, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE DECLARANT IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE DECLARANT EXPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN ANY MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING DECLARANT ANY ADVANCE NOTICE. t C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING a i STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE DECLARANT REPRESENTS THAT: INITIALS —)v5c, 1. DECLARANT WAS REPRESENTED BY DECLARANT'S OWN IPENDENT LEGAL COUNSEL IN CONNECTION WITH THE INSTRUMENT. 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONSSION OF JUDGMENT PROVISION IN THE INSTRUMENT TO DECLARANT'S ATT . TION. 3. DECLARANT'S ANNUAL INCOME EXCEEDS $10,000. TH 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: JuI'e A. Cassidy j 2- i f, GUARANTY AND SURETYSHIP AGREEMENT THIS GUARANTY AND SURETYSHIP AGREEMENT is made as of June , 2010 by MICHAEL J. CASSIDY(the"Guarantor'), in favor of ORRSTOWN BANK(the"Lender'). RECITALS Pursuant to and in accordance with that certain Loan Agreement of even date herewith (the"Loan Agreement") by and between G & C ASSOCIATES, a Pennsylvania Partnership (the `Borrower"), and the Lender, the Lender has agreed to make a $1,486,500.00 Term Loan ("Loan") to the Borrower. All capitalized terms not otherwise defined herein shall have the meanings attributed thereto in the Loan Agreement. The Guarantor is a shareholder of the Borrower. As an inducement to the Lender to make the Loan, the Guarantor has offered to execute and deliver this Agreement to the Lender. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Guarantor, and intending to be legally bound hereby,the Guarantor hereby agrees as follows: SECTION 1. Guaranty. The Guarantor hereby irrevocably and unconditionally guarantees to the Lender and agrees to act as surety to the Lender for (a) the full and prompt payment when due, whether by acceleration or otherwise, and at all times thereafter of the Loan, (b) the full and prompt performance of all of the obligations of the Borrower under the Loan Documents, and (c) the full and prompt payment and performance of any other indebtedness or liability of the Borrower to the Lender, whether direct or indirect, joint or several, absolute or contingent, contemplated or uncontemplated, now existing or hereafter arising (collectively, the "Liabilities"), whether accruing before or after any bankruptcy or insolvency case or proceeding involving the Borrower, any other guarantor, or any other Person, and, if interest on any portion of such obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, including such interest as would have accrued on any such portion of such obligations if such case or proceeding had not commenced, and further agree to pay all expenses (including reasonable attorneys' fees and legal expenses) paid or incurred by the Lender in endeavoring to collect the Liabilities,or any part thereof, and in enforcing this Agreement. In any action or proceeding involving any state corporate law, or any state or Federal bankruptcy, insolvency, reorganization or any other law affecting the rights of creditors generally, if the obligations of the Guarantor under this Agreement would otherwise be held or determined by a final and non-appealable order of a court of competent jurisdiction to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under this Agreement, then, notwithstanding any other provision hereof to the contrary, the amount of the Guarantor's liability only, without any further action by such Guarantor or any other Person, shall be automatically limited and reduced to the highest amount which is valid and enforceable as determined in such action or proceeding pursuant to such final and non-appealable order. 4 i S Guarantor agrees that, in the event of the dissolution, bankruptcy or insolvency of Borrower or any other guarantor or the inability or failure of Borrower or any other guarantor to pay its debts as they become due, or an assignment by Borrower or any other guarantor under any bankruptcy, insolvency or similar laws, and if such event shall occur at a time when any of the Liabilities may not then be due and payable, the Guarantor will pay to the Lender forthwith the full amount which would be payable hereunder by the Guarantor as if all liabilities were then due and payable. This Agreement shall constitute an absolute and unconditional guaranty of payment and performance (and not of collection) and the absolute and unconditional undertaking by the Guarantor with respect to the payment and performance of the Liabilities. This Agreement shall remain in full force and effect (notwithstanding, without limitation, the dissolution of the Guarantor). The liability of the Guarantor hereunder shall be direct and may be enforced without the Lender being required to resort to any other right,remedy or security. The Lender may, from time to time at its discretion and without notice to the Guarantor, take any or all of the following actions (a)retain or obtain a lien upon or a security interest in any property to secure any of the Liabilities or any obligation hereunder, by the grant thereof from the Borrower or any guarantor, or other owner thereof; (b) retain or obtain the primary or secondary obligation of any obligor or obligors, in addition to the Guarantor, with respect to any of the Liabilities; (c) extend or renew for one or more periods (regardless of whether longer than the original period), alter or exchange any of the Liabilities, or release or compromise any obligation of the Guarantor hereunder or any obligation of any nature of any other obligor with respect to any of the Liabilities; (d) release or fail to perfect or maintain perfection of its lien upon or security interest in, or impair, surrender, release or permit any substitution or exchange for, all or any part of any property securing any of the Liabilities or any obligation hereunder, or extend or renew for one or more periods (regardless of whether longer than the original period) or release, compromise, alter or exchange any obligations of any nature of any obligor with respect to any such property; and (e) upon an Event of Default (hereinafter defined) resort to Guarantor .for payment of any of the Liabilities, regardless of whether the Lender shall have resorted to any other Person or any property securing any of the Liabilities or any obligation hereunder or shall have proceeded against any other obligor primarily or secondarily obligated with respect to any of the Liabilities (all of the actions referred to in this paragraph being hereby expressly waived by Guarantor). SECTION H. Guarantor's Obligation Unconditional. Guarantor's obligations hereunder are independent in respect of any other Person, and the Lender may enforce any of its rights hereunder independently of any other right or remedy that it may at any time hold with respect to the Liabilities or any security or other guaranty therefor; provided that no double recovery of the same amount shall be permitted. Such obligations shall be absolute and unconditional, shall not be subject to any counterclaim, set off, deduction, diminution, abatement, recoupment, suspension, deferment, reduction or defense (other than full and strict compliance by the 's Guarantor with its obligations hereunder), whether based upon any claim that the Borrower or 2- F any guarantor, or any other Person may have against the Lender or any other Person or otherwise, and shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever(whether or not the Guarantor or any other Person shall have any knowledge or notice thereof) including, without limitation: A. any amendment, modification, addition, deletion, supplement or renewal to or of or other change in the Liabilities or any Loan Document or any of the agreements referred to in any thereof, or any other instrument or agreement applicable to any Loan Document or any of the parties to such agreements, or to the Collateral, or any assignment, mortgage or transfer thereof or of any interest therein, or any furnishing or acceptance of additional security for, guaranty of or right of offset with respect to, any of the Liabilities; or the failure of any security or the failure of the Lender to perfect or insure any interest in any collateral; B. any failure, omission or delay on the part of the Borrower or any guarantor to conform or comply with any term of any instrument or agreement referred to in clause A above; C. any waiver, consent, extension, indulgence, compromise, release or other action or inaction under or in respect of any instrument, agreement, guaranty, right of offset or security referred to in clause A above or any obligation or liability of the Borrower or any guarantor, or the Lender, or any exercise or non-exercise by the Lender of any right, remedy, power or privilege under or in respect of any such instrument, agreement, guaranty, right of offset or security or any such obligation or liability; D. any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or similar proceeding with respect to the Borrower or any guarantor, the Lender or any other Person or any of their respective properties or creditors, or any action taken by any trustee, receiver or court in any such proceeding; E. any limitation on the liability or obligations of any Person under any Loan Document, the Liabilities, any collateral security for the Liabilities, any other guaranty of the Liabilities or any discharge, termination, cancellation, frustration, irregularity, invalidity or unenforceability, in whole or in part, of any of the ` foregoing or any other agreement, instrument, guaranty or security referred to in ' clause A above or any term of any thereof; F. any defect in the title, compliance with specifications, conditions, design, operation or fitness for use of, or any damage to or loss or destruction of, or any interruption or cessation in the use of any Collateral by the Borrower, Guarantor or any other Person for any reason whatsoever(including, without limitation, any j } 3 - E governmental prohibition or restriction, condemnation, requisition, seizure or any other act on the part of any governmental or military authority, or any act of God or of the public enemy) regardless of the duration thereof (even though such duration would otherwise constitute a frustration of a lease), whether or not resulting from accident and whether or not without fault on the part of Guarantor or any other Person; G. any merger or consolidation of Borrower into or with any other Person or any sale, lease or transfer of any of the assets of Borrower or any guarantor to any other Person; H. any change in the ownership of any of the shares of capital stock of the Borrower or any structural change in the Borrower; I. any loan to or other transaction between the Lender and Borrower or any guarantor, or J. any other occurrence or circumstance whatsoever, whether similar or dissimilar to the foregoing, and any other circumstance that might otherwise constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or that might otherwise limit recourse against the Guarantor. The obligations of the Guarantor set forth herein constitute the full recourse obligations of the Guarantor enforceable against it to the full extent of all of its assets and properties, notwithstanding any provision of the Loan Documents or any other document or agreement to the contrary. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Liabilities and notice of or proof of reliance by the Lender upon this Agreement or acceptance of this Agreement, and the Liabilities shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Agreement. Guarantor unconditionally waives, to the extent permitted by law: (a) acceptance of this Agreement and proof of reliance by the Lender hereon; (b) notice of any of the matters referred to in clauses A through J above, or any right to consent or assent to any thereof; (c) all notices that.may be required by statute, rule of law or otherwise, now or hereafter in effect, to preserve intact any rights against Guarantor, including, without limitation, any demand, presentment, protest, proof or notice of nonpayment under any Loan Document and notice of default or any failure on the part of the Borrower or any guarantor to perform and comply with any covenant, agreement, term or condition of any Loan Document; (d) any right to enforcement, assertion or exercise against the Borrower of any right, power, privilege or remedy conferred in any Loan Document or otherwise; (e) any requirement of diligence on the part of any Person; (f) any requirement of the Lender to take any action whatsoever, to exhaust any remedies or to mitigate the damages resulting from a default by any Person under any Loan Document; (g) any notice of any sale,transfer or other disposition by any Person of any right under, title to or interest in any Loan Document, or any Collateral; and (h) 3 } 7 —4— s. I r any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge, release or defense of a guarantor or surety, or that might otherwise limit recourse against such Guarantor. Guarantor agrees that this Agreement shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of itself or the Borrower or any guarantor, is rescinded or must be otherwise restored by the Lender whether as a result of any proceedings in bankruptcy or reorganization. Guarantor further agrees that, without limiting the generality of this Agreement, if an Event of Default shall have occurred and be continuing and the Lender is prevented by applicable law from exercising its remedies under the Loan Documents, the Lender shall be entitled to receive hereunder from Guarantor, upon demand therefor, the sums which would have otherwise been due from the Borrower had such remedies been exercised. SECTION III. Waiver of Subrogation. Guarantor hereby irrevocably waives any claim or other rights, which it may now or hereafter acquire against the Borrower or any guarantor by virtue of any payments made by Guarantor hereunder. SECTION IV. Reasonableness and Effect of Waivers. Guarantor warrants and agrees that each of the waivers set forth in the Agreement is made with 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 of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by law. SECTION V. Representations and Warranties of Guarantor. As of the date hereof, Guarantor makes the representations and warranties set forth in this Section V to the Lender. A. Sui Juris. The Guarantor is sui juris. B. Authorization: No Conflict. The execution, delivery and performance by Guarantor of the Loan Documents to which he.is or is to be a party, and the consummation of the transactions contemplated thereby, do not and will not cause or constitute a violation of any provision of law or regulation or result in the creation of any lien, charge or encumbrance upon any of the properties, revenues, or assets of the Guarantor pursuant to, any indenture or other agreement or instrument to which the Guarantor is a party or by which the Guarantor or Guarantor's property may be bound or affected; no authorization, consent, approval (including any exchange control approval), license or other action by, and no notice to or filing or registration with, any governmental authority, agency or regulatory body or any other third party is required for the due execution, delivery and performance by Guarantor .of the Loan Documents. - 5 - B t C. Enforceability, etc. Each Loan Document to which the Guarantor is or is to be a party constitutes its legal, valid and binding obligation, enforceable against Guarantor in accordance with the terms thereof, except as such enforceability may be limited by applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and by general equitable principles. D. Litigation There is no action, proceeding or investigation pending or threatened to which Guarantor is or is to be a party in which Guarantor is challenging or intends to challenge the validity of the Loan Documents or any action taken or to be taken pursuant to the Loan Documents, and there is no action, proceeding or investigation pending or threatened to which Guarantor is or is to be a party which, if adversely determined, would have a material adverse effect on (i) the financial condition, operations or business, prospects or property of Guarantor taken as a whole, (ii) the ability of Guarantor to perform Guarantor's obligations hereunder or under any other Loan Document to which Guarantor is a party or(iii) the ability of the Lender to enforce this Agreement or any Loan Document. E. Taxes. Guarantor has filed or caused to be filed all United States Federal and all other material tax returns that are required to be filed by Guarantor, and has paid or caused to be paid all taxes shown to be due and payable on such returns or on any assessment received by Guarantor to the extent that such taxes have become due and payable except to the extent that taxes due, but unpaid, are being contested in good .faith by Guarantor by appropriate action or proceeding and, to the extent (if any) that such taxes are not due and payable, Guarantor has established or caused to be established reserves that are adequate for the payment thereof in accordance with generally accepted accounting principles. F. Investment Company Act. Guarantor is not an "investment company" or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. G. Public Utility Holding_Company. Guarantor is not subject to regulation as a "holding company," an "affiliate" of a "holding company," or a "subsidiary company" or a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. H. Solvency. The. consummation by Guarantor of the transactions.contemplated by the Loan Documents to which Guarantor is, or is to be, a party does not and will not render Guarantor insolvent, nor have the transactions contemplated by the Loan Documents to which Guarantor is, or is to be, a party been entered into by the Guarantor in contemplation of Guarantor's insolvency; the value of Guarantor's assets and properties at fair valuation and at their then present fair salable value is and, after such transactions, will be greater than Guarantor's total liabilities, including contingent liabilities, as they become due; the property remaining in Guarantor's hands was not and will not be an unreasonably small amount of capital. -6- r t i SECTION VI.. Event of Default. The occurrence of any of the following events shall constitute events of default("Events of Default")under this Agreement a.-Lid shall entitle the Lender to exercise all rights and remedies provided by applicable laws or otherwise set forth in this Agreement: A. The occurrence of an Event of Default as defined in any other Loan Document, subject to the giving of such notice and the expiration of such cure period, if any, as may be required therein. B. An Act of Bankruptcy(hereinafter defined) shall occur with respect to Guarantor; provided, however, if a proceeding with respect to an Act of Bankruptcy is filed or commenced against Guarantor, the same shall not constitute an Event of Default if such proceeding is dismissed within ninety (90) days from the date of such Act of Bankruptcy. The term "Act of Bankruptcy," as used herein, shall mean the filing of a petition in bankruptcy under the United States Bankruptcy Code, 11 U.S.C. §101 et. sM_, and all fixture acts supplemental thereto or amendatory thereof, or the commencement of a proceeding under any other applicable law concerning insolvency,reorganization or bankruptcy, by or against the Guarantor. C. A representation or warranty made by Guarantor herein, in any of the other Loan Documents to which Guarantor is a party, if any, or in any certificate, report or opinion (including legal opinions), financial statements or other instrument furnished by or on behalf of Guarantor in connection with this Agreement or the other Loan Documents, is proven to have been incorrect, false or misleading in any material respect. D. Any obligation of Guarantor, whether as principal, Guarantor, surety or other obligor, for the payment of any indebtedness or operating leases, (i) shall become or shall be declared due and payable prior to the expressed maturity thereof, or (ii) shall not be paid when due or within any grace period for the payment thereof, or(iii) any holder of any such obligation shall have the right to declare such obligation due and payable prior to the expressed maturity thereof. E. The occurrence of a default under any other indebtedness owed by Guarantor or any affiliate of Guarantor to the Lender, whether now existing or hereafter created, whether secured or unsecured, subject to the giving of such notice and the expiration of such cure period, if any, as may be required thereunder. SECTION VII. Confession of Judgment. GUARANTOR DOES HEREBY EMPOWER ANY ATTORNEY OF,ANY COURT OF RECORD WITHIN THE UNITED STATES UPON THE OCCURRENCE OF AN EVENT OF DEFAULT TO APPEAR FOR THE GUARANTOR AND, WITH OR WITHOUT DECLARATION FILED, CONFESS JUDGMENT AGAINST THE GUARANTOR AND IN FAVOR OF THE LENDER, ITS SUCCESSORS AND ASSIGNS, FOR SUCH SUMS AS SHALL HAVE BECOME DUE UNDER THIS AGREEMENT, BY ACCELERATION OR OTHERWISE, WITH COSTS OF SUIT AND AN ATTORNEYS' COMMISSION FOR COLLECTION,AND FORTHWITH ISSUE A WRIT OR - 7 - j i WRITS OF EXECUTION THEREON, WITH RELEASE OF ALL ERRORS, AND WITHOUT STAY OF EXECUTION, AND INQUISITION AND EXTENSION UPON AND LEVY ON REAL ESTATE ARE HEREBY EXPRESSLY WAIVED, AND CONDEMNATION AGREED TO, AND EXEMPTION OF ANY AND ALL LAND FROM LEVY OR SALE BY VIRTUE OF ANY EXEMPTION NOW IN FORCE OR WHICH MAY HEREAFTER BE ENACTED IS ALSO EXPRESSLY WAIVED BY THE GUARANTOR. IF A COPY OF THIS AGREEMENT, VERIFIED BY AFFIDAVIT OF THE LENDER, OR SOMEONE ON THE LENDER'S BEHALF, SHALL HAVE BEEN FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS AGREEMENT AS A WARRANT OF ATTORNEY. THE ENTRY OF JUDGMENT UNDER THE FOREGOING WARRANT SHALL NOT EXHAUST THE WARRANT, BUT SUCCESSIVE JUDGMENTS MAY BE ENTERED THEREUNDER FROM TIME TO TIME AS OFTEN AS AN EVENT OF DEFAULT OCCURS. THE LENDER MAY FORTHWITH ISSUE A WRIT OR WRITS OF EXECUTION FOR THE AMOUNT OF ANY JUDGMENT AND COSTS WITHOUT LEAVE OF COURT. GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL INTCONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT. GUARANTOR HEREBY FREELY, KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO THIS CONFESSION OF JUDGMENT PROVISION. SECTION VIII. Transfer by the Lender. The Lender may, from time to time, whether before or after any discontinuance of this Agreement, at its sole discretion and without notice to or consent of the Guarantor, assign or transfer any or all of the Liabilities or any interest therein; and, notwithstanding any such assignment or transfer or any subsequent assignment or transfer thereof, such Liabilities shall be and remain Liabilities for the purposes of this Agreement, and each and every immediate and successive assignee or transferee of any of the Liabilities or of any interest. therein shall, to the extent of such assignee's or transferee's interest in the Liabilities, be entitled to the benefits of this Agreement to the same extent as if such assignee or transferee were the Lender. SECTION IX. No Waiver by the Lender. No delay in the exercise of any right or remedy shall. operate as a waiver thereof, and no single or partial exercise of any other right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy; nor shall any modification or waiver of any of the provisions of this Agreement be binding upon the Lender except as expressly set forth in a writing duly signed and delivered on its behalf: No action permitted hereunder shall in any way affect or impair the Lender's rights or Guarantor's obligations under this Agreement. For the purposes of the Agreement, Liabilities shall include all of the obligations described in the definition thereof, notwithstanding any right or power of Guarantor or anyone else to assert any claim or defense as to the invalidity or enforceability of any such obligation, and no such claim or defense shall affect or impair the obligations of Guarantor hereunder. Guarantor's obligations under this Agreement shall be absolute and unconditional irrespective of any circumstance, whatsoever which might constitute a legal or equitable discharge or defense of such Guarantor. Guarantor hereby acknowledges that there are no conditions to the effectiveness of this Agreement. SECTION X. Heirs and Assiggs. All obligations under this Agreement shall be binding upon Guarantor and upon Guarantor's heirs and assigns; provided, however, that this provision should not constitute any right of Guarantor to assign Guarantor's rights or obligations under this Agreement or the other Loan Documents. All references herein to Guarantor shall be deemed to include any successor or successors,whether immediate or remote, to such Person. SECTION XI. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Agreement shall be prohibited by or invalid thereunder, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. SECTION XII. Submission to Jurisdiction. Each party hereto may bring suit to enforce any claim arising from or relating to this Agreement or any other Loan Document in any appropriate court in Franklin or York Counties, Pennsylvania at the discretion of the Lender and with respect to any such claim, Guarantor hereby irrevocably: (a) submits to the jurisdiction of such courts; and (b) consents to the service of process out of said courts by mailing a copy thereof, by registered mail,postage prepaid,to the Guarantor at its address specified in Schedule I attached hereto and incorporated herein by reference, and agrees that such service, to the fullest extent permitted by law: (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding; and (ii) shall be taken and held to be valid personal service upon and personal delivery to it. Guarantor irrevocably waives, to the fullest extent permitted by law. (A) any claim, or any objection, that it now or hereafter may have, that venue is not proper with respect to any such suit, action or proceeding brought in such a court including, without limitation, any claim that any such suit, action or proceeding brought in such court has been brought in an inconvenient forum; and(B) any claim that Guarantor is not subject to personal jurisdiction or service of process in such forum. Nothing herein contained shall preclude the Lender from bringing an action or proceeding in respect hereof in any other state or Federal court within. the United States having subject matter jurisdiction with respect to such action and personal jurisdiction over the parties to such action. Guarantor agrees that a final judgment in any action or proceeding in a state or Federal court within the United States may be enforced in any other jurisdiction by suit on the judgment or in any manner provided by law. SECTION XIII. Jury Trial. GUARANTOR WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY RELATED DOCUMENT OR UNDER. ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED i - 9- DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURE'. SECTION XIV. Notices. All notices, demands, requests, consents, approvals, and other instruments hereunder shall be in writing and shall be deemed to have been properly given if given in the manner provided in Loan Agreement to the address specified in Schedule I hereto. SECTION XV. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY; AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO PRINCIPLE&OF CONFLICT OF LAWS. SECTION XVI. JOINT AND SEVERAL. The Liabilities are the joint and several obligations of Guarantor and each other guarantor of the Loan. IN WITNESS WHEREOF,the Guarantor has caused this Agreement to be executed and delivered as of the date first above written. ch Cassidy t { 1Q t SCHEDULE I ADDRESSES Guarantor Michael J. Cassidy 18 Log Cabin Road Newville, PA 17241 i i 3. 3 P L g S 6 `f DISCLOSURE FOR CONFESSION OF JUDGMENT Declarant: Michael J. Cassidy Lender. Orrstown Bank DISCLOSURE FOR CONFESSION OF JUDGMENT THE DECLARANT IS EXECUTING AS OF JUNE 2010, THE FOLLOWING INSTRUMENT(THE"INSTRUMENT"). $ 1,486,500.00 GUARANTY AND SURETYSHIP AGREEMENT A. THE DECLARANT UNDERSTANDS THAT THE INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO EN'T'ER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE INSTRUMENT, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE INSTRUMENT, 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 INSTRUMENT, THE DECLARANT IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE DECLARANT EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT AGAINST DECLARANT BY CONFESSION AS PROVIDED FOR ` IN THE CONFESSION OF JUDGMENT PROVISION. B. THE DECLARANT 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 INSTRUMENT 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 DECLARANTS PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE INSTRUMENT, BEING FULLY AWARE OF DECLARANTS RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE DECLARANT IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE DECLARANT EXPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN ANY MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING DECLARANT ANY ADVANCE NOTICE. t C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING q STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES; THE DECLARANT REPRESENTS THAT: INITIALS 1. DECLARANT WAS REPRESENTED BY DECLARANT'S OWN DEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE INSTRUMENT. 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE ONTFESSION OF JUDGMENT PROVISION IN THE INSTRUMENT TO DECLARANT'S ATTENTION. 3. DECLARANT'S ANNUAL INCOME EXCEEDS $10,000. 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: c aei J.Ca I f Y t i -2- t t . a Open-End Mortgage and Security Agreement dated Jane 30, 2010, executed by G & C ASSOCIATES, a Pennsylvania partnership, the grantor, to Orrstown Bank,the Lender,recorded on July 15, 2010,as Inst<vment Number 201019043 in the Official Records of Cumberland County, State of Pennsylvania ("Recorder's Office"), as the same may have been assigned, amended, supplemented, restated or modified(the "Mortgage"). The Mortgage covers the property described therein, less and except any portion of the property previously released and/or reconveyed. TO HAVE AND TO HOLD the same unto said MAGNOLIA PORTFOLIO, LLC, ITS SUCCESSORS AND ASSIGNS. THIS ASSIGNMENT IS MADE WITHOUT RECOURSE, REPRESENTATION OR WARRANTY,EXPRESS OR M(PLIED,WRITTEN OR ORAL,BY ASSIGNOR. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] AMO Ref.:2310.017 Loan Nam.C,&C ASSOCIATES Loan Rd:714819+023 IN WITNESS WHEREOF, Assignor has caused this instrument to be executed this day of February,2013. ASSIGNOR: ORRSTOWN BANK,a Pennsylvania banking corporation By: Magnolia Portfolio,LLC,a Delaware limited liability compan By: Name: R.Patterson Jackson Title: Authorized Signatory R�►�+uc�srt s��1m1�( R�u��c�'0��nr - �,o2d� arx,tct aa18015a .)►s ACKNOWLEDGMENT STATE OF CALIFORNIA } } SS. COUNTY OF ORANGE } On this day of February, 2013' befo a personally appeared R. Patterson Jackson, as Authorized Signatory for Magnolia Portfol' C, a Delaware limited liability company, Attorney-in- Fact for Orrstown Bank, a Pennsylvan' anking corporation, known to me or proved to me on the basis of satisfactory evidence to be the ons who executed the foregoing instrument, and they thereupon duly acknowledged to me tha ey executed the same to be their free act and deed. WITNESS my hand and o cial sea]. My commission pires: Name of Notary: AMO Rd:2510_017 Loan Name:G&C ASSOCIATES Loan Rcf.:714819025 State of California ) County of Orange ) On February S, 2013, before me, Lynn Mattson, Notary Public, personally appeared R. Patterson Jackson, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. LYNN MAIbuN commission 1930475 x < ,a Notary Public-California s Orange County M Comm.Expires Mar 27.2015 (SEAL) RMMYfu—blic Signature ♦IHL• f iVi�V7JJY � IM� . �� ROBERT P. ZIEGLER RECORDER OF DEEDS CUMBERLAND COUNTY 1 COURTHOUSE SQUARE - CARLISLE, PA 17013 =_ s 717-240-6370 • Instrument Number-201304938 Recorded On 2113/2013 At 12:58:30 PM •Total Pages-5 •Instrument Tvpe-ASSIGNMENT OF MORTGAGE Invoice Number- 129281 User ID-MSW •Mortgagor-G&C:ASSOCIATES •Mortgagee-MAGNOLIA PORTFOLIO LLC •Customer- SIMPLIFILE LC E-RECORDING •FEES STATE WRIT TAX $0.50 Certification Page STATE JCS/ACCESS TO $23.50 JUSTICE DO NOT DETACH RECORDING FEES — $12.50 RECORDER OF DEEDS PARCEL CERTIFICATION $70.00 This page is now part FSEs of this legal document. COUNTY ARCHIVES F93 $2.00 ROD ARCHIVES FEE $3.00 TOTAL PAID $110.50 I Certify this to be recorded in Cumberland County PA )A74- RECORDER OF DEFDS •-Inrormadw drooted by an astMsk may change during the veri/lcat6an process and may aot be reneded oa tbls page. _ - CERTIFIRD PROFYRTY IORNTIFICATIOM NU1RE.R.B 36-33-1871-003 - 5HIPPENSBURO T. 32-34-241.3-313 - SHIPP-MST MART 36-35-2385-125 - SHZPPSHB15 O T. 36-35-2386-010 - 8HIPP1tr8BUR0 T. 36-35-2385-132 - SHIPFBNSBURO T. 39-35-2383-023 - 80>:>z'HA>WTON TP UCC FINANCING STATEMENT AMENDMENT 36-35-2386-013 - SHIPPYMSBURO T. FOQL CAREFUig CCOIS MWISTRT 02/13/2013 BY TB HMAE 3 PHOWF OF CONTACT AT FILER[ Recording Department 405 238-0003 8ENDACIWOWL.EDGBAENTT0.pftMerWAtltlroe6) Anderson, McCoy&Orta PC 100 North Broadway Suite 2600 Oklahoma City,OK 73102 THE ABOVE SPAM 18 FORFIL Mp OFFICE USE ONLY #201019044 filed 7/15nm b010; Cumberland County, PA �„ 0 STATEWNT r L,.fJ10 qor�to+.�d.co N trw 2. _j TEFiATlNA710N: Odlao7.re�db p StetenOutt idwR RP Md shoe Y temeseYri arlr 7p�ct b tb MV4200 d ft&—W Poo acid w Otis Te m%wien Ids W'WL ]. eo 9Tedwea*fewFtnenot>o 5YdleTnn td.ree.e mew Mal rlasea 0**=2V ktW Wd}d!w 8eaew Prq tw,00*'r 6Wjft*A ar Mand Ar Ole eddlimW p.Koa pwbd sF 6I,{/CaW lea <. ��A$$IGIVMENT p..rimae dewtf/ve to ODern t•a 7p end edlrer d era else yw nern of ano in Wm 4. S. DN (PARTY erewetrwR elttrta I Oafdor to 8eoxw a+b 401 or CCee sena J aw d Berard.Ohec1 AMD 1V*M V=d r&1- rtree toga nd;,ki eppepdae adomndo,r M eoao 6-Wft 7. f j� udlar w�Glw f M arm a m yr.rwa� r MUM n.,.:Oh mmmnr na ��AOO.r..c Gbr�INt tsm In 7�or Tp r w abe 1 rrr s h lens Te To be dnifW In wn as«m, errr 7d- 6. eK G&C ASSOCIATES, a Pennsylvania partnership OR ft tNOAAOUAL'S LAST NAME FIRST NMIE MMOLE KNAE WFM T. ♦OROMUZATi0" MAGNOLIA PORTFOLIO, LLC,a Delaware limited liability company OR FIRST NAA MIOOLE NAW 7C.=G AOI KESS CITY STATE PORTAL CODEEIE c/a Sabal Financial Group,L.P.,4675 MacArthur Co Newport Beach CA 92660 7d.TAI(IO!83N OR mm INFO 76.TYPE OF ORO 2ATION Tr. OF ORWRRATION OROAIWATM 9 ORGANIZATIONAL b s,It wry ar. TFRAL «11p LONE Onvtv oauarrra aaeted or(].m.a or ox,• .❑reereeed eo4atanf eaotI:U «dentea aoeeb,y r".eaOwtl Parcel ID: 36-33-1871-003, 32-34-2413-315, 36-35.2385-125;36-36-2386-010; 36.35-2385-132: 39-35-2383-023 and 36-35.2386-013 A NAME OF OF RECORD AUTHORmNO THIS AMEImMENT ow*or wbnx if dd,b■,meq.!td Y en Aerrept�en aewbod e aev<oohbr>r er eddo or euveal�q deb,a!tea b a Te Tntrlen■etaIM q e Dettor,0*t%ter* aid~name d DEBTOR ag"'t,o nY xnwwa nL aNar RL ORGWMATLON6HAW ORRSTOWN BANK OR WIMMOUNVe LAST NAILE FIRST HNHE MULE NAME SUFFCI R G&C ASSOCIATES(Loan Ref.: 714819025 AMO Rei.:2510.017) FILM OFFICE COPY-NATIONAL UOC FIW CMC;STATHIENT AKENM ENT(FORM(JCC3)(REN.OSI711pQ) ROBERT P. ZIEGLER RECORDER OF DEEDS CUMBERLAND COUNTY 1 COURTHOUSE SQUARE _ CARLISLE, PA 17013 =r 7I7-240-6370 Instrument Number-201304935 Recorded On 2113/2013 At 12:52:52 PM 'Total Pages-2 "Instrument Type-FINANCING STATEMENT-ASSIGNMENT Invoice Number- 129278 User ID- MSW _ •Debtor-G&C ASSOCIATES "Secured Party-MAGNOLIA PORTFOLIO LLC "Customer- SIMPLIFILE LC E-RECORDING •FEES RECORDING FEES - $95.00 Certification Page RECORDER OF DEEDS PARCEL CERTIFICATION $,70-00 DO NOT DETACH FESS COUNTY ARCHIVES FEB $2.00 ROD ARCHIVES POE $3.00 This page is now part TOTAL PAID $170.00 of this legal document. I Certify.this to be recorded in Cumberland County PA RECORDER OF DEEDS •_Inforundon denotrd by an asterisk amy cb=V during Ike vcrW=ttom process and may rW be reflected on this page. File Number: 2013021501979 Date Filed:02/15/20311A7AM Carol Alchele UCC FINANCING STATEMENT AMENDMENT Secretary of the Commonwealth FOLLOW INSTRUCTIONS CAREFULLY A.NAME 6 PHONE OF CONTACT AT FILER[optionall clhitds,ptaria (4051 236.,0003 6.SEND tiZKNOYYLEDGYENTTO: (Name and Address) Qlorla Childs 100 north broadway suite 2600 Oklahoma city ok 73102 Barcode too bit to ft in this area DWI:gchildsCamopc.com Fax.(445)236-1448 THE ABOVE SPACE 1S FOR FILING OFFICE USE ONLY 1a.INITIAL FINANCe4G STATEMENT FILE 0 I Thin FINANCING STATEMENT AMENOMENT is 2010071600820 fD tobaftorr ledlecorti](ormcordad)intht I --REAL rrra�r aGrrone 2O TEGMINAT10N.ETIWN" 11 or IM F rtnono Sbetamem tdamrJad mnweR"f"Inued in r4s poet to wuty into mp(S)of Sec--Lrtd EA �,atnDn¢,rg:I.s TORDSion$toament -- 3,OCAN OMW P1 r0N:E oodedon s:ci the FI ft. 5wtamrt 10011]hed ab Ova wqh hSoeet to se Omly mterest(s)oS ri e twn,md Penv oitrimzi ng inis COnpnuaDdn Ste[omtirt is Cone neo for the aOOlbanl0 pt rpO Dt'WIdW by�6M1cahM Ian. T 16 ASSIGNMENT(A/l at Omd) T AMENDMEW(PA 1TYINFORMA,TION):ThisAmendmentaffects Domar er savwPsyerreeoro CrWJGEnamwervorammis; [3 DELETE name 0 ADDname 6. CURRENT RECORD INFORMATION; ta.ORG4NI2ATXM'S NAME OR MAGNOLIA PORTFOUO,LLC,a Delaware limited liability company 1b.INDMDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX T. CHANGEMEW)ORADDED INFORMATION 7a.ORGANQATM'S NAME OR MAGNOLIA PORWOU0,LLC,a DehWaM limited liability Company 7b.1NDMDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX Ta_"LING ADDRESS CITY STATE POSTAL CODE COUNTRY do Sabal Flnanalel Group,LP.,4675 MacArthur Newport Beach CA 92980 Cant,Butte 1660 USA d AM>:NDMENT(COLLATERAL CHANGE) DeWft CdXb tt C] WM4 or Q added.n c ve ert ra O regdted CORZI(rN WScndbm or doxnte CciliWue: p M-9ma A NAME of SECURED PARTY o1 RECORD AIJ TORIZNG THIS AMENDMENT Q DEBTOR ewTerivnplhc ameramiitt Stt.ORG0.NPJIT 'S OR ORRSTDYVN BANK Sb.INDMDUAL'S ASYNAME FIRSTNAME MIDDLE NAME SUFFIX 1 D.OPr ONAL FILER REF ERENCE 1.]s.TA 2510.017 2510.017 ASSIGNMENT OF SECURITY DOCUMENTS ORRSTOWN BANK, A PENNSYLVANIA BANKING CORPORATION, ("Assignor"), for good and valuable consideration, the receipt and sufficiency of which are acknowledged, hereby sells, transfers, assigns, delivers, sets-over and conveys to MAGNOLIA PORTFOLIO, LLC, A DELAWARE LIMITED LIABILITY COMPANY, its successors and assigns ("Assignee"), without recourse to the Assignor, and without representations, warranties or covenants, express or implied, written or oral, by the Assignor, all right, title and interest of the Assignor in and to the loan identified on Exhibit A attached hereto (the "Loan"), including without limitation all of Assignor 's right, title and interest in any guaranties, loan participation interests, indemnities, claims, collateral, insurance policies, certificates of deposit, letters of credit, escrow accounts, performance bonds, demands, causes of action and any other collateral arising out of and/or executed and/or delivered in or to or with respect to the Loan, together with any other documents or instruments cxccuted and/or delivered in connection with or otherwise related to the Loan. Dated this of February,2413 ASSIGNOR: ORRSTOWN BANK,a Pennsylvania banking corporation By: MAGNOLIA PORTFOLIO, LLC, a Delaware limited liability compan its Attorney-in-Fact By: Name: R. Patterson Jackson Title: Authorized Signatory AMO Ref.: 2510.017 Loan Name: G&C ASSO IATF.S Loan Ref.:714819025 C3RTIYI -1a871-lD PROPB003R—TT I'RUTIPICATION HUHM R8 SHIPPMSEMO TP 36-33 32-34-2413-315 - SHIPP-aC,MT WARD 36-35-2385-125 - SHIPPSHSMW TP 36-35-2386-010 - SHIPMSV.UW TP 36-35-2385-132 - SHIPP&HSB= TP 35-35-2386-013 - SHIPPSMSBUR0 TP 39-35-2383-023 - SOtn%AK@TON TP ccnla AXOISTRT 02/13/2013 BY TB THIS DOCUMENT PREPARED BY AND UPON RECORDATION,RETURN TO: ANDERSON,MCCOY 8c ORTA,P.C. 100 North Broadway,Suite 2600 Oklahoma City,OK 73102 Telephone: (888)236-8007 Cumberland County,State of Pennsylvania Tax Map No.or Tax Parol Identification No.:36-33-1871-003,32-34-2413,'315;36-35-2385.125; 31F35-2386-010;36-3&2385.132;39-35-2383-023 and 36-35-2386-013 I certify that the precise address of the Assignee is c/o Sabal Financial Group,L.P.,4675 MacArthur Court,Suite 1550,Newport Beach,CA 92660 Nicl alone ASSIGNMENT OF MORTGAGE KNOW ALL MEN BY THESE PRESENTS: THAT, Orratown Bank, a Pennsylvania banking corporation, having an address of 77 East King Street, Shippensburg,PA 17257(hereinafter referred to as"Amignor'% for value received, does by these presents, grant, sell,transfer, assign, convey and set over to Magnolia Portfolio,LLC, a Delaware limited liability company. its successors and assigns(hereinafter referred to as "Assignee" having an address of c% Sabal Financial Group, L.P., 4675 MacArthur Court, Suite 1550, Newport Beach, CA 92660, all of Assignor's right, title and interest in and to that certain: AMO Ref.:,2510.017 1.081,Nume:c1&C ASSOCIATES Loan lief:714819M THIS DOCUMENT PREPARED BY AND UPON RECORDATION, RETURN TO; ANDERSON,MCCOY 8r.ORTA,P.C. 100 North Broadway,Suite 2600 Oklahoma City,OK 73102 Telephone: (888)236-0007 Cumberland County,State of Pennsylvania Tax Map No.or Tax Parcel Identification No.:36-33-1871-003,32,34-2413-315;36-35-2385-125; 36-35-2386.010;3&-35-2385-132,39-35-23&3-023 and 36-35-2386-013 I certify that the precise address of the Assignee is c/o Sabal Financial Group, L.P.,4675 MacArthur Court,Suite 1550,Newport Beach,CA 92660 Nic llone ASSIGNMENT OF MORTGAGE KNOW ALL MEN BY THESE PRESENTS: THAT, Orrstown Bask, a Pennsylvania banking corporation, having an address of 77 East King Street, Shippensburg, PA 17257 (hereinafter referred to as"Assienor'), for value received, does by these presents, grant, sell, transfer, assign, convey and set over to Magnolia Portfolio, LLC,a Delaware limited liability company, its successors and assigns(hereinafter referred to as "Assignee" having an address of c/o Sabal Financial Group, L.P., 4675 MacArthur Court, Suite 1550, Newport Beach, CA 92660, all of Assignor's right, title and interest in and to that certain: AMO Ref.:2510.017 Loan Name:G&C ASSOCIATES Loan Rd.:714819023 EXHIBIT"A" TO ASSIGNMENT OF SECURITY DOCUMENTS That certain loan dated June 30, 2010, in the stated original principal amount of$1,486,500.00, executed by G & C ASSOCIATES, a Pennsylvania partnership to Orrstown Bank, which is secured by properties located in Cumberland County, State of Pennsylvania. AMO Ref.: 2510.017 Loan Name: G&C ASSOCIATES Loan Ref.:714519025 EXHIBIT F Kate Deringer Sallie 1;t,r7rli'3°,079�',' f.r (7 17) ?3IF-G.S7(j A &'Ti5'U 111C'(f?/1TUC t1S'-1'lnOn.Colt! R O D S SINN U1-) FIIJ:\'Cl: 12652.101 - s i une 19, 2014 Re: DEMAIND N011.CE VIA FEDERAL EXPRESS Mark. D. Hipp, Esquire Mette [vans ,&, Woodside 11C 3401 North Front Street h.0. Box 5950 Ilarrisburg, PA 17110-0950 Dear Mr. Hipp: We represent Sabal. Financial Group; L.P.; as servicing agent for Magnolia Portfolio, LLC (the "Lender") w.ho purchased those certain loans made to G&C Associates, being more specifically identified as Loan Nos, 104182-001, 104186-001, 104187-001. and 104188-001, which such loans are guaranteed by Michael and Julie Cassidy. It is our understanding that you represent G&C Associates and Michael and Julie Cassidy (collectively, the "Obligors"), and that you 4vill share this Notice: with your clients. if that is not the case, please advise us within the next.three (3) days so that.we can.re-deliver this notice accordingly. The foregoing loans may be referred to herein as each a "Loan" and. collectively. the "Loans". Capitalized terms used herein shall.have the meanings attributed thereto by the various loan documents associated \with the Loans (the "Loan Documents') unless otherwise defined herein. As you may know, the Loans were in default at the time Lendcr purchased them, and since that time, the Obligors have made efforts to make paymcnis and rehabilitate the Loans. Unfortunately, the Obligors have not made consistent or timely payments as required under the Loan :Documents, and therefore, the Loans continue to be in default. 'file failure to snake timely payments on the Loans constitutes an event.of default under the Loan Documents (the "Events of Default"). As a result.of the Events of Default. the Lender was and continues to be entitled to pursue various rights and remedies under the Loan Documents, including, without limitation, the ac.ccle.ration of all 0l the indebtedness that is owed by the Obligors to the Lender under the Loan One South Market Square, 12th Floor • P.O. Box, 1146 Harrisburg, PA 17108-114.6 • ph: 717.233.5731 4540381 29 Dowlin Forge Road • Exton, PA 19341 • ph: 610.423.4200 • fax: 610.423.4201 Id11.MCI.Vhoads-SInon.corn MAGNOLIA PORTFOLIO, LLC, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA V. CIVIL ACTION - LAW G G&C ASSOCIATES and NO. JULIE A. CASSIDY, Defendants c , ENTRY OF JUDGMENT AND NOW, this .26 day of August, 2014, Judgment is hereby entered in favor of the Plaintiff Magnolia Portfolio, LLC, and against Defendants G & C Associates and Julie A. Cassidy and damages are assessed in the amount of$1,507,260.32 together with accruing interest at a per diem rate of$282.84 from the date of judgment. Prothonotary 960145.2 Stephanie E.DiVittore,Esquire , Attorney I.D.No. 85906 AUG 26 AN 11 : 03 Kathryn D. Sallie,Esquire CUMBERLAND �� if Attorney I.D.No. 108116 RHOADS& SINON LLP PENNSYLVANIA One South Market Square P.O. Box 1146 Harrisburg,PA 17108-1146 (717)233-5731 Attorneys for Plaintiff MAGNOLIA PORTFOLIO, LLC, : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA V. CIVIL ACTION - LAW ' G& C ASSOCIATES and NO. JULIE A. CASSIDY, Defendants NOTICE UNDER RULE 2958.1 OF JUDGMENT AND EXECUTION THERETO Notice of Defendant's Rights To: G & C Associates 18 Log Cabin Road Newville, PA 17421 Julie A. Cassidy 18 Log Cabin Road Newville, PA 17421 A judgment in the amount of One Million Five Hundred and Seven Thousand Two Hundred and Sixty Dollars and Thirty Two Cents ($1,507,262.32) plus interest from the date of judgment accruing at the rate of Two Hundred Eighty Two Dollars and Eighty Four Cents ($282.84)per day and costs of collection, has been entered against you and in favor of the Plaintiff without any prior notice or hearing based on a Confession of Judgment contained in a written agreement or other paper allegedly signed by you. The Sheriff may take your money or other property to pay the judgment at any time after thirty (30) days after the date on which this notice is served on you. You may have legal rights to defeat the judgment or to prevent your money or property from being taken. YOU MUST FILE A PETITION SEEKING RELIEF FROM THE JUDGMENT AND PRESENT IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE 960145.2 T j DATE ON WHICH THIS NOTICE IS SERVED ON YOU OR YOU MAY LOSE YOUR RIGHTS. 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. Court Administrator 4th Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 Lawyer Referral Service 4th Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 Lawyer Referral Service: Pennsylvania lawyer Referral Service (800) 692-7375 960145.2 MAGNOLIA PORTFOLIO, LLC, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA V. CIVIL ACTION - LAW G& C ASSOCIATES and NO. 1 tr- 5Ol,q cad c JULIE A. CASSIDY, MC 7-W Y MCO ri C—_ "I - Defendants -Defendants 'cr u 3>C PRAECIPE FOR ENTRY OF JUDGMENT To: The Prothonotary Pursuant to the attached Entry of Judgment, please enter judgment in favor of the Plaintiff Magnolia Portfolio, LLC and against Defendants G & C Associates and Julie A. Cassidy and damages are assessed in the amount of$1,507,260.32 together with interest from the date of judgment accruing at the rate of$282.84 per day plus costs of collection. RHOADS & SINON LLP By: Stephanie DiVittore Kathryn D. Sallie One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants G & C Associates and Julie A. Cassidy for purposes of confession of judgment; Attorneys for Plaintiff Magnolia Portfolio, LLC, for all other purposes 960145.2 MAGNOLIA PORTFOLIO, LLC, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA V. CIVIL ACTION -LAW G& C ASSOCIATES and NO. JULIE A. CASSIDY, Defendants NOTICE OF ENTRY OF CONFESSED JUDGMENT To: G & C Associates 18 Log Cabin Road Newville, PA 17421 Julie A. Cassidy 18 Log Cabin Road Newville, PA 17421 You are hereby notified that on August, , 2014,judgment by confession was entered against you in the amount of$1,507,260.32 together with accruing interest at a per diem rate of $282.84 from the date of judgment. Attached hereto are copies of all documents filed with the Prothonotary in support of the confession of judgment. Date: Prothonotary 960145.2 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. Court Administrator 4th Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 Lawyer Referral Service 4th Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 Lawyer Referral Service: Pennsylvania lawyer Referral Service (800) 692-7375 960145.2 Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 Kathryn D. Sallie, Esquire Attorney I.D. No. 108116 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff MAGNOLIA PORTFOLIO, LLC, COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. CIVIL ACTION — LAW G & C ASSOCIATES and JULIE A. CASSIDY, Defendants CASE NO. 14-5018 PROOF OF SERVICE As evidenced by the Acceptance of Service attached hereto as Exhibit "A" and incorporated herein by reference, the Complaint in Confession of Judgment, Notice of Entry of Confessed Judgment, Praecipe for Entry of Judgment, Notice under Rule 2958.1 of Judgment and Execution Thereto, Confession of Judgment and Entry of Judgment was served upon Defendants G & C Associates and Julie A. Cassidy on September 9, 2014. Respectfully submitted, RHOADS & SINON LLP By: (3-d72-1, Stephanie E. DiVittore One South Market Square P. 0, Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff 9638211 EXHIBIT "A" 963821.1 MAGNOLIA PORTFOLIO, LLC, :.IN THE COURT OF COMMON PLEAS : OF CUMBERLAND COUNTY, Plaintiff : PENNSYLVANIA v. : CIVIL ACTION - LAW G & C ASSOCIATE and : NO. 14-5018 CIVII, JULIE A, CASSIDY, Defendants ACCEPTANCE OF SERVICE I, Heather Zink Kelly, Esquire, accept service of the Complaint in Confession of Judgment, Notice of Entry of Confessed Judgment, Praecipe for Entry of Judgment, Notice under Rule 2958.1 of judgment and Execution Thereto, Confession of Judgment and Entry of Judgment in this matter on behalf of Defendants G & C Associates and Julie A. Cassidy. As counsel for Defendants, I certify that I am authorized to do so. Date: 962693.1 &ACOCRO-4 Heather Z. Kel. , Esquire Mette, Evans & Woodside 3401 North Front Street Harrisburg, PA 17110-0950 Attorneys for Defendants CERTIFICATE OF SERVICE I hereby certify that on this day of September 2014, a true and correct copy of the foregoing Proof of Service was served by means of United States mail, first class, postage prepaid, upon the following: 963821.1 Heather Z. Kelly, Esq. Mette, Evans & Woodside 3401 North Front Street Harrisburg, PA 17110-0950 Heather Z. Kelly, Esquire Sup. Ct. I.D. No. 86291 METTE, EVANS & WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 — Phone (717) 236-1816 — Fax hzkelly@mette.com Attorney for Defendants MAGNOLIA PORTFOLIO, LLC, Plaintiff VS. G & C ASSOCIATES, and JULIE A. CASSIDY, Defendants �. E0 -OFFICE PROTI'10NOTARY N114NI14 OCT -8 PM 3: 33. CUMBERLAND COUNTY PENNSYLVANIA IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, : PENNSYLVANIA : NO. 14-5018 Civil Action : CONFESSION OF JUDGMENT PETITION TO OPEN OR STRIKE CONFESSED JUDGMENT AND MOTION TO STAY EXECUTION NOW COME Defendants, G & C Associates ("G&C") and Julie A. Cassidy ("Cassidy," and, collectively with G&C, "Defendants"), by and through their attorneys, Mette, Evans & Woodside, and file the within Petition to Open or Strike Confessed Judgment and Motion to Stay Execution (collectively, the "Petition") filed by Magnolia Portfolio, LLC ("Plaintiff"), and in support whereof aver as follows: Background 1. On August 26, 2014, Plaintiff filed a Complaint in Confession of Judgment (the "Complaint") against Defendants and entered judgment pursuant thereto (the "Judgment"). 2. The Judgment was entered pursuant to warrants of attorney contained in a June 30, 2010 Term Loan Note executed by Defendant G&C in favor of Orrstown Bank (the "Note") and a Guaranty and Suretyship Agreement executed by Cassidy guarantying the indebtedness evidenced by the Note (the "Guaranty"). The Note and Guaranty are attached to the Complaint as Exhibits "C" and "D", respectively. 3. Plaintiff avers in the Complaint that it is the successor by assignment to the Note and Guaranty based on "Assignments" that are attached to the Complaint as Exhibit "E." 4. The Assignments attached to the Complaint consist of (1) an "Assignment of Mortgage" referencing a mortgage recorded with the Cumberland County Recorder of Deeds at Instrument No. 201019043; (2) a UCC Financing Statement Amendment assigning and referencing a Financing Statement recorded with the Cumberland County Recorder of Deeds at Instrument No. 201019044; (3) a UCC Financing Statement Amendment assigning and referencing a Financing Statement with a File Number of 2010071500820 and (4) an "Assignment of Security Documents" for certain specified documents executed in connection with a June 30, 2010 "Loan" (as defined in the Assignment of Security Documents). 5. All of the Assignments attached to the Complaint are executed by Plaintiff, the purported Assignee of the documents. 2 6. The Assignment of Mortgage, which does not specifically assign the Note or Guaranty to Plaintiffs, indicates that it is executed by Plaintiff's "Authorized Signatory" "Pursuant to the Limited Power of Attorney Recorded January 30, 2013 as Instrument 201303263" (the "Limited POA"). 7. The Limited POA is not attached to the Complaint. 8. Notwithstanding, the Limited POA is a public record recorded with the Cumberland County Recorder of Deeds and is attached hereto as "Exhibit A." 9. The Limited POA references a "Loan Sale Agreement" between Orrstown Bank and Plaintiff. (Limited POA, Ex. A). 10. Pursuant to the Limited POA, Orrstown Bank provided Plaintiff with the limited power to indorse documents "necessary to assign, transfer, extend, release or otherwise carry out the intent of the Loan Sale Agreement..." (Limited POA, Ex. A). 11. The Limited POA does not include a copy of the Loan Sale Agreement and does not specifically reference any loans that were sold or transferred by Orrstown Bank to Plaintiff pursuant to the Loan Sale Agreement. 12. The Loan Sale Agreement is not attached to the Complaint. 13. Notably, at the same time that Plaintiff confessed judgment in this action against Defendants, it also confessed judgment in seven (7) other actions against Defendants and/or related individuals and entities, under different instruments, but pursuant to assignments related 3 to the Loan Sale Agreement. See Cumberland County Docket Nos. 14-5003; 14-5007; 14-5010; 14-5014; 14-5016; 14-5017; 14-5019. 14. Because the Loan Sale Agreement was not attached to the pleadings in this action or any of the other actions referenced above, and because neither Plaintiff nor Orrstown Bank has ever made it available to Defendants, Defendants have never seen the Loan Sale Agreement and have never received confirmation that the Note, Guaranty and other loan documents were properly assigned by Orrstown Bank to Plaintiff. 15. Neither Defendants nor the Court, based on the face of the pleadings, can determine the "intent of the Loan Sale Agreement" (as set forth in the Limited Power of Attorney), because it is not attached to the pleadings and has never been made available to Defendants. 16. Plaintiff confessed judgment in the amount of $1,507,260.32, together with accruing interest at a per diem rate of $282.84. (Pl. Compl. at ¶19). 17. Defendants made payments to both Orrstown Bank and Plaintiff that have never been accounted for in statements provided to Defendants. 18. Defendants raised concerns about the application of payments separately with Orrstown Bank and with Plaintiff, both verbally and in writing. 19. Defendants have requested payment histories for payments made, both from Orrstown Bank and Plaintiff. 20. Defendants' requests for a payment history have been ignored. 4 21. Plaintiff did not respond to Defendants' concerns, nor provide the requested records. Petition to Open or Strike Confessed Judgment First Defense - Failure to Establish Proper Assignment of the Note and Guaranty 22. The above Paragraphs are incorporated by reference. 23. The face of the Complaint, even coupled with the Limited POA of public record, fails to establish Plaintiff's right to confess judgment against Defendants. 24. Plaintiff signed the Assignments pursuant to the Limited POA, which gave Plaintiff only the power to execute documents to "carry out the intent of the Loan Sale Agreement..." (Limited POA, Ex. A). 25. The Loan Sale Agreement is not a matter of public record, nor is it attached to the Complaint. 26. Accordingly, there is no proof that Plaintiff's signature on the Assignments was authorized by Orrstown Bank. 27. A judgment entered by confession must be self-sustaining and may not be entered when the court must consider matters outside the instrument in order to support the judgment. Manor Bldg. Corp. v. Manor Complex Assoc. Ltd., 645 A.2d 843, 846 (Pa. Super. 1994). 28. If Plaintiff did not have the legal right to confess judgment against Defendants, which is not established by the face of the Complaint, the Judgment must be stricken. 5 29. No judge has ruled on any other petition in this or any related matter. Petition to Open Confessed Judgment Second Defense — The Amount of the Judgment is Disputed 30. The above Paragraphs are incorporated herein by reference. 31. The amount of the judgment is incorrect due to Orrstown Bank's and Plaintiff's improper application of payments under the Note. 32. Defendants' requests for a payment history and other information related to the application of payments have been ignored by Orrstown Bank and Plaintiff. 33. Defendants have also never had the opportunity to review the application of rates of interest, fees and other amounts set forth in the Complaint. 34. Where the accuracy of the amount in judgment has been challenged, the court should open the judgment. See Davis v. Woxall Hotel, Inc., 577 A.2d 636, 638 (Pa. Super. 1990). 35. WHEREFORE, the Defendants, G & C Associates and Julie A. Cassidy, respectfully request that the Judgment dated August 26, 2014 in the above -referenced matter be stricken. In the alternative, the Defendants respectfully request that the judgment dated August 26, 2014 in the above referenced matter be opened and the Defendants be permitted to file an answer to the Complaint. Defendants further request such other relief as the Court deems just and appropriate under the circumstances. 6 Motion to Stay Execution 36. The above Paragraphs are incorporated herein by reference. 37. Defendants accepted service of the Complaint on September 9, 2014. 38. The Complaint was served together with a Notice Under Rule 2958.1 of Judgment and Execution Thereto, indicating that Defendant may execute on the Judgment on or after 30 days from the date of service, or October 9, 2014. 39. If the Court grants Defendants' Petition to Open or Strike, set forth above, the amount of the Judgment may be reduced or stricken completely. 40. Rule 3121(b) provides that "[e]xecution may be stayed by the court as to all or any part of the property of the defendant upon its own motion or application of any party interest showing...(2) any other legal or equitable ground therefore." 41. Here, Defendants have raised meritorious defenses to the Judgment, including the very ability of Plaintiff to confess judgment against Defendants. 42. Under the circumstances, it would be inequitable to permit Plaintiff to proceed with permitting Plaintiff to execute upon the Judgment. 7 WHEREFORE, Defendants respectfully request that the Court stay execution upon the Judgment entered in this case pending disposition of this Petition to Open or Strike. Respectfully submitted, METTE, EVANS & WOODSIDE By: Date: October 8, 2014 K6 Y Heather Z. Kelly; Esquire Sup. Ct. I.D. No. 86291 METTE, EVANS & WOODSIDE 3401 North Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 (717) 236-1816 — Fax hzkelly@mette.com Attorney for Defendants 8 VERIFICATION I, Julie Cassidy, have read the foregoing document and verify that the facts set forth therein are true and correct to the best of my knowledge, information and belief. To the extent that the foregoing document and/or its language are that of counsel, I have relied upon counsel in making this Verification. I understand that any false statements made herein are subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities. Dated: CERTIFICATE OF SERVICE I certify that I am this day serving a copy of the foregoing document upon the person(s) and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by depositing a copy of same in the United States Mail at Harrisburg, Pennsylvania, with first-class postage, prepaid, as follows: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 By: Date: October 8, 2014 Respectfully submitted, METTE, EVANS & WOODSIDE &eV Heather Z. Kelly, Esquire Sup. Ct. I.D. No. 86291 METTE, EVANS & WOODSIDE 3401 North Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 (717) 236-1816 — Fax hzkelly@mette.com Attorney for Defendants Inst. # 201303263 - Pago 1 of 3 NOT APPLICABLE FOR PIN NUMBER CCGIS REGISTRY 01/30/2013 BY DC LIMITED POWER OF ATTORNEY Reference is made to that certain Loan Sale Agreement for Portfolio Offering #121210, dated as of December 20, 2012 (the "Loan Sale Agreement") by and between ORRSTOWN BANK having a notice address of 77 East King Street, Shippensburg, PA 17257, Attn: Jeffrey 14 Seibert, EVP/Chief Operating Officer ("Seller") and MAGNOLIA PORTFOLIO, LLC having a notice address of c/o Sabal Financial Group, L.P., 4675 MacArthur Court, Suite 1550, Newport Beach, California 92660; Attn: R. Patterson Jackson ("Buyer"). Each capitalized term used herein but not defined herein shall have the meaning assigned thereto in the Loan Sale Agreement. In accordance with the Loan Sale Agreement, Seller hereby makes, constitutes, appoints and confers upon Buyer, its successors and assigns, Seller's irrevocable, limited power of attorney to indorse Seller's name and collect any checks or other forms of payment received from Obligors, under the related Evidence of Indebtedness sold by Seller to Buyer under the Loan Sale Agreement and to endorse and sign any documents necessary to assign, transfer, extend, release or otherwise carry out the intent of the Loan Sale Agreement with respect to Loan Notes, mortgages, deeds of trust, security instruments, judgments, assignments of insurance policies or other instruments related to an Evidence of Indebtedness; provided, however, any such endorsement (i) shall be permitted only to the extent necessary to carry out the intent of the Loan Sale Agreement and (ii) shall state clearly that such endorsement is "WHERE IS", "WITH ALL FAULTS" AND WITHOUT RECOURSE AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN. This Limited Power of Attorney shall expire one (1) year from the date of execution hereof. Page 1 of 2 Inst. # 201303263 - Page 2 of 3 IN WITNESS WHEREOF, Seller has caused its name to be subscribed hereto by its duly. authorized officer this 19th day of December, 2012. Signed, sealed and delivered in the prese By: Name: i $'n (i,R !Yt() VJ\ By: Name: ORRSTOWN BANK, a Pennsylvania banking corporation By: Name: Zachary Lynn Title: SVP, SAG rector Special Assets Group ACKNOWLEDGEMENT STATE OF rny\sti NG,Y\1 G COUNTY OF PYtm\\cl;tA I CERTIFY that on the 19th day of December 2012, Zachary M. Flynn personally came before me and acknowledged under oath, to my satisfaction, that: (a) he signed the attached document as Senior Vice President of Orrstown Bank and (b) this document was signed and made by Orrstown Bank as its voluntary act and deed. COMMONWEALTIi OF PENNSYLVANIA Notarial Seal Ashley R. Nell, NotaryPublic MY Greene mmissfon Expires MaFranklin y 29, 2016 MEMBER, PENNSYLVANIAASSOCIATION OF NOTARIES NOTARY ' : LIC My Comm . on Expires: Val a` ciro-o U -p Page 2 of 2 /net. # 201303263 - Page 3 of 3 ROBERT P. ZIEGLER RECORDER OF DEEDS CUMBERLAND COUNTY 1 COURTHOUSE SQUARE CARLISLE, PA 17013 717-240-6370 Instrument Number - 201303263 Recorded On 1/30/2013 At 2:14:56 PM * Instrument Type - POWER 01? ATTORNEY Invoice Number -128113 User ID - MSW * Grantor - ORRSTOWN BANK * Grantee - MAGNOLIA PORTFOLIO LLC *Customer - SIMPLIFILE LC E -RECORDING *FEES STATE WRIT TAX RECORDING FEES — RECORDER OF DEEDS COUNTY ARCHIVES FEE ROD ARCHIVES FEE TOTAL PAID $0.50 $11.50 $2.00 $3.00 $17.00 *Total Pages - 3 Certification Page DO NOT DETACH This page is now part of this legal document, I Certify this to be recorded in Cumberland County PA RECORDER OF DEEDS * - Information denoted by an asterisk may change during the verification process and may not be reflected on this page. MAGNOLIA PORTFOLIO, LLC, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, c PENNSYLVANIA c rnp c� �n NO. 14-5018 Civil Action z� G & C ASSOCIATES U) CD CONFESSION OF JUDGMENT 1-- M --- and v) : . =c) -- CD JULIE A. CASSIDY cn Defendant ORDER GRANTING RULE TO SHOW CAUSE AND STAY OF EXECUTION AND NOW, this/ O� , upon consideration of the foregoing petition, it is hereby ordered that (1) a rule is issued upon the respondent to show cause why the petitioner is not entitled to the relief requested; (2) the respondent shall file an answer to the petition withia(9 days of this date; (3) the petition shall be decided under Pa.R.C.P. No. 206.7; (4) depositions and other discovery shall be completed within days of this date; (5) argument shall be held on A ALV in Courtroom / of the Cumberland County Courthouse; (6) execution on the judgment entered in the action is STAYED pending disposition of the Petition to Open or Strike; and (7) notice of the entry of this order shall be provided to all parties by the petitioner; BY THE COURT: J. Notice of the entry of order to be sent to: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 Cpl I� II�5 Heather Z. Kelly, Esquire Dw METTE, EVANS & WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 745204v1 1 Stephanie E. DiVittore, Esquire PA I.D. No. 85906 sdivittore@rhoads-sinon.com Kathryn D. Sallie, Esquire PA I.D. No. 208116 ksallie Trhoads-sinon.com Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717.237.6790 Attorney for Plaintiff Magnolia Portfolio, LLC MAGNOLIA PORTFOLIO, LLC, Plaintiff v. G&C ASSOCIATES and JULIE A. CASSIDY, FILED-OFFiCE VHEPROTHONOTAPO' 2IiOV -14 NI 12: I 0 CUMBERLAND COUNTY PENNSYLVANIA COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW Defendants CASE NO. 14-5018 ANSWER TO RULE TO SHOW CAUSE NOW COMES Plaintiff Magnolia Portfolio, LLC ("Magnolia Portfolio"), by and through its counsel, Rhoads & Sinon LLP, and submits the following Answer to the Rule to Show Cause issued by the Court in response to the Petition to Open or Strike Confessed Judgment and Motion to Stay Execution filed on behalf of Defendants G&C Associates and Julie Cassidy (collectively "Defendants") and in support thereof states as follows: 1. Denied as stated. Magnolia Portfolio admits that it filed a Complaint in Confession of Judgment on August 26, 2014 and judgment was entered thereon. The Complaint and Judgment are writings that speak for themselves and Magnolia Portfolio denies any characterization of them. 2. Denied as stated. Magnolia Portfolio admits that the judgment in confession was entered pursuant to warrants of attorney in a June 30, 2013 Term Loan Note and Guaranty and Suretyship Agreement. The judgment, Note and Guaranty are writings that speak for themselves and Magnolia Portfolio denies any characterization of them. 3. Denied as stated. Magnolia Portfolio admits that the Complaint references and attaches Assignments of the Note and Guaranty. The Complaint, Note, Guaranty and Assignments are writings that speak for themselves and Magnolia Portfolio denies any characterization of them. 4. Denied as stated. Magnolia Portfolio admits that the Complaint references and attaches Assignments. The Assignments are writings that speak for themselves and Magnolia Portfolio denies any characterization of them. 5. Denied as stated. Magnolia Portfolio admits that the Assignments attached as Exhibit "E" to the Complaint are executed by R. Patterson Jackson, Authorized Signatory, for Magnolia Portfolio, LLC, as Attorney -in -Fact for Orrstown Bank, a Pennsylvania banking corporation pursuant to a Limited Power of Attorney recorded January 30, 2013 as Instrument Number 201303263. The Assignments and Limited Power of Attorney are writings that speak for themselves and Magnolia Portfolio denies any characterization of them. 6. Denied as stated. Magnolia Portfolio admits that the Assignments attached as Exhibit "E" to the Complaint are executed by R. Patterson Jackson, Authorized Signatory, for Magnolia Portfolio, LLC, as Attorney -in -Fact for Orrstown Bank, a Pennsylvania banking corporation pursuant to a Limited Power of Attorney recorded January 30, 2013 as Instrument Number 201303263. The Assignments and Limited Power of Attorney are writings that speak for themselves and Magnolia Portfolio denies any characterization of them. 7. Admitted. By way of further response, it is specifically denied that the Limited Power of Attorney was required to be attached to the Complaint. 8. Admitted. By way of further response, the Limited Power of Attorney is a writing that speaks for itself and Magnolia Portfolio denies any characterization of it. 9. Admitted. By way of further response, the Limited Power of Attorney is a writing that speaks for itself and Magnolia Portfolio denies any characterization of it. 10. Denied. The Limited Power of Attorney is a writing that speaks for itself and Magnolia Portfolio denies any characterization of it. 11. Denied as stated. It is admitted that the Limited Power of Attorney does not include a copy of the Loan Sale Agreement or reference the specific loan that was sold or transferred by Orrstown Bank to Plaintiff. It is specifically denied that there is any requirement that the Loan Sale Agreement be attached to the Limited Power of Attorney or that the specific loans be listed therein. 12. Denied as stated. It is admitted that the Complaint does not include a copy of the Loan Sale Agreement. It is specifically denied that there is any requirement that the Loan Sale Agreement be attached to the Complaint. 13. Admitted. 14. Denied as stated. It is admitted that the Loan Sale Agreement was not attached to the pleadings in this action or any related actions and that the Agreement was not made available to Defendants. It is specifically denied that the Loan Sale Agreement was required to be attached to the pleadings or other actions instituted by Magnolia Portfolio against Defendants or related entities. It is also specifically denied that Magnolia Portfolio or Orrstown was required to make the Loan Sale Agreement available to Defendants. Instead, Orrstown properly sold loans to Magnolia Portfolio pursuant to a Loan Sale Agreement and executed the Limited Powers of Attorney necessary for Magnolia Portfolio to sign, as Attorney in Fact for Orrstown Bank, the Assignments. Pursuant to the Assignments, Magnolia Portfolio lawfully and properly confessed judgment against Defendants based on their failure to comply with their obligations under the Business Loan Agreement, Note and Guaranty. 15. Denied as stated. It is admitted that the Loan Sale Agreement was not attached to the pleadings or made available to Defendants. It is specifically denied that Magnolia Portfolio or Orrstown Bank was required to make the Loan Sale Agreement available to Defendants or otherwise disclose the terms thereof to Defendants. It is also specifically denied that Defendants are entitled to "determine the `intent of the Loan Sale Agreement'. By way of further response, Orrstown properly sold loans to Magnolia Portfolio pursuant to a Loan Sale Agreement, and executed the Limited Powers of Attorney necessary for Magnolia Portfolio to sign, as Attorney in Fact for Orrstown Bank, the Assignments. Pursuant to the Assignments, Magnolia Portfolio lawfully and properly confessed judgment against Defendants based on their failure to comply with their obligations under the Loan Agreement, Note and Guaranty. Such action is fully consistent with the terms of the loan documents in this case, as the Loan Agreement is clear that "[t]his Loan Agreement shall inure to the benefit of and shall be binding upon the Lender, the Borrower and their respective successors and assigns." (Exhibit A to Complaint —Loan Agreement, ¶12.4). Further, transfer and sale of the loan obligations was expressly authorized by the terms of the Note: SECTION 12.6. Assignment. None of the Loan Documents may be assigned by the Borrower. The Lender may at any time sell or grant participations to any other Person or Persons ("Participants") in the Loan provided, however, that the Lender shall at all relevant times continue to serve as lead lender and, except as provided in the immediately following sentence, the Borrower shall continue to deal solely and directly with the Lender in connection with the Lender's rights and remedies under this Loan Agreement and the other Loan Documents. The Borrower hereby authorizes the Lender and each Participant, in case of an Event of Default, hereunder, to proceed directly, by right of setoff, banker's lien or otherwise, against any assets of the Borrower which may at the time of such default be in the hands of the Lender or in the hands of such Participant. (Exhibit A to Complaint —Loan Agreement, §12.6). The Note similarly provides that it "[t]his Note shall inure to the benefit of and be enforceable by the Lender and the Lender's successors and assigns and any other person to whom the Lender may grant an interest in the Maker's obligations to the Lender, and shall be binding and enforceable against the Maker and the Maker's personal representatives, successors and assigns." Exhibit C to Complaint — Term Loan Note, §20). This language is sufficient, under Pennsylvania law, for Magnolia Portfolio to proceed with confession of judgment against Defendants. 16. Admitted. 17. Denied. It is specifically denied that Defendants made payments to Orrstown Bank or Magnolia Portfolio that were not accounted for in statements provided to Defendants and proof thereof is demanded at the time of hearing. 18. Denied as stated. It is admitted that Defendants, in correspondence with counsel for Magnolia Portfolio, made allegations about concerns about the application of payments. It is specifically denied that Orrstown Bank or Magnolia Portfolio failed to apply payments made by Defendants with respect to the underlying obligation. 19. Denied as stated. It is admitted that, in discovery in this case, Defendants have requested payment histories from Magnolia Portfolio. Magnolia Portfolio is without knowledge regarding the remaining allegations of this Paragraph and the same are thus specifically denied. 20. Denied as stated. It is admitted that Magnolia Portfolio has not yet responded to the discovery served in this case which includes requests for payment histories. It is specifically denied that Orrstown Bank or Magnolia Portfolio withheld information to which Defendants were entitled under the loan documents. 21. Denied as stated. It is admitted that Magnolia Portfolio has not yet responded to the discovery served in this case which includes requests for payment histories. It is specifically denied that Orrstown Bank or Magnolia Portfolio withheld information to which Defendants were entitled under the loan documents. PETITION TO OPEN OR STRIKE First Defense 22. Magnolia Portfolio incorporates herein by reference its responses to Paragraphs 1 through 21 above. 23. Denied. It is specifically denied that Magnolia Portfolio's Complaint is devoid of any allegations that would support its right to confess judgment against Defendants. 24. Denied. The allegations of Paragraph 24 concern the Assignments and a Limited Power of Attorney, writings that speak for themselves and Magnolia Portfolio denies any characterization of them. 25. Denied as stated. It is admitted that the Loan Sale Agreement is not a matter of public record or attached to the Complaint. It is specifically denied that the Loan Sale Agreement is necessary to demonstrate Magnolia Portfolio's right to confess judgment against Defendants or otherwise required to be provided to Defendants. By way of further response, see the response to Paragraph No. 15 above. 26. Denied. It is specifically denied that Magnolia Portfolio was not authorized, pursuant to the Limited Power of Attorney, to execute the Assignments on behalf of Orrstown Bank. 27. The allegations of Paragraph 27 are conclusions of law to which no response is required. To the extent a response is deemed appropriate the same are specifically denied. 28. The allegations of Paragraph 28 are conclusions of law to which no response is required. To the extent a response is deemed appropriate the same are specifically denied. 29. Admitted, PETITION TO OPEN OR STRIKE Second Defense 30. Magnolia Portfolio incorporates herein by reference its responses to Paragraphs 1 through 29 above. 31. Denied. It is specifically denied that Orrstown Bank or Magnolia Portfolio improperly applied payments under the Note or that the amount of the judgment is incorrect, and proof thereof is demanded at the time of hearing. 32. Denied as stated. It is admitted that Magnolia Portfolio has not yet responded to the discovery served in this case which includes requests for payment histories. It is specifically denied that Orrstown Bank or Magnolia Portfolio withheld information to which Defendants were entitled under the loan documents. 33. Denied as stated. It is admitted that Magnolia Portfolio has not yet responded to the discovery served in this case which includes requests for certain information regarding the loan obligations. It is specifically denied that Orrstown Bank or Magnolia Portfolio withheld information to which Defendants were entitled under the loan documents. 34. The allegations of Paragraph 34 are conclusions of law to which no response is required. To the extent a response is deemed appropriate the same are specifically denied. 35. WHEREFORE Plaintiff Magnolia Portfolio respectfully requests that this Court deny the Petition to Open or Strike Confessed Judgment and Motion to Stay Execution on behalf of Defendants and uphold the Confessed Judgment entered in favor of Magnolia Portfolio. MOTION TO STAY EXECUTION 36. Magnolia Portfolio incorporates herein by reference its responses to Paragraphs 1 through 35 above. 37. Admitted. 38. Admitted. 39. Denied as stated. It is admitted that if the Court grants Defendants' Petition to Open or Strike, the judgment may be opened or stricken. It is specifically denied that Defendants have established any basis upon which to open or strike the judgment. 40. The allegations of Paragraph 40 concern Rule 3121 of the Pennsylvania Rules of Civil Procedure, a writing that speaks for itself. 41. Denied. It is specifically denied that Defendants have a valid basis to challenge the judgment entered against them in this case, as Magnolia Portfolio properly confessed judgment for the outstanding amounts owed under the loan obligations following assignment thereof by Orrstown Bank. 42. The allegations of Paragraph 42 are conclusions of law to which no response is required. To the extent a response is deemed appropriate the same are specifically denied. WHEREFORE Plaintiff Magnolia Portfolio respectfully requests that this Court deny the Petition to Open or Strike Confessed Judgment and Motion to Stay Execution on behalf of Defendants and uphold the Confessed Judgment entered in favor of Magnolia Portfolio. By: Respectfully submitted, RHOADS & SINON LLP Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 sdivittore@rhoads-sinon.coni Kathryn D. Sallie, Esquire Attorney I.D. No. 208116 ksalle@rhoads-sinon.com One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Magnolia Portfolio, LLC CERTIFICATE OF SERVICE I hereby certify that on this 4 day of November, 2014 a true and correct copy of the foregoing document was served by means of United States mail, first class, postage prepaid, upon the following: Heather Z. Kelly, Esquire Mette, Evans & Woodside 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-5950 969835.1 ara Whistler Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 Kate Deringer Sallie, Esquire Attorney I.D. No. 208116 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1 146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff MAGNOLIA PORTFOLIO, LLC, Plaintiff v. G & C ASSOCIATES and JULIE A. CASSIDY, Defendants And MAGNOLIA PORTFOLIO, LLC, Plaintiff v. CARILLO, LLC and JEFFREY A. GOSS, Defendants And MAGNOLIA PORTFOLIO, LLC, Plaintiff V. MT. HOLLY BEVERAGE, L.L.C. and JULIE A. CASSIDY, Defendants And 971013.1 r!LED-OFF ICE r:_ THE PRO1HONOTARY ?.011i 149V 19 PM 3: 01 CUMBERLAND COUNTY PENNSYLVANIA COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION — LAW CASE NO. 14-5003 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION — LAW CASE NO. 14-5007 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION — LAW CASE NO. 14-5010 [Caption Continues Onto Next Page] MAGNOLIA PORTFOLIO, LLC, COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION — LAW PINEXPRESS, LLC and JEFFREY A. GOSS, Defendants A ii d CASE NO. 14-5014 MAGNOLIA PORTFOLIO, LLC, COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA ( V. G&C ASSOCIATES and JULIE A. CASSIDY, Defendants And MAGNOLIA PORTFOLIO, LLC, Plaintiff CIVIL ACTION — LAW CASE NO. 14-5016 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION — LAW G&C ASSOCIATES and JULIE A. CASSIDY, Defendants And CASE NO. 14-5017 MAGNOLIA PORTFOLIO, LLC, COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION — LAW G&C ASSOCIATES and JULIE A. CASSIDY, Defendants And CASE NO. 14-5018 [Caption Continues Onto Next Page] MAGNOLIA PORTFOLIO, LLC, COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION — LAW CARILLO, LLC and JEFFREY A. GOSS, Defendants CASE NO. 14-5019 UNCONTESTED MOTION TO CONSOLIDATE, ISSUE ' DISCOVERY SCHEDULE & SCHEDULE A HEARING NOW COMES, Plaintiff Magnolia Portfolio, LLC, by and through its counsel, Rhoads & Sinon LLP, and files the within Uncontested Motion to Consolidate, Issue Discovery Schedule & Schedule a Hearing pursuant to Rule 213 of the Pennsylvania Rules of Civil Procedure, and in support thereof, avers the following: Motion to Consolidate The instant motion seeks to have the above -captioned eight actions consolidated pursuant to Rule 213 of the Pennsylvania Rules of Civil Procedure. Pa. R. Civ. P. 213. 2. Each of these actions was initiated by filing a Complaint in Confession of Judgment relating to underlying loan transactions between the parties. 3. Specifically, Complaints in Confession of Judgment were filed on behalf of Magnolia Portfolio with respect to eight loan transactions on August 26, 2014. 4. On October 8, 2014, Petitions to Open or Strike Confessed Judgments and Motions to Stay Execution were filed on behalf of the Defendants in Docket Nos. 14-5003, 14-5010, 14- 5016, 14-5017 and 14-5018. 5. These actions were assigned to The Honorable Albert H. Masland, and in each of these actions, Judge Masland issued an Order issuing a Rule to Show Cause. Those Orders specified respondent had 20 days to answer the Petitions, directed discovery to be completed within 60 days and scheduled argument for December 22, 2014 at 11:00 a.m. in Courtroom 1. (Copies of Judge Masland's Orders are attached hereto as Exhibit "A" and incorporated herein by reference). 6. On October 9, 2014, Petitions to Open or Strike Confessed Judgments and Motions to Stay Execution were filed on behalf of the Defendants in Docket Nos. 14-5007, 14-5014, and 14- 5019. 7. These actions were assigned to The Honorable Thomas A. Placey, and in each of these actions Judge Placey issued an Order dated October 21, 2014 issuing a Rule to Show Cause. These Orders specified that the Rule was returnable within twenty (20) days from the date of service. (Copies of Judge Placey's Orders are attached hereto as Exhibit "B" and incorporated herein by reference). 8. Plaintiff filed Answers to the Rules to Show Cause in each of the eight proceedings. 9. Plaintiff submits that each of the above -captioned cases arise from related transactions or occurrences and involve common questions of law and fact and, as a result, the Parties agree that they should be consolidated for discovery, pretrial proceedings and, if necessary, trial. 10. Specifically, these actions each involve commercial loan transactions originally entered into between Orrstown Bank and the Defendants. The loans were purchased from Orrstown Bank by Plaintiff Magnolia Portfolio, LLC. In the Petitions to Open or Strike Confessed Judgments filed on behalf of Defendants, Defendants raise a defense challenging the validity of the assignments, an identical defense which Plaintiff submits will involve the same necessary resolution of facts and law. 11. Rule 213 of the Pennsylvariia Rules of Civil Procedure permits a court to consolidate actions pending in the same county that involve common questions of law or fact or which arise from the same transactions or occurrence. Rule 213 states: In actions pending in a county which involve a common question of law or fact or which arise from the same transaction or occurrence, the court on its own motion or on the motion of any party may order a joint hearing or trial of any matter in issue in the actions, may order the actions consolidated, and may make orders to avoid unnecessary cost and delay. Pa. R. Civ. P. 213(a). 12. Consolidation is a procedural device used in order "to avoid multiplicity of hearings, the loss of time of participants and the possibility of unjust differences in results . . . Consolidation fosters the orderly and speedy disposition of disputes . . . ." Children's Hosp. of Phila. v. Am. Arbitration Ass'n, 331 A.2d 848, 850 (Pa. Super. Ct. 1974) (citing Van Campen Corp. v. Bldg. & Constr. Trades, 195 A.2d 134 (Pa. Super. Ct. 1963)). 13. Pennsylvania case law interpreting Rule 213(a) has established three elements that are required in order to consolidate multiple suits: (1) the presence of the same transaction or occurrence, (2) the presence of the same issues, and (3) one party is not at an advantage or disadvantage to another due to the consolidation. Azinger v. Pa. R.R. Co., 105 A. 87, 88 (Pa. 1918) (citations omitted); cited in Hill v. Hill, 619 A.2d 1086, 1087 (Pa. Super. Ct. 1993). 14. Here, on the face of the Complaints, as well as the Petitions to Open or Strike filed on behalf of the Defendants, it is obvious that the actions arise from the same transactions or occurrences, that is the commercial loan obligations between Orrstown Bank and the Defendants, and that the defenses raised by Defendants in the Petitions to Open or Strike involve similar questions of law and fact. 15. As the actions arise from the same transaction or occurrence, the Parties anticipate conducting discovery that would jointly cover both the actions. Consolidating the cases would streamline the discovery process. 16. No party will be advantaged or disadvantaged as compared to one another as a result of consolidation. To the contrary, consolidation is in every party's, and the Court's, best interest. 17. Having a single hearing on the Petitions to Open or Strike moreover, will save the time and money incurred from litigating multiple cases, not only for all relevant parties, but also for the Court. Motion to Issue Discovery Schedule & Schedule Hearing 18. In the Orders in Docket Nos. 14-5003, 14-5010, 14-5016, 14-5017 and 14-5018, Judge Masland directed the parties to conduct discovery within 60 days and scheduled oral argument for December 22, 2014. 19. Judge Placey did not, in the Orders issued in Docket Nos. 14-5007, 14-5014, and 14- 5019, issue a discovery schedule or schedule hearing or argument. 20. The parties agree that discovery will be necessary in order to resolve the Petitions to Open or Strike. 21. The parties further agree that, instead of oral argument, a hearing enabling the parties to present evidence, as well as legal argument, will be necessary to resolve the Petitions to Open or Strike. 22. As a result, the parties also respectfully request that this Court issue an Order cancelling the December 22, 2014 oral argument, granting the parties 90 days to conduct discovery and schedule a hearing before the Court. 23. Counsel for the Defendants, Heather Kelly, Esquire, has reviewed this Motion and consents to the relief requested. WHEREFORE Plaintiff respectfully requests that this Honorable Court grant the within Motion and consolidate the above -captioned actions, cancel the oral argument scheduled for December 22, 2014, grant the parties 90 days in which to conduct discovery and schedule a hearing as soon thereafter as available with the Court. By: Respectfully submitted, RHOADS & SINON LLP 6p-1, Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 sdivittorea,rhoads-sinon.corn Kate Deringer Sallie, Esquire Attorney I.D. No. 208116 ksallie@rhoads-sinon.com P. 0. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Magnolia Portfolio, LLC EXHIBIT A MAGNOLIA PORTFOLIO, LLC, Plaintiff VS. G & C ASSOCIATES and JULIE A. CASSIDY Defendant : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY. : PENNSYLVANIA : NO. 14-5003 Civil Action : CONFESSION OF JUDGMENT ORDER GRANTING RULE TO SHOW CAUSE AND STAY OF EXECUTION AND NOW, this 15 day of foregoing petition, petition, it is hereby ordered that C") r3 c=3 CD upon consideration of the (1) a rule is issued upon the respondent to show cause why the petitioner is not entitled to the relief requested; (2) the respondent shall file an answer to the petition within et) days of this date; (3) the petition shall be decided under Pa.R.C.P. No. 206.7; (4) depositions and other discovery shall be completed within /4 days of this date; (5) argument shall be held on tea 4, (9014 , 100 amin Courtroom 1 of the Cumberland County Courthouse; (6) execution on the judgment entered in the action is STAYED pending disposition of the Petition to Open or Strike; and (7) notice of the entry of this order shall be provided to all parties by the petitioner; BY THE COURT: Albert 14. Maslen() J. Notice of the entry of order to be sent to: Stephanie E. DiVirtore, Esquire Kathryn D. Sallie, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg., PA 17108-1146 Heather Z. Kelly, Esquire METTE, EVANS & WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg:, PA 17110-0950 745162v1 MA.GNOLIA PORTFOLIO, LLC. Plaintiff VS. MT. HOLLY BEVERAGE, L.L.C. and JULIE A. CASSIDY Defendant : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY. : PENNSYLVANIA : NO, 14-5010 Civil Action : CONFESSION OF JUDGMENT ORDER GRANTING RULE TO SHOW CAUSE AND STAY OF EXECUTION AND NOW, this 15 day of -f-ooer doi4 upon consideration of the foregoing petition, it is hereby ordered that (1) a rule is issued upon the respondent to show cause why the petitioner is not entitled to the relief requested; (2) the respondent shall file an answer to the petition within days of this date; the petition shall be decided under Pa.R.C.P. No. 206.7; (4) depositions and other discovery shall be completed within LpD days of this date; (5) argument shall be held on bee a) 14 , ji:Warn in Courtroom I of the Cumberland County Courthouse; (6) execution on the judgment entered in the action is STAYED pending disposition of the Petition to Open or Strike; and (7) notice of the entry of this order shall be provided to all parties by the petitioner; BY THE COURT: is) Albert H. Masbnci J. Notice of the entry of order to be sent to: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg; PA 17108-1146 Heather Z. Kelly. Esquire METTE, EVANS& WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 745177v1 MAGNOLIA PORTFOLIO, LLC, Plaintiff VS. G & C ASSOCIATES and JULIE A. CASSIDY Defendant : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, : PENNSYLVANIA : NO. 14-5016 Civil Action : CONFESSION OF JUDGMENT ORDER GRANTING RULE TO SHOW CAUSE AND STAY OF EXECUTION AND NOW, this i5it day of OAbe- ;_dot4 . upon consideration of the foregoing petition, it is hereby ordered that (1) a rule is issued upon the respondent to show cause why the petitioner is not entitled to the relief requested; (2) the respondent shall file an answer to the petition within c9,6 days of this date; (3) the petition shall be decided under Pa.R.C.P. No. 206.7; (4) depositions and other discovery shall be completed within days of this date; (5) argument shall be held on (Qe2 apt4 arrt in Courtroom I of the Cumberland County Courthouse; (6) execution on the judgment entered in the action is STAYED pending disposition of the Petition to Open or Strike; and (7) notice of the entry of this order shall be provided to all parties by the petitioner; BY THE COURT: /s/ Aiber+ /land J. Notice of the entry of order to be sent to: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg., PA 17108-1146 Heather Z. Kelly, Esquire METTE, EVANS & WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 745185v1 MAGNOLIA PORTFOLIO, LLC. Plaintiff VS. G & C ASSOCIATES and JULIE A. CASSIDY Defendant :IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY. : PENNSYLVANIA : NO. 14-5017 Civil Action : CONFESSION OF JUDGMENT CD ORDER GRANTING RULE TO SHOW CAUSE AND STAY OF EXECUTION AND NOW, this 154iday of Ddtber 0/0(4 upon consideration of the foregoing petition, it is hereby ordered that (1) (2) the respondent shall file an answer to the petition within a© days of this date; (3) (4) (5) (6) (7) a rule is issued upon the respondent to show cause why the petitioner is not entitled to the relief requested; the petition shall be decided under Pa.R.C.P. No. 206.7; depositions and other discovery shall be completed within tot) days of this date; argument shall be held on bea, /Poo a in Courtroom of the Cumberland County Courthouse; execution on the judgment entered in the action is STAYED pending disposition of the Petition to Open or Strike; and notice of the entry of this order shall be provided to all parties by the petitioner; BY THE COURT: is/ Albert L iv6land Notice of the entry of order to be sent to: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 Heather Z. Kelly; Esquire METTE, EVANS & WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 745145v1 MAGNOLIA PORTFOLIO, LLC, Plaintiff VS. G & C ASSOCIATES and JULIE A. CASSIDY Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 14-5018 Civil Action : CONFESSION OF JUDGMENT ORDER GRANTING RULE TO SHOW CAUSE AND STAY OF EXECUTION AND NOW, this 15 day of lY:tolac,r , c96JI ; upon consideration of the foregoing petition, it is hereby ordered that (1) a rule is issued upon the respondent to show cause why the petitioner is not entitled to the relief requested; (2) the respondent shall file an answer to the petition within ab days of this date; (3) the petition shall be decided under Pa.R.C.P. No. 206.7; (4) depositions and other discovery shall be completed within (pel days of this date; (5) argument shall be held on Thee,aa, aoi4 . opal, in Courtroom 1 of the Cumberland County Courthouse; (6) execution on the judgment entered in the action is STAYED pending disposition of the Petition to Open or Strike; and (7) notice of the entry of this order shall be provided to all parties by the petitioner; BY THE COURT: isl AIb -14. Ma5land J. Notice of the entry of order to be sent to: Stephanie E. DiVittore, Esquire Kathryn D. Sallie., Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisbur2, PA 17108-1146 Heather Z. Kelly, Esquire METTE, EVANS & WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 745204v1 EXHIBIT B MAGNOLIA PORTFOLIO INC. Plaintiff v. CARILLO, LLC, and JEFFREY A GOSS Defendants nizt Countp of euntbertuub IN THE COURT OF COMMON PLEAS OF THE NINTH JUDICIAL DISTRICT 14-5007 CIVIL ACTION IN RE: PETITION TO OPEN OR STRIKE CONFESSED JUDGMENT AND STAY EXECUTION ORDER OF COURT AND NOW, this 21st day of October 2014, upon consideration of Defendants' Petition to Open or Strike Confessed Judgment and Stay Execution, a RULE is issued upon Plaintiff to show cause the requested relief should not be granted. DEFENDANTS shall effectuate service of this Order of Court upon Plaintiff and shall file proof of service. Response by Plaintiff shall contain a proposed order. RULE RETURNABLE twenty (20) days from the date of service. Distribution List: Stephanie E. DiVittore, Esq. Kathryn D. Sallie, Esq. Heather Z. Kelly, Esq. BY Thomas A. Placey C.P.J. c -o rn co zrn� z coD z c' 0 > G Z -d 1 (-n co MAGNOLIA PORTFOLIO INC. Plaintiff v. PINEXPRESS, LLC, and JEFFREY A GOSS Defendants Countp of tumbertanb IN THE COURT OF COMMON PLEAS OF THE NINTH JUDICIAL DISTRICT 14-5014 CIVIL ACTION IN RE: PETITION TO OPEN OR STRIKE CONFESSED JUDGMENT AND STAY EXECUTION ORDER OF COURT AND NOW, this 21st day of October 2014, upon consideration of Defendants' Petition to Open or Strike Confessed Judgment and Stay Execution, a RULE is issued upon Plaintiff to show cause the requested relief should not be granted. DEFENDANTS shall effectuate service of this Order of Court upon Plaintiff and shall file proof of service. Response by Plaintiff shall contain a proposed order. RULE RETURNABLE twenty (20) days from the date of service. BY THE COURT, Distribution List: Stephanie E. DiVittore, Esq. Kathryn D. Sallie, Esq. Heather Z. Kelly, Esq. Thom_. . Placey C.P.J. -J MAGNOLIA PORTFOLIO INC. Plaintiff v. CARILLO, LLC, and JEFFREY A GOSS Defendants County of Cumbertanb IN THE COURT OF COMMON PLEAS OF THE NINTH JUDICIAL DISTRICT 14-5019 "CIVIL ACTION IN RE: PETITION TO OPEN OR STRIKE CONFESSED JUDGMENT AND STAY EXECUTION ORDER OF COURT AND NOW, this 21st day of October 2014, upon consideration of Defendants' Petition to Open or Strike Confessed Judgment and Stay Execution, a RULE is issued upon Plaintiff to show cause the requested relief should not be granted. DEFENDANTS shall effectuate service of this Order of Court upon Plaintiff and shall file proof of service. Response by Plaintiff shall contain a proposed order. RULE RETURNABLE twenty (20) days from the date of service. Distribution List: Stephanie E. DiVittore, Esq. Kathryn D. Sallie, Esq. BY THE COURT, Thomas . Placey C.P.J. C r =f -0— •r —i zcra =-� rri CO r' --- =. j- _.„t �' ni r-= f\) r <Q s=, o CERTIFICATE OF SERVICE I hereby certify that on this day of November, 201-4 a true and correct copy,of the foregoing document was served by means of United States mail, first class, postage prepaid, upon the following: Heather Z. Kelly, Esquire Mette, Evans & Woodside 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-5950 Heather Z. Kelly, Esquire Sup. Ct. ID. No. 86291 METTE, EVANS & WOODSIDE 3401 North Front Street P. 0. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 — Telephone (717) 236-1816 — Facsimile hzkelly@mette.com Attorneys for Defendants MAGNOLIA PORTFOLIO, LLC, Plaintiff V. G & C ASSOCIATES and JULIE A. CASSIDY, Defendants 1' - • : z5. C r.1 • r , 7 : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : NO. 14-5018 CERTIFICATE PREREQUISITE TO SERVICE OF SUBPOENA PURSUANT TO PA.R.C.P. 4009.2 As a prerequisite to service of a subpoena for documents and things pursuant to Rule 4009.22, Defendants, certify that: (1) a Notice of Intent to serve a subpoena with a copy of the subpoena attached thereto was mailed to each party; (2) a copy of the Notice of Intent, including the proposed subpoena, is attached to this Certificate; (3) no objection has been filed and the twenty day requisite period has expired; and (4) the subpoena which will be served is identical to the subpoena which is attached to the Notice of Intent to serve subpoena directed to Records Custodian, Orrstown Bank. By: Date: November 19, 2014 Respectfully submitted, METTE, EVANS & WOODSIDE Heather Z. Kel ggegy squire Sup. Ct. I.D. No. 86291 3401 North Front Street P. 0. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 Attorneys for Defendants Heather Z. Kelly, Esquire Sup. Ct. LD. No. 86291 METTE, EVANS & WOODSIDE 3401 North Front Street P. a Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 — Telephone (717) 236-1816 — Facsimile hzkelly@mette.com Attorneys for Defendants MAGNOLIA PORTFOLIO, LLC, Plaintiff V. G & C ASSOCIATES and JULIE A. CASSIDY, Defendants : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : NO. 14-5018 NOTICE OF INTENT TO SERVE SUBPOENA TO PRODUCE DOCUMENTS AND THINGS FOR DISCOVERY PURSUANT TO PA. R.C.P. 4009.22 Defendants, G & C Associates and Julie A. Cassidy, intend to serve a subpoena upon Orrstown Bank for the purpose of obtaining loan documentation. The subpoena is identical to the one that is attached to this notice. You have twenty (20) days from the date listed below in which to file of record and serve upon the undersigned objections to the subpoena. If no objection is made, the subpoena may be served. Date: /0 Respectfully submitted, METTE, EVANS & WOODSIDE By: 3/ Heather Z. KellyMsquire Sup. Ct. I.D. No. 86291 3401 North Front Street P. 0. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 Attorneys for Defendants MAGNOLIA PORTFOLIO, LLC, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA v. : NO. 14-5018 G & C ASSOCIATES and JULIE A. CASSIDY, Defendants SUBPOENA TO PRODUCE DOCUMENTS OR THINGS FOR DISCOVERY PURSUANT TO RULE 4009.22 TO: Records Custodian, Orrstown Bank, 22 S. Hanover Street, Carlisle, PA 17013 (Name of Person or Entity) Within twenty (20) days after service of this Subpoena, you are ordered by the Court to produce the following documents or things: Your entire loan file relating to Loan No. 714819025 ("Loan") dated June 30, 2010 in the original principal amount of $1,486,500 between G & C Associates and Orrstown Bank and guaranteed by Julie Cassidy, including but not limited to: 1) any and all correspondence that refer, relate or pertain to the referenced Loan including any commitment letter; 2) a detailed payment history including dates payments were made and how payments were applied; and 3) a complete copy of the Loan Purchase Agreement between Orrstown Bank and Magnolia Portfolio, LLC relating to the referenced Loan. at Mette, Evans & Woodside, P.O. Box 5950, Harrisburg, PA 17110-0950 (Address) You may deliver or mail legible copies of the documents or produce things requested by this subpoena, together with the Certificate of Compliance, to the party making this request at the address listed above. You have the right to seek, in advance, the reasonable cost of preparing the copies or producing the things sought. If you fail to produce the documents or things required by this subpoena, within twenty (20) days after its service, the party serving this subpoena may seek a court order compelling you to comply with it. THIS SUBPOENA WAS ISSUED AT THE REQUEST OF THE FOLLOWING PERSON: Name: Heather Z. Kelly, Esquire Address: Mette, Evans & Woodside 3401 North Front Street, P. O. Box 5950, Harrisburg, PA 17110-0950 Telephone: (717) 232-5000 Supreme Court ID# 86291 ATTORNEY FOR: Defendants DATE: Seal of the Court 748142v1 BY THE COURT: Prothonotary Return of Service: On the day of , 2014, I, , served with the foregoing subpoena by: (Name of Person Served) (Describe method of service) I verify that the statements in this return of service are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S.A. § 4904 relating to unsworn falsification to authorities. Date: (Signature) CERTIFICATE OF SERVICE I certify that I am this day serving a copy of the foregoing document upon the person(s) via electronic mail addressed as follows, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire RHOADS & SINON, LLP One South Market Square, 12th Flr. P.O. Box 1146 Harrisburg, PA 17108-1146 METTE, EVANS & WOODSIDE HEATHER Z. KELLY, ES Sup. Ct. I.D. No. 86291 3401 North Front Street P. 0. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 - Phone (717) 236-1816 - Fax Attorneys for Defendants Date: 748150v1 CERTIFICATE OF SERVICE I certify that I am this day serving a copy of the foregoing document to the person(s) and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by depositing a copy of same in the United States Mail at Harrisburg, Pennsylvania, with first-class postage, prepaid, addressed as follows: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire RHOADS & SINON, LLP One South Market Square, 12th Flr. P.O. Box 1146 Harrisburg, PA 17108-1146 By: Date: November 19, 2014 753161v1 Respectfully submitted, METTE, EVANS & WOODSIDE aga,t-Ap„Ie� y Heather Z. Kell , squire Sup. Ct. I.D. No. 86291 3401 North Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 Attorneys for Defendants MAGNOLIA PORTFOLIO LLC, Plaintiff v. CARILLO, LLC, and JEFFREY A GOSS, Defendants "HID -OFFICE C,F t 'RO i I lO!NO iAr 20R NOV26 All 9: t;.7 CUMB► LAND COU PE ANSYLV; --501 %/' Count!) of Cumberland IN THE COURT OF COMMON PLEAS OF THE NINTH JUDICIAL DISTRICT 14-5019 CIVIL ACTION IN RE: UNCONTESTED MOTION TO CONSOLIDATE, ISSUE DISCOVERY SCHEDULE & SCHEDULE A HEARING ORDER OF COURT AND NOW, this 24th day of November 2014, upon consideration of Plaintiff's Uncontested Motion to Consolidate, Issue Discovery Schedule & Schedule a Hearing, the Motion is GRANTED. It is hereby ORDERED that the parties have 90 days from the date of this Order to conduct discovery on the issues raised in Defendants' Petitions to Open or Strike. The oral argument previously scheduled for 22 December 2014 is hereby RESCHEDULED to 7 March 2015 at 11:00 a.m. in Courtroom Number Six (6) of the Cumberland County Courthouse. Furthermore, it is ORDERED that the above -captioned actions are hereby consolidated to the Docket 14-5003 CIVIL ACTION with Plaintiff described as and MAGNOLIA PORTFOLIO LLC, and Defendants described as CARILLO, LLC, G&C ASSOCIATES, MT. HOLLY BEVERAGE, LLC, PINEXPRESS, LLC, JULIE A. CASSIDY, and JEFFREY A GOSS. Distribution List: Stephanie E. DiVittore, Esq. Heather Z. Kelly, Esq. ivia4 rv'