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HomeMy WebLinkAbout14-5019 E. DiVittore, Esquire LiC� ��r°��Y Attorney I.D.No. 85906 ,� l l l tp 2� Kathryn D. Sallie,Esquire ') Attorney I.D.No. 108116 CUt-IBERLAND COUNTY RHOADS& SINON LLP PENNi;YBIANIA 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 CARILLO, LLC and NO. -6'01 JEFFREY A. GOSS, 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 Carillo, LLC ("Borrower") is a Pennsylvania limited liability company with its principal place of business at 60 Pine Street, Carlisle, Cumberland County, Pennsylvania 17013. 3. Defendant Jeffrey A. Goss is an adult, married individual with an address of 10 Derbyshire Drive, Carlisle, Cumberland County, Pennsylvania 17013. 960141.2 4. On or about September 5, 2007, Orrstown Bank extended a loan in the original principal amount of$150,000 to the Borrower [Orrstown Loan No. 264741090011 (the "Loan"). (A copy of the Business Loan Agreement is attached hereto as Exhibit "A" and incorporated herein by reference). 5. The Borrower also executed and delivered a Promissory Note dated September 5. 2007 to Orrstown Bank evidencing its obligation to repay the Loan (the "Note"). (A copy of the Note is attached hereto as Exhibit "B" and incorporated herein by reference). 6. Defendant Jeffrey A. Goss (the "Guarantor") guaranteed the Loan, evidenced by the Guaranty agreement executed September 5, 2007. (A copy of the Guaranty is attached hereto as Exhibit "C" and incorporated herein by reference). Michael Cassidy also executed a guaranty. Michael Cassidy is now deceased. 7. 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 Note, Mortgage and Guaranties to Magnolia Portfolio, LLC, now referenced as Loan No. 104189-001 . (Copies of the Assignments are attached hereto as Exhibit "D" and incorporated herein by reference). 8. Pursuant to the terms of the Note, Borrower was obligated to make repayment as follows: Borrower will pay this loan in full immediately upon Lender's demand. If no demand is made, subject to any payment changes resulting from changes in the .Index, Borrower will pay this loan in accordance with the following payment schedule: 60 monthly consecutive principal and interest payments in the initial amount of$1,821.10 each, beginning October 5, 2007, with interest calculated on the unpaid principal balances at an initial discounted interest rate of 7.900% per annum; and 60 monthly consecutive principal and interest payments in the initial amount of$1,880.49 each, beginning October 5, 2012, with interest calculated on the unpaid principal balances at an interest rate based on the Wall Street Prime (currently 8.250%), plus a margin of 1.000%, resulting in an initial interest rate of 960141.2 9.250%. Borrower's final payment will be due on September 5, 2017 and will be for all principal and accrued interest not yet paid, together with any other unpaid amounts under this Note. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any late charges; and then to any unpaid collection costs. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as the Lender may designate in writing. (Exhibit B—Note, p. 1). 9. An Event of Default has occurred under the terms of the Note, as the Borrower has failed to make a payment when due. (Exhibit B—Note). 10. Pursuant to the terms of the Note, "the Borrower will pay this loan in full immediately upon Lender's demand." (Exhibit B —Note). 11. 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"E" and incorporated herein by reference). 12. 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). 13. 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 B —Note; Exhibit C—Guaranties). 14. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 960141.2 15. Except as set forth above, the Mortgage, Note and Guaranty have not been assigned by the Lender. 16. The Obligors continue to be in default under the terms of the written agreements set forth herein. 17. Judgment has not been entered previously on the warrants of attorney contained in the Note or Guaranty in any jurisdiction. 18. The actual amounts due and payable to the Lender under the Note as of July 29, 2014 are itemized as follows: (a) Unpaid Principal $90,290.58 (b) Unpaid Interest $12,660.67 (c) Late Charges $ 2,341.62 TOTAL $105,292.87 960141.2 WHEREFORE Plaintiff Magnolia Portfolio, LLC demands judgment in its favor and against Defendants Carillo, LLC and Jeffrey A. Goss in the amount of$105,292.87 together with accruing interest at a per diem rate of$18.18 costs of suit, attorneys' fees, and such other charges as authorized by the warrants contained in the Note. Respectfully submitted, RHOADS & SINON LLP By: VL�4(7-� 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 960141.2 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. l Date Annemp in A anager Sabal Financial Gr a .P. EXHIBIT A BUSINESS LOAN AGREEME r Princiisaf Loan Hate Maturity �Loan Cau.a CouAccount FS cer lnitiats$150,000.00 09-05-2007, GI CRA0867 AY References in the boxes above are for Lender's use only and do not limit the applicability of this document to any partioan or item. Any item above containing "`**" has been omitted due to text length limitations. Borrower: Carillo,LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle, PA 17013 77 EAST KING STREET P 0 BOX 250 SHIPPENSBURG, PA 17257 THIS BUSINESS LOAN AGREEMENT dated September 5, 2007, is made and executed between Cariilo, LLC ("Borrower") and ORRSTOWN BANK ("Lender")on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement ("Loan"). Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion;and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement. TERM. This Agreement shall be effective as of September 5, 2007, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until September 5, 2017. CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents. Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender's counsel. Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions,authorizations, documents and instruments as Lender or its counsel, may require. Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable c as specified in this Agreement or any Related Document. Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this.Agreement are true and correct. No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal,extension or modification of any Loan, and at all times any Indebtedness exists: Organization. Borrower is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the Commonwealth of Pennsylvania. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be,duly qualified as a foreign limited liability company in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 60 Pine Street, Carlisle, PA 17013. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borrower's state of organization or any change in Borrower's name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower's business activities. Assumed Business Names. Borrower has filed or recorded all documents.or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower,the following is a complete list of all assumed business names under which Borrower does business: None. Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do.not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of organization or membership agreements, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties. Financial Information. Each of Borrower's financial statements supplied to. Lender truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements. Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements I relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five (5)years. 3USINESS LOAN AGREEMENT Loan No: 26474109001 (Continued) Page 2 Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation,or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected .by Lender's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise. Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than litigation, claims, or other events, it any, that have been disclosed to and acknowledged by Lender in writing. Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other,governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided. Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral. Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms. AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that,so long as this Agreement remains in effect, Borrower will: Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor. Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower's books and records at all reasonable times. Financial Statements.. Furnish Lender with such financial statements and other related information at such frequencies and in such detail as Lender may reasonably request. Additional Information. Furnish such additional information and statements,as Lender may request from time to time. Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender; including stipulations that coverages will not be cancelled or diminished without at least ten (10)days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans,Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require. Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower. Guaranties. Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantors named below,on Lender's forms, and in the amounts and under the conditions set forth in those guaranties. Names of Guarantors Amounts Jeffrey A.Goss $150,000.00 Michael J.Cassidy $150,000.00 Lakeside Holding Company,Inc. $150,000.00 Other Agreements. Comply with all terms and conditions of all other agreements; whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements. Loan Proceeds, Use all Loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing. Taxes,Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes; governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior BUSINESS LOAN AGREEMEN Loan No: 26474105001 (Continued) Page 3 to the date on which penalties would attach, and all lawful claims that, i;unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement. Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner. Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower. Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense. Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources. a Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note;or ECJ be treated as a balloon payment which will be due and payable at the Note's maturity. NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender: Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower's accounts,except to Lender. Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) make any distribution with respect to any capital account, whether by reduction of capital or otherwise. Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business. Agreements. Borrower will not enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower's obligations under this Agreement or in connection herewith. CESSATION OF ADVANCES. if Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any E Guarantor., or in-the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender;or (E) Lender in good faith deems itself insecure, even though no Event of Default shall have occurred. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender(whether checking, savings, or some other account), This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by JUSINESS LOAN AGREEMENT Loan No: 26474109001 (Continued) Page 4 law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Loan. Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other termination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout,, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequat reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness orany Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Loan is impaired. Insecurity. Lender in good faith believes itself insecure/ Right to Cure. If any default,other than a default on In6ebtedness, is curable and if Borrower or Grantor,as the case may be, has not been given a notice of a similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be, after receiving written notice from Lender demanding cure of such default: (1) cure the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiate steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents,all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Everit or Defaultof the type a 'bed in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not-affect Lender's right to declare a default and to exercise.its rights and remedies. FINANCIAL INFORMATION.The Borrower agrees to provide the Lender with Federal Tax Returns and/or CPA prepared Financial Statements and any other financial information, required by the Lender's Original Commitment Letter to the Borrower, on an annual basis, If the Lender does not receive the required financial information within two hundred seventy (270) days of the Borrower's fiscal year end, the Lender has the right to increase the interest rate charged on this Note by 0.25%. The Borrower shall receive written notification ten (10) days prior to the Lender increasing the interest rate charged on this Note. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Borrower agrees to pay upon demand ail of Lender's costs and expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not there is a lawsuit,including reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court. 3 Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. i Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation.interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests,as well as all notices of any repurchase BUSINESS LOAN AGREEMENT Loan No: 26474109001 (Continued) Page 5 of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later acainst Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower,or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided by applicable law, if there is more than one Borrower,any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers. Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law,the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates. Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender. Survival of Representations and Warranties. Borrower understands and agrees that in making the Loan, Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the making of the Loan and delivery to Lender of the Related Documents, shall be continuing in nature, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full,or until this Agreement shall be terminated in the manner provided above,whichever is the last to occur. Time is of the Essence. Time is of the essence in the performance of this Agreement. Waive Jury. All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement, Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement: Advance. The word"Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis under the terms and conditions of this Agreement. Agreement. The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time. Borrower. The word "Borrower" means Carillo, LLC and includes all co-signers and co-makers signing the Note and all their successors and assigns. Collateral.. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now.or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust,conditional sale,trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device,or any other security or lien interest whatsoever,whether created by law, contract, or otherwise. Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health.or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and.Liability Act of 1986, as amended, 42 U.S..C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization.Act of 1986, Pub. L. No. 99-499 ("SARA"),the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement. f SUSINESS LOAN AGREEMENT Loan No: 26474109001 (Continued) ),age 6 GAAP. The word "GAAP" means generally accepted accounting principles. Grantor. The word "Grantor" means each and all of the persons.or entities granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest. Guarantor. The word "Guarantor" means any guarantor,surety, or accommodation party of any or all of the Loan. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents, Lender. The word "Lender" means ORRSTOWN BANK, its successors and assigns. Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time. Note. The word "Note" means the Note executed by Carillo, LLC in the principal amount of $150,000.00 dated September 5, 2007, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. Permitted Liens. The words "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled "Indebtedness and Liens"; (5) liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing,executed in connection with the Loan. Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements,understandings or other agreements, whether created by law, contract,or otherwise, evidencing,governing, representing, or creating a Security Interest. Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract,or otherwise. BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED SEPTEMBER 5, 2007. THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: CARILLO, LLC By: (Seal) By: ��� . '�•:��-- (Seal) J . oss,Member of Carillo,LLC ae J. y,-1K mber of Carillo, LLC LE ER: ORRSTOWN BANK ey: (Seal) JEFFREY GAYMAN, VP/COMMERCIAL MARKET MANAGER CARLISLE RE LASER PRO Lc"Eip,Vc,.5.37.00.003 Cop.HwLmE F aleeM S160111,We.1997,i-V,7. AU Rightc Re d. .PA c:WCFALPVC.40.FC 7RA7788 PR 17 , EXHIBIT B ............................. - --------s PROMISSORY NOTE Principal Loan Date Maturity Loan No call t con Account Officer Initials $1501000.00 09-05-2-007 26474109001 GBR0867 JSG&Y References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing ""•" has been omitted due to text length limitations. Borrower: Carillo,LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle, PA 17013 77 EAST KING STREET P 0 BOX 250 SHIPPENSBURG, PA 17257 Principal Amount: $150,000.00 Date of Note: September 5, 2007 Maturity Date: September 5, 2017 PROMISE TO PAY. Carillo, LLC("Borrower") promises to pay to ORRSTOWN BANK ("Lender"), or order, in lawful money of the United States of America,the principal amount of One Hundred Fifty Thousand&00/100 Dollars($150,000.00),together with interest on the unpaid principal balance from September 5, 2007,until paid in full. PAYMENT. (Borrower will pay this loan in full immediately upon Lender's demand If no demand is made, subject to any payment changes resulting from changes in the Index, Borrower will pay this loan in accordance wit fS the following payment schedule: 60 monthly consecutive principal and interest payments in the initial amount of $1,821.10 each, beginning October 5, 2007, with interest calculated on the unpaid principal balances at an initial discounted interest rate of 7.900% per annum;and 60 monthly consecutive principal and interest payments in the initial amount of$1,880.49 each, beginning October 5, 2012, with interest calculated on the unpaid principal balances at an interest rate based on the Wall Street Prime(currently 8.250%),plus a margin of 1.000%, resulting in an initial interest rate of 9.250%. Borrower's final payment will be due on September 5, 2017 and will be for all principal and accrued interest not yet paid, together with any other unpaid amounts under this Note. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest;then to principal; then to any late charges; and then to any unpaid collection costs. The annual interest rate for this Note is computed an a 365/360 basis;that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. VARIABLE INTEREST RATE. For the first 60 payments, the interest rate on this loan will be 7.900%. Thereafter,the interest rate on this Note is subject to change from time to time based on changes in an independent index which is the Wall Street Prime (the "Index"). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 8.250% per annum. The interest rate or rates to be applied to the unpaid principal balance during this Note will be the rate or rates set forth herein in the "Payment" section. Notwithstanding any other provision of this Note, after the first payment stream, the interest rate for each subsequent payment stream will be effective as of the last payment date of the just-ending payment stream. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. Whenever increases occur in the interest rate, Lender, at its option, may do one or more of the following: (A) increase Borrower's payments to ensure Borrower's loan will pay off by its original final maturity date, (B) increase Borrower's payments to cover accruing interest, (C) increase the number of Borrower's payments, and (D) continue Borrower's payments at the same amount and increase Borrower's final payment. PREPAYMENT PENALTY. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Upon prepayment of this Note, Lender is entitled to the following prepayment penalty: Should Borrower prepay all or any amount of principal during the next five(5)years,the Borrower shall be assessed against the amount prepaid,a five percent(5.00%)prepayment penalty.The assessment percentage shall decrease one percent (1.00%) per annum to par. Lender acknowledges that excepted from this assessment will be principal payments that are generated as a result of operation of the business for which the loan was extended. Specifically not excepted will be any prepayments generated as a result of a refinancing at any other financial institution. Except for the foregoing, Borrower may pay all or a portion of the amount owed earlier than is due.Early payments will not,unless agreed to by Lender in writing, relieve Borrower or Borrower's obligation to continue to make payments under the payment schedule. Rather, they will reduce the principal balance due and may result in Borrower making fewer payments. . Except for the foregoing. Borrower may pay all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: ORRSTOWN BANK, 77 EAST KING STREET, P.O. BOX 250 SHIPPENSBURG, PA 17257. LATE CHARGE. If a payment is 16 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $50.00, whichever is greater. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding a 3.000 percentage point margin ("Default Rate Margin"). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default. After maturity, or after this Note would have matured had there been no default, the Default Rate Margin will continue to apply to the final interest rate described in this Note. If judgment is entered in connection with this Note, interest will continue to accrue after the date of judgment at the rate in effect at the time judgment is entered. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law. DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreem between Lender and Borrower. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under PROMISSORY NOTE Loan No: 26474109001 (Continued) Page 2 Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other termination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen 115) days; or (2) if the cure requires more than fifteen (151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law, declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including reasonable attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action,proceeding,or counterclaim brought by either Lender or Borrower against the other. DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored, RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings,.or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts,and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. COLLATERAL. Borrower acknowledges thisNoate is secured_ by following collateral described in the security instrument listed herein: collateral described in a Commercial Security A,j leemei' ted SepttemEr5r2 PROPERTY INSURANCE. Borrower understands that Borrower is required to obtain insurance for the collateral securing this Note. Further information concerning this requirement is set forth in the Security Agreement and in the Agreement to Provide Insurance, all the terms and conditions of which are hereby incorporated and made a part of this Note. FINANCIAL INFORMATION. The Borrower agrees to provide the Lender with Federal Tax Returns and/or CPA prepared Financial Statements and any other financial information, required by the Lender's Original Commitment Letter to the Borrower, on an annual basis. If the Lender does not receive the required financial information within two hundred seventy (270) days of the Borrower's fiscal year end, the Lender has the right to increase the interest rate charged on this Note by 0.25%. The Borrower shall receive written notification ten (10) days prior to the Lender increasing the interest rate charged on this Note. OVERDRAFT PROTECTION.You may obtain credit advances under your Credit Line by writing a check on your checking account(s) with us in excess of the available collected balance in the account(s). . SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if we report any inaccurate information about your account(s) to a consumer reporting agency. Your written notice describing the specific inaccuracy(ies) should be sent to us at the following address: ORRSTOWN BANK 77 EAST KING STREET P.O. BOX 250 SHIPPENSBURG, PA 17257. GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific default provisions or rights of Lender shall not preclude Lender's right to declare payment of this Note on its demand. If any part of this Note cannot be enforced,this fact will not affect the rest df the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification PROMISSORY NOTE Loan No: 26474109001 (Continued) Page 3 is made. The obligations under this Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS OF SUIT,AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW, BORROWER: CARILLO, LL ey: (Seal) By: s _ ----� (Seal) e A. Goss, Member of Carillo, LLC Mfc �fJ Cas ' e r of Carillo, LLC LASER PRO L-1g,V.I.5.37.00.003 CIPI.HRWnd F—WF S.61Ions,Inc.1997.2007. All Avhla Reevved. -PA c:%CF11LPL1020.FC Tp-1MR PR-17 DISCL SURE FOR CONFESSION OF DGMENT Principal Loan Date lVtaturity Loan No call I Coll Account (3'F#iear lnifrals $150.,000.00 09-05-2007 264741:09001 CSA:0867 JSGAY References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations. Declarant: Carillo, LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle, PA 17013 77 EAST KING STREET P 0 BOX 250 SHIPPENSBURG,PA 17257 DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGNED IS EXECUTING ON BEHALF OF DECLARANT, THIS 5th DAY OF September 20 07 A PROMISSORY NOTE FOR $150,000.00 OBLIGATING DECLARANT TO REPAY THAT AMOUNT. A. THE UNDERSIGNED UNDERSTANDS THAT THE NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DECLARANT UNDER THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE UNDERSIGNED EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT NST DE NT BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. INITIALS: J B. THE U DERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER. AFTER ENTRY OF JUDGMENT.AGAIN WITHOUT-EITHER ADVANCE NOTICE OR A HEARING,TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECLARANT'S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE UNDERSIGNED EXPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN ANY MANN P MITTED / PPLICABLE STATE AND FEDERAL LAW,WITHOUT GIVING DECLARANT ANY ADVANCE NOTICE. INITIALS: 6 C. AFT HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES,THE UNDERSIGNED REPRESENTS THAT: IN JA 1. CLARANT WAS REPRESENTED BY DECLARANT'S OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE tNOTE- 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE TO DECLARANT'S ATTENTION. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: CARILLO, LLqV By: , / (Seal) Je ey oss, Mem Carillo, LLC By., (Seal) eJ. s' ember of o, LLC LASER PRO Lep g.Va$.37.W.OD3 Cope.R✓ A.—$ol�luns.M 1997,2007. All Rig—RFanvaU. PA cACFRLPLM30.FC TR-172BB M.0 EXHIBIT C GUARANTY THIS AGREEMENT dated the_ day of '3)k YY\b e. 2007,entered into bythe undersigned (the"Guarantor")in favor of Orrstown Bank,a`Pennsylvania banking institution,with a principal mailing address of P.O. Box 250, 77 East King Street, Shippensburg, Cumberland County,Pennsylvania 17257(the"Bank")relating to the liabilities of Carillo,LLC,a Pennsylvania Limited Liability Company, doing business at 60 Pine Street, Carlisle, Cumberland County, Pennsylvania 17013 (the "Borrower") In consideration of credit accommodations heretofore, now or hereafter granted to Borrower by Bank, the Guarantor hereby unconditionally and irrevocably guarantees and becomes surety to Bank and its successors, endorsees and assigns for the payment when due (whether at stated maturity,by acceleration or otherwise)by Borrower of all indebtedness,obligations,and liabilities of every kind and nature(whether primary or secondary,direct or indirect,absolute or contingent,sole, joint, or several, secured or unsecured, similar or dissimilar, or related or unrelated), heretofore, now, or hereafter contracted or acquired, of Borrower to Bank, including but not limited to indebtedness, obligations and liabilities underand on account of a $150,000.00 commercial term loan and a $50,000.00 commercial line of credit, together with all amendments, modifications, renewals and refinancing thereof or thereto and all substitutions therefor (jointly the "Liabilities"). Such liability shall not be affected by nor shall anything herein contained be deemed to be a limitation on the amount of credit which maybe extended to Borrower,orthe number of transactions with Borrower or the nature or amount of the obligations which may be incurred by Borrower. The Guarantor further agrees as follows. 1. Guarantor assents to all agreements made or to be made with Bank by Borrower, including any amendments or modifications of any instruments or agreements evidencing or creating any of the Liabilities. 2. Bank may,without affecting the obligation of the Guarantor hereunder,exchange or surrender any property pledged by Borrower without notice to or the consent of the Guarantor, and Bank need not proceed against or exhaust any remedies against Borrower, any other surety or guarantor, any security, or any other party before proceeding against the Guarantor. 3. Bank may renew or extend the term of any of the Liabilities or otherwise amend the terms thereof without notice to or the consent of the Guarantor. 4. Bank may waive any of its rights or remedies against Borrower or any other surety or guarantor with respect to the Liabilities without notice to or the consent of the Guarantor. 5. Bank need not notify the Guarantor of its acceptance of this agreement or of its intention to act in reliance thereon, or of any loan to or any other transaction between Bank and Borrower, or, except as expressly required herein, of any default by Borrower. 6. As security for all obligations hereunder Bank shall have,and the Guarantor hereby assigns and grants to Bank, a right of set-off against and a lien upon and security interest in (a)all property of the Guarantor now or at any time hereafter in Bank's possession in any capacity whatsoever,including but not limited to any balance or share of any deposit,trust or agency account and any policy of life or other insurance, (b) any claim of the Guarantor against Bank, and the proceeds thereof, and (c)any present or future claim or demand of the Guarantor against Borrower and any collateral therefor. The Guarantor hereby irrevocably appoints Bank (with full power of substitution)as the Guarantor's attomey-in-fact to enforce such claims or demands by legal action, voting or proof of debt in any collection, bankruptcy or other proceeding for liquidation, reorganization or arrangement of Borrower or its debts and to endorse on behalf of the Guarantor any instrument for the payment of money concerning same, such recovery to be held by Bank as additional collateral security.The Guarantor shall receive as trustee for,and shall upon receipt and in the form received forthwith pay to Bank, any recovery made on account of such claims or demands against Borrower. No such claim or demand shall ever be represented by any promissory note or other written evidence of debt,except such as are forthwith endorsed and delivered to Bank. 7. If any of the Liabilities shall not be paid when due(whether at stated maturity or upon demand, acceleration of maturity or otherwise) or if Borrower shall otherwise default (after the expiration of any applicable grace periods)with respect to any of the Liabilities, Bank,subject to the aforementioned limitations, (a) may forthwith recover from the Guarantor the full amount of the Liabilities;(b)may sell all or any part of any property held as security hereunder on any exchange or at public or private sale at the option of Bank,at any time or times without advertisement or demand upon or notice to the Guarantor(all of which are hereby waived,except such notice as is required by applicable statute and cannot be waived), with the right on the part of Bank or its nominee to become the purchaser thereof at such sale (unless prohibited by statute)free from any equity of redemption and from all other claims; (c) may exercise any rights it may have under any document executed by the Guarantor securing its liabilities hereunder or otherwise executed in connection herewith;(d)shall have the right,immediately and withoutfurther action,to set off against the liability of the Guarantor hereunder all money owed by Bank in any capacity to the Guarantor,whether due or not; and (e) may exercise any other remedy available at law or in equity. 8. The obligations of the Guarantor hereunder shall be in addition to that stated in any other suretyship agreement or guarantee, and shall be binding on the heirs, personal and legal representatives, successors and assigns of the Guarantor. 9. No failure by Bank to exercise any right hereunder shall be construed as a waiver of the right to exercise the same or any other right at any other time and from time to time thereafter. 10. This Agreement and the Guarantor's payment obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment of any of the Liabilities is rescinded or must otherwise be restored or returned by Bank,all as though such payments had not been made. Bank's good faith determination as to whether a payment must be restored or returned shall be binding on Guarantor. 11. The Guarantor waives: a. all presentments, demands for performance, notices of nonperformance, protests,notices of protest,and notices of dishonor,except such as is required by applicable statute and cannot be waived; b. the defense of any statute of limitation affecting the obligation of the Guarantor hereunder or the enforcement thereof, to the extent permitted by law; C. any defense arising by reason of any invalidity or unenforceability of any of the Liabilities or any instrument evidencing or securing the Liabilities or any disability of Borrower,or by any cessation from any cause whatsoever of the liability of Borrower for the Liabilities or any of -2 - them,or by reason of any event or circumstance that under any rule of law would otherwise operate to discharge the liability of a surety or guarantor; d. any right to require Bank to advise the Guarantor of any information known to Bank regarding the financial condition of Borrower(it being agreed that the Guarantor assumes the responsibility for being and keeping informed regarding such condition); e. any right of subrogation or reimbursement and any right to enforce any remedy which Bank now has or may hereafter have against Borrower and any benefit of, and any right to participate in, any security now or hereafter held by Bank; and f. any defense arising by reason of any election by Bank pursuant to Section 1111(b)(2)of the United States Bankruptcy Code or any similar or successor section or based upon any borrowing or grant of a security interest under Section 364 of such Code or any similar or successor section. 12. The Guarantor hereby authorizes and empowers Bank, its successors, endorsees and assignees,to exercise in its or their sole discretion,any rights and remedies,or any combination thereof, which may then be available, it being the purpose and intent of the Guarantor that its obligations hereunder shall be absolute, independent and unconditional under any and all circumstances. The Guarantor therefore waives any defense based upon an election of remedies by Bank including,without limitation,any election to'proceed byjudicial or nonjudicial foreclosure or by deed in lieu thereof. 13. The Guarantor hereby authorizes and empowers any attorney of any court of record to appear for and confess judgment against any or all of the undersigned for such sums as shall have or may become due hereunder,with or without declaration,with costs of suit,release of error, without stay of execution and with $1,500 or fifteen percent of the Liabilities then outstanding, whichever is greater,added for attorney's collection fees;and also waives the right of inquisition on any real estate levied on, voluntarily condemns the same, authorizes the Prothonotary or Clerk to enter upon the Writ of Execution said voluntary condemnation,agrees that said real estate may be sold on a writ of execution;and also waives any relief from any appraisement,stay or exemption law of any state now in force or hereafter enacted. If a copy of this Agreement, verified by affidavit of any Bank officer shall have been filed in such action, it shall not be necessary to file the original Agreement as a warrant of attorney, any practice or usage to the contrary notwithstanding. 14. The Guarantor shall pay Bank on demand all reasonable costs and expenses (including reasonable counsel fees) incurred by Bank in the preparation, administration, amendment, enforcement or collection of any of the Liabilities or of this agreement, including reasonable costs, expenses and fees incurred after as well as before the entry of any judgment. 15. The provisions of this agreement, and the obligations of the Guarantor hereunder, are independent of and separable from each other, and no such provision or obligation shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other such provision or obligation may be invalid or unenforceable in whole or in part. 16. This agreement shall be governed by the laws of the Commonwealth of Pennsylvania. The Guarantor waives any objection based on venue or inconvenient forum. THE GUARANTOR WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION INVOLVING THIS AGREEMENT. This agreement may be signed in any number of,counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. - 3 - 17. Bank may wholly or partially transfer the benefit of this Guaranty to any subsequent transferee or holder of any of the Liabilities. Subject to the preceding sentence, this Guaranty is made exclusively for the benefit of Bank and the undersigned, and no other person or entity (including, without limitation, the Borrower) is authorized or intended to rely hereon. IN WITNESS WHEREOF,the undersigned,intending to be legally bound, has executed this agreement, under seal, as of the date first written above. Witness: 0101 Mic a assidy I hereby certify that the precise mailing address of Michael J. Cassidy is: J rr By: illiam A. Duncan, Esquire Orrstown Bank Guaranty Cassidy Lig1PLCB settle scn 1260-002 - 4 - P COMMERCIAL GUARANI' Principat Loan bate maturity Loan NoCali i coil Amount dicer initials IJSGAY References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations. Borrower: Carillo, LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEH£DGE OFFICE Carlisle, PA 17013 77 EAST KING STREET P O BOX 250 SHIPPENSBURG, PA 17267 Guarantor: Michael J. Cassidy(SSN: 176-46-6157) 3 Rockwell Court Carlisle, PA 17013 GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order, on demand, in legal tender of the United States of America, in same-day funds, without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. INDEBTEDNESS. The word "indebtedness" as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid interest.thereon and all collection costs and legal expenses related thereto permitted by law, reasonable attorneys' fees, arising from any and all debts, liabilities and obligations that Borrower individually or collectively or interchangeably with others, owes or will owe Lender under the Note and Related Documents and any renewals, extensions, modifications, refinancings, consolidations and substitutions of the Note and Related Documents. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. Release of any other guarantor or termination of any other guaranty of the indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (A) to make one or more additional secured or unsecured loans to Borrower., to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions.of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent.of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information.is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (i) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (D} to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place.of any public or private sale of personal property security held by Lender from Borrower or to comply with i any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind, or at'any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any } i COMMERCIAL GUARANTY Loan No: 26474109001 (Continued) Page 2 action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by energise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the indebtedness; (C) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. if payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. However, this does not include any IRA or Keogh accounts,or any trust accounts for which setoff would be prohibited by law. Guarantor authorizes Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these accounts to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness, Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attomeys' fees and legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy proceedings. (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages;and costs (including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph, interpretation. in all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. if any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers,directors, partners,. managers, or other agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law; any notice required to be given under this Guaranty shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mai( postage prepaid, directed to the addresses shown near the beginning of this Guaranty. :Any parry may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all COMMERCIAL GUARANTY Loan No: 26474109001 (Continued) Page 3 Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and sinned by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing be'v✓een Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. The terms of this Guaranty snail be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. DEFINITIONS. The following capitalized words and ,arms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plurat, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commerbial Code: Borrower. The word "Borrower" means Carillo, LLC and includes all co-signers and co-makers sjgning the Note and all their successors and assigns. Guarantor. The word "Guarantor" means everyone signing this Guaranty, including without limitation Michael J. Cassidy,and in each case, any signer's successors and assigns. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "Lender" means ORRSTOWN BANK, its successors and assigns. Note. The word "Note" means the promissory note dated September 5, 2007, in the original principal amount of $150,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY;AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL, EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED SEPTEMBER 5, 2007. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND.SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: X (Sea[) Mrffael J.71y COMMERCIAL GUARANTY Loan No: 26474109001 (Continued) Page 4 INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA ) )SS COUNTY OF s� 111''" Or�this, the day of C ;'; . 1 s ;t 20 � before me i the undersigned Notary Public, personalty appearecFMichael J. Cassidy, known to ripe (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he or she executed the same for the purposes therein contained. In witness whereol, I nereunto seNRj&yfiWd offic-ia sea. Kathy L.Mumrnert,Notary Public Carlisle Borough,Cumi~rland County,PA My Cotnf-nission Expires August 11,2011 Notary Public in and for the State of LASER PRC Lmdi g.VAr.E.a7.00.000 Cop,.Hwl-i Finanas15-1—,enc.1997.2007. Al:Alr ll PA cICALLFL120.FC TR�1726E PR.17 DISCL SURE FOR CONFESSION OF DGMENT Prirleipal man Date Maturity Loan No call/Coll Account Officer initials $150,50:,E100.0t1 8 3-05-2.007 1 . 264741090G1 I I CRA0867 IJSGAY References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing " ``" has been omitted due to text length limitations. Borrower: Carillo, LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle, PA 17013 77 EAST KING STREET P O BOX 250 SHIPPENSBURG, PA 17257 Declarant: Michael J. Cassidy(SSN: 176-46-6157) 3 Rockwell Court Carlisle, PA 17013 DISCLOSURE FOR CONFESSION OF JUDGMENT I AM EXECUTING, THIS 5th DAY OF September , 20 07 , A GUARANTY OF A PROMISSORY NOTE FOR $150,000.00 OBLIGATING ME TO REPAY THAT AMOUNT. A. I UNDERSTAND THAT THE GUARANTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST ME UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S ENTM GMENT AGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. INITIALS: '� ✓ B. I FURTHER UNDERSTAND THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON,TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, 1 AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN NER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW,WITHOUT GIVING ME ANY ADVANCE NOTICE. INITIALS: C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES,1 REPRESENT THAT: INlTIA 1. 1 WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY. 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY TO MY ATTENTION. D. I CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000;THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN 1 INITIALED AND SIGNED IT;AND THAT 1 RECEIVED A COPY AT THE TIME OF SIGNING. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: X Seal) Mic .Cass' LASER PRO L,ntlnp,l,,.5.3".00.0::Cow.M,fb"d Fm,nn,15oW--,No.199].:00). All Righn R,—.d. PA cACF1%LPL%O.,.FC TR�17268 PR17 , 3 COMMERCIAL. GUARANT' Principal Loan Date Maturity Loan No Call 1 Go11 Account Gfficer Initials I,JSGAY I References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations. Borrower: Carillo, LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle, PA 17013 77 EAST KING STREET P 0 BOX 250 SHIPPENSBURG, PA 17257 GElarantor: Lakeside Holding Company, Inc.(TIN: 65-0714325) 105 West King Street Shippensburg, PA 17257 GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order, on demand, in legal tender of the United States of America, in same-day funds, without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. INDEBTEDNESS. The word "Indebtedness" as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law, reasonable attorneys' fees, arising from any and all debts, liabilities and obligations that Borrower individually or collectively or interchangeably with others, owes or will owe Lender under the Note and Related Documents and any renewals, extensions, modifications, refinancings, consolidations and substitutions of the Note and Related Documents. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties, DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness shall have been fully and finally paid and satisfied'and all of Guarantor's other obligations under this Guaranty shall have been performed in full. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (A) to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof,including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request.of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending.or threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and Q Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest;demand; or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with.the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms; time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any ; act or omission of any kind,or at any time,with respect to any matter whatsoever. .Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or COMMERCIAL GUARANTY Loan No: 26474109001 (Continued) Page 2 defenses arising by reason of (A) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Cuarantor's subrogation nights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not bared by any applicable statute of limitations; or (r) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or some other account, This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor authorizes Lender, to the extent permitted by applicable lave, to hold these funds if there is a default, and Lender may apply the funds in these accounts to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any.notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that.the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce'its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and.expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Integration.. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages, and costs (including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words"Guarantor," "Borrower," and "Lender"include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not,be enforced, that fact by itself will not mean that the rest of this Guaranty will not.be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies; or similar entities,it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf,and any indebtedness made or.created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shall be given in writing, and. shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier; or, if mailed, when deposited in the United States mail, as first class; certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by { COMMERCIAL GUARANTY Loan No: 26474108001 (Continued) Page 3 applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver ;s given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. The terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Carillo, LLC and includes all co-signers and co-makers signing the Note and all their successors and assigns. Guarantor. The word "Guarantor" means everyone signing this Guaranty, including without limitation Lakeside Holding Company, Inc., and in each case, any signer's successors and assigns. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "Lender" means ORRSTOWN BANK, its successors and assigns. Note. The word "Note" means the promissory note dated September 5, 2007, in the original principal amount of $150,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing,executed in connection with the indebtedness. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY;AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL.NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED SEPTEMBER 5, 2007. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: LAKESIDE,AOLDING COMPANY, INC. By: (Seal) Je rey A. GOs ident of Lakeside Holding C mp ny, In COMMERCIAL GUARANTY Loan No: 26474105001 (Continued) Page 4 CORPORATE ACKNOWLEDGMENT COMMONWEALTH Or PENNSYLVANIA } /J }Ss COUNTY OF Or Zhis, the ri day of Cj j }1`I}C f A 20M ,before me the undersigned Notbry Public,personally appeared Jeffrey A. Goss, President of Lakeside Holding Company, Inc., who acknowledged himself or herself to be the President of Lakeside Holding Company, Inc., of a corporation, and that he or she as such President of Lakeside Holding Company, Inc., being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation by himself or herself as President of Lakeside Holding Company, Inc.. In witness whereof,I hereunto set my hand and official seal. Notarial Seai Kathy L.Mummert,Notary public Y Carlisle Borough,Cumberland County,FA Notary Pu d.in and for the State of F f my Commission Expires August 11,2d l i LAS=R VIID lending,Ver.5.37.00,=Copy,ilerland F—1W Slwani,Inc.1991.i0C7, Ar,Ayht:Rearm -°A x-',Crll_FlL`MFC T5::285 M-1 1 CORPORATE RE )LUTION TO GRANT COLLA RAL / GUARANTEE Principal town Date Maturity Loan No Tcall,Cat[ Account Officer 'nitiais $150_,000.00 09-0S-2Q07 2,64741090 .1 CRA0867 IJSGAY References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing ""•" has been omitted due to text length limitations. Borrower: Carillo, LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle, PA 17013 77 EAST KING STREET P O BOX 250 SHIPPENSBURG,PA 17257 Corporation: Lakeside Holding Company,Inc.(TIN: 65-0714325) 105 West King Street Shippensburg,PA 17257 I,THE UNDERSIGNED, DO HEREBY CERTIFY THAT: THE CORPORATION'S EXISTENCE. The complete and correct name of the Corporation is Lakeside Holding Company, Inc. ("Corporation"). The Corporation is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the Commonwealth of Pennsylvania. The Corporation is duly authorized to transact business in all other states in which the Corporation is doing business, having obtained all necessary filings,governmental licenses and approvals for each state in which the Corporation is doing business. Specifically, the Corporation is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. The Corporation has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. The Corporation maintains an office at 105 West King Street, Shippensburg, PA 17257. Unless the Corporation has designated otherwise in writing, the principal office is the office at which the Corporation keeps its books and records. The Corporation will notify Lender prior to any change in the location of the Corporation's state of organization or any change in the Corporation's name. The Corporation shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to the Corporation and the Corporation's business activities. RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation, or if the Corporation is a close corporation having no Board of Directors then at a meeting of the Corporation's shareholders, duly called and held on , at which a quorum was present and voting,or by other duly authorized action in lieu of a meeting,the resolutions set forth in this Resolution were adopted. OFFICER. The following named person is an officer of Lakeside Holding Company, Inc.: NAMES TITLES AUTHORIZED ACTUAL SIGNATURES Jeffrey A.Goss President Y X _,--i (Seal) ACTIONS AUTHORIZED. The authorized person listed above may enter into any a reements of any nature with Lender, and those agreements will bind the Corporation. Specifically, but without limitation, the authorized person is authorized, empowered, and directed to do the following for and on behalf of the Corporation: Guaranty. To guarantee or act as surety for loans or other financial accommodations to Borrower from Lender on such guarantee or surety terms as may be agreed upon between the officer of the Corporation and Lender (the "Guaranty"). The amount of the Guaranty shall consist of all amounts owing under that certain note dated September 5, 2007, in the original principal amount of One Hundred Fifty Thousand & 00/100 Dollars ($150,000.00) from Borrower to Lender (the "Note"), including without limitation (1) all principal, (2) all interest, (3) all late charges, (4) all loan fees and loan charges, and (5) all collection costs and expenses relating to the Note or to any collateral for the Note, in addition to such sum or sums of money as the Corporation currently may have guaranteed to Lender. Collection costs and expenses include without limitation all reasonable attorneys'fees. Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or otherwise encumber and deliver to Lender any property now or hereafter belonging to the Corporation or in which the Corporation now or hereafter may have an interest, including without limitation all of the Corporation's real property and all of the Corporation's personal property (tangible or intangible), as security for the Guaranty, and as a security for the payment of any loans, any promissory notes, or any other or further indebtedness of Carillo, LLC to Lender at any time owing, however the same may be evidenced. Such property may be mortgaged, pledged, transferred, endorsed, hypothecated or encumbered at the time such loans are obtained or such indebtedness is incurred, or at any other time or times, and may be either in addition to or in lieu of any property theretofore mortgaged, pledged, transferred, endorsed, hypothecated or encumbered. The provisions of this Resolution authorizing or relating to the pledge, mortgage, transfer, endorsement, hypothecation,granting of a security interest in, or in any way encumbering, the assets of the Corporation shall include, without limitation, doing so in order to lend collateral security for the indebtedness, now or hereafter existing, and of any nature whatsoever,of Carillo, LLC to Lender. The Corporation has considered the value to itself of lending collateral in support of such indebtedness, and the Corporation represents to Lender that the Corporation is benefited by doing so. Execute Security Documents. To execute and deliver to Lender the forms of mortgage, deed of trust, pledge agreement, hypothecation agreement, and other security agreements and financing statements which Lender may require and which shall evidence the terms and conditions under and pursuant to which such liens and encumbrances, or any of them, are given; and also to execute and deliver to Lender any other written instruments, any chattel paper,or any other collateral,of any kind or nature, which Lender may deem necessary or proper in connection with or pertaining to the giving of the liens and encumbrances. Further Acts. To do and perform such other acts and things and to execute and deliver such other documents and agreements, including agreements waiving the right to a trial by jury and confessing judgment against the Corporation, as the officer may in his or her discretion deem reasonably necessary or proper in order to carry into effect the provisions of this Resolution. ASSUMED BUSINESS NAMES. The Corporation has filed or recorded all documents or filings required by law relating to all assumed business names used by the Corporation. Excluding the name of the Corporation, the following is a complete list of all assumed business names under which the Corporation does business: None. NOTICES TO LENDER. The Corporation will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may designate from time to time) prior to any (A) change in the Corporation's name; (B) change in the Corporation's assumed CORPORATE REQ..LUTION TO GRANT COLLATERA, , GUARANTEE Loan No: 26474109001 (Continued) Page 2 business name(s); (C) change in the management of the Corporation; (D) change in the authorized signer(s); (E) change in the Corporation's principal office address; (F) change in the Corporation's state of organization; (G) conversion of the Corporation to a new or different type of business entity; or (H) change in any other aspect of the Corporation that directly or indirectly relates to any agreements between the Corporation and Lender. No change in the Corporation's name or state of organization will take effect until after Lender has received notice. CERTIFICATION CONCERNING OFFICERS AND RESOLUTIONS. The officer named above is duly elected, appointed, or employed by or for the Corporation, as the case may be, and occupies the position set opposite his or her respective name. This Resolution now stands of record on the books of the Corporation, is in full force and effect, and has not been modified or revoked in any manner whatsoever. NO CORPORATE SEAL. The Corporation has no corporate seal, and therefore, no seal is affixed to this Resolution. CONTINUING VALIDITY. Any and all acts authorized pursuant to this Resolution and performed prior to the passage of this Resolution are hereby ratified and approved. This Resolution shall be continuing, shall remain in full force and effect and Lender may rely on it until written notice of its revocation shall have been delivered to and received by Lender at Lender's address shown above (or such addresses as Lender may designate from time to time). Any such notice shall not affect any of the Corporation's agreements or commitments in effect at the time notice is given. IN TESTIMONY WHEREOF, 1 have hereunto set my hand and attest that the signature set opposite the name listed above is his or her genuine signature. I have read all the provisions of this Resolution,and I personally and on behalf of the Corporation certify that all statements and representations made in this Resolution are true and correct. This Corporate Resolution to Grant Collateral/Guarantee is dated September 5, 2007. THIS RESOLUTION IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS RESOLUTION IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. CERTIFIED TO AND ATTESTED BY: X zll (Seal) Je k .`Goss,Secretary NOTE: H the officer signing this Resolution is designated by the foregoing document as one of the officers authorized to act on the Corporation's behalf,it is advisable to have this Resolution signed by at least one non-authorized officer of the Corporation. LASER PRO-dm,Ver.5.37M.DD7 Copy./le,lend F.—I Solufipnp,btc,1997.3007. AM Rp t,Rererved. PA 0CFIl FLUC10.FC TR-1 789 PR 17 CORPORATE GUARANTY RESOLUTION I, Jeffrey A. Goss, Secretary of Lakeside Holding Company, Inc., do hereby certify that the following is a true and correct copy of a resolution duly adopted at a meeting of the Board of Directors of said corporation duly called and held on the day of , 200 , at which a quorum was present and voting throughout, and that the said resolution remains in full force and effect: RESOLVED, That Jeffrey A. Goss, the President of this corporation be and he is hereby authorized to execute and deliver to Orrstown Bank (the "Bank") in the name and on behalf of this corporation, a guaranty and suretyship agreement in the form presented to this meeting pursuant to which this corpo- ration absolutely and unconditionally guarantees and becomes surety for the prompt payment and punctual performance of any and all present and future obligations, liabilities and indebtedness of Carillo, LLC to Bank. FURTHER RESOLVED, That said officers be and they hereby are authorized to secure such obligations with appropriate security agreements, pledges and mortgages covering real and personal property of this corporation and to take any steps necessary to perfect any interest thus created. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of this corporation this day of 2007. �//, ut, ---' [Corp. Seal] Jeffrey A. Goss, Secretary Onrstown Bank Lakeside Guaranty Resolution Liq/plcb settle scn 1260-002 GUARANTY THIS AGREEMENT dated the J day of 2007,entered into by the undersigned (the"Guarantor")in favor of Orrstown Bank, Pennsylvania banking institution,with a principal mailing address of P.O. Box 250, 77 East King Street, Shippensburg, Cumberland County,Pennsylvania 17257(the"Bank")relating to the liabilities of Carillo,LLC,a Pennsylvania Limited Liability Company, doing business at 60 Pine Street, Carlisle, Cumberland County, Pennsylvania 17013 (the "Borrower") In consideration of credit accommodations heretofore, now or hereafter granted to Borrower by Bank, the Guarantor hereby unconditionally and irrevocably guarantees and becomes surety to Bank and its successors, endorsees and assigns for the payment when due (whether at stated maturity,by acceleration or otherwise)by Borrower of all indebtedness,obligations,and liabilities of every kind and nature(whether primary or secondary,direct or indirect,absolute or contingent,sole, joint, or several, secured or unsecured, similar or dissimilar, or related or unrelated), heretofore, now, or hereafter contracted or acquired, of Borrower to Bank, including but not limited to indebtedness, obligations and liabilities under and on account of a $150,000.00 commercial term loan and a $50,000.00 commercial line of credit, together with all amendments, modifications, renewals and refinancing thereof or thereto and all substitutions therefor Qointly the "Liabilities"). Such liability shall not be affected by nor shall anything herein contained be deemed to be a limitation on the amount of credit which may be extended to Borrower,or the number of transactions with Borrower or the nature or amount of the obligations which may be incurred by Borrower. The Guarantor further agrees as follows. 1. Guarantor assents to all agreements made or to be made with Bank by Borrower, including any amendments or modifications of any instruments or agreements evidencing or creating any of the Liabilities. 2. Bank may,without affecting the obligation of the Guarantor hereunder,exchange or surrender any property pledged by Borrower without notice to or the consent of the Guarantor, and Bank need not proceed against or exhaust any remedies against Borrower, any other surety or guarantor, any security, or any other party before proceeding against the Guarantor. 3. Bank may renew or extend the term of any of the Liabilities or otherwise amend the terms thereof without notice to or the consent of the Guarantor. 4. Bank may waive any of its rights or remedies against Borrower or any other surety or guarantor with respect to the Liabilities without notice to or the consent of the Guarantor. 5. Bank need not notify the Guarantor of its acceptance of this agreement or of its intention to act in reliance thereon, or of any loan to or any other transaction between Bank and Borrower, or, except as expressly required herein, of any default by Borrower. 6. As security for all obligations hereunder Bank shall have,and the Guarantor hereby assigns and grants to Bank, a right of set-off against and a lien upon and security interest in (a)all property of the Guarantor now or at any time hereafter in Bank's possession in any capacity whatsoever, including but not limited to any balance or share of any deposit,trust or agency account and any policy of life or other insurance, (b) any claim of the Guarantor against Bank, and the proceeds thereof, and (c)any present or future claim or demand of the Guarantor against Borrower and any collateral therefor. The Guarantor hereby irrevocably appoints Bank (with full power of substitution)as the Guarantor's attomey-in-fact to enforce such claims or demands by legal action, voting or proof of debt in any collection, bankruptcy or other proceeding for liquidation, reorganization or arrangement of Borrower or its debts and to endorse on behalf of the Guarantor any instrument for the payment of money concerning same, such recovery to be held by Bank as additional collateral security. The Guarantor shall receive as trustee for,and shall upon receipt and in the form received forthwith pay to Bank, any recovery made on account of such claims or demands against Borrower. No such claim or demand shall ever be represented by any promissory note or other written evidence of debt,except such as are forthwith endorsed and delivered to Bank. 7. If any of the Liabilities shall not be paid when due(whether at stated maturity or upon demand, acceleration of maturity or otherwise) or if Borrower shall otherwise default (after the expiration of any applicable grace periods)with respect to any of the Liabilities, Bank,subject to the aforementioned limitations, (a) may forthwith recover from the Guarantor the full amount of the Liabilities; (b)may sell all or any part of any property held as security hereunder on any exchange or at public or private sale at the option of Bank,at any time or times without advertisement or demand upon or notice to the Guarantor(all of which are hereby waived,except such notice as is required by applicable statute and cannot be waived), with the right on the part of Bank or its nominee to become the purchaser thereof at such sale (unless prohibited by statute)free from any equity of redemption and from all other claims; (c) may exercise any rights it may have under any document executed by the Guarantor securing its liabilities hereunder or otherwise executed in connection herewith;(d)shall have the right,immediatelyand withoutfurther action,to set off against the liability of the Guarantor hereunder all money owed by Bank in any capacity to the Guarantor,whether due or not; and (e) may exercise any other remedy available at law or in equity. 8. The obligations of the Guarantor hereunder shall be in addition to that stated in any other suretyship agreement or guarantee, and shall be binding on the heirs, personal and legal representatives, successors and assigns of the Guarantor. 9. No failure by Bank to exercise any right hereunder shall be construed as a waiver of the right to exercise the same or any other right at any other time and from time to time thereafter. 10. This Agreement and the Guarantor's payment obligations hereunder shall continue to be effective or be reinstated,as the case may be, if at any time payment of any of the Liabilities is rescinded or must otherwise be restored or returned by Bank,all as though such payments had not been made. Bank's good faith determination as to whether a payment must be restored or returned shall be binding on Guarantor. 11. The Guarantor waives: a. all presentments, demands for performance, notices of nonperformance, protests,notices of protest,and notices of dishonor,except such as is required by applicable statute and cannot be waived; b. the defense of any statute of limitation affecting the obligation of the Guarantor hereunder or the enforcement thereof, to the extent permitted by law; C. any defense arising by reason of any invalidity or unenforceability of any of the Liabilities or any instrument evidencing or securing the Liabilities or any disabilityof Borrower,or by any cessation from any cause whatsoever of the liability of Borrower for the Liabilities or any of - 2 - them,or by reason of any event or circumstance that under any rule of law would otherwise operate to discharge the liability of a surety or guarantor; d. any right to require Bank to advise the Guarantor of any information known to Bank regarding the financial condition of Borrower(it being agreed that the Guarantor assumes the responsibility for being and keeping informed regarding such condition); e. any right of subrogation or reimbursement and any right to enforce any remedy which Bank now has or may hereafter have against Borrower and any benefit of, and any right to participate in, any security now or hereafter held by Bank; and f. any defense arising by reason of any election by Bank pursuant to Section 1111(b)(2)of the United States Bankruptcy Code or any similar or successor section or based upon any borrowing or grant of a security interest under Section 364 of such Code or any similar or successor section. 12. The Guarantor hereby authorizes and empowers Bank, its successors, endorsees and assignees,to exercise in its or their sole discretion,any rights and remedies,or any combination thereof, which may then be available, it being the purpose and intent of the Guarantor that its obligations hereunder shall be absolute, independent and unconditional under any and all circumstances. The Guarantor therefore waives any defense based upon an election of remedies by Bank including,without limitation,any election to proceed byjudicial or nonjudicial foreclosure or by deed in lieu thereof. 13. The Guarantor hereby authorizes and empowers any attorney of any court of record to appear for and confess judgment against any or all of the undersigned for such sums as shall have or may become due hereunder,with or without declaration,with costs of suit,release of error, without stay of execution and with $1,500 or fifteen percent of the Liabilities then outstanding, whichever is greater,added for attorney's collection fees;and also waives the right of inquisition on any real estate levied on, voluntarily condemns the same, authorizes the Prothonotary or Clerk to enter upon the Writ of Execution said voluntary condemnation,agrees that said real estate may be sold on a writ of execution;and also waives any relief from any appraisement,stay or exemption law of any state now in force or hereafter enacted. If a copy of this Agreement, verified by affidavit of any Bank officer shall have been filed in such action, it shall not be necessary to file the original Agreement as a warrant of attorney, any practice or usage to the contrary notwithstanding. 14. The Guarantor shall pay Bank on demand all reasonable costs and expenses (including reasonable counsel fees) incurred by Bank in the preparation, administration, amendment, enforcement or collection of any of the Liabilities or of this agreement, including reasonable costs, expenses and fees incurred after as well as before the entry of any judgment. 15. The provisions of this agreement, and the obligations of the Guarantor hereunder, are independent of and separable from each other, and no such provision or obligation shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other such provision or obligation may be invalid or unenforceable in whole or in part. 16. This agreement shall be governed by the laws of the Commonwealth of Pennsylvania. The Guarantor waives any objection based on venue or inconvenient forum. THE GUARANTOR WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION INVOLVING THIS AGREEMENT. This agreement may be signed in any number of counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. - 3 - 17. Bank may wholly or partially transfer the benefit of this Guaranty to any subsequent transferee or holder of any of the Liabilities. Subject to the preceding sentence, this Guaranty is made exclusively for the benefit of Bank and the undersigned, and no other person or entity (including, without limitation, the Borrower) is authorized or intended to rely hereon. IN WITNESS WHEREOF,the undersigned,intending to be legally bound, has executed this agreement, under seal, as of the date first written above. Witness: r/Affrey A. Goss I hereby certify that the precise mailing address of Jeffrey A. Goss is: Ld C --?Lb C S'_ By: I liam A. Duncan, quire Orrstown Bank Guaranty Cassidy Liq/PLCB settle scn 1260-002 -4 - COMMERCIAL GUARANT PrindpaF7 Loan bate maturity Loan Na Cats i Coll Account O'ffloer Initials JSGAY References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "" '" has been omitted due to text length limitations. Borrower: Carillo, LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle,PA 17013 77 EAST KING STREET P O BOX 250 SHIPPENSBURG, PA 17257 Guarantor: Jeffrey A. Goss(SSN: 211-42-5913) 10 Derbyshire Drive Carlisle,PA 17015 GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order, on demand, in legal tender of the United States of America, in same-day funds, without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. INDEBTEDNESS. The word "Indebtedness" as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law, reasonable attorneys' fees, arising from any and all debts, liabilities and obligations that Borrower individually or collectively or interchangeably with others, owes or will owe Lender under the Note and Related Documents and any renewals, extensions, modifications, refinancings, consolidations and substitutions of the Note and Related Documents. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. DURATION OF GUARANTY, This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (A) to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law, regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any COMMERCIAL GUARANTY Loan No: 26474109001 (Continued) Page 2 action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor authorizes Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these accounts to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages, and costs (including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers; or other agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all COMMERCIAL GUARANTY Loan No: 26474109001 (Continued) Page 3 Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. The terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives,successors, and assigns, and shall be enforceable by Lender and its successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Carillo, LLC and includes all co-signers and co-makers signing the Note and all their successors and assigns. Guarantor. The word "Guarantor" means everyone signing this Guaranty, including•Without•liitlitation Jeffrey A. Goss, and in each case, any signer's successors and assigns. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "Lender" means ORRSTOWN BANK, its successors and assigns. Note. The word "Note" means the promissory note dated September 5, 2007, in the original principal amount of $150,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing,executed in connection with the Indebtedness. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER-SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED SEPTEMBER 5, 2007. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: X —ilf-I (Seal) J re s COMMERCIAL GUARANTY Loan No: 26474109001 (Continued) Page 4 INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA ) )SS COUNTY OF { ,�'}� � X ry-J ) his,the ,5 day of Q!f)4, h PA 20 r�;� before me � rl/ 1�! LM�)n\ me (`"'� , the undersigned Notary Public, personally appeared Jeffrey A. Goss, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he or she executed the same for the purposes therein contained. In witness whereof,Ohl-rounto sat my han and offici I seal. Notarial Seal �/ a Kathy L.Hammett,Notary Public ��)-)���� I Carlisle Borough,Cumberland County,PA Notary Public in and for the State of My Commission Expires August 11,2011 L S'_N P80--g.V—5.37.00.003 Co H,—d F—-1 S—m-1—1997.20L All All eesnred. PA r 1CFlILPL\ENYC'8,17288 PP 17 D1SCL MRE FOR CONFESSION OF MGMENT i'rincipai Loan bate Maturity Loan No Call t Cott Account Officer Initials $150.,000._00 09-05-2007 2f4741G9001 CBA0867 JSGAX References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "`'*" has been omitted due to text length limitations. Borrower: Carillo, LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle,PA 17013 77 EAST KING STREET P 0 BOX 250 SHIPPENSBURG, PA 17257 Declarant: Jeffrey A. Goss (SSN: 211-42-5913) 10 Derbyshire Drive Carlisle, PA 17015 DISCLOSURE FOR CONFESSION OF JUDGMENT I AM EXECUTING, THIS 5th DAY OF September 20 07 , A GUARANTY OF A PROMISSORY NOTE FOR $150,000.00 OBLIGATING ME TO REPAY THAT AMOUNT. A. I UNDERSTAND THAT THE GUARANTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST ME UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S EI�V?E�G J ENT AGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. INITIALS: B. I FURT R UNDERSTAND THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON,ATTACHING, LEVYING ON,TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, 1 AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND 1 EXPRESSLY AGREE AND CONSENT TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENTIIN MANN ERMITTED BY APPLICABLE STATE AND FEDERAL LAW,WITHOUT GIVING ME ANY ADVANCE NOTICE. INITIALS: C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, 1 REPRESENT THAT: INITIALS 7. I WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY. 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY TO MY ATTENTION. D. I CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000;THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN I INITIALED AND SIGNED IT;AND THAT I RECEIVED A COPY AT THE TIME OF SIGNING. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: #114e-��-- (Seal) LISER PRD"Idm0.Vm.5.37.00.003 Cam.H—d F—W S1W—Ine.1037.2007. All A%hl,R...d. -PA a\CRMIDWSC—1720.9 PR.,7 FINANCIAL INFORMATIOt Prineip4l Loan Date Maturity Loan No Gats 10011 Aecouni t�#�ioer Inti#iais $150. 000.4Q 09-05-2£#�3 264741-G.9001 C)�Afl.S67 JSGAY References in the boxes above are for Lender's use only and do net limit the applicability of.this document to any particular loan or item. Any item above containing "' •" has been omitted due to text length limitations. Borrower: Carulo, LLC(TIN: 26-0302846) Lender: ORRSTOWN BANK 60 Pine Street STONEHEDGE OFFICE Carlisle, PA 17013 77 EAST KING STREET P 0 BOX 250 SHIPPENSBURG, PA 17257 Financial Information As the borrower, I agree to provide the Lender with all necessary financial information" annually, as required by the Lender's Original Commitment Letter and/or as cited in the executed Promissory Note. If the Lender does not receive the required financial information within two hundred and seventy(270) days of the Borrower's fiscal year end, the Lender has the right to increase the interest rate charged on this Note by 0.25%. The Borrower shall receive written notification within ten (10)days prior to the Lender increasing the interest rate charged on this Note. 'Necessary Financial Information: Businesses: -'Complete'Annual Federal Tax Return Information and/or CPA prepared Financial Information (Audited, Reviewed, or Compiled) -Other Financial Information (Interim Profit&Loss Statements, Balance Sheets,Accounts Receivable Aging reports, etc.) Business Individuals and Guarantors: 'Complete'Annual Federal Personal Tax Return Information Annually updated Personal Financial Statement Borro Trey A. Goss, IKember c e J. as , ember 09/05/0 z Date Jef A, Goss, Guarantor "chael X y, Guarantor 'Complete'- Includes all schedules, attachments, and K-1 information. / x LASER FRO{wntl,nR,Vie.9..'.Oa003['cpr.Nrlalb Finnebl SRNtmne,rne.1997,500, A!t Riphn gpYrayR, -PA e:1CFYrLPl1G60.FL TR-17155 PR.17 ^ffrey A. Goss, President Lakeside Holding Company, Inc. Guarantor i r EXHIBIT D 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,_cWms, 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 executed and/or delivered in connection with or otherwise related to the Loan. Dated this�of March,20I3 ASSIGNOR: ORRSTOWN BANK,a Pennsylvania banking corporation By: MAGNOLIA PORTFOLIO, LLC, a Delaware limited liabil' company,its Attorney-in-Fact By: Name: R. Patterson Jackson Title: Authorized Signatory AMO Ref.: 2510.129 Loan Name: CARILLO LLC Loan Rd-26474109001 .EXHIBIT"A" TO ASSIGNMENT OF SECURITY DOCUMENTS That certain. loan :dated September 5, 2007, in the stated original principal amount of $150,000.00,executed byC illo, LLC to-Orrstown Bank. AMO Ref.:'2510.128 Loan Name: CARILLO LLC loan Ret:2-6474 169601 o� IKECommonwealth of Pennsylvania g Department of State - Corporation Bureau Carol Aichele UNIFORM COMMERCIAL CODE FILING ACKNOWLEDGMENT 03!08/2013 Anderson Mccoy & Orta I 00 N Broadway Ave Ste 2600 Oklahoma City,OK 73102 File Number: 2013030802978 Filing Date: 03/07/2013 8:00 AM Filing Type: UCC Lapse Date: 09124/2017 Original File Number: 2007092406816 Pages: 2 Amendments: Assignment Indexed Debtor(s): Secured Party(s)/Assignee(s): Commercial: MAGNOLIA PORTFOLIO,LLC.A DELAWARE LIMITED LIABILITY COMPANY,C/o Sabal Financial Group,L.P..4675 MacArthur Court.Suite 1$50.Newport Beach.CA.92650,United States Other Information: Please review the above information that was indexed in our database. We have indexed the above information exactly as it was presented on your enclosed riling. If there is an error please contact our office at the number listed below. If you wish to make a change from your original document an amendment(UCC-3)with the appropriate fee is required. UCC Filing Fees: UCC-1 and UCC-3 584.00 206 North Office Building UCC-l1 $12.00 Harrisburg.PA 17120 Copies $3.00 (717)7137-1057 Please refer to the Secretary of State's web page at www.do3.state.p,n.us/corps www.dos.state.pa.us/corps for additional filing Information. Folder: 71306664086 Tracking:T1306664094 File Number:2013030802692 Date Filed:0310712013 oa:00 AM Carol Alchele Secretary of the Commonwealth UCC FINANCING STATEMENT AMENDMENT FOLLOW TR S aro CAREF Y E a PHONE ACT FILER Recondin rtment 405 236-0003 B.SENOAC EWNTTO:(Nannwditkt s) Anderson, McCoy&Orta PC 100 North Broadway Commorweefth of Pennsyhrenia SUfte 2e0o UCC3 Amendment 2 Page(a) Oklahoma City,OK 73102 Il���I�Illll�l�llll�llll�lllllll�ln[�U�1II��1IINI� 71308664096 a uvIM FVVJCrMG BTATEhr-WwE t0 FIRANUM 1ORMNAIMINOMEN7 - h 0 2007082406828 filed 912412007; Pennsylvania Department of State r aa.tiMwl+vrEME wrn,1araooreEdiNEw 2.1 TERNMATION:EAdn.ws a to Fi wc"ON.-- d.AA.d.ao..M Mr wwY 1 s0 nrpU b ww i4 nl.vsl►)a to Sv"W P"wfnnd%to TowwwO n Ofthow.lTr CORTINUATION: l FJf.bmmm ode=FFw+ Sttf.rMnl twIrMlEd E00�f MEI d b warRT YirrKs)d Eb 9.Ou.d Pwb SIO thq f�01w11,Etlan STrErtlrt - N,E 1hf E.fddhandp"WI — YFFvhx"&". 4.ry AISM)IMEN7&w w1a Wmrwl.rw.- nurnraaToEnoeannaawprwnftmrGmvswETwrwr.aEu4vnamv F MEMM(PART7 IN FORMI ): This wanwm dYW I • Ofty of Erano Pero a Rwda.OVIX aly to of MW Eww. Ab 'M d f•$iRaMlp fIIM OaOw bd pOrbf.pprap6ldE NMalada0.in am E w.us 7. G7WOE WN rldb dRsw:Ova www nobo nwn In Om M a of aft= O MM nww Ctw wmd w.w A00;7=1v.Garyrr E.n n74 a Tal.d dw n� rvs n flfn TE d 7p EfTl01 Aw,Eddnp Eddr.el I_To d ddd.d h rrn d w Eh MI lq ds w—Td E 6. REM LED GANLTATIOWS NAME llo, LLC IT ORMDUAL'S LAST NAME FMT NAME MIDDLE i;—WESUFFUC R ADDED INFORMATION 7a OROMIZATTONS WW MAGNOLIA PORTFOLIO, LLC,A DELAWARE LIMITED LIABILITY COMPANY OR 70.IMOMDUAL%LAST NAM FWSTNAiE MMOLENANCE SLIFF11A T.,MMRQEG AOORESS CITY STATE POSTAL CODE UMTR7 C/o Sabel Financial Group, L.P., Newport Beach CA 82660 USA urC9,Site 1550 Td. TAA D E SSM OR EIN L INFO RE TE.TYPE OF ORGANIZATION 7T.IURISOICTIOM OF OROAM MTION Tp ORGANIZATIONAL 0 a,1 sry ORGIOR � ANQATION a.AMENDMENT 4p►� r **ON 1 — I..ase.COd.1.d r dd.Yd w 1.a/ddR7.or o»w%n rt rrams.o w dwatltvr,v dwiwo.oaaal.>r 1.�;. waiQwd 9. NANICEOFSECURED PARYYOPREC-0—RoAuTmqRtDNGTmtrAMENMENT-Cr w-i d soVa I VU u M wsl MWM.■tw u wl ARI.IO7Mfrt rewtaa A.odear d.d 1=00-0- M r usw fl. O.w.,a f ENE•E T.rn.Won afwr a•tsaor,a>rol Mnn sra war n d OE6TOR ENEIEItOnp op Enw Orlrf Ea ORGANIZA17 Md/AME ORRSTOWN BANK OR 20 VJM'a LAST NAME FOWNAME' ANDIDWIA49FOC 10 CFrK*VL FLEA!RU CARILLO LLC(Loan Ref.:28474109001 AMO Ref.:2510.128) FILM OFFICE COPY-NAT*K4L UCC FfMW WG STATOaM AMENDMENT(FORM UCC3)(REV.0 VZM) Y-ot '-. Commonwealth of Pennsylvania Department of State - Corporation Bureau 2 Carol Aichele UNIFORM COMMERCIAL CODE FILING ACKNOWLEDGMENT 4 T 03/0812011 Anderson Mccoy &Orta 100 N Broadway Ave Ste 2600 Oklahoma City,OK 73102 File Number: 2013030802952 Filing Date: 03/0712013 8:00 AM Filing Type: UCC Lapse Date: 09/24/2017 Original File Number: 2007092406828 Pages: 2 Amendments: Assignment Indexed Debtor(s): Secured Party(s)1 Assignee(s): Commercial: MAGNOLIA PORTFOLIO.I.I.C.A DELAWARE LIMITED LIABILITY COMPANY,C/o Sabal Financial Group.L.P.,4675 MacArthur Court,Suitc 1550.Ncwvport Bcach,CA.42660,United Stales Other Information: Please review the above information that was indexed In our database. We have indexed the above information exactly as it was presented on your enclosed filing. If there is an error please contact our office at the number listed below. if you wish to make a change from your original document an amendment(UCC-3)with the appropriate fee is required. UCC Filing Fees: UCC-1 and UCC-3 584.00 206 North Office Building UCC-11 $12.00 Harrisburg,PA 17120 Copies $3.00 (717)787.1057 Please refer to the Secretary of State's web page at www.dos.state.pa.us/corps www.dos.state.pa.us/corps for additional filing information. Folder; T1306664086 Tracking:TI 306664095 I EXHIBIT E Kate Deringer Sallie Ph(7/7)237-6792 fv (717)23;-6676 hsalhe(u?rhoaels-sinon.cnm RHOADS SINONLLP tuxes: 12652/01 June 19- 2014. Re: DEMAND NOTICE VTA FEDIFRAL EXPRESS Mark.D. Hipp, l-squire Mctte Evans& Woodside PC 3401 North Front Street P.U. Box 5950 Harrisburg, PA 17110-0950 Dcar Mr. Hipp: We represent Sabal Financial Group; L.P., as servicing agent for Magnolia Portfolio. LLC (the "I.,ender") who purchased those cetlain loans made to Carillo, LLC: being more specifically identified as Loan Nos. 1.04153-001 and 104189-001, which such loans are guaranteed by Je.ffi-ey Goss and Michael Cassidy. It is our understanding that you represent Carillo, LLC. Michael Cassidy and Jcil'rey Goss ('collectively. the `'Obligors"), and that you will share this Notice with your clients. If that is not the case, please advise its N-x�ithin 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 Lender purchased them and since that. time. the Obligors .have made efforts to make payments 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. The failure to make 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 tender the Loan Documents, including; without limitation, the acceleration of all of the indebtedness that is owed by the Obligors to the I._cnder under the Loan Documents relating to the Defaulting Loans, the imposition of the default rate of interest ("'Default Rate") authorized by the Moan Documents, confession of judgment, and the One South Market Square, 12th Floor • P.O. Box 1146 • Harrisburg, PA 17108-1146 • ph: 717.233.5731 �Sann�� 29 Dowlin Forge Road • Exton, PA 19341 • ph: 610.423.4200 • fax: 610.423.4201 —� ---- - - —1urVIv.Hioads-sinon.co'ni foreclosure, liquidation, collection or other enforcement of the L,ender's security interests and liens in any or all of the collateral securing the indebtedness and obligations under the Loan Documents. Accordingly, you and the Obligors are hereby notified that: • interest shall continue to accrue on the unpaid principal balance at the default.interest rate of three percent (3%) over the current applicable rate of each i..oan. • The Lender is hereby declaring the Loans immediately due and payable. The outstanding principal and accrued interest under the Loans as of May 30, 2014 is as follows: Principal Unpaid Default Total Loan 9 Balance Interest bate Fees Other Fees Interest I)ue 104183-001 $45.947.50 62,367.28 $900.00 5625.00 51,726.86 $51,566.64 104189-001 S90,290.55 56,733.47 52,153.58 8-- 54,836.19 $104,013.82 f Total Amount Due $1.55,580.46 Notwithst.3.nding the fact that the Lender may immediately exercise its rights and remedies tinder the Loan Documents, the Lendcr will allow the Obligors until July 15, 2014 to satisfy the outstanding indebtedness as set forth above. If the Obligors do not satisfy the outstanding indebtedness on or before July 15,2014, the Lender may choose to exercise its rights and remedies under the Loan Documents without any further notice to the Obligors. Additionally, if payment is not made on or before Jul), .l 5, 2014 as set forth above, we have been authorized to institute appropriate legal action against the Obligors, including, but not .limited to, confession of_judgment against the Obligors; and the foreclosure, liquidation, collection or other enforcement of the Lender's security interests and liens in any or all of the collateral. (''Collateral") securing the indebtedness and obligations under the Loan Documents, in order to ' recover all amounts owed to the Lender under the Loan Documents, including legal fees, costs of collection and interest. The Lender's election not to exercise tiny of its other rights and remedies at the present time, and any financial accommodations the I.,ender may have made to date, shall not be construed as a waiver of any rights or remedies of the Lender. Nothing contained herein or in any other communication of in any ongoing discussions or negotiations which have or may take place between the Obligors and the Lender shall directly or indirectly: (i) create any obligation upon the Lender to defer a.ny enforcement action or make any further financial accommodations; (ii) constitute a consent or waiver of any past, present or future Event of Default or other violation of any provisions of any .Loan Document; (iii) amend, modify or operate as a waiver of any provision of any Loan. Document or any right, power, privilege or remedy of the Lender thereunder; or (iv) constitute-a course of dealing or other basis for altering any duty or obligation owed by the Obligors to the Lender. Nothing contained in this letter shall confer on any Obligor or any other person or entity any right to other or further notice or cure periods with respect to any Event of Default. The Lender expressly reserves all ot'its rights, powers, privileges and rernedies under the Loan Documents and/or applicable laws, including, without limitation, the Lenders right at any time, as applicable: (i) to apply the Dcfault Rate to the obligalioiis under the Loan Documents since the, date of inception of the I'Velits of Dcfault; (ii) to commence any legal or other action to collect any or all of the indebtedness and obligations under the Loan Documents and/or any Collateral or any property pledged by any other person or entity as security for any or all of the indebtedness and obligations under the Loan, Documents; (iii) to foreclose or otherwise realize on any or all of the Collateral. and/or set-off or apply to the payment of any or all of the indebtedness or obligations under the Loan-Documents any or all of the Collateral, and (iv) to take any othcr enforcement action or otherwise exercise any or all rights and remedies provided by any Loan Document or by applicable laws, The Lender appreciates the efforts made to date with respect to the Loans and feels that a call to discuss these Loans would be beneficial. Please advise of Your availability for a conference call within the next ten days, In the meantime, please do not hesitate to contact the undersigned with any questions or concerns. Very truly yours, RI-OARS& SINNON LIT KI,fBy: inger Sallie cc: Ann Fle.rilpfling, Sabal Financial Group, L.P. (via electronic mail) Ralph Fetrow (via electronic mail) MAGNOLIA PORTFOLIO, LLC, : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA V. CIVIL ACTION - LAW CARILLO LLC and NO. �°m � JEFFREY A. GOSS, Defendants r _.. ENTRY OF JUDGMENT AND NOW, this JL_ day of August, 2014, Judgment is hereby entered in favor of the Plaintiff Magnolia Portfolio, LLC, and against Defendants Carillo, LLC and Jeffrey A. Goss and damages are assessed in the amount of$105,292.87 together with accruing interest at a per diem rate of$18.18 from the date of judgment. W Prothonotary 960141.2 I 4E t,_R 'l; Stephanie E. DiVittore,Esquire Attorney I.D.No. 85906 1 ✓F Kathryn D. Sallie, Esquire Attorney Attorney I.D.No. 108116 l.,UMS�' RHOADS& SINON LLP � � +S NO COUNTY One South Market Square L VA Fr 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 CARILLO, LLC and NO. JEFFREY A. GOSS, Defendants NOTICE UNDER RULE 2958.1 OF JUDGMENT AND EXECUTION THERETO Notice of Defendant's Rilzhts To: Carillo, LLC 60 Pine Street Carlisle, PA 17013 Jeffrey A. Goss 10 Derbyshire Drive Carlisle, PA 17013 A judgment in the amount of One Hundred Five Thousand Two Hundred Ninety Two Dollars and Eighty Seven Cents ($105,292.87)plus interest from the date of judgment accruing at the rate of Eighteen Dollars and Eighteen Cents ($18.18)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 DATE ON WHICH THIS NOTICE IS SERVED ON YOU OR YOU MAY LOSE YOUR RIGHTS. 960141.2 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 960141.2 MAGNOLIA PORTFOLIO, LLC, : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA V. CIVIL ACTION - LAW NDr.N CARILLO, LLC and : NO. ® n JEFFREY A. GOSS, • 'y[v% r Defendants 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 Carillo, LLC and Jeffrey A. Goss and damages are assessed in the amount of $105,292.87 together with interest from the date of judgment accruing at the rate of$18.18 per day plus costs of collection. RHOADS & SINON LLP By: v rn U4, Stephanie DiVittore Kathryn D. Sallie One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants Carillo, LLC and Jeffrey A. Goss for purposes of confession of judgment; Attorneys for Plaintiff Magnolia Portfolio, LLC, for all other purposes 960141.2 MAGNOLIA PORTFOLIO, LLC, : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA V. CIVIL ACTION - LAW CARILLO, LLC and NO. /�' S�[0 JEFFREY A. GOSS, Defendants NOTICE OF ENTRY OF CONFESSED JUDGMENT To: Carillo, LLC 60 Pine Street Carlisle, PA 17013 Jeffrey A. Goss 10 Derbyshire Drive Carlisle, PA 17013 You are hereby notified that on August, 2014,judgment by confession was entered against you in the amount of$105,292.87 together with accruing interest at a per diem rate of $18.18 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 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 960141.2 Lawyer Referral Service 4th Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 Lawyer Referral Service: Pennsylvania lawyer Referral Service (800) 692-7375 960141.2 Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor SHERIFF'S OFFICE OF CUMBERLAND COUNTY OFFICE QFTh ERR= ?of SEP 23 010: a I. 1.1 CUI•18ERLANO COUNT PENIVsYLVAtii4 Magnolia Portfolio, LLC vs. Carillo, LLC (et al.) Case Number 2014-5019 SHERIFF'S RETURN OF SERVICE 09/18/2014 08:49 PM - Deputy Jason Kinsler, being duly sworn according to law, served the requested Complaint in Confession of Judgment, Confession of Judgment, Entry of Judgment, Notice of Entry of Confessed Judgment, Notice Under Rule 2958.1 of Judgment and Execution Thereto and Parecipe of Entry of Judgment by handing a true copy to a person representing themselves to be Jeffrey A Goss, Co-owner, who accepted as "Adult Person in Charge" for Carillo, LLC at 10 Derbyshire Rd, South Middleton, Carlisle, PA 17013. ASON KINSLER, DEPUTY 09/18/2014 08:49 PM - Deputy Jason Kinsler, being duly sworn according to law, served the requested Complaint in Confession of Judgment, Confession of Judgment, Entry of Judgment, Notice of Entry of Confessed Judgment, Notice Under Rule 2958.1 of Judgment and Execution Thereto and Parecipe of Entry of Judgment by "personally" handing a true copy to a person representing themselves to be the Defendant, to wit: Jeffrey A Goss at 10 Derbyshire Drive, South Middleton, Carlisle, PA 17013. —1 JA ON KINSLER, DEPUTY SHERIFF COST: $50.78 SO ANSWERS, September 19, 2014 (c CountySuile Sheriff, Teleosoft, Inc, RONNY R ANDERSON, SHERIFF 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.corn Attorney for Defendants MAGNOLIA PORTFOLIO, LLC, Plaintiff VS. CARILLO, LLC, and JEFFREY A. GOSS, Defendants 017: MONO TAW( 2111 ti 1 4 114 11 : 30 At:ID CO PENNS LN N 1 * : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, : PENNSYLVANIA : NO. 14-5019 Civil Action : CONFESSION OF JUDGMENT PETITION TO OPEN OR STRIKE CONFESSED JUDGMENT AND MOTION TO STAY EXECUTION NOW COME Defendants, Carillo, LLC ("Carillo") and Jeffrey A. Goss ("Goss," and, collectively with Carillo, "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 September 5, 2007 Promissory Note executed by Defendant Carillo in favor of Orrstown Bank (the "Note") and a Guaranty executed by Goss guarantying the indebtedness evidenced by the Note (the "Guaranty"). The Note and Guaranty are attached to the Complaint as Exhibits "B" and "C", 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 "D." 4. The Assignments attached to the Complaint consist of (1) an "Assignment of Security Documents" for certain specified documents executed in connection with a September 6, 2007 "Loan" (as defined in the Assignment of Security Documents); (2) a UCC Financing Statement Amendment assigning and referencing a Financing Statement numbered 2007092406816; and (3) A UCC Financing Statement Amendment assigning and referencing a Financing Statement numbered 2007092406828. 5. All of the Assignments attached to the Complaint are executed by Plaintiff, the purported Assignee of the documents. 6. The Assignment of Security Documents indicates that it is executed by Plaintiff's "Authorized Signatory", as "Attorney -in -Fact" for Orrstown Bank. 2 7. Plaintiff does not provide evidence of its power to act as Attorney -in -Fact for Orrstown Bank, nor does Plaintiff attach a Power of Attorney to the Complaint granting such power to so act. 8. Notwithstanding, a Limited Power of Attorney giving Plaintiff the limited power to endorse Orrstown Bank's name pursuant to the intent of a Loan Sale Agreement is available as a public record recorded with the Cumberland County Recorder of Deeds on January 30, 2013 as Instrument 201303263 (the "Limited POA") 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; 14-5018. 14. Defendants are unable confirm whether Plaintiff has signed the Assignments on behalf of Orrstown Bank pursuant to the Limited POA, 15. Even if Plaintiff has signed the Assignments pursuant to its powers under the Limited POA, 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. 16. 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. 17. Plaintiff confessed judgment in the amount of $105,292.87, together with accruing interest at a per diem rate of $18.18. (Pl. Compl. at ¶18). Petition to Open or Strike Confessed Judgment For Failure to Establish Proper Assignment of the Note and Guaranty 18. The above Paragraphs are incorporated by reference. 4 19. 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. 20. 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). 21. The Loan Sale Agreement is not a matter of public record, nor is it attached to the Complaint. 22. Accordingly, there is no proof that Plaintiff's signature on the Assignments was authorized by Orrstown Bank. 23. 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). 24. If the Plaintiff did not have the right to confess judgment against Defendants, which is not established by the face of the Complaint, the Judgment must be stricken. 25. No judge has ruled on any other petition in this or any related matter. 26. WHEREFORE, the Defendants, Carillo, LLC and Jeffrey A. Goss, 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 5 Complaint. Defendants further request such other relief as the Court deems just and appropriate under the circumstances. Motion to Stay Execution 27. The above Paragraphs are incorporated herein by reference. 28. Defendants accepted service of the Complaint on September 18, 2014. 29. 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 18, 2014. 30. If the Court grants Defendants' Petition to Open or Strike, set forth above, the amount of the Judgment may be reduced or stricken completely. 31. 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." 32. Here, Defendants have raised a meritorious defense to the Judgment, including the very ability of Plaintiff to confess judgment against Defendants. 33. Under the circumstances, it would be inequitable to permit Plaintiff to proceed with permitting Plaintiff to execute upon the Judgment. 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. 6 By: Date: October 9, 2014 Respectfully submitted, METTE, EVANS & WOODSIDE Heather Z. KeeEsqui e. 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 VERIFICATION Jeffrey A. Goss, 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: 7/tV ly 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 9, 2014 Respectfully submitted, METTE, EVANS & WOODSIDE Heather Z. Ket, Esq ire 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 - Page 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 M. Seibert, EVP/Chief Operating Officer ("Seller") and MAGNOLIA PORTFOLIO, LLC having a notice address of do 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 presei1c By: & \o Name: 1•Y\ -i•nG#R 1Y10lO -\ By: Name: ORRSTOWN BANK, a Pennsylvania banking corporation By: Name: Zachary Lynn Title: SVP, SAG (rector Special Assets Group . S1- ccra0,, —\- ACKNOWLEDGEMENT STATE OF nv\st1NCi<Y\1 C^, COUNTY OF CYwAVA:A. �n 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. COMMONWEALTh OF PENNSYLVANIA Notarial Seal Ashley R. Nell, Notary.public My Greene etplreS Maanidin County9, 016 MEMBER PENNSfLVANIAASSOCIAT1oN OF NOTARIES NOTARY My Comm Page 2 of 2 BLIC on Expires: (kA -1541 a9,i Ix() Inat. # 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 OF 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 $7.1.50 $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 x - Information denoted by an asterisk may change during the verification process and may not be reflected on this page. MAGNOLIA PORTFOLIO INC. Plaintiff v. CARILLO, LLC, and JEFFREY A GOSS Defendants Countp of s umberiattb 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: L/Stephanie E. DiVittore, Esq. 1,-1 athryn D. Sallie, Esq. ✓tit Irk.1• 1<c�.Ly , Gso. C©Copies .i C te>yot:/{, y BY THE COURT, Thomas . Placey C.P.J. ` : i i wv ZZ no 41131 .a 2914 OCT 24 AM 11: 4") CUND COUNTY PENN SYLVAN A METTE, EVANS & WOODSIDE Heather Z. Kelly, Esquire Sup. Ct. I.D.No. 86291 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 (717) 236-1816 (fax) Attorneys for Plaintiff MAGNOLIA PORTFOLIO, LLC, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 14-5019 CARILLO, LLC and JEFFREY A. GOSS, Defendants PROOF OF SERVICE 1, Heather Z. Kelly, Esquire, counsel for the Defendants, certify that on October 23, 2014, I served an Order granting Rule to Show Cause dated October 21, 2014 on the Plaintiff, via United States mail, first-class postage prepaid, as follows: Stephanie E. DiVittore, Esquire Kathryn D. Sallie, Esquire RHOADS & S1NON, LLP RHOADS & SINON, LLP One South Market Square, 12th Floor One South Market Square, 12th Floor P.O. Box 1146 P.O. Box 1146 Harrisburg, PA 17108-1146 Harrisburg, PA 17108-1146 . �.__,c ,> :.. :.:.: �.....,ttw.'.sns�-vr' �.--s -.,rt-�:--.v«sm'x^;:�^xx+im5.�smY�'•-_� _.. '�+h..,�.-,. ++.�w,m�... .= ... « z,- ,+?k<e;. '. -a - .�-. .. - Respectfully submitted, METTE, EVANS & WOODSIDE By: 1'l Heather Z. K ly, Esquire Sup. Ct. ID No. 86291 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 Attorneys for Defendants Date: October 24, 2014 748273v1 w � 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 RHOADS & SINON, LLP One South Market Square, 12th Floor One South Market Square, 12th Floor P.O. Box 1146 P.O. Box 1146 Harrisburg, PA 17108-1146 Harrisburg, PA 17108-1146 METTE, EVANS & WOODSIDE By: al n EATHER KELLY, ESQUIRE Sup. Ct. I.D. No. 86291 3401 North Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 - Phone (717) 236-1816 - Fax Attorneys for Defendants Date: October 24, 2014 Stephanie E. DiVittore, Esquire PA I.D. No. 85906 sdivittore@rhoads-sinon.com Kathryn D. Sallie, Esquire PA I.D. No. 208116 ksallie@rhoads-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, v. CARILLO, LLC and JEFFREY A. GOSS, Plaintiff D OF ..-. f . P OTHONOIAR 20 NOV 10 PM12:25 CUMBERLAND COUNTY PENNSYLVANIA COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION — LAW Defendants CASE NO. 14-5019 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 Carillo, LLC and Jeffrey A. Goss (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 September 5, 2007 Promissory Note and Guaranty. 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 "D" 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 "D" 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. Denied as stated. It is admitted that Magnolia did not attach a copy of the Power of Attorney to the Complaint. It is specifically denied that Magnolia was required to so attach the Power of Attorney or otherwise provide additional evidence to establish its power to act as Attorney -in -Fact for Orrstown Bank as fully set forth in Paragraph 5 above. 8. Denied as stated. Magnolia Portfolio admits that the Assignments attached as Exhibit "D" 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. 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 against Defendants or related entities. It is also specifically denied that Magnolia Portfolio or Orrstown Bank was required to make the Loan Sale Agreement available to Defendants. Instead, Orrstown Bank 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 were required to make the Loan Sale Agreement available to Defendants or otherwise disclose the terms thereof to Defendants. By way of further response, Orrstown Bank 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. Such action is fully consistent with the terms of the loan documents in this case, as the Business Loan Agreement is clear that "[a]11 covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns." (Exhibit A to Complaint — Business Loan Agreement, p. 5). This is further confirmed by the plain language of the Business Loan Agreement: Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without nay limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender. (Exhibit A to Complaint — Business Loan Agreement, p. 4-5). The Note similarly provides that it "[t]he terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns." (Exhibit B to Complaint — Promissory Note, p. 2). This language is sufficient, under Pennsylvania law, for Magnolia Portfolio to proceed with confession of judgment against Defendants. 16. 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 were 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, see the response to Paragraph 15 above. 17. Admitted. ` PETITION TO OPEN OR STRIKE Assignment of the Note and Guaranty 18. Magnolia Portfolio incorporatesherein :by referenceits responses to Paragraphs 1 through 17 above. 19. 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. 20. Denied. The allegations of Paragraph 20 concern the Assignments and a Limited Power of Attorney, writings that speak for themselves and Magnolia Portfolio denies any characterization of them. 21. 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. 22. 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. 23. The allegations of Paragraph 23 are conclusions of law to which no response is required. To the extent a response is deemed appropriate the same are specifically denied. 24. The allegations of Paragraph 24 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. Respectfully submitted, RHOADS & SINON LLP @� 17l41 -u Q - By: Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 sdivittore@rhoads-sinon.com Kathryn D. Sallie, Esquire Attorney I.D. No. 208116 ksall@rhoads-sinon.com 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 j bday of Ndvember, 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 Stephanie E. DiVittore, Esquire Attorney 1.D. No. 85906 Kate Deringer Sallie, Esquire Attorney I.D. No. 208116 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, 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 FILED -OFFICE C;= THE PROTHONOTARY 7.0111#OV 19 PM3:Q1 CUMBERLAND .D 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 v. CIVIL ACTION — LAW MT. HOLLY BEVERAGE, L.L.C. and JULIE A. CASSIDY, Defendants CASE NO. 14-5010 And [Caption Continues Onto Next Page] 971013.1 MAGNOLIA PORTFOLIO, LLC, COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION — LAW PINEXPRESS, LLC and JEFFREY A. GOSS, Defendants And 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 1. 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 Pennsylvania 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. Respectfully submitted, RHOADS & SINON LLP By: Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 sdivittore@rhoads-sinon.com 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 bbor foregoing petition, it is hereby ordered that , 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 dp 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 toti days of this date; (5) argument shall be held on 1:ea c90/4 , 11:00 am in Courtroom j, 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: jsi AlLert 14. Maisland Notice of the entry of order to he 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 4 WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 745162vI MAGNOLIA PORTFOLIO, LLC Plaintiff VS. MT. HOLLY BEVERAGE. L.L.C. and JULIE A. CASSIDY Defendant :N 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 6,-1-aber • (5014 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 b 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 L�() days of this date; (5) argument shall be held on bee, cucQ014 ,likam 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: Ribert 14 . Mastnr1 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. & C ASSOCIATES and J1JLIE 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 f54 day of al/aar. (04 foregoing petition, it is hereby ordered that (1) upon consideration of the 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 c1,6 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 ge„2,21a4, j 1:6D ant 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: Is/ Aiher+ 14. kbajand 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 IvIETTE, EVANS & WOODSIDE 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 745185v1 MAGNOLIA. PORTFOLIO. LLC; Plaintiff VS. 0 & 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 ORDER GRANTING RULE TO SHOW CAUSE AND STAY OF EXECUTION AND NOW; this day of 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; the respondent shall file an answer to the petition within ao days of this date; the petition shall be decided under Pa.R,C.P. No. 206.7; depositions and other discovery shall be completed within (p0 days of this date; argument shall be held on bea, Cumberland County Courthouse; upon consideration of the li:DO a in Courtroom of the 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 N. A3ignd J. p. 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 MAGNOLLA PORTFOLIO, LLC, Plaintiff VS. G & C ASSOCIATES and JULIE A. CASSIDY Defendant IN THE COURT OF COMMON PLEAS OF : CUMBE.RLAND 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 IYA r , c9614 , 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; the respondent shall file an answer to the petition within ab days of this date; the petition shall be decided under Pa.R.C.P. No. 206.7; depositions and other discovery shall be completed within fp() days of this date; argument shall be held on Thee, aa, 014 • fi:OQaa Cumberland County Courthouse; in Courtroom 'L of the 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: 1s1 AI6er+ H. MInd 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 745204v1 EXHIBIT B MAGNOLIA PORTFOLIO INC. Plaintiff v. CARILLO, LLC, and JEFFREY A GOSS Defendants Countp of eumberfanb 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. l Distribution List: Stephanie E. DiVittore, Esq. Kathryn D. Sallie, Esq. Heather Z. Kelly, Esq. BY Thomas A. Placey MAGNOLIA PORTFOLIO INC. Plaintiff v. PINEXPRESS, LLC, and JEFFREY A GOSS Defendants Coital, of eunrbertanb 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. --4 MAGNOLIA PORTFOLIO INC. Plaintiff v. CARILLO, LLC, and JEFFREY A GOSS Defendants Comp of Cumi►ertana 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. BY THE COURT, Thomas . Placey C.P.J. c- c cm --13' -L-- PI co o m z. -4 Distribution List: (Al"x ry Stephanie E. DiVittore, Esq. <C=7 = Kathryn D. Sallie, Esq. �o = -4 U7 -t CO CERTIFICATE OF SERVICE I hereby certify that on this 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 Heather Z. Kelly, Esquire Sup. Ct. I.D. 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. 0 : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : NO. 14-5019 CARILLO, LLC and JEFFREY A. GOSS, : Defendants 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; no objection has been filed and the twenty day requisite period has expired; and (3) (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. Respectfully submitted, METTE, EVANS & WOODSIDE By: ie,!;zPset Heather Z. Ke1ly`,-Esqui2.6167 Sup. Ct. I.D. No. 86291 3401 North Front Street P. 0. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 Attorneys for Defendants Date: November 19, 2014 Heather Z. Kelly, Esquire Sup. Ct. LD. No. 86291 METTE, EVANS & WOODSIDE 3401 North Front Street P. O. 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. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : NO. 14-5019 CARILLO, LLC and JEFFREY A. GOSS, : Defendants NOTICE OF INTENT TO SERVE SUBPOENA TO PRODUCE DOCUMENTS AND THINGS FOR DISCOVERY PURSUANT TO PA. R.C.P. 4009.22 Defendants, Carillo, LLC and Jeffrey A. Goss, 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. By: Date: October 23, 2014 Respectfully submitted, METTE, EVANS & WOODSIDE eather Z. Kelly, Equire Sup. Ct. LD. 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. 14-5019 CARILLO, LLC and JEFFREY GOSS, 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. 26474109001 ("Loan") dated September 5, 2007 in the original principal amount of $150,000 between Carillo, LLC and Orrstown Bank and guaranteed by Jeffrey Goss, 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. 0. Box 5950, Harrisburg, PA 17110-0950 Telephone: (717) 232-5000 Supreme Court 1D# 86291 ATTORNEY FOR: Defendants DATE: Seal of the Court 748250v1 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 Fir. P.O. Box 1146 Harrisburg, PA 17108-1146 METTE, EVANS & WOODSIDE HEATHER Z. KEtLY, ESI IRE Sup. 'Ct. I.D. No. 86291 3401 North Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000- Phone (717) 236-1816 - Fax Attorneys for Defendants Date: October 23, 2014 748254y1 MAGNOLIA PORTFOLIO, LLC, IN THE COURT OF COMMON PLEA =r_ OF CUMBERLAND COUNTY, iro,.tcT.� C- Plaintiff PENNSYLVANIA x-n c : V. CIVIL ACTION - LAW rev" CARILLO, LLC and : NO. Salr JEFFREY A. GOSS, Defendants 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 $18.18 and costs from the date of judgment and costs of collection, as follows: (a) Unpaid Principal $90,290.58 (b) Unpaid Interest $12,660.67 (c) Late Charges $ 2,341.62 TOTAL $105,292.87 RHOADDSS & SINON LLP By: U C 0 `Wz't� 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 Carillo, LLC and Jeffrey A. Goss for purposes of confession of judgment; Attorneys for Plaintiff Magnolia Portfolio, LLC for all other purposes mow- 960141.2 /7e /LL B 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 Fir. P.O. Box 1146 Harrisburg, PA 17108-1146 By: Date: November 19, 2014 753177v1 Respectfully submitted, METTE, EVANS & WOODSIDE k(d-V Heather Z. Ke , 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 101 Li NOV 2-6 AM 9: 47 MAGNOLIA PORTFOLIO LLC3u1BER1 ALJ COUNTY Plaintiff PENNSYLVANIA v. CARILLO, LLC, and JEFFREY A GOSS, Defendants Countp Cuittherlait 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. ly