Loading...
HomeMy WebLinkAbout14-6133 Supreme Cou ennsylvania Cou Oil M-0 leas For Prothonotary Use Only: Docket No: - CU N,b Countv o The information collected on this form is used solely.for court administration purposes. This fibrin does not supplement or replace the filing and service ofpleadings or other papers as required by law or rules of court. Commencement of Action: El Complaint 0 Writ of Summons 0 Petition S rl Transfer from Another Jurisdiction 0 Declaration of Taking E C Lead Plaintiffs Name: Lead Defendant's Name: FIRST NATIONAL BANK OF PENNSYLVANIA CAPITOL REAL ESTATE DEVELOPMENT, LP T Dollar Amount Requested: ®within arbitration limits Are money damages requested? OYes El No (check one) [Routside arbitration limits 0 N Is this a Class Action Suit? 0 Yes El No Is this an MDJAppeal? 0 Yes M No A Name of Plaintiff/Appellant's Attorney: John B.Joyce, Esquire PA I.D.#68242 Check here if you have no attorney(are a Self-Represented [Pro Se] Litigant) Nature of the Case: Place an"X"to the left of the ONE case category that most accurately describes your PRIMARY CASE. If you are making more than one type of claim,check the one that you consider most important. TORT(do not include Mass Tort) CONTRACT(do not include Judgments) CIVIL APPEALS Intentional [3Buyer Plaintiff Administrative Agencies Malicious Prosecution rl Debt Collection:Credit Card Board of Assessment [3 Motor Vehicle MI Debt Collection:Other Board of Elections 0 Nuisance ri—I Dept.of Transportation M Premises Liability 0 Statutory Appeal:Other S 0 Product Liability(does not include Employment Dispute: E mass tort) Discrimination [3S[ander/Libel/Defamation C 0 Other: 0 Employment Dispute:Other 0 Zoning Board T 0 Other: I I [J Other: o MASS TORT M, Asbestos N E] Tobacco Toxic Tort-DES Toxic Tort-Implant REAL PROPERTY MISCELLANEOUS Toxic Waste 0 Ejectment M Common Law/Statutory Arbitration n Other: 0 Eminent Domain/Condemnation 0 Declaratory Judgment 0 Ground Rent [3 Mandamus r] Landlord/Tenant Dispute 0 Non-Domestic Relations [] Mortgage Foreclosure:Residential Restraining Order PROFESSIONAL LIABLITY El Mortgage Foreclosure:Commercial QJ Quo Warranto 0 Dental 0 Partition 0 Replevin 0 Legal 0 Quiet Title 0 Other: E] Medical M Other: 0 Other Professional: Updated 11112011 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA FIRST NATIONAL BANK OF CIVIL DIVISION PENNSYLVANIA, successor by merger r to The Legacy Bank, Plaintiff, VS. TYPE OF PLEADING CAPITOL REAL ESTATE DEVELOPMENT, LP, CIVIL ACTION-COMPLAINT Defendant. IN MORTGAGE FORECLOSURE TO DEFENDANT: FILED ON BEHALF OF PLAINTIFF: You are hereby notified to plead to the ENCLOSED COMPLAINT WITHIN TWENTY First National Bank of Pennsylvania, (20)DAYS FROM SERVICE HEREOF successor by merger to The Legacy Bank ATT O LA I BY CER YT T THE ADDRESS OF COUNSEL OF RECORD FOR THIS HE PLAINTIF IS. PARTY: One FNB Boulevard Hermitage,PA 16148 John B. Joyce, Esquire Pa. I.D. #68242 AND THE DEFENDANT IS: 110 Third Street, Suite 200 GRENEN& BIRSIC, P.C. ew Cumberland,PA 17070 Firm 4023 One Gateway Center, 9th Floor Pittsburgh, PA 15222 A Y FO L (412) 281-7650 CE FICATE L TIO EREBY CER THAT THE LOCATION OF THE REAL ESTATE AFFECTED BY THIS LIEN IS Borough of Lemoyne (CITY,BORO, TOWNSHIP,WARD) AT O PLAT F 246K Walnut IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA FIRST NATIONAL BANK OF CIVIL DIVISION PENNSYLVANIA, successor by merger to The Legacy Bank, NO.: Plaintiff, vs. CAPITOL REAL ESTATE DEVELOPMENT, LP, Defendant. NOTICE TO DEFEND You have been sued in court. If you wish to defend against the claim set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE 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. Lawyer Referral Service Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 (800) 990-9108 717-249-3166 246K Walnut 4 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA FIRST NATIONAL BANK OF CIVIL DIVISION PENNSYLVANIA, successor by merger to The Legacy Bank, NO.: Plaintiff, vs. CAPITOL REAL ESTATE DEVELOPMENT, LP, Defendant. COMPLAINT IN MORTGAGE FORECLOSURE AND NOW, comes Plaintiff, First National Bank of Pennsylvania, successor by merger to The Legacy Bank, including Legacy Bank, a Division of First National Bank of Pennsylvania, by and through its attorneys, Grenen & Birsic, P.C., and files this Complaint in Mortgage Foreclosure as follows: I. The Plaintiff is First National Bank of Pennsylvania, successor by merger to The Legacy Bank, including Legacy Bank, a Division of First National Bank of Pennsylvania (hereinafter "Plaintiff' or "FNB"), which has principal place of business located at One FNB Boulevard, Hermitage, PA 16148. 2. Defendant, Capitol Real Estate Development, LP, is a Pennsylvania limited partnership with its principal place of business at 110 Third Street, Suite 200, New Cumberland, PA 17070 (hereinafter "Defendant"). 3. On or about February 28, 2007, Defendant executed a Promissory Note in favor of Legacy Bank, a Division of First National Bank of Pennsylvania, which has since merged into First National Bank of Pennsylvania, in the original principal amount of $246,000.00 (as amended, modified, supplemented, substituted and restated from time to time, the "Note"). A true and correct copy of said Note is marked Exhibit "A", attached hereto and made a part hereof. 4. On or about February 28, 2007, as security for payment of the aforesaid Note, Defendant made, executed and delivered to Plaintiff an Open-End Mortgage in the original principal amount of$246,000.00 on the premises hereinafter described and commonly known as 238 & 240 Walnut Street, Lemoyne, PA 17043, said Open-End Mortgage being recorded in the Office of the Recorder of Deeds of Cumberland County on March 1, 2007, at Book 1983, Page 3978 ("Mortgage"). A true and correct copy of said Mortgage containing a description of the premises subject to said Mortgage is marked Exhibit "B", attached hereto and made a part hereof. 5. Defendant is the record and real owner of the aforesaid mortgaged premises. 6. The Mortgage is in default for Defendant's failure to make payments due and owing under the Note and Mortgage. 7. Plaintiff was not required to send Defendant written notice pursuant to 35 P.S. §1680.403C (Homeowner's Emergency Mortgage Assistance Act of 1983 - Act 91 of 1983) prior to the commencement of this action for the reasons that: (a) the mortgaged premises is not the principal residence of the Defendant [35 P.S. §1680.401C(a)(1)1; and (b) the mortgaged premises is not a one or two family owner-occupied residence [35 P.S. §1680.401C(a)(2)]. 8. Plaintiff was not required to send Defendant written notice of Plaintiffs intention to foreclose said Mortgage pursuant to 41 P.S. §403 (Act 6 of 1974) prior to the commencement of this action for the reasons that: (a) said Mortgage is not a "residential mortgage" as defined in 41 P.S. §101; (b) the Defendant is not a "residential mortgage debtor" as defined in 41 P.S. §101; and 2 (c) the mortgaged premises is not "residential real property" as defined in 41 P.S. §101. 9. The amount due and owing Plaintiff is as follows: Principal $ 216,632.87 Interest through 8/12/14 $ 45,117.14 Late Charges through 6/27/14 $ 4,355.83 Attorneys' Fees and Costs $ 9,415.00 TOTAL $ 275,520.84 WHEREFORE,Plaintiff demands judgment in mortgage foreclosure for the amount due of $275,520.84, with interest on the principal sum ($216,632.87) at the rate of $49.64 per diem from August 12, 2014, and additional late charges, additional reasonable and actually incurred attorneys' fees, plus costs, and for foreclosure and sale of the mortgaged premises. GRENEN & BIRSIC, P.C. BY: Jo . Joyce, �sq ' e t neys for PI ' ti ne Gateway e er, 9th Floor Pittsburgh, PA 15222 Pa. I.D. 468242 (412) 281-7650 THIS IS AN ATTEMPT TO COLLECT A DEBT, AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. 3 EXHIBIT "A'' To Complaint in Mortgage Foreclosure t `r "0955" PROMISSORY NOTE q References in the shaded area are for Lender's use only a*d 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: Capitol Real Estate Development LP Lender: Legacy Bank a Division of First National Bank of 110 Third Street,Suite 200 Pennsylvania New Cumberland,PA 17070 Commercial Lending One FNB BLVD Hermitage,PA 16148 principal Amount: $246,000.00 Date of Note: February 28, 2007 PROMISE TO PAY. Capitol Real Estate Development LP ("Borrower") promises to pay to Legacy Bank a Division of First National Bank of Pennsylvania ("Lender"), or order,in lawful money of the United States of America,the principal amount of Two Hundred Forty-six Thousand & 001100 Dollars($246,000.00),together with interest on the unpaid principal balance from February 28,2007,until paid in full. PAYMENT. Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan in accordance with the following payment schedule: 60 monthly consecutive principal and Interest payments in the initial amount of $2,037.72 each, beginning April 1, 2007, with interest calculated on the unpaid principal balances at an initial discounted Interest rate of 7.750% per annum; and 180 monthly consecutive principal and interest payments in the initial amount of $2,230.26 each, beginning April 1, 2012, with interest calculated on the unpaid principal balances at an st rate based on the "Prime Rate" as published from time to time in The Wall Street Journal, or any intere successor publication(currently Interek), plus a margin of 1.000%,resulting in an Initial In rate of 9.250%. Borrower's final payment will be due on March 1, 2027 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 unpaid collection costs; and then to any late charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by numlberg of days the principal balanthe rao of the annual ce is routstanding. year Borrower will spayuLenlder at Lender's taddress shown above c multiplied i or at such tactual h oher place Lender may designate In writing, te on this loan will be 7.750%. Thereafter, the interest rate on this Note VARIABLE INTEREST RATE. For the first 60 payments,the interest ra is subject to change from time to time based on changes in an independent index which is the "Prime Rate" as published from time to time in The Wall Street Journal,or any successor publication(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 herein in per annum. The interest rate th 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. LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 8.000%of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding a 4.000 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 described in this Note. if judgment is entered in connection with this Note, Default Rate Margin will continue to apply to the final interest rate in effect at the time judgment is entered. However, In no event will the interest will continue to accrue after the date of judgment at the rate interest rate exceed the maximum interest rate limitations under applicable law. DEFAULT. Each of the following shall constitute an event of default("Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation, covenant or condition contained in any other agreement between Lender and Borrower. loan, extension of credit, security agreement, purchase or Default In Favor of Third Parties. Borrower or any Grantor defaults under any sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. The dissolution or termination of Borrower's existence as a going business or the death of any partner,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 PROMISSORY NOTE (Continued) Page 2 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. Events Affecting General Partner of Borrower. Any of the preceding events occurs with respect to any general partner of Borrower or any general partner dies or becomes incompetent. Change In Ownership. The resignation or expulsion of any general partner with an ownership interest of twenty-five percent(25%) or more in Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender In good faith believes itself insecure. Cure Provisions. if any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes 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 attorneys' fees apd Lender's legal expenses, whether or not there Is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. 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. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Note has been accepted by Lender in the Commonwealth of Pennsylvania. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Mercer County, Commonwealth of Pennsylvania. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender(whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender,to the extent permitted by applicable law,to charge or setoff all sums owing on the indebtedness against any and all such accounts. FINANCIAL INFORMATION.The undersigned hereby agrees to prepare or cause to be prepared and to furnish financial statements and additional information,lists of assets and liabilities,aging lists of accounts receivable and payable,inventory schedules, budgets,forecasts,tax returns and other reports and documents with respect to the undersigned's financial condition and business operations and that of any guarantor or surety in form and substance as the holder hereof may request from time to time. PREPAYMENT FEE. Borrower shall have the right to prepay this Note in whole at any time or in part from time to time. In the event of any such prepayment, whether by declaration, acceleration or otherwise, a prepayment charge equal to three percent(3%) for the first year, two percent (21/6) for the second year,one percent(1%) for the third year,one percent 0%)for the fourth year, and one percent(1%) for the fifth year of the prepaid principal balance, only in the event of refinance with another financial institution, shall be immediately due and payable to the Lender. . INTEREST RATE AFTER DEFAULT. Upon the occurrence of an event of default as set forth herein the undersigned agrees that the interest rate shall be amended and increased to four percent (4%) per annum greater than the rate set forth above and shall continue to accrue at said default rate until the holder agrees and the underlying event of default has been cured by the undersigned or any defaulting party. 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 inaecuracy(ies) should be sent to us at the following address: Legacy Bank a Division of First National Bank of Pennsylvania,Commercial Lending, One FNB BLVD, Hermitage, PA 16148. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment, and notice of dishonor, Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend {repeatedly and for any length of time) this loan or release any party, partner, or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. If any portion of this Note Is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT 1 07 1 PROMISSORY NOTE (Continued) Page 3 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: CAPITOL REAL ESTATE DEVELOPMENT LP CAPITOL FITNESS,...INe7 Geperal"partner I Capito4„Real3state Development LP 4 ► ,.� :d" By �' �ff°�J `�.•� -2� (Seal) Eric J. Ddarosterw,"P're,�sident of Capitol Fitness, Inc. LASER PAO LwWha,VY.5.34,0.001 CM."Plata FIA—IN 50140 a Ina 10117,1007. A0 MOMS R—ed. •PA I:1CAIVOIN95ICRUPLV010.EC 70..05717 PR.44 1 EXHIBIT "B" To Complaint in Mortgage Foreclosure i i MORTGAGE (Continued) Page 2 interest thereon,of Grantor to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor may be liable Individually or jointly with others, whether obligated as guarantor,surety, accommodation party or otherwise,and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable. Grantor presently assigns to Lender all of Grantor's right,title,and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF $246,000.00, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PURCHASE MONEY MORTGAGE. If any of the debt secured by this Mortgage is lent to Grantor to acquire title to the Real Property, this Mortgage shall be a purchase money mortgage under 42 P.S. Section 8141. PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve Its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property,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 the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (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 Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant,contractor, agent or other authorized user of the Property shall use,generate, manufacture, store,treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) 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. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any 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 Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or Interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend,shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property,whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or-,waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas),coal,clay,scoria, soil,gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property EK19 8 f� 1 X979 a 111 MORTGAGE (Continued) Page 3 without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value.: Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond,reasonably satisfactory to Lender,to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section,which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE-CONSENT BY LENDER. Lender may, at Lender's option,declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer,without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal,beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, Installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three(3) years, lease-option contract,or by sale, assignment,or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Grantor is a corporation, partnership or limited liability company,transfer also includes any change In ownership of more than twenty-five percent (25%) of the voting stock, partnership interests or limited liability company interests, as the case may be, of such Grantor. However,this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Pennsylvania law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments) water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the Interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified In the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment,or claim in connection with a good faith dispute over the obligation to pay,so tong as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (16) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender,deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such BK1903PG3980 MORTGAGE (Continued) Page 4 coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, Including but not limited to hazard, business interruption and boiler Insurance as Lender may require. Policies shall be written by such insurance companies and In such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of ten(10) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for fallure to give such notice. 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 Grantor or any other person. Should the Real Property be located In an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is located In a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan,up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such Insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss If Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage,then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness,such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year,Grantor shall furnish to Lender a report on each existing policy of insurance showing; (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value;and (5) the expiration date of the policy. Grantor shall, upon request of Lender,have an Independent appraiser satisfactory to Lender determine the cash value replacement cost of the property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. Grantor's obligation to Lender for all such expenses shall survive the entry of any mortgage foreclosure judgment. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, and (b)Grantor has the full right, power,and authority to execute and deliver this Mortgage to Lender. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time BK 1983PG 398 ! MORTGAGE (Continued) Page 5 to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain In full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION'. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding,but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all actual costs, expenses, and attorneys' fees Incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes,fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred In recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for'an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided-above In the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ADDITIONAL AUTHORIZATIONS. The following provisions relating to further assurances and additional authorizations are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and BKI983PG3982 MORTGAGE (Continued) Page 6 deliver,or will cause to be made, executed or delivered,to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate,complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security Interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary In writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Additional Authorizations. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby Irrevocably authorizes Lender to make, execute, deliver, file, record and do all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. it is understood that nothing set forth herein shall require Lender to take any such actions. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or Insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor falls to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage 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 Grantor. Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage 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. Defective Coifateralization. This Mortgage 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. Death or insolvency. The dissolution or termination of Grantor's existence as a going business or the death of any partner, the insolvency of Grantor, the appointment of a receiver for any part of Grantor'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 Grantor. 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 Grantor or by any governmental agency against any property securing the Indebtedness. This Includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the craditor 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. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender,whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be N 19c6 PG3 933 60 t MORTGAGE (Continued) Page 7 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 Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve (12) months, It may be cured if Grantor, after receiving written notice from Lender demanding cure of such default; (1) cures the default within fifteen (15)days;or (2) if the cure requires more than fifteen 05►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 avid necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies,in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving such notices as required by applicable law, to declare the entire Indebtedness immediately due and payable. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor,to take possession of the Property and, with or without taking possession of the Property, to collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably authorizes Lender to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent,or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property,with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Possession of the Property. For the purpose of procuring possession of the Property, Grantor hereby authorizes and empowers any attorney of any court of record in the Commonwealth of Pennsylvania or elsewhere, as attorney for Lender and all persons claiming under or through Lender, to sign an agreement for entering in any competent court an amicable action in ejectment for possession of the Property and to appear for and confess judgment against Grantor, and against all persons claiming under or through Grantor, for the recovery by Lender of possession of the Property, without any stay of execution, for which this Mortgage, or a copy of this Mortgage verified by affidavit, shall be a sufficient warrant; and thereupon a writ of possession may be issued forthwith, without any prior writ or proceeding whatsoever. Nonjudicial Sale. If permitted by applicable law, Lender may foreclose Grantor's interest in all or in any part of the Personal Property or the Real Property by non-judicial sale. Deficiency Judgment. Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lander otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. BK 19S3rG39S4 a MORTGAGE (Continued) Page 8 Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other Intended disposition of the Personal Property is to be made. Unless otherwise required by applicable law, reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to,make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph Include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, Including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance,to the extent permitted by applicable law. Grantor also will pay any court costs,in addition to all other sums provided by law. NOTICES. Unless otherwise provided by applicable law, any notice required to be given under this Mortgage 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 Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage and notices pursuant to 42 Pa.C.S.A, Section 8143,et. seq., shall,be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change Its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided by applicable law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments.` This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage 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. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. .Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the Commonwealth of Pennsylvania. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Mercer County, Commonwealth of Pennsylvania. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right GIK 19 PG 33985 t�� l MORTGAGE (Continued) Page 9 shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage 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 Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, 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. Severability. If a court of competent jurisdiction finds any provision of this Mortgage 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 Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successor Interests. The terms of this Mortgage shall be binding upon Grantor,and upon Grantor's heirs, personal representatives, successors, and assigns,and shall be enforceable by Lender and its successors and assigns. Time is of the Essence. Time is of the essence in the performance of this Mortgage. Waive Jury. All parties to this Mortgage 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 Mortgage. 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 Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Capitol Real Estate Development LP and includes all co-signers and .co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. I"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, at 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 Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Capitol Real Estate Development LP. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. 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. Improvements. The word "Improvements" means all existing and future Improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means and includes any and all of Grantor's liabilities, obligations, debts, DK 1983FIG3986 MORTGAGE (Continued) Page 10 and indebtedness to Lander, now existing or hereinafter incurred or created, including, without limitation, all loans, advances, future advances, interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease obligations, other obligations, and liabilities of Grantor, or any of them, and any present or future judgments against Grantor, or any of them; and whether any such indebtedness is voluntarily or involuntarily incurred, due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined; whether Grantor may be liable individually or jointly with others, or primarily or secondarily, or as guarantor or surety; whether recovery on the indebtedness may be or may become barred or unenforceable against Grantor for any reason whatsoever; and whether the indebtedness arises from transactions which may be voidable on account of infancy, insanity, ultra vires or otherwise.. Lender. The word "Lender" means Legacy Bank a Division of First National Bank of Pennsylvania, its successors and.assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated February 28, 2007, in the original principal amount of $246,000.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE. Personal Property. The Words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property: The words "Real Property" mean the real property; interests and rights, as further described in this Mortgage. 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. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. THIS MORTGAGE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS MORTGAGE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GRANTOR: CAPITOL REAL ESTATE DEVELOPMENT LP CAPITOL I.FITNESS N General Partner of CapitoJ,Repl Estate Development LP By: f � - d t' > (Seal) Eric J. Desrdsiers,President of Capitol Fitness, Inc. Signed,ac Voe,.and doJIVRe d in the presence of: Witness - X Witness H 1983PG3987 Alf MORTGAGE (Continued) Page 11 CERTIFICATE OF RESIDENCE I hereby certify, that the precise address of the mortgagee, Legacy Bank a Division of First National Bank of Pennsylvania, herein is as follows: Commercial Lending, One FNB BLVD, Hermitage,PA 16148 Attorney or Agent for Mortgagee PARTNERSHIP ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA ) ' I 4 )SS COUNTY OF_ �t�n�2rlunGd ) ---On this, the }k day of rehrUQ7M 20 U� before me t M&L L i Sitz a ,an the undersigned Notary Public,personally appeared(Eric J. Desrosiers,President of Capitol Fitness, Inc. , who acknowledged himself or herself to be the partner or designated agent of Capitol Real Estate Development LP, a partnership,and that he or she as such a partner or designated agent, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the partnership by himself or herself as as a partner or designated agent. In witness whereof, I hereunto set my hand and official /✓Y ' 3 o.ao a Notary Public in and for the State of --Q t,•:;°,;�,N .. •`y n Hyl-;.t,-..4{�4�' .\,y ,yeA/APER PPO lmdFp.V-9.94.00.00.7 Cop,.H,Iwd FF meiJ 9oW,b 1"a 1997,Ml7. All Rlphl,fl--d. •PA 1ACN\WIN95\CFnM%OO1FC TR-115]{7 PR-14 y'i•Kt oe"':fe:Q, COMMONWEALTH OF PENNSYLVANIA .,h�lt:2��Ixri 7r Notarial Seal A Traci L.Sheridan,Notary Public Lemoyne Boro,Cumberland County My Commission Expires Dec.15,2009 Member,Pennsylvania A+ sodalion of Notaries B�{ 198P3988 EXHIBIT "A" ALL THOSE CERTAIN two tracts or pieces of land situate in Borough of Lemoyne, Cumberland County, Pennsylvania, more particularly bounded and described as follows, to wit: TRACT NO.1 BEGINNING at a point on southern line of Walnut Street 68.00 feet East of the Southeast corner of Walnut and Church Streets, at the center of the partition wall between houses; thence Southwardly through the center of said partition wall and beyond, 150.00 feet to the northern line of a 20.00 feet wide alley; thence eastwardly along said alley, 24.00 feet to a point; thence northwardly parallel with said partition line 150.00 feet to the southern line of said Walnut Street; thence westwardly along Walnut Street, 24.00 feet to the place of BEGINNING. BEING known and numbered as#238 Walnut Street, Lemoyne, Pennsylvania. TRACT NO.2 BEGINNING at a point on the southern line of Walnut Street, 44.00 feet East of the southeastern corner of Walnut and Third Street; thence eastwardly along Walnut Street, 24.00 feet to the center of the partition wall between houses; thence southwardly through the center of said partition wall, and beyond, 150.00 feet to a 20.00 feet wide alley; thence westwardly along said alley, 24.00 feet to a point; thence northwardly 150.00 feet to the place of BEGINNING. BEING known and numbered as#240 Walnut Street, Lemoyne,Pennsylvania. (y this to be recorded s..n-" berlaxid County PA fV Recorder of Deeds BK 198 PG3989 { R VERIFICATION J.Martin Dell,Special Assets Officer and duly authorized representative of'First National Bank of Pennsylvania, successor by merger to The Legacy Bank, deposes and.says subject to.the penalties of 18 Pa. C.S.A. §4904 relating to unsworn falsification to authorities that:the facts set forth in the foregoing Complaint in Mortgage Foreclosure-are true and correct to his;information and belief. Pmartin Dell Special Assets Officer