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Home My WebLink About14-6594 Supreme Cad 76—G�.ennsylvania ,k COUr">�of.Comrnoleas For Prothonotary Use Only: Coil Comer h�eet CUM�dti Docket No: S �EMD County The information collected on this form is used solely for court administration purposes. This form does not supplement or replace the filing and service of pleadings or other papers as required by law or rules of court. Commencement of Action: S xI Complaint 0 Writ of Summons E3 Petition J Transfer from Another Jurisdiction n Declaration of Taking C Lead Plaintiff's Name: Lead Defendant's Name: Metro Bank f/k/a Commerce Bank/Harrisburg, N.A. Phelaro, Inc., Richard E. Phelan, Linda L. Phelan& USA T s Dollar Amount Requested: Owithin arbitration limits Y Are money damages requested? x_i Yes �� No (check one) x outside arbitration limits � O N' ' Is this a Class Action Suit? Yes El No Is this an MDJAppeal? 0 Yes 0 No t A Name of Plaintiff/Appellant's Attorney: Marc A. Hess, Esquire Check here if you have no attorney(are a Self-Represented 1Pro 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 !i Intentional Buyer Plaintiff Administrative Agencies Malicious Prosecution Debt Collection:Credit Card Board of Assessment J Motor Vehicle Debt Collection:Other Board of Elections �I Nuisance Dept.of Transportation I S Premises Liability Statutory Appeal:Other =u Product Liability(does not include 0 Employment Dispute: j E . mass tort) W Slander/Libel/Defamation Discrimination i' C 'n Other: ❑ Employment Dispute:Other Zoning Board T J Other: Other: o MASS TORT J Asbestos N Tobacco Toxic Tort-DES -� Toxic Tort-Implant REAL PROPERTY MISCELLANEOUS i Toxic Waste [3 Ejectment Common Law/Statutory Arbitration Other: C� Eminent Domain/Condemnation B � � Declaratory Judgment 0 Ground Rent � Mandamus © Landlord/Tenant Dispute Non-Domestic Relations Mortgage Foreclosure:Residential Restraining Order PROFESSIONAL LIABLITY Xr Mortgage Foreclosure:Commercial Quo Warranto j Dental Partition Replevin Legal Quiet Title ®r Other: Medical n Other: Other Professional: Updated 1/1/2011 ti F,. r n. HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 METRO BANK f/k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLV NIA Plaintiff CIVIL ACTION - LAW vs. No. )q— b Sq PHELARO, INC., RICHARD E. PHELAN and LINDA L. PHELAN, his wife, and THE UNITED STATES OF AMERICA, Defendants NOTICE You have been sued in court. If you wish to defend against the claims 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 ti 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. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle, PA 17013 (717) 249-3166 or (800) 990-9108 Notice Required Under the Fair Debt Collection Practices Act, 15 U.S.C. §1601 (as amended) and the Pennsylvania Unfair Trade Practices Act and Consumer Protection Law, 73 Pa.Con.Stat.Ann. §201, et seq. ("The Acts"). To the extent that the Acts may apply, please be advised of the following: 1. The amount of the original debt is stated in the Complaint attached hereto. 2. The Plaintiff who is named in the attached Complaint and/or its loan servicing agents are creditors to whom the debt is owed. 3. The debt described in the Complaint attached hereto and evidenced by the copies of the mortgage and note will be assumed to be valid by the creditor's law firm, unless the debtors/mortgagors, within thirty (30) days after receipt of this,notice, dispute, in writing, the validity of the debt or some portion thereof. - 2 - 4. If the debtors/mortgagors notify the creditor's law firm in writing within thirty (30) days of the receipt of this notice that the debt or any portion thereof is disputed, the creditor's law firm will obtain verification of the debt and a copy of the verification will be mailed to the debtor by the creditor's law firm. 5. If the creditor who is named as Plaintiff in the attached Complaint is not the original creditor, and if the debtor/mortgagor makes written request to the creditor's law firm within thirty (30) days from the receipt of this notice, the name and address of the original creditor will be mailed to the debtor by the creditor's law firm. 6. Written request should be addressed to: Marc A. Hess HENRY & BEAVER LLP 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 7. THIS MAY BE CONSTRUED AS AN ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. 8. Be advised that the thirty (30) day time period allotted herein will not stop or toll the time period set forth above, which requires you to take action on the Complaint within twenty (20) days after this Complaint and Notice are served upon you. - 3 - ti AVISO Le han demandado a usted en el tibunal. Si usted quiere defenderse de las demandas expuestas en las paginas siguientes, usted debe tomar accion en el plazo de veinte (20) dias a partir de la fecha en que se le hizo entrega de la demanda y la notificacion, al interponer una comparecencia escrita, en persona o por un abogado y registrando por escrito en el tribunal sus defensas o sus objeciones a las demandas en contra de su persona. Se le advierte que si usted no to hace, el caso puede proceder sin usted y podria dictarse un fallo por el juez en contra suya sin notificacion adicional y podria ser por cualquier dinero reclamado en la demanda o por cualquier otro reclamo o desagravio en la demanda solicitado por el demandante. Usted puede perder dinero o sus propiedades u otros derechos importantes para usted. USTED DEBE LLEVARLE ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI NO TIENE ABOGADO O NO PUEDE CORRER CON LOS GASTOS DE UNO, VAYA O LLAME POR TELEFONE A LA OFICINA EXPUESTA ABAJO. ESTA OFICINA PUEDE POVEERLE INFORMACION RESPECTO A COMO CONTRATAR A UN ABOGADO. SI NO PUEDE CORRER CON LOS GASTOS PARA CONTRATAR A UN ABOGADO, ESTA OFICINA PUDIERA PROVEERLE INFORMACION RESPECTO A INSTITUCIONES QUE PUEDA OFRECER SERVICIOS LEGALES A PERONAS QUE CALIFICAN PAR LA REDUCCION DE HONORARIOS O QUE NO TENGAN QUE PAGAR HONORARIOS. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle, PA 17013 (717) 249-3166 or (800) 990-9108 MARC A. HES - 4 - HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 METRO BANK f/k/a COMMERCE : IN THE COURT OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW vs. No. PHELARO, INC., RICHARD E. PHELAN and LINDA L. PHELAN, his wife, and THE UNITED STATES OF AMERICA, Defendants COMPLAINT 1. The Plaintiff is Metro Bank f/k/a Commerce Bank / Harrisburg, N.A., with an office located at 3801 Paxton Street, Harrisburg, Pennsylvania 17111. 2. The Defendant Phelaro, Inc. is a business corporation with a last known address in care of Richard E. Phelan, President, 735 South Hanover Street, Carlisle, Cumberland County, Pennsylvania 17013. 3. The Defendants Richard E. Phelan and Linda L. Phelan, his wife, are adult individuals last known to reside at 735 South Hanover Street, Carlisle, Cumberland County, Pennsylvania 17013. 4. The Defendant The United States of America is a nation located on the continent of North America. 5. The United States of America is hereby joined as a party in accordance with the provisions of the Act of Congress of the United States, 28 U.S.C. §2410, as amended, and for the reason that the United States of America may allege to have an interest in the premises subject to the Mortgage herein on account of certain tax liens. The United States of America is being joined herein for the purpose of having any liens discharged which it may have pursuant to 26 U.S.C. §7425, as amended. 6. The United States of America, through the Department of Treasury, Internal Revenue Service (Detroit, MI Office), filed the following tax liens against Defendant Phelaro, Inc. in the Office of the Prothonotary of Cumberland County, Pennsylvania as follows: a. No. 2010-05038 recorded August 2, 2010, in the amount of Forty-One Thousand One Hundred Ninety-Seven Dollars and Six Cents ($41,197.06). b. No. 2010-07823 recorded December 21, 2010, in the amount of Twenty Thousand Four Hundred Fifty-Nine Dollars and One Cent ($20,459.01). c. No. 2012-02465 recorded April 23, 2012, in the amount of Twenty-Seven Thousand Three Hundred Nine Dollars and Twenty-One Cents ($27,309.21). A copy of the tax lien Forms 668 as filed and referenced herein are attached hereto collectively as Exhibit "A" and incorporated herein by reference. 7. Plaintiff loaned the Defendants Richard E. Phelan and Linda L. Phelan (the "Phelans") the sum of Four Hundred Eighty Thousand Dollars ($480,000.00) pursuant to 2 - s the terms of and evidenced by a Promissory Note dated, executed and delivered by the Phelans to Plaintiff on or about April 25, 2006 (the "Note"), Exhibit "B" attached hereto and incorporated herein by reference. 8. The obligations and liability of the Phelans to Plaintiff pursuant to the Note were unconditionally guaranteed by Defendant Phelaro, Inc. ("Phelaro") pursuant to the terms of its Commercial Guaranty dated, executed and delivered by Phelaro to Plaintiff on or about April 25, 2006 (the "Guaranty"), Exhibit "C" attached hereto and incorporated herein by reference. 9. Contemporaneously with the execution of the Note and Guaranty, and in order to secure payment of the same, the Phelans as the sole and only shareholders and directors of Phelaro made, executed and delivered to the Plaintiff a real estate Mortgage dated April 25, 2006, which was recorded on May 2, 2006, in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Record Book 1948 at Page 4200, et seq. (the "Mortgage"), intending to convey to Plaintiff a security interest in the real estate described therein. A copy of the Mortgage is attached hereto as Exhibit "D" and made a part hereof by reference. 10.The premises subject to the Mortgage is a certain lot and piece of ground commonly known as 26-28 West Main Street, Mechanicsburg, Cumberland County, Pennsylvania 17055, as more particularly described on Exhibit "D" attached hereto (the "Mortgaged Real Property"). 11.The Note, Guaranty and Mortgage have not been assigned. - 3 - 12.The Mortgaged Real Property is owned by and titled in the name of Phelaro, Inc., a Pennsylvania corporation. 13.By virtue of an action captioned Metro Bank f/k/a Commerce Bank/ Harrisburg, N.A. vs. Phelaro, Inc., Richard E. Phelan and Linda L. Phelan filed in the Court of Common Pleas of Cumberland County, Pennsylvania to No. 14-2516, judgment has been entered against Defendants Phelan and Phelaro in favor of Plaintiff Metro Bank reforming the Mortgage so as to properly reflect Phelaro as the Mortgagor therein. 14.The Defendants Phelaro and Phelan are in default of their obligation under the Note, Guaranty and Mortgage, having failed to pay the installment of principal and interest due for June 25, 2012, and all subsequent installments. 15.The terms of the Note, Guaranty and Mortgage provide that in the event of default.Defendants Phelaro and Phelan shall be liable for Plaintiff's costs and attorney's fees. 16.To date, Plaintiff has incurred attorney's fees and costs in attempting to enforce its rights under the Note, Guaranty and Mortgage in the amount of Nine Thousand Seventy-Four Dollars and Ninety-Three Cents ($9,074.93). 17.As a result of the default in the Note, Guaranty and Mortgage, the following amounts are due and owing: Principal $ 423,727.05 Interest to 11/5/2014 - 62,627.80 Late Fees to 11/5/2014 - 27,983.21 Attorney's Fees and Costs to Date - 9,859.43 Total - $ 524,197.49 - 4 - Plus interest after November 5, 2014, and continuing after entry of judgment at the contract rate ($82.391370 per diem), actual and additional attorney's fees as may be incurred, additional late fees as may accrue at the contract rate after November 5, 2014, costs of suit and all other amounts, fees and costs incurred in maintaining and preserving the Mortgaged Real Property. 18.No judgment has been entered upon the Mortgage in any jurisdiction. 19.The Mortgaged Real Property is commercial real estate and not residential real property and as such, the notice provisions of Section 403(c) of Pennsylvania Act 91 of 1983 (35 P.S. §1680.403(c)) and Act 6 of 1974 (41 P.S. §403) are not applicable. 20.To the best of the undersigned's knowledge and belief, Defendants Phelaro and Phelan are not members of the Armed Forces of the United States of America, nor engaged in any way which would bring them within the provisions of the Service Members Civil Relief Act of 2003, as amended. WHEREFORE, Plaintiff demands that judgment be entered in mortgage foreclosure in favor of the Plaintiff and against the Defendants, Phelaro, Inc., Richard E. Phelan and Linda L. Phelan and The United States of America, in the amount of: Principal - $ 423,727.05 Interest to 11/5/2014 - 62,627.80 Late Fees to 11/5/2014 - 27,983.21 Attorney's Fees and Costs to Date - 9,859.43 Total - $ 524,197.49 Plus interest after November 5, 2014, and continuing after entry of judgment at the contract rate ($82.391370 per diem), actual and additional attorney's fees as may be - 5 - incurred, additional late fees as may accrue at the contract rate after November 5, 2014, costs of suit and all other amounts, fees and costs incurred in maintaining and preserving the Mortgaged Real Property. HENRY & BEAVER P By: AR HE S I.D. #55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 Attorney for Plaintiff - 6 - S L METRO BANK f/k/a COMMERCE IN THE COURT,OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW vs. No. PHELARO,-INC., RICHARD E. PHELAN and LINDA L. 'PHELAN, his wife, and THE UNITED STATES OF AMERICA, Defendants VERIFICATION I, Amy M. Custer, being duly affirmed according to law, depose and say that I am an Assistant Vice President of Metro Bank, and that I am authorized to make this Verification on its behalf and that the facts set forth in the foregoing Complaint are true and correct to the best of my knowledge, information and belief. To the extent that any of the averments in the foregoing document are based upon the understanding or application of law, I have relied upon counsel in making this Verification. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. Section 4904 relating to unsworn falsification to authorities. METRO BANK i By: M. st A sistant ice President i i I PROMISSORY NOTE ' 9 fk1C..P..................................an..D .i®::......:::.-:Maturit .:................ ....:... ::. :.::..:....:.. .......................... ....................................................::::..................X........ .................on::N.a..............................c II. ..0 II............. ..............A. o.unt.................:.. :............................ ......................................................:...................................................................:..:..................................a.....t......o.....................................cG...............................Offc. r... ......lrtl t ::.........:........................................................... .....................................................................I...�....................t. Es...,... " >:::a:s:. :4. >:>:$::::>:>;.: ::.:., ', ...:k::....:..:.:......:::::<>::>.:::::;...,:..;:..::....;...,...,:..,::::::»::::>:<:5 s::':>::::::......'>: >:><>r>:=i >:::>: s:«:;<;;>::<>>:»»:::`:: :;:::>::s>r::::;:<:>;....>;:g:::>:>:ez.;;:::>i>>:> :r:>: >::>:>::::s>::>:ztiss::: ......`�..:.8..Q.O.O:O..O:b.:::::::::._fj4 2 .2QQ6... 7(� 2(32 ...::......... ::::.-:::::..........:...:::. :.:..:::.:.:.::.::::.: ::::..:::::.: ................6................3...3..7 45© ,......:::::::::::::::.-::::::::::::.-:::::::::::.:.::::•::::::::::.::.::.:. ,.Q .....:::::::::::::..- References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "'••" has been omitted due to text length limitations. Borrower: Richard E. Phelan Lender: COMMERCE BANK/HARRISBURG N.A. Linda L. Phelan COMMERCIAL MORTGAGE DEPARTMENT 735 South Hanover Street 100 SENATE AVENUE Carlisle, PA 17013 CAMP HILL, PA 17011 (717) 975-5630 Principal Amount: $480,000.00 Date of Note: April 25, 2006 PROMISE TO PAY. Richard E. Phelan and Linda L. Phelan ("Borrower")jointly and severally promise to pay to COMMERCE BANK/HARRISBURG N.A. ("Lender"), or order, in lawful.money of the United States of America, the principal amount of Four Hundred Eighty Thousand & 00/100 Dollars ($480,000.00),together with interest on the unpaid principal balance from April 25, 2006, 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: 6 monthly consecutive interest payments,beginning May 25, 2006,with interest calculated on the unpaid principal balances at an interest rate of 7.500% per annum; 60 monthly consecutive principal and interest payments in the initial amount of $3,899.10 each, beginning November 25,'-2006, with interest calculated on the unpaid principal balances at an interest rate of 7.500%per annum; 179 monthly consecutive principal and interest payments in the initial amount of$4,207.32 each, beginning November 25, 2011, with interest calculated on the unpaid principal balances at an interest rate based on the Prime Rate as established by and adjusted from time to time by the Commerce Bank/Harrisburg, N.A. (currently 8.750%), resulting in an initial interest rate of 8.750%; and one principal and interest payment of $4,208.06 on October 25, 2026,with interest calculated on the unpaid principal balances at an interest rate based on the Prime Rate as established by and adjusted from time to time by the Commerce Bank/Harrisburg, N.A. (currently 8.750%), resulting in an initial interest rate of 8.750%. This estimated final payment is based on the assumption that all payments will be made exactly as scheduled and that the Index does not change; the actual final payment will be for all principal and accrued interest not yet paid, together with any other unpaid amounts under this Note. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest;then to principal; then to any unpaid collection costs; and then to any late charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is Lender's Prime Rate (the "Index"). This is the rate Lender charges, or would charge, on 90-day unsecured loans to the most creditworthy corporate customers. This rate may or may not be the lowest rate available from Lender at any given time. 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 8.750% 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 iBorrower's final payment. I PREPAYMENT PENALTY. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and 1 will not be subject:to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Upon prepayment of this Note, Lender is entitled to the following prepayment penalty: Prepayment of any amount of the principal sum shall be subject to a penalty charge of 5% during the first year of amortization and declining 1% per year thereafter to par. Except for the foregoing, Borrower may pay all or a porton-of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any'of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: COMMERCE BANK/HARRISBURG N.A., COMMERCIAL MORTGAGE DEPARTMENT, 100 SENATE AVENUE, CAMP HILL, PA. 17011. LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000%of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding a 2.000 percentage point margin ("Default Rate Margin"). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default. After maturity, or after this Note would have matured had there been no default, the Default Rate Margin will continue to apply to the final interest rate described in this Note. If judgment is entered in connection with this Note, interest will continue to accrue after the date of judgment at the rate in effect at the time judgment is entered. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law. DEFAULT. Each of the following shall constitute an event of default("Event of Default") under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. Environmental Default. Failure of any party to comply with or perform when due any term, obligation, covenant or condition contained in any environmental agreement executed in connection with any loan. EXHIBIT PROMISSORY NOTE -Loan No: 3372450 (Continued) Page 2 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 death of Borrower or the dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. 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: 11) 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 and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Note has been accepted by Lender in the Commonwealth of Pennsylvania. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender(whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts. COLLATERAL. Borrower acknowledges this Note is secured by Titled insured First lien mortgage on the property located at 26-28 West Main Street, Mechanicsburg, PA. OPTION TO DECLARE LOAN DUE. Although the repayment of the loan evidenced by this instrument has been designed as if it were to extend for the term established in the "Payment" section, hereinabove outlined, Borrower understands that Lender expressly reserves the right and option, exercisable at its discretion, to'declare the entire unpaid principal balance under this Promissory Note together with all interest which shall have accrued thereon to be due and payable on the 17th Day of September 2011, and on each succeeding Five(5) year anniversary of that date during the term hereof, hereinafter referred to as "Loan Call Date". In the event that Lender desires to exercise its option to declare the Loan due, it shall deliver written notice thereof by regular first class mail to Borrower's last known address 90 days prior to the Loan Call Date. In the event that Lender desires to exercise its option to declare the Loan due, it shall deliver written notice thereof by hand delivery, nationally recognized overnight courier or regular first class mail to Borrower's last known address at least 90 days prior to the Loan Call Date. Borrower shall, on or before the Loan Call Date immediately following such notice, repay the entire principal balance due under the Promissory Note together with all unpaid interest which shall have accrued thereon as well as any other sums which may then be due under the Promissory Note or any other document constituting a part of the within loan transaction. Notice provided by first class mail to Borrower's last known address shall be deemed to have been delivered when deposited in the mail. POST CLOSING COMPLIANCE. Borrower agrees to execute, re-execute, cause a Guarantor(s) or other third party(ies) involved in the loan transaction to execute and/or re-execute and to deliver to Lender or its legal counsel, as may be deemed appropriate, any document or instrument signed in connection with the Loan which was incorrectly drafted and/or signed, as well as any document or instrument which should have been signed at or prior to the closing of the Loan, but which was not so signed and delivered. Borrower agrees to comply with any written request by Lender within ten (10) days after receipt by Borrower of such request. Failure to Borrower to so comply shall, at the option of Lender, upon notice to Borrower, constitute an event of default under the Loan. REQUIRED DEPOSIT ACCOUNT. Borrower and Guarantor shall be required to establish and maintain primary deposit account relationship with Commerce Bank. COMMITMENT LETTER COMPLIANCE.. This loan is contingent upon Borrower's compliance with all of the terms and conditions in the commitment letter issued by Lender to Borrower on or about April 5, 2006. Upon breach of any term of condition therein Lender shall have the right to declare this loan in default and demand payment in full of the principal balance remaining unpaid, together with all interest, which shall have accrued thereon. . COPIES OF LEASES. Borrower hereby agi to assign to Bank, all present and future rents an" 'ries associated with the mortgaged premises. Borrower shall provide Bank with all copif all leases and any addendums thereto. 1 SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal .representatives, ' (1 PROMISSORY NOTE {. Loan No: 3372450 (Continued) Page 3 successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if we report any inaccurate information about your account(s) to a consumer reporting agency. Your written notice describing the specific inaccuracy(ies) should be sent to us at the following address: COMMERCE BANK/HARRISBURG N.A. LOAN SERVICING PO BOX 1195 CAMP HILL, PA 17011-1195. 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. Each Borrower understands and agrees that, with or without notice to Borrower, Lender may with respect to any other Borrower (a) make one or more additional secured or unsecured loans or otherwise extend additional credit; (b) alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of any indebtedness, including increases and decreases of the rate of interest on the indebtedness; .(c) exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any security, with or without the substitution of new collateral; (d) apply such security and direct the order or manner of sale thereof, including without limitation, any non-judicial sale permitted by the terms of the controlling security agreements, as Lender in its discretion may determine; (e) 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; and (f) determine how, when and what application of payments and credits shall be made on any other indebtedness owing by such other Borrower. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone'other than the party with whom the modification is made. The obligations under this Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL BE 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, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH 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: X::::`>:::<>:..,::'.: `:.::...;:. . ,..::.....ISeal) X:>`;. ": Seal) Richard E. Phelan Linda L. Phelan LASER DRO Le dE g.Va 5.71.00.OW COD..Hr1m EY id Spk,1!. .1n 1997,2000. PD Right.Aew . DA N:IWINAD %LDWIMCPRLPL1020.PC 78.19171 -19 DISCLO<. )RE FOR CONFESSION OF A /GMENT ::::.::::.:::::::::::.. ::::::::::::::::::::::-::. ::::::::::.::::: ::::::::.::::::.:::::::::::::. ..::::::::::::::::.::::.::::::::::::::::.:.:....:. :::::::::::::: �oan...Dte.............M� rt : :::;:;:::.:;.;.::::: :::.:.::.:::: #.........................:.:.:.::.::.:::::.,....................... ................tU....f........:::::.:.::......L.p t1..11�.t?..............................CaIE. ..ColE............. ...:.....:::.:A. Y............................ : ................................................. ... .........................................c.....t.;:.;::;.:;.;:.::;.;::.;Offtc.e.............Ittt tags........ ....................................................................:.....:...:.:::::.:.:................. ...........................................................:.::.:.::::::::::........................................................................... ........................ . . . . . .................. . ......................... .............. »;` ;': >;' s:'...:::. ...... :::;>:::>»> :_><:«:......<>:>=:<:« >:<><:::::;s::>:z:::a>:>»>«:»> >:>««:»::>'s:<'>>`>a:>>>:»': >`::i......>' Q OQ a4 25 200:6.: 10::2 7245f2.... .::..... .... .:::.:..< :::: :;::::: :.:: : • Z ..:.............................................. .....:. 7 4#...... .... ..:.:.. References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations. Borrower: Richard E. Phelan Lender: COMMERCE BANK/HARRISBURG N.A. Linda L. Phelan COMMERCIAL MORTGAGE DEPARTMENT 735 South Hanover Street 100 SENATE AVENUE Carlisle, PA 17013 CAMP HILL, PA 17011 (717) 975-5630 Declarant: Linda L. Phelan 735 South Hanover Street Carlisle, PA 17013 DISCLOSURE FOR CONFESSION OF JUDGMENT 1 AM EXECUTING, THIS _ j DAY OF 20-00,A PROMISSORY NOTE FOR $480,000.00 OBLIGATING ME TO REPAY THAT AMOUNT. A. I UNDERSTAND THAT THE NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE NOTE, 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 NOTE, 1 AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S ENTERING JUDGMENT AGAINST ME BY Cq1 FESSION 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 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 MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, I AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN ANY MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW,WITHOUT GIVING ME ANY ADVANCE NOTICE. INITIALS: »>U49M C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, I REPRESENT THAT: INITIALS 1. 1 WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE NOTE. C } l� 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE 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: a XISeal) Linda L. Phelan LASER PRO Lending,V—5.31.00,004 C.p,.H,Wd Financial Solutions,Inc.1997,1006. All Righ,a Read. -PA HAWINAPPS\LPWIN\CFIILPL1030.FC TR-19171 PR-19 )COMMERCIAL GUARANTY( . . ........... ................. ................. ............................. ...................................................................... .......... REWMEW!............ ............. ............................................................ . ... .. ... ... ........................................................ ....................... .............................. . ........ ............ .............................. .............................................................. ......... :.1!1.f>::.,:.:.:,:..., ............................................ .... . . ..... ........... .... ..................... ...................................................................................................z............ .... . ..... ..........*............ ............................................... .................. .. ............ ......................................................... .... ........................ . ...... .......... lm-_M[ .................................. .................. ... References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Richard E.Phelan f Lender: COMMERCE BANK/HARRISBURG N.A. Linda L. Phelan COMMERCIAL MORTGAGE DEPARTMENT 735 South Hanover Street 100 SENATE AVENUE Carlisle, PA 17013 CAMP HILL, PA 17011 (717) 975-5630 Guarantor: Phelaro, Inc. 114 East Allen Street Mechanicsburg, PA 17055 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower, or any one or more of them, to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order, on demand, in legal tender of the United States of America,.in same-day funds, without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word "Indebtedness" as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others, owes or will owe Lender. "Indebtedness" includes, without limitation,loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection apreements or foreign currency exchange agreements or commodity price protection agreements, other obligations, and liabilities of Borrower,or any one or more of them, and any present or future judgments against Borrower, or any one or more of them, future advances, loans of transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or Surety; secured or unsecured;joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any.reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER, OR ANY ONE OR MORE OF THEM, TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED,ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY,ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only tp advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to Zero dollars ($0.00), prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars ($0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (8) 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 of 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, includin EX-0I I Jr, COMMERCIAL GUARANTY "Loan No: 3372450 (Continued) Page 2 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 FINANCIAL STATEMENTS. Guarantor agrees to furnish Lender with the following: Annual Statements. As soon as available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Guarantor's balance sheet and income statement for the year ended, prepared by Guarantor. Tax Returns. As soon as available, but in no event later than one-hundred-twenty (120) days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by a professional accountant satisfactory to Lender. All financial reports required to be provided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true and correct. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor authorizes Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these accounts to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lende requests, any notes or credit agreements now o' eafter evidencing any debts or obligations of Borrower to Guarantor shall be marked w: t legend that the same are subject to this Guara, and shall be delivered to Lender. Guarantor COMMERCIAL GUARANTY -Loan Nd: 3372450 (Continued) Page 3 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 attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender in the Commonwealth of Pennsylvania. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (including Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this'Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid,-directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. 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 Richard E. Phelan and Linda L. Phelan and includes all co-signers and co-makers signing the Note and all their successors and assigns. GAAP. The word "GAAP" means generally accepted accounting principles. Guarantor. The word "Guarantor" means everyone signing this Guaranty, including without limitation Phelaro, 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 COMMERCE BANK/HARRISBURG N.A., its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental . ....---' --'..__,.,... --A -II k., ;n t, ,m tc COMMERCIAL GUARANTY Loan No: 3372450 (Continued) Page 4 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 LENDERJSNECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED APRIL 25, 2006. 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: P14ELAR0' INC. Sea Richard E. Phelan, President of Phelaro, Inc. CORPORATE ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA ) 1 (! )SS COUNTY OF On this, the day of 20��, before me the undeLsigfiecr Notary Public; personally appeared Richard E. Phelan, President of Phelaro, Inc., who acknowledged himself or herself to be the President of Phelaro, Inc., of a corporation, and that he or she as such President of Phelaro, 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 Phelaro, Inc... In witness whereof. I here unto set v hand and official seal. Notarial Seal % Cassie L Owen;Notary Public Camp Hill Boro,Cumberland County mic� My Commission Expires Mar.12,2007 Notary Public in and for the State of Member,Pennsylvania Association Of Notaries la9LR PRO Lw dC q.Va 9.3I.00.O Coq.Nrl,nd i'nnc1J 9oWlbn,,Ina.1997,1006. M RipM1„Re,s . -'PA N:IWINAP WPWINICNILPLIL101C 7R-19171 M-19 f , Z33� A 460 Parcel Identification Number: DS G5 p :J RECORDATION REQUEST D BY: !`1riY 2 COMMERCE BANK/HARRISBURG N.A. COMMERCIAL MORTGAGE DEPARTMENT 100 SENATE AVENUE CAMP HILL, PA 17011 WHEN RECORDED MAIL TO: COMMERCE BANK/HARRISBURG N.A. LOAN SERVICING _ 3801 PAXTON STREET HARRISBURG,PA 17111-1418 SEND TAX NOTICES TO: COMMERCE BANK/HARRISBURG N.A. LOAN SERVICING 100 SENATE AVENUE CAMP HILL PA 17011 U U 0-2.33 FOR RECORDER'S USE ONLY OPEN - END MORTGAGE THIS MORTGAGE SECURES FUTURE ADVANCES Amount Secured Hereby: $480,000.00 THIS MORTGAGE dated April 25, 2006, is made and executed between Richard E. Phelan and Linda L. Phelan, whose address is 735 South Hanover Street, Carlisle, PA 17013 (referred to below as "Grantor") and COMMERCE BANK/HARRISBURG N.A., whose address is 100 SENATE AVENUE, CAMP HILL, PA 17011 (referred to below as "Lender"). GRANT OF MORTGAGE.. For valuable consideration, Grantor grants, bargains, sells, conveys, assigns, transfers, releases, confirms and mortgages to Lender all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all streets, lanes, alleys, passages, and ways; all easements, rights of way, all liberties, privileges, tenements, hereditaments, and appurtenances thereunto belonging or anywise made appurtenant hereafter, and the reversions and remainders with respect thereto; all water,'water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property") IoCated in Cumberland County, Commonwealth of Pennsylvania: See Exhibit "A", which is attached to this Mortgage and made a part of this Mortgage as if fully set forth herein. The Real Property or its address is commonly known as 26-28 West Main Street, Mechanicsburg, PA 17055. 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 $480,000.00, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all EXHIBIT B ` � 94 PG4ZO0 MORTGAGE Loan No: 3372450 (Continued) Page 2 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 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, 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 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 1 t . MORTGAGE Loan No: 3372450 (Continued) Page 3 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. 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 long 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 (15) 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 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 failure 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 1948PG4202 MORTGAGE Loan No: 3372450 (Continued) Page 4 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. 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 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. ,i cia -RPf,4203 1 MORTGAGE Loan No: 3372450 (Continued) Page 5 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 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. Environmental Default. Failure of any party to comply with or perform when due any term, obligation, covenant or FIG a204 MORTGAGE Loan No: 3372450 (Continued) Page 6 condition contained in any environmental agreement executed in connection with the Property. Other Defaults. Grantor fails 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 Collateralization. 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 death of Grantor, 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 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. 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 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 (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. 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 .'94,8 PG205: MORTGAGE Loan No: 3372450 (Continued) Page 7 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 Lender 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. 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' IFt MORTGAGE Loan No: 3372450 (Continued) Page 8 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. Joint and Several Liability. All obligations of Grantor under this Mortgage shall be joint and several, and all references to Grantor shall mean each and every Grantor. This means that each Grantor signing below is responsible for all obligations in this Mortgage. 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 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 person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or 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. 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 DV. t 'Cl (t R Pr"t< ? 'n,7 t MORTGAGE Loan No: 3372450 (Continued) Page 9 have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Richard E. Phelan and Linda L. Phelan 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 L6%vs. 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. ("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 Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Richard E. Phelan and Linda L. Phelan. 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 all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage,together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means COMMERCE BANK/HARRISBURG N.A., its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated April 25, 2006, in the original principal amount of $480,000.00 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. 1 t 7ft : 1. . MORTGAGE Loan No: 3372450 (Continued) Page 10 I EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH 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: ............... Seal Richard E. Phelan >'s:> >:..::::..:.::.....................:. I X > '`> ::<';>":::`.`;;'.`s::;.>;«::>::<<< ..... ........................................ Linda L.Phelan CERTIFICATE OF RESIDENCE I hereby certify,that the precise address of the mortgagee, COMMERCE BANK/HARRISBURG N.A., herein is as follows: COMMERCIAL MORTGAGE DEPARTMENT, 100 SENATE AVENUE, CAMP HILL, PA 17011 Attorney oa,69,eifit for Mortgagee A INDIVIDUAL ACKNOWLEDGMENT I COMMONWEALTH OF PENNSYLVANIA 1 ) SS I COUNTY OF 1 1 / 1 �99 n this, the day of j 20 0,b before me P,FA/ L, 6 tj6Aj' the undersigned N6tary Public,.personally appeared Richard E. Phelan and Linda L. Phelan, known to me (or satisfactorily proven) to be the person whose names are subscribed to the within instrument, and acknowledged that they executed the same for the purposes therein contained. In witness whereof, I hereunto set my hand and official seal. COMMONWEALTH OF PENNSYLVANIA Notarial Seal Karen L Burch,Notary Public Notary Public in and or the State of i Mechanicsburg Boro,Cumberland County Vy Commission Expires Nov.24,2009 iMember.Pennsylvania Association of Notaries l LASER PRO Lo dmg.Vw.5.31.00.004 Cop,.HMd Financial Soh tia-,Inc.1997.2006. A9 Rights R—s,1. -PA KAWINAPPSUI WINICFIIIPUG03.FC TR-19171 PR-19 B :`:� 948PG42:09 1 ss J • - 1 r I Certify this to be recorded In Cumbcr?end. County PA ',.vr. i. �` Recorder of Deeds f-t r- 1.1. 20 HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 METRO BANK f/k/a COMMERCE IN THE COURT OF COMMON PLEAS BANK/ HARRISBURG, N.A., CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION - LAW vs. No. / PHELARO, INC., it RICHARD E. PHELAN and LINDA L. PHELAN, his wife, : and THE UNITED STATES OF AMERICA, Defendants PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Sir, please enter the appearance of Marc A. Hess, of the law firm of Henry & Beaver LLP whose address is 937 Willow Street, P.O. Box 1140, Lebanon, Pennsylvania 17042-1140, as attorney for Metro Bank, the Plaintiff in the above- captioned matter. Dated: 6V`{ ( ( , 2014 yakw-b- MARC A. HE S I.D. #55774 METRO BANK f/k/a COMMERCE BANK / HARRISBURG, N.A. : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V PHELARO, INC., RICHARD E. PHELAN : and LINDA L. PHELAN, his wife, and : THE UNITED STATES OF AMERICA : CIVIL ACTION NO.: 14-6594 Defendants PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter my appearance, JAMES M. BACH, Attorney -at -Law, on behalf of the Defendants, PHELARO, INC., RICHARD E. PHELAN and LINDA L. PHELAN, his wife. C' Service may be made to the address set forth below. Respectfully submitted, S M. BACH Attorney for Defendants 352 South Sporting Hill Rd. Mechanicsburg, PA 17050 I.D. #18727 Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor SHERIFF'S OFFICE OF CUMBERLAND COUNTY 7 PE 1011;C of combo__- 2.'I4 DEC 29 OFF;CE OF THE SHERIFF PENNS YL IFS Metro Bank f/k/a Commerce Bank/Harrisburg, N.A. vs. Phelaro, Inc. (et al.) Case Number 2014-6594 SHERIFF'S RETURN OF SERVICE 11/13/2014 Sheriff Ronny R Anderson, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: United States of America, but was unable to locate the Defendant in the Sheriffs bailiwick. The Sheriff therefore deputizes the Sheriff of Dauphin, Pennsylvania to serve the within Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure according to law. 11/14/2014 Ronny R Anderson, Sheriff, who being duly sworn according to law, states that he served the within Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure upon the within named defendant, United States of America Eric H. Holder, Jr. Attorney General, in the following manner: On November 14, 2014 the Sheriff mailed by certified mail, return receipt requested a true and correct copy of the within Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure to the defendant's last known address of 10th and Constitution Avenue, N.W., Room 400, Washington, DC 20530. The certified mail return receipt card was received by the Cumberland County Sheriffs Office signed by stamped signature, illegible on November 20, 2014. 11/18/2014 10:54 AM - Deputy Brian Barrick, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by "personally" handing a true copy to a person representing themselves to be the Defendant, to wi Linda Phelan at 735 S. Hanover Street, Carlisle Borough, Carlisle, PA 17013. BRIAN BARRICK, DEPUTY 11/18/2014 10:56 AM - Deputy Brian Barrick, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by handing a true copy to a person representing themselves to be Linda Phelan, Wife, who accepted as "Adult Person in Charge" for Richard E Phelan at 735 South Hanover Street, Carlisle Borough, Carlisle, P 17013. BRIAN BARRICK, DEPUTY 11/18/2014 10:57 AM - Deputy Brian Barrick, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by ' . nding a true copy to a person representing themselves to be Linda Phelan, Owner, who accepted as " It Person in Charge" for Phelaro, Inc. at 735 South Hanover Street, CarlislBorough, Carlisle j A .13. RIAN BARRICK, DEPUTY (c) CountySu,to Sheriff, Teleoscif, Inc. 11/18/2014 07:50 PM - Deputy Jason Kinsler, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by handing a true copy to a person representing themselves to be Carrie Houston, Employee of Gingerbread Man, who accepted as "Adult Person in Charge" for Occupant at 26-28 West Main Street, Mechanicsburg Borough, Mechanicsburg, PA 17055. SON KINSLER, DEPUTY 11/19/2014 08:40 AM - The requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure served by the Sheriff of Dauphin County upon Susan Melendez, Secretary, who accepted for United States of America, at 228 Walnut Street, Suite 220, Federal Building, Harrisburg, PA 17108. Jack Lotwick, Sheriff, Return of Service attached to and made part of the within record. 11/20/2014 03:04 PM - Deputy Shawn Gutshall, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by handing a true copy to a person representing themselves to be Chris Joynt, Apt 4, who accepted as "Adult Person in Charge" for Occupant at 26-28 West Main Street, Mechanicsburg Borou•h Mechanicsburg, PA 17055. N G ' ' LL, DEPUTY 11/20/2014 03:04 PM - Deputy Shawn Gutshall, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by handing a true copy to a person representing themselves to be Chris Joynt, who accepted as "Adult Person in Charge" for Occupant at 28 West Main Street, Apt. 4, Mechanicsburg Borough, Mechanicsburg, PA 17055. GUTSHALL, DEPUTY 12/09/2014 03:05 PM - Deputy Christopher Sharpe, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by handing a true copy to a person representing themselves to be Peter Songster, Apt 1, occupant, who accepted as "Adult Person in Charge" for Occupant at 26-28 West Main Street, Mechanicsburg Borough, Mechanicsburg, PA 17055. CHRI . OPHER SHARPE, DEPUTY 12/09/2014 03:05 PM - Deputy Christopher Sharpe, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by handing a true copy to a person representing themselves to be Scott Ritter, Apt. 3,occupant, who accepted as "Adult Person in Charge" for Occupant at 26-28 West Main Street, Mechanicsburg Borough, Mechanicsburg, PA 17055. CHRIST.' ER HARPE, DEPUTY 12/15/2014 Ronny R Anderson, Sheriff, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: Occupant, but was unable to locate the Defendant in his bailiwick. The Sheriff therefore returns the within requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure as "Not Found" at 26-28 West Main Street, Apt. 2, Mechanicsburg Borough, Mechanicsburg, PA 17055. Several attempts at service were made but the complaint expired before service was able to be effectuated. 12/15/2014 Ronny R Anderson, Sheriff, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: Occupant, but was unable to locate the Defendant in his bailiwick. The Sheriff therefore returns the within requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure as "Not Found" at 26-28 West Main Street, Apt. 5, Mechanicsburg Borough, Mechanicsburg, PA 17055. Several attempts at service were made but the complaint expired before service was able to be effectuated. (c) Coun ySuile Sheri;(, Teleosoft, inc. SHERIFF COST: $334.06 SO ANSWERS, December 17, 2014 RONNY R ANDERSON, SHERIFF (U CountySuite Sheriff, Teleosoff, Inc. SENDER: COMPLETE THIS SECTION • Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. • Print your name and address on the reverse so that we can return the card to you. IN Attach this card to the back of the mailpiece, or on the front if space permits. 1, Article Addressed to: United States of America Eric H. Holder, Jr. Attorney General 10th and Constitution Avenue,.N.W. Room 400 Washington, DC 20530 COMPLETE THIS SECTION ON DELIVERY A. Signature X B. Received by (Printed Name) D. Is delivery address If YES, enter deli 1.. nt dr 0 Agent ❑ Addresse C. Date of Delivery mitemi? OYes .w: 0 No NOV 2 0 2014 DV -1-(05(1 --)h Service Type 0 Certified Mall® 0 Priority Mall Express' 0 Registered 0 Return Receipt for Merchandise 0 Insured Mall 0 Collect on Delivery 4. Restricted Delivery? (Extra Fee) 2. Article Number (Transfer from service label) 7007 0 710 03-2'210 4426 PS Form 3811, July 2013 Domestic Return Receipt Shelley Ruhl Real Estate Deputy Matthew L. Owens Solicitor Commonwealth of Pennsylvania County of Dauphin Dauphin County 101 Market Street Harrisburg, Pennsylvania 17101-2079 ph: (717) 780-6590 fax: (717)255-2889 Jack Lotwick Sheriff Jack Duignan Chief Deputy Michael W. Rinehart Assistant Chief Deputy METRO BANK F/K/A COMMERCE • BANK / HARRISBURG, N.A. VS THE UNITED STATES OF AMERICA Sheriffs Return No. 2014-T-2994 OTHER COUNTY NO. 2014-6594 And now: NOVEMBER 19, 2014 at 8:40:00 AM served the within COMPLAINT IN MORTGAGE FORECLOSURE upon THE. UNITED STATES OF AMERICA by personally handing to SUSAN MELENDEZ * 1 true attested copy of the original COMPLAINT IN MORTGAGE FORECLOSURE and making known to him/her the contents thereof at FEDERAL BUILDING, 228 WALNUT STREET, SUITE 220 HARRISBURG PA 17108 * SECRETARY Sworn and subscribed to before me this 20TH day of November, 2014 ' COMMONWEALTH OF PENNSYLVANIA NOTARIAL SEAL Karen M. Hoffman, Notary Public City of Harrisburg, Dauphin County My Commission Expires January 8, 2018 So Answers, A(3A4_ Sheriff of By Dep +' heriff De ty: JOSHUA FRUHWIRTH Sheriffs Costs: $41.25 11/18/2014