HomeMy WebLinkAbout94-00026
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Dean H. Dusinberre
Attorney 1.0. No. 41065
RHOADS , SINON
On~ South Market square, 12th Floor
P.O. Dox 1146
Harrisburg, Pennsylvania 17108-1146
Attorneys for Plaintiffs, Dennis J, Farina,
Trust.e for the benefit of Robert Merriqan,
and Robert Merrigan
DENNIS J. FARINA, Trustee
tor the benefit of
ROBERT MEHRIGAN, and
ROBERT MERRIGAN,
Plaintiffs,
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
NO.
)J (1"'lt /'l~4
I
V. I
I
DOUGLAS J. HANSEN, individually I CIVIL ACTION -
and a. heir of 1<AY JOANN I MORTGAGE FORECLOSURE
HANSEN, deceased, I
I
Oetendant. I
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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 tiling 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 cass may proceed without you and a judgment may be
entered against you by the Court without further notice tor any
money claimed in tho Complaint or for any other claim or relief
requested by the PIa inti f f. 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 OR CANN01' AFFORD ONE, GO TO OR TELEPHONE
THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET [,EGAL
HEI,P,
COURT ADMINISTRATOR
4th Floor, Cumberland County Courthouse
CarliSle, PA 17013
(717) 240-6200
3, Defendant Douglas J. Hansen is an adult individual
who.e last known address is 2015 Turkey Point.. Road, Baltimore,
Marylllnd 21221.
4. At all relevant times, the Detandant, either jointly
with his late wife, Kay Joann Hansen. deceased, or individually by
right of survivorship, has been t.he real OWn(lr of two oertain
tracts or parcels of land with buildings and other improvementa
thereoll looated at 4 North Watch Lane, Silver spring Township,
Cumberland County. Pennsylvan ia (the "Premises"). 'l'he Premises are
more specifically descr J.bed hereinafter.
5. 011 or about December 20, 1991, in consideration of
two oertain loans in the respective amounts of Sixty 'rhousand and
00/100 Dollars ($60,000.00) and Forty Thousand and 00/100 Dollars
($40,000.00), made by one Robert Plante to Defendant, his late
wife, Ray Joann Hansen, deceased, and Boating Center of Baltimore,
Inc., a Maryland corporation (collectively, the "Borrowers"), which
funds were received by the Borrowers, the Borrowers executed and
delivered to Mr. Plante, as payee, two certain promissory notes
(collectively, the "Notes"), each datod December 20, 1991, in the
respective principal amounts of Sixty Thousand and 00/100 Dollars
($60,000.00) and Forty 'rhousand and 00/100 Dollars ($40,000.00)
(collectively. the "Principal"), and each requiring tho payment of
tnterout 011 the Principal at the rate of twelve percent (la) per
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.
year (the "Interest"), provid~d that Interest would not begin to
accrue under sit.hel' Note until June 20, 199:il, True and oorreot
copies of the Notes are attaohed hereto a. Exhibit. A-l and A-2,
respeotively, and made parts hereof by this reterenoe.
6. The Notes obl igate the Defendant. to pay to the
holder of ths Notes the Prinoipal and Interest "eighteen (18)
months from the date of [the Note., i,.., Jun. 20, 1993) or within
ten (10) days of the sale of Defendants' prinoipal place of
residence,
looated at 4 North Watoh Lane, Mechanicsburg,
pennsylvania (i.e., the Premises), whichever shall first oocur."
7. The payment of the Notes by the Borrower. of, intsr
alia, the Prinoipal and Intsrest due under the Notes is secured by
a mortgage, in the forM of a "Deed of Trust," on the premi.e. dated
Deoember 30, 1991 (the "Mortgage"), executed, oonveyed and
delivered by Detendant and his late wite, Kay Joann Hansen llll
Borrower., to Plaintiff Farina, as Trustee for the benetit ot the
Lender. thereunder, and to Robert R. Plante and Mary E. Plante, his
wite, as Lendere. A true and correct copy of the Mortgage is
attached hereto as Exhibit 8 and made a part hereof by this
reference,
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8, The Mortgage was duly reoorded in the Office of the
Rvoorder ot Deeds in and for Cumberland County, Pennsylvania, on
D.o.m~er 26, 1991, in Mortgage Book 1040, Page 714.
9. The failure of the Bl1rrowers, int.er alla, to pay
when due and payable the principal and Interest under the Notes
conatitutes a "default" liS defined undor the terms of the Mortgage.
10. The Borrowers have tailed or refused to pay the
Principal and Interest due and payable on the 20th day of June,
1993, oonstituting a default under the terms of the Mortgage. The
aum of these amounts is One Hundred Twslve Thousand One Hundred
Sixty-Five and 45/100 Dollars ($112,165.45).
11. The Premisos subject to the lien ot the Mortgage are
described ae follows:
I. Ulm:
PARCEL NO.1
ALL THAT CERTAIN lot or piece of ground, lying and
situate in that Township of Silver Spring, County of Cumberland,
and Commonwealth of Pennsylvania, more particularly described in
the Final Sub-Division Plan of Rich Valley Manor prepared by
Whittock-Ifartman and reoorded in the Office of the Recorder of
Deeds in and for Cumberland County, Pennsylvania in Plan Book 56,
Page 36, as rerecorded in Plan Dook 57, Page 109.
BEGINNING at a point on the Southwestern Right-of-Way
Line of Rioh Valley Road, said point being referenced as the
intersection of the Southwestern Right-of-Way I.ine of Rich Valley
Road and the Eastern Right-of-Way line of Northwatch Lanel thence
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from said point ot beginning along the Southwestern Right-at-Way
Line at Rich Valley Road by a curve curv ing to the r'ight, hav inrJ a
radius of 1,865.00 feet, an arc length of 359.92 feet to a point;
thence continuing along same south 44 degrees 49 minutes 30 seconds
East a distance of 129.08 feet to a point at the property line
between Lote No. 20 and 21 of the "Final Subdivision Plan of 28
Lots - RICH VALLEY MANOR, Silver Spring Township, Cumberland
county, Pennsylvania"; thence along uaid propsrty line of Lots No.
20 and 21 South 45 degreee 10 mlnutee 30 seconds West a distance of
307.84 feet to a point at the property line between I.ots No. 20, 21
and 26 of the aforementioned plan; thl\lnce along Late No. 26 and 27
North 43 degrees 50 minutes 32 seconds West a distance of 413.22
feet to a point on the Eastern Right-of-WRY Line of t10rthwatch
Lane; thence along the Eastern Right-of-Way Line of Northwatch Lane
by a curve curving to the right, having a radius of 350.00 feet, an
arc length of 111.19 feet to a point; thence along said North J]
degrees 21 minutes 00 seconds East a distance of 166.24 feet to a
point, the point of beginning.
ALL of that land situate ill silver Spring Township,
containing 135,737.32 square feet or 3.1161 acres and being shown
aB Lot '2.0 on the Final Plan of Lots of Rich Valley Manor prepared
by Whittock-Hartman Engineers on November 15, 1988, Drawing No.
8-87-15 and being subject to a reserved area for the extension of
Northwatch Lane to Land now or late of Max C. Hempt, along the
Southern Property Line, should it ever be required.
F.ARCEL NQ.--1
ALL 'I'HAT CERTAIN lot or piece of ground, lying and
situate in the Township of silver Spring, County of Cumberland, and
Commonwealth of Pennsylvania, more particularly described in the
Final Sub-Division Plan of Rich Valley Manor prepared by Whittock-
Hartman and recorded in the Office of the Recorder of Deeds in and
for Cumberland County, Pennsylvania in Plan Book 56, Page 36.
BEGINNING at a concrete monument located on the eastern
right-at-way line of Northwatch Lane (50' right,'of-way) said
monument located at the right-of-way intersection of Northwatch
Lane and Perms Way ROi\d (50' right-of-way), thence a long t.he r ight-
Of-way line of Northwatch Lane, North 07 degrees 46 minutes 30
seconds East, a distance of 592.21 feet to a concrete monument;
thence on a curve, curving to the right having a radius of 350.00
feet and an arc length of 45.04 feet to a point; thence along Lot
'20, South 43 degrees 50 minutes 32 seconds East, a distance of
359.13 feet to a point; thence along Lot *26, South 15 degrees 24
minutes 52 seconds West, a distance of 446.42 feet to a point
located on the right-at-way line of penns Way Road; thence along
the right-Of-way line ot Penns Way Road, on a curve curving to the
left having a radius of 375.00 feet and an arc lengt.h of 50.00 feet
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(a) Unpaid Principal $ 100,000.00
(b) Unpaid Interest ( throllCJh
Deoember J1, 1993) 18.6.11,4'7,
TOTAL $ 118,631.47
14. On or about June 26, 1993, the aforesaid Robert R.
Plante, tor CJood and valuable oonsideration, assiCJned his interest
in the Notes to Plaintiff Merrigan.
Said aesignment has been
endorsed upon each of the Notes hy Mr. Plante and notice thereof
was givsn to Defendant by Mr. Plante pursuant to a letter dated
June 26, 1993. A true and correct oopy of said letter is attaohed
hereto as Exhibit C and made a part hereof by thie reference.
15. On or about September 9, 1993, the aforesaid Robert
R. Plante and Mary E. Plante, hill wife, for good and valuable
conslderation, assigned their lntereot aD Lenders under the
Mortgage to PlalntH! Merrlgan, sald asslgnment being represented
by an ASlllignment of Deed of Trust dooument dated September 9, 1993
and recorded ln the Off ice of the Recorder of Deeds in and for
Cumberland County, Pennsylvanla, on September 15,
1993 at
Miscellaneous Book 454, Page 294. A true and correct copy of said
Asslgnment of Deed of Trust is attached hereto as Exhibit 0 and
made a part hereof by this referenoe.
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16. flaintitf ha. duly complied with the provisions of
the Emergency Mortgage Assi.tance Act at 1983 ("Aot 91") in that
the pre.oribed notice of eligibility wa. eent to the Defendant by
fh:.t alasa mail on September 1, 1993. The temporary .t.Ily of
entorcement of the Mortgage by rea.on of Act 91 has oxpired in that
the Pennsylvania Housing Finance Agenoy eith~r has failed to aot on
the Dllfendant'e applioation after more than 60 day. from its
reoeipt of same or has denied the Defendant assistance under Aot
91.
17. Written Notice ot Intention to Foreolose pursuant to
Seotion 403(a) of the Act of January 30, 1974, P.L, 13, No.6, aR
amended, 41 P.S. 1403(a), wa. not required to be sent to Defendant
by reason that the Notes specifically provide that the indebtedness
represented by the Notes was inourred "solely tor the purpose of
carrying on or acquiring a business or commeroial investment ...
(and that] the entire loan proceods will be used tor such
purposes," such that no purpose of the indebtednese wall to assist
in the puroha.e, improvement or repair of residential property.
WHEREFORE, Plaintiff demands judgment in the Bum of One
Hundred Eighteen Thousand six Hundred Thirty-One and 47/100 Dollars
($118,631,47), together with oost. and interest aocruing at the
rate under the Notes ($33.33 per day), from December 31, 1993, and
demands foreclosure and judicial sale of the interests ot the
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1)',1,' or'1CE5
SNlPER, HUCK.r.
\UC,OAL
,'qIH~1'_D
,', 1 ~('\ :u11
\M'i"I")LJ'i \lOl1.rlo1
l'lJ'I.",,;,il;'\.\
ANNAPOLIS, MAR'iLAlID
December~, 1991
FOR VALUE RECEIVED, DOUGLAS J. HANSEH and KA '{ JOAHN HANSEN,
and BOATING CENTER OF BALTIMORE, IHe., a Maryland corporation,
the undersigned ("Borrower"), promise to pay to the order of
ROBERT PLANTE the principal sum of SIX'f'i THOUSAND DOLLARS
($60,000.00), with no intel'est, for the first six (6) months.
Thereafter, beginning on June ~o. 1992, interest will accrue at
the r',lte of TweJ,ve percent (12\)-per annum. The principal sum of
Sixty Thousand Dollars ($60,000.00) together with accrued
interest thereon shall be due and payable in full, eighteen (16)
months from the date of this note or within ten (10) days of the
sale and settlement of Borrower's principal place of residence,
loca ted at 4 Not'th Watch Lane, Mechanicsbur'1, Pennsylvania,
whichever shall first occur.
e60,OOO.OO
Interest shall be calculated on the basis of a 360-day year
applied to the actual number of days the principal sum, or any
portion thereof. is outstanding.
BORROWER may prepay the principal amount outstanding in
whole or in part ~Iithout penalty, Any partial prepayment shall
be applied against the principal amount outstanding and shall not.
postpone the due date of this Note or change the amount of this
Note, unless the Note Holder shall otherwise agree in writing.
ANY uotice to Borrower provided for in this Note shall be
given by mailing such notice by Certified Mail, addressed to 4
Northwatch Lane, Mechanicsburg, PA 17055, or to such other
address as Borrower may designate by notice to the Note Holder.
Any notice to Note Holder shall be given by mailing such notice
by certified mail. rp.turn receipt requested to 2014 Sue Creek
Drive, Baltimore, Maryland 21221. or at such other address as may
have been designated by Notice to Borrower.
ON the occurrence of any of the following events, at the
option of the Note Holder, the fOllowing shall be deemed to be a
default under the terms hereof: The filing by or against either
the maKers or any partles liable hereon of a pe.tition in
banknlptcy. insolvency or reorganization in a federal or state
court as prescribed of a receiver or trustee of the business or
property of either the Borrower or any persons or other entities
liable hereon; or the making of an assignment for the benefit of
credltors by either t.he Borrower or any persons or other entities
liable hereon. and which petition shall not be withdrawn or
dismissed or whJ.ch appointment or assignment shall not bl:!
c~ncelled or terminated within sixty (60) days after the filing
\.
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L"Wr)mCF.S
.'IANlS.
SNlDfR, 8UCK"
t\llr,n.\L
CHIPT[JI[Q
PO ~11l ;11'1)
UINAP' I Ij ~In 2' u"
II I'" :I\.l "'\,~
.-"'
$40,000.00
ANNAPor.IS, /1AIWLAlIO
December ;'(' , 1991
FOR VAJ.UE RECEIVf:D, DOUGLAS J. HANSEN and KAY JOAlHl HANSEl"
and BOATING CENTER OF BAI.TIMORE, INC., a Mary land corpora t ion.
the 'Jndersigned ("Borrower"), promise to pay to the order of
ROBERT PLANTE the pdncipal sum of FORTY THOUSAND DOLLARS
($40,000.00). with no interest for the fh'st six (6) months.
Thereafter, beginning on .1une.~:';;L1 1992, intorest wi.l1 accrue at
the rate of Twelve percont (12') per annum. The principal sum of
For:ty Thousand Dollars ($40,000.00) together with accrued
interest thereon shall be due and payable in full, eighteen (18)
months" from the date of this note or within ten (10) days of the
sale and settlement of Borrower's principal place of residence.
located at 4 North Watch Lane. Mechanicsburg. Pennsylvania,
whichever shall first occur.
Interest shall be calculated on the basis of a J60-day year
applied to the actual number of days the principal sUm, or any
portion thereof, is outstanding.
BORROWER may prepay the principal amount outstanding in
whole or in part without penalty. Any partial prepayment shall
be applied against the principal amount outstanding and shall not
postpone the due date of this Note or change the amount of this
Note, unless the Note Holder shall otherwise agree in writing.
ANY Notice to Borrower provided for in this Note shall be
given by mailing such notica by Certified Mail, addressed to 4
Northwatch Lane, Mechanicsburg, PA 17055, or to such other
address as Borrower may designate by notice to the Note Holder.
Any notice to Note Holder shall be given by mailing such notice
by certified mail, return receipt requested to 2014 Sue Creek
Drive, Baltimore, Maryland 21221. or at such other address as may
have been designated by Notice to Borrower.
ON the occurrence of any of the fol.lowing events, at the
option of the Note Holder, the following shall be deemed to be a
default under the terms hereof: The filing by or against either
the makers or any parties liable hereon of a pet.ition in
bankruptcy, inso 1 veney or reorgan i zation in a federa 1 or st.at.e
court as prescribed of a receiver or trustee of the business or
property of either the Borrower or any persons or other entities
liable hereon; or the making of an assignment for the benefit of
creditors by either' the Borrower or any person!! elr other entities
liable het'eon, and which petition shall not be withdra'm or
dismissed or which appointment or assignment shall not be
cancelled Ot' terminated within sixty (60) d.1YS after' the fllinq
/
"
"
. TOGETHER WITH alllhe ,mprovemenlS now or hereaf,er ereeleu on Ih,' property. ,1I1d ,111 e;,.'emenl', appurleMnee., alld
" n,ItHU nnw or hfF~lrler a pari 1)( the property. All replacements IInd addltlOnlt .\hall illso b~ covered l>y In is Sccurll~'
lrulrlJll1Cnl. All or the forcgoll1M, i.. referred to in thl~ Securlly .nMnlmenl us the ~Proncrty."
nOR ROWER COVENANTS Ih,lI Borrower is lilwfully .wed of Ihe e.lla'e hereby wnveyed alld ha, Ihe IIghl 10 8ram and
<cnnvey Ihe Properly and th;1I Ihe Properly i. IInencllmbered, e"'epl for encllmbrallee.1 of record, Borrower warmnll and will
dl..!f(,'nd ~cncrally lhe title 10 Iht Property ilplllfUI all cl3ims and demalllh. 'IUhJ&",:IIO an)' encumbrnnces of record.
TillS SECUHITY INSTRUMENT cllmb,ne, IIniform covenants for nallOnal u.e and non.uniforrn covenanu wilh Iimlled
\';\(LIIIOm hy Jurl.~lll(ljon 10 con.'itllule a uniform ~ecurily lIlfllrumcnl "overJn~ re;}1 propert).
UNIPORM COVENANTS, nnrrower and Lemler cnvena/ll and agree a. follnws:
I, "Aymenl of Principal and Inleresl; I'repayment And Lnle Chargu. Borrower shall prompily pay when due the
1'r1n':Ipal of and ,n""" on Ihe deht evidenced hy Ihe Nore alld any prepaymem and lale charges due under Ihe Note,
2, fund, for Tuu and IlI,uronce, SlIh]ect 10 applicahle law or In I wrillen waiver hy Lender, Dorrower xhall PIlY to
I.,nder on the day "'nnlhly paymenu ore due under Ihe Nllle, uTIIlllhe No" IS puid ill full. a ,um ("Fullds") fllr: (a) yearly la..s
,mo H~('~'i\menl\ which Ill:!}' .111.1i" priority o\'cr lhi.'i SccurllY JmtnJlllCnl us U lien on lhe Property; (b) yearly ICil~chold paymcnls
or groulld relll! nn llie ProperlY. if any; (c) ye"dy ha,,,,d or propeny IIlSlIrance premlUm.l: (d) yearly nllod IIlSurance premiums,
If OilY: (e) ye;1rly morlr-i1~e in.'\urnncc premium". ir ilOY; nnt! (() ony ~um~ pay.1hlc by Borrower In Lr.ndcr, in I)crnrdance with
Ih,. I'rnv.\ill"'i or fl",.I/'r"ph A, 111 It~u or the payment or mnrt(!:lJ.!~ Inmrnnce IIrc,munI,,\. Thc.'c Ilem~ llru cnlled "r:."crow Ilrlll...."
I.elld<r may, a' any lime, collccl .lId hold Fuod.l in an .'mOUlI1 nol 10 exceed the ma.,mum amount a lender for a Icderally
,d,,'ed mOr\p~e Inall may rellulle for Borrower'. escrow ACCoum under Ihe federal R..,I Es'alc Selllemenl Procedures Act "f
1'174 a' amended frllm lime In lime, 12 U.S,(', Secllon 2601., scq, ('RESPA"). unlCls anolher law thaI applie.ll"lhe Funds
'.W " Ie".. amnllnt. II so, Lender may, II OilY lime, cnllect alld hold Funds in an amollnl nol 10 exceed Ihe lesle' amount.
I (""lei Illa)' e'"male Ihe amnllnl of FUlld.1 due nn Ihe hAm of c'ment dala and rea.onahle e.llimales of e.pendlture.l of I'ulure
r:~cr(l\\, Ilem~ or Olhcnvl,e In nccordoncc with npplicablc 1.1W.
Tile FundI ,hilll he held 111 an in"iluuon who.. dep".ill lire Insured by . fedelul agency. 'r1Slrumen'"lilY, or eOllly
(,nclud,ng Lender, If Lender" luch an Inslitul,on) or In any Fede,'al Home Loan Dank. Lender .Ihall apply Ihe Fonds 10 pay Ihe
r.'er"'" herns. Lender may nOI charge Borrower for hold,n~ and apfllyin~ Ihe Fund., IInnually anlll)'1.Ing Ih" escrow account, or
"crtly'n~ Ihe Emnw Ilcm,. unleB Lender pay. Borrower '"terell on Ihe FI'.\d. and appliCAble law permll.l Lender 10 make ~uch
,I d""pc, f1owever. Lender may require Borrower 10 pal' a one.t,me char',e for an indcpendenl real e!lale to. 'epnning .ervlce
u'ed hy Lender ,n conneCllon wllh thts loan, unle.ls applicable law r ovides olherwi.,e, Unle.l~ an agreement is made or
;'ppllCable law reqllll" 'nlereSI 10 be paid, Lender shall nol he rrqu"eu . ,J pay 1I00'rower any imere51 or earnings on Ihe Funds,
Ilorrower and Lender may agr.c ill wl'illng, however, thai inleresl .hal be pa,d on Ihe Funds, Lender shall H,ve '0 D0rrower,
WllhoUI <harge, an ,nnual accouming of the Fund.l, ,howing cred,u ','d debilS 10 ,he Fllnd! and Ihe purpOIe for which each
dchir to the Funds wa. made, The Fund. are pledged a. addillonal .ecurll.' for all .ums !Ccured hy Ih,s Securily In.'lrum,nt.
If the Fond. held hy Lender e.ceed Ihe amnunl.l perm,"ed to be heh hy app"cablc law, lenocr !hall accounllo 110rrowel
rnr Ihe oce~~ FlJlUh In :Iccordancc Wllh Ihe requirement" or arrlicilhle 1.1W. If lhe i11l10UIH or the Punds held hy Lender Rt any
time 15 nol ~u(ficicnllo PIlY (he E.~crow Ilems when due, Lender may ~o nlJtlry JJorrower In wriunn. nnd. in slIch ('Me Borrower
Ih,lll pay to Lender Ine amounl neCe!lAry 10 make up 'he defic,ency, Dllrrower shall make up Ihe deficiency in no more Ihan
Iwel"e monthly payment!, AI Lender's .ole d"erelion,
Upon paymem .n full of all sums .lCclIred by Ihi! Secullly (n"rumenl. Lend-.r shall promptly refund 10 Dorrower Jny
Fllnds held by Lender. If, under paragraph 21, Lender .hall acquIre nr .elllhe Properly, Lender. prior to the acquisition or sale
nf Ihe l'rop.rI)'. .h.llapply any Funds htld by Lender allhe lime of acqui'"lon or .ale a.l a cred'l againslthe .um! ~ecured by
'hi~ .-;~curil~' In"rtIm~nt.
J, ApplieAllnn of rAymenll, Unleu applicahle low prov,de. olherwi.e, all paymenu received by Lcnder linde,' paragraphs
I and 2 ,hall be applied: first, 10 any prepayment charges due IIndcr Ihe Note; ~econd. 10 amounts payable under paragraph 2;
IIIIrd, 10 ,n'ere" due: fnurth, 10 principal due: ond la,I, to any hie charge,l due under lhe NOIe,
4. ChBrRr,,; Lien" Dorrower shall pay all taxcs, a55eum<nll, charges, fine. and impoSlI,ons Allriblllable to the Property
which may alla,n priorily oVer this Securlly Instrume"t, and I~a.lehold paymenu or ground renu. if any, BO/Tower shall pay
Ihe.. obligallnn! ,n Ihe manncr provided in paragraph 2, or if nol p,lid in thai manner, Dorrower shall pay Ihem on lime dircctly
"'lhe I'ellon nwed pa)'ment. Borrower shall promptly fumi,h 10 Lender all nOlices of amounlS 10 bc pa,d under Ihis paragraph,
I( n",rower moke.. Ihe.e p.lymenls directly. Borrower .Iholl promplly furn"h 10 Le"der reeeiplI eVIdencing the paymenls,
Dorro\Ver shall prom"lly di~chi\rge any lien which hll! priorilY over lhi, Scr.lJrily Irmrun,cnl unleu Borrower: (0) agrees in
"'IItlOg '0 the paymenl of the ohlisation .ecured by rhc lien in a n1l'""<I acceplable 10 Lender; (h) conic'" in sood failh Ihe lien
hy, '" defend, a~a'nst enforcemelll of Ih~ hen in. legal proceed'ngs whIch In the Lender's opinion operale 10 prev~nt Ihe
enfnrcem'"1 of the lien: or (c) "cures from the holder of Ihe lien an a~reemenl .,oll.lfaclory to Lender .uhord,noling Ihe lien 10
Ihi, Seeuril)' In'"l1n,ent, If Lender dt,tcrmine. .hat any pOri of Ihe Property" .ubJecl to a lien which may allaln pllo/ily over
Ih" Securily In'lr"menl. Lender moy give DOllower a nOlice ,delll,fy.ns th.. lien. Dorrower shall sali,fy the lien or tal:e one or
mere of Ihe aclions .., fOrlh above wilhin 10 days of Ihe S'Vtng of not'ce.
'0'10 3021 9/90
,.,.10"
~. 1t.7.nrd or Proporly In.'uranca. Ilorrower .,hall keep Ihe improvel11enl~ onw e>lSlIog 0, Iwe'afle, e,ecled on Ihe
Pn1p('rty 1I1.'\urct.l .lll"in."1 Im\ hy n,C1, hlllard~ included wllhin the IC~'1l1 "e:ctClldcd l,:(wcrauc" alld IIny other hll1..1rll~. including
nt1l1d~ or f111mJln!1. (or which Lender require! in!'urunce. This 1n,'IIllrnnce ~hllll h, 1l11l1r1laillct.! in the lIml1unu uml (or Iht fJcri(ltJ~
Ih,II Lender rcqu"" The "'.IlIrance eamer provldln~ Ihe i'lIumnee ~hall he dlllsen hy Bor,ower suhJecl 10 Lender's approval
~ I"ch ,hall 001 h, 1J0r<'a,onahly wllhhold. (( Borrower (.111, 10 mall1lall1 covera," de,crih,d above, Lender may. al Leod.r'~
fll'tlflll. ohlilln (OVCr;ll.H' 10 prnlltct lcndc,'^ rit!ht!l in the Propeny In ilccord.lnce With paul&,rilph 7.
All 1l1\U""l'" pohcle' and rencwal, ,hall be accepwble 10 Lender and "hall include IJ ,landard mOrlgage clau,". Lender
,h.dlll.,ve Ihe rlghl 10 hold Ihe pollCte' IInd ren,wal,. I( Lender r'qlJir... norrower shall promplly give 10 Lend., all receip" o(
p.lld p"l11lum, "nd ,,"ew;11 nollce,. In Ihe evenl of 10s.I. Borrower ~hall gIve prompl nollee 10 Ihe Insurance carrier and Lender,
l..:,,,I,, may make proof o( hm i( nol made promplly by Borrower.
Unl'B Lender and Borrower olherwise agree in wriling, in,urallce proceed, .Ihall be applted 10 rellorallon or rep.ir o( Ihe
Prllrl'r1y d,Hnillj!tcl. If Ihe retjlOr1Ilion or rtrai, i5 economically fCI1'\ihl~ and Lcntler'5 ~ecurily is nOI le~,lliened. If the re~lorl1lion or
r"l',1I1 I.' not ccnnoll1iclllly fea"ihlc nr Ltnder'!< ~CClJflIY would be leslIcncd. Ihe II1~Uri1ncc proceeds 3hall he applied to the Wnl\
'''tI,ed hy 1111\ Sectl"'Y Instrumenl, whelh., or nol Ihen due, wllh any exe", p;lId 10 norrower. I( norrnwer IIbandnn, Ihe
Pl'f1rcrly. or dne~ onl ar1!'wer wilhin JO daY5 " notlcc from Lender 11Iill (he lmurnnce carrier has offered to ,Ilil!ule a clairn, Ihen
Lr."IHkl mil)' (Olll'l'l Ihe 100urnnce procccd!i. Ll'llucr may use Ihe proceed!1 10 repair or rc~Ullrc lhe Prnrcrty or 10 rlJY ,'\lIm,'\
~r.cllr('d n)' Ihl\ Srl.:lJrlly Irl'itnJm~nt. wllcthcr or nOI then due. The JO.day period will hegin when the notice i5 ,pivcn.
tJnle"is Lender and Dorrower olherwi!ic agree in Writing. any IIppiicallon or proceeds tc\ principal 5111111 not C,IIlend or
rnQpol1t' the dlle dilte of the monthly poyment\ referred 10 111 pilragr,'rh5 I and 2 or change the amQunt or lhe paymt!Ol.\. If
ul\der pilr"~raph ~J Ihe Property u acquired l1y Lender, Borrower':; ri~hl 10 any imurance policlI:~ lInd proceed5 re~IJHiJ'1G (rom
d;lllli1~C WIlle Prnpcny prior 10 the ar;:qulsllion shall pas5 10 Lender to the exltnt o( the 5um~ 5ccured b)' this Security In5tmmenl
Iml1ll.'l.li;Jtcl~' prior WIlle ;Il:qlll~ilion
(,. Onupallc.', Prl.'~C:f\'lllinn, l\lllilllcllancc und l'roll'c,:(iull ur (he Proper'.,'; nOl'rOWCr'5 Lon" ^flpllcl1t1tHli LeMchnlds.
Ollrrtl\l.'cr \hall occupy. c"tnbllsh. and u.'ie the Properly a~ Borrower's principal rC!ildencc within SIXIY clays a(ter the e:uclIIlon of
thl\ SCCUI'IIY In\tnltnent and ~,h,lll (Onllnllt: In occupy the Properly as norrower's principill rC5idencc for ilt leaS( one ye,,, after
II" dale o( occupancy. unles, Lender olherwise ayrees In wrillng, whICh consenl ,hall nol be unreasonably wilhheld, or unles,
e."lcflualln!; clrcurmtance!i exisl whIch art beyond Borrower's cOlllml. Borrower shall nol dC:'Ilroy, dnmJge or impair the
I'r00e,,)'. allow Il1e Property 10 delcrlOrale. or commll waSle on Ihe Properl)'. Borrower .,hall he In de("ull i( aoy (o,(eilure
IlCl'on or proceeding. whelher civil or criminal. 1\ heguo Ihnl III Lender', good (ailh Judgmenl could resuli in (nr(ellure o( Ihe
P'''P'rl)' or olberwise malerjally'impair Ihe lien crealed by Ihi, Securtly lnwumenl or Lender's ,ecurily inlefe,l. Borrowe, may
cure such :I der~mlt and rein'il.,le. ;1$ provided In para,graph 18. hy cnusing 'he aClion or proccedin~ to be c1i~rl,i5~cd with a rulinp,
Ih.1I. In Lender's good fllllh determlnallon, precllldes (orfeilure of Ihe BorrolVer', inlere" in Ihe Property or olher malerial
1I11p"""'enl or Ihe Iren creMed hy Ihi, SecurilY III",umem or Lender', .,ecUllIY 1I11ereSl. Borrower ,hall also he in default I(
Onrrowcr, tJunnllthc 10iln lIrphcnlion pr(lCCS'i. g;lve n1i1lcrially false or lIluccur.1IC inrorm,JliOIl or ~latemCnl$ to Lender (Clr failed
tf1 proVide Lender with any malcrial in (ormation) in conneClIon wl,h Ihe loan evidenc.:ed by lhe Note, lncludirl~. but not limited
10. rcprr,enl;llionli concerning norrower's occupancy of lhe Property n il prinr:ipal rC!ildcnce. If thi!i Sc~urilY In~trument i'i on "
IC:l';ehold. norrower shO'1I comply wllh all the provi,ion~ of Ihe IC.1SC. Ir norrowcr l1cquirc~ ree tille 10 the ProperlY. the
le."ehold and Ihe ree lille shall "01 merge unles, Lender IIgree' 10 Ihe merger in IVrilln,.
7, Protection or Le"dcr'~ RIRhl! In th. Property. I( Borrower (ails 10 perrorm Ihe crvenan" and agree menu cOlllained io
11m SecurilY InSln1menl, or Ihere " a legal proceeding Ihal nlAY Slgnificanlly arrecl Lender's righ" in Ihe Properly (,tlch a, a
proceeding in bAnkrupley. probale. (0' condemnalion or (or(ellllre or 10 enforce law, or reglllalion,), Ihen Lender may do and
o;IY (or whalever is nect"'''y 10 prolcel Ihe VAllie or the P"'oert)' and Lender', ugh" in Ih, Property. Lender's aClions may
ind\1d~ p,yillg any ,nm~ secured by a lien which ha, priority ol'er 11111 SeC\1rlly Instrumenl, appeoring in eOUrl" pAYing
H';I~Orlahlc :'lI10rnC)'~' fees nnd enlering on the Property to m:l~,e rcp.:ur\, Although Lender may take BClion under Ihis pal'llgr3ph
7, Lender doe, nol have 10 do so.
An)' 'IllOllnt, d"bursed by Lender under IhlS paragraph 7 $hall become addllioll.lJ dehl o( Borrower secured by IhlS
Securrly 11"lmn1tnl. Uole" norrow", and Lender agree to olher lerms o( paymenl. Ihese .mounlS shall be.r interest (rom lhe
d.lI., or di,bursemenl al Ihe Note rate and shall be payable. wilh 'nlerest, upon nOlice (rom Lender 10 Borrower requeSling
p;1yml:'nt.
R, ~lor'Aa~e 11I,urAnce. Ir Leoder required morlgag. Inlurnnet. "' a eondllion o( makln~ Ihe loan secured by Ihi, SecurilY
In"lnHl1Cnt. Borrower \h.11I pay the pr~m"Jm~ required 10 m;,inlilin Ihe mort~asc in~lJrilnce in efrect. 1(, I'or any rc:uon. the
mnrl,!lilge in~\JrllncC'. covernRl! rl!quirtd by Lender lapse, or ccalle.. 10 be in efrect, norrowcr ~hnll pOly Ihe ,1rcnliums reqUired 10
011l;1In cover:t~e ,ub,'lilntially eqUivalent 10 lhe n1orlgn~e in\unlnce previoll.'\ly In erreCI, ot a emt ~ub"13nlially t.quivdlcnt to the
c.:(I~1 10 Dorrowtr fir the mortl!:t~e in,urance I'1rr.vlolI.,ly in erfect, (rom UIl alternate mOrlgal:!e Inmrcr approved by Lender. If
\\lr\larHlally equlvalenl mort~;1ge imurant:c covcr:\gc IS nOI aVililahle, Llormwcr ~h;)11 pay 10 Lender each month i' sum equal 10
oll~.lw(!lflh or Ihe y~."ly mOr1ga.ge in~\UrBnce premium being p3id by Borrower when Ihe in~\Jf3nce coverage lap,ed or c~3'ed 10
I., In effect. Lerldtr will accept, u,e and relain lliese p;ymen" a, . 10" reserv,"n lieu o( mortgage In.,urance. Lo" reserve
Fo.m 3021 9190
'10110'11
,ll.'lIh nlllV no longel be lI:quircd. 0, .Ie optlun ur I.ender, Ir lllorlt;agc IJI.IIUranl.'c l:I. la~c (mtlle ,U)llllJIH iln~ Illr 4h:: perltJd
"II LI~"dcr ~C'lUI(l,~~) pro\"I'JctJ hy un In,\ur~r .Ippruved hy I.cl1lJer U[;,1I11 becollles ,1\'iJllablc iJnd I~ OIHi!il1ctJ, lJorlllwt.:r Rhall pay
IllI' pn':l11l1J1nl, reljulred In lllall1l,lIn nh1rl~i1~c II1Wrilll(C in cf(ccl, nr 10 provide a Im~ re~cr\'c, UIlIlI IlIe rCCjuin:l1u:U1 (or 1I1orl~ilGe
in'\llrnllcr. end'\ in accordan.;!: wllh any wriucn ,ll1n:cmenl herwccn Bon'ower lInd L.ender or IIprlicahl~ law,
f). I"'peellon. I.ender 111 III .1genl may make r.."onallle elllroe~ IIpon IInd ""peclion, of Ihe Property. lender shnll give
fl.,rrowcr notice alllle lllne o( or prIOr 10 nn II1.'\pcctinn spCClrYlI1,g reiuonablc cau.'\l! ror Ihe Impec:llon,
10. Clllldemnnlion. The proceeds of ony award nr claim for damages. direct or clln"qllenlial. in conn<<lIon wllh any
,,,,,flemn.lllon nr olher lakinG of any pari of Ihe Property. or for conveyance in heu of condemnallon, are hereby aSSIgned nnd
,11.111 he paid 10 Lender.
In Ihe evenlnf a 'olallaking of Ihe Properly. Ihe procoeds sh,1I1 be applied II) Ihe sllm~ ,"curell hy IIlIs Securlly 'nllrunleOl.
1I'11,,,I"'r or nol Iben dlle. wllh any exeell paid 10 !lorrower. In Ihe even' of a parllal I".mg of Ihe ProperlY ill which Ibe fa"
nw,e, v.lh" I)f Ih', I'ro"Clty IIl1medl."ely before Ihe la.ing i, equ,,1 to or gre"ler Ih;", Ihe "mOllol of Ihe sums ,ccorcd by Ihll
S~'(t1rIlY 1n\lr\Jlnefll Inll1\c(lI.11c1y hcfnre the lakln~. U1llcs~ Borrower and Lender olhcrv.J'~c il,l!ree in Wrifltl~, the ~lJm1 ~ecurcd by
1111\ SeclIIily In,"ul11el1l ,h,,1I he redllced hy 'he a",ounl of Ihe proceeds 11\lIll1plle.J hy Ihe following fr"c1ion: (al Ihe Inial
;11111111111 of Ihe '"lnS 'eclHed IIl1medialely hefore 'he la.lng. dlvlll<d hy (b) Ihe f"" markCl value "f Ihe Properly imm"llalely
f,..rorc ,he la'lIlg Anl' halnn" ,hall be pall' In Ilorrower. In Ihe event of a parllal takios of Ibe Prnperl)' Oil Vihich Ihe fair
flI.lr~CI value (I( Ihe Property Imnmdl;llcly heror/'! the la~lIlg I~ It:l.\ thllll Ihlt 11111\111111 or the sul1ls sCl.:lIrcd IIntncth,ucly hdore tlie
laklllF. unle" !lorro\Vel and Lcnder olherw"e ar.ree In wrlllng cr IlIllel.\ appllc;lbic law o,herwile provides, the procecd, shall
he applied 10 Ihe '"1111 ''''lIcd hl' IIlIS SeclJrlly In.llrumcnl whelher nr nnllhe ,um~ are then due,
If the Prnpcr1)' I~ uh.1lltlnncd by Borrower. or if, a(ter notice by Lender 10 Oonower that {he condemnor of(~n In n~Jkc an
i1\1'Md or ~cllle a d;mn (or d;lIn.l~clll. normwcr rail~ In respond to l...tnller within 30 (J.1y~ after the diue the nOlIl,'e i~ given.
Lender 1'\ JlllhurilCd 10 collecl t1I1J'l1pply the J1rocccd~. ,II it~ upliOll. eithcr to restorn'.ion or repair of the l'rnp::rty or 10 the sum~
M!(lHCd t-y Ihl\ Security Imll'umcllt. whcther or "(lllhen du~.
Unle,s Lender ond norrowcr othc"wl~e Il~rec In Wrtllng, nny upplit;ntlnn of proceed.1ii 10 prtllr.lpill ~hall not cll.lr.nd or
p(\qronc lhe due rj.lle of the monthly l1aymcnt~ referred 10 in pilragrorhs I am) 2 or chang~ ttlc nnlOlJnt of ~,uch Ilaymcnt~,
11. 1I0rnoll'er Nol Ilcleaml; "nrhellrance II). Lender Nnl a Wlliver. EXlen"on of Ihe lime for paymenl N ",ndifkllinn
or .111l0rlll;llion of the SlJllI~ ~ccurl.;d hy thi!l Security ImtrumCI11 grantl.'lI by L.cnder to any \Ul,;ce~sor III lnlCrc~t or D(J(rower .'\11011
nnt orcrme In reki1~,c the IlIlhillly of the nrl!;inal narrower l")r norrow~r'1.' :'iUcce\~or.~ In Interest. Lemler sholl not be required 10
((1I11111<:nl,:C rroceedll1~... Jf!:lIn!i1 an)' ~uccc~.mr in IlIterC.llt or rerll'\e 10 extend lime ror pnymellt or otherwi:'iC! modify amortll..1lion
of lht' ~,1I111~ secured hy thi~ Security In~trumenl by rca'\on or any demand macle by thr. ongln.ll Oorrowcr or Borrower's
~11l..l"CS';On in in1erC!sr. Any forbearance by Lender in exercising any right or remedy ~hall not be a waiver or or precludc tht
cxcrci"i(: o( an>' right or remedy.
12. Suece'50rs and A"I~ns Ilound; .Jninl "lid Severnl L1nhilll)'; Co.,i~lIers. The covellant, and "greemenls ,,( IhlS
SCnJrllY Ill.'InllnCIH !lh;\lI bind ilnd be,,~rll Ihe ~ucccs~or~ llnd .l."i'iigm nf l.ender olld llnrrowcr, ~uhlcct 10 the provi.~ion~ nf
p:l"agrilph 17. Dnl'rower"s COV~lIalll\ amI IIgrccl1lcnt~ :'illilll be JOInt illld ~cvcrill. AllY Borrower who CIH~ig1\~ Ihl$ S~(urity
In'.trument hUI docs not execute the Notc: (a) i~ cO.!lltlnlng thl!. SccurllY In1tnJlTlenl emly 10 mnrtgoge, grant and convey th.'l
norrov.'er'~ interest in the PrOpp.rl)' under Ihe terr1l~ o( this Secllrlty ~n\lrUll1enl; (b) h ntH personally obh~;HCd to puy th.: ~UOl~
~cctjrr:d hy thi'\ SCellrll}/ lIutnllnel1l. and (e) aprecs lhill L~l1dcr nnd ;111)' ollwr norrow..', may il!;ree 10 eXlcnd, modify, (nr'..:tcnr or
Ol;l~e iln)' ,1CCnnlll1oc}alion!\ with rC,:!ilrd to the lerl1l.11 or 111l~ ScCurll)' 11l'ilrUnlCllt ur the N'JIC without thnl Borrowr.r'J Clln~r:llt.
IJ, Lnnn Chl1r~r.lI. Ir the JOiln ~ecllr('d by thu S(!curily ImrnJmCnl i~ ~lJhlectlo a law which ~el~ nHIlUm'Jln Inun t:hargt",II,
on,; that law!., nnally Interpre'cd '0 thol Ihe inleresl or olher 103n chnrges collcered or 10 be eolleeled in conneclion wHh Ihe
10.111 e.,ceed the permilled limlls, Ihen: (a) any ,ur.h loan charge ,h311 be rcdlJcod hy Il1e amolJnl neees5a.y 10 reduce 'he c1nrge
to Il1e permllled lil11il: ami (b) any slims already colleCled from Dorrower whICh exceedcd permilled lil1\1I1 will be ,e(ullde.J III
Ill'rrower. Lende, 11I0Y cl1o",e 10 m,ke thi, refund hy reducmg Ihe pnnclp.1 oIVed IInder Ihe Nore or by makll1g a direct
p3\'menl '0 Borro\Vr,r. If 3 refund reduce5 prinelpol, Ihe redlJCIIOn will bo I,.."cd a, a parll.1 prepayment wilhou\ Any
pr"p'Yfne", charge u"der Ihe NOIe.
14. Nolice~. Any ""tice 'n (lorrower provided for in Ihi, SWlrltl' IIl!\rumenl Ihnll be given by delivering il or by In,ding
il by fir.\! clall m.il unlell applicable Inw reqllires use of nnolher melhod. The nollee ,h,1I he directed 10 the Properly ,"'ddre"
or any olher oddLe" lIorrower de.ligoMles by nOllce 10 Lender. Any nOlice 10 L.eoder ,hall he given by fir\! clo.lS mail 10
under's ;Hldre~' ~1.lle_d herein or any olher addre" Lender dC~IJ;Ol1lt~5 by nolice 10 f1orrower. Any notice provided (l'l" In thi5
Security In"'"menllh,,1I he lkemed to have been given 10 norrower or lender whon given a, prOVided in Ihil paragraph.
I'. Go"ernin~ Law; Severnhillly. Thi' Seeu,"y In!lrumcnl ,h.,11 he governed by frdcral law alld Ihe law of Ihe
JUrt',diction in which the Property i5 !oc:1ted, In Ihe event th:lI Dny provmon or dilUliC or lhls Security Innrun1~", or the Note
e""mcII wllh applicable lalV. luch conniCl shall nOI arrCCl olher prnv!."ons of IllIS Sceurily Inlll1lmenl or lhc NOle whICh can he
J;:i\,..'n effcct \A'lIhoUl the connicting provision, To this rond the provi.liion, or thl~ Sccurlly II1~lrumcnt nnd lhe Note are d~c1ilrcd
10 he ,c-vcrabll""
1(,. n"rro\Vec'5 Copy. Borrower ,hall he given one conformed copy of Ihe NOIe 3nd of Ihi, Securily In~llumenl.
'0'''' 3021 9/90
"9'''ur.
11. TrUllli(cr II( the Pl'lIl1Crl)' fir 0 HCllrridyllllll'rl'\1 In Uurru\\cr. If ;111 or ilny flolrlll( lilt: rrOptrly or iHl)' InI('rc,\1111 II
, ',dd {lr Ir;IIl',(crred (or Ir ,I hcrlcfll'I,lllnlerr.~t 11\ Hnrhl\\lcr ,., ~old IIr 1r,llJ'\rnrCtJ ,md Borr(lwcr ,\ J101 ,I llilllJrill r~r!lnn) wllhoUI
I.l'llIle,., prior Wllllnl (1111~elll, l.ender may, lit II... tlplltlll, n~q\JII'c 1IIIlIlCd,I,IIC P,IYI1lCI1~ III (1111 or all ~llIm ,.c('urcd h)' Ihl!\
St:tl.rl!\ 111~lrulll<.'nl. tlowcvcr, Ihls option ~hall nut he e~crcl.sccJ h)' Lendc'" II Cll.erc/5C I~ P((}hllIlICIJ hy fcdcrall.lw J~ orlhe dJtc
of rill'" '~,e(IHIlY IfI'ilrlll1tent. . .
If l.ender ('''~ercl'''e~ lhls optIon, Lf,nder lihillllJlvc: Pmrnwt':r 1l011l:e of ac(('IL'rnll(ln, rhe nolu:e d1i11l provlde i1 perlHO IIr nol
It,~,. Ih,Jfl \0 d,1Y\ (rom Ihe tl,lIe Ihe noltce i\ lIellverc:d or 1l1:III('d Wllhlll whICh llorrowl'r rnll~1 PilY ;111 MJm'\ sccIJl'etJ hy 1111.\
S(', 1,,,1\ 111\lnJllll:nl. If nnrroWl!r fails In pay Ih,\e .\UOl'\ pnor 10 lhe ell.rurnlltJn nf thiS pt.rlOd, Lender "MY Invoke any re01edll~~s
rCrllllll"'d bv thl.lIi ~1'r:\Jrllv ImtrUr11l'nl wllhmll fllr1her l10llCe or demand nn Bnrrnw('I',
I H, IInl'rowrr', 1(I~hl In I\rlll,tllle, If Borrower me." cerlilln cOlldlllon', Borrowe, ,hilll have Ihe rI~hl 10 Il1ye
enl If'l.:('.lH!11I of 1111\ ~(,Cl/rlly In'\lnJ01(~nI dl.\cnntlnllcd at ,my 11ll1C,~ prior 10 the eMller or: (:I) ~ d,IYS (or ~uch Illh(!r "c~lod it'i
ilPldlrllhl~ law may 'peClfy for rt':in~t111Cmcnt) 11l:fort ~,llc or Ihe PropCr1y pu"uunl 1\1 any power or ~.lle COnlillnel.J In Ih"
~C"I"lly ImlrUn1enl, IIr ell) cmry or a jud,l!mcnt tnforclJ1g ItW. S(':('urily ImlrUlllcml, TtlO...e COndlllf)n~ arc lhal Dnnower: (n) polyS
l.l!lIder ,ill ~U/TU wllld, then would he due und~r Ihili SecllrllY In\tnlll1ellt and the NOIe a~ ir ('10 accelerl\tlon had occurrrd; (h)
('Ill ''', dflY de(;J1I11 or allY olher covcnnnU ur ilJ.:rcc:m~nl\; ee) Jl"Y~ all upcn5C~ IIIcurr('d In en(Ol'cln~ Ihu SecuFlly In!ln.llnenl.
II1(llldlll~, hut nol 1111\11('.1 10, rea~(ln,lhle allorneys' (CC,"l; alld (d) 11I~C~ su('h ani()l~ "., Lendl':r may renmnuhly require 10 ,H~un~
Ih,,' <he lIOn of Ih" Seeu,"y Inmllment, l-"nder', r<~11I' \0 Ihe Prorerly and Ilorr<)we" ohlipal,on to flay Ihe 'ums secured h)'
th,~ 'srClIrlly In_\lrUmcnl shall continue unch;mpc:d. Upnn rt"JnMalemenl hy Borrower, Ihl5 Secunly Jn~trumenl flnu the
nbll"allqn~ \~clJr('d I1r;>rehy \11;\11 remain fully errecllve il~ Ir no accelerallon had ol.'clIrred, Ilnwcver. tht!l ri~hllo rCIIlMI\It: :'thall
no' ,1rl"Y III Ihe c;\~e of i)(<:l'IrrilllOn u"der P,1rillHilfll1 17,
I'}. ~nl(' of Nnll!; Chnnll(! 01' I.nllll Scrvh:cr. The Note or a pllrtlal ,nlerc.';l 111 Ihe NOlc (Iopcthel' with lhi.~ Srcurlly
In\\I'1I111clll) O1ay hc ...old nnc (If more: lIme,~ wilhout pnor nollC~ to Horrower, ^ ,'\ale 01;)~ rc~ult In il chiln~c In the enllly (!t:nown
a... lhp. "l.ll;]n Servll:cr") lllal collecu Inonlhly pa)'lnCnl~ oue under the NOle and Ihl,~ Se,uflty In~tnunent. There al~o n1ay be one
or ",ore change, of Ih, Loan Servlcer unrrlalrd 10 a ,al. nf the NOIe. If Ihere IS a ch:ln~e of Ihe Loan Serviecr, Borrower ,.,ill bc
~I\('n W(lllcn rH1tll':e or Ihe r,'hanFc 1/1 accordanl.:!: with paragraph 14 ahove nnd oppllcahle LI\V, The notice will Mate (he name and
ad,ln:~~ or Ihe nc" Lo,1I1 ServlCl'r and the 3dJrc'i~ 10 which payments should be mJde, The nOllce will also contain all)' other
,n"lrnl,lll(lfl rcquln:d Iw ,ll'plll'ahh: 1.1\\'.
20. UlllardulJ' ~lIh'ilance.'i, Borrower .,11,,11 1101 t:au,e or Jwrmlt the presence. tue, dl'JlU,ul, 'loril~e. or rclcJ'c of ony
JLl/.lrdnlJl SlIh\l.lllCC" Oil or In Ihe Prtlpl!rty, Borrower ~h.l11 not do. nor ullow anyone ehe 10 do, anylhlnG afrecting the
Pr'l!ll'rr)' Ihill ,:' III violatIon f}f ,Uly EllvlronmcllIal La""', The Jlrecl'dln~ (wo ~enlel1l.:C~ ~hllll notllpply 10 Ihe prc$cncc, lj,'e, or
""r.lgr on Ihr Prorerl\, of small qU:lOIII", of ltil7.;lrdous Sub"anc" Ihal arc generally recognlled 10 he appropriate to normal
rc',ld('tltlJlu\c.. ilnd h\ nlatlllCnanf.'C or the Properly,
(\nrltlWCr ,hi\1I promptly I;IVC Lender wrlllcn nOlice or ilny Illve'\llJ!allon. c1all" , d.::mand, law~uil {If other action by 'Jny
~(l\'(:mmclllill or rcpul.lll1ry agenC)' or pnv,lle pan)' ,"vo/vln;.! th~ Proper1y Jnd any Ha.znrdolJ!i Sub~tance or Envirnnmenlal Law
of ",h,ch norrowr.r ha, ilclllal knowledge. If Bol'lOwcr Irilr"', or " nOllned hy any goyemmelllal or rcgullllnry aUlhorlly, Ih"l
any rClll(l\".\1 or nther remedi:ltlon of any lIi11ardoll'\ Suhllilncc arrtcling the ProperlY IS necessary, Borrower !lhall promptly lake
all I1CC~'~,lry rerncdlill i1ction\ In accord;,wcc wllh EnVironmental L.1W.
A' lI\Cd in Ihi, raragraph 20, "1Ii11ardou, Subslane"" are Ih",. ,uh,lane" dcnned as loxie or halllrdou, sllbSlilne", by
EI\\'Irl'IH11(,nlal L;lW ,1nd the following \lIb~lanCC'l ~.J\ollne, )c:ermene, other flammable or 10XlC pelrolellm producu. IO'IC
r("o!IClllc~ ;,nd hcrhlcldc\, \/Oli111lc ,olvcnu, matc(lill\ Cl1f\l.lIrlll1g ;1~h('~ln_~ or formaldchYlle, and radloaclive m,lICrlil"', As u\cd in
Ih,', r,acar',lrh 20, "El1y"onmel1li11 L..lI"" l1"an' feder..1 law" a"d laws o( Ihe Jumd,cllon where Ihe ProperlY IS located Ihal
relate 10 h~alth, \nr~(y or environmental prolectlOn
NOr-/.UNII;ORM COVENANT~. lIorr0w", ..nd I.roller fOrlher ((\YCni"" ,'1Il1 il~ree ii' follow;:
21. Acc,:clcfntinl1; nC'IT1(,IIlC'~, Lender ,,1.:.11 give ""tin.' 10 I\nrro\\"cr priflr lu ncrclrrnlion rullrlwlnJ,t norrnwc.'r',1i breach
or 1I"~' conn"n' or :lj.!rccl11('nl in Ihh Sccurit)' In,trum'!nl (hili nnl prior 10 ll('cclcrlHlon under pilroJ,.:rnph 17 ul1k~'i
arrllc"hle lal\' rrOlI,I.. olherwlsc), The IIolice ,h"lIsrrdfy: (II) the Ilef,,"II: (b) Ihe Ilcllon rl'llllired 10 cure the <lcfooll:
(l') a d;\lc. not IC,lIi' than JO day!' from the (hUe the notice i~ ~,v('n to I\orrowl!'r, h)' which the dduult mU!'it h..: cUl'ed; Rnd
(dl Ihnt [lIl1l1re to cure the drflllllt on or hefore Ihe dllte ,,,e<inr.11 In the nollee nlll)' rr.,"lt In aeerlerntloo of Ihe ,um'
"l"cllrrd hy thl~ Stcllrily Inlilrtlmenl nnd ~llr or the' Property. Tht nutice Iih:lll furthl'r inrorm norrnwer or the ri~ht to
rl'lrl'~tnlc nflrr llCl'rlernlion nnr1 the rl~hl to nCi~crt in lh(' ror('do~urr prot'l'('din~ Iht non4~~i\lcn('(' nr n cl('rl\\l1I or nnj' other
tl('r'.'n~f' or nnrrnwrr 10 ncceierAtlolI nnd !lAIc. Ir Ihe rle(null I, nm rUfrd on or hcfr)rc the lInh' 'I)ednl'ct in the nutlce.
1. I..'n rlrr , :ll it~ option, may rl'(I\Jlrc I",media.e P:'~'"H!lIt In rull or nil r;unn lirellrl'd hy thi~ Security In.ll1J1nrnt wilhout
rllrthcr Ilrmnlld and mny Invoke Ihe fI<lwer or ".Ie nnd aoy olher remedie, rcrmllled hy npr1ie"hle law, Lender ,hall hr
entilil'II 10 e"lIe,t nil "ren"., Incurred 11I11lI,,"ill~ Ihe ..emedi.. provided In Ihl., pnragl'lIph 21, including, hul not Iimiled
10, re:l,nnnhle allotorl'" fre., nnd cn,h of tille eYidrllce,
tr Lt'ndcr In\tokr~ Ihf powcr or salc, Ltnder ,hall m..ul nr C,l1J~C Tru"tl'c 10 mnil :1 notier nr !lille 10 norrower in the
m;1IH1('r prf'_licrihf'd hy npplic:lhlt law, Trtl~'rc ,hall Jtivr noliC\~ nr ,~.l'(, h)' Jmblic nclvl.'rti,c",cnt ror .he time oml in the
111;IIIncr rre"rihed h)' "rplicahle la"', Tn"lee. ",lthl1ullIel11alld on Ill)rrow", ,hall sell Ihe I'rorerty .t public aucllol1 In
Ih(' hit.:llc~1 hidder nllh(' 1In1(! And plnct'! Rnd IIn,lcr Ihe trrm, dc.'til,:nilled in the notice or ~1,le in nne or more piltcch ilnd in
nll~' ~rdcr TrllCilrc d~lermlne,', Trustee ml1Y I'o:\tl'on(' ,linlc or nil or ;tn,\' p;trCtI or the Propert)' hy puhlic Announcement I\t
the lunc :lOci plnce or nor previou.ly ~chedlllefl ~;,Ic. Leocler or it" dt'~i~l\('e molY purchn!\e the Properly nlnn)' ~Qle,
Trmlec ,hnll dl:lh'cr Co Ihe purchA~er Tnntec'.'\ dced con\tcyinA the Property without Ilny coyenonl or wlIrrnnl.\',
e\!lrc.l;,'ccI or i,"plied. The rC'Cltol, In the TnJli'fC'~ deed !\hitll he primA fncle evidence.' nr lhe truth or the ,"latemerH'i ",illl('
Iherr.ln, Trll'lrr ,hall arPly the proceed, of the ,,'Ie 111 the flllll1..lo~ onl,'r: (a) 10 1111 up""" of Ihe "lie, Inch"lio~. bill
not limitcd 10, Tru,tee',,\ ree:1 or 5 % or tht ~ro" sule price And rea"onable allorneys' rccs; (h) tn :'Ill
'arm J021 !JI')O
~'V. ~ of II
.11", .erured hy Ihl, Scrllrlly In.,lrllmun'; and (() AllY nce~~ Illlhe /,erSOllllr /,cr<om le~all.\' unlilled 10 II.
/lnrrll",cr: Inllccnrdnnce with Suhlllle W ot Ihe Mar.vllll1d lIuh" IIr I'rnrcdure. do~. herehy d...lnr" ,",,1 "S'''"llo Ihe
1':I'illllJ!C of 0 .ICL'rei! 10 .'u:1I 'h~ rrUIl\'I'I\' ~n (jne or ruOl't.' ,mrcl'l~ I", file "(lulty ('uurt IHI\'llIlt Jurl.'HIl('lioo '1Ir tlw sulc of 1111'
'I'lll'"rl). "lid ""'''''111" 10 Ihe ~rlllllhi~ 10 AO.I' Iru,'., "l'polnlUa h)' Iho I\..unl 10 deer"e or nil Ih. rl~hU. flOW"" nnd
'1:II,,,lIe. ~r""I.1I '" Ih. Tru'lee 111 Ihl. Sururllr 111'Ir<unenl lo~c(h"r wllh "ny "lid all rl~hh. I"'''''''' o'hl 1"'l11e<lI"
~r""lcd hI' Ih" lI.n,'e. Nellhor Ih. ""CI1"1l d.rrcc I1nr lhc \1<11"'1' nr .nle ~r.nlod In Ih.. pAra~r"'lh 21 ,.hnll hI' ",hall~led
'" Ihe ""rill Ih" nrllc.cd,"~ I. dl.'l1lhml herl1r. Ih.J'nvm.1I1 11 rullor nil '"11I,' ....III'.d hy Ihl" S.ellI'III' In,ll'umo"l.
n. 11.1.,,,,,. UPUI1 n"ym.nl or all .um, .'WlI'C hy 11111 S.curny 11I.II,u01enl. l.endel' or Tn"le.. Ih"ll ,olease Ih" S.curl'l'
I"","",cn' wllhoUI dla,@. 10 lIonower and rna'~ Ihe NolO 'pald" and rC.lul'l1 Ihe NUle 10 lIorrower. Borrow. I' ,hall pay any
n'l'OrdllllOI1 C'ml~.
!J. Suh"lIl1h' Trll,llilrc. l.ender. af i" optionf rnuj' rrom lime 10 lime remove TruMtl! nnd appoinl tl !lUCCCS~OI' Iru.\lc!e 10
,PI\, Tnl.~lr(! ,'PPOIllICd hereunder by an InSlrulllenl recorded 111 the city or C,","ly in which lhili Se{;UrHy Instrument IS rCl.:OI'ded,
Wilhoul cnnv.\'an<< or Ih. Propeny. Ihe succe"or Iru"e. shull succced 10 alllhe litle, power and dUlIe. conferred upon Trusle.
herelll and by nppilcilhlr law
~... 1'".....'lon or the l'roror,)..llorrower .hall hllve nosse"ion or Ihe Properly unlil Lender ha, @Iven Borrower nOlleeor
d,.r.11111 pI",unOI 10 nal'i1~raph 2 of Ih.. Sccllruy Inwu",en!.
25. 'tldel'"lo thh Sccuf'lIy I"~trumunl. It one or more ridcl~ are execlIted hy Borrower 01111 i'ccon.let1 lop.elhcl' with thl~
Sccur"y In.\lrUl11el1l. Ihe covenunr" nnd uSl'eemenu of clIch IIIch rider \hall be IIIClll'pOl'illed Intn lInd ,hall amend and supplem.,,1
Ille eovellilnl' nllll "~recrn'nlS of Ihi. Sceunly Inmumenl QI ir Ihe I'Ider(,) were a part or Ih.. SeeurllY Inmumenl.
rCI1".k IInphcable b'''(,'lI. _
~AdJllmahle ~lIle Illdcr ~ COlldonllllill," RideI' 81.4 ramily Rider
Grlldllnlcd Payment Rider I'la/lIlCd Vnli Devc!"pmenl Rldel' Biweekly paymen' Ride,
C. Ilalloon "i,l~r Rale Irl1provenle", Rider ._ Second Horne Rider
L V.A. Rider Olher(.) [sneciry)
(JV SIGNING OF.LOW, (J"rrower accenl' alld aglees IIllhe ieI'm. and
ill "I'~' ridcrU,) CkCCUlCd hy Anrmwer nnd rccorcl<.:d wilh it.
\\'ll"CHC~.
vcnont~ contained il1lhi~ Securily InJlrulTt'nl nnd
4
.._/Senll
.8o"n~er
(Seal)
.Uorro.....er
..iSeal)
.8I)rrow~,
STATE or MARYLAND, ,;:1,."". / ...../.../ . C"UIllVSS:
I Hereby eerlir)'. Thai on Ihis 7.-"'~ day 01 ~'''._'.'''''-\:.~. .,.j 'i I . hcfove 1)1,'. Ihe suh,"ri~.r.
a Nowy Public or Ihe Stale or Maryland. in and rol' Ihe c...~" cj 7 e -,-. #~,...... ~.........,/e.1 . personally nppeared
\2). ~\"--$ ~. \\-'~"".c........ c:;- /("-1 J <.1"-,,,-""- \-\."".....~e.....
kn.,"'n 10 me or 'alisfaclorily prove" In lie Ihe pe"on(s) who.e O3me(l\ .ub.erlbed 10 the within in"",menlaod
ncknowlcd~e that -f-h. ';? "'u.. sam. ror the purpose,' Ihere,n eonlllJP"~....l ....,..-'J
AS WITNESS: my h{n, . ~~ola "J9lfj / /_~ . @-:~' /,/
My Cornm'3,.ion EXn"..:::l '+ < i.-' ....;fc..!_...__.~ A....._~.=---
0/' i>: tl')T:W.~ . No",y Pub",
STATEOr //,..._J, . F\J'at\C :T! ....,.!-~".,/c./. C"unly":
I Hereby Cer1;(y, Thill ~" /~ day or b ,_ ,.,__. \., ". v' . I 'I 'i' J . herore me. the ,ubJcrib.r.
a NOlllr~u~~i:n~,: s~al~.:. .~ll~~.....<... and for Ihe G.......,:.\-1 a\. A........... ..1...........(.,.\, personally appcar~
'he n~enl or Ihe n:"'Y ,"c"rtd by Ihe roregoln, Dccd or TrUll. and ,"ode oalh .n due rorm or low IhRl Ihe conlldcralion I'eclled
in ",,"lId Deed or T n"t I~, tr\lt 31UJ hOf1:\ fade AS therein ~et forth tlruJ lhat lhe f'ClUi11 ~\In1 or mone)' ndv:'Jnced 31 the dOSltl~
1r;1I1\:lCII0" hy Ihe ,ccuretl ri1ny ,W.H pAid ovt!r and rii.~blJr'r.d ~y the ptlrty or pi\rtle~ sc:cl,Il'cd b}' the De~d o( Trust to the
Onm')wcl' or to Ihe ptr~on u:~ron'uhlc for dl"ihur~elnenl or (unds In the' do,ing Irnn~ncllon or lheir 1~5pe(;livC! IIgent At . lime nol
lalu Ihiln tJll~: u,eculIOIl ,md rtehverrowt;r n( lhl.\ Deed o( Tru,c; and nl~Q nmde nnlh th~at hI!' i~ Ihl! . tent or the f!1rty
Or rnr1I., ,ecured and i, ~uly nil 'L~e g \9 hi. .rr"I,lYil. :::a~. .~ '7
AS Wn:NESS: my ~alld I ~.,.'Jbl,. '.f" /. ""....7 . /~.... /....
My CommISSIon E~P e~: ~ ~ _ ~*'..,.~____
~// 1" it: t\O'~l\~. No,,'1' rub",
Thll 1\10 Cer1i(y Ii, att~i, doc nen wlIU~'ol,~. c4'u de, the IIIPervl"Q- Dennia J, ina.
Attorney-at-Lav ~o?, ,,~. one 0 e p ios amed in Ihe ;nSlrumen!.
'(I Arunt\t\ ( A,., .
-- -- l.M- .vX-~
r"r
'19.8.,. Form 3021 9/90
,00000PQJoIl ~
p^nS:~L NO.1
ALL TJlhT CERTAIN lot or piRce of ground, lying and Ilitu4\te ir.
that TownRhip of Silver Spring, County of Cumbar14nd, and
Commonwealth of Pennsylvania, more particularly described in th~
Pinal GUb-Division Plan of Rich Valley Manor prepar~d by Whittock-
Ilal.tlnan and recorded in the Office of tha Recorder of [Jeeds in and
for Cumborland County, Pennsylvania in Plan Dook 56, Page 36, as
rorocorded in Plan Dook 57, Page 109.
DEGINNI/lG at a point on t.he Southwestern Right-Of-Way Line of
Rich Valley Road, said point being referenced as the intersection
of tho Southwestern Right-Of-Way Line of Rich Valley Road and the
F.ast<Jrn Right-Or-Way Line of Nor.thwatch Lane; thenc!! from sa id
point of boginning along the Southwestern Right-Of-Way Line of Rich
Vall'.!y Road by a curve cUl'Ving to the right, having a radiuB of
1,865.08 feet, an arc length or 359.92 foet to a point; thenc.)
continuing along same South 44 degrees 49 minutes 30 seconds East
a distance of 129.08 feet to a point at the property line between
Lots No. 20 and 21 of the "Final Subdivision Plan of 28 Lots - RICH
VALLEY MANOR, S11 ver Spring Township, Cumberland CQunty,
Ponnsylvania"; thence along said property line of Lots No. 20 and
~1 South 45 dogrees 10 minutes 30 seconds West a distance of 307.84
fnet to a point at the property line between Lots No. ~O, 21 and 26
..,f the aforementioned plan; thence along Lota No. 2fi IInd 27 North
43 degrees 50 minutes 32 seconds West d distance of 41).22 faet to
q point on the Eastern Right-or-Way Line of Horthwatch Lane; thence
along the E~stern ~ight-of-Way Line of Northwatch Lane by a curve
curving to the right, having a radius of 350.00 feet, ~n arc length
of 111.19 feot to a point; thence along same North 33 degrees 21
minutes 00 seconds East a distance of 166.24 feet to a point, the
point or beginning.
ALL of that land situate in Silver Spring Townahip, contain.lng
135,737.32 square feet or 3.1161 acres and being shown as Lot #20
on the Final Plan of Lots of Rich Valley Manor prlJpared by
Whittock-Hartman Engineers on November 15, 1988, Drawing No. 5-87-
15 and being subject to a reservlJd area for the extension of
tlorthwatch Lane to Land now or lata of Max C. Hempt, alonq th..
Southern Property Line, should it ever be required.
-~
R081RT R. '~E Ind MAAY E. 'LANTE
hh wa..
IAndeJ;,Au11110r
DJ:ED 0.. T1lUST
DATED Dec..ber 20. 1991
Vpon tho.e two certaln p.rcel, of
land, the bulldlnJ' and
lmproveUllnta of DOUIl.. J. HaMen
and kay JOlnn Ilanlln. hh w1fe,
4 North Watch I:..n., BUvu 8pdnll
Town.hip, C\lIIIbetland County, 'A
to
ROBERT M1R1UGAN,
A.. 1."..
Te Secure $100,000.00
Interest trom June 20, 1992
Record.d in C~b.rland COunty, on the 26th day of December, 1991, in
Hortg'Ce BooK 1040 .t 'a.e 714.
ASSIQNM!NT 0' D!!D o~
IIKDUS, ROBERT Il. PLANTE and MARY E. Pt.WT!, hh wif., adult
lndlvldu.l. re.idinll at RR -1, Box 32, '.rker.burg, Iowa (the "AIsilnor"), ..dl
a 10.n of $100,060.00 to Dou.l'. J. Hln.en .nd K.y Joann Haneen, hi. wlte, who
resld. .e 4 \'lorth Watch Lan., Silver sprln. Tmmahlp. CWllbuland County,
Pennsylv.nia (thl "Borrewer"), on Oee.mbe~ 20, 1991, in consideration ef their
writt.n promi.. to r.pay the .ald lean with inter..t ..cur.d by thelr Not.. of
th.. "lIIe dati (the "Notes") .nd on the further ..curlty of . Deed of TI:'..t of the
same date (the "Oe.d of Trult") on th'lr re.ldene. at: 4 North \latch Lane, SUver
sprlni, Township, Cumberland County, 'enneylv.nla (the .Pr.mi.e..) recol:ded on
Dec.mber 26, 1991 in Cumb.rland County Kortsase Book 1040 at pIse 714, und.r
vhlch Deed ot Tru.t Dlnni. J. rarlna, P.O. Box 189, Danton, Karyland 21629. 11
Trult.e for the ben.fit of Ae~IRnor; ~nd
VIlIU.AS, AUisnee hu purchas.d the Vot.. wIthOut recour.. to the
A..imer and de.lr.. to take an aa.icnment ot the O...d of Trust a. collateral
th.refor.; and
VHEREA4. As.15l\~' hat -cr.ed to accept A~'igno.'s transfer of all
thair r1sht, title and int.reat in the Ifore.aid Note. and O.ed of Tru.t; and
~
VKlll4I, A..ifRo~ haa liv.n aouual WTitcen notloe to the lorrower,
1)0\111.. J. Han..n and Kay Joann lIan..n, hb wl.h, of the vithin A..l,M.nt.
lClll)V ALL IftN I'l TR!SE 'USENTI, that the All1anor, ROBUT P,. PWTE
ami MAl't E. PUNt!, hla wlt'., LInder in the .bove,capt1on.d n..d at Tl'uat, d.ted
D.c.mb.r 20, 1991, liv.n by Doulla. J. H.n..n and key Joann Han.an, hi. wire,
Bo~rov.r, in the orllinal principal amount of $100,000.00 and r.oorde4 in the
ortlc. of the Reoord.r ot D..d. in and tor Cumb.rland County, '.nn.ylvania in
Horta'S' look 1040 et paa' 714, lar .nd In the conaid.ratlon of the .~ af ONS
DOLLAl ($1.00) .n4 ath.r load and valuable con.ideratlon, 1.wfu1 ~on.y ot the
United 5t.tee at' Am.rlca, to "ull'ftor, in hand pald by Aulsn.e, ROBERT lfElIaIGAN,
an adult IndiVidual r..ldlnl at 1420 C.lcutta Lan., N.p.rvill., 1111no1., .t or
b.tor. the .n....Unl and delh.ry of the.e prn.nts, the receipt wh.reof' h
h.t.by aeknmr1eda..d, have gr.nt.d, bargAln.d, .old, aulan.d. tran.farred and..t
over, and by th... pres.nt. do crant, barl.ln, ..11, a..len, tr.net.r and ..t
over unto the ..1d A..ltn.., hIs h.lr., .uce.saor. .nd a..l&"., the a(or...ld
Deed oC Trust, II true and correllt copy of whIch 1. attallh.d .. Exhibit "A" h.reto
and lncorporat.d h.r,ln by thl, ref.r.nc..
TOGZTHER VITH all the risht., remedia., Inold.nt. and appurt.n.nce.
ot A..imor th.r.unto b.lonalnl or In anyvl.. app.rtalnlna, and all the rl.he,
title, intl....t, .u:ate, property, chil1\ and demAnd whatso.ver of, In, end. to the
JAm. and the prlmis.. therein descrIbed.
TO HAVE A.ND TO 'HOLD, IllCIIVE AftD TAXI:, All .nd linsul.... th
her.dltAII.ntl and prellh.. hereby srlnted end us1sned air lIenticned and intended
sc to be, with the apputtenance8, unto the said lobe~t Merrigan, AI.ignee, hi.
heir., BUCC.I.or. an4 a..itn' , to and for hls And their proper U1e and behoof
,~ ','
~, Defendant Douglas J. Hansen 18 an adult individual
who.. la.~ known addre.. 1s 2015 Turkey fointe Road, Baltimore,
Maryhnc:l 21221.
.. At all relevant times, the Defendant, either jointly
with hia late wife, Kay Joann Haneen, deceased, or individually by
right of survivorship, has been tho real owner of two certain
tracts or parcels of land with buildings and other improvements
thereon looated at 4 North Watch Lane, Silver spring Township,
Cumberland County, Penn8yl vania (the "Premises"). The Premises are
more .pecifically described hereinafter.
5. On or about December 20, 1991, in con.ideration of
two certain loans in the respective amounts of Sixty Thouaand and
00/100 Dollar. ($60,000.00) and Forty Thousand and 00/100 Dollars
($.0,000.00), made by one Robert Plante to Defendant, his late
wite, Kay Joann Hansen, deceaaed, and Boating Center of Baltimore,
Inc., a Maryland corporation (collectively, the "Borrowe.rs"), which
funds were received by the Borrowers, the Borrowers executed and
delivered to Mr. Plante, as payee, two certain promi.sory notes
(COllectively, the "Notes"), each dated December 20, 1991, in the
re.pective principal amounts of Sixty Thousand and 00/100 Dollars
($60,000.00) and Forty Thousand and 00/100 Dollan ($.0,000.00)
(collectively, the "frincipal"), and each requiring the payment of
intere.t on the Principal at the rate of twelve percent (12') per
- 2 -
year (the "Intereet"), provided that Intereet would not beqin to
acorue under either Note until June ao, 1992. True and oorreot
oopie. of the Notee are attaohed hereto ae Exhibite A-l and A-2,
reepeotively, and made parte hereof by thie referenoe.
6. The Notee obl1qate the Oefendanta to pay to the
holder ot the Note. the Principal and Intereat "eiqhteen (18)
montha from the date of [the Note., i.e., June 20, 1993) or within
ten (10) day. at thll aale of Defendanta' prinoipal p: ace of
re.idence, located at 4 North Watch Lane, Mechanicsburq,
Penneylvania (i.e., the Premises), whichever shall first occur."
7. The payment of the Notes by the Borrowera ot, inter
alia, the frincipal and tntereat due under the Notes ia seoured by
a mortqaqe, in the form of a "Oeed of Trust," on the premiaes dated
Deoember 20, 1991 (the "Mortqaqe"), exeouted, oonveyed and
delivered by Defendant and his late wife, Ray Joann Hansen as
Borrowere, to flaintiff Farina, as Trustee for the benafit of the
Lenders thereunder, and to Robert R. Plante and Mary E. Plante, his
w ite, as Lenders. A true and oorrect oopy of the Mortqaqe is
attached hereto aa Exhibit B and made a part hereot by this
reterenoe.
- 3 -
8, The Mort9~ge was duly reoorded in the ottice of the
Reoord.r at Oeeda in and for Cumberland county, Pennsylvania, on
Oeoem~.r 36, 1991, in Mortgage Book 1040, Page 714.
9. The failure of the Borrowers, inter alia, to pay
when due and payable the frinoipal and Intereet under the Notes
constitutes a "default" as dllfined under the term. of the Mortgaye.
10. The Borrowers have tailed or refused to pay the
frincipal and Interest due and payable on the 20th day of June,
1993, oonetituting a default under the terms at the Mortgage. The
aUlD ot these amounts is One Hundred Twdve Thoueand One Hundred
Sixty-rive and 45/100 Dollars ($112,165.45).
11. The Premises subject to the lien ot the MOl:tqaqe are
de.oribed ae folloWSl
X. Wi.Dl
PARCEL NO, 1
ALL THAT CERTAIN lot or piece at ground, lying and
situate in that Townahip of Silver Spring, County at cumberland,
and Commonwealth ot Pennsylvania, mOTe particularly described in
the Final Sub-Division Plan of Rich Valley Manor prepared by
Whittock.-Hartman and recorded in the ottice of the Recorder of
Deeds in and tor CUmberland County, Pennsylvania in Plan Book 56,
Page 36, ae rerecorded in Plan Book 57, Page 109.
BEGINNING at a point on the Southwestern Rlght"of-Way
Line of Rich Valley Road, Slid point being referenced as the
interaection of the Southwestern Right-of-Way Line of Ril:h Valley
Road and the Eaetern Right-of-W^y line of Northwatch Lane; thence
- 4 -
from said point of beginning along the Southwestern Right-of-Way
Line of Rich Valley Road by a ourve curving to the right, having a
radius of 1,865.08 feet, an arc length of 359.92 feet. to a pointl
t1ulOce continuing along same South 44 degrees 49 minutos 30 seconds
East a distance of 129.08 feet to a point at the property line
between Lots No. 20 and 21 of the "Final subdivision Plan of 28
Lots RICIl VALLEY MANOR, silver Spdng TownShip, Cumberland
County, Pennsylvania", thenoe along said property line of Lots No.
20 and :n South 45 degI'ees 10 minutes 30 seconds West a distance of
307.84 feet to a point at the property line between Lots No. 20, 21
and 26 of the aforementioned planl thence alonq LQta No. 26 and 27
North 43 degrees 50 minutes 32 seconds West a distance of 41].22
feet to a point on the Eastern Right-Of-Way I,ine of Northwatch
Lane I thunce along t.he Eastern Right-ot-Way Line of Northwatch Lane
by a curve curvi.ng to the right, having a radius of 350.00 feet, an
arc iength of 111.19 feet to a point, thence along said North 33
degrees 21 minutee 00 seconds East a distance of 166.24 teet to a
point, the poi.nt of beginning.
ALL of. that land situate in silver spring TownshJ.p,
containing 1]5,737.32 square feet or 3.1161 acres and being shown
as Lot *20 011 the Final Plan of Lots of Rich VallElY MallOI' prepared
by whittock-Ilartman Engineerft on November 15, 1988, Drawing No.
S-87-15 and being subjeot to a reserved area for the extension of
Northwatoh Lane to Land now or late of Max C. Ilempt, along the
Southern property I,ine, should it ever be required.
PARCEL NO.2
ALl, THAT CERTAIN lot or piece of ground, lying and
situate in the Township of silver Spring, county of Cumberland, and
Commonwealth of PenllsylvanJ.a, more particularly described in the
Final Sub-Di.vision Plan of Rich Valley Manor prepared by Whittock-
Hartman and recorded in the Office of the Recorder of Deeds ill and
for Cumberland County, Pennsylvania in Plan Book 56, Page 36.
BEGINNING at a concrete monument looated on the eastern
right-ot-way line of Northwatch Lane (50' right-of-way) said
monument located at the right.-of-way intersection of Northwatch
Lane and Penns Way Road (50' right-of-way), thence along the right-
Of-way line of Northwatch Lane, North 07 degrees 46 minutes ]0
seconds East, a distance of 592.21 feet to a concrete monument I
thence on a curve, curving to the right having a radius of 350.00
feet and an arc length of 45.04 feet to & point, thence along Lot
*20, South 43 degrees 50 minutes 32 seconds East, a distance of
359.13 feet to a pointl thence along Lot *26, South 15 degrees 24
minutes 52 seconds West, a distance of 446.42 teet to a point
located on the right-of-way line of Penns Way Roadl thence along
the right-of-way line of Penna Way Road, on a curve curving to the
left having a radius of 375.00 feet and an arc length of 50,00 feet
- 5 -
(a) unpaid Prinoipal $ 100,000.00
(b) Unpaid Interest (throuqh ----111 / 631. 41
Deoember 31, 1993)
TO'l'AL $ 118,631.47
14. On or about June 26, 1993, the atoreeaid Robert R.
Plante, tor good and valuable consideration, as.igned hi. inter..t
in the Note. to Plaintift Merrigan.
Said aasignment has been
endor.ed upon each of the Note. by Mr. flante and notioe thereot
wa. given to D.tendant by Mr. Plante pureuant to a letter dated
..
June 26, 1993. A true and correct copy of said letter is attached
hereto ae Exhibit C and made a part hereof by thi. ret.rence.
15. On or about September 9, 1993, the atore.aid Robert
R. flante and Mary E. Plante, hi. wite, tor good and valuable
conaideration, asaigned their intereet as Lenders under the
Mortgage to Plaintitf Merrigan, said assignment being r.epresented
by an Aasignment of Deed ot Trust document dated September 9, 1993
and recorded in the ottice of the Recorder ot Deeds in and for
Cumberland County, Pennsylvania, on September 15, 1993 at
Miscellaneou. Book 454, Page 294, A true and correct copy ot said
Aasignment ot Deed of Trust ia attached hereto as Exhibit D and
made a part hereof by this raterence,
- 7 -
16. ~laintift has duly oomplied with the provisions of
the Em~rgenoy Mortgags Assistanoe Aot of 1983 ("Aot 91") in that
the presoribed notioe of eUgibility wu sent to the Defendant by
first olas. mail on September 1, 1993. The temporary stay of
enforoement of the Mortgage by reason of Aot 91 has expired 1n that
the fennsylvania Housing Finanoe Agenoy either haa failed to aot on
the Defendant's applioation after more than 60 day. trom it"
reoeipt of same or ha. denied the Defendant asaistanoe under Aot
91.
17. Written Notioe of Intention to Foreolose pursuant to
Seotion 403(a) ot the Aot of January 30, 1974, P.L, 13, No.6, as
amended, 41 P.S. 1403(a), was not required to be sent to Defendant
by reaaon that the Notes speoifically provide that the indebtedness
represented by the Notes was incurred "solely for the purpose of
carl'yirlg on or aoquiring a business or oommerc1el investment ...
(and that] the entire loan prooeeds will be used for suoh
purposes," such that no purpose of the indebtedness was to assist
in the purohase, improvement or repair of residential property.
WHEREFORE, Plaintift demands judgment in the sum of One
Hundred Eighteen Thousand six Hundred Thirty-One and 47/100 Dollars
($118,631.47), together with oosta and intereat acoruing at the
rate under the Notes ($33.33 per day), from Deoember 31, 1993, and
demands torecloeure and judioial sale ot the interests at the
- 8 -
IY~iJ"'.1C[5
5NlN:R. lllJCK..
\\lriDAl
,-'q~r"'uo
" , ~I~\- :Il't}
lJ'i?<'r"'JU~ "021$
I 'I!"'.,"''''
ANNAPOLIS, MAR'lLAJIO
Oeoembor~_, 1991
FOR "lILt]! RECElVEO, oouot.A~ J. HANSEll and KA'l JOllllN HANSEN,
and BOATIlIG CENTER OF BALTIMORE, HIe., a Maryland corporation,
the undersigned ("Borrower"), promise to pay to the order of
ROBERT PLAN'rE the principal SUID of SIXT'l TIIOUSlIIlO 00 LI.AR S
($60,000.00), with no interest for the first six (6) months.
Thereafter, beginning on ,June 2'::!, 1992, interest ...ill accrue at
thfJ rate of Twelve percent (12\) per annum. The principal Sllm of
Sixty Thousand Dollal's ($60,000.00) together with accrued
interest thereon shall be due and payable in full, eighteen (18)
months from the date o~ this note or within ten (10) days of the
sale ~nd settlement of Borrower's principal place of residence,
l'Jcated at 4 1I0rth Watch Lane, Mechanicsburg, Pennsylvania,
whichever shall first occur.
$60,000.OQ
Interest shall be calculated on the basis of a J60-day year,
applied to the actual number of days the principal sum, or any
portion thereof, is outstanding.
BORP.OWER may prepay the principal amount outstanding in
whole or in part without penalty, Any partial prepayment shall
be applied against the principal amount outstanding and shall not
postpone the due date of this 1I0te or change the amount of this
Note, unless the Note Holder shall otherwise ,agree in writing.
AN'l Uotice to Borrower provided for in this 1I0te shall be
given by mailing such notice by Certified Mail, addressed to 4
1I0rthwatch Lane, Mechanicsburg, PA 17055, or to such other
address as Borrower may designate by notice to the Note Holder.
Any notice to Note Holder shall be given by mailing such notic~
by certHied mail, retllrn receipt requested to 2014 Sue Creek
Drive, Baltimore, Maryland 21221, or at such other address as may
have been dosignated by Notice to Borrower.
ON the occurrence of any of the following events, at the
option of the Note Holder, the following shall be deemed to be a
default under the terms hereof: The tiling by or against either
the makers or any parties liable hereon of a petition in
bankruptcy, insolvency or reorganization in a federal or state
court as prescribed or. a receiver or trustee of the business or
property at either the Borrower or any persons or other entities
liable hereon; or the making of an assignment for the benefit of
credi~ors by either the Borrower or any persons or other entitie~
liable hereon, and which petition shall not be withdrawn or
dismissed or which appointment or assignment shall not be
cancelled or terminated within sixty (60) days after. the filil1C!
()II/...
I
,
I",'
~ '\ :.
t..~\\I r1rnr.~s
\1.".M15.
!N10E!l. BUCK"
MlfjO^L
(H."n.[O
'r) '1'1~ tl'Y)
_mlAp. IJi ~1I11lU),l
lH'.'.OU.....U
,"'
$40,000.00
ANNAPOLIS, MlIR'lLAIID
December :'(' , 1991
FOR VlILUE REeEIVED, DOUGLAS J. IIANSEII and KA'l JOANN HMISEII,
and BOATING eENTER OF BALTIMORE, INC., a Maryland corporation,
the undersigned ("Borrower"), promise to pay to the order o(
ROBERT PLAll'rE the prJ,ncipal sum of fORTY THOUSAIIO DOLLARS
($40,000.00), with no interest for the first six (6) months.
Thet"ea(ter, beginning on June,,,,~, 1992, intere>>t will accrue at
the rate of Twelve percont (12%) per annum. The principal sum of
forty Thousand Dollars ($40,000.00) together with accrued
interest thereon shall be due and payable in full, eighteen (18)
months" from the date of this note or within ten (10) days of tho
sale and settlement of Borrower's principal place of residence,
located at 4 Uorth Watch Lane, Mechanicsburg, Pennsylvania,
whichever shall first occur.
Interest shall be calculated on the basis of a J60-day year
applied to the actual number of days the principal sum, or any
portion thereof, is outstanding.
BORROWER may prepay the principal amount outstanding in
whole or in part without penalty. Any partial prepayment shall
be applied against the principal amount outstanding and shall not
postpone the due date of this Note or change the amount of this
Note, unless the Note Holder shall otherwise agree in writing.
AN'l Notice to Borrower provided for in this Note shall be
given by mailing such notice by Certified Mail, addressed to 4
Northwatch Lane, Mechanicsburg, PA 17055, or to such other
address as Borrower may designate by notice to the Note Holder.
Any notice to Note Holder shall be given by mailing such notice
by certified mail, return receipt requested to 2014 Sue Creek
Drive, Baltimore, Maryland 21221, or at such other address as m~y
have been designated by Notice to Borrower.
ON the occurrence of any of the following events, at the
option of the Note Holder, the following shall be deemed to be a
default under the terms hereof: The filing by or against either
the makers or any pArties liable hereon of a petition in
bankruptcy, insolvency or reorganization in a federal or state
court as prescribed of a receiver or trustee of the business or
property of either the Borrower or any persons or other entities
liable hereon; or the making of an assignment for the bene(it of
creditors by either the Borrower or any persons or other entitles
liable hereon, and which petition Sho111 not be withdrawn or
dismissed or which appointment or assignment shall not be
c,~ncelled or terminated within sixty (60) days after the flling
,/
--
"
, TOOEHlER Wlnl ,lIlhe Improvemcn" now llr herc.lfter ereCle~ Oll Ih< propc"y, an~ ,111 eJ<emenl', oppunen,,"ce!, "nd
'r.'luru nnw nr he"af"r a part of Ih. propen)'. ...11 "pl..cemon.. an~ all~Jllon' .Ihall .1110 be cllverc~ by IhlS SecurJl)'
In.llrumen!. ...11 of Ihe futeGOInB II referred 10 In Ihl$ S<curJly In~II1'",'11I 01$ Ihe "Property,"
nORROWER COVEN"'NTS Ihal Borrower i. lawfully $"'e~ of Ihe Ulale hereby elJnveyt~ and ho" Ihe IIShl III Bronl ;In~
'.<1nley Ihe ",npelly Jnd Ih,1I Ihe Propeny " onencumbered, c..epl for tncumbrauce.. of rteord. norrower warranl! ond will
delenll scne,ully Iht 1111. Il) Iht Property 's"n" all el3lml and dernon~., 'Ull),clln any encumbrancu of rccord.
TillS Sr,CURITY INSTRUMENT cornblne$ oOlfulln Cllvenan.. for nOlional u.e and non.onllol111 covenanl! wilh hmlle~
";IrI,lllnll~ hy JUrI\diclll1n 10 cnmUlule iI ulIIrorm ~tCurlly ,".~Irumcnl covering: rcul propCl1y.
UNIFORM COVENANTS, Dorrower an~ l.eOller cov.nonl an~ aGree a$ lollow.:
I, I'o","cnt or Principal and Inl"..t; "repnyment ~nd Lotu ChorRu, Burrower ~hall proOlplly p.y when doc Ih.
l'nn':lp.1 nl ,nd Inltr"l nn Ih. ~ehl evidcn:e~ hy Ih. NOle and ,10Y prepaymenl an~ 10le charge.1 ~ue un~er Ihe Nn..,
2, FUI"h ror To'~ and huur.nce. SubjecI 10 .ppllCahle law or 10 a Wllllen waiver hy l.ender, Borrower ,hall puy 10
I.eniler on Ih. day OIonlhly pay men.. are due under Ihe NUl', unlillhe NOle i$ pUI~ in lull, . ~UIl1 (OOFulld$") ror: (.) yearly '..e$
.Ind .1~~rume"U whIch II1.1Y ,Ulain priority over lhi~ Securlly In.,lrumcI11 as ... Ilcn on lhe Property; (h) yearly len.~ehold pilymtnlS
Ilf grounrl ,enl~ on Ihe Property, if ony; (c) yearly hal.1rd or propeny imurance premiums: (d) yearly nood IIlsurance pr':'mIUlm,
Ir ilny~ (el ye,'rl~' 1I11H1~;I.ce jn~lJrnl1CC prrmlUm" ir ilnY; Ilnd (f) tiny .'um~ pily.lhlc by Borrower 10 l.ender. In iW:Orltance with
III(' ,'rnvl\i/lll~ or r,1raJ'I','ph R, Il1ltl'U orlhc "lIym~n1 or rnnr1{lil~r In'urnncc prOmlllnl'\, The.": Ilem... Me coiled "E,cl'Ow Ilrlll~ ~
I.ender m,y, ,11 allY lime, colleel and hold FundI in .n .mounl nOI 10 ex..e~ Ihe maXimum Jmnonl . lender lor a lederally
rd,"ed monS'r.' loa" may requite for Borrower', e~crow accounl un~er Ihe fe~eral Re.11 Es'ale S,"lemenl Procedures ACI of
1~74 .. amended Irom lime 10 lime, 12 U.S.C, Seclion 2601., uq. C"RESP""), uol.., another l,lW Ihol "pplle! IIllhe Fun<h
~('r~ II lc"er ilmnunt. II" so, Lr.n~cr may. II any lime. collecl and hold Funds in an .1mounl nol In exceed lhe les.~e' amounl.
l.el1dcr Ill3)' e"lf"aie Ihe al110Unl of FUI1~1 due nn Ihe ha"s of currenl d.lIa arl~ rca$onahl~ e~llfnate$ or expen~llore$ of fUlure
E<crow Iltn1l or olhw",. In accordance wilh npplicable law,
The r:und~ ~h.ll1 be held 111 un in.\t1lutlon who!le dcpnsiu are lO,urcd hy a tcderiJl a/;-cncy, Imtrunltnl311ly, or entity
"neludlng L.n~er, ,f Lender" $uch .111 mlli'ullon) or In any F.de,,1 flome Loan B.nk. Lender ~hall apply Ihe Fond$ 10 pay Ihe
E,crow Ilem$. Lell~er O1a)' nC)I charge Borrower for holding and applying Ihe Fonds, al1nually analYllng Ihe escrow arcount, or
vCllfv.ng Ihe E,,,,,,,,, Item" un leu Lender paY$ Aorrower InlerUI on Ihe Funds and .pplicable law permll! Lcn~er 10 make ,uch
" ch,lrge, flowever, l.en~er may require Borrower 10 pal' a one.llme charge ror an independenl, real eSlate l,lX reporting .lervKe
II<C~ hy Lender In connecllon wllh Ihls loan, unle~s applICable law provides olherwise, Unles~ an agreemenl IS mo~e or
1l1pllcable law rcqutre$ In..,e$1 10 he paid, Lender $hall nol b. roqult.d 10 pay Dorrower any Inlere!! or e.1mlngl on Ihe FundI,
Ihmower .nd Lcnder may .~r.e in Willing, however, Ihat ,nler"l ,hall be pard on Ihe FUOl1$, L.nder $hall gIVe 10 Dorrower,
wllhoUI ,harge, an annu.1 "counring of Ihe Funds, $how,ng cre~IIs and debil! 10 Ihe Fund$ and tht putpo,e for which each
dehi, 10 Ihe Fun~.' wa' m.de. The Fund., a" pledged a, addi,ion.1 ,.curlly for 011 sumllecured hy ,hl$ Secunly (nllrument.
If Ihe Fund, held by Lender exceed Ihe omoulIl\ "ermlfled 10 he held by ,lppllCoble law, Lender ,hall accounllo florrow<r
((H Ihe C)lCC5' F\wds lr1 accordance wllh Ihe rcquiremclII!l. or Uppllcilhlr 1.1W. I( Ihc "mnum or the rllnds held hy Lender nt 3ny
I,me II nol ,urnc;ent 10 pay ,he Escrow Items when due, Lcn~er mol' $0 notify Ilorrower.n wrillnc, and, in luch rose Borrower
<h,1I pay '0 l.ender Ihe olnounl necemry 10 make up Ihe dencrency, Borrower $hall make up the denciency in no mo,e Ihan
lwei"" monlhly p'ymenll, at Lender'l $ole di$crction.
Upon paymenl ,n full or all soms secured by Ihh SeeurilY (nslrument, Lr.ndcr sholl promptll' "fund 10 Borrower any
Fund, held by Len~er, If, under paragraph 21, Lender sh.1I acqulte or "lIlhe Property, Len~er, pllor 10 Ihe acqoillllon or $alc
01 ,he Propeny, ,h.1I npply aoy FUl1ds held by Lender aI Ihe lime of acqui,,"on or lale .~ a crodll again$t the $ums 'ecure~ by
thi~ Securll~' '",,"\lment.
3, Applicnllnn nf PAyments. Uoltll applicable law provl~" o'herw"e, all paym.nn received by Lellder under ".rasrnph,
I alld 2 ,h,1I he applied: nm, to .ny prepayment ch.rge$ dut. un~cr Ihe NOle; ,econd, to amoonll payable under pa..groph 2;
lIl1rd, 10 mlere!! due; fnunh, In principal due; and last, 10 any late charge, due under Ihe Note,
4, CharRc.,; Llenl, BO"Tower $h.1I p.y nil taxe., U$e$,menl$, charge$, nne$ and ImpOSlllon$ auributable In Iht "rop.ny
which may ,1110111 prionly over Ihis SeeUnlY Instrumenl, an~ Ir.aschold payments or ground rents, Ir any, Borrower shall pay
,hese oblr~atlonl in Ihe manner provided in paragraph 2, or Ir not p.,d in Iha' Manner, Borrower $hall pay them on time dltcclly
10 the perlon owed p.)'menl. Borrower $h.1I promplly rumi$h 10 Lcnder all nOllce! of amounlS 10 he poid Iln~er Ihil p.>ragroph,
If Borrower makCllhe,e payments di,."ly. Borrower Ihall promplly fumi$h 10 l.ender rcceiplS eVidencing Ihe paym.nu.
Darrower ~hall promptly di~chftrRe any lien which h3!1 priority over thi! Security In~lnJ"'Cnl unleu Borrower: (0) agrees In
'vrlllng 10 Ihe paymenl Qf Ihe ohligalion ,ecured by Ihe Ii.n in a n""ne.r occcpiable 10 Lender; (b) conlem in good failll Ihe lien
hy, or defend, .~olnll enforcem.nl ollhe hen in, legal proceedlng$ wl"ch In Ihe Len~er'$ opinion oper.l~ 10 prevenl lite
enforcemtnl of Ihe Iieo; or (c)lwJrel rrnm Ihe holder or Ihe hen an a~reemenl 'ali,raClOry to Lcnder lubordlnaling lit. Ileo 10
Ihi, Securlll' In!!runlenl. If Lender dele,mine, Ihal any port of the ProperlY IS ,ubJ'e1 10 a lien whICh mal' allalO prroll'y ovO(
II", Sccurily In!!rllmenl, Lender may give Dorrower a nolice l~entlfYlng Ihe lien, Borrower shall s",i'fy Ihe lien or lal;e one or
more of Ihe actions set fonh above wilhin 10 day! or Ihe glviog or nollce,
'o,m 302' 9190
,..... 2 Ill'.
;, IIaMrd or I'roporly Imuranu, Dorrower ,Ihall ~ttp Ihe 'mprOVel11enlS now emllng or hore.f,er ,rw,d 00 lh,
Prllpr:rlY lI",urad IlgulnM los.. hy nfC. hllz..rd~ in,ludcd wllllln Ihe lurm .ulcndcd c,O\'c~agc". .Hld any <ll11t:r ha1.nrc.h. Indt/(..Iln~
nl'lllh or norllJlnlL. ror which Lcndltr rcqulres il1~uruncc. This In~uranCl! ~hj)1I he m;unl:lll1cd In Iho amoul1U ilnd ror Ihe l'(rH'd,~
,hi' Lender rc'lijlre' TIle Insurance c"",er p"1VI0lO~ Ihe insijr"oce lhall h. d,men hy Dorrower \ijhJeCl 10 Lende/I approll.'
u I",h Ih,,11 no' h, unreasonahly will,held, If Borrower (ails 10 malOl.ln eover.ge ofle"bed above, Unoer may, aI Lenoer',
('11'11011 ohlalf1 L'f)Vl!rol~C 10 prnlC~1 Lender's rlghu In Ihe Prnpe(1)' In accordance with p..ra~'Dph 7.
All ""ur"oee pol",es "nd ..newals shall h. accepl.b!e 10 Lenoer and ,llUlI inclijd, " Slandard morlUilge CI,IIJIf l..nder
.1,.,11 h,lve ,he "gh' 'a h"ld Ih, pol,clOs and renewals. Ir l.qnder requirel, Dorrower sh;lIl promplly give 10 Under all rcee,p" of
o,,,d rrenlluml ,Ind rellew,,' nOllces In Ihe ,v,nl of lOll, Uorrower sh,1I give prompl noliCe 10 Ihe ,nsur.nee camer and Lender.
L'.'l1der milY make pronr or 10," If nol made promplly hy Uorrower.
Lillie", l.ender i1nd Bnrrower olherwl.le agr.e IO WrlllOg, ,murance pmooedl sh.1I be apphed 10 r.'lOral,on or reI'''' of Ihe
Pr"j1l'r!;.' d.lmaged. Ir lht r,'IOril(lOn or r'p,ur is cconomic;p.lIy (ciuible nnd Lender's ~ccurlly IS not lelli!lencd, If the re,lorallc,n or
r('I'.llI I' 1101 eCOllntlllC;illl)' rC'a~"blc or uncler'~ !lCC;lJrlly would be la\~cncd, Ihe 1l'~Urilnc{,! proceeds shall he nl'plied 10 lhe ~un1\
~r :wr:d hy II1Is Secuflly In~lrument. whelher or nOI lhen due. with any cJ,ce~\ paid to B')rTowcr, If Borrower ab3ndon\ the
Pr,'rCrlY. or dot!~ n<1ll1l1.'wer wilhin :\0 daYl i\ 1l0llCe rrom Lender Ih:Jtlhe In'urnnce c<lrrier h,lS offered ((1 -'Cmle iI clalln, then
I. r.'r1d.., I 1J1:1)' colil'cl lhe Inliur.lncc procccd.\. L.ender milY use Ihe rrocccd~ 10 repair or re'lme the Property or to pJV .'um.'\
~("~lIn:d hy thl\ SccurllY In'\lnmltnl, whether or nOI lhcoll due, The ~O~dll)' pcrn'd will begin wh~n Iht nOllCe i\ plvefl,
Unle'l.5 Lender and Borrower othelw;se ag.rce 111 writing,. ,my opplicallon or I"rocceds w principal shall nol cKtend or
r''''o<'"' 'he dll' ~a" or Ihe monlhly p.ymenl' referred 10 In p>ragr.phs I and 2 or ch.nse Ihe .mounl o( Ihe paym"nl" lr
l)l'd!.:r p;jrtl~rl1ph ! I the Proper')' I~ acquired hy Lender. Borrower'5 rt~hllO any in"ur;,lOce pollcle~ and procced~ re'IJlllnf; (rom
d.",,,,'" 'n ,he Prnpcn'y 1'''''' '0 Ihe acqUls"ion ,hall pall 10 Lender 10 Ihe Cl"nl of Ihe 'ijm, secured by Ihll SeCU"I)' InSlrumenl
11l'11l('(h;llcl~' prior r~, the ilcqul.'\lIion
fl. OCtUI'.IIIC,\. rn:.~(,'r\'lltion, "'Bil1t~IIIIIICC und flrnh'cllun ur lhe Propcrt)'j Rorrowcr's I.onn APlllicotlolli Ltn'\chflld'\,
[l,'rr<m'cr !lhidl occupy. clitilbll!lih. :Jnd lJ:\C Illc Property as Onrrnwer's principal re~IfJcnce WIlhln slKfy clays .I(ter the C:U:ClIlIon or
till" SeeUlII)" I"'tnllncnl iJnd ~h.1l1 conllnuc 10 occupy tile Property U!li Dorrower's prinCipal re~idcncc ror at leasl one ye.u after
II" daIC "r <1CC1Jpanc)', unless Lender olherwlle a~ree' ,n wrillng, whICh con,enl ,hall nol be unre,"onabl)' wilhheld, or unle.ls
l!~ICnlJ;jllng clrcum'lance' U,I51 which are beyond Dorrower'!I conlrol. Borrower shall nol dc,.roy. dilmagl! or impair lhlt
P""'pe"y, allow ,he Propeny to dOleriorale, or commll walle on Ihe Property, Borrower ,hall be In derauli if .ny ror(ellure
ac""" ,,,. proceed,n~. whelher cII'1I or criminal. is be~un Ihal ,n Lende/s good (aith Jij~gmenl cOllld re'ijli 10 r",rollure o( Ihe
Pr"pe")' or olher".'IIe mate",lIy'impair Ih. lien crealed by Ihis SecllrllY Inllrumenl or Lender's seeuruy inlerell. Morrower may
"'" ,"ch a deraull and reiOllate, J\ provided ,n paragraph 18, hy cnusing "ie aClion or proeeedlO~ 10 be dllmiMed wllh J rul,ng
Ih.,f. '" Lender's good failh delfrmlOallon, precludes rorrellur~ or Ihe BorrolVer's InlereSI in Ihe Prop.ny or olher malcml
lI1'o""OIel1l of Ihe hcn crealed by Ihll SeeurllY III\!rumenl or Lender's s"urllY IlIlereSI. BorrolVer shall nlso he ,n derauh ,r
[lnrrowcr, dUfln~ Ihe loan uppllcation proc":,,. ~3VC! nUIHmall)' raL,c or InIJ('eurntc inrQr01JtlOn or !lILJlemcnlS 10 tender (rof railed
1(1 prfl\-'Idc Lender wllh any mJleriallnrorm3t1on) in connecllon With thl! loan eVIdenced by lhe NOle. 11''tC;luchng. but nol limned
10, rr:pr(''l.~nlnllOn~ concerning norrower'~ occupancy or lhe Property i1S:I principal re~ldence. If lhi~ Security In!llrument l!'l. on a
IC,I~('hnld, norrowcr ~h,,1I comply wllh 1111 the prOVi'l.IOn~ or Iht IC.l~C. Ir norrower ucc;uirc:\ rcc lillc to the rrof,crty. the
Ic,m:l1old and the rer tIll~ Shilll not merge unlcH Lender Agrce~ 10 the: rncrLLer In wri"n~.
7, I'rotecllon or Lender's RI~hl~ In the Property, If Borrower f,llLllO perrorm Ihe eovenanls nnd agreelOenlS conlalned ,n
Ihll SeeijrllY (n"rum.nl, or Ihere IS . legal p",cee.dlOg Ih31 mnY \IgOlnc.nlly arfeCl Lender's rights in Ihe Property (~"ch JI ,
or"cc,din~ ill bankruplcy, probate, for condemnJIIOn or forrellure or 10 .nforee laws or reglllal'ons), Ihen Lender may do and
r'l ror IVhOlever 1\ neee"ary 10 prolecllh. value of Ihe Propen}' and Lend.r's rlghlS in Ihe Propeny. Lender's "II011S mal'
111'~I\Jd~ pJyil1~ ilny .'lIms secured hy I lien which hilS priority ovcr 11m Security rn~tr\Jment. appeitring In court. p,1Yln:;
rl',l'.on.lhlc 3110rnC)'" r~c~ iJnd enlerlng on the Property h: m3ke repi1lr:\., Ahhough Lender may ti\~e action under thiS palngr3pl1
7, I.l~nrlcr dr)c, nOI hiJvl! 10 do 50.
An)' .mCllnll dllbursed hy Lender ijnder IhlS p,1ra~raph 7 ~h,1I hccOlne o,ld'lional debl o( Bonowcr sceijred by .hll
S'",url'y Inl!rumenl Unlell "onower and Lender agree It) olher 'erms of payment, Ihfl. amounll shall bear ;nler"I from Ihe
",," or ~lIbursemenl ,'1 Ihe NOle rale and shall b. p.y.ble, wilh interell, ijpon nOlice rrom Lender to Borrower requcslin.
p.'~'mr:'l1t.
R, ~lor'RnRo In,urnnee, If Lender rcqijire.d mongage .nsuronce as a condllion of mak,ng Ih. lo.n secured by Ihis Securny
IrQnHl1enl. nonower ,hall P3Y the premlUm~ required 11') m3inuun the mnrt~asc in~urance In errect. Jr. for any rc~uon. lh~
"Hlrl~i1!;e In\urunce cov~r:JRe required by Lend~r lapse!\ or cea,e!\ 10 be in errect. norrower ~hRII pay the premiums req\J1rc:d h1
n!ll:lln co\'~r:lI;~ 'ub~t"nli3I1y equivnlenllo the ",nr1~"fl.e Insurance prrtviomly In errect, at " cn!\l sub!\tontli11ly \!qulvillenl to the
{Il',f to Oorrowl!1' or Ihe ",n"~3~e in~mfilnce prevlou,ly In errccl. (rom an lllternille mnrtC3ite In~urer approved by Ltnd~r tr
'l't'I'tanll;'\lIy r.qlllv.1lcnl mort~;'\Ge In,uriJnce clJvI;ri\~e IS nOI I1vl1lll1hle. nnrrowcr !\h.ll1 pay 10 lender eoch month iI sunl equill 10
nn-:.lwelrlh or the YCMly mongase tn~mrtnce prQmlUm being paid by Borrnwer when the in!luri1nee coverage lap!\ed or c"."ed to
I" In errfCI. t-'lnd~r will ..eepl, ijse and rfl..n Ihe,e paymenu as 3 loss re,erve In Ii.u of monga3e 'nlurance. Loss rele"'e
,.,." 3021 9'90
~'Q' ,.' l\
11,'111' may 110 hlll~CI he! rcqulrl:'d. a. ..e nplllHl or l.cnc.Jcr. If mllrlgiJg,= 1f1.~urJn..:c (l. .I,I~C (Ill Ihe allUHlIll ,In'j lor lh:: pCrlod
,II I.I'nd~r rC'1ulrC,\) pro'mlelJ by iln .murer JpproveJ hy 1.ender ag.aln becomes ,I\'iulilbl~ JntJ I~ 'lluiilllCd. UClrJlIwt.:r !ihall p,JY
1111.' (lrCl1l1Um\ rcqulrcd 10 ",illlll.lln mOrlri1~C lIl~ur,lncc In C((Ct:C or 10 provllle alo\s rC,\lU\"C, Ulll1ll11c requlr~lH'lI( (or lIlon~Jgc
In'urllllce .n<ll In accord"nc. wllh any wrillen a~leern.nl h.,w,en Borrowel and Lendel 01 apphcahl. law
'), 11I""..II"n, Lender nl III a~enl lTIay make ,.;,son.,hl. enlllOl "pan and Inlpeclion' or Ih. Ploperly, l.nd.r 511all glv.
n"'''''"r nOllee allh. "m. "r '" 1'1101 '0 an ll\.lpeClion ~p.C1rylO~ I.a,onable caule (01 Ihe InlpeCllon,
In, Cnndcmnallon, Th. prnc.eds o( .ny award '" claim (01 dama~el. d"ecl 01 conl.quen"al. 10 conn.Cllon wllh any
e'''"klnnllllnn or nlh.r laklns or any pall o( Ihe Prop.rly, nr (or conveyance In li.u O( c"ndemnatlon, al. h.reby amgned ond
,h,lil pe paid '0 I.rndel
In Ihe .venl or a 10lall"klng o( Ih~ Propeny, Ih. proceed" Ihall h. appll.d III Ih. Iuml .eeuled by Ihll S.cu,lIy In,'rument,
\\I"''',,,r III nnl Ihen due, wllh any .'eell p"d 1(1 Borrower, In Ihe evenl 0(. panlal la~lng o( Ih. Property In which Ih. (ai,
"'''~C1 v"lu. ur Ih. Property Immed,al.ly berol. Ih. laking" equal 10 or grelller Ihan Ihe amounl o( Ihe luml ,'ecllred by Ihll
SI:cllrll)' In\In.llnt'nllmmcch;lIcl;.' hcrorc Ihe lakinp;. unlc~~ Borrower and Lcndr:r nlherwl~e apreCl lit wrllln~. lhe ~um5 ~"clJrcd by
"'" SCClJlilY Inllrllll1enl ,hall he I.duced hy Ihe "mllun' or Ih. proc..ds mulllpheJ by Ih. (ollowln~ rracllon: <al II" 10lal
'''''''"In Ilr Ihe 'uln, ,eeulCdlmmedlal.ly herore 'h. 1"~lng, d'V1d.d hy (b) Ihe (.ir mark., v.lue or Ihe Prnp.rty Immtdlately
h.r"le ,he lakillg. Any hal",,,. "hall h. p""t In BO,II,we" In Ih. event o( a ~;)rl1,,1 laklllS o( II,. Plopeny In \'/hlCh II,. rail
1I1,lr~c' value or lhe Prorerly Immedialely helor!! Ihe Iillln~ I~ Ins Il1ill1 the alllllurll or tile sum~ secured Ilnmcdli1lcly hdnrc tile
I.lk,n" IInle" UOITow.r anll lender olh."""e a~ree II' wllllog C.I "nle", apphcahle law olherwllc prol'ldu, lhe procetd. ,h,,1I
he .'pphed 10 the <lln" !C<urcd hy thll Sccu/lly In,IIIumcnl whelher 01 nOllh. SUml are Ihen du.,
I r Ihe Prnrerty " ah.1ndnned by Uorrnwer, or 1(, a(tcr nOlice by l.nder 10 Bonow.r Ihal Ih. condemnor o"~r,' 10 n"ke an
,II' .HlI or !CIII. a clall" (M damll~C!. Borrower ralll 10 relpond 10 Lender wllhin 30 daYI a(I~' the dal. Ihe nOllee " g,ven,
lender" 1Ililhll/lud io cnllCCl and apply the proceeds, al ill opllon, eilh., 10 "!loru!ion 01 rep.il o( Ih. Proparly 01 10 Ihe ,IUI1l,
.\c~'lJrcd b\' 1111\ St'CUtll\' 10'\ll'umenl. whcther lit nOI then due,
Unl~'15 Lender a;lt1 nClrrnwer othr:f'."I~e ilgree III wrni'ns. ilny apfJlu,:ollnn of proceeds tu pflnr.lpill ~hi.lll nOI ul('nd or
po"~nne Ihe due d,lIe o( Ih. nlonlhly paymenu r.rerred 10 In ".mgr.rhl I IInd 201 change Ihe an,nunl o( "uch paymcn\!,
II, 1I0nn1\'er Nnl lIc1enl.d; Fnrbenrante II)' Lender ",..I a Will Vcr. [lXlen,,,on or Ihc ,ime ror paymenl N modlne.I,on
or ,1I11llrlll...JlIon or the ~Ull1!'1 .,ecurcd hy thi~ Securuy In'UUInCnl ~ranll,'d by Lender to iJny 5ucceuor In Inlcrc5t or Do"owcr ~hall
n." orCla,. 10 rele~\e Ihc ',"hllley o( Ihe orl~lnal Dorrower 01 1I0rrowel'" SUCC.,IO" In InlCr.11. l.nd., ~hall nol be reQlllled 10
(Cltllmcnl.:C rl(ocerdlll~~ ill;:lln.\( any ~lJcce~'or in Illlerc~t or rcru.\e~ 10 eXlcnd lime ror payn1:1nl or olhcrwl~c mndify amnrtlL1110n
or ,h. <1111" .ecurcd by Ih" Stcu,ilY (nllrumenl by rell,on II( allY dcmand m~de by Ih. ollll,nal Dorrower <'1/ BO/lower',
\lJ'.et""" In inle..", Any (o,heulanc. by lend.r ,n ...,cuing an)' /lSlll 01 r.m.dy shall nOI b. a waivel o( or pl:clfJ~e Ih.
ekrrel~C or on}' rl~ht or remedy.
12, Succellor! And AI,"~ns Bound; Jnlnl alld Sev.rnl LiAbllll,\'; Co.,IRII..', The cOV.nanll and .~r..menll u( Ih..
SC(,Url'~' 'n~rnJlnellt ~hill1 bind and beneOI the ~UCCC5~or~ "nd iJ."~I!;n~ ur Lender and Unrrowcr, sulllect In the prClYI,~lfIn~ nr
(1;11 ,1~r;1ph 17 Dlll'rowcr's covcnants and il~reell1CnUi shull he JllInl llnd ~cvcr:ll. Any Borrnwcr who CO.~II~lI.\ Ihl5 S-!curilY
In",umenl hUI doC! nol e'ecul. Ih. Note: (a) " co'''plllng Ihll SeculIlY Inllrumenl onl)' 10 mort~a~., granl and convey Ih,lI
nnrrO".r', 'nlereS! in Ihe Property und., th. I. 'Ill' o( Ihi. Securll)' lnstrumtn!; (b) '" nm pellonally obll~aled 10 pay IhJ 'un"
.,cr.-Ilred hy Ihl' SeCUrllY InslrIllncnI; and (e) altrce~ 111.11 L\~IIlJcr nnd ;111)' nlher Dorrowl:1' M1i1Y ogre..: 10 c:\lcnd. l11odlry, rort.ic.lr or
M1,I~C: ,"lY :1ccnmmlJ<.J,Hlon\ \link 'c~lIrd Il) lhe lern\.\ or lhi~ SeCUrIl}' In~lrUn1(ml or the N"lc wilhout th"l Dorrow~r', etllUClll.
1.\, Lnon Chnrn.', If the loan ,eeured by Ihis S<eurily In"nlm.nl IS "uh,eelIO . law wluch "et< n'Qx,mum loun ehar~e,',
,'n'; IlIil' Llw " nnlllly InlCrprCled '0 Ihxl Ihe inlerest or olher lo,n ch"'gel colleCled 01 10 be cllllecled in eonncclion wllh Ihe
10,1n e"eed Ihe pern1llled IImlll, Ihen: (a) any ,uch loan chalge ,hall b. reduced by Ihe amounl nece!lar)' 10 reduce Ihe ch'Jlge
10 Il1e ~ermllled "Illil: anel (b) any ,ums alr.ady colleCl.d rrom Borrower which exce.d,d permilled linul! will be rerulldeJ 10
Il,'rrn"'.r, Lender n'lIY choo," 10 mxk. thil refund by "dUClOg, Ihe p/lnCl~.1 owed under Ihe Net. 01 by mal,,"~ a dlleCl
p,Wn1.III 10 !lorrowCl, If a "~Ind reducel pllnClpul. Ihe reducllon will b~ lr..lIed a,' a pxrllal prepaymenl wllhoUI any
rr"~ay",.nl eharg. under Ihe Note,
14, Nollce" Any nOliee 10 Ilol/owel provided (or ,n IllI! Securol)' Inlllumenllhall be siven by d.livering i, 01 hy ,""tllnr
II "" nr" cia" m~11 unle!! nppllC3ble lAW requl/os u,'e o( anolher In,,,hed, The nOllce ,hall b. dir.cl.d 10 Ih. Prop./IY ,~ddreSl
or ,Inr olher lIddrm [Jorrower d."gnalel by nOllee to Lender, AllY nmice 10 L.nd.r ,hall be given by n/ll clall mail 10
Lender'1 addr." !Ialed herein ur .ny olh.r .dd,,!! Lender dellg03I.S by nOli'. 10 Borrower, Any nollCe plovided rN In Ihi,
Seell"'v (n'tnJmenl ,h.1I b. deemed In have heen ~Iven 10 DOl/owel or lendel when given al prOVided in Ihil pal~Gtaph,
15, Go"ernlnn LA\!'; Severablllly, Thil SecurolY InSlrumenl ~hall he goveln.d by rede,al law and Ih. la"' or Ihe
)U'"dICIIOIl in whICh Ihe Plop.ny II local.d, In the .venllhal any provllmn or elau,," o( IhlS SeCurity Inmul1lenl or Ih. NOle
COnnlC" wllh il~pllcahl. law, luch eonnlCllhall nOI .((eel 01 her prov,,,on. o( Ihll SeculllY InstlUmenl 01 Ihe NOle which c.n be
g"cn CrrCel "'IIIiOlll Ihe conn'ellng provilion, To Ihi" cnd Ihe prOVISions or "m SecUIllY In,IIumenl and Ih. NOI. or. decl.red
10 h~ ~rv('ra"le,
)(" Borrower', Copy, B~rrowel ,hall b. ~"'en on. conrormed copy o( Iii. NOI. and o( thil S.cullty Inll'Umenl.
'.'",302' 9mo
'...4.f'
17, Tran,fer of lhl Prnperl)' or a lIeoenelalllll",,,1 III 1I0m.wer, I( all or any 1'",1 of Ill" Properly or any InICI"" In II
" '.'llll N 11'i111'1(crrcd lOr If iI hcn..:flcial ,"1"rc~M III BMrt1WCr I!>> ~old Uf lral1~rcrrl!d I\ni.J [Jorr<1wer" 0(11 iJ nil llJfil I pc'~nn) wllhl1W
LI.:11IIcr', prior wnllell CClIl:-'Cr\t, LC:lldcr molY, ill It !I npllun. H~"Ulrc lI11mlulJ.IIC pilynlclH In rull or ,III ,~unu ~ccurcd hy 1111.\
Ser'''''~ 1f1'!rlllnen!' However, 1IIIIOpllon ,h~1I n<lI he ucrClle~ b)' Lendcr If e.erClle IS prnlllbiled by federall,lw a,l of Ihe dale
or 11m ~CClJrlly 11l\lnllllcnl.
If Lender c'(crC:l\e~ Ihls oplUJn. lender shall gl'vl! norrower noller, of accC'.lcrOIlCJn, The nQtlce ~hall provIde... period o( nnt
l~''i'' IIl;ln .'0 d,IV~ (rolll the (Lilt' the nollce 1\ delivered or ll1adlrd WllllIl1 which lJnfrowC'r must pay all .'un15 5ecurfo h)' Ihl\
5eUlrJl\' 111'ilrUmerll. If Ilorrowcr (aiL\ II) pay thl'~e\Um'i prim to the cxrHrallUn or 11m penod. Lender may Invoke .:Jny reme-dlu
pcrllllll."d by thl.lIj ~c!"'lJrH;; Illo;trlJm~nt wlllllJlJt rlltlhcr I,otl(:e or demand ol'l Oorrower.
IN. Horrowu'\ Iti~hl In Ill'!milure, If Borrower meets cer1;"n condltlOn~. [\orrower shall have the (I~hl 10. hJvt
cnf"fccmCIlI of lhl~ !l{'{:urIlY Inllrument dl.~contlOlI!!d at ilny time prior to Ihe earlier 0(: (0) 5 d.1YS (or 'HJch nlhcr penod iH
arr,llcahlc lilw may <or!!clf)' (nr r~inSlil1ClT1ent) heron~ salt. or the Property plJrsuant 10 ilny power or 5ale contained In 'hiS
S('t."qrlly Imlrumerll, Or' (h) t:nlry ()( il Judgment en(or<;:lng thl.\ SeC'utlty In5trument. Tho~e conditiOns lIrc that I)onower: (a) pays
Lender all \U,"' "",hlch then would be due under thl\ Ser.uruy Inlljtmment ilnd Ihe NOle 8!i if no a<;:c(!leraIlOn had ot:currl!d. (b)
Clllr;~ ;lrlY (\e(;JlJII of any other coven,,",, or il~rcernent~; ie) puys all upensc~ IIIcurred In enrorcin~ thl." Securll)' Instr\lmenL
In(hj(IIIl~L but nOI IIl11ned 10, rea~(Inilhle IIllorn(!y~' rl'~:r;; ilnd Cd) IlIkes 5uch action a~ Lender may reason;lhly require 10 H~ure
tl1:\I the lien of thl\ Security In5tnJmltnl. Lender's t1glwi In the Property and Borrower'~ oblillRtlon (0 pay the ~ums secured by
thl~ S~'':llrll)' In~lrun\cnt shall continue unch..\O~eJ Upon relnlitalement by Borrower. lhl~ Security In:'\trument llnd Ihe
()hll~;1IIr)n~ ~ccurcd herehv ~11,,11 rem"ln rully errct.:llve as Ir no llccclerallon had occurred. Hnwever. IhlS right 10 rCHlsl."~ ~hall
110' ilrply 1I1lhe (.1~e or ilcccl<'rrlllon under p.Uill!t;lph 17,
I '). Sole o( Note; ChAnl:c of Lnan Scrvit:cr. The Note or a p.utl,ll InlCrC.'it In thc NOIC (t(J"r:thcl' with this SecUrity
IlI'dr\11l1cnl) ro,lY be ~old one or more (1Il1C5 wilhout prior nollC': to Borrower. A sale may result In a ch:)n~c In the enllly (known
a< ,he "Loan ServICe''') tha. coll<m O1onlhly pa)'men" due onder Ihe NOle and Ihl! S<curJlY In''''lmen!. There .11l0 may be one
or more change~ of 'hE Loan Servlcer unrelated 10;'J .~ale or the NOle. ie there is a change of thc Loan Scrviccr. Dorrnwer ",1111 be
!:!I' ~n wrlltcn notice of llle change In ocr:ordilnce wllh paragraph 14 ahove nnd applicable- I.l\\!. The notice Will slate the name and
~1r.1r1r('~o; or the nC'" LO,1I1 Servlccr and the 3dtlrcss 10 which pay menu should be made. The notIce wlil also comaln an}' Of her
Inlnrlll.1[Hln r(qulr~'d h~. ,IJlI'IIt.:ahlc 1.1\\'.
~O. Ilnlarduu\ SlIh"it3I1CCj, Borrower ,hull nol CJuse or fl~rmit lhe pre~cnce, IIse. disposal. IIjlorage. or ,dca~c of uny
H;'I,lrtlnu\ Sub"l,mc<:\ nn or In Ihe Property. Borrower shnll not dll, nor allow anyone el~e 10 do. anythIng arrccting tht
Pr11fll.'rl)' IlInt I:' 111 \'lOlatlon l)f iH1Y Erl'nrnnmcnlal L.JW, The preceding two ~enlcnt.:e~ ~hall nOI apply 10 the ,.,re~cncc. lJ~e, or
""',I~' on Ihe P,operty of Imall quanll"., of Ilazardous Sub!lances Ihal arc generally recoynl/.ed 10 be approprJ3le 10 oormal
rC<'ldcll\l;l1 O\C\ and to 111;lll"llcnanCe or the Pr(lrer1y,
rlllrl'tlwcr sh;111 ,.,rompll)' ~Ive Lender wtlllcn nOlice or .lnY ,"ve~t1!;3Iion. claim, demand, laW,~\lit or other acllon by .any
g("lI'~rnmctllal or rc~ulalory agency or prlv:)le port)' involVing the Property Jnd any Uunrdous Substance or Envlronmenr,al Lau.'
of Whldl Oorrower h.l~ acwill kl'\owlcdpt. I( Borrower k;)rn~, nr IS nnlified by any governmental or rcgulillory authOrity. that
any ,elllol,,1 or olher remedl'lion of any fhzardolls Submnc< affwlnS lh< Propel~y II necessar)', BOrTower ,hall promptly lake
all ncce~s;\ry remcctldl acllon~ In accordance wilh Envl((mment.l1 Law.
^' lI,ed in Ihll par'~r3ph 'lO, . Hazaruous Sub!l.lnce,' are Iho," !ubslance! denned as lo.ic or huardoa, slIbslancel by
En'lroomenlal Law ,lnd Ihe follOWing sub~'ance\: ga,ollne, kerosene, olher nammable or 10<lC petroleom prnduclI, 10"C
pC'~lIcidc,~ i"lT1d herbicides. volallle ~olven\~. milll!rial~ conl;lInlng a~b('~lo~ or (ormaldehyde. nnd rO(hOnClive nlaterti11s. A,~ \Hed in
Ih", p..a~rarh 20, 'Eovlronme",,,1 Law" mean, federal lawl and laws of Ihe Jumdlcllon where Ihe Property II localed Ihat
reLlIe 10 heallh, !>felY or environmental prolOcuon,
NON.UNIFORM CQVENAN'rS, flor",wer and Lender further covellOn. and agree a, followl:
21. ^cc:clcrlltinn: RCln~dle~, Lender !ihnll J.:lvc nntlc:c 10 l\orro\\'cr prlnr In nccclcrntion r()lIowln~ norrnwer'!'i breach
1)( on~' ,0llCrlll"1 or :1J,!rcc1V1cnl In thll\ Sccurlt)' In'trum~nl (hul nnl prior 10 llcceleratlon under pnroJ!rnph 17 lInl('.~~
arplleable low prn' ide, nlh.l'1I'l,e), Th. notle~ ,hall ,ptelfy: (a) the Ilefnoll; (b) Ih. ocllan required to cure Ihe ,Icrallll:
(c) a dnte, not Ie... Ih.n 30 d.y, from Ih. dale the nolic. h "I..n to lIorrow.., bl' which Ihe default must b. cured; nnd
(dl Ih"t rnll\lfO to cure Ih. deralllt on or heror~ Ih. dote ,,,.elned in th. nolice mal" re.,ull In Accelcrotion of the ,urn,
!<cured by Ihl, Secur:l)' In'I..,n..nl aod nle of Iht Properly, Th. notic. ,hail furlher Inlo.m Borrower of the ri~hl 10
rf'imlntc nrt(,f nccclcrnlion Bnd lhe rlRht 10 O!llllllcrt In Ihr foreclolllluft' I1rocr.rdlnlllht nnn.~~I.'tC!n('(l nr n .Idnull or nnj' nther
fIr('.'n'. of nnrrnwer 10 occcierAtioll alld ,ale, If Ihe default i, not cured 011 or hef'"e .he flal< 'pecmed In t"e nolk"
Lcnder, al ill npllon, may require In.medlote pa)'mellt In full nf nil mnu ,eeured hy thl, Security In,1I1Iment wllhou.
fllrthe, demnnd .n~ mny invoke lhe power of sale ond any oth.r remedi.., permit led hy npflleoble law, Lender .hall be
elllllled to colle,1 all e'llcn'l'.5lncurred III pu"uln~ the remedies provldecJ In thll paraGraph I, including, but nOllimiled
In, ren,ooable ollorne)'s' ree5 and co.u or tille evldenc...
If Lender invok., Ih. pow.. of sale, tender ,hall mall or cou,e Tru,tee 10 mail a notiee of sale to norrower in Ihe
"1;'"nor pre<crlhcd by arrllcnhl. law, T.."tee ,hall ~h'. notie. of ,'ale h}' public "d.ertlle",ent for Ihe time nnd In lhe
1I",nncr pre,5Crlhed h)' allplleahle I."" TnI,tee, wilhout demand on 1I0rrower, ,hall .ellthe Properly al public our.tion 10
tho hi~he,'t blclller nl the lime Ind place and under tht term. de,innnlld in the nollce of sale In nn. or more parcels and in
nil)' nrder Tru,tee determln.." Tru'te. mol' "n,lpnn" ..Ie of ,,11 or an)' poreel nf the PrOperl)' by public onnollncemenl M
th. time and place of any pr.viou.ly ,eheduled lal.. Lend.r or ii, d..,I""ee may purchn,e Ihe Property nt an)' lale,
Trll"ee ,hnll deliv.r to Ihe purch.... Tru.t..'1 deed conveylnR lhe rroperly wlthnut any co..nant or warranf),
.'pr.,,,ed or Implied, The r<<lIol, I" Ihe Tru"t<<', deed ,hall he prima rncie .videncc of Ih. troth or the ,Ilalement' mod.
tllereln, Trn,lee ,hall nprly the prneeed. of Ihe ;ale In the followin" order: (a) to nil e'pen'e, of Ihe ,alt, loeludin~, bul
Mlllmllld 10, Trultee'. fel!5 of ~ '1. of th. "ro.. ,.Ie price and ru.onabl. attorneys' feu; (b) III all
'orm 302' 9/90
".~.f'
,,,n' ,...ure~ h) Ihls Sllfu,lly lust,umenl; enrl (c) nll,\' on...!" Illlh're,sou 0' po"on" I.~all,\' elllilled In il.
1I..",m", in lIero,elallee \4'i.II liuhllll. W of the Ma',vland flule. IIf ",ocedu,e, dnc.' herehl' dedll'c 111111 ~,""1111 Ihe
1J:1~~jll!1.: or 0 lltrrcc 10 ,ell'he (lrnpcl'l~' in onl.' or mon.' parcl.',h h\- 'he "(Iully court hjlVjll~ jUl"hdicliun (fir Ihl: ,~IIIC! nf ehe'
'''"rerl~, and 'IlImnl! In Ihe ~rantin~ 10 an,I' tru,'.. 1I1'I'Olllle,1 h~' Iho ",..nl 10 deere. Ilr ;oil Ihe ,I~hl,', I'"WC'.' and
"'II1<..lIe, ~rnnl.d III ,he T,u'.ee in Ihi, S.rurilr In,'I,um.nl 'o~elhc' wllh lIn~', aod all ,I~hl\, I"'''''''' ..nd "'lIIedlc,
~r""I,,'11\ Ihe eI.uee. !'Iellhl' Ihe a".nllo d.eree no, Ihe (lo...r or .,nle ~'.nlc,lln Ihi, p.ra~rarh 21 ,hllll hI' .,hau.ted
Ifl Ihr l"'l'l1l lhe.' Jlrn('ccdil1~ i. di1ml'i!'lccJ hrforc Ih'J'ilym~lIlln full of all ,'lUlU ~l'('urcd hy fhl." Securitv In,,lrumclIl.
12. U...lrll"lc. Url)" p.yment or all 5lJll1\ .'ecurt' bY.lhls SCCUrIIY InMrumenl, Lend~r lIr Tru~ree. ,h..lI relc...c lhl\ S..h:Urll)'
''''''"01C01 "illloUI charge 10 Born,we, aou mark ,he Nllle 'pald' aod re'urn Ihe Nllte 10 Borrower, 1I0frowe, shall pay any
rt'((lrt!;lIIClll 'mi.'
~J. Suh,'illlh' Trll,~t('c. Lender, al il\ optlon. lnilV (ror., lime 10 lime remove Tru,,(c nod appolnl a .\UCCC:oUOI Ir\Hlce 10
all" Tr\lsl<~e ,1PJ111II1ICtl hl'r(!llndcf by 3n I"."rumenl recorded 111 the ell}' or cnunly 111 which Ihi~ Se-.:unty In~ilrulllflll IS ((:COI ded
\\'illllllJf crJnVndncr n( the Propeny, the "ucccuor IrUSlee shull svcceed co alllhr. tllle. power and dUlle~ cnnfened l,I~on Tru,uec
/1"'('111 ,!ncl hy ilrphc.lhlr low
~4, PO'.\<.,ion of ehe "'orerl~', 80rrower ,h,,1I lI..ve pOllU!lon of 'he Propcn> unlil Lende, hal ~lVen Borrow",' nOllee or
d"(o1ull pllnuanl l('l parasr,lph 2 of IhlS Sccurlly In~lrument,
l5. !(lllcl') 10 .lIb Securlly 'n.'Unllncnt. Jr one or more rldeu are eAtCuled hy no""wcr and recorucd lo,.Iher wllh Ihu
S',eurilY In.<lrumr"l. Ihe coven"n" and lI~rcemcn" 01 :,ch !ueh ndcr ,hall be IIlcorpora,qd Inln Dn<J .h..1I 3rr.enoJ and !UppleOlelll
Ille COI'ell',n" "",I "~reClnenll or Ihis S~eunly InslrlJOlcnl 311( Ihe "der(s) were a pan o( Ihl! St~U"'l' In,"um,nl.
rt he,. ..pp"cable ho>(t'l!
R AdJu','''le [t,lle RI<Jer ~ CondomulIu,,, Rider 8 1.4 ramil) Rider
Grlld,,",.cd Paymenl Ride, Planned II"iI Oevelopmenl Rider Blw~~kly PBY01en~ Rldtr
f:"i Uallunn Rldor RDle Improve",eol Ride, Second Home Rider
U VA Rider Olher(,) Isp.elr~J
'" """"" "'DW. '''ro~. .,." .", "y"" '" ,", "~"M"" .."","", '" '''', ,,,",,of '"""'"'' '"'
111 .111\ rlrlcr(,' e..ccuTcd hy Rnrmwer j'mtl rccnrd(;d with II J
\\'llnc~~c~ -~ ~
~I-A ~'I':_:l,._ -.....-:.__ .-lScaI1
D L~' . NSk:N y ,Bo""...,
~1. OJ ~~~_ c
-~ =::::::,.{~c"I)
, 11 \;. HANSEN ,00"0""
(Seal)
.lJor,ollt.'
..JSeal)
.s.,rrow"
ST^'m 01' M^R\'LANO, '~"i- "I.... ~./,.-/ , Cllunl,v 55:
I fI.,.by C'enir)', Th31 on Ihl! l~~ day 01 ~"""""-\:._' "'I 'i I ,be(ore m<" Ihe lub'"rohcr,
a ~otary Public o( Ihe Slale of Mlrylund, In and (or Ihe c...... cj 7 . -:- 4.......... ,1......../"./ . ~trlonulll' "J1~'eared
-i'0. "",,,\\"-5 '1", \+'~""......... 0::;- [(<"'1 J;..,-""-,,,- ~.........~c,....
known 10 me or '3Ii!raCIOrily proven to b. Ihe penonls) whose name(l\ !UblCribcd 10 the withio inllrllmenl and
nclnowledge Ihal ,/'he Y 'ifu Ie ..me (or Ihe purpose. Ihercln con"~d .1 ~ ?:L
AS WITNESS, my hl'nr ~~Ol .,J9~ / /,,# . A~/'7 ./~
My COlnmJl<lon hplr)!':;j + < v .~,_.._~ ~~_ __-==---.
0) /A: tl')T'W,~ NOlllY I'ublo,
ST^Tr.OI' /f,...~j, _ FUllllC :'7 ,.."!-nt:-,,.,,/~ Counl,VSS:
I fferebyCcn,(y, n,ll ~" /~~ d3yor b,_,_,__ k"..- , ,1'i J ,hero.. me, 'he !ub,crrber.
a NOI~Q: rubllC or Ih.e SI.I:.~ !11("'V.~ and (0' lhe c..........:-I,..'1 a'st- A,.~"'"- ".I........k. \, pmonally appeared
'\0 c............ ____ \ ( .~, . '''''"''-.. ,
the '~ent or Ihe r""y .ec"",d by ehe 70regOlnl Deed or TrUll, and made oalh In due form or 1a\V Ih.1 Ih. eO"!iderallon rec"ed
In qld Deed o( Tnl1' ", IUle and ~O"~ nde u therein ~el (ol1h <1nd Ihill the 3CI",,1 ~11", of ,"one)' ndv:inced at the l.:lo,lnc.
,r;1",;1Cllnn hy Ihe ,ccured r'"rt)' W.,~ pnitJ, over and 'H,t)IJ"r.d "y the party or pi1rtlU ~ecUred b)' the De.:ct or Trust 10 lh~
nnrrowcr or 10 Ihl! per,o" l"uf1on'uhlc (or dl~hur~e,"enl of funds In thC' dOJin,:; IrQn.~tJC'lon or Ihelr It:spet:live .gent .11 . lime "111
hrl"r Ihan tht'l.tAccUlIon nl1d l1t.hv~ . roUler of Ihn Deed of Trust; Ind I\lso mllde ()t1lh thlt~ht I~ lhl~ 'en! (I( the f!1'l1y
or r,1rtlcs ~("cur('d ,1nd I' duly nil rfle g -,,, hl~ I1rnd3VII.~' ~. '7
AS WITNESS: my ha"d: <l;J Ol, ,It,~ /' ' '" _/-/
Mv com",isslok1'~P e~: ~ r .......::...., ~.,~
. / 1:1" !ii 1I01M\~. No,,'Y Pub", -
Thll" 10 <en, y II 31 ,hi! doc n~ wll\l~~~, .iQu rlor Ihe !Upe.....ill 0 nenni. J. :Jna,
Attorney-at-Law "',,- 'V.,' one 0 c pie' amed In Ihe'n\l~Jmenl.
l' Arun~e\ ~__
'8ft. 'f~nt 'otm 3021 9/90
8CK1lDULIl h
Pl\nC1'.L 110. 1
ALL TIlAT CERTAIN lot or pil'loe of ground, lling and sit:uate iT.
that Townl'lhip of Silver Spring, eounty 0 eumborl~nd, and
Commam/ealth af Pennsylvania, more pal-ticularly described in the
Final ~ub-Divi~ion Plan of Rich Valley Manor prep3rad by Whittock-
Hartman and recorded in the Office of tho Recorder of Dseds in and
for eumbarland eounty, PQnnsylvania in Plan Book 56, ~ags 36, as
reracordod in Plan Book 57, Page 109.
BEGINNING at a point on the Southw~9tarn Right-or-Way Line of
Rich Valley Road, said point being referenced as the intersection
of the Southw~stern Right-Of-Way Line of RiCh Valley Road and the
Eastorn Right-Or-Way Line of Northwatch Lane I thence from sa id
point of boginning along the Southwestern Right-Of-Way Line of Jl,ich
Va114Y Road by a curve curving to the right, having a radJ.us t'f
1,065,08 feet, an arc length of 359.92 teet to a point; thenc<1
~ontinuing along same South 44 degrees 49 minutes 10 seconds East
a distance of 129.08 feet to a point at the property line betwaen
Lots No. 20 and 21 of the "rinal Subdivision Plan of 28 Lots _ RICH
VALLE'l MANOR, silver Spring Town!lhip, Cumberland County,
Pennsy1vania"1 thence along said property line of Lots No, 20 and
?1 South 45 deqr~ee 10 minutes 30 seconds West: a distance of J07.84
foet to a point at the property line between Lots No. 20, 21 and 26
of the aforementioned plan: thence along Lots No. 2~ and 27 North
4) degrel'ls 50 minutes 32 seconds Wesl: d distance of 413.22 reet to
II point on the Eastern Right-Of-Way Line of 1I0rthwatch Lane I thence
nlong the Eastern Right-Of-Way LJn.. of Northwatch Lane by a curve
curving to the right, having a radius of 350.00 feet, an arc length
of 111.19 feet to a point; thence along same North 33 degrees 21
minutes 00 seconds East a distance of 166.24 teet to a point:, the
point of beginning.
ALL of that land situate in Silver Spring Townshi.p, containlng
135,737.32 square feet or 3.ll6l acres and being shown as Lot #20
on the P'inal Plan of Lots of Rich Valley Manor prepared by
Whittock-Hartman Engineers on Novemb~r 15, 19Y8, Drawing No. 5-87-
J.5 and being subject to a reserved area for the extension of
tlorthwatch Lane to Land now or lata of Max C. Hempt, alonq th..
Southern Property Line, should it ever be required.
-
-
SCHlJDULI! A C:;O~a.
PAReEL NO. .1
ALL Tfl1\T C.t:RTAIN lot or phoe ot qrounc1, lyinq and aituate in
the Town.hip ot Silver Sprinq, eounty ot CUmberland, and
Commonwealth ot Penn.ylvanta, more p.rtioularly de.oribed in the
Final Sub.Oivi.ion Plan at Rich Valley Manor prepared hy Whittock.
Ha~tman and recorded in th~ Oftioe ot the Recorder ot needs in and
tor Cumberland eounty, Pennsylvania in Plan BOOK 56, PAqe 36.
OF-GInNING at a concrete monumant local;nd on the slUlt.rn r1.ght-
or-w~y line of NorthwAtch Lane (50' riqht-ot-WllY) said monument
locate<l at the riqht.ot'.way intersoction of tlorthwatch Lane and
Penns Way Road (50' right-of-w.y), thence alonq tho r,i.ght.Of-'...y
line ot Northwatoh Lane, North 07 deqr.e. 46 minute. 30 secon-1o
East, i distance at 5~2,2l teet to a concrete monument; thence on
a curvl!l, curving to the right having a radius at 350.00 reet and .~n
1l1"C length ot 45.04 reet to a point; thence I1long Lot #20, South 43
degr.ees 50 minute. 32 seconds East, a distance at 359.13 teet to a
point; thence along' Lot M26 South 15 degrees 24 minutes 52 seconds
West, a distance or 446.42 teet to a point located on the right-ot-
way line at' Penna Way Road; thence along the right-at-way line ot
Penns Way Ro.d, on a curve curving' to the lett havinq a radius of
375.00 teet and an arc length at 50.00 teet to a point; thence
still on the right-at-way, North 82 degrees 13 minutes 30 seconds
West, n distance ot 150.21 feet to a point; thence on a Gurve
curVing to the right with a radius ot 25.00 teet and an arc length
o t 39.27 teet to the pliloe at BEGINUING.
ALL at that Land situate in Silver SprinC} TOWTlsh.ip, cont,alnir.g
14 3,1)70. /\5 squ.re teet or 3.3028 aCl"eS and being shown as Lot .n
on the P'inal Plan at Lots of Rich Valley Manor prepared I:y
WhittC:/I:lK-Hartmar., on November 15, 1988, Drawing No. a-87-l!L
. ,
~
~
RnaZ~T R. .LAHTI an4 KAAY I. '~I
hh ...U"
Len4uoA..ll110r
DUD or nus1'
OATID O.ca.b., 20. 19'1
Upon tho.a tloIQ e"CIln plraal, ot
1&n4. the bUlldln,. anll
t.m,r__anu of Doual.. J. Hln."n
and ICIY Jo.nn Il.n..n. hll wife.
4 North Watch lAn., SUver Sprlnll
TO"","hlp, CWlbuhnd County, PA
TO
~o.n1' KJ:1Ul lOAlf ,
Anl",a.
To S.cur. $100,000,00
Intere.t from June 20, 1992
I
,
Reoordd In CWlIber1end County, on the 26th day at D.o..b." un, In
"ortl..a Igo. 1040 .t "1' 714.
ASSrQNHENT or DI!D or TlUS~
V1lDUI, ROI!RT 11.. PlANU and /IAJlY I. ,tANTt:, hh "'It., adult
Indlvldual. r"ldlnl at RR'l, lox '2, 'ark.r.burl, 10"" (tha "A..II110Y"), .Id.
a loan ot '100,060.00 to Dou111. J, Han..n and Kay JOlnn Hln.en, hi. wife, who
nald. n 4 North WItch l...n., Sllv.r SprLnl Town.hlp, ClJlIlberl.nd County,
Penn.ylv.nl, (th. ..o,row.r.), on Dec..ber 20, 1991, In con.ld.rltLon ot thaLr
vrltt.n proml.. to r.pay the .'ld loan "'lth Inter..t ..curld by th.lr Not.. at
the 111111 date (th. ./fote..) .nll on the further ucurlty of a Dead ot Tr\l.t ot the
IIlme date (the 00..4 vt 'IrUlt.) on th.lr r'.ld.nc. .t 4 North w.toh Lan., Sllv.r
Sprln" Town.hLp, Cumbar1and County, '.nnay1venla (tha .'r..l....) recordad on
Oae'Nb.r 26, 1'91 1n Cu.b.r1.rd County KortS'I' look 1040 at p'.a 714, und.r
which D..d or Truat D.nnle J. rlrln., P.O. lox 189, D.nton, K'ry1.nd 21629. la
Tr\..t.. Cor th. b.n.llt ot "-,.llftor; .nd
VHlllAl, AaILIft" has pureha.ad the Not.. wlthout recour.. to tha
.....llftor an4 d.dra. to Uk. an a..l.-ent of the Dlld <)f Trwlt: .. collateral
th.r.tore; and
~, Alllsn.a he. _,r..d to acc.pt .....l¬'s tranSret or all
thalr rl.ht, tltl, 'nd lnear..t 1n tha .tor..ald Not.a and D..d or Tru.t; a"d
~
VMII1Al, A"l("ol hi' liv.n actull WTlcc.n not1~. to the lorrover,
D~.la. J. Han.en and KIY Joenn "an..n, hl. vLf., of the wi~hIn A..llftM.nt,
~OV ALL KlM IT THl'E .kJ.IENfl, chat the A..lsnor, RO!ERT k. PLANTE
Ind KAJ.Y E, PlANTE, hla wife, IAnd.r ln the .bove.o.ptloned Dud of Tru.t, d.t.d
Deo.llblr 20, 1991, ILv.n by Doull.. J. Han..n a"d Kay Jo.nn "an..n, hh wUe,
lorrowlr, In thl orLlln.l prlnalp.l amount ot $100,000.00 .nd record.d In tha
01110. of ~he aecord.r of D..d. In and for C~b.rland County, ..nn.ylv.nia in
"ort"I' ~ook 1040 at pa.. 714, for an4 In the ~o~ld.ratlon of the .u. of ONE
DO~ ($1,00) .nd other load .nd valuabla co~ld.ratlon, lawful mon.y of the
United Stat.. of Marlc., to "..lenor, In hand paid by A.II1&".., ROIDT I1U.aIGAIf,
an adult 1ndivLdual re.id1n& at 1420 Caloutta l~n., NIPltvilil, 111Ln01., It or
before the .n...,l1nl .nd ddlvery at the.. pr..enea, thl nCllpt whlnof L.
hlreby .elcn""lld'f1,d, hlv, Ir.nt.d, b.r.11n.d. .old, I..lened, tranaf.rr.d and ..t
over, and by ~h"e pra.ent. do Ir.ne, b.rlaln, ..11, '..ien, tr.n.t.r and .et
over unto thl .a1d Alllen", hL. h.lr., .uac...or. and ...i..... the afon.ald
Deed of Trult, a trua and corrut copy of whLch i. .ttaahed a. Exhibit "A" hereto
.nd Incorporated hlr.ln by thl. r.t.r.no..
TOQETHEP. Vlru .11 the rl,ht.. r.medi.., Lnaidlnt. and 'ppurt.nance.
01 Allll"or thlreunto bllon.lnl or In anyvll' .ppertalnlna, and all the rL,he,
Htla, tntu..e, .Iceea, p1l'oplny, cll1l1\ and dl"'and wh.un.v.r of, in, end to the
J.m. and the pr..ls.. thlrlin d..Cfib.d.
TO HAVI AlII) TO 'HaUl, nCIIVI AI'ID UlI, All .nd alnlular the
her.ditallenta and preetae. h.rtby ,ranted and a"1",1d o~ lI.ntlon.d .nd intended
50 to be, w1th chI apputtlnancl', unto ch. said Robert Klrri'ln, A..i~,... hi.
h.Ir., succ...or. .nd 1..Lma, to and tor hi. .nd thelr prop.r ua. and behoof
Defendant's Exhibit "A".
6. Denied. The Notes were attached to the stock Purohase
Agreement as an exhibit and were incorporated into the Agreement.
The Agreement specifically provides in Clause 10 that the Buyers
shall have the right of set-off against any amounts or payments due
Ol" to become due to Mr. Plante, inoluding payment on t.he Notes, for
any breach of representation, covenant, warranty or agreement made
by Mr. Plante in the Agreement, or in any Schedules attached to the
Agreement. As will be set forth in more detail in New Matter Mr.
Plante breached the Agreement through misrepresentations, failure
to honor covenants and breaches of warranties within the Agreement
and SchedUles attached thereto. Therefore, it is denied thnt
Defendants are obI igated to pay a mere holder of the Notes the
principal and interest according to the dates set forth on the
Notes.
7. Admitted in part, denied in part. It is admitted that
the Principal and Interest due under the Notes was secured by the
Deed of Trust identified ao Exhibit "nil in the Complaint. It is
denied that payment of the Notes is due and owing to Plaintiffs for
the reasons set forth in Defendants' answer to paragraph 6 of the
eomplaint.
8. Admitted.
9. Denied. To the extent that this averment implie. that
the Notes are due and payable Defendants deny such implication for
reasons previously set forth in paragraphs 6 and 7.
2
,
10. Admitted in part, denied in part. It i8 admitted that
the Borrowers have refused to pay either. Principal or Interest on
the Notes, but it is denied that the Borrowers refusal to pay
consti tlltes a defalll t. under the terms of the Mortgage, 1. o. Deed of
Trust. Clause 16 of the stook Purchase Agreement incorporatoR the
Mortgage into t.he Agreement. For reasons set forth in paragraph 6
Defendants' failure to pay is not a default.
11. Admitted.
12. Admitted. By way of further Answer, the Mortgage further
states that the Borrower shall have the right t.o assert in a
foreclosure proceeding t.he non-existence of a default or any other
defense of Borrower to acceleration and sale.
13. Denied. For reasons already set forth Defendants deny
that these sums are due and payable by Defendants.
14 . Admitted.
15. Admitted.
16. Admitted.
17. Denied. This allegation is a conclusion of law to which
no responsive pleading is required and therefore same is denied.
WHEREFORE, Defendants pray that judgment will be entered in
favor of Defendants and against. Plaintiff on Plaintiffs' claim for
$118,631.47 plus costs and interest, and Defendant.s further pray
that Plaintiffs' demands for foreclosure and jUdicial sale of the
mortgaged premises be denied.
3
If.. MATU.
18. pa~agrapha 1 through 17 are incorporated herein as if
fully set forth.
19. Mr. Plante, the assignor of the Notes and Mortgage to
plaintiff, received the Notes and Mortgage from Defendants as part
of the consideration for the purchase of all of Mr. Plante's shares
of stock in floating eenter of Baltimore, Inc. by Defendants on
December 20, 1991.
20. The Notes and Mortgage were incorporated in, and were an
integral part of the stoak Purchase Agreement praviously identified
as Defendants' Exhibit "A" which is attached hereto and
incorpocated herein.
21. The purchase price which Defendants agreed to pay for Mr.
Plante's shares of stock, hls covenant not to compete, a consulting
agreement and an assumption of lease option was one million fifty
thousand ($1,050,000.00) dollars.
22. At closing on December 20, 1991, Defendants gave Mr.
Plante the sum of two hundred thousand ($200,000.00) dollars.
23. The balance of the purchase price was to be paid in
installments with one hundred thousand ($100,000.00) dollars to be
paid as set forth in the Notes at issue, and the remaining seven
hundred fifty thousand ($750,000.00) dollars due was evidenced by
a separate promissory note payable in 218 monthly installments.
24. The stock Purchase Agreement specifically authorizes
Defendants and gives Defendants the right to set-off against any
4
payments due or. to beoome dUe to Hr. Plante under the terme of the
Agreement, any loee, aotione, assessments, liabilities, damage or
expanse caused by or arising out of any breach, inoluding
covenants, warrantiea and millrepresentations made by Hr. Plant.e in
either the Agreement or any Schedules attached thereto.
25. Hr. Plante did in fact breach t.he agreement by making
material misrepreaentat.ion, failing to honor his covenants
contained within the Agreement and by giving false war.ranties.
26. Specifically, Mr. Plante:
a. misrepresented the lIet worth of
Boating eenter of Baltimore, Inc. by
overstating its net worth in
Financial statements relied upon by
defendant i.n the amount of
$182,773.00;
b. understated the costs of boat sales
from prior years which had to be
absorbed by defendant in the amount
of $167,014.00 during fiscal year
1991;
o. double counted t.he item of "othur
income II in 1991 by $20,845.00 which
impactfild on the agreed upon sales
price by raising the sales price
$104,225.001
5
atoraqe faoUities oonst.ruoted in
previoua years, this
misrepresentation impaoted on the
salea prioe by raising it in the
amount of $240,000.001
h. failed to perform under the
Shareholder eonsulting Servioes
olause in the stock Purchase
Agreement which was specifically
valued at $75,000.00 within the
Agreement I and
i. violated the shareholder's eovenant
not to compete oontained within the
Stook Purohase Agreement which was
speoifically valued at $100,000.00
within the Agreement.
27. The total value of defendant's rights of set-off total
$1,194,652.00.
28. By letter dated Fobruary 22, 1993, Defendants notified
Plaintiff Dennis J. Farina, Trustee for the benefit of Robert
Merrigan, of the breaohes and misrepresentation set forth in
paragraph No. 26. A copy of that letter is attached hereto,
incorporated herein, and marked Defendants' Exhibit liB".
29. After February 22, 1993, Defendants made no payments to
Mr. Plante on any of the promissory notes executed and delivered to
7
"r. Plante at the time of 0108ing on the stook Puroha8e A9~eement.
30. Plaintift Robert. Merrigan had aotual notice of Defendants
oomplaints 8et t'oI'th in the letter of February 22, 1993, prior to
tho aSBiqnment of the Notes in question to him, and aotual notice
that Defendants were exeroising their riqht of 8et-off aqain8t the
Notes prior to the aosignment of the Note8 to him.
31. Aocordinqly Plaintiff Robert Merrigan i8 not a holder in
due course of said Notes and took the Notes Rubjeot to Defendants'
right of set-off.
32. The Notes held by Plaintiff Robert Merrigan were payable
at a definite time, specifically June 20, 1993.
33. Plaintiff Robert Merr Igan became a holder of the Notes in
question on June 26, 1993, with knowledge that t.he NoteD were
overdue, and acoordingly is not a holder in due oourse.
34. Plaintiff Robert Merrigan, not being a holdor in duo
course, took the Notes subject to any defenses the Defendants had
against his assignor.
35. The Notes were executed and delivered by Defendants
solely for and on account of the covenants, representations and
warranties set forth in the stook Purchase Agreement.
36. The breach of the covenants, representations and
warranties by Mr. Plante, as set forth earlier herein, has resulted
in Defendants being deprived of consideration in exchange tor the
Notes.
37. Plaintiffs
torenlosure action is d.epend.ent upon
8
price, The balance of the purchll~e prica is 1'0 be paid Il~ I()II()'N~:
(Il) At the time of cloSinll las is set forth in Section 3 below) the
Buyers shall pay the sum of Two Hundred Thousand ($200,000,00) Dollars to
the Shareholder, toward which sum the Deposit shall be applied,
(b) Within ten (10) days at the date at tho sale end selllement of the
Buye,. principal place of residence, located at 4 Northwatch l.ane,
Mechanicsburg, Pennsylvania, 17055, the Buyers shall pay the sum One
Hundred Thouaand (f 1 00,000,00) to the Shareholder, In order to secure the
p.yment of thlJ One Hundred Thousand ($100,000,00) Dollars, at the time of
Clo.ing, the Iluyera and the Corporation shllllaxecute two (2) Promissory Notes
in the total amount of One Hundred Thousand ($100,000,00) Dollars, olle of
which shall be in the amount of Sixty Thousand ($60,000,00) Dollars and the
other .hall be in the amount 01 FQrty Thousand ($40,QOO,00) Dollars, payable
to the Shareholder, with interest at twelve (12%) percant per anllum, with
interest to bf1gln to accrue six (6) months from the date of settlement, said
notes to be in the form attached hereto a' Composite Exhibit "A", Said
Promissory Notes shall also provide that thay sh<lll be due and payable in full
within ten (10) days from the date of the sale and sattlement of Buyers
prinCipal place of residenca, or eighteen (18) months from the date 01 Closing,
whichever shall first occur, At the tlllle of Closillg, the Buyers shall also
execute a Deed at Trust in the amount at One Hundred Thousand
(.100,000,00) Dollars lor the benefit of the Shareholder, It is understood
between the parties hereto that the Promissory Note in the amOlJl1t of Sixty
Thousand ($60,000,00) Dollars together with an interest in the Deed of Trust,
to thll extent of Sixty Thousand ($60,000,001 Dollars, shall be assigned, at the
time of Closing, by the Shareholder to Robert S, Merrigan I"Merrigan"),
Merrigan i. an existing creditor ot the Corporation and is secured by a U,C,C,
Flnencing Statement, recorded on October 21, HI88 and which encumbers all
of the assets of the Corporation, which Financing Statement shall be released
upon full satisfaction of the Sixty Thousand ($60,000,00) Promissory Note,
Mllrrigan is elso sllcured by an assignment of the Shareholder'S stock
certificate representing all at the issued and outstanding shares at stock in the
Corporation, Merrigan has egreed to release, unencumbered, all ot said sharas
of stock to tha Shareholder for assignment to the Buyers,
(c) Buyers and the Corporation stlall execute a Promissory Note in
thll amount of Sftven Hundred Fifty Thousand ($ 750,000,00) Dollars amortized
over two hundflld eighteen (2181 mOnlhs, at eight and ninety-seven one
hundredths percllnt (8,97%) interllst, payable in two hundred seventeen (217)
equal consecutive monthly installments of Six Thousand Nine Hundred Ninety.
One ($6,991,00) Dollars each and the laat payment in the amount at Threll
Thousand Six Hundred Sixty Two 1$3,662,00) Dollars (said note to be in the
form atteched hereto as Exhibit "B"),
2
of the Corporation'$ Articles of Incorporation and all amendments
thereof, to dete, end of the Corporation's By-Laws as 8111enddrJ to date,
uch of which have been certified by the Corporation's Secretary, have
been dallverelj to the Buyers lInd are complete end correct as Of the date
of this Auraamant,Tho Corporation hils the corporate power and
authority to own and use its properties and to transact the busint:ss in
whloh it Isangaglitd, holds all franchlsos, licenses and permits necessary
and requlrlld ther'efor and is not raquired to be licensed or qualified to do
buslneu in any other jurisdiction,
(ill There are Five Thousand (5,000) 10101 shores of capitel
alack of the Corporation authorlled to be issued, The outstanding
Qapital stock of the Corporation consists solely of Five Thousand (5000)
sheres of common stock which are owned by Robert Plante, All voting
rights In the Corporation ore vested exclusively in ils shares of common
stock, All of the issued and outstanding shares of common stock are
validly euthorlzed end issued end are fully paid and nonassessable,
There ere no outstending rights of any kind to acquire any sheres of Its
common stock or securities of any kind nor has the Corporation any
obllgetion to acquire any of its issued and outstanding shareS of
common stock or any other security issued by it from any holoer
thereof,
(iii) The Shareholdar has hill authority to enter into and
perform his obligations under this Agreement and each other agreement
attached as an Exhibit or Schedule hereto to which he will be a party,
<lnd neither the execution, delivery nor performance by the Shareholder
of this Agloement or any such other agreement will result in a violation
01 breach of any term or provision nor constitute a default undel any
contract or agreement to which tho Shareholder is a party or by which
he is bound. or violate any order, writ, injunction or decree of any COUlt,
administrative agency or governmental bOdY,
(iv) The transfer of stock in the Corporation contemplated
hare in by the Shareholder to the Buyers, will vest in the Buyels
complete ownership In such shares free from all liens, security
egreements, encumbrances, claims, demands and charges of every kind,
(b) The Shareholder, as the sole Shareholder and as President of the
Corpofltion, hereby makes the following representations and warranties which
shell survive the Closing Date;
(i) Shareholder has transferred Four Hundred Seventy.Five
Thousand ($475,000,00) Dollars of notes and accrued interest of the
COlporation due Shareholder as of 11/1/91 to the eqUIty account of the
Corporation and hes made this an irrevocable capital contllbution to thl!
Corporation, The nOI,es, accrued interest and canital lease due
Shareholder es of the Closing have been tendered to Buyer in exchenge
fOI Buyel notes,
4
(Ii) The Corporotlon has not transacted or enterod Into or
altllrlld any agreement to transact eny blJsin'l8S activities with any
company, buslneu or other entity controlled by the Corporetlon or
Shareholder, including the transfer ot assets, rights, Ii,lbilitles and
obligations other than in the ordinary course ot business,
Wi) A comllletll list of lienholders has been delivered to the
BUYllrs, a copy of which is aUached her<llo and marked as Exhibit "C",
Robert B, Merrillan ("Merrigan") is one of the two (21 lien holders listed
on Exhibit "C", the total indebtedness being due and payable to him in
the amount of Sixty Thousand ($60,000,00) Dollars, The Shareholder
hn represented to the Buyers that Morrigan presently holds the
Shareholders issued and outstanding shares of stock in the Corporation
as collateral for the repayment of the loan in the arTIOllllt of Sixty
Thousand ($60,000,00) Dollars and has also filed a U,C,C, Financing
Stot4lment encumbering all of the assets 01 the Corporation, The Buyers
and the Shareholder have agreed to repey the indebtedness due to
Merrigen pursuant to the provisions set forth heroin and in paragraph
"2(b)" of this AgrEement, "he second creditor listed on Exhibit "C," by
thll Shareholder, is Transam~rica Commercial Finance Corporation; with
a total indebtedness (pursuant to a letter dated December 12, 1991
from Transarnerice to the Shareholderl in the amount of Twenty Two
Tholj,sand Five Hundred Seventy Four and 20/100 ($ 22,5 74, 20) Dollars,
The Corporation has good and marketable title to all personal property
rllflected on attached Exhibit "0" and on its Financial Statements, free
and clear of all mortgages, options, liens, charges, security interests,
leases, covenants, conditions, agreements, claims, restrictions and other
encumbrances of every kind, except as set forth in the Financial
Statements of the Corporation or in this Agreement, and there exists no
restriction on the use or transfer of slJell property, The Shareholder has
represented that all of the esse" of the Corporation are being sold free
and clear of any liens except as hereinbefore ami hereinafter set forth,
However, the Shareholder has I'epesented that the "HYSler 300" Lift
Truck, which is described on Exhibit "D", is owned by the Corporation;
bul that, it may be encumbered by a U,C,C, filing, or otherwise
encumbered, and that a portion of the funds payable to the Shareholder,
pursuant to the terms and conditions of the Promissory Note set forth
as Exhibit "B" will be utilized to pay, in full, any and all existing
encumbrances on the "Hyster 300" Lift-Trllck, It shall be the sole
responsibility of the Shareholder to sati~fy any such liens out of the
funds payable to the Shareholder hereunder and to provide evidence
acceptable to the Sllyers that the Corporation is the sole owner of the
"Hyster 300" Lift.Truck, All of Itle Corporation's assets which are part
of its business and property, as of the date of the Closing, but are not
listed on Exhibit "D" are to go with the sale of stock of the Corporation
unless speCifically excluded in writing and agreed to In writing by the
Buyers, Shareholder has the right to list personal articles to bll excluded
4lnd Buyer~ will agree in writing to such list before the Closing,
5
Shareholder lInd Buyers hereby agree to excludtl ftolllthe Corporation's
property one (1) Dell 31 6SX computer, Epson printer, l.G 1050, Elgar
U,p,S" software and rlllated support Ilquiplllent,
(Iv) A description of each lease under which the Corporation
Is the lessee of any real or personal property is set forth on attached
Exhibit "E", The property described in said leases ar8 presently used by
the Corporation as lessea under the terllls of said leases, which leases
ere In full force and effect and are not in default,
(vi Attached hereto as Exhibit "F" are unaudited Finanoial
Stetemenu for the Corporetion for the years 1986.1991 ("Financial
Stallsmenu"), Th.L-fJ!l.!l_~~i.lll Sta~l!men\s h~yeblle!l prepared in
conformity wi th 1l.11.f!Il.~l!!!Y.lcCelltetl!;~Q.\lIlting 1)[l!l~jQl@!!.g.9I1,~i~tl!r.llly
malntaln'iifiirnfapplied, The Financial Statements present fairly without
tlllllrvlIdo?f07 -quaHi"ic.atl ori:~till.,iD~.!it,;ial p_~silion_()! t~e<;:.Q!J.l()!.a.!ion. .a~.
ine rupectlve.ail'fesTndica~.~.d .!Ind_ t~HI re.s.<oJl!!!...9L.CJPl!!!tio.n.~~f_t-'].ll_n
C.orpor a tiOifl9!Jl1jl~sDec t[VliPBl iods.indicalll.C.i and do nat. ami It <;/ a.talll
or reflect any material ilI!:~Ll.CJlILililG-th.lLColpoLatlOn.roqui!lld t.aha.
stated or letlectedltJ.!\!Wnor illlC.lUJllII'L t'l. make the statements therein
"trot mlsleaiJlriif.-To tht! best knowledge- a~;((b01ierol .ihli-Shareholaof,nun .
ilie ligures inthe ~lnanclal Statement.ibiivAWl.lln.takJlIlllQmJ.tl.9.JLQ.Qks~ ~:-
and records of the Corporation and _lJH)Lf;!.~~.rlL.llE.lUal, bona fida
tran"actlanT. ___.__.._n.'_ ----------,- --.-
(vi) The Corporlltion has conducted its bUSiness in the ordinary
coursa and no materially adverse change in the condition of the
Corporation's business has occulled, nor has the Corporation,
conducted any of the following transactions outside of the normal
coursa of the Corporation's business which are materially adverse to the
condition of the Corporation's business:
(a) borrowed 01' agreed to borrow any funds or
inculled, or become subject to, any obligations or liability
(absolute or contingent) except for loans used in the ordinary
course of its business;
(b) except in the ordinary course of business and
consistent with the past practice of the Corporation, sold,
transfelled or otherwise disposed of, or agreed to sell, transfer
or otherwise dispose of any of its assets, properties or rights,
Including inventories, or canceled or otherWise terminated, or
agreed to cancel or otherwise terminate, any debts or claims;
(cl entered or agreed to enter Into any agreement or
arrangement granting eny preferential rights to purchase any of
Its essets, properties or rights, including inventories, or requiring
the con.,ent of any party to the transfer and assignment of any
6
matarial markdown or discount, f
(ix) Tha Corporation and the Shareholder, have given Buyer
accns to complete lists of all receivables of the Corporetion as of the
29th d,y of November, 1991, including accounts recaivable, notes
recelvabla and Insurance receivable, All accounts and notes recelviilble
"flectad on thll Financial Statements and all accounts and notes
reoelvable subsequently eccrulng and outstandin\j as of the Closing will
ba (a) valid, genuine and subsisting. and ib) subject to no known
d.fenses, set.offs or counterclaims,
(x) The Corporation does not have and nono of its assets are
subject to, any liabilities or obligations of any /lalure whatsoavar, elth"r
absolute, accrued, contingent or otherwise, except for such liabilities
which ere normally shown or reflacted on tha Financial Statements
prepared in a manner consistent with generally accapted accounting
principles, and Shareholder knows of PO basis for any additional
liabilities or obligations incurred other than in the normal and ordinary
courslj of business and consistent winl past practice, none of which will
have a material adverse effect upon the business or condition, financiel
or otherwise, of the Corporation,
(xi) The Corporation has timely and ploperly filed, or caused to \
be filed with the appropriate agencies all tax raturns and tax reports
required by law to be filad by the Corporation,
(xii) All contracts and commitments of the Corporation have
been entored into in the ordinary course of the Corporation's business,
none of which ere materially adverse to tho condition of the
Corporation's business,
(xiii) There is no suit, claim, action or proceeding now pending
or threatenad before any court, administrative or regulato,y body, or any
governmental agency including but not limited to tax questions or liens,
nor are there any grounds therefor, relating to which the Corporation is
a party or which may rasult in any judgmont. order, decree, liability or
other determination Wllich will have any matelially advorso effect upon
the business or condition, financial or otherwise, of the CorporatIon, No
judgment, order or decree has been antered against the Corporation nor
any such liability incurred which has, or will have, such effect. There
is no claim, action or proceeding now pending or thrElataned bafore llny
court, adminlstretive or regulatory body, or dny governmental agency,
which will prevent or hamper the consummation of the transactions
contemplated by this Agreement.
(xiv) All permits and authorizations have not yet been obtained \
by the Corporation for the existing dry storage racks and for the
construction and e'ectlon of en additional ona hundred (100) dry st%ge
8
mlsl..ding, and unluss specifically otharwl~a prOVloao In this
Agl8ement, none will contain any untrue statamant of matenal tact, or
omit any material tar-tthe omission of which woulo be mislelloing os 01
the Closing Date, The Corporation and the 5ha18holoor, the Corporation
contirms, represonts ano warrants thilt it has affirmativoly and tully
disclosed by tha attached Schedules and the loregolng representations
all tacts material to its assats, business, operations, linanciel conditions
and prOlpects,
&, Recresenllltions an\J ..YY4u1lIJ.1iJl.1...llL.IW.Y.lu,
Buyer hereby makes the lolloWinll representations and warranties, flach 01 which il
true and correct on the date hereol end each 01 which will survive the Closing:
(al The execution at this Agreement and othor (locuments
r-ontflmplated herein, and tho consummation ot the transaction contempleted
hereby has not, and will not as ot the Closing constitute or result in any breach
at any at the provisions 01, or constitute a dolault undar any loose, contract,
purchase or other commitment or any other agreomont to which Buyers are e
patty or which would have a matanal adverse effect upon tho Buyers,
(bl There is no suit, claim, action or proceeding now ponding or
threatened belore any court, edminisllative or rogulatory body, or any
governmental agency, nor are there any grounds therofor, to which the Buyers
ere e pllrty or which may result in any judgment, ordor, decree, liability or other
determination which will, or could, have any materially adverse affect upon
Buyers, No judgment, order or decree has boen emered against Buyers nor eny
such liability incurred which has, or coulo have, such effoct. There is no claim.
action or proceeding now pending or threatened before eny court,
admlnisllative or regulatory body, or any governmental agoncy, which will, or
could pravent or hamper the consummation of tho transaction~ contempleted
by this Agreement,
(c) Atter Closing, the SharollOlder will have the r1Qht to purchase
Irom the Corporotion tour (4) boats at the Corporation's cost including all
associated costs of shipping, handling, preparation, financing, taxes and eny
other costs essociated with the normal end reasonable selling 01 pleasure boats,
Shareholder will not pay any sales commission for tho purchase 01 such boats,
This sale will not be required if the Corporation or ttle Sllyers in their reasonable
discretion determine that Shareholder is purchaSing such boats for any reason
other then lor personal use, Additionally, this right shall be contingent upon the
Shereholder performing all of his obligations as 501 forth in this Agreement
according to their terms, to Irlclude but not be limiled to all of his obligetions
as ere set forth in paragrephs "7" and "8",
(d) Buyers will prOVide a copy of an annual physical Irlventory to
Sharaholder atter the close of each calandar year,
10
Ie) In order to asslIfe the rapayment of It1a monies due to the
Shareholder pursuant to the terms arid conditions of thiS Agreement, the Buyers
have egraed to purchase, within sixty (601 cJays 01 the CloslnQ, a decraasing
t8lm life insurance policy in the amount 01 Four Hundred Thollsend
(.400,000.00) Dollars on the IIIe 01 Oouglas J, Hansen, naming tha
Shareholdar as tha banatlclary 01 said policy,
e, ConQitions ~W'
Tha following conditions must be met prior to or at tha Closing unless such condition
Is waived by the Buyers:
(e) SharaholcJer shall be bOlmd by his Consulting Agreement with the j
Corporetion and the Buyers as is more particularly deSCribed in paragraph "7"
below,
\
\
(bl Shareholder shall be bourld by his Covenant not to Compete with
the business of tha Corporation or with Buyers, as is mora particularly
described in paragraph" 8" below,
leI The Shareholder's representations and warranties herein remain
true and correct at the time of Closing hereof,
Idl The existing lease agreement dated February 1, 1988, (the
"Lease"). e copy 01 which is attached t1ereto marked as Exhibit "G" and made
a part hereof, for all of that real property, containing four (4) acres, plus or
minus, located at 2015 Turkey Point Road, Baltimore, Maryland 21221 (the
"Property"), by and between James High and Doris M. High, landlord and
Boating Centor of Baltimore, lnc" tenant shall have baan amendad to reflect
thet the landlord has consantad in writing, to the Buyers assumption of the
Lease and of the purchase option contained therein, As part of tha amandment
tha landlord shall have executed an estoppel r.ertificate acknowledging that
there are no defaults under the terms and conditions of the Leasa, that the
Laese remains in full force and effect, and that there are no claims, counter-
claims, or rights of sat.off of either party to the Lease and that the option trJ
purchase contained in the Lease has not been exerCised by the Tanant and
remains in full force and effect according to is terms,
leI The Buyers shall have the right, prior t'l closmg, to have such title
examinations, surveys, environmental audits, englneellng, due diligence, and
such other tests end studies completed at the Buyers' sole cost and expense,
In lhe event the Buyer's are not satisfied with the results of any of the tests or
studies, Buyers shall in their sole discretion have the righ: to cancel this
Agreement, in which event all of their Daposit money shall be returned to them
llnd the parties hareto shall be relieved 01 any further liability hereunder,
If) All of thll existing liens, which are due and payable to the
craditors of the Corporation, shall be paid in lull at the Closing from the
11
8, ~tw~holdeCU;ovenarU...NQt to ClillliWll.
Shlleholder recognizes that the Buyers are indirectly purchasin\l the good will and
r8putellon of the Corpor.tion's busirlllSs .nd that such would be signiliGanliy diminished if
5har8hold8r 8ntarad into a cornpating business (;arried on by SharehQlder in any geographic
are8 in which the Corporation is dQing business, Tharefore, 85 a condition of Clo!.ing, Buyer
and Shareholdar have bargained lor, in good 'aith and at arm's length, the Stlareholdur's
Covenant Not to Compete as is hereinafter set forth in this paragraph "8". The consideration
for the abova.mentioned agreement l1as been seperetely bargeined for, and the parties ai/ree
that the consldaratlon therein is reasonable. The parties further agree tc) report these
payments for federal income tax purposes on a consistent basis.
Sharllholder will not, commencing on the date of e~ecution hereof until three (3) year"
from the date of Closing, either solely or Jointly, or together with or as agent for lIny pllrson,
persons, 8Isoclation or aS8ociations. corporation or corporalions, within e radius of thirty-five
(315) miles from the regularly maintained office of the CorpC)retion located lit 20115 Turkey
Point Road, Baltimore, MlIrylend, directly or indirectly carryon, engage in, or compete with
the Corporation in its business 01 owning and operating marinas, new and used boat sales,
boet maintenance and repair and other businesses associated therewith, e.~cept with I.he
Buyers' prior written consent which shall not be unreasonably withheld, but, In any event, the
Shareholder Gannot be an adjacent dealer for the "Marinette" and "Thundercrafl". As
consideration for the foregoing, Buyers shall pay Shareholder the amount of One Hundred
Thousend ($100,000,001 Dollals as part of the conSideration set forth in paragreph "2",
9, ~nduct of Corcorat;on's Busine>>..E.w.IlinQ Closino.
The parties hereto mutually covenanl tllat the Corporation's bUSiness shall be
conducted as follows through the Closing contemplated herein Without thu written mutuel
agreement of all the parties hereto:
(a) The Corporation's business will be conducted only in the ordinary
course in the manner that it is now conducted,
(bl No change will be made in the Corporation's certificale 01
Incorporation or by.laws,
(c) No charge will be made in the Corporation's authorized or
outstanding corporate shares; arid no additional stock of tho Corporetion will
be Issued,
(d) Each of the parties hereto agrees not to lake any action which
would disqualify the election of thll Corporation to be taxed as en "5"
corporation for federal income tax purposes, and lurther agrees to lak. any
ectlons in the future which may be necessary to protact or preserve such
election,
13
10. In.ltiLDnitica\i orL.b.~..s.hilLllb.ll!.w.
Sutjject to the conditlon~ hlHeinalter ~et forth, Shareholder ~hall indemnity and hold
harmless the Buyers again~t any 10~1l, action~, a~~es~ments, Ilabllilies, rJamage or e~pen~e (in-
cluding but not limited to rea~onable allornay~' fee~ and costs incurred in trial and appellate
proceedings, interest and penalties a~~erted Ilgain~t or IInposed upon or incurred by Buyers
and including oosts and lIttorney's fea~ in any appallete proceedings) caused by or ari~ing out
of many brllllch of II rllprllSlIntation, covenant, warranty or aoruulTleni-,naJi!by Shareholder
contained in this Agreement or made in connoction with tho transaction contemplated by this
Agreement IInd 1111 rlllllted documonts, or (ii) any breach of warranty, incl\JdinO any breach of
warranty made by the Shareholder herein in any S.:hecJule allachad or to be delivered pursuant
hereto or in lIny certificate or other instrument delivared by or on bohalf of the Corporation
or the Shareholder pursuant hereto, The Shareholdar has advlsod the Buyer that there are two
(2) e~i~ting claims end/or lawsuits pending before the CirCUlI Court of Baltimore County,
Maryland and lIS are more ~peclficelly set forth in E~hibit "H" " allached haroto and made a
part hereof. The Sharaholder spacifically agrees to indemnify and hold harmle~s the Buyers
and the Corporation against any lo~~, action~, as~e~slTlents liabilltitl~, damages, e~pen~es,
including, but not limited to attorney's fees and court costs, caused by or arising out of those
claims andlor lawsuits shown on Exhibit "H" attached hereto. Buyers shall have the right of
set-off against any amounts or payments duo Or to becomll duo to the SharetlOldor under this
Agreement, such as the payments reqUired to bo made by the Buyors pur~uant to the Seven
Hundred Fifty Thousand ($750,000001 Dollar Promissory Note. Buyers shall also maintain
all rights In law Or at equity tor rodress in the event of any alleged broach In thiS Agreement.
lal Attorneys fees Will only be awarded as a Gonso'luentlal damage
in any Indemnification action to the prevailing party.
11, Indemnification bv the Buvers,
The Buyers shall indemnify and hold harmless the Shareholder against any loss,
damage or e~pense (inciuding reasonable allorneys' fees and costs incurred in trial and
appellete proceedings) caused by Or arising out of Iii any claim made against the Shereholder
in raspect of any breach or default 111 the performance by the Buyers of any covenant or
agreement of tha Buyers contained in this Agreement, Or (iil any breach of warranty or
inaccurate Or erroneous representation made by the Buyers herein Or in any certificate Or other
instrument delivered by or on behalf of the Buyers pursuant hereto, The Shareholder agrees
to give prompt written notice to the Buyers of each claim for idemnifiable dall1a'les which the
Shareholder believes he has suffered.
(a) Allomeys fees will only be awarded as a consequential damege
in any indemnification action to the prevailing party.
12, Assets of. CorooraU.QL1.J.Q..bo Subiill-~Seculltv,
(e) As secullty for the payment of any unpaid part of the purchase
price or any other obligations of the Buyers, Shareholder shall have a lien upon
all of the assets of the Corporetion, subject, however. to any of the e~l5ting
liens on those assets whictl the parties agree are not paid at the time of
Closing, Said assets shall Include, but not be limited to, the equipment.
14
machinery, trucks, inventory, eccounts receivable, the Laase and ttle Option to
Purchel8 which Is containlld in tho Lease, However, the Shareholder
recognizes that the Buyers will need to have working capital in order to
continue the operations 01 the Corporation and therefore, the Shareholder
agru. that the Buyers shall have the right to place a lien auainst said assets to
the extent of FifIY Thousand (.60,000.00) DQllars, wrlicn lien shall have
priority over the lien 10 be IIranted to tho Shareholder at tho time 01 Closing,
The Sharoholder covenants and agreos 10 e~ecute such documents as may be
reeaonably required of him in order to allow the Buyurs to obtain seid linancing
and to subordinate his lien to sdid financinll,
(b) Additionally, the Buyors covenam and lI{Jree lhat tho Stock of the
Corporetion may not be transferred, aSSigned, encumbered or given as colloteral
to any other porson, partnership or corporalion, without the express written
conaent 01 the Shareholder, except, however, no such consent sholl be required
for a loan up to Fifty Thou,and (.50,000.00) Dollars as is hereinbefore set
forth In paragraph "11 (a)" ,
(c) Buyers and lor the Corporation shall have the absolute right to
exercise the option set forth in the Lease to purchase tho Property at any time
within the option periOd "at forth In the Lease, The Shareholder covenants and
. egrees that his lien on the Lease andlor option shall at all times be subordinate
to the right of the Buyers and/or the Corporation to exercise the option and
their right to place a lirst mortgage on the Property whether taken back by the
Lessor or through a banking institution at the time the option is exercised, The
Buyers andlor the Corporation agree to further secure any invoices which may
be due and payable to the Shareholder at such time as the option to purchase
is exercised by executing a second mortgage to the Shareholder,
13, Arbitra!ilm,
If either Buyers and Shareholder maka timely and proper objaction to any claim or
claims set forth if' any notice of claim, and if such claim or claims shall not have been resolved
or compromised within thirty (30) days from the date 01 the notice of objaction, then such
claim or claims shall be settled by arbitration In Maryland by a panel of three arbitrators, in
accordanca with the rules of the American Arbitration Association, and such arbitration shall
be conducted In accordance with tho rules 01 thl! American Arbitration Association, The three
arbitrators shall all promptly obtain such information regarding the matter as they deem
necessary and shall decide the matter and render a written order of award based upon a
majority opinion which shall be delivered to Buyers and tl.1O Shareholder, The prevailing party
to the arbitration award shall be entitled to recover from other party any lees and expenses
at the arbitration proceeding conducted pursuant to this paragraph provided, however, that
the portion 01 such lees and expen~es shall be limited to the same percantage of such fees
and expenses as the percentage obl8ined by diViding any amount awarded to the prevailing
party by the amount 01 the claim, Any award shall be a COnclUSive rjetarmination of the
matter and shall be binding upon the Buyers and tr,e Shareholder and shall be paid on dflmand,
in cash. an emount equal to the aggregate amount 01 such claim or claims and the allocable
arbitration expanses and lees, An award made tram arbitration of any claim shall be tinel as
between the parties and shell be irnmediat03ly enforceable in courts of low,
1!S
14, SII/vlval Qt W\llIantillS and Raprasontatioru,
Rega/dless at any investigation at any time made tJy or an behalf of any party he/eta
0/ at any Intormation an~ party may have in respect thereof, all rep/estti1tationa and wall an.
tlu of the Co/potation, the Shareholder and Buyer made under or pursuant to this Ag/Bement
shall survive tha Closing Date hereunder, as follows:
(a) In the case of a representation or wallanl~ made by any party
he/eta which is not true whttn made and which was made t)y luch party
fraUdulently and with intent to defraud or mislead, the same shall expire as
p/ovlded by law.
(b) In all other cases the representations and warranties herein shall
expire eightoen (18) yurs from the Closing Date; provided however that any
bona fide claim which shall have been asserted during such survival period shall
continue In effect until such time as such claim shall havll been resolved 0/
settled,
1 5, Remedies,
Nothing contained herein is intended to or shall be cor strued so 85 to limit the I
remedl,. which any party may have against any other in the eve t of a breach by any party
ot any representation, wallanty 0/ aoreement made under or pur uant to this Agreement, It
being intanded thet any remedias shall be cumulative and not ex lusive,
16, ~e Auraement and Mod~Q!l.
This Agreamant, including the Exhibits attachod hereto, the c10llng documents, and
the documonts delivered pursuent hereto, constitutes the entiro agroement between the
parties and supersedes all prior agreements and understandings between the parties with
respect to the subject matter contained herein. No changes of, modifications or, or additions
to this Agreement shall be valid unless the same shall be in Willing and signed by all parties
hereto,
17, ~!Dent: Assionmon1-
This Agreement shall be binding upon and Inuro to tll0 benefit of the parties named
herein and to their respective successors and assigns, Neither this Agreoment nor all or any
part of Buyer's rights, interesu or obligations hereunder may be assigned by Buyer without
the consent of all other parties hereto. Neither thiS Agreement nor any of Shareholder's
rights, interests or obligations hereunder may be assigned b~ Shareholder Without Buyer's
prior written consent, This Agroement, however, shall be binding upon the parties end their
heirs, successors, personal representatives, legatees, alld as,igns, All references to the
personal representative of any party ,hall Include, If the context permits at tequiras, any
legatee, transferee, or assignoe of s'Jch party or such party's ostate, as the case may be, and
such heir, essignee, legatee or transferee in the event of any party's death, shall succeed to
the benefit and be bound by the obligations set forti, in this Agreement with respect to such
party or such persona/representative, All Exhibits in this Agreement are inco,po,ated into this
Agreement as if fully rewritten herem; all reference to Exhibits whllrein a legal document is
16
, .'
,.
,--
o....u 1, I'w.. l"lult.
l'.blllOl}' 21, 1993
P"," 2
On November 16, 1991, the parties to the Contract aarced 011 a net worth to be
purchased of $323,400,00, Atlhe time of closlna, the Seller alve to the Buyer a check,
which when added to the Balance Sheet, represented a net worth of $326,700,00, Mer the
purchase was completed, however, Buyer audited the accoullt balances and discovered that
the lIet worth was actually $143,927,00 at the time of purchase,
In addition, a footllote in the October 31, 1991, Financial Statements indicated thaI In
fiscal year 1990, the cost of boal sales was understated by $167,014,00, This adjustment
win belna absorbed In the 1991 fiscal year, No mention of \llis material adjustment was
made 10 the Buyer. In fact, under Parallraph "4(b)(I)", the Seller purportedly contributed
$47~,OOO,OO In notes and accrued Interest as a capital contlibution. Because of the
adjustment In 1991 carried over from 1990, this amount should have been $167,014,00
h1llher,
. 1\ also is apparent that the Seller double counted the item of "other Income" In 1991
by .S20,84~,OO, ThIs would have impacted the sale price in the amount of $104,225,00,
Similarly, Seller overstated the boat sales on the Income Statement by $230,000,00, The
correct amount would have reduced the contract price by $115,000,00, Finally, based on Ws
experience, Seller's forecast on slip and rack reutal was overstated in the amount of
$39,000,00, which would have Impacted on the sale price by $195,000,00,
An audit by the Department of Natural Resources has disclosed that sales taxes on
boats sold during your client's ownership were paid late and in incorrect amounts, The
estimated claim Is $15,000,00, In addition, the Maryland Income Tax Division has audited
the 1987 tax year and has found underpaymeut and interest due of S64(), 87, TIus amount is
beillll withheld from the payments due your client and is being forwarded t'.> the State for
their claim, Palle 8, paragraph 4(b)(xi) of the stock purchase agreement states that all tax
returns were flied on time anrlthat properly and timely and that would appear to be
inaccurate,
Furthennore, there are other problems which existed at the time of settlement known
to Seller, and which exist to today, According to Paragraph "4(b)(xiv), the Seller
represented that there were no outstanding or pending objections to the erection of rack
storage on the property, In point of fact, the Seller had been trying to get pennission to
ere.ct rack storage facilities for many years, He had given up on being able to obtain such
pernlission due to objections from various Baltimore County departments, This would have
Impacted the sale price by 5240,000,00,
Seller has failed to perfonn under either the Shareholder Consulting Services and
under the Shareholder's Covenant Not to Compete contained in Parallraphs 7 a.'ld 8 of the
Alln:ernenl. Seller allreed under Paragraph 7,1 to allend all boat shows, He did not. Under
Parallraph 7.2, he was to assist in the lraining of ooat salesmen, Seller refused to assist,
Wilh respect 10 PllI1Ilraphs 7,3, 7,5, 7,6, 7,7. 7,9 and 7,10, the Seller refused to return
I'"
I
I.
\
"
\
3. Plaintift Robert Merrigan ia an adult indlvidulll
r..iding at 1430 Calcutta Lane, Naperv!lle, Illinoi.,
3. Oetendant Douglas J. Han8en is an adult individual
who.e lut known address is 201!l Turkey pointe Road, Baltimore,
Maryland 21221.
4. At all relevant times, the Defsndant, either jointly
with hi. late wite, Ray Joann Hansen, deceased, or individually by
right of survivorship, haD been the real owner of two certain
tract. or parcels of land with buildings and other improvements
thereon located at 4 North Watch Lane, Silver Spring TownShip,
eumberland County, Pennsylvania (the IIpremises"). 'rhe Premises are
more specifioally described hereinafter.
!l. On or about December 20, 1991, in consideration at
two certain loans in the respective amounts ot Sixty Thousand and
00/100 Dollars ($60,000.00) and Forty Thousand and 00/100 Dollars
($40,000.00), made by one Robert Plante to Defendant, his late
wite, Ray Joann Hansen, deceased, and Boating eenter of Baltimore,
Inc., a Maryland corporation (collectively, the "Borrowers"), which
tunds were received by the Borrowers, the Borrowers executed and
delivered to Mr. Plante, as payee, two certain promissory note.
- :I -
(oollectlvely, the "Notea"), each dated December 20, 1991, in the
r..peotive principal amount.e of Sixty Thousand and 00/100 Dollar8
($60,000.00) and Fort.y Thousand and 00/100 Dollars ($40,000.00)
(oollectively, thll "principal"), and each requiring t.he payment of
int~ere8t on the Princl.pal at the rat.e of twelve percent (12\) per
year (the "Interest"), provided that Interest would not begin to
accrue under ei t.her Not.e until .lune 20, 1992. True and correct
copies of the Not.es are attached heret.o as Exhibits A-1 and A-2,
respectively, and made part.s hereof by thie refElrence.
6. 'fhe Notes obligate the Defendants to pay t.o t.he
holder of the Notes the principal and Interest "eighteen (18)
monthe fl.om the dat.e of [the Notes, i.e., June 20, 1993] or within
ten (10) days of the sale of Defendants' princlpal plaoe of
r.esidence, located at 4 North Watch Lane,
Mechanicsburg,
Penneylvania (i.e., the Premises), whichever shall first occur."
7. The payment of the Notes by the Borrowers of, inter
alia, the principal and Interest due under the Notes is secured by
a mortgage, in the form of a "0eed of Trust, II on the Premises dated
['ecember 20, 1991 (the "Mortgage"), sxecuted, conveyed and
delivered by Dsfendant and his late wife, Kay Joann Hansen as
Borrower.s, to Plaint.iff Farina, as Trustee for the benefit of the
Lenders thereunder, and to Robert R. Plante and Mary E. Plante, his
wife, as Lenders. A true and correct copy of the Mortgage is
- 3 -
.
Deeds in and tor Cumberland County, Penns1lvania in Plan Book 56,
pag~ ~6, as rerecorded in Plan Book 57, Page 109.
BEGINNING at a point on the SouthwesteL"n R~ght-of-Way
I.ine of Rich Valley Road, said polnt belng referenced as the
intersectlon of the Southwestern Right-of-Way Line of Rich Valley
Road and the Eastern Ri<]ht-of-Way line of Northwatch Lane; thence
from said point of beginning along the Southwestern Right-of-Way
I,ine of Rich Valley Road by a curve curving to the right, having a
radius of 1,865.08 feet, an arc length of 159.92 feet to a point;
thence continuing along same South 44 degrees 49 minutes 30 seconds
Eaet a distance of 129.08 feet to a point at the property line
between Lots No. 20 and 21 of the "Flnal subdivision Plan of 28
Lots - RICH VALLEV MANOR, Silver 8pring Township, Cuml1erland
County, Pennsylvania"; thence along sald property line of Lots No,
20 and 21 south 45 degrees 10 minutes 30 seconds West a distance of
~07. 84 feet to a point at the property line between I,ots No. 20, 21
and 26 of the aforementioned plan; thence along Lots No. 26 and 27
North 4J degrees 50 minutes 32 seconds West a dintancs of 413.22
feet to a point on the Eaatern Right-of-Way Line of Northwatch
Lane; thence a long the Eastern Right.-of-Way Line of Northwatch Lane
by a curve curving to the right, having a radius of 350.00 feet, an
arc length of 111.19 feet to a point; thence along said North 33
degrees 21 minutos 00 seconds East a distance of 166.24 feet to a
point, the point of beginning.
ALl. of that land situate in silver Spring Township,
containing 135,7J7.32 square feet or 3.1161 acres and being shown
as Lot *20 on the f'inal Plan of Lots of Rich Valley Manor prepared
by Whittock-Hartman Engineers on November 15, 1988, Drawing No.
8-87-15 and being subject to a reserved area for the extension of
Northwatch Lane t.o I,and now OL' late of Max C. lIempt, along the
Southern Property Line, should it ever be required.
PARCEL NO.2
ALL 'I'HAT eERTAIN lot or piece of ground, lying and
situate in the Township of Silver Spring, County of cumberland, and
eommonwealth of Pennaylvania, more particularly described in the
Final Sub-Division Plan of Rich "alley Manor prepared by Whittock-
Hartman and recorded in the Office of the Recorder of Deeds in and
for Cumberland County, Pennsylvania in Plan Book 56, Page J6.
BEGINNING at a concrete monument located on the eastern
right-Of-way line of Northwatch Lane (50 I right-of-way) said
monument located at, the right-Of-way intersection of Northwatoh
Lane and Penns Way Road (50' right-Of-way), thence along the right-
Of-way line of NOl'thwatch Lane, North 07 degrees 46 minutes 30
seconds East, a distance of 592.21 feet to a concrete monument;
thence on a curve, curving to the right having a radius of 350.00
- 5 -
13. The sums presently due and payable by Defendants
under the NQtes and sflcured by the Mortgage are computed as
tollQW8'
(a) Unpaid principal
(b) Unpaid Interest (through
December 31, 199J)
. 100,000.00
TOTAL
18.6]1.47
. 118,631,47
14. On or about December 21, 1991, the aforesaid Robert
R. Plante, for good and valuable consideration, assigned his
interest. in the $60,000.00 Note to Plaintiff Merriqan.
On or
about June 16, 1993, the aforesaid Robert R. Plante, tor good and
valuable consideration, assiqned hi. interests in the $40,000.00
Note to Plaintiff Merrigan. As of December 21, 1991, Defendant had
actual notice of the assiqnment of the $60,000.00 Note to Plaintiff
Merrigan as evidenced by the tsrms and conditions of the stcok
Purchase Agreement, dated December 20, 1991, exocuted by Defendant
and Robert R. Plant.. Written notice of the assignment of ths
$40,000.00 Note to Plaintiff Merrigan was given to Defendant on
June 26, 1991 as evidenced by the letter from Robert R. Plante to
Defendant. A true and oorrect copy of said letter is attached
hereto as Exhibit "e" and made a part hereof by this reference.
15. On or about September 9, 1993, the aforesaid Robert
R. Plante and Mary E. Plante, his wife, for good and Valuable
consideration, assigned their interest as Lenders under the
- 7 -
Mortgage to plaintiff MerrIgan, said aIIsignment being represented
by an Assignment of Deed of Trust dooulllent dated Sept.ember 9, 1993
and reoorded in the Offioe ot the Reoorder of Deede in and for
Cumberland eounty, Pennsylvania, on September 15, 1993 at
Misoellaneous Book 454, Page 294. A true and oorreot oopy ot said
Aee1gnment of Deed of 1'rust ie attaohed heret,o as Exhibit D and
made a part hereof by this referenoe.
16, Plaintiff hae duly oomplied with the provisions at
the Emergenoy Mortgage Assistanoe Aot of 1983 ("Aot 91") in that.
the presoribed notioe of eligibilit.y was sent to the Defendant by
first olass mail on Septsmber 1, 1993. The temporary stay of
enforoement uf the Mortgage by reason of Aot 91 has expired in that
the Pennsylvania Housing f'inllnce Agenoy either has tailed to act on
the Defendant I s application aft,er more than 60 days from its
receipt of same or has denied the Defendant assistance under Act
91.
17. Written Notice of Intention to Foreclose pursuant to
Seotion 403(a) of the Aot of January JO, 1974, P.L. 13, No.6, as
amended, 41 P.S. 1403(a), was not required to be sent to Defendant
by rea.on that the Notes speoifically provide that the indebtednes.
represented by the Notes was inourred "SOlely for the purpose of
carrying on or aoquiring a business or commeroial investment ...
[and that] the entire loan prooeeds will be used for suoh
- 8 -
D.an H, Ou.".rrt, .~trt
AlI.'noy I.D, 114'06'
JIM."r M. Me Hugh, I.qulre
AlI.'noy I.D, 1l661n
.h.~ I lI_
on. lout" Mark,t ',,~rt
",rrl_burl, PA "'01
Attornev' 'or Pl.'ntl".
DENNIS J. FARINA, Tru8te.
tor the bene tit of
ROBERT MERRIGAN, and
ROBERT MERRIGAN,
Plaintiffs,
IN THE eOURT Of COMMON PLEAS
CUMBERLAND COUNTY, PEtlNSYLVANIA
NO. 26 eivil 1994
v.
DOUGLAS J. HANSEN, individually
and a8 heir of KAY JOANN
HANSEN, deceased,
Detendant.
CIVIL ACTION -
MORTGAGE FOREeLOSURE
.. .. .. ., ., .. It . t .. .. ..
llEr.LY-~-MA'ITEB
NOW COME Plaintiffs, Dennis J. Farina, Tru8tee tor the
benetit at Robert Merrigan, and Robert Merrigan, by their
attorney., Rhoad. and Sinon, and tile the within Reply To New
Matter ae tolloW81
18. No re.ponse is required.
19. Admitted in part and denied in part.
Plaintiff
admit. Mr. Plante was the assignor of the Note. and Mortgage to
II
:l4. Denied. The stook Purohllee Agreement speaks tor
iteelf. By way of further anewer, thie averment ill a oonolueion of
law to whioh no reeponee ill re(luired.
:l5. Denied. After reasonable investigation, Plaintiff
Merrigan ie without suffioient information to oonfirm or deny the
truth of thie averment. By way of further answer, thie averment ill
a oonolueion of law to which no response is required.
26. Denied. After reasonable investigation, Plaintiff
Merrigan ie without suffioient knowledge to oonfirm or deny the
truth of the averments set forth in eubparagraphs (II) through (i)
ot Paragraph 26. Proof thereof, if IIdmissible, is demanded at
trial.
27. Denied. After reasonable investigation, Plaintiff
Merrigan ie without sufficient information to confirm or deny the
truth of this averment. Proof thereof, if admissible, is demanded
at trial.
28. Admitted in part and denied in part. Plaint:iff
Merrigan admits that the letter attached as Exhibit "8" to
Defendant's Answer and New Matter was addressed to Oennie J.
Farina, Eequire. Plaintiff Merrigan is without sufficient
informat.ion to confirm or deny the truth of the remaining averment.
-3-
33, Denied. It i. .peoifically d8nied that plaintiff
Herrigan beoome a holder of the Note. on in question on June 26,
1993. It is sp.olfic~lly denied Plaintiff beoame a holder of the
Note. with knowledgo that the Notes were overdue and acoordingly,
is not a holder in due course. Rather, Plaintiff Merrigan became
a holder in due course of the $60,000.00 Note on December 20, 1991
and a holder in due course of the $40,000.00 Note on June 16, 1993.
By way of further answer, the averment.s conta1.ned in t,hill paragraph
are a conclusion of law t.o which no responee is required.
34. The averment.. cont.ained in this paragraph are a
oonclusion at law to which no response is required. To the oxtent
a respollse is necessary, Plaint.ift slecifically denies Plaintiff is
not a holder in due course and specifically denies Plaintiff took
the Notes subject to any defenses the Defendant had against the
aesignor.
35. Denied. strict proof of same, if admissible, is
demanded at trial. By way of further answer, the Notes were
executed and delivered by Defendants for the express purpose of
obtaining the release of the valid and perfected lien held by
Plaintiff Merrigan on the stock purchased by Defendant from Plante.
",a",
Defendant's Exhibit "A".
6. Denied. The Notes were attached to the stock Purohase
Agreement as an exhibit and were inoorporated into the Agreement,
The Agreement speoifioally provides in Clause 10 that the Buyers
shall have the right of set-off against any amounts or paymentu due
or to beoome due to Mr. Plante, including payment on the /lotes, for
any breach of representation, oovenant, warranty or agreement made
by Mr. Plante in the Agreement, or in any Schedules attaohed to the
Agreement. As will be set forth in more detail in New Matter Mr.
Plante breached the Agreement through misrepresentations, failure
to honor covenants and breaches of warranties within the Agreement
and Schedules attached thereto. Therefore, it is denied that
Defendants are obligated to pay a mere holder of the Notes the
pr inc1pal and interest accord ing to the dates set forth on the
Notes.
7. Adm1 tted in part, denied in part. It is admitted that
the Principal and Interest due under the Notes was secured by the
Deed of Trust identified as Exhibit "B" in the complaint. It is
denied that payment of the Notes is due and owing to Plaintiffs for
the reasons set forth in Defendants' answer to paragraph 6 of the
Complaint.
B. Admi tted.
9. Denied. To the extent that this averment implies that
the Notes are due and payable Defendants deny such implication for
reaeons previously set forth in paragraphs 6 and 7.
10. Admitted in part, denied in part. It is admitted that
the Borrowers havs refused to pay either principal or Interest on
the Notes, but it is denied that. the Borrowers refusal to pay
constitutes a default under the terms of the Mortgage, i.e. Deed of
Trust. Clallse 16 of the stock Purchase AlJreement incorporates the
Mortgage into t.he Agreement. For reasons set forth in paragraph 6
Defendants' failure to pay is not a default.
H. Admitted.
12. Admitted. By way of further Answer, the Mortgage further
states that the Borrower shall have the right to assert in a
foreclosure proceeding t.he non-existenoe of a defalll t or any other
defense of Borrower to aooeleration and sale.
13. Denied. For roasons already Bet forth Defendants deny
that these sums are due and payable by Defendants.
14. Denied. It is specifically denied that Robert Plante
assigned his interest in either the $60,000.00 Not.e or the
$40,000.00 Note to Plaintiff MerrJ.gan prior to June 21, 199J.
Although the stock Purchase Agreement states that as of the date of
closing the $60,000.00 Note shall be assigned to PlaintJ.ff
Merrigan, it is spoc1.fically denied that that assignment took place
prior to June 21, 199J.
15. Admitted.
16. Admitted.
17. Denied, This allegation is a conclusion of law to which
no responsive pleading i. required and therefore Dame is denied.
3
WHEREFORE, Defendants pray that judgment will be enterad in
favor of Defendants and against Plaintiff on Plaintiffs' claim for
$110,631.47 plus costs and interest, and Defendants further pray
that Plaintiffs' demands for foreclosure and judicial sale of the
mortgaged premises be denied.
HI" MATTIR
18. Paragraphs 1 through 17 are incorporated herein as if
fully set forth.
19. Mr. Plante, the assignor of the Notes and Mortgage to
Plaintiff, reoeived the Notes and Mortgage from Defendants as part
of the consideration for the purchase of all of Mr. Plante's shares
of stOCK in Boating Center of Baltimore, Inc. by Defendants on
December 20, 1991.
20. The Notes and Mortgage were incorporated in, and were an
integral part of the stock Purchase Agreement pr.ev iously identi f ied
as Defendants' Exhibit "A" which is attached hereto and
incorporated herein.
21. The purchase prke which Defendants agreed to pay for Mr.
Plante's shares of stock, his covenant not to compel.e, a consulting
agreement and an assumption of lease option was one million fifty
thousand ($1,050,000.00) dollars.
22. At closing on December 20, 1991, Defendants gave Mr,
Plante the sum of two hundred thousand ($200,000.00) dollars.
4
23. The balance of the purohllse price was to be paid in
installmente with one hundred thousand ($100,000.00) c1cllare to be
pdd as set forth in the Notes at issue, and the remaining seven
hundred fifty thousand ($750,000.00) dollars due was evidenced by
a separate promissory note payable in 218 monthly installments.
24. The stock Purchl.lse Agreement speoifioally authorizes
Defendants llnd gives Defendants the right to set-off against any
payments due or to beoome due to Mr. Plante under the terms of the
Agreement, any loss, actions, assessments, liabilities, damage or
expense caused by or arising out of any breaoh, including
covenants, warranties and misrepresentations made by Mr. Plante in
either the Agreement or any Schedules attached thereto.
25. Mr. Plante did in fact breach the agreement by making
material misrepresentation, failing to honor his covenants
contained within the Agreement and by giving false war.ranties.
26. Opecifically, Mr. Plante:
a. misrepresented the net worth of
Boating Center of Baltimore, Inc. by
overstating its net worth in
Financial statements relied upon by
defendant in the amount of
$182,773.00;
b. understated the costs of boat salas
from prior years which had to be
absorbed by defendant in the amount
5
a7. The total value of defendant's rights of set-off total
$1,194/ fi!)2. 00.
28. Dy letter dated February 22, 1993, Defendants notified
Plaint.iff Dennis J. Farina, 'l'rustee for the benefit of Robert
Merrigan, of the breaches and misrepresentation set forth in
paragraph No. 26. A copy of that letter is attached hereto,
inoorporated herein, and marked Defendants' ExhJ.bit "B".
29. After February 22, 1993, Defendants made no payments to
Mr. Plante on any of the promissory notes executed and delivered to
Mr. Plante at the time of closing on the stock Purchase Agreement.
30. Plaintiff Robert Merrigan had act.ual notice of Def.endants
complaints set forth in the letter of February 22, 1993, prior to
the assignment of the Notes in question to him, and actual notice
that Defendants were exercising their right of set.-off against the
Notes prior to the assignment of the Notes to him.
31. Accor~ingly Plaintiff Robert Merrigan is not a holder in
due course of said Notes and took the Notes subject to Defendants'
right of set-off.
32. The Notes held by Plaintiff Robert Merrigan were payable
at a definite time, specifically June 20, 199J.
3J. Plaintiff Robert Merrigan became a holder of the Notes in
question on June 26, 1993, with knowledge that the Notes were
overdue, and accordingly is not a holder in due course.
34. Plaintiff Robert Merrigan, not being a holder in due
course, took the Notes subject to any defenses the Defendants had
8
price, The oalanf;o 0' tl10 pll/chase price Is to hu pmd u~ follC)w~:
la) At tho tillw of clC)~inu I,~. I~ 80t forth ill Suction 3 bolow) th'!
Buyers shall pay tho sum 01 Two Hundred Thousand (~200,OOO,00) nollars 10
Ihe Shareholder, toward which ~Jllfn the Depo811 511811 hu oppliud,
(b) Within len (101 daY8 of thu daw of thu sulu and suttlulllonl of thu
Buyers principal place of rusidence, locatod at 4 Northwotch Lone,
Machenicsburg, Ponnsylvanill, 17065, the Iluyurs shull pay tho sum One
Hundred Thousend 1$1 00,000,001 to tho ShorullOlrJur, In olltor to socuro tho
poymonl of Ihe One Hundred Thousand ($100,000,00) Dollars, 01 tho lime 0'
Closing, Ihe Bl.yors and tho Corporation 8holl executu two (2) Promissory Notes
In the total amount of Ona tlundrad Thousand ($100,000,00) Dollars, ono 0'
which shall be in Ihll amount of Sixty Thousand 1$60,000,00) Dollars end tho
other shall be In thll omount of Forty Thousand 1$40,QOO,OO) Dollars, payablo
to thll Shareholder, with inlllrest at twulvo (12 % 1 purcllflt por anfllllll, with
interllst to bllgin to accrUll 81x (6) months from tho dato of suttlumont, 8aid
notes 10 bo in thll lorm attached howto as Composito bhibit "A", Said
Promissory Notes shall also provide th.1t tlwy shall bo duu and payahlu in lull
wilhin ton (101 days from Ihu datu of tho salo and sOlllumunt of Ouyors
principal place 01 wsidence, or oighteen (181 months trOln thu date 01 Closinu,
whichever shall first occur, At the tlmo <31 Closill\), tlw Uuyurs shall also
axecute a Deed of TlllSt in the amount of OIlU Hundrod Thousand
($100,000,001 Dollars for the bonelit 'JI the StlilflltlOldor, It is undorstood
betwoon the partios haroto that the Promissory Noto III tlw a/l\lllllll of Sixty
Thousand ($60,000,00) Dollars to\)otller with an IPtOfl,st in tlw Doud of Trust,
to the extont of Sixty Thousand ($60,000,001 De)lIars, slHlII bo assllln'l", at tho-
time 01 Closin\), by the Shareholdor to floboll EJ, MlHlI\)iII1 ("M'lfll\Jan"I,
Merrigan is an existing creditor of tho Corporation and IS socurod by a U,C,C,
Financing Statemont, recorded on October 21, 1988 ond which oncumbers all
01 the assllts 01 thll Corporation, which Financln() Statomont shall htl reloasod
upon lull satisfaction 01 the Sixty TholJsand 1$60,000,00) Promi'lsllfY Note,
Marrlgan is also secured by an assignlllont of tllfJ Sharoholuur's stock
cortificate representing all at the issuod and outswndin() shares of stock in tho
Corporation, Merrigan has agrood to releaso, linoncumLlllrod, all 01 sa"l sharos
01 stock to the Sharohohler for assignlllont to tilu EJuyor~,
(cl Iluyers and tho Corporation stwll exocuttl a Prollllssory Noto III
the amount at Seven Hundrod Fifty Thousand ($l50,000,00) Dollar~ amortizod
ovar two hundred eighteen (2181 montlls, at olUht MId rllnoty.suvtln one
hundredths percent 18,97%llntorest, payable in [wo hundred sovollleon (217)
equal consecutivo monthly installments at Six Thousand ~line Hundrud Ninety-
One ($6,991,001 Dollars each and the last paYlPo/lt III the amount of Three
Thousand Six Hundred Sixty Two ($3,662,001 Dollars (said /lote 10 bo in the
form altach'ld tlOreto as Exhibit "Il").
2
Tha purchllSII pricllshllll bu 1I110ClIbl1l UIIIOIIU lhl) p/opUlly iIlIU/U,IS buillU cOllvuyull nu/uulIllll/
liS lollow.:
III t'.\IH;!JlI~U llL:itll!;.lI, Tho SlI/n uf Fivo t IUlIll/u,' Suvo/lly'
FivlI Thou~unll ($575,000,00) Dolla/s,
Iii I 1I1l1l11lIwJu.IIr:l.!;;IlVlllUJIII NUll!1 CQHlIHIlU., Tho sum 01 ()nu
~jund/lId Thousalld ($100,000,001 Dollars,
(III) ~ullJnu.I.\Ul.llUJJ]jjnLbY:lllilfUIJ!)/dll! Thu mlln of SlIvunly
Fivll Thousand (075,000,00) Dollo/s,
(Iv I 8:1:1JJlIlIJIlllILIlLJ.llll:llLlIlIJ.L8':;:l1 Wll/l~!JL!lL Slllll III wid U~li
Qtl!lllIUlL.P..IlLlll1l1iJ.Q j\UIlBlJillnil I lI[)'_.f..\IuLl 4 LA~rll:i. \..QClIltl!J. i1L2QU
IJJckllY...Pllint..BQ,il.JJ..fl~llifIl!l11l..M1I1V!U!l'.L Thu till/n ot Th/ou Hunll/ull
Thousunll ($300,000001 Dalla,,),
3, Glll'illlll.D>l11l \'; C!J:m_fit C!!J:lI!IU,
(a) Tho clusill\l shall taku pluco Oil or but oro .January 31, 1991 (Ihu
"Closing"). in Annapolis, Mlllylanll or such othur placu, timo and dato as tho
.partios herato shall mutually agrou, At tho CIOSl/1U thu Shal'ohoilJur SIHlII deliver
to tho Buyers, f/eo and cloar 01 all encumbrallces, Iho Sharoholdor's curliticates
lo/the Corporations shiHos of stock IlIflllled to III pO/a\jraph "1" illnllgotiable
lo/tn, Upon such dulivury, tlH! Buye/s shall dullvur to thu SlliIreholdur 0/ such
individuul or entity of Ihe Shareholcjer's dOSI\Jllilllon, thu PU/ctlilsll prlCll in the
to/m provided tor ill parag/aptl "2",
(Ill Each 01 Ihu partius horeto shall pay for IllS attorney',~ teos
Incul/ed In cOllnoclion wittl Ihis transaction,
(cl Tho Sharuholdur shall lJu solely rl)Sp'1I1S11l1u to pay for allY
commissions 0/ tells payable to Morge/ AcquisltlOll and Dlvestituru Associates,
Ino" for its sorvicos p/ovidod in connoction withtilis transaction, wllll:h will bu
paid Qut ot tho Purchase Price,
4, R~lll.ll~milllQ!I~jJ!ld_Wll!IiliUj!l:l QI .ltl!L .s!!i.H!ltwhl!j(,
(01 Shareholde/, he/oby makes tho follOWing /uprusentations illl',\ war.
ranties, each at which is true and cOllect on the daw huroo' (il rulatlflO ltl tho
title at the stock, and Iii) relating to the authorlly 10 OllllJr II\tO tllis Iransaction,
Eech re reSantallon and wallal1ly shall survive thu CIOSII1U Ollto and Iho Sille}
con~,!ml?il!!l hgrii~'Y'~an'(1e~'ch 0; whi~h shalllJo doomod to bo illdopundontly
miiierlal.~r1(~. rolied uponhy Buyers rO\jardlllSS of illlY IIlvuStl\Jillioll IIlddo hy, or
InfOrmation known 10 BlIyers:
(il Tho Corporation is a corporallc)r1 duly and validly existing
and In good standing undor the laws ot thll State ot Maryland, Copies
1
01 the Corpo/ution's A/ticlos at Illcorpmution ..fld all umundlllenls
Iherllof, to dotu, and of thu Corpmation's By-l.aws as amundud 10 datu,
811Ch 01 which hava buan (iOrlitled hy Iho Corporalion's SocroullY, havlI
been dellverad to tho Buyors and are cOlllplutll and corrllct as of thu date
of Ihls Agrelllllent. Thu Corporalion has tho corpowtu powor and
lI11thorlty to own and uso Its proplllllos and to lIansaCI Ihe husinuss in
which Ills enoaged, holds ulllran(;hisos, Iicunsos and pU/lllilS nucussa/y
and roqolrod thu/ofor anI' is nOI/uqulrod to bu liconsod or qoalilltJd to do
businoss In any othor IWfSdiction,
(ii) Thuro oru Five Thousand lEi.OOO) lOllIl sharus of copilUI
stock of tho Corporulion outhorilud 10 bu issuod, Thu outslanding
capllal stock of tho Co/poralion conslsls sololy of t'lvo Thousond (5000)
shares of common Slack which ora owno(j hy Rohllrl Plonlll. All voting
rights In Ihll Corporation aro vested eXCllJsivllly in ilS shares of cOlllmon
stock. All of the issuod und outstanding shurus of COll111lon stock arll
vlllldly outhorized end Issued and are fully pUld and nonossllssablll.
Thllro ore no outslanding rights of any kind 10 ocqullo allY sharus of lis
common stock or sacu/ilios of any kind nor has thu Corporation any
obligation to ecqlJira any of its issuud and oUlstanding sllUrus of
common stock or any otllllr socurilY issuud by il Irom OilY holdur
the/oaf.
(iii) Tile Sharuholder has tull autlHlflly to unlU/ into and
perform Ilis obligations undllr tllis AoroulTl!lnt and !lad) otllor ag/eemont
atlacherJ as an Exhibit 0/ Sclledulo hOlalo 10 Wllicllllo will bo a party,
and neilhor the execulion, delivery nor perfOrfTHlllCU hy tho Sharuholde/
of this ALreemanl or any such otlHlr aoruomunt will/osult in a VIOlation
or breach of on'( term 0/ provision nor conSlltlllO !l dofalllt undur any
conlfoct or aoroemant to whlclllhu Sha/alloldu/ IS a party 01 hy which
he Is bound, Of' violate any order. Wfll, Injuncllon 0/ ducluo of allY cOUlL
admlnlSlfatlve aoency or govornmolllal body,
(Iv) The trans fe/ 01 stock in tllo Corporation contomplatud
heroin by tho Shareholder to tho Buyers, will IIUSt in Ihe Buyor,~
completo owne/shlp in such sharos frue I/om all liens, security
ag/ooments. encumb/ancos, claims, demands an,1 c1lUrgos of uvury kind.
(b) The Shareholder, as Iho solo Shareholdur and as President of thu
Corporation. heroby makes tho following /op/esontations and war/antles which
shall survive Iho Closing Date;
(i) Sharoholder has transferrod Four Hundrod Sovunly-Fivu
Thousand ($475.000.00) Oolla/s of notus and accrued intorest of Ihe
Corporation due Shareholdor as 01 11/1/91 to tho uquity account of the
Corpo/atlon and hes made tl"s an Ir/ovocahlo ,:aplwl contrrhutlon to Ille
Corporation. Tho notus, accruod Inturust and capital loaso duu
Sharaholdu/ as 01 tile ClOSing 110VO lluon lurrdurud to Buyer in uxchangll
for Buyer notos.
4
WI Tho Corpo/1I1ion lias nOI lransaclull or anlijlllll Illlo or
alia red IIny auruurnijnl 10 transact dny uusinoss uctlvilias wllh any
Qompany, businuss or olhar untlly l;onuollo1j hy tho CO/fll)(o\ion or
Shareholder, Includinu thu lranslur 01 a,suls. rlgllts. lIatJihllus and
obllgllllons olhll/ thun In Iha OllJlnary COlJl'JU 01 IIlISflIUSS.
(lill A complUlu 1151 01 lIonholdllr 5 has huon dullvurlld 10 Ih<l
lluyurs, e copy of which is alluchud hurulo and fnarkud as bllfbil "e".
Robort B. MOl/lgun ("Mel/igun") is Ollll of IlIu IWO (21 lion holdu/s lislad
on Exhibit "C", Hill tOlllllndabtlldnuss bainu duo and payahlu to hflll In
thu umount 01 Sixly Thousand ($60,000,00) Dollars, Thu Slldraholdur
hos reprosuntud to the Buyors lhol Morrlgan p/usently holds Ihu
Shureholdu/s issued and ouutandlnij shalus 01 stock in lllu Co/poratlon
as collutural for tho rupaymllnt of Iho loan in 1110 flfllOlJlII of Sixty
Thousand 1$60,000.00) Dolla/s and has also /jlod a U.C,C. finunclng
Stolemonl oncurnburing all of tho assots ollho Corporalion, TlIU Buyors
and the Shuruholdur tHlVU agroud to ropay Iho indubludnuss duu to
Mel/igan pursuant to 1110 provisions SUI forth hOIUln and in p..ra()raph
"2Ib)" of this Ag/ournunl. Tha socond crudflor lislud on bl1itllt "C," by
Iho Sha/eholdu/,Is TliHlsillTlarlca COflllllOrClal Financu Corporalion; wilh
a totol indubtodnuss (plJlsuanl 10 a 101lU/ do Iud DUClIlntJu/ 12, 1991
from T/ansalllorlca to thu Sha/Ilholdor) in lhu amount of Twunty Two
Thousand Fivo Hundrod Sovonty Four and 20/100 1$ 22,5 -, 4,20) Dollars.
The Corporation has good anlllTlarkut<1hlu (1111) 10 all porsonal propOlty
refloctad on allachad E~hihit "()" and on Its Fllhfllclal SlalOIllUnlS , freu
and clear of alllTlo/tgagu3, options. lions. cllilf\)US. sucullly inlu/ostS.
loasos, covonants, conditions. ao'oomants. c1all"s. (tlSUiClions and olho/
enculllb/ancos of every Kind. OXCtlpt a,; sot follh in thu Financial
Statornenw of tha Co/porotioll or inlhis Aurollfllont. and 1110/0 tlXlSIS no
/eslIiction on Ihu use 0/ transfur of such propony, Thu SlIa/ullolda/ hus
rop/osonted lhel all of thu assuts of ,hu Co/poratlo/\ are helnu sold trou
and clear of ony Irens axcopl as tlOloinbol<Jro and lIu/elfluftu/ SUI lortll.
Howovor, the Sharoholdor has /opresonlod lhal Ihu "HYSlOr 300" Lift
T/uck, which is duscllhud on Exllibil "[)", is ownod by tho Cotporution;
but that, it may ue uncumuurod hy a l),c.c, filing. or olhorwlso
oncumbe/ed, andlhat a pOllion 01 Ihu lunds payable 10 the Sha/uholdor,
pursuant to the torms and conditions of (ho Promissory NOlO sot fQrth
as Exhibit "B" wfll bu ulilizoll 10 pay, in hJ11. any and all existing
oncurnbrancos on tho "Hysto/ 300" Lilt-Truck. II sholl bu tho sola
responsibility of Ihe Sha/ollolrlor to satisfy any slJch lions out of thll
funds payable to Iho Sha/uholder horeundur and to p/ovido ovidonce
acceptable to Iho Buyors that Iho Corporation IS tho sole owner of the
"Hystor 300" Lift-Truck_ All of ilIa Corporation's essats which ere part
of ilS busfnuss and p/oporty. os of tho daw of Iho ClOSing. hut alu not
listed on Exhihit "()" a/u to UO Wllhtho salu of slO(:k of tllo ell/pO/allorl
unle" speCifically excludod in wrltlnu and auruoJ 10 fn wilting by tha
Buyers. Sharoholdor has tho lI\)ht to lisl porsonal articles to bo excluded
and Buyers will agleo in writinu to such hst bofo/u tho Closing.
5
Shsreholder snd fju~urs hUloby oor~u 10 u.d\Jllo frO/ll UIO CorporaHOll'S
propsrty onu (ll Dull 31 6SX cO/llplllur, Ep~OIl prullur. l.Cl 1050, EllJor
U.P.S., softwsru and /ulated supporl equiplllunt.
(lvl A descriplioll 0' each 11IlISU ulfdur wtllch lhll Corporalion
Is the lossoe of lIny rool or pursonul p/oporly i~ ~ul forlh Oil llllochlld
Exhibit '"f". Tho propllrty doscrihed in suid IUllSU~ arll pre~ently usod by
the Corporalion os lusseo undu/ Iho to/illS 01 ~aid IUllses, which luuses
are In lull force alld offoCl snd erll 1101 in do'ault.
(vi Allachlld h%to ss E.hibft "F" o/u ulla'J<lItlld Findnciul
StlltlltnOnlS '0,' tho Co/porstion '0/ Iho yuurs 1 \.IllS, 19\.1' I"FJIlancial
Slslutnonts"l. T!JILfinancial Slatl!nll!lll~ h~yu Ili!tln p/uparo<l II]
conformity wlth\lIl-".B./II-,jY~~~lI(!llI!JilggmJ/1III1U 1l!1!!!;il!llI~ <:!QIl~I~tlllllly
maintsiilliifaniJ applio<!, Thl! finsn<;illl SlalufllofllS p/o~unl fai/ly witholll
hlSlffVlltlon-or lluulillcal,ioll thll fillllrlcial f1o~lili()n 0' lhll C;C!/lllHation a!
thifriiipeclrvii-tlaiiis Indicated ond tho r,!~lIlt~ 0' ()1!1I/lItl_OIl~ 9' lhe
C.Qt.E..or8tTOlno;~!11_~ i!l:liiilciivapllriod$ illdic:alud ilnd 110 nut omit to :ltalll
or reli8cliiny malll/ial faClconclllningthu r;orpOlalion /uqllillld 10 be
staled or ra'fii-cferihllrllin (ll nUClI:l:lilfY II} !naklllhll sllllements tho/uln
not mlsreailliiii. --To tho hoSI knowledge and beliul of Iho Shareholde/,
Ifiiilfij u res fr1~l!ffn6il c @~f~-!]!iii:ntiflavQ.fill 011- takol! li9[i'j-ijl Ei-~Q()!< i-
elid ruco/ds of the Corporslfon IIncl /lIprosolll actual. IlOna fide
liiilu.ctHiilj[-------u --.- - - ---- -- -. -
(1,"1 Thu Corporatfon ililS condllclUd its bllSII1USS ill Iho o/din'HY
cou"u and no matotially advo/se challut! in Iho conditioll 0' Ihe
Co/poratlon's business hos occurre<l, 110/ has the Co/po/atJon,
conducted any of the followlllg transactions outsldo of Itle norlllal
cou/so of the Corporation's business which % lIlatu/Ielly odvo/su to Ihe
condilioll 0' tho Corpo/ution's LJuslnoss:
(0) harrowed 0/ ug/oed to horrow any lund~ or
illculled, or hocorne subjoct 10. any ohligalioll~ or Iillhilily
(absolute 0/ contlngenll e~cept '0/ loans used in Ihu ordinnry
coursa of its business;
(bl uxcapt in tho ordinary courso 0' husflless and
consislent with lha past p/aclico of Ihu Corporation, sold.
lIanslalled or othe/wiso disposud 01. or ag/oed to soli. lIanslo/
or otharwise dispose of any of ilS assets. propellios or lights.
Including inventories. or cancolo,j or olhe/wlse ttlllll""110d. or
aoraedto concol or olho/wi-so ItHIIllllnlCl. any dohls or c1ollns;
(cl untered or aureod to lIflIur "110 any au/uolllunt 0/
lI11ungement oralllinu any p/ele/unllol righl$ to purchaso uny 01
its assets, properties 0/ /Ights. including Inventories, 0/ requiring
the consent of ony patty to the lIons'er end assignmont of any
6
mllle/lal morkdown 0/ discounl. (
(ixl Thu Corpo/ation and thu Sharuholdur, tlavu glvun Buyur
1I00USS to complota Iisls of all/ecltivatJlu~ of lhu Corporulion as of llie
29th !lilY of Novembor, 1991, including accounls roclllvablo, notl;ls
r8calveble andlnslJronca reculvabla. All aceounls and nOles IllcuivalJlo
rallaclad on tho Finoncial SlalalTlanlS and ull uecounls and notes
racuivoblo subSIlCjuonlly accruing and OlJlslanding as of Iho Closfng wfll
bo (0) volid, gonulno and subsisting. and (h) sllhjoct 10 no known
dufonslls, 501-0115 0/ counlo/c1olrns.
(x) Tho Corporation doos nOl havu and nono of it~ ati~o(s aru
subjuctlo, any Iiohilillus 0/ obligalions of uny nutlJlo wlla(tiollvo/. uiUw/
absolUlo, acc/uud, contingont 0/ otllurwisll, axcupl lor tilHJl1 Iiubilitioti
which e/a no/mally shown or rufloctud on lhu FlllUnciul StulufJIoms
pre porod In 0 Illanne/ conslstenl wilh gonurally accoplod a(;collntlng
prlnciplos, and Sharuholdur knows of no hasis lor any addilional I
Iiabilitlus or obligations inclJlrod olhor Ulilll III the f\()/IlHlI ilIld ordinary
/;oursa of business alld colltiislenl WfUl pasl praclice, nono 01 whlt:h wfll
have II rnatorial adverso ulloclupon tho bUtiinoss 0/ condition. ffnancial
0/ 0lharwi50, of Iho Cnrporation,
\
lxi) Tho Co/poralion has limuly and properly 1iI0d, 0/ causod to
ba filed with the opp/op/iato agoncios all tax ruturns and lUx rupo/ls
roqulred by law to bo filod by Iho Corporation,
(xii) All contracts and COlTllTlfllllenlS of the Corpo/alion have
boon enturud into in thu ordinary cou(su of the Corpotation's buslnoss,
nono of which a/o matu/ially adverse 10 tho condition of tho
Corporation's businoss,
(xiiil Thu/o is no suit. claim, action or procuoding now pundfng
or Ihroatonod bolo/e any court. administralivu or rogulalO/y bouy. 0/ any
governrnemal egoncy includfng bill nOllimiwd to tax quuslions or Iiuns.
no/ ale thore any grounds UlIHlltO/. rolaling to which Ihu Co/poratlon IS
a party 0/ which lTIay rosull in ilny IlIdgmUlll. ordor. docrllo. liallllity or
olho/ dOlerrnfnalion wlllch willlldVll any nld(Onally adverso offecl upon
the business 0/ condition. financral or otl\lHWISO. of lilt! Co/poratfon_ No
judgment, ordo/ or 1I0GrlJa has Ileun enturod d\Jninst ttlU Corporation no/
any such liollililY inclJllod which hds, or will tWVli. SUcll effect. '[ tlUru
is no claim, action or p/oceoding now pundln\) o/lh/uallJf1ed bllforu any
court, adminisllativo or rogulatory hody. 0/ ony govornrnentol n!Joney,
which will prevont or hampe/ Iho consurnfnatfon of tho transactions
contomplated by tillS A!Jreomonl.
(XlvI All permfl5 and aUUlOrflUtfOnS have not yut houn obllllnud \
by the Co/potation fo/ tho oxiStlflfj ury storagu lacks anll 10/ lho
construction and orocll<H1 of on odllflfonal OIlO tlllflllruu (1001 dry ,1l01U\lO
H
ml,leadlnll, IInd unless specillcully otllllrwI5u provided in Ihls
AUreement, none will contain ony lJlll/lJe slutllfllent of fIluterlol focI. or
omit any material factlho omission 01 which would hll mlsluadin{) as of
the Closino Data, The Corporalion and thu Shalaholdllr, Ihe Corporation
confirms, rflpresllnlS and warrants that il has affinnutivoly and fully
discloSlld by the UlIoched Schadulos Ilndlho forogoinU rllp/osontations
ell feclS mlltetlalto its assets, buslnllss. opurallons. financiul cOlllfilions
ond prospoclS.
!i. IlUII(illUlLllllliQ!~.jllllLWllllilIUillJUJfIlUYll(.
Buyor horoby makos thu following replllsontulions and warrantius. uuch of which Is
truo and corroct on lha data haroof und oach 01 which will survivu Ihll ClOSing:
(al Tho oxoculion of this Auroumunt and othur docllfnunts
contomplated heroin, and thu consulllmalion of thll t/onsaclion COfllllfllplatlld
hlllohy has not, ond wlllllot as of thll CloslnO con~1I1utu or rusulllll any b/lloch
of uny of the provisions 01. 0/ constitlltu a dllfuull Ulld'H any hlUS')' cOlltract.
purchusll 0/ othllr comfllitrnonl 0/ any other 1l0rUulllunt to which Buyurs ,HIl a
patty 0/ which would havu a fl111111rial a,lvtl/su uflu,:l lIpOIl thu Buyors,
lb) Thora is no suit. claim. action or proceodillg now pundlllU or
th/oalenad before any court, adrninistrativu or regula lory hody, or any
governmenlol agency. nor oro thoro any g/ounds Ihorofor, 10 which lhll Buyors
are a patty or which may rosult in any judgrnonl. ordor, dUG/lie, liahility or olher
dotll/rninalion which will. 0/ could. havlI any fIlalorially advorsu offuct upon
Buyers. No judumont, ordo/ 0/ ducruu has huen ufllu/od agafnst Buyurs no/ any
such liabllily incu/lod wllfch has, 0/ cOllld havu. such offocl. Thuro is 110 clal"'.
ection 0/ procuoding now pending or th/oatonod beforo any Cllllrt.
administrative 0/ /lloulatory body, or any oovIHnlllontal a\Juncy. which Will. or
could p/evont or hompllr thu CllnSUfllfTHlllon of thu l/lll"actions contomplatlld
by this Agroement.
lc) Alte/ Closing. till) SIHlruholdu/ wfll llOVU thu rlula to purclHlsU
from the Corporation tour (41 boUlS ill tho Corporation's cost includlllO all
associated costs 01 shipping, handling, p/oparatioll, tinanclng. taxus lllld any
other COSlS associated witl1the norlllot and /oosonahlo soiling of ploaswu boats,
Shareholder Will not pay any solos conlfnlssion for tl10 purcl1asll of such bOiJts_
This sola will not be requirod it tho Corpo/allon or lIw Buyurs III ttwir ruasonahlu
discrollon delormino that SllO/oholdor is purctHlSIII\] SlJcl1 boats fo/ allY wasoll
othor than lor pu/sonaluso. Additionally. tl1is "IJllt stHlII bu contHlgfHIt upollll1u
Sha/oholder pelfo/lTling all of l1is ohliOiltions 0'1 set fOrll1 III tillS ^lJrUOlllurll
according to tl1ei/ terms. to include hut not lw llillitud to all of his ohliUilllons
as ero sat lorth in pareorapl1s "7" and" 8",
(d) Buyers will prOVide a copy ot an annual phYSical 1I1VOlll<lry to
Shareholder afto/ thfl closo of each calenda/ YUilf,
10
(al In ordor 10 assu/e tllU ropaYfflunl of tlltl "WIIIOS dllo 10 lhll
$harahlJldo/ pursuant to lhu lUtlns and r;ondilions 01 this AgruulIlunl, lhu Buyu/s
hava ooroad to pll/Ch,1Ua, wilhin sixty (60l <lays of tho Closing, a dllcreusing
tar/ll lifa Insurancll policy in tho omOlHlI 01 Four Hundrlld Thousund
(.400.000.001 Dollars on lho lilo lJt Douglas J, Hanson, nanllrlg lha
Sha/eholder as tho benatlciery ot seid policy.
6. Cnluli1lanllJQ.CJ!lllll.
The followlno conditions muSl hu rnut prior to 0/ at Ilia Closing unlo~s such condition
Is waived by lho Buyar$:
(0) Sharaholdu/ shall bo bound by his ClJnsullin{j Ag/OlJ/Ilelll wilh Ihe J
Corporallon and lho Buyors as is more particularly duscribed in paragraph "7"
below.
\
\
(b) Sha/uholdu/ shall bu bound by his Covunant not to COlnpulu with
the business of lhe Corporation or with Buyors. as fS m% palliculatly
described In paragraph "8" holow.
(cl Tho Shareholder's ropresontBlions dllll warrantius hurtlin romain
true and correct at lho time ot Closing hereof.
(cJI Tho uxisting 10050 agflltlmSf\t dilled Fob/uary I. 1 Q88, (tho
"Leaso"). a copy of which is otlochud IlorOto markud as Exhlbft "G" and nllHle
a part h%of. fo/ all of lhal /eol p/opony. contafning low (4) ac/us, plus or
minus, located at 2015 Turkoy Point Road. Baltllnoro, Ma/yland 21221 (tho
"Proporty"l. by and botwtlon James High und Doris M. High. landlord ond
Boatlno Center of Baltimoro, Inc., tenant shall havo boun amendud to rotluct
thot tho landlord has consented in writing. to thu E1uyors assulllption 01 Iho
Leese and 01 tho purchasu oplion conlainod the/oin. As port of 1110 llmondmoflt
the landlord sholl have executod on estoppol conilicatu acknowlodging thaI
thero % no delaults under tho lorms and condftions 01 the Loosu. Ihot lhe
Lease remains in full forco and offocl. and that thu/o aro no clillrTls. counto/-
claims, or nghts of set-off of oithu/ pony to 1110 ,-easo and lhat tl10 option 10
pll/chase containod in tho Loose has nOI buon eX<Jrcfsod by lho TtHlUnt and
remains in lull force and elloct according to is l!lnnS,
(0) Tho Buyors slwllllavo lilu nght, prior to clOSing. to IldVlJ slIl:h lillu
examinalions, SlJ/voys, envilonmentol audits. onglfluOrlll\1, due diligoncu. and
sllch other tests and studios completed at tho Buyo/s' solo cost and oxpuns6,
In the eVlInt the Buyer's a/o not satisfiod with tile rosults of any of tho tosts 0/
studios, Buyers shall in thei/ solo disc/ation havo tho right to cancul this
Agreofnont. in which evant all of their Depositrnonuy 511011 bo returntld 10 thorn
and tho parties hurOlo shall bu rehovod of any furtlHH liabilfty Iwroundo/,
(II All 01 Ihe eXlsling liens. whicll are duo and payable 10 1110
creditors 01 the Corporation, shall bu paid In lull at Ille Closing from tho
11
8, :U1.lll~UL~J1{&\llIllilJUNQU!J C!JIJllllitlll
Sharoholdar rocognilu8 lhat Ihu Buyurs a/u indil'uclly pwchasing Ihu \lood will and
ruputatlon 01 the Corporation's husinuss and that such would ba signlfluantly diminishulllI
Sharljholder anterad Into Ii compuling buslnoss cOlliod on by Shareholder In any guog/aphn:
a/oil in which thu Corporation is doinO business. Thureforu, as a condition of Closin\l. Buyer
end Shareholdor hovo bargainur) 10/, in good 'aith and at arm's lun\Jlh. Ihu Shareholdll/'s
Covenunt Not to COlllllute as Is horuinaltor sut forlh in lhis paragraph "8". Thu considu/alioll
fa/ the above-muntionad aoroumenl has buun supa/aluly baroainull '0/. und Ihu pil/lles agrou
that tha conslcJuralion therein is rtlasonahlll, Tho purllus 'wlher ag/ull 10 ruplI/t Ihose
payrnllnu for ftlderullncome tax purposes on e consislUnt basis
Sho/eholder Will not. cornmancing on the dato 01 oxocution h%of unllllhroo (31 yours
from thu datu of Closing, ulthor ooluly or Joinlly, or togulhor wilh or os ugont for UIlY porson,
persons, association or ossoclations, corpo/allon 0/ cO/potations. wilhln a radius of Ihl/ty./ive
(36) miles from the ruoularly maintained offlcu of the Corporation locoted at 2016 Turkey
POint Road, Baltim%, Ma/ylond. di/actly 0/ indiroclly CUllY on, ongooe in, or compatu with
tho Corporation In ils business 01 owning and oporatill\l maWUIS, new and usod boat salos.
boat rnolnlonancu and repair and othllr businesses asslIclarud thu/ewilh. uxcupl with the
Buyers' p/lo/ wtillen consont which shall not be unroasonallly wfthhold. but, In any llvOnt. lho
Sharuholdor cannol bu all adjocullt duulor for tho "Marlnollu" and "Thundorcraft", As
considoralion for tho f%golng. Buyors shall pay mwruholdcr tho arnouf\l ot Ono Hundrod
Thousand ($100.000,00) Dollars as part of lho consnloratlon 501 forth in pu/agraph "2".
9. C-llrullli.1QL~Q!llQ[ll1iQn'~Jhl~jllll~~ f!ll!_llJ1!l9 _CIQ~lIl!J.
Tho palllos hu/oto mutually COVUIIUfl! lIl,Jt tilu Corporu!ioll's lI",fllUSS shall bo
conductoll as follows through tho Closing cOfllUrnpl,J[ud horUlfl without tilu wflltun nlllhJul
agreement of all the pa/tios hu/olO:
(a) The Corp%tion's businoss will bll conuucleu only in lhe ordinary
course In the manner lhatlt Is now conducted.
(bl No change will bo made in tho Corporalion's clJ/tificOlll of
Incorporalion or by-laws,
(cl No chango will bo rnade in tho Corporation's allltlorllod or
outstanding corporato sheres; and no additionol stock of tho Corporation will
be issued,
(dl Each of the po/ties he/elO agrees not to take any action which
would disqualify the eloction of the Corporation to be taxlld os an "5"
corporation for foderal income tal< pllrposos, and fu/ther ~orees to take any
actions In tho future which moy bo necessary to protect or Il/esorve such
alectlon.
13
10. Inl1wnnifilillllUlLl1YuSllJIlIlHllil.llL,
Subjllct to the conditions heroinaftllr set lorlh, Shareholdor sllall indelllnify and hold
Itarmlen tho BuyolI against any loss, ectlon&, ussossrnenls, liabilities, damauu or expanse tin-
cluding but not lirniled to reusonahle otto/nays' foos and costs incurrod in IIldland appellaltl
procoodlngs, intorost end penollios ossortod a\luinst 0/ imp05edupon 0/ inclJ//od hy !.Iuyers
ond including costs and attornoy's 'oos in ony oppellotu procoedings) caused hy or arising out
0' (I) any broach of u representation, covonent, warranly 0/ ou/oomoiliillado-hy Sha/elloldo/
cunlalnedln this Agrofllllont o/mudu in connection With lhu lIansaGlion conlomplalod uy this
Agroolllenl and all roluted docurnenlS. 0/ (ii) any u/uach of warranly, includinll uny u/oech of
warronty modo hy the Shore hold or horoln in any Schlldulo allachod or 10 bo delivured IllJ/,suant
h%lO 0/ In ony cerUficolO or othe/ insl/umenl doliv%d by or on bllholf of lho Co/po/ulion
or Ihe Gharoholdor pursuant horeto, The Slloretwldo/ has advisud lhu Buyur Ihiltlhero arlltwo
(2) axlsting claims and/or lawsulls pending bo'ora thu Ci/clJIl Cou/t 0' Baltim% County,
Maryland and us ara 1Il0re specitlcally sut 'orlh In ExlliUlt "H", allached horuto and madu a
port hareof. The Sharaholde/ spocifically agroos to indomfllly and hold hormloss tllu Buyors
andlhe Corpo/ulion against eny loss, aClions. ussosslllonts liahililios, dumogos, oxpunslls,
Including, but not limltod to allorney's fuos and Court costs, causod by or arising out of thoso
claims and/or lawsuits shown on Exhibit "H" ullached Ilo/eto. Buyors shull havo thu right 01
set-off against any amounts or paymorlls duo or to hllcome duo to Iho She/ellOldor ullllor 11115
Agroement, sucl1 as Ihe payments ruqui/ed In he madu by thu Buyers pu/suant to thu Suvon
Hundred Fifly Thousond ($750.000,00) Dollar P/ornlss[J(Y NOlO, Buyers shllll elso lIlaintain
ell rights In law 0/ 01 equity lor rodress in Ihe eVllnt ot allY allo'Jod b/lloch If\ lhis Agrulllllllnt.
(e) Allornoys tOllS ",II only bu owardod as a consoquont.al dumeuo
in any indemnification oction to Ihu provailin\l POllY,
11. 1l1\J.wJDifualtiQllJl~__tillleU'Lll[~.
Tl10 Buyors shall indomnify und hold harmloss thu Shareholder ugalnsl any loss,
dama[Ja 0/ expunse (incllJ(jin[J /eusonablo allornoys' luos und costs incurred In lIial and
appellete p/ocoodings) caused by or o/isinu out 01 (I) any c1ailll mode againsl tho Sheroholder
In rospect of any broach or de"llJlt In rho perfo/Illonco by lho Buyors of any covenant 0/
agreement of tho Buye/s contained in tillS Agreolllorll, or Iii) any bleach of wallenty or
Inaccu/ate 0/ orronoous /opresentulion mado by Ihe Buyors he/am or in any co/llllcero or othllr
instrument dolivarod hy or on betloll of the Buyurs Pll/SUUllt hereto, The Shareholder allreos
to give prompl w/illon notfco 10 tho Buye/s of oach clailll lo/ulomnifiable damagos which lhll
Sharoholdor belioves he has suffered,
(a) Allorneys 1005 wilt only bo awardod as a consaqullntral damago
in any indumnificatlon aClion to rhe p/ovailing party,
1 2, A~!ll~-.!1LCQ!UQfll1!12Ql!L1JlLS.\1tljtl>;l tQ5!l!';W!lY,
la) As secullly 10/ Iho puymorll of any lInpafCl part ot tho pwchaso
prlco 0/ any other ohligaliolls 01 tho Buyurs. Sha/eholde/ shalll1nvo a lien UpOIl
all of tho assots 01 tho Co/po/atlon. subjecl. howuve/. 10 any of Ihu existing
liens on those assets which tho parties ag/eo <He not puid at the tima 01
Closing. Said assets shall trlcludo, bUI not hll IIITlltlld to. the equipmenl,
14
machlnary, lIucks. Invonlory. OCCO"'1I5 roceivablo. Ihu l.uusu anI! Ihe Option 10
Pwchoso which Is cOlllulnlld in lho Louse. Howuver, HIll Sharoholder
rer,ognlzos lhat thu Buyers will nued 10 havu working capilul in ordur to
conllnue thu opurullons of lho CoqlOrolion and lhurofo/u, tho ShorohohJor
1I1lree8 lhot thu BUYllrs shall havo thu righlto place u lion against ,~old aS8015 10
the extenl of Fifty Thousand ($60.000_00) Oolla/s, which lion sllall havo
prlorilY ovor Ihe lien to he gronlod 10 HIU SlIuruholl!or ul lho limu of Closing,
Thll Sharoholdur covonunts unl! ag/oes to IlXeClJta ~lJch doclJlI1onts as may bo
rllusonubly ruquifud of hlJnlJl o/du/ 10 allow Iho OllYu/s to oblain 5uid financlflg
and 10 subordlnotu Ills Ilonll, sold financing,
(b) Additionally, lha Buyu/s GflVOnant and agruu lhollho Stock of Iho
Corporallon may nol bu Iransfollud, ossfgnO(1. uncumbe/od 0/ givun u,s (:ollalaral
to any olher po/son, portne/shll> 0/ corpo/atlon. wltlloul Ihll axp/oss wrlttan
consent of tho Shareholder, oxcopt, howavo/, no such consunt sholl be requirod
lor a loan up to Fifty Ttfousand ($50.000_001 Dolla/s as is herointJeforo set
lorth In pe/agraph "11 (al",
(c) Buyors and/or Iho Cotporation shall have lho ab~olule righl 10
oxerclse the opllon sot forth in thu Loas~ 10 pllrclHlsu the P/opo/ty at any lime
within Iho option period sot forth In tho Luasu. Tllll S~lU/uholder covununts and
, ag/oas thai his IiU'l on lhu l.oasu and/or oplfon sllall ill all limes bu sutJordinalu
to lho IIghl of tho Buye/s and/or the Co/po/alion to oxe/clso the oplion and
thai/ righllo place a lirst morl\lagu on thu Properly WllOlhu/ laken back by lhe
Lossll/ or Ih/ollgh e banking institution at tho limu Ihe oplion IS oxe/cJsod. The
Buyers and/or Iho Corporation aorou to lurlhur S(]ClIru any invoices which may
be duo and payatJlu to tho Sha/oholdo/ 01 such tffllO as lho option 10 purchase
Is exe/cisud by oxocullng a sucond mortgagu to HlO Sharoholder,
\ 3_ t\IUilJlIIHlIl,
If eilho/ Buye/s and Sharoholdor make llJnely and propel obluclion to any cJailn or
claims set fOllll In any notico 01 claim. and if such claim Or cJafflls shall nOI have huon resolvod
or compromised wllhin thirty (30) days from tho date of the notice of objection. lhon such
claim or claims shall be settlod by arbitration in Ma/yland by a panel of Ih/eo a/billalors. In
acco/danco with Ihe rules of the Amorican Arbitration AssocliHion. and such a/hillatlon shall
bo conductod in accordance with Iho rules of Iho Amorlcan A/bllliltion Association, Tho lhree
arbitrators shall all promptly obtain such information roglllding the mallor as Ihey doom
necessary and shall doclda the matter and ronder a WOllen older of aWilrd hasud upon a
malority opinion which shall he dalive/ed to Buye/s dnd tho Shareholdor Tho IHovillling party
to the erbitralion Ilward shall he ontitled to recover from olhor party any fees Ilnd o.punses
of the orbit/alion proceeding conducted pu/suant 10lhls paragraph p/ovlllod. howvve/. thill
tho portion of such loos end oxpensos shall bo IImltod 10 tho sarno percontage 01 such fees
ond oxpellsos as tho pe/centaga oblalnod by dividing any amount awarded to lho provaillllg
pa/ly by the amount of thu c1ulfl' , Any award shall llu a Goncluslvo dOlo/lllinalfOn of tile
metter ond shall I)a binding upon tho Ouyo/s af\(llhu Sharuholde/ and shllll bu pafd on delllund.
in cesh, en amount equal to ttlO aggregeto amounl of such claim 0/ clalflls end Iho allocable
arbitration expenses end leos, An award made frolll artlllration 01 any claun shall hI! "nal as
balwoen the parties and shall be unmodialely onfo/cealllo III Cllurls of law,
15
14. ~1I1YJ1lg,LWlIllllI11iU4luJ.lI.uIlUllUl!UiUIllIlll.
HIIQlIrdleu 01 any invllstiootion at any timolllade by or on bohalf 01 lIny pOlly hllroto
or 01 any Inlormatlon any perty may haw in rospect thorool, oll/opre~efllations allll welton-
lias of thll Corporation, th/l Sharohold/lr and Buyor lIIadoundllr 0/ pursuant 10 lhls Aor/lemalll
,hall survive Iho Closing Dolll harllundo/, o~ follows:
(al In ttla casu 01 U /llprosolllUliun or warrulIly modo by any plllly
herllto whi(Jh Is nut I/Ull whan modo and which wUS modo hy such pOlly
fraudulonlly Ilnd wilh intont 10 dutralHI or mislood. lhll somo sholl oxpiru liS
provided by law.
(hI In 011 othor cosos lhll reprosofllotions lInd walta/Hills huroin shall
expirll olohlolln (161 yoars from lho Closing Doto; providod Ilowovor lhot ony
bona fide claim which sholl havo boon ossorlod duting such survival ponod shall
continue in effect until such tlmo as such claim shall havo bean r/lsolvod or
s/llllod.
16. fuu!l~.
Nothing contained horoln is Intondod 10 0/ shall be consl/ued so as to Iimil the
remedlf/s which any pally mllY have ogainsl any olher in the event of a breach by ony pally
of allY reprosentation, warranty or ollreemtlnt mado under 0/ pu/suont to Ihis Au/uolllent. it
baing Intondod that any romedies shall be cumulotivo ond not 0 xclusivo.
16, ~A.ur~m~ltMlIL.MQilllli;lll!!l[\.
This Agroomont, Including tho exhibits ollachod hu/elo. tho closing docul1\onls, and
lhe docllmonts doliv%d pursuant horoto. conslllulUs tl10 omire lIllroomelll bUlwelln lhe
parties snd supo/sodos all prior og/eemonts and undo/stundlnus blltweon thll parlios with
rospect to Iho subjoct mUllet contoinod h%in, No changus ot. mod,licalions or. 0/ additions
to lhls Ag/oOlTlont shall llo velid unlllss tho salllo shall be '" wriling and sigllod by all pa/tlos
hsroto.
1 -, , lli!llJiIlQ.A!JfJiUm.~nt;-8:i.:lJ911IllJlru,
This Agroumont sholl bo blndinu upon and inuro to tho bonulit of Iho pur lias namod
here ill and to thol/ raspoclivo succosso/s and assigns, NOllhe/ thiS Au/oomont nOt all or any
part 01 Buyor's rights, into/est.s or obligations hereundor may btl ossignod lly Buyur wilhOlJl
the consent of 011 othor parties herolo, Noithar Ihls Agreemenl nor any 01 SIHl/oholdur's
rights, Int%sls or obligations ho/eundo/ may be assignud by Sho/el1older wllhoul Buyo/'s
prior written consmH. ThfS Agreoment, howover. shall bo hinding upon the pellios end their
heirs, SlJccossors, personal roprasentetivos. legatfles. and asslgn~, All rotoronces to tho
porsonal ropresontotivo ot any party shall fncludo. ft the COlltflxt pe/mlts or rllqlJl/OS. ony
leoatoo. t/onsforoo. or assfllnuO ot such porty or such party's fJSlale. as 1110 case lIlilY bo. and
such hoir, assignee, lellatoo 0/ transteroo In tho ovont of any pa/ty's dealh. sholl succolld 10
tho bone fit end bo bound by tho o()llgallons SOl lorlh in ttllS Agrnotrle/ll wilh respuct to such
party or such pe/sonal/op/osonlative. All extub,lS in tIllS Agroemunt ole Inco/po/atod inlO lhis
Ag/eemont as it tully rew/ltten ho/eln; all retorence to eXlllbflS wherein a 10001 documont is
16
22. ~Yi,AuJlJlI. As splIcllicolly uc:knowlotlUlId onJ ourlllld hy thll
parllea hereto, thet thll dulllll of Ihll Sacrow Agllnt oro (J'Jrllly Ildrnlnlalsrialln rll~tIJ/O, Thll
fae/ow Agent II authorllod and Inllluoted to hold the 1lI0nlos delivered to him In oscrow. The
SIc/oW Agent Ihllll have no IIl1hlllty lor Its actions horeundor, providlld It has acted in good
lalth. The Elcrow Agent shall be entitled to roly on olllmllructions It reasonuhly bellavu are
tendered In IIccordllnce with the terms and conditions of this Aoreolllent. In tho ovent 01 II
dispute hOle under, tho Escrow Auonlls nol autholllsd to oct until such lime as 0 cOlllt 01
competent jurisdiction so dlrllcts or the parties heroto jointly, by wrlllen notice, apprlsll the
escrow egllnt of Iho resolution of such dlsputo. Tho Escrow Agllnt f1\OY in Its sole and
ebsolute discretion do posit In the approlJrlote cou/I 01 IlIw tI\O Dllposits hold In di3pule IInd
ehllll thereupon be rolloved 01 Its lIebilitles IInd duties herounder,
23. t:lltlaI1llI_'LAlaI.
The porties oQroe lhat they, lhair agllnts or lhoir porsonol rllprosunlolivos will do IIny
oct 0/ thing or will e~ocuto ony 0/ all documents nocossa/y or proper to make offoctlvo the
p/ovlslons of this Agrllement, ondto effecwale untie/ thu terms of Ihis Agroornu/ll the closing
and othor roC\ui/elllonts 01 Ihis Agrooflllllll,
IN WITN~S WHEREOF, the pOlllas hereto have caused Ihis Agroomont 10 bo executed
as of this ..;zL'::-day of Decomber, 1991.
Wlt(Ul~sos: Shmeholde/:
_L ) lf1~L':v2-L0[~" ~;;)J~c;;j(.~~ ---'
-()- O' ROBERT PLANTE
~" &~~"V"~:.._____.___
~~~_../,~~~~ . ._){,,(t'.~---r
DOUGLAS J NSEN--
/
~~.,.' ~~ /
(,;~..' _' d;2
/
"-'.
(.,,) ./-,: ., "
. K.A,'i' JOANN ~IANSEN
r::/.-..
-.J.,...._~._
--~'---'
~
,
Tho Boating ConlU/ of
Baltimore. Inc.
B (----?Hi~/22to=
~Uittlresidlnt .. --
A\t88t:
I./..m't,whblhlnlln 2.,pl
12118/.\
18
, '
, .
O"llh ,. f_rwI, Il.qul/.
f.btllary 11, 1993
~. PI" 1
On Nov~mb~r 16, 1991, Ihll pallllls 10 Ihe Contract agreed on a nel worth 10 bll
pl,Irchased of $323,400.00. Al the lime of closln., Ihe Sellllr .ave 10 Ihe Buyer a ChCl;k,
which when added 10 Iho Balance Shret, repr~sllnlcd a net wurlh of $326,700.00. After Iho
purchase was compleled, however, Buyer oudlted Ihe accounl balances lind discovered Ihal
Ihe net worth was iClually $143,927.00 allhe lime of purchase.
In addlllon, a foolnote In tho Oclober J I, 1991, Jllnancial Statemenls Indlcaled Ihat In
flscal y~ar 1990, the cosl of boat sales was understated by $167,014.00. This adjuslment
was bein. absorbed Inlhe 1991 flscal year. No mention of Ihls malerlal adjuslmcnl was
made 10 Ihe Buyer. In fact, under Para.raph "4(b)(I)", Ihe Seller purportedly conlrlbulcd
$47S ,000.00 In noles and accrued Interesl as a capital contribulion. Because of Ihe
adjustment In 1991 carried over from \990, Ihls amoulII should have been $167,014.00
hlllher.
. II also ls apparent thallhe Seller double COUIII(~llhe lien of "olher inconlll" in \99\
by $20,84S.00. This would have Imp3clcd the sale price in the amounl of $\04,225.00.
Similarly, Seller ovenlalcd Ihe boat sales on the Income Slatem'nt by $230,000.00. The
correcl amounl would have reduced lhe cant roc I price by $11 S, 0.00. Finally, based 00 his
experience, Seller's forecasl on slip and lack renlal was oversla ed In lhe amounl of
$39,000,00, which would have impacted on Ihe sale price by $ 95,000.00.
An audit by Ihe Departmenl of Natural Resources has disclosed thaI sales tax~s on
boalS sold during your client's ownership were paid late and In incorrecl 8mOUIIIS. The
esllmalcd claim is $IS,OOO.OO. In addition, Ihe Maryland Income Tax Division has audited
the 1987 lax year and has found underpaymenl and interesl du~ of $640.87. This amounlls
belnll wilhheld from the payments due your c1ielll and Is being forwarded 10 Ihe Stal~ for
their claim. Pale 8, paragraph 4(b)(xi) of the stock purchase allrC<lment stales Ihat all tax
returns were t1Ied on lime and Ihal properly and timely IInd lhat would appear 10 be
Inaccurate.
Furthennore, there are other problems which existed at Ihe lime of selllernent known
to Seller, and which exist to loday. According to I'aragmph "4(b)(xiv), the Seller
represented thaI Ihere \liere no oUlstanding or pending objections to the ereclion of rack
storage on the propelty. In polnl of fact, Ihe Seller had been Irylng 10 get pennlssion to
erect rack slorage facHides for many years. He had given up on being able to obtain such
pennlsslon due 10 objections from various Baltimore Counly departments. This would have
Impaclcd Ihe sale price by $240,000.00.
Seller has failed 10 perform under either lhe Shareholder Consulling Services ond
under the Shareholder's Covenant Not 10 Compele conlained in Paralraphs 7 and 8 or Ihe
Agreement. Seller agreed under Paragraph 7.1 to allend all boal shows. He did nOI. Under
Paragraph 7.2, he was to assist in Ihe lralning or boal salesmen. Seller ret\lSed 10 assist.
Wilh respecllo Pardgraphs 7.3, 7.S, 7.6, 7.7, 7.9 and 7.10, Ihe Seller refused to return
Plaintitt. All remaining aver.ments ot this paragraph are denied
and striot proof of same, if admissible, is demanded at trial.
20. Denied. By way ot further response, only the form
of the Note was at.taohed as an ollhibi t to and incorporated by
reterenoe in ths Stook {IurchaBo Agreement. Noither the actual Note
or the aotual Mor.tgago was incorporated in or an integral part of
the stock Purchase Agreement.
21. Denied. After reasonabls inveetigation, Plaintiff
Merr.igan is without sufficient knowledge to confirm or deny t.he
truth of this averment. Proof thereof, it admissible, is demanded
at trial.
22. Denied. After reasonable investigation, Plaintiff
Merrigan is without sufficient inf.ormation to confi.rm or deny the
truth of this averment. Proof thereof, if admissible, is demanded
at trial.
23. Denied. After reasonable investigation, Plaintiff
Merrigan is without sufficient information to confirm or deny the
truth of this averment. Proof thereof, if admissible, is demandsd
at trial.
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24. Denied. The Stook Purchase Agreement speaks for
it.elf. By way of further answer, this avsrment is a oonclusion of
law to whioh no response is rsquired.
25. Denied. After reasonable investigation, Plaintiff
Herrigan is without suffioient information to oonfirm or deny the
truth of this averment. By way 0 f further answer, this averment i.
a oonolusion of law to which no response is required.
26. Denied. After reasonable investigation, Plaintiff
Herrigan is without sufficient knowledge to oonfirm or deny the
truth of the averments set forth in subparagraphs (a) through (i)
of Paragraph 26. Proof thereof, if admissible, is demanded at
trial.
27. Denied. After reasonabls investigation, PlaintJ.ff
Hsrrigan is without suffioient information to oonfirm or deny the
truth of this averment. Proof thereof, if admissible, is dsmanded
at trial.
28. Admitted in part and denied in part. Plaintiff
Merrigan admits that the letter attached I.IS Exhibit "B" to
Defendant I s Answer and New Matter was addressed to Dennis J.
Farina, Esquire. Plaintiff Merrigan is without sufficient
information to confirm or deny the truth of the remaining averment.
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33. DenIed. It is spsoifioally denied that Plaintiff
Merri9an beoome a holder of the Notus on in question on June ~6,
1993. It is speoifioally denled Plaintiff beoame a holder of the
Note. with knOWledge that the Notes were overdue and aooordingly,
i. not a holder in due course. Rather, Plaintiff Merrigan beoame
a holder in due oourse of the $60,000.00 Note on Deoember ~O, 1991
and a holder in due oourse of the $40,000.00 Note on June 16, 1993.
By way of further answer:, the averments oontained in this paragraph
are a oono1usion of law to whioh no response is required.
34. The averments contained in this paragraph are a
oonolusion of law to which no response is required. To the extent
a reeponse is neoessary, Plaintiff specifically deniee Plaintiff i.
not a holder in due oourse and specifically denies Plaintiff took
the Notes subject to any defenses the Defendant had against the
a.signor.
35. Denied. strict proof of same, if admissible, is
demanded at trial. By way of further answer, the Notes were
exeouted and delivered by Defondants for the express purpose of
obtaininq the release of the valid and perfeoted lien held by
Plaintiff MerrIgan on the stook purohased by Defendant from Plants.
MIS-
36. Denied.
d.~anded at trial.
striot proof of same, if admie.i~le, i.
By way of further answer, the averment
oontained in thle paragraph is a Clonoludon of law to whioh no
re.pon.e i. required.
37. Denied. The averment oontained in this paragraph ie
a oonolusion of law to whioh no re.pon.e i. required.
WHEREFORE, Plaintiffs pray that Defendants New Matter be
di.mi..ed and judgment entered in favor of Plaintiffs.
RHOADS . SINON
BYI I) -It/';:/?
u nberre ~
Jennifer M. McHugh
One South Market Square
P.O. Box 1146
12th Floor
Harrisburg, PA 17108-1146
(717) 233-5731
Attorneys for Plaintiffs,
Dennis J. Farina, Trustee for
the benefit of Robert Merrigan,
and Robert Merrigan
Datet April le, 1~94
5171'
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ff
V
IilXHIBIT A
ALL THAT CERTAIN lot or' piece of- ground, lying and
situate in the Township of Silver Spring, County of Cumberland, and
Commonwealth of Pennsylvania, shown as Lot U27 in the Final Sub-
Division Plan of Rich Valley Manor prepared by Whittock-Hat'tman and
recorded in the Of f ice of the Recorder of Deeda in and for.
Cumberland County, Pennsylvania in Plan Book 56, Page 36.
BEGINNING at a concrete monument located on the eastern
right-of-way line of Northwatch Lane ISO' right-of-way) said
monument located at the right -of -way intersect.ion of Northwat.ch
Lane and Penna Way Road (50' right -of -way), thence along the right.-
of -w'ay 1 ine of Northwatch Lane, North 07 degrees 46 minutes 30
seconds East, a distance of 592.21 feet to a concrete monument;
thence on a curve, curving to the right. having a radius of 350.00
feet and an arc length of 45.04 feet. to a point; thence along Lot
1120, South 43 degrees 50 minutes 32 seconda East, a distance of
359.13 feet to a point; thence along Lot 1126 South 15 degrees 24
minutes 52 seconds West, a distance of 446.42 feet to a point
located on the right-of-way line of Penns Way Road; thence along
the right-of-way line of Penns Way Road, on a curve curving to the
left having a radius of 375.00 feet and an arc length of 50.00 feet
to a point; thence still on the right-of-way, North 82 degrees 13
minutes 30 seconds West, a distance of 150.21 feet to a point;
thence on a curve curving to the right with a radius of 25.00 feet
and an arc length of 39.27 feet to t.hE! place of BEGINNING.
Containing 143,870.65 square feet or 3.3028 acres.
Having thereon
improvements known as
Pennsylvania.
BEING the same premises identified as Parcel No. 2 in
that certain Deed of Trust dated December 20, 1991 and recorded in
the Office of the Recorder of Deeds in and for Cumberland County,
Pennsylvania in Mortgage Book 1040 at page 714, given by Douglas J.
Hansen and Kay Joann Hansen, his wif. (now deceased), to Dennig J.
Farina, as Trustee for the benefit of Robert R. plante and Mary E.
Plante, his wife, which Deed of Trust the said Robert R. Plante and
Mary E. Plante, his wi f(o, assigned to Robert Merdgan by Assignment
of Deed of Trust dat,~d E"'ptember 9, 1993 and recorded in the Office
of the Recorder of Df~eds in and for Cumberland County, Pennsylvania
in Miscellaneous Book 454 at Page 294,
erected
4 North
a dwelling house and other
Watch Lane, Mechanicsburg,