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Home My WebLink About01-5763F kFILESkDATAFILE\Gendoe cur/103641-¢om 1 Created: 09/26/01 03240:57 ]PM Re~isexl: 10/02/0.1 09:57:13 AM MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01- ~'~{~ CIVIL ACTION - LAW : JURY TRIAL DEMANDED NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiffs. 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 CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP: Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 Telephone (717) 249-3166 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01- ~'7/~ CIVIL ACTION - LAW JURY TRIAL DEMANDED COMPLAINT AND NOW, comes Plaintiff, Mohammed G. Swati, by and through his attorneys, MARTSON DEARDORFF WILLIAMS & OTTO and avers as follows: 1. Plaintiff is Mohammed G. Swati, an adult individual residing at 1134 Countryside Drive, Harrisburg, PA 17110. 2. Defendants are Afzal H. Chaudhry and Sajid M. Warraich, adult individuals with a principal place of business at the Mt. Holly Grocery Store, f/k/a King Food, 12 North Baltimore Avenue, Mt. Holly Springs, PA 17065. 3. On April 11,2001, Plaintiff entered into a contract with Defendants whereby Plaintiff was, inter alia, to sell certain equipment and inventory at a supermarket being operated by Plaintiff at 12 North Baltimore Avenue, Mt. Holly Springs, PA 17065. A copy of the Agreement is attached hereto and marked as Exhibit "A". 4. The inventory component of the above referenced sale was for the amount of $111,000.00. Defendants paid $100,000.00, but have failed and refused, and continue to fail and refuse, to pay the remaining $11,000.00. 5. The equipment portion of the sale was in the amount of $72,500.00, plus interest at nine (9%) percent payable in monthly installments of $3,793.00. To secure the payment of these installments, Defendants gave to Plaintiff postdated checks. Copies of these postdated checks are attached hereto and marked collectively as Exhibit "B". 6. Defendants have stopped payment on all of the postdated checks referred to in the above-referenced paragraph and Exhibit "B". 7. Defendants have failed and refused, and continue to fail and refuse, to make any payments on account of the equipment sold to them by Plaintiff as required in Exhibit "A". WHEREFORE, Plaintiffdemands judgment against Defendants in the mount of $83,500.00, plus interest and costs. Date: October 2, 2001 Respectfully submitted, MARTSON DEARDORFF WILLIAMS & OTTO By ~~Wii~ ~ Thomas J. i liams, Esquire Ten East High Street Carlisle, PA 17013-3093 (717) 243-3341 Attomeys for Plaintiff Exhibit A AGREEMENT OF SALE SELLER: MOHAMMED SWATI BUYER: AFZAL H. CHAUDHRY and SAJID M. WARRAICH LOCATION: KING FOOD MART, Mount Holly Springs, PA ITEMS PURCHASED: Equipment and inventory SALES PRICE: $72,500.00 plus inventory Buyer shall pay to Seller the sum of Seventy-two Thousand Five Hundred Dollars ($72,500.00) in 24 constant monthly payments in the amount of $3,793.00. This represents an annual interest rate of 9. %. The first payment shall be due and payable on the 15th day of April, 2001. Each subsequent payment shall be due and payable on the 15th day of each successive month. The value of the inventory shall be paid in full at the time of the valuation. Buyer shall pay a broker's fee in the amount of $5,000.00 at the time of the payment of the inventory. WITNESSETH: AGREEMENT, made this 11m day of April, 2001, by and between the above Seller and Buyer, the terms of which are as follows: 1. Seller shall sell and Buyer shall purchase all of the Seller's right, title and interest in the above described property in exchange for the above sale price. 2. Seller hereby grants to Buyer the exclusive right to use the current trade name of the business and guarantee to Buyer that Seller currently has the right to use of said trade name. 3. Seller hereby warrants and guarantees that he has good and marketable title to all of the Assets free and clear of all liens and encumbrances. Seller shall be fully and solely responsible for all debts incurred by the business through April 12, 2001. Buyer shall be fully and solely responsible for all debts incurred after on and after April 13, 2001. EXHIBIT "A" 4. All information relating to Seller, the assets and the business has been provided to the Buyer. 5. Seller hereby agrees to assign all leases to Buyer and guarantees that he has the right to do so. 6. All warranties and guarantees contained in this Agreement shall remain in full force and effect and shall survive the closing. 7. Upon the execution of this Agreement by all parties, Seller agrees that he will not compete with the Buyer in any manner in any phase of the retail grocery sale business for a period of three years within a five (05) mile radius of the business. 8. Until the execution of this Agreement by all parties, the Business shall continue to be conducted in a manner similar to its current manner. 9. This Agreement sets forth the entire understanding of the Seller and Buyer with respect to the subject matter of this Agreement and supersedes and replaces all prior agreements, arrangements, representations, letters of intent and memoranda of understanding between Seller and Buyer. 10. Title and full ownership shall revert to Seller if Buyer fails to pay any monthly payment when due or if Buyer's check is returned to Seller. Seller shall retain all funds paid as liquidated damages. 11. Buyer shall pay Seller in sequential checks beginning with check number 1001 and ending with check number 1024. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written. WITNESS WITNESS WITNESS I~I6HAMMED SWA~- AF~A~. CHAUDHRY SP/SID M. WARRAiCH Exhibit B MT HOLLY FOODMART ' GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 PAY DATE PNC B~ N.~ O~ ~PA MT HOLLY FOODMART 1006 GENERAL ACCOUNT 12 N BALTIMORE AVE MI' HOU.Y SPRINGS, PA 17065 *'*' /- O ~ 60-1273/313 DATE PAY - ' II ~XHIBIT "B" PAY TO THE ~ . ORDER OF MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE DATE //- $ 1007 60"-1273/313 PNCBAN FOR "'OD i, OO ?,' ~:O ~ t, ~ i, ~ ? ,RS 191-~',,,~,,.~'. MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 DATE PAY TO THE ~/' . ~,~'a~ JeSt' ORDER Of _ O. PNCBAN( 1008 FOR ""DO J, OOa"' I:0 :~ i. 3 & E ? 3BI; ~;00 3 Et, q i~ ;~r-,,, PAY TO THE ORDER OF MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 .PNCBAN( "'OD &OOq,' FOR DATE ~$ 1009 ,:O3 ~3 ], ~?]a,: 5OO:~ 2hq 2 Eh,U PAY TO THE ORDER OF MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 O. PNCBANK PNC B~ N.A. 040 CeeL~! PA DATE FOR 1010 O~ '~/- ~ 2.- ,~, ~'"'~///--' DOLLARS ~ ~ff'~-~' MT HOLLY FOODMART GENERAL ACCOUNT ~12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 PAY TO THE ORDER OF O. PNCBA Ceottal PA FOR "=OD &O & 1011 60-1273/313 DATE {Z;),.3, ~ 0 / ' ~ 171 MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 PAY TO THE ORDER OF O. PNCBAN< PNCBank, N.~ 040 DATE FOR "'DO i,O & ~,' I,'O 3 & ½ I, ~ ? 1012 DOLLARS MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLy SPRINGS, PA 17065 PAY ( .PNCBAN< PNC Bank. N.A. O4O FOR 1013 ~:O =. & ] & i~? ~Et,: 5OO~, 2t, q ~ 2&,'U MT HOLLY FOODMART GENERAL ACCOUNT 12 N BAI-TIMORE AVE MT HOLLy SPRINGS, PA 17065 PAY .PNCBAI K PNC Bank, N.A. O4O C~mtral PA DATE 0~-~1-0 L FOR J$ 1014 MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 DATE ,'"'~ - O [. ~ Se-t273/313171 PAY TO THE O. PNCBA u PNC B~lk, N.A_ O40 FOR 1015 Central PA ............ ~. ~.-.'L.--~ .................. ,'GO 1,0 I, 5,' ~:O 3 ~ =. 1. i~ ? 3B~: 500 =. MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 1016 DATE 0 00-' C"9 (~ ~°~:'- PAY TOTHE ~) ~.~ ORDER OE ~ ' ~/~ PNCBANK ""- PNC Bank, N.A. 040 Central PA FOR ,'OD t,O i,?~,' ':031,3 l, P ? 3P.': DOLLARS 50032~q 22r~. MT HOLLY FOODMART GENERAL ACCOUNT 12 N E~.LTIMORE AVE MT HOlly SPRINGS, PA Pay TO THE ORDER OF ~ ' FOR .PNCBAN< I1'00 ~-O & ?mi' ':O=. &3 $ 2?3am: 1017 DATE ~ . ~_~/ ~ ~ 8g-1273/313171 I$ $7~7/.oo 50032hq 22r-,,' ~J PAY TO THE ORDER OF MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLy SPRINGS, PA 17065 O. PNCBAhK DATE FOR "'OD &O &P,"' m:O =t & ] & 2 "2:6°,1,' 1018 DOLLARS I~ SOO :~ 2hq 2 ~r-.,, 1019 MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 PAY TO THE ORDER OF ~']~' ~ O. PNCBAN( PNC Bark, N.A. 040 FOR ,'00 i,D i,q,' MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 PAY TO THE ORDER OF O. PNCBAN( PNC Baak, N.A. 040 Central PA FOR 1020 ~'OO i,D 201~' m,'O =, i, 3 & 2 ? 60=1273/313 DATE /~ -0 t- ~:~o~.~ 171 500.~ 2~q 22?~1~ MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 PAY TO THE O. PNCBAN( PNC Bank, N.A. 040 FOR. 1021 DATE 500:~ 2hq 22~11' MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 ORDER OF O PNCBAN PNC Ba~k, N.A. 040 FOR 1022'~ PAY TO TH E ORDER OF ff~' O. PNCBAN( FOR MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17(~5 II'DO iD 2 ~,"' 1023 DOLLARS t:O 3 1,3 i, 2 ? MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 PAY TO THE /t~ ORDER OF .PNCBAN 1024 FOR VERIFICATION The foregoing Complaint is based upon information which has been gathered by my counsel in the preparation of the lawsuit. The language of the document is that of counsel and not my own. I have read the document and to the extent that it is based upon information which I have given to my counsel, it is tree and correct to the best of my knowledge, information and belief. To the extent that the content of the document is that of counsel, I have relied upon counsel in making this verification. This statement and verification are made subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsification to authorities, which provides that if I make knowingly false averments, I may be subject to criminal penalties. Moh'an:uned G. Swa--~ SHERIFF'S CASE NO: 2001-05763 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SWATI MOHAMMED G VS CHAUDHRY AFZAL H ET AL RETURN - REGULAR DAVID MCKINNEY , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to says, the within COMPLAINT & NOTICE was served upon CHAUDRY AFZAL H the law, DEFENDANT , at 1927:00 HOURS, on the 9th day of October , 2001 at 12 NORTH BALTIMORE AVENUE MT HOLLY SPRINGS, PA 17065 SAJID M WARRAICH a true and attested copy of by handing to COMPLAINT & NOTICE together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing 18 Service 3 Affidavit Surcharge 10 31 00 90 00 00 00 90 Sworn and Subscribed to before So Answers: me this /[~ day of 0~.~ ~J A.D. / ;Prothonotary ' iO/iO/200i MDW&O By: Thomas Kline -- D~puty 'Sheriff SHERIFF'S RETURN - REGULAR CASE NO: 2001-05763 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SWATI MOHAMMED G VS CHAUDHRY AFZAL H ET AL DAVID MCKINNEY , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT & NOTICE was served upon WARP~AICH SAJID M the DEFENDANT , at 1927:00 HOURS, on the 9th day of October , 2001 at 12 NORTH BALTIMORE AVENUE MT HOLLY SPRINGS, PA 17065 SAJID M WARRAICH by handing to a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing 6.00 Service .00 Affidavit .00 Surcharge 10.00 .00 16.00 Sworn and Subscribed to before me this /~ day of ~CL~ ~e~ f A.D. ! / Prothonotary So Answers: R. Thomas Kline 10/10/2001 MDW&O By: Deputy Sheriff MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED 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 Answer with New Matter and Counterclaim and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiffs. 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 CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FiND OUT WHERE YOU CAN GET LEGAL HELP: Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 Telephone (717) 249-3166 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED DEFENDANT'S ANSWER WITH NEW MATTER AND COUNTERCLAIM TO PLAINTIFF'S COMPLAINT AND NOW, comes Defendant Sajid M. Warraich, (hereinafter "Defendant"), by and through his attorney, SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C., and files this Answer to Plaintiff Mohammed G. Swati's Complaint as follows: After reasonable investigation, the Defendant, Sajid M. Warraich, is without information or knowledge sufficient to form a belief as to the truth of the averments asserted in Paragraph No. 1, and proof thereof is demanded. Admitted in part and denied in part. It is specifically denied that the principal place of business is at the Mt. Holly Grocery Store. To the contrary, the principal place of business is at the Mt. Holly Food Market. The remaining averments in Paragraph No. 2 are admitted. Denied. The allegations are conclusions of law and/or fact to which no answer is required. To the extent that an answer may be required, the allegations are denied on the basis that the Agreement is a written document which speaks for itself and, therefore, any attempt to characterize, summarize, interpret or paraphrase the Agreement is denied. Admitted in part and denied in part. It is admitted that Defendants paid $100,000.00 for inventory. It is denied that the inventory was for the amount of $111,000.00. To the contrary, the parties agreed that the cost of the inventory would be the valuation of the inventory less a customary discount of twenty-seven percent (27%). Denied. The allegations are conclusions of law and/or fact to which no answer is required. To the extent that an answer may be required, the allegations are denied on the basis that the Agreement and checks are written documents which speaks for itself and, therefore, any attempt to characterize, summarize, interpret or paraphrase the Agreement and checks is denied. 6. Admitted. 7. Admitted. WHEREFORE, Defendant, Sajid M. Warraich, respectfully requests that this Honorable Court dismiss Plaintiff's Complaint and that judgment be entered in Defendant's favor without costs. NEW MATTER Defendant hereby incorporates his answers reference as if fully set forth herein. to Paragraphs 1 through 7 by The Agreement entered into by the parties was not supported by adequate consideration on the part of the Plaintiff. 10. The Plaintiff fraudulently misrepresented to the Defendant that the inventory was not outdated and the equipment was in working condition. 11. Plaintiff received full payment for the value of the inventory. COUNTER CLAIM 12. Defendant hereby incorporates his answers to Paragraphs 1 through 11 by reference as if fully set forth herein. 13. Plaintiff represented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that the following items were in working condition: Meat room cooler Daily freezer NCR cash register/computer system Three (3) additional freezer cases 14. The items listed in Paragraph 13 were not working causing Defendant to incur approximately $37,700.00 in additional costs as follows: $30,000.00 for a new cash register/computer system, $2,900.00 for the repairs to the daily freezer and, $3,000.00 in repairs to the meat cooler in the meat room, and $1,800.00 for repairs to the three (3) additional freezer cases. 15. The daily freezer continues to need repairs monthly at the rate of $500.00 to $600.00. 16. The Plaintiff misrepresented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that inventory in the backroom coolers was merchantable when in fact the items had expired in 1996 through 1998. 17. The inventory in the backroom coolers was valued at approximately $15,000.00 and was included in the $100,000.00 which Defendant paid Plaintiff. 18. The Plaintiff misrepresented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that the store could sell meat cut and prepared in the meat room. However, to the contrary, the Defendant discovered that the State health inspector had shut down the meat room in December 2000, and the meat room continued to be closed at the time of execution of the Agreement and the sale of the business. 19. The Defendant was required to make certain upgrades to the meat room in order to pass State inspection. In addition, the Plaintiff suffered lost revenue of $4,500.00-$5,000.00 for the time that the upgrades were being done. 20. The Plaintiff has exercised control of approximately $4,500.00-$5,000.00 in credit card sales from the Defendant that were automatically deposited in PlaintiWs account since the sale of the business. Plaintiff has refused and continues to refuse to release the funds to the Defendant. 21. Due to outdated inventory, the Harrisburg Newspaper Company refused to issue a credit for magazines which Defendant paid $800.00 to the Plaintiff and which was a part of the $100,000.00 payment to the Plaintiff. 22. Due to Plaintiff's overdue accounts with grocery wholesalers, Defendant was not allowed to enter into any agreements with wholesalers and had to purchase inventory at a higher price from a convenience store retailer at a cost of $15,000.00 per month in lost profits from April 12, 2001 until October 22, 2001. 23. Plaintiff has retained $3,750.00 in rent deposits that were to be applied to the Defendant's property lease. 24. The parties were mistaken as to the essential and material terms of the Agreement in that: a. The Plaintiff did not disclose to the Defendant that the inventory was unmarketable and outdated. b. The Plaintiff did not disclose to the Defendant that the equipment was inoperable and in need of repairs and/or replacement. c. The Defendant entered the Agreement with the intention to sell the inventory and use the equipment in his store. d. The Plaintiff did not disclose the closure of the meat room which Defendant believed to be operable. e. The Plaintiff did not disclose overdue vendor accounts which Defendant believed to be included in the sale of the business. 25. In the alternative, the Plaintiffbreached the contract as follows: a. Failure to provide adequate consideration. b. Failure to provide marketable inventory. c. Failure to provide operable equipment. d. Failure to disclose the shut down of the meat room by the State Health Department. e. Failure to disclose overdue vendor accounts. WHEREFORE, the Defendant respectfully requests judgmem in his favor in an amount of $157,250.00 and against Plaintiff including attorneys fees and costs of suit. Date: Respectfully Submitted, SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C. G. Bryan Salzn~, Esquire Attorney ID No. 61935 Norma J. Bartko, Esquire Attorney ID No. 80135 455 Phoenix Drive, Suite A Chambersburg, PA 17201 Telephone (717) 263-2121 Fax (717) 263-0663 Attorney for Defendants VERIFICATION I verify that ail the statements made in the foregoing Complaint are true and correct to the best of my knowledge, information and belief and that any false statements made are subject to the penalties of 18 Pa.C.S. Section 4904 relating to unswom falsification to authorities. Sajid M. Warraich CERTIFICATE OF SERVICE ~.1~r I hereby certify that on this ~ day of]~5)~., 2001, I served a tree and correct copy of the foregoing Plaintiffs' Answer with New Matter and Counterclaim by first class mail, postage pre-paid to the following: Thomas J. Williams, Esquire MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 SALZMANN & DePAULIS, FISHMAN & MORGENTHAL, P.C. By..~,~(~ ~ 6~/.. Bryan Salzfi4ann, Esquire Attorney ID # 61935 Norma J. Bartko, Esquire Attorney ID # 80135 455 Phoenix Drive; Suite A Chambersburg, PA 17201 (717) 263~2121 MARTSON DEARDORFF WILLIAMS l~' OTTO MDW O TEN EAST Hit;lq STREET CARLISLE, PENNSYLVANIA 17013 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED REPLY TO NEW MATTER AND NOW, comes Plaintiff, Mohammed G. Swati, by and through his attorneys, MARTSON DEARDORFF WILLIAMS & OTTO, and replies to the New Matter and Counter- Claim of Defendant Sajid M. Warraich as follows: NEW MATTER 8. Paragraphs 1 through 7 t)ftlle Complaint are incorporated herein by reference thereto. 9. Denied as a matter of fact, and denied as a conclusion of law. The agreement was supported by adequate consideration. 10. Denied. None of the inventory included within the scope of the agreement was outdated, and the equipment was in working condition, as of the date of settlement. 11. Denied. Paragraph 4 of Plaintiff's Complaint is incorporated herein by reference thereto. COUNTER CLAIM 12. Paragraphs 1 through 7 of the Complaint and 8 through 11 of the Reply to New Matter are incorporated herein by reference thereto. 13. Denied that Defendant relied to his detriment on the described items being in working condition; in fact, the items described were in working condition as of the date of settlement. By way of further answer, Defendant, and others acting on behalf of Defendant, had inspected all of the items prior to the date of settlement and satisfied themselves that they were in working condition. 14. Denied. PlaintilT s Answer to Paragraph 13 above is incorporated herein by reference thereto. It is specifically denied that any cost or expenses incurred by Defendant was the result of misrepresentation made by Plaintiff, and it is further denied that Plaintiff made any misrepresentation. The mount set forth in Paragraph 14 of the Counter-Claim are unnecessary and unreasonable. 15. Denied. Plaintiff's Paragraphs 13 and 14 are incorporated herein by reference thereto. Monthly repairs described in Paragraph 15 of Defendant's Counter-Claim are unnecessary and unreasonable, and are in no way related to the conditions the daily freezer was in on the date of settlement. 16. Denied. While some items of merchandise in the backroom coolers were not merchantable, those items were not included in the inventory which was part of the agreement, Exhibit "A" to Plaintiff's Complaint. As Defendant was well aware, Plaintiff disposed of most items of inventory that were not merchantable, but the short time period for settlement did not permit all of them to be hauled away as the dumpsters were full; nevertheless, the non-merchantable items were not included in the inventory that is referred to in the agreement, Exhibit "A" to Plaintiff's Complaint. 17. Denied. Paragraph 16 hereof is incorporated herein by reference thereto. It is specifically denied that any non-merchantable inventory was valued on the inventory that was referred to in the agreement, Exhibit "A" to Plaintiff's Complaint. 18. Denied and denied as stated. It is admitted that a state inspector requested certain cleaning and repairs to the meat room in December, 2000; however, it is averred that said cleaning and repairs were performed immediately. By way of further answer, Plaintiff used the meat room continuously until the date of settlement, April 12, 2001, and in compliance with all laws and regulations. It is specifically denied that the meat room "continued to be closed" at the time of the agreement or at the time of settlement. 19. Denied. Paragraph 18 hereof is incorporated herein. Whatever upgrades to the meat room were done by Defendant was unrelated to the state inspection of December, 2000. By way of further answer, a state inspection is routinely made at the time ownership or control of the supermarket changes hands and it is common for said inspection to result in a requirement for various things to be done. 20. Denied. Plaintiffis without knowledge or information sufficient to form a belief as to whether credit card sales made to Defendant's customers were deposited to Plaintiff' s account and proof is therefore demanded. If any such deposits were inadvertently made, it would be a relatively small amount in a period of a few days following settlement and so the allegation of $4,500-$5,000 is unreasonable. 21. Denied. The inventory referred to in the agreement, Exhibit "A" to the Complaint, did not include any credit for magazines. 22. Denied. After reasonable investigation, Plaintiffis without knowledge or information sufficient to form a belief as to the nature and extent of Plaintiff's credit with his vendors. It is specifically denied that Plaintiffhad any obligation in that regard. It is further specifically denied that any of Plaintiff's accounts, or the status of same, had an effect on Defendant's credit worthiness. By way of further answer, Plaintiff believes, and therefore avers, that Defendant had vendors available to him, and who would provide product under normal acceptable terms and conditions. 23. Denied. The $3,750.00 was retained by Plaintiff as reimbursement for his security deposit. 24. Denied. The agreement between the parties was fully and completely set forth within its four comers and Plaintiff is absolutely clear as to the duties and responsibilities of the parties which are as more fully set forth in his Complaint and in his answer to this Counter-Claim. 25. Denied, and denied as a conclusion of law. Plaintiff did not breach the contract either in general or in the specifics set forth in Paragraph 25 of the Counter-Claim. Paragraphs 1 through 7 of the Complaint and 8 through 24 of the New Matter and Counter-Claim are incorporated herein by reference thereto. WHEREFORE, Plaintiff demands that the Counter-Claim of Defendant, Sajid M. Warraich, be dismissed. Respectfully submitted, MARTSON DEARDORFF WILLIAMS & OTTO Thomas J. Williar~, Esquire Ten East High Street Carlisle, PA 17013-3093 (717) 243-3341 Attorneys for Plaintiff Date: November 21, 2001 VERIFICATION The foregoing Reply to New Matter is based upon information which has been gathered by my counsel in the preparation of the lawsuit. The language of the document is that of counsel and not my own. I have read the document and to the extent that it is based upon information which I have given to my counsel, it is true and correct to the best of my knowledge, information and belief. To the extent that the content of the document is that of counsel, I have relied upon counsel in making this verification. This statement and verification are made subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworu falsification to authorities, which provides that if I make knowingly false averments, I may be subject to criminal penalties. Mohammed G.~watit''~- CERTIFICATE OF SERVICE I, Ami J. Thumma, an authorized agent for Martson Deardorff Williams & Otto, hereby certify that a copy of the foregoing Reply to New Matter and Counter-Claim was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: G. Bryan Salzmann, Esquire SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C. 455 Phoenix Drive, Suite A Chambersburg, PA 17201 MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: November 21, 2001 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED DEFENDANT'S PETITION FOR RELIEF FROM JUDGMENT BY DEFAULT AND NOW, comes Afzal H. Chaudhry and files this Petition for Relief of Default Judgment as follows: 1. A Praecipe to Enter Default Judgment in this matter was filed by the Plaintiff on December 20, 2001. 2. Judgment was entered in this matter against the Defendant Afzal H. Chaudhry (hereinafter "Mr. Chaudhry') on December 21, 2001. 3. This Petition is being filed pursuant to Pa.R.C.P. 237.3. 4. Service of the Complaint in this matter has not been made on Defendant Chaudhry as required by Pa.R.C.P. 402 et. seq. The Complaint was erroneously served on Defendant Warraich despite any averment by Plaintiff that Defendant Warraich is either a panner of Defendant Chaudhry or may otherwise accept service on behalf of Defendant Chaudhry. 5. The notice of intention to enter judgment was erroneously mailed to the residence of Defendant Warraich's father-in-law and Defendant Chaudhry was not made aware of the notice until December 24, 2001. 6. From October 27, 2001 until November 23, 2001 Defendant Chaudhry was outside of the country. From November 23, 2001 until December 3, 2001 Mr. Chaudhry was in New York City. On November 23, 2001 Mr. Chaudhry returned to his residence in Odenton Maryland, where he has resided to this date. 7. The undersigned was retained by Defendant Chaudhry on December 28, 2001. 8. Defendant Chaudhry has stated a meritorious defense to the Complaint which Answer is attached hereto and made a part hereof as Exhibit "A". WHEREFORE, Defendant Afzal H. Chaudhry respectfully requests this Honorable Court to open the judgment entered in this matter. Date: Respectfully Submitted, SALZMANN & DePAULIS, G. B~c~r~~quire Attor~y I~D # 61935'~--~ Norma'J':'Bartko, Esquire Attorney ID # 80135 455 Phoenix Drive; Suite A Chambersburg, PA 17201 (717) 263-2121 VERIFICATION I verify that all the statements made in the foregoing Petition are true and correct to the best of my knowledge, information and belief and that any false statements made are subject to the penalties of 18 Pa.C.S. Section 4904 relating to unsworn falsification to authorities. Afzal ~ Chaudhry CERTIFICATE OF SERVICE I hereby certify that on this ,~. day o f~r,~ 2001, I served a true and correct copy of the foregoing by first class mail, Defendant's Petition for Relief for Default Judgment postage pre-paid to the following: Thomas J. Williams, Esquire MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 SALZMANN & DePAULIS, FISHMAN & MORGENTHAL, P.C. Attorney ID ~6'1935 ~ Norma J. Bartko, Esquire Attorney ID # 80135 455 Phoenix Drive; Suite A Chambersburg, PA 17201 (717) 263-2121 EXHIBIT "A" EXHIBIT A MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED 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 Answer with New Matter and Counterclaim and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiffs. 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 CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP: Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 Telephone (717) 24%3166 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED DEFENDANT'S ANSWER WITH NEW MATTER AND COUNTERCLAIM TO PLAINTIFF'S COMPLAINT AND NOW, comes Defendant Afzal H. Chaudhry, (hereinafter "Defendant"), by and through his attorney, SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C., and files this Answer to Plaintiff Mohammed G. Swati's Complaint as follows: After reasonable investigation, the Defendant, Afzal H. Chaudhry, is without information or knowledge sufficient to form a belief as to the truth of the averments asserted in Paragraph No. I, and proof thereof is demanded. Admitted in part and denied in part. It is specifically denied that the principal place of business is at the Mt. Holly Grocery Store. To the contrary, the principal place of business is at the Mt. Holly Food Market. The remaining averments in Paragraph No. 2 are admitted. Denied. The allegations are conclusions of law and/or fact to which no answer is required. To the extent that an answer may be required, the allegations are denied on the basis that the Agreement is a written document which speaks for itself and, therefore, any attempt to characterize, summarize, interpret or paraphrase the Agreement is denied. Admitted in part and denied in part. It is admitted that Defendants paid $100,000.00 for inventory. It is denied that the inventory was for the amount of $111,000.00. To the contrary, the parties agreed that the cost of the inventory would be the valuation of the inventory less a customary discount of twenty-seven percent (27%). Denied. The allegations are conclusions of law and/or fact to which no answer is required. To the extent that an answer may be required, the allegations are denied on the basis that the Agreement and checks are written documents which speaks for itself and, therefore, any attempt to characterize, summarize, interpret or paraphrase the Agreement and checks is denied. 6. Admitted. 7. Admitted. WHEREFORE, Defendant, Afzal H. Chaudhry, respectfully requests that this Honorable Court dismiss Plaintiff's Complaint and that judgment be entered in Defendant's favor without costs. NEW MATTER Defendant hereby incorporates his answers to Paragraphs reference as if fully set forth herein. I through 7 by The Agreement entered into by the parties was not supported by adequate consideration on the part of the Plaintiff. 10. The Plaintiff fraudulently misrepresented to the Defendant that the inventory was not outdated and the equipment was in working condition. 11. Plaintiff received full payment for the value of the inventory. COUNTER CLAIM 12. Defendant hereby incorporates his answers to Paragraphs 1 through 11 by reference as if fully set forth herein. 13. Plaintiff represented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that the following items were in working condition: Meat room cooler Daily freezer NCR cash register/computer system Three (3) additional freezer cases 14. The items listed in Paragraph 13 were not working causing Defendant to incur approximately $37,700.00 in additional costs as follows: $30,000.00 for a new cash register/computer system, $2,900.00 for the repairs to the daily freezer and, $3,000.00 in repairs to the meat cooler in the meat room, and $1,800.00 for repairs to the three (3) additional freezer cases. 15. The daily freezer continues to need repairs monthly at the rate of $500.00 to $600.00. 16. The Plaintiff misrepresented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that inventory in the backroom coolers was merchantable when in fact the items had expired in 1996 through 1998. 17. The inventory in the backroom coolers was valued at approximately $15,000.00 and was included in the $100,000.00 which Defendant paid Plaintiff. 18. The Plaintiff misrepresented to the Defendant, and the Defendant _reasonably relied on the representation to his detriment, that the store could sell meat cut and prepared in the meat room. However, to the contrary, the Defendant discovered that the State health inspector had shut down the meat room in December 2000, and the meat room continued to be closed at the time of execution of the Agreement and the sale of the business. 19. The Defendant was required to make certain upgrades to the meat room in order to pass State inspection. In addition, the Plaintiff suffered lost revenue of $4,500.00-$5,000.00 for the time that the upgrades were being done. 20. The Plaintiff has exemised control of approximately $4,500.00-$5,000.00 in credit card sales from the Defendant that were automatically deposited in Plaintiff's account since the sale of the business. Plaintiff has refused and continues to refuse to release the funds to the Defendant. 21. Due to outdated inventory, the Harrisburg Newspaper Company refused to issue a credit for magazines which Defendant paid $800.00 to the Plaintiff and which was a part of the $100,000.00 payment to the Plaintiff. 22. Due to Plaintiff's overdue accounts with grocery wholesalers, Defendant was not allowed to enter into any agreements with wholesalers and had to purchase inventory at a higher price from a convenience store retailer at. a cost of $15,000.00 per month in lost profits from April 12, 2001 until October 22, 2001. 23. Plaintiff has retained $3,750.00 in rent deposits that were to be applied to the Defendant's property lease. 24. The parties were mistaken as to the essential and material terms of the Agreement in that: a. The Plaintiff did not disclose to the Defendant that the inventory was unmarketable and outdated. b. The Plaintiff did not disclose to the Defendant that the equipment was inoperable and in need of repairs and/or replacement. The Defendant entered the Agreement with the intention to sell the inventory and use the equipment in his store. The Plaintiff did not disclose the closure of the meat room which Defendant believed to be operable. The Plaintiff did not disclose overdue vendor accounts which Defendant believed to be included in the sale of the business. 25. In the alternative, the Plaintiffbreached the contract as follows: Failure to provide adequate consideration. Failure to provide marketable inventory. Failure to provide operable equipment. Failure to disclose the shut down of the meat room by the State Health Department. Failure to disclose overdue vendor accounts. WHEREFORE, the Defendant respectfully requests judgment in his favor in an amount of $157,250.00 and against Plaintiff including attorneys fees and costs of suit. Date: Respectfully Submitted, SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C. By: O. Bryan Salzmann, Esquire Attorney ID No. 61935 Norma J. Bartko, Esquire Attorney ID No. 80135 455 Phoenix Drive, Suite A Chambersburg, PA 17201 Telephone (717) 263-2121 Fax (717) 263-0663 Attorney for Defendants VERIFICATION I verify that all the statements made in the foregoing Complaint are true and correct to the best of my knowledge, information and belief and that any false statements made are subject to the penalties of 18 Pa.C.S. Section 4904 relating to unswom falsification to authorities. Afzal H. Chaudhry CERTIFICATE OF SERVICE I hereby certify that on this __ day of ., 2001, I served a tree and correct copy of the foregoing Defendant's Answer with New Matter and Counterclaim by first class mail, postage pre-paid to the following: Thomas J. Williams, Esquire MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 SALZMANN & DePAULIS, FISHMAN & MORGENTHAL, P.C. ,/~3. Bry~'Saizmann, Esquire Attome~4D # 61935 Norma J. Bartko, Esquire Attorney ID # 80135 455 Phoenix Drive; Suite A Chambersburg, PA 17201 (717) 263-2121 EXHIBIT A MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED 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 Answer with New Matter and Counterclaim and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiffs. 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 CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP: Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 Telephone (717) 249-3166 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED DEFENDANT'S ANSWER WITH NEW MATTER AND COUNTERCLAIM TO PLAINTIFF'S COMPLAINT AND NOW, comes Defendant Afzal H. Chaudhry, (hereinafter "Defendant"), by and through his attorney, SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C., and files this Answer to Plaintiff Mohammed G. Swati's Complaint as follows: After reasonable investigation, the Defendant, Afzal H. Chaudhry, is without information or knowledge sufficient to form a belief as to the truth of the averments asserted in Paragraph No. 1, and proof thereof is demanded. Admitted in part and denied in part. It is specifically denied that the principal place of business is at the Mt. Holly Grocery Store. To the contrary, the principal place of business is at the Mt. Holly Food Market. The remaining averments in Paragraph No. 2 are admitted. Denied. The allegations are conclusions of law and/or fact to which no answer is required. To the extent that an answer may be required, the allegations are denied on the basis that the Agreement is a written document which speaks for itself and, therefore, any attempt to characterize, summarize, interpret or paraphrase the Agreement is denied. Admitted in part and denied in part. It is admitted that Defendants paid $100,000.00 for inventory. It is denied that the inventory was for the amount of $111,000.00. To the contrary, the parties agreed that the cost of the inventory would be the valuation of the inventory less a customary discount of twenty-seven percent (27%). Denied. The allegations are conclusions of law and/or fact to which no answer is required. To the extent that an answer may be required, the allegations are denied on the basis that the Agreement and checks are written documents which speaks for itself and, therefore, any attempt to characterize, summarize, interpret or paraphrase the Agreement and checks is denied. 6. Admitted. 7. Admitted. WHEREFORE, Defendant, Afzal H. Chaudhry, respectfully requests that this Honorable Court dismiss Plaintiff's Complaint and that judgment be entered in Defendant's favor without costs. NEW MATTER Defendant hereby incorporates his answers to Paragraphs reference as if fully set forth herein. 1 through 7 by The Agreement entered into by the parties was not supported by adequate consideration on the part of the Plaintiff. 10. The Plaintiff fraudulently misrepresented to the Defendant that the inventou~ was not outdated and the equipment was in working condition. 11. Plaintiff received full payment for the value of the inventory. COUNTER CLAIM 12. Defendant hereby incorporates his answers to Paragraphs 1 through 11 by reference as if fully set forth herein. 13. Plaintiff represented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that the following items were in working condition: Meat room cooler Daily freezer NCR cash register/computer system Three (3) additional freezer cases 14. The items listed in Paragraph 13 were not working causing Defendant to incur approximately $37,700.00 in additional costs as follows: $30,000.00 for a new cash register/computer system, $2,900.00 for the repairs to the daily freezer and, $3,000.00 in repairs to the meat cooler in the meat room, and $1,800.00 for repairs to the three (3) additional freezer cases. 15. The daily freezer continues to need repairs monthly at the rate of $500.00 to $600.00. 16. The Plaintiff misrepresented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that inventory in the backroom coolers was merchantable when in fact the items had expired in 1996 through 1998. 17. The inventory in the backroom coolers was valued at approximately $15,000.00 and was included in the $100,000.00 which Defendant paid Plaintiff. 18. The Plaintiff misrepresented to the Defendant, and the Defendant ~reasonably relied on the representation to his detriment, that the store could sell meat cut and prepared in the meat room. However, to the contrary, the Defendant discovered that the State health inspector had shut down the meat room in December 2000, and the meat room continued to be closed at the time of execution of the Agreement and the sale of the business. 19. The Defendant was required to make certain upgrades to the meat room in order to pass State inspection. In addition, the Plaintiff suffered lost revenue of $4,500.00-$5,000.00 for the time that the upgrades were being done. 20. The Plaintiff has exercised control of approximately $4,500.00-$5,000.00 in credit card sales from the Defendant that were automatically deposited in Plaintiff's account since the sale of the business. Plaintiff has refused and continues to refuse to release the funds to the Defendant. 21. Due to outdated inventory, the Harrisburg Newspaper Company refused to issue a credit for magazines which Defendant paid $800.00 to the Plaintiff and which was a part of the $100,000.00 payment to the Plaintiff. 22. Due to Plaintiff's overdue accounts with grocery wholesalers, Defendant was not allowed to enter into any agreements with wholesalers and had to purchase inventory at a higher price from a convenience store retailer at_ a cost of $15,000.00 per month in lost profits from April 12, 2001 until October 22, 2001. 23. Plaintiff has retained $3,750.00 in rent deposits that were to be applied to the Defendant's property lease. 24. The parties were mistaken as to the essential and material terms of the Agreement in that: a. The Plaintiff did not disclose to the Defendant that the inventory was unmarketable and outdated. b. The Plaintiff did not disclose to the Defendant that the equipment was inoperable and in need of repairs and/or replacement. c. The Defendant entered the Agreement with the intention to sell the inventory and use the equipment in his store. d. The Plaintiff did not disclose the closure of the meat room which Defendant believed to be operable. e. The Plaintiff did not disclose overdue vendor accounts which Defendant believed to be included in the sale of the business. 25. In the alternative, the Plaintiff breached the contract as follows: a. Failure to provide adequate consideration. b. Failure to provide marketable inventory. c. Failure to provide operable equipment. d. Failure to disclose the shut down of the meat room by the State Health Department. e. Failure to disclose overdue vendor accounts. WHEREFORE, the Defendant respectfully requests judgment in his favor in an amount of $157,250.00 and against Plaintiff including attomeys fees and costs of suit. Date: Respectfully Submitted, SALZMANN, DePAULIS, FISHM^N & MORGENTH^L, P.C. ~ttome_y~o. 6193x5 Norma J. Bartko, Esq~re Attorney ID No. 80135 455 Phoenix Drive, Suite A Chambersburg, PA 17201 Telephone (717) 263-2121 Fax (717) 263-0663 Attorney for Defendants VERIFICATION I verify that all the statements made in the foregoing Complaint are true and correct to the best of my knowledge, information and belief and that any false statements made are subject to the penalties of 18 Pa.C.S. Section 4904 relating to tmsworn falsification to authorities. Afzal H~haudhry CERTIFICATE OF SERVICE I hereby certify that on this 2~ day 1~.~, 2001, I served a tree and ~ ~ ~ correct copy of the foregoing Defendant's Answer with New Matter and Counterclaim by first class mail, postage pre-paid to the following: Thomas J. Williams, Esquire MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 SALZMANN & DePAULIS, FISHMAN & MORGENTHAL, P.C. By~ Attomey-'~ID ~61935 x~ Norma J. Bartko, Esquire Attorney ID # 80135 455 Phoenix Drive; Suite A Chambersburg, PA 17201 (717) 263-2121 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED TO: AFZAL H. CHAUDHRY You are hereby notified that on December been entered against you in the above-captioned case. ,2001, the following Judgment has Date: I hereby certify that the name and address of the proper person to receive this notice under Pa. R. Civ. P. 236 is: Afzal H. Chaudh~ 11 McClellan Drive East Berlin, PA 17316 - and- Afzal H. Chaudhry Mt. Holly Grocery Store 12 North Baltimore Avenue Mt. Holly Springs, PA 17065 MOHAMMED G. SWATI, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants JURY TRIAL DEMANDED PRAECIPE TO THE PROTHONOTARY: Enter default judgment in the above-captioned action in favor of Plaintiff and against Defendant Afzal H. Chaudhry in the mount of $83,500.00 plus interest and costs of suit, as prayed for in the Complaint for failure to file an answer to Plaintiffs Complaint. I do hereby certify that a written notice of intention to file this Praecipe (in the form attached hereto) was mailed to the Defendant at the address indicated thereon, on November 7, 2001 and November 21, 2001, which date was subsequent to the date default occurred and at least ten (10) days prior to the date of the Praecipe. MARTSON DEARDORFF WILLIAMS & OTTO By ~ Thomas J. Willi~fls, Esquire Ten East High Street Carlisle, PA 17013-3093 (717) 243-3341 Attorneys for Plaintiff Date: December 20, 2001 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDFLRY and sam) M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED TO: AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IMPORTANT NOTICE YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO TAKE ACTION REQUIRED OF YOU IN THIS CASE. UNLESS YOU ACT WITI-IIN TEN (10) DAYS FROM THE DATE OF THIS NOTICE, A JUDGMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING AND YOU MAY LOSE YOUR PROPERTy OR OTHER IMPORTANT RIGHTS. YOU SHOULD TAKE THIS NOTICE TO A LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE FOLLOWING OFFICE TO FIND OUT WHERE YOU CAN GET LEGAL HELP: Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 Telephone (717) 249-3166 Date: November 7, 2001 MARTSOIN DEAR~DORFf WILLIAMS & OTTO B~ Thomas J. Williams, Esquire Ten East High Street Carlisle, PA 17013-3093 (717) 243-3341 Attorneys for Plaintiff MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED TO: AFZAL H. CHAUDHRY, Defendant IMPORTANT NOTICE YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO TAKE ACTION REQUIRED OF YOU IN THIS CASE. UNLESS YOU ACT WITHIN TEN (10) DAYS FROM THE DATE OF THIS NOTICE, A JUDGMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING AND YOU MAY LOSE YOUR PROPERTy OR OTHER IMPORTANT RIGHTS. YOU SHOULD TAKE THIS NOTICE TO A LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE FOLLOWING OFFICE TO FIND OUT WHERE YOU CAN GET LEGAL HELP: Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 Telephone (717) 249-3166 MARTSON DEARDORFF WILLIAMS & OTTO Thomas J. Wit~ams, Esquire Ten East High Street Carlisle, PA 17013-3093 (717) 243-3341 Attorneys for Plaintiff Date: November 21, 2001 CERTIFICATE OF SERVICE I, Tricia D. Eckenroad, an authorized agent for Martson DeardorffWilliams & Otto, hereby certify that a copy of the foregoing Praecipe was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: G. Bryan Salzmann, Esquire SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C., 95 Alexander Spring road Suite 3 Carlisle, PA 17013 Afzal H. Chaudhry 11 McClellan Drive East Berlin, PA 17316 Afzal H. Chaudhry Mt. Holly Grocery Store 12 North Baltimore Avenue Mt. Holly Springs, PA 17065 MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED ORDER AND NOW, this I'~'1~ day of ,9 ~le. ,200~_ upon consideration of the attached Defendant AfzarH. Chaudhry's Petition for Relief From Judgment by Default. IT IS HEREBY ORDERED th.at the Default Judgment entered in this matter be opened~a~n- ~ ~ ~ /t~. ~.C./~. ~ ~ 9.3. ' ' S V1NVA'IASNNaa MOHAMMED G. SWATI, Plaintiff Vo AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT TO: AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants, and their attorney, G. BRYAN SALZMANN, ESQUIR YOU ARE HEREBY DIRECTED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED MOTION FOR SUMMARY JUDGMENT IN ACCORDANCE WITH Pa. R.C.P. 1035.3. AND NOW, comes Plaintiff, Mohammed G. Swati, by and through his attorneys, MARTSON DEARDORFF WILLIAMS & OTTO, and moves this Honorable Court for summary judgment, pursuant to Pa. R.C.P. 1035.2, and, in support thereof, avers as follows: 1. The moving party is Plaintiff Mohammed G. Swati. 2. The discovery period in the above captioned case has closed. 3. On April 11,2001, Plaintiff entered into a contract with Defendants whereby Plaintiff was, inter alia, to sell certain equipment and inventory at a supermarket being operated by Plaintiff at 12 North Baltimore Avenue, Mt. Holly Springs, PA 17065. A copy of the Agreement is attached hereto and marked as Exhibit "A." 4. The Agreement contains an integration clause conspicuously stating: This Agreement sets forth the entire understanding of the Seller and Buyer with respect to the subject matter of this Agreement and supersedes and replaces all prior agreements, arrangements, representations, letters of intent and memoranda of understanding between Seller and Buyer. 5. Defendant Chaudhry came to the store in mid-March with his broker to visually inspect the store. See Defs.' Dep. p. 14. 6. Defendant Chaudhry returned to the store a few days after the mid-March visit accompanied by Defendant Warraich and their broker to visually inspect the store a second time and review register tapes. See Defs.' Dep. p. 14-15. 7. Plaintiff hired an inventory specialist company to take inventory of the store. A copy of the RGIS Inventory Specialists Records is attached hereto and marked as Exhibit "B." 8. Defendants and their broker were present when RGIS took the inventory of the store. See Defs.' Dep. p. 23-24. The taking of inventory did not begin until Defendants arrived at the store. See Defs.' Dep. p. 28. 10. Defendant Chaudhry participated in taking inventory of the deli section, and did not find any problems with the inventory of the deli section. See Defs.' Dep. p. 23. 11. Defendant Warraich participated in taking inventory of the produce section, and did not find any problems with the inventory of the produce section. See Defs.' Dep. p. 23-24. 12. Defendants read the Agreement before signing. See Defs.' Dep. p. 79-82. 13. Defendants requested revisions to the Agreement before signing. Specifically, Defendants requested a provision stating: "Seller is responsible for all debts incurred through April 12, 2001, and Buyer is responsible for debts incurred from April 13, 2001 forward." See Defs.' Dep. p. 80-82. 14. The additional provision was added into the Agreement before signing the Agreement. See Defs.' Dep. p. 80-82. See also Agreement. 15. For the following reasons, and as more fully discussed in the forthcoming Brief, the undisputed facts establish that Movants are entitled to summary judgment as a matter of law because: a. Plaintiff and Defendants signed an Agreement with an integration clause stating any prior agreements or representations are superseded by the Agreement, and the Agreement represents the entire contract. b. Defendants visually inspected the inventory and used-equipment. c. Defendants do not allege that any prior representations made by Plaintiff as to the quality of the inventory or used-equipment were fraudulently, accidently, or mistakenly omitted from the integrated written contract. WHEREFORE, PlaintiffMohammed Swati respectfully requests this Court grant his Motion for Summary Judgment. Respectfully submitted, MARTSON DEARDORFF WILLIAMS & OTTO By Thomas J. Willila~s, Esquire I.D. No. 17512 Ten East High Street Carlisle, PA 17013-3093 (717) 243-3341 Attorneys for Plaintiff Date: September 18, 2002 SELLER: BUYER: MOHAMMED SWATI AFZAL H. CHAUDHRY and SAJID M. WARRAICH LOCATION: KING FOOD MART, Mount Holly Springs, PA ITEMS PURCHASED: Equipment and inventory SALES PRICE: $72,500.00 plus inventory Buyer shall pay to Seller the sum of Seventy-two Thousand Five Hundred Dollars ($72,500.00) in 24 constant monthly payments in the amount of $3,793.00. This represents an annual interest rate of 9. %. The first payment shall be due and payable on the 15th day of April, 2001. Each subsequent payment shall be due and payable on the 15th day of each successive month. The value of the inventory shall be paid in full at the time of the valuation. Buyer shall pay a broker's fee in the amount of $5,000.00 at the time of the payment of the inventory. ~TN~S~H: AGREEMENT, made this 11m day of April, 2001, by and between the above Seller and Buyer, the terms of which are as follows: 1. Seller shall sell and Buyer shall purchase all of the Seller's right, title and interest in the above described property in exchange for the above sale price. 2. Seller hereby grants to Buyer the exclusive right to use the current trade name of the business and guarantee to Buyer that Seller currently has the right to use of said trade name. 3. Seller hereby warrants and guarantees that he has good and marketable title to all of the Assets free and clear of all liens and encumbrances. Seller shall be fully and solely responsible for all debts incurred by the business through April 12, 2001. Buyer shall be fully and solely responsible for all debts incurred after on and after April 13, 2001. EXHIBIT "A" 4. All information relating to Seller, the assets and the business has been provided to the Buyer. 5. Seller hereby agrees to assign all leases to Buyer and guarantees that he has the right to do so. 6. All warranties and guarantees contained in this Agreement shall remain in full force and effect and shall survive the closing. 7. Upon the execution of this Agreement by all parties, Seller agrees that he will not compete with the Buyer in any manner in any phase of the retail grocery sale business for a period of three years within a five (05) mile radius of the business. 8. Until the execution of this Agreement by all parties, the Business shall continue to be conducted in a manner similar to its current manner. 9. This Agreement sets forth the entire understanding of the Seller and Buyer with respect to the subject matter of this Agreement and supersedes and replaces all prior agreements, arrangements, representations, letters of intent and memoranda of understanding between Seller and Buyer. 10. Title and full ownership shall .revert to Seller if Buyer fails to pay any monthly payment when due or if Buyer's check is returned to Seller. Seller shall retain all funds paid as liquidated damages. 11. Buyer shall pay Seller in sequential checks beginning with check number 1001 and ending with check number 1024. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written. WITNESS I~I~)HAMMED SWATI WITNESS WITNESS AI~A~H--~. CHAUDHRY sK IO W^RmUcH ~5t~ D:st: 2? ~1~ ='~,.c: 1~7-~~-~a Z87.2~ 11,826.75 EXHIBIT "B" F'LIEASE REM, FI' TO: ,¢-' O. BOX 17631 DETRO)T, MICHIGAN 4~277 iNVOiCE '~.5% PER MONTH SEIqVICF- CH, ARGO. L~,*~ .... ~,~ I~,ALANCES ~,$2.00 MtNIMUNI} '~8'~/o A,NNU;d. H.A~E 0[~ AT THE f~ ;~[:~ ~ :~TE PERMITTED BY L~W SPECIALI,.q rS PLEASE REMIT' TO: P,O BOX 77531 OETROIT, MICHIGAN 482?7 INVOICE No.= 7 - 530382 DUNS 04-;~4~2542 FEDERAL I,N. 717/731-9&$~ 16,2001 LOCATION IN YEr,ilO~ieL~ i TOTAL IN',¢ENTOIFf TERMS -- NET 10 DAYS SERVICE CHARGE, WHERE PERMIT"~ED, Wit t BE I ADDED TO PAST DUE ACCOUNTS. fermi: ,'Net t0 ';.5% PCR MC;NIH SERv'ICi; CHAHG¢ ON PA.~T DU~ 9ALANCES ($2.00 MINIMUM) 11t% ANNUAL RATE OR AT TIdE HiCHEST' RATE PERMITTED BY LAW DI?,TRiCTI (,.~: ~ CERTIFICATE OF SERVICE I, Tricia D. Eckenroad, an authorized agent for Martson Deardorff Williams & Otto, hereby certify that a copy of the foregoing Motion for Summary Judgment was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: G. Bryan Salzmann, Esquire Salzmann, DePaulis, Fishman & Morgenthal, P.C. 455 Phoenix Drive; Suite A Chambersburg, PA 17201 MARTSON DEARDORFF WILLIAMS & OTTO j~ T'~ennC~aDs; HE~;~t Carlisle, PA 17013 (717) 243-3341 Dated: September 18, 2002 PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten ~nd sukmitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please 1 ~t the within matter f~r tb~a next ~t C~u~t. CAPTION OF CASE (entire caption must be stated in MOHAMMED G. SWATI AFZAL H. CHAUDHRY and SAJID M. WARRAICH ( pi aintiff) ( Defer-~nt ) No. 01-5763 Civil Action x~9 2001 1. State matter to be argued (i.e., plaintiff's motion for nc-=.tri~], defe~nt's d~,-,,xe.r to cc~p]~int, etc. ): Plaintiff's Motion for Summary Judgment. 2. Identify me_l ~a~ ~Hll ~e c~e: (a) for plaintiff: Thomas J. Williams, Esquire ~]dress: Ten East High Street, Carlisle, PA 17013 (b) for defer~lmnt: G. Bryan Salzmann, Esquire ;u~ess: 455 Phoenix Drive, Suite A, Chambersburg, PA 17201 3. I Mll notify ~]~ p~rties in writing within b~ d~fs that tbi~ c~se h~s been 1 ~ted for ~t. Ar~3t~nent Court Date: October 23, 2002 September 18, 2002 Attorney f~laintiff F:WILES~DATAFILE\Gendo¢cur~lO3641-pral/t, Created: 05/14/02 05:53:55 PM Revised: 10/23/02 ll:30:ISAM 10364.1 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED PRAECIPE TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please file the attached deposition transcript of Afzal H. Chaudhry and Sajid M. Warraich with the record in this case. MARTSON DEARDORFF WILLIAMS & OTTO Thomas J. Wi libras, Esquire Ten East High Street Carlisle, PA 17013 (717) 243-3341 Date: October 23, 2002 Attorneys for Plaintiff CERTIFICATE OF SERVICE I, Tricia D. Eckenroad, an authorized agent for Martson Deardorff Williams & Otto, hereby certify that a copy of the foregoing Praecipe was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: G. Bryan Salzmann, Esquire SALZMANN, DePAULIS & FISHMAN 455 Phoenix Drive, Suite A Chambersburg, PA 17201 MARTSON DEARDORFF WILLIAMS & OTTO TT :nC i~ aDs; HE ;gkt~ ~r;e~l~ t Carlisle, PA 17013 (717) 243-3341 Dated: October 23, 2002 1 OR:31NAL 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MOHAMNED G, SWATI, Plaintiff, vs. AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION -LAW JURY TRIAL DEMANDED Depositions of: AFZAL H. CP~AUDHRY and SAJID M. WA/tRAICH Taken by: Before: Plaintiff Jill L. Roth Court Reporter-Notary Public Date: Place: April 8, 2002, 3:35 p.m. Martson, Deardorff, Williams & Otto Ten East High Street Carlisle, Pennsylvania APPEARANCES: MARTSON, DEA_RDORFF, WILLIAMS & OTTO BY: THOMAS J. WILLIAMS, ESQUIRE FOR - PLAINTIFF SALZM3kNN & DePAULIS, P.C. BY: WILLIAM W. THOMPSON, ESQUIRE FOR - DEFENDANTS . Reporting Services ;57 · 717-258-3657 · 717-258-0383fax co urtreporters4t~ @ao/corn 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 DEPONENT Afzal H. Chaudhry Sajid M. Warraich NO. 1 2 3 4 5 6 7 8 INDEX TO TESTIMONY EXAMINATION By Mr. Williams By Mr. Williams INDEX TO EXHIBITS DESCRIPTION Agreement of Sale RGIS Inventory papers Photocopy of Check Photocopy of Checks Lease Agreement Dept. of Agriculture Inspection Report Dept. of Agriculture Inspection Report Answer, New Matter & Counterclaim PAGE 7, 12, 22, 24, 58, 60, 64, 68, 79 10, 18, 23, 37, 59, 61, 65, 73 PAGE 25 27 31 33 35 47 47 68 83 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMONWEALTH OF PENNSYLVANIA ) ) SS. COUNTY OF CUMBERLAND ) I, JILL L. ROTH, a Court Reporter-Notary Public authorized to administer oaths and take depositions in the trial of causes, and having an office in Carlisle, Pennsylvania, do hereby certify that the foregoing is the testimony of AFZAL H. CHAUDHRY and SAJID M. WA1RRAICH. I further certify that before the taking of said deposition the witnesses were duly sworn; that the questions and answers were taken down stenotype by the said Reporter-Notary, approved and agreed to, and afterwards reduced to computer printout under the direction of said Reporter. I further certify that the proceedings and evidence are contained fully and accurately in the notes taken by me on the within deposition, and that this copy is a correct transcript of the same. In testimony whereof, I have hereunto inscribed my hand this 26th day of April, 2002. Notary Public 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 STIPUIJ~TION It is hereby stipulated by and between the respective parties that all objections except as to the form of the question are reserved until the time of trial. AFZAL H. CHAUDHRY and SA~3ID M. WAP~RAICH, called as a witness, being duly sworn, were examined and testified as follows: EX3~4INATION MR. WILLIAMS: Good afternoon, gentlemen. My name is Thomas Williams. I represent Mr. Swati, sitting here to my left, with regard to litigation currently pending in the Court of Common Pleas of Cumberland County in which you two are named as defendants. My questions here are going to pertain to the allegations made in that action. Do you understand that? MR. CHAUDHRY: MR. WARRAICH: MR. THOMPSON: Yep. Yes. When he asks a question, you'll need to give a verbal response. The court reporter will not be able to take down your head movements, so you'll need to give verbal responses. MR. WILLIAMS: In response to my questions, I'd like you to give all the information that you have that's responsive to that question. However, if your information 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is based upon something that you heard somewhere or that you read somewhere, please tell me that as part of your answer. Otherwise, I'll assume that your answer is based upon your own personal knowledge. Okay? MR. WARRAICH: MR. CHAUDHRY: MR. WILLIAMS: testimony before? MR. CHAUDHRY: MR. WARRAICH: MR. WILLI~/MS: questioned by a lawyer? MR. WARRAICH: Ail right. Okay. Have either of you given prior No. Never raised your hand and been I did when I got my permanent residence for the United States. MR. WILLIAMS: This is a deposition. This is unlike what you might see on TV or any prior experience you may have had in court. We're going to be asking you questions designed to elicit all of your knowledge. Okay? MR. WARRAICH: MR. CHAUDHRY: MR. WILLIAMS: Ail right. Okay. We want to make sure that the stenographer records the testimony here today accurately, so one of the rules of testimony is that I have to wait until you've finished your answer, but you have to wait until I finish my question before you give your answer. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Okay? time. MR. CHAUDHRY: MR. WARRAICH: MR. WILLIAMS: Okay. Ail right. So only one of us can speak at a Also you're doing very good about giving your answers out loud, as your attorney just said. Because I can see you nodding your head yes, and I know what that means, but we need to make sure it gets down on paper. Okay? MR. WA_RRAICH: MR. CHAUDHRY: MR. WILLIAMS: There's no right answer. Ail right. Okay. This deposition is not a test. If you know the answer, tell me what the answer is. If you don't know the answer, just say you don't know and I'll ask another question. Okay? MR. WA/~P~AICH: Ail right. MR. CHAUDHRY: Okay. MR. WILLIAMS: If you don't know the answer, please don't guess at what it might be. Just say you don't know. Ail right? MR. CHAUDHRY: Okay. MR. WILLI/LMS: Also if you don't understand my question, please don't try to answer it. Just say you didn't understand it and I'll rephrase it until you're 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 satisfied until you do understand it. Okay? MR. WARRAICH: Okay. MR. CHAUDHRY: Okay. MR. WILLIAMS: Also if you don't hear my entire question for whatever reason, please don't try to answer that question. Just say you didn't hear it all, and I'll have the question read back to you. Okay? MR. CHAUDHRY: MR. WARRAICH: MR. WILLIAMS: Okay. Okay. We want you to be comfortable here today, so if at any time you want to take a break, please say that and we'll adjourn until you're ready to continue. Okay? MR. CHAUDHRY: MR. WARRAICH: MR. WILLIAMS: Okay. Okay. Have either of you taken any medications lately or feeling in any way drowsy or ill that you can't answer your questions truthfully? MR. WARRAICH: No, not me. MR. CHAUDHRY: I have a headache, but I'm not taking any medicine, but I have a headache. MR. WILLIAMS: We want you to be able to concentrate. So again, if you need to take a break, rest for a while, get a drink of water, please say that and we'll get water for you and we'll take a break. Okay? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. CHAUDHRY: MR. WILLIAMS: names for the record. the record. MR. CHAUDHRY: Okay. All right. I want to get your Will you state your full name for name is C-h-a-u-d-h-r-y and first name Afzal, A-f-z-a-l, middle initial H. MR. WARPJ~ICH: First name is Sajid, S-a-j-i-d, middle initial is M, last name is W-a-r-r-a-i-c-h. MR. WILLIAMS: And how do you pronounce that? MR. WARRAICH: Warraich. (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLIAMS: Q. Mr. Chaudhry, where do you live? A. Maryland. Q. Where in Maryland? A. 3468 Andrew Court, Apartment 303, Laurel, Maryland 20724. Oo A. I'm living on four month. Q. Where did you live before that? A. I bought a condo in Greenbelt. last 10 years there. And how long have you lived there? Who do you live with presently? Live with wife and kids. And your wife's name is? I was living 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Last name is Chaudhry, C-h-a-u-d-h-r-y, and first name is Kousar, K-o-u-s-a-r. what? Where are you employed? Beltsville Ash-Dar Enterprises. Could you spell that? A-s-h, dash, D-a-r, Enterprises. What kind of a business is that? It's a convenient store plus gas station. How many business locations do you have? I'm working only this place. A~d when you say this place, you're referring to A. Ash-Dar Enterprises. Q. What's the address there? A. 10901 Baltimore Boulevard, B-a-l-t-i-m-o-r-e, Boulevard, Beltsville, Maryland, B-e-l-t-s-v-i-l-l-e, Maryland 20705. Q. A_nd Ash-Dar Enterprises, what type of business entity is that, a corporation or partnership or what? A. they incorporate. It's a corporation. In which state is it incorporated? Maryland. When did you incorporate it? I'm manager there. I don't know exactly when I'm working for them. I'm employee 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 there. Q. A. Q. In what capacity are you employed? I'm the manager there. How long have you been the manager at that years? A. that? Q. convenient store? Three year. Have you worked anywhere else in those three No. Excuse me. Within this two years or before You said you've been the manager at the Ash-Dar convenient store in Beltsville, Maryland for the past three years. A. Q. A. Q. That's right. Did you work anywhere else during that time? No. Do you have any interest in that corporation, that business, Ash-Dar Enterprises? A. I'm working just like owner there. there I have interest, that's it. That's up to Do you have an ownership interest in it? No. You are a salaried employee? Yeah. What is your interest in the supermarket in 10 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mount Holly? I'm as you can see as a sleeping member, that's Ao Could you explain what you mean by that? I come once a while to here. Are you an employee there, do you work there? No. (Whereupon, Mr. Warraich testifies as follows.) BY MR. WILLIAMS: Q. Mr. Warraich, where do you live? A. I live 238 North Baltimore Avenue, Mount Holly Spring, 17065. Q. Is that a house or apartment? A. House. Q. Do you own it or rent it? A. Rent it. Q. How long have you lived there? A. About eight month. Q. And who do you live there with? A. With my wife. Q. Where did you live before that? A. 8782 Cloud Lep Court, C-l-o-u-d, L-e-p, C-t, Maryland; zip code I really don't remember. Q. How long did you live there? A. About two year. 11 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Oo Q. Are you also an owner? A. Yes. Q. You and Mr. Chaudhry own that together? A. Correct. Q. 50/50? A. Yes. Q. Where did you work before that? A. Shell Food Mart. Q. You better spell that for us. A. Shell, S-h-e-l-l, Food Mart. Q. Where was that located? A. Greenbelt, G-r-e-e-n-b-e-l-t, Maryland. Also with your wife? Yep. B_nd how are you employed? I work at the Mount Holly Food Market. In what capacity? Meaning... What do you do there? Are you the manager? Yes. really don't remember the zip code. Q. What did you do there? A. Q. A. And I I was the manager there. What kind of place is that, convenient store? Convenient store and the gas. 12 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. How long did you work as manager at the Shell Food Mart in Greenbelt, Maryland? A. About six years, six and a half. Q. Do you have any experience in a supermarket? A. No. Q. Prior to this one in Mount Holly? A. Well, that was the first supermarket I ever had I will get there. I was just a convenient store manager there. (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLI/LMS: Q. Mr. Chaudhry, do you have any prior exgerience in the supermarket? A. No. Q. Mr. Chaudhry, can you tell us how you got involved in this Mount Holly store? A. In Maryland there is a broker, and we ask him if anything come up, so we are interested. So he ask us about this store, look at it. What is the name of the broker? First name is Y-o-u-s-a-f last name is John. J-o-h-n? Yeah. Does he have an office in Maryland? I don't know. 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 How did you get in touch with Mr. John? I know by friends. How long have you known Mr. Warraich? Who? Mr. Warraich. How long have you known him? I knew him for last ~years. Were you ever in business together? Same owner that he was used to work, and I'm still working same owner. Q. So you were both managers of convenient stores that the same owner owned? A. That's right. Q. When you went to this broker in Maryland that you met through some friends, did Mr. Warraich go with you? A. Yeah. Q. Had you and he both been looking for an investment to make, a store to buy? A. Yeah. Q. What did the broker tell you about the store in Mount Holly? A. He said the store right now is doing about 27 to 3,000 sale. And he wants to sell it. He has a lot of other business and he cannot give full attention to them. Q. He being who? A. Mr. Swati. 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Oo When is the first time that you met Mr. Swati? It was about mid March. Would that have been last year? Yeah. Where did you meet him? At the Mount Holly, that store, what used to be King Food Mart. Q. Was the broker with you? A. Yeah. Q. Did you all drive up together? A. First time, I came alone. A_nd a few days that Mr. Warraich was with us too. Q. When you say you came alone, you mean you came with the broker? A. Yeah. Q. And met Mr. Swati at the store? Yeah. Would you tell me what happened on that Ao occasion. A. We came. He was there. and that property, that's it. He just show us store Q. Do you recall him telling you anything about the financials of the store? A. After that, we came again, me, Mr. Warraich, and broker and ask Mr. ~ahn that we are coming to look at it 15 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and ask him to show us the register tapes. Q. The tapes? A. Yeah. Q. And did you see them? A. He show us that about the week, and the rest of he said that my accountant took it. His accountant? Yeah. And did you go through the tapes with Mr. Oo Warraich? A. Q. A. Q. A. Q. year? A. Q. Yeah. And the broker? Yeah. And what -- That one shows about 29 to 3,000 sale daily. And that would have been in mid March of last Yeah. Now, that was on the second visit to the store that you saw the tapes? A. Yeah, the second visits. Q. On that second visit, did you look at anything that you hadn't looked at the first time? A. No, same we looked at it, and Mr. Swati said everything is working fine. We're not operate anything, 16 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. payment. Q. A. Q. A. but to him he says works everything fine. Mr. Swati said everything's fine? Yeah. What happened next? Next we come we give him $5,000 check as a down MR. WA_RRAICH: MR. WILLIAMS: which account? MR. WA_RPJ~ICH: MR. WILLIAMS: you visited? MR. CHAUDHRY: MR. WARRAICH: asking him? MR. WILLIAMS: MR. WARRAICH: MR. WILLIAMS: Did you sign anything? No. Who did you make the check out to, Mr. Swati? Yeah. I'm not sure. We make the check to King Food. Amd that was a check drawn on That was my personal check. Was that on the second time that Yeah. Are you asking me or are you I'm asking both of you really. Okay. That was the second time. Let me make this clear. If I ask him something and you feel that's incorrect, please tell us that it's incorrect. MR. WARP~AICH: Sure. 17 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. WILLIAMS: understanding. MR. W~JIRAICH: MR. WILLIAMS: if I ask him. MR. CHAUDHRY: MR. WILLIAMS: What we're trying to do is get an Sure. A_nd that's the same for you too, Okay. I don't want to take both of your was. MR. WILLIAMS: MR. WARRAICH: BY MR. WILLIAMS: Q. occasion? A. Q. A. times to ask you these same questions. MR. CHAUDHRY: Thanks. MR. WA-RRAICH: I wasn't sure which account it That's why I said my personal checks. Thank you. You're welcome. Was there any discussion of inventory on that NO. Anything about the lease of the store? We ask Mr. Swati give us a lease. He said okay, I will provide you the lease. But again was calling him to give us a lease. He gave us a lease about three, four days prior to we took over, that copy of lease. Q. Prior to the closing? A. Yeah. MR. WILLIA~MS: Was there anything in the lease 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that was surprising to you? MR. CHAUDHRY: MR. WARRAICH: MR. WILLIAMS: MR. WARRAICH: No. Yes. What was it? His name was still on the lease. (Whereupon, Mr. Warraich testified as follows.) BY MR. WILLIAMS: Q. Why was that surprising? A. Because he's selling the place to us, his name should not be there. If his name is still there, that means he's part of the owner. Q. Do you recall a discussion about assigning the lease to you, Mr. Chaudhry? A. Did we ask him? I'm sorry. I didn't get your question. Q. Do you recall a discussion about that, talking about the lease how it's going to get into your name and Mr. Chaudhry's name? A. Well, we did talk to him and he said he already talked to the landlord already, and she's going to send it to him. The moment he get the lease, he's going to give it to us. And when we already took over the place, and then he bring the lease, his name was still in there. And we ask him, he's not to worry about it. I said, we don't want your name in there. And 19 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 he said, well, it's just my name is in there. It's not like I'm going to be a part owner. Then I talk to Fisherman and show him the lease. And he said regarding that part, he's still kind of part of owner because his name is still under the lease. When you say Fisherman, do you mean Attorney Fishman? A. Q. I'm sorry. Yeah. About when did you speak with Attorney Fishman about the lease? A. I really don't remember that part. I really don't remember exactly. Q. A. Q. A. Q. A. two weeks. Q. Afterward? A. Yep. Q. Had you spoke with Mr. Fishman prior to that about anything? A. Yes. He's handling our case whatever between me and my partner and him is going on. Amd with regard to the closing date of the -- It's after closing date. After closing? Yeah. A week or a month after? I would say about a week, week and a half, or 2O 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Was the first time you saw Attorney Fishman the date you took the lease in to him? A. Correct. Q. Was there any attorney that was advising you or representing you at the time that you purchased this store? A. No. Q. What was the role of the broker in this transaction? A. Well, we ask him, we're interested in buying a convenient store or something with good location. So he show us, as my partner told, how good store is, what the location is. There's nothing close by down there. And then we came up and look at those register tapes and whatever the register tape was showing. That's basically what we was looking for. So we like the location. We like how much gross he is doing it. Q. When you say that when you looked at the register tapes that that's what you were looking for, you mean you're looking for the revenue of the store? A. Correct. Q. How much sales it was making? A. Right. Q. A_nd the sales that were shown to you on that tape were satisfactory to you? 21 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Yes, because it had the potential and increase the sale from that much money to make 2,700 to 3,000. It had the potential in there so you can increase, you can work in there by yourself instead of having a lot of employees. Cut down the expense you can raise it basically. There was the potential in there. Q. If I understand you correctly, your thinking was that a store that generates $3,000 a day was a store that you could operate by yourself? A. Correct. Q. Without the employees that have been -- A. Not me without all the employees, with the employees, because I work at the convenient store, so I have a very good idea what the grocery, so I can generate i-a~more than that, so that would get increase. MR. WILLI~LMS: I don't follow you. Could you read that back to me, that answer. (Whereupon, the reporter read from the record as requested.) BY MR. WILLIAMS: Can you explain what you mean by increasing? Increasing the sale. Instead of 3,000 maybe 4,000? Correct. Okay. You felt that there was a potential 22 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 there -- A. Q. A. Q. Yeah, there was a potential there. And why did you think that? Because the location. Did you look at any other register tapes besides that one week? A. No. As my partner say, he say he don't have the rest of the tape because the accountant took it. Q. Did you ask him to make copies of it for you? A. No, we did not ask him. Q. Did you ask him for any other type of financial information such as a tax return or profit and loss statement? A. Q. No, we didn't ask him. Did you ask the broker? MR. CHAUDHRY: No. Broker says everything's here in front of you. You can ask him. Actually, he has a problem too. He cannot see it much, the broker. His eyesight is very weak. (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLIAMS: Q. Did the broker -- how did you pay the broker? Did you pay the broker? A. Yeah. Q. How much did you pay him? 23 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. $5,000. Q. Was the broker involved in the inventory of the store at the time of closing? ~ A. He was there, but he did not ~nything. Especially for him, his eyesight is so weak he cannot see even steps that -- that not know where the entrance out is. So who did the inventory? Mr. Swati brought the inventory people. Were you there also? Qo A. Yeah. MR. WARP~AICH: BY MR. WILLIAMS: I was there too. Q. What if any part did either of you play in taking the inventory? A. I did with that other guy, meat section. Deli, we waited for that one. I mean we wait and calculated, and that one bring to Mr. Swati, say this one is. Q. You mean you did the deli section? A. Yeah. Q. And did you find problems in the deli section? A. No. (Whereupon, Mr. Warraich testified as follows.) BY MR. WILLIAMS: Q. And what part of the inventory did you play, mr. Warraich? 24 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. He asked me to do the weight for the produce, how much is what and how much is what. That's all I did. Q. ~Lnd did you find any problems with that? A. No. Q. And who did the rest of it, this company that Mr. Swati hired? A. Correct. And his people was with them too. I think one guy was walking with each guy, then man was doing inventory. (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLIAMS: Q. Mr. Chaudhry, what was your understanding of the transaction, what were you buying? A. When we saw the tape, it says it's good business and it has potential. when -- Q. A. Q. A. Q. That's going to buy, and especially Excuse me. By the tape you mean the register -- Register tape. -- not the inventory tape? Inventory tape I did not look at it. How did you know how much to pay him for the inventory if you didn't look at it? A. He gave us a number. He said this much inventory, and he calculate it, and we gave the check. MR. WARRAICH: Basically there was a top page 25 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 that said the grand total for the store, and that's all we see. And he said, that's the grand total right here. That's the personalty I'm taking out of it. That much money is left. That's all we look. We didn't go through the complete set of the inventory. We didn't see anything else what is being charged -- I mean, divided by the section, that's deli, that's meat case, that's the produce, that's the frozen food. We didn't look at anything like that. We just look at the grand total. (Exhibit No. 1 was marked.) BY MR. WILLIAMS: Q. Mr. Chaudhry, I'm going to show you what we've marked as Exhibit Number 1. Can you tell us what that is? A. This is a contract agreement of sale. Do you want me to read it whole? No. I just want to know have you seen that before? A. That one we saw when we was coming to take over. That, on the way, he said you have to sign the contract too. Q. A. anything. Q. of 20017 Who said that? Mr. Swati. And prior to this, he never mention Do you see where this refers to April the llth 26 6 7 8 9 10 '11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 contract? A. Yeah. Was that the date -- Yeah. -- that he showed it to you? Yeah. Who else was there when he showed you this Me, Mr. Warraich, and broker we three together in the same car, and Mr. Swati. Q. You were in a car? A. Yeah, we was coming to car, to that Mr. Swati's car. He took us to his lawyer to sign this contract. A_nd there he show us this contract. Q. Took him to Carlisle? A. No. MR. WARRAICH: That was in Harrisburg. MR. CHAUDHRY: Harrisburg. BY MR. WILLIAMS: Q. So do I understand that you and Mr. Warraich and Mr. Swati and the broker drove to Harrisburg together? A. Yes. Q. From Mount Holly? A.' No. First we came visit his store, which is I don't know exact address. And from there he took to lawyer office. I don't know the address either that one. 27 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Oo So Mr. Swati drove? Yeah. The three of you? Yeah. A_nd there you went over this agreement? Yeah. Did you read it? Yeah. Did you agree to it? I sign it, yeah. Was there anything else that you did in the lawyer's office, other than this agreement? A. No. Q. This agreement was the only purpose in going to the lawyer's office? Yeah. Your signature appears on the second page? Ao office? That's right. MR. WARRAICH: MR. WILLIAMS: Mine too. Was that signed in the lawyer's MR. WA_RRAICH: Yes. (Exhibit No. 2 was marked.) BY MR. WILLIAMS: Q. I'm going to show you what we've marked as 28 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Exhibit Number 2 and ask you, have you ever seen that before? A. Q. A. I saw the last page. When did you see the last page? When inventory was done. He brought it. He says that's the total number come up. Q. Was that the same day that you signed the Exhibit Number 17 A. That's right. Q. So you went to the store in Mount Holly first to do the inventory? A. No. First we went his store. He took from the store to his lawyer, and then we come back to the store. Q. So you all came back to Mount Holly? A. Yeah. Q. Together in Mr. Swati's car? A. No. He drop us again from his store where we have our cars, and we took our cars from there. Oo need to correct something. Were the people already starting the inventory? No. They didn't start until you got there? Yeah. Amd this last page -- MR. WA~RB_AICH: Actually, I'm sorry, in here I This contract when we sign it, 29 t 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it was day before inventory. Inventory was done on 12th, and the contract was signed on the llth. I was just thinking contract is signed on llth and inventory done on 12. MR. WILLIAMS: So Mr. Chaudhry was mistaken when he said that you drove back? MR. WARRAICH: That's what I was thinking and trying to put in my head trying to figure out exactly what day inventory was done. MR. WILLIAMS: So did you stay over night here or did you go back home and then come back the next day? MR. WARRAICH: MR. WILLIAMS: for the inventory? MR. WARP~AICH: MR. WILLIAMS: MR. CHAUDHRY: We went back home both of us. A~d then drove back the next day Correct, yes. Referring if you would to the -- Excuse me. This date is wrong. It was not llth. They put llth, but it was 12th. BY MR. WILLIAMS: Q. So Mr. Warraich's wrong when he said you went home over night? A. We not went home. That same day we did sign the agreement and inventory is done. We not go back home. Amd this one, that is not llth, it should be the 12th. Q. Referring to Exhibit 17 3O 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Yeah, it should be the 12th. And because the inventory the 12th and the 13th we took over. 13 was the first day we start the business. Q. Okay. Let me make sure I have this correct then. On April 12th of last year, you came up, met Mr. Swati, went to his lawyer's office, signed the agreement. Then the four of you, including the broker, went back to the store and had the inventory done with this other company, RGIS Inventory Specialists? A. I don't know what the company name, but that's the date is done inventory, same date. Q. And was the next day April 13th -- A. Yeah. Q. -- that you actually took over the store? A. That's right. Q. If you would refer to Exhibit 1, the agreement. A. Sure. Q. Where it says the sale price of 72,500, plus inventory. Do you see where it says that? A. Yeah. Q. And above that it has sale items purchased, equipment and inventory. Do you see that? A. Yeah. Q. So I understand that the $72,500 was for the equipment? 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 out to be? A. Q. A. Yes. And then the inventory was whatever it turned That's right. What did the inventory turn out to be? I mean, it should be here. I can't read it. MR. WARRAICH: It's probably somewhere around 111,000, something. MR. WILLIAMS: 111,000 approximately? MR. WARRAICH: I don't have exact figure. And how was that to be paid, Give him $95,000 with a cashier check, and plus he had $5,000 down payment so that make 100, plus we give him the other check, whatever amount it was that left over. So we give him that check. MR. CHAUDHRY: No. It was some personal check and one of my credit card check I pay by that one. Not all cashier check. (Exhibit No. 3 was marked.) BY MR. WILLIAMS: Q. I'm going to show you what's marked Exhibit Number 3. Can you tell us what that is? A. Yeah. This is the Mount Holly Food Mart general account check which is payable to Mr. Swati for 11,000. Q. What is the $11,000 for? A. Remaining of inventory. 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Oo inventory? A. Q. So you had already paid him 100,0007 That's correct. And this 11,000 was the remaining payment for That's correct. And this check is dated April the 20th of 2001. Is that the date that it was paid? A. Because we ask Mr. Swati that there is not much money in the account, so deposit on this date. Oh, you gave it to him earlier, a postdated check? A. Q. check? Yeah, that's right. And that's Mr. Warraich's signature on the MR. WA~RRAICH: Yep. MR. WILLIAMS: Is this an account that was opened to operate the store? MR. WARRAICH: MR. WILLI~LMS: MR. CHAUDHRY: MR. WARRAICH: Correct. A_nd who opened the account? We both opened. Actually three of us. He took us up there to open this account, the branch. MR. WILLI~MS: MR. WARRAICH: MR. WILLIAMS: To the PNC Bank? Correct. And was that account opened as a 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 partnership between you and Mr. Chaudhry? MR. WARPJ~ICH: Correct (Exhibit No. 4 was marked.) BY MR. WILLIAMS: Q. I'm going to show you what we've marked Exhibit Number 4. Can you tell me what they are? A. Again, that's general contract payable to Mr. Swati, 3791. And the next one again 3791. What was that for? That for equally payments we have to pay to Mr. Oo A. Swati. Q. Would you turn to the agreement which we've marked as Exhibit Number 1. Amd again to the sale price of $72,500, is that what those checks were for, to pay off the 72,500? A. Yes. MR. WILLI~MS: MR. WA~RRAICH: MR. WILLIAMS: of $3793 to purchase the equipment? MR. WARRAICH: MR. CHAUDHRY: MR. WILLIAMS: I see you shaking your head. I'm sorry. Correct. And you were to make 24 payments those checks is earlier than the numbering on these checks. Does that mean that the checks on Exhibit 4 were prepared Yes. Yeah. I notice that the numbering on 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 before the check on Exhibit 3? MR. WA/~RAICH: MR. CHAUDHRY: MR. WARP~AICH: MR. WILLIAMS: MR. WARP~AICH: that day. BY MR. WILLIAMS: Yes. Yeah. What happened is because -- Let him finish. This check we give him first on Q. Amd that's Exhibit... A. Exhibit Number 3. And since we already wrote this check first to him, and he said, well, while they're doing inventory, why don't you give me the postdated check for that. So we give him a postdated check for this one. At the end of that, we didn't have enough money on the hand, so we wrote this check for $11,000 to him. Q. Do I understand that the checks that are on Exhibit 4 were part of a series of postdated checks? Ao Correct. To pay off the $72,500? Right. As per the agreement? Right. MR. WA/{P~AICH: Correct. BY MR. WILLIAMS: Q. I notice that the checks are $3791. Amd the 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agreement says $3793. there? A. Do you know why there's a difference We do not have the agreement -- I mean it was in the car, and this says $3791. I wrote the check. Q. A. Q. A. Q. I ask him how much is, 3791, You wrote a lot of checks? Yeah. That's -- In fact, you wrote 24 checks? That's right. Because you had your agreement out in the car and you couldn't remember the exact figure? A. Yeah. I ask him how much, 3791. (Exhibit No. 5 was marked.) BY MR. WILLI/LMS: Q. I'm going to show you what's marked as Exhibit Number 5. Do you recognize that? A. Yeah. Q. What is that? A. That's lease agreement. Q. A~d is this the lease that was provided to you by Mr. Swati? A. Yeah. That time that I didn't have that cutting, it doesn't have these cutting in it. Q. You mean the cross-outs? A. Yeah, cross-outs. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. So you have a copy of the lease without the cross-outs somewhere? That's correct. Do you recall when Mr. Swati gave you that Ao lease? A. When we were coming to took over. That would have been April 12th or the 13th? That's correct. And was it your understanding that as of that date you were to make the payments on the lease? A. Correct. Q. And I think you gave Mr. Swati two payments, did you not? Do you recall that? A. For rent? Q. Yes. A. Yes. Q. One for the security deposit and one to pay a month in advance? A. That's correct. Q. Have you -- MR. WARRAICH: I'm sorry. That wasn't a month advance. That was the rent for April. He says he's going to reimburse the money, partial money for us to April 12th since he had the business for those 12 days. (Whereupon, Mr. Warraich testified as follows.) 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1 18 19 20 21 22 23 24 25 BY MR. WILLIAMS: Q. I'm not sure I follow you there. A. The first check was for the April rent we pay. Since he had store for 12 days, we took over -- the 12 day was date was 12th April, that was his last day. So those 12 days he says he's going to reimburse us since we pay the April rent. Q. Do I understand that you were going to give him a check for the entire month's rent? A. Correct. Q. And then he was going to give you a check back for half of it? A. No, for those 12 days. Q. For 12 days? A. Correct. Starting from April 1st to April 12th. Q. Why didn't you just give him a check for part of the month instead of the whole month? A. Because he says he's going to reimburse the day we took -- once we done the inventory whatever the difference afterward, he's going to do it that way. rent? A. Did he do that? No. You're saying that he owes you money for 12 days Correct. 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Qo Since then have you negotiated a new lease? Yes. When did you do that? Well, we don't have a lease right now. Because there's a part of the propert that Mr. Swati owe her, and she want us to pay that one for those years. A~d she said, well, until you pay the full balance, I'm not going to give you the lease. Her attorney has the lease right now. It's been signed. And so we're not going to pay part of his taxes, so she's holding the lease. But we've been sending a check every month to her, and she's been cashing it. Q. And so there are some expenses that Mr. Swati owes to her from before you took over? A. Correct. Q. And the landlord, who is Ann Iselin and Harry Garonzik, that are not going to sign over a new lease to you until the amount of what Mr. Swati still owes them is settled. Is that what your understanding is? A. Well, they sign over the lease, they send it to her attorney. Her attorney had a lease. If I walk there right now, gave her the total balance, they can give me the lease. Q. A. What is the total balance? I don't really remember in my head right now. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Can you give us an approximation? A. It's about total $6400, I think. I'm not 100 percent sure about. But that's not all his. That's partial of his, the rest of is ours. A~d she say she don't want partial payment, whatever he owes her. So she want that one too in there. Q. Did she or her lawyer ever tell you what she thinks Mr. Swati owes her? A. I think it's like $18- or $1900. Q. Do you continue to operate that food mart? A. Yes. Q. What has been your experience as far as sales? A. I'm sorry. I didn't get it. Repeat it again. Q. Let me ask you this question: Are there plans to close that store? A. We or who -- what do you mean who's planning to close the store? Q. Do you have plans to go out of business there? A. No, we don't have any plans. Q. Is it your intention to remain there and make that a profitable store? Ao Correct. How many employees do you have there now? Four. Are they all full-time or some of them 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 part-time? A. There is one full-time, there's meat guy who's part-time, the other two guys there are part-time. Q. So out of the four employees, there's one full-time and three part-time? A. Correct. Q. The full-time, what's the name of that person? A. Diane Mear. Q. Could you spell Mear? A. M-e-a-r. Q. What does Diane do? A. She's a cashier. Q. A~nd who are the part-time employees? A. Kelly Groce, K-e-l-l-y, G-r-o-c-e. Q. What does she do? A. She's also cashier. Q. How many hours a week does she work? A. 20. Q. And who else is part-time besides Kelly? A. Tracy $one (phonetic). Q. What does Tracy do? A. She's also cashier. Q. Amd how many hours a week does she work? A. About 20, 25. Q. And who is the last part-time employee? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Meat cutter, his name is Dave -- I really don't remember his last name. Q. How many hours a week does he work? A. About 15 to 20. Q. Were any of those four employees working at that store to your knowledge before you took it over? A. Besides Diane, Diane she did work for him. The rest of them, they're new. I have the other girl, her name is also Tracy. She did work for him, she work for me for a while, then she move out and she move to Pittsburgh. Q. Other than those four and yourself. A. There's other guy, he had the meat cutter before. When we took over, he work for me. His name is Sonny, that's all I know. Q. Just speaking of right now, those are the only four employees, correct? A. Right now? Q. Yes. A. Yes. Q. Do you have plans to hire any more? A. I can't afford it. Q. So you have not tried to hire any more, correct? A. Well, because I can't afford it, that's why I didn't hire anybody yet. Because I work 12 hours, 13 hour a day myself up there, seven days a week. 42 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Other than yourself and the four employees you've just identified, is there anyone else that works at the store? A. Q. A. e. license? A. Q. A. No. Do you have a meat license? Yes. Did you have any problem getting your meat Yes. What kind of problem? Meat cooler wasn't working. There was something need to be done in the meat room regarding to the health inspector, so he give the whole list of what he need to be done before we start cutting the meat. We cannot cut the meat until all those things done. Q. When did you get your meat license? A. I think about two month after that. I'm not sure exact date. Q. What did you have to do to get it? A. Fix the meat room cooler, meat prepare room, then the cooler; then wall need to be replace, front part of the deli area need to be replaced to do anything. Oo Amd who did that work? My father-in-law. What is your father-in-law's name? 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Ao Theodore Bower. Where does he live? East Berlin. What was wrong with the meat cooler? I know you But other said there was a wall that needs to be replaced. than that, what did you have to do? A. It wasn't enough freon in there. The temperature required to the health department, it wasn't there. So we had to fill up the freon, because freon was leaking out. Q. And who filled up the freon, your father-in-law? A. No, I think Thermotech. Q. And your father-in-law, did he replace the wall, is that what he did? A. Yep. Q. Was it one wall or more than one? A. There was one, two, and three. Q. Three walls? A. I mean, there was part of this side of the complete wall, then part of this side was part of it, and then the morting under it, then the other wall at the outside on the deli area where you see all the lunch meat and you can see it. Because it was wood, you cannot clean it if blood get on it. That's against the health law. That's what the health inspector said. So I replace that 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 one. Back in the meat case, the stand was up there that need to be sanded, clean it, and painted. Now, the meat case is not the cooler, is it? Meat case is a separate. The cooler is the A. totally separate. Q. I want to stick with the cooler. Do I understand that the walls needed to be replaced because they were wood? A. Correct. They need to be some kind where you can clean the blood. The raw wood you cannot clean. If the blood stay in there, bacteria comes up, according to the health inspector. Q. So referring to the cooler, we have the freon and we have the wooden walls that needed to be replaced. Was there anything else wrong with the cooler? A. Nothing else wrong with the cooler. There's cutting boards where you cut the meat on it, they need to be replaced. That's what the health inspector says. Q. Because they were wood too? A. No, there was -- I really don't know how to say what it is. Because it had so much cut on it, you cannot clean it because the blood you can see it in there after cleaning it. So the bacteria stay in there. You got to buy a new one before you get your license back. So that 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Ao Swati? A. was the part of his requirement what we need to do it. Q. Mr. Warraich, did you see inside the meat cooler before you bought this -- Correct. -- place? And you saw that the walls were wood? Correct. Did you raise any objection to that to Mr. No, because we don't know what the requirements for the health inspector what they're supposed to be. And we didn't know at that time he wasn't able to cut the meat either when we bought it. Q. So this was a surprise to you? A. Correct. A_nd when we bought it, we did pay the inventory for the meat on the shelf when they're not supposed to cut the meat. back -- A. Q. A. Q. license? A. Q. When you say that you got to get your license License mean get license to cutting the meat. Whose name is the license in? My name. Is that the first time you've ever had a meat Correct. Let me ask you about the meat case. You 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 mentioned that you had to sand it, clean it, and paint it? A. No. There was the stands in there where you put the meat. You cannot put the meat boxes on the floor. There is a metal stand in there where you put the meat on it. That's a requirement for the health inspector. Those was so rusty and so everything, so that was his part of it what the health inspector told me. He goes step-by-step, that needs to be done before I apply for the license because he's not going to pass me the inspection. Q. To your knowledge, is the premises inspected before you get your license, before anybody gets their license as a normal thing? A. I'm sorry. I didn't get your question. Q. Well, if I were to apply for a meat license for a certain premises, before I would get that, an inspector would have to come out and look at it? A. Correct. Q. Did you consider having someone with knowledge of the requirements for a meat license come out and look at this premises before you bought it? cooler? A. No. We just take his word, Mr. Swati word. What did Mr. Swati tell you about the meat He didn't tell me anything about the meat 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 cooler. MR. CHAUDHRY: He says everything works. I have the meat in the cooler and on the shelves. We are cutting the meat. Only thing you have to do, get apply for the license and transfer under your name. That's it. MR. WILLI~=MS: Were you aware that an inspection was necessary in order for you to get a license? MR. WARPJ~ICH: No. MR. CHAUDHRY: No. BY MR. WILLIA/~S: A. is Gary. Q. A. Q. Your broker didn't mention that to you? Absolutely not. Do you remember the name of the meat inspector? I'm not 100 percent sure, but I think his name May the 9th. Does that sound familiar? been less than a month. A. I don't know. Does Gary Orner sound familiar? I'm not sure about his last name. I have a note that you got your meat license on That would have I have the license at the store. I can get the correct date when we get it. (Exhibit Nos. 6 and 7 were marked.) MR. WILLIAMS: Mr. Chaudhry, I'd like you to look at Exhibit 6 and 7, and let me ask you, have you ever 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 seen these before? MR. CHAUDHRY: MR. WILLIAMS: No. Would it be fair to say that you left to Mr. Warraich the actual handling and running and management of this business? MR. CHAUDHRY: That's right. MR. WILLIAMS: Would you pass those exhibits over to him then. I'll ask him about them. BY MR. WILLIAMS: Q. Mr. Warraich, could you tell us have you seen Exhibit 6 and 7 before? A. No -- actually yes, I did. 6 and 7 I did see it before. Q. I'm going to ask you about number 7 first, if you have that there in front of you. A. Yeah. Q. That appears to be an inspection report dated April 20th, 2001. Do you see that at the top? A. Correct. Q. And that was done by the Pennsylvania Department of Agriculture? A. This list, that's what we printed out what he told us to do, me and my wife did. Q. This Exhibit 7 refers to Mount Holly Food Market, Sajid Warraich, President. Do you see that? 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Yes. Are you the president? I'm a vice-president. On the paper he's the president, because it don't make a difference for us who's president, who's vice-president. On what paper? In the corporation. This is a corporation? Right. Mount Holly Food Market is a corporation? MR. WARRAICH: No, that's the trade name. Corporation is Areeb and Fahid. Would you spell that? A-r-e-e-b and F-a-h-i-d. Incorporated? Yeah. Pennsylvania or Maryland In Pennsylvania. Who did that for you? MR. CHAUDHRY: MR. WILLI~LMS: MR. CHAUDHRY: MR. WILLIAMS: corporation? MR. CHAUDHRY: MR. WILLIAMS: Did you do it yourself or did somebody else do it? MR. CHAUDHRY: No, accountant did, accountant work for us. MR. WILLIAMS: What's the name of your accountant? 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it. MR. WARRAICH: MR. WILLIAMS: MR. WARRAICH: Hemid Azad. You better spell that. I really don't know how to spell Probably H-e-m-i-d, A-z-a-d. I You mean the day he inspect the store, no, I wasn't there. A. over to the store, that was after that. store. Did you talk to him at all? I did talk to him. I see him once. He came My wife was at the Oo store? A. MR. CHAUDHRY: guess it. BY MR. WILLIAMS: Q. Looks good to me. Where is Mr. Azad located? A. He's in York. Q. And he prepared the corporation papers for you? A. Correct. Plus we applied for it with Mr. Swati, that was incorrect. So the paper came back, then we give it to him, so he incorporated. Q. And Mount Holly Food Market, is that a registered fictitious name that you use? A. I think it's not registered name, I mean it's just the town name. That's what we call the store name. Were you here when Mr. Orner inspected the 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. You said after, you're referring to Exhibit 6? A. 7, that was wrong with all the equipment what we need to get done to get the license. Q. If you refer to Exhibit 7 at the bottom it gives you a phone number to call for a reinspection. Did you see that? 20th? Ao Correct. Did you call for the reinspection? Yes. And he came out again? Yes. And did it pass that time? Correct. Do you remember what date that was? No, not really. I really don't remember. It would have been some time after April the A. It was after April 20th. Q. And whatever that date was, all of the items on this list, Exhibit 7, were taken care of? A. Everything is taken care of. Q. Would you turn to Exhibit 6, that appears to be a Pennsylvania Department of Agriculture inspection report dated May 1, 2001. And it appears as though at 8:55 in the morning they did an inspection. Do you recall that? 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. I really don't remember the time. Probably my wife was at work, because she normally goes during the morning and I go a little bit late because I stay longer over up there. That could be right. Q. Your wife is Jennifer? A. Correct. Q. She's listed as a co-owner, at least that's the way it appears to be on this report. Is she a co-owner? A. She's my wife, so that's all it is. Automatically she's a co-owner, but not on the documents anywhere she's listed. Q. That's what I was getting at. She's not a shareholder in the corporation? A. No. Q. This Exhibit 6 has a list of five things that need to be done according to the inspector. Do you see that? A. Yes. Q. Were all those things done for the next inspection? A. Actually I just passed the inspection two weeks ago again for the yearly, whatever they do it. Q. But referring back to this report which is dated May the 1st of last year, which is marked Exhibit 6. A. Those everything is done on cutting the meat, so 53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 I do have a license. Q. Were they done immediately after the inspection, that is immediately after May the lst? A. I don't know how long it took us. But I did talk to my father-in-law, as I said before. So they came up, we went to the -- look at the material, what stuff he asked for it, and we do it. I'm not sure exactly because it was back and forth here, back in Maryland because I had stuff still in Maryland trying to move the things in. Q. I'm sorry. You had what still in Maryland? A. I still had the apartment in my name in Maryland at that time. My stuff was half over there. So I move things and empty the apartment on a certain date. My wife spend most of time in Holly, first month at the store. And I was there, but... Q. I want to ask you about the inventory. Did you find any problems with the inventory after you took over the store? A. Q. Correct. The check that we've marked Exhibit 3 to complete the payment on the inventory, $11,000, did you stop payment on that check? Yes. And why did you stop payment on that check? Stuff was more expired. The merchandise not on 54 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the right place what the tag says. And when I go through the store, then I talk to him, he said he really don't know anything about it. So I told him I'm stopping the payment on every single checks, because until after the things get clear. Q. A. So you stopped payment on all the checks? First we stopped payment on this one. Then we stopped payment on the rest of them. Q. And when you say this one, you're referring to Exhibit 3? A. Correct. Q. Did you make a list of what was expired? A. I did make a list, but I really don't remember where I had it now. Q. Do you remember how much it came up to? A. Probably around like 2000 something. Because the day we took over, on the weekend my brother came over to help me out. He was there, so we go through the shelf. We took only the dairy section and the frozen food. We go through there trying to reset everything and pulling all the expired stuff. And they just came only, but that much money only on those two sections. Later on once we go through the rest of store, there was lot more in there. Q. Why didn't your brother come up and go through 55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the store before you wrote these checks? A. Well they work too, so they don't have the time. Weekend they're off, so they came to help me. Q. Just so I'm clear, did you say that you had a list, but you don't know where it is? A. No. Q. Tell me about the list. Did you make a list of the expired merchandise, inventory? A. In the dairy stuff there was cheese, juices, the other stuff that was out of dated. ~tnd frozen food stuff, whatever, that was out of dated. A~d I really don't know specifically what it was exactly. So you don't know how much it came to? We did add it up. It's somewhere around like A. $2,000. Q. A_nd when you added it up, did you use a calculator with a tape that comes out of it? A. No, I didn't use the tape to come out of it. Q. Do you have written down anywhere what was expired that goes into this $2,000? A. I did make the list, but I really don't remember where the list is. It's been a year. Q. You also mentioned about some of the inventory not being where it's supposed to be. A. Correct. 56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 So you have to reshuffle it to where it was out? Yes. Did you make a list of these things -- No. -- that were improperly labeled? I didn't do it. Did you take part in the inventory on I think it codes? A. was April the 12th? Correct. When you do the inventory, do you scan the bar No, that was the food and the vegetable. We just weighed it. And one of his employee was there, and he was writing down how much it is. And that's the banana, a supposed to be? A. Well, we move all merchandise, whatever. We was going through the tag looking at the merchandise where it was supposed to be and moving the things. Q. Were the aisles marked on the shelves as to what type of merchandise was supposed to be there? A. There was tags on the front it says can soup, Campbell can soup, it supposed to be ~ cents, but there's something else in there'that's even ~9 cent. Q. So is this something that you had to straighten 57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 50 pound banana cost 69 cents. a dollar. dollar. There's oranges, three for There's 100 orange in here, price is three for a It's just like that, whatever it says on the shelf at that time. Q. Because you did the produce? A. Correct. Q. Is that what you did, the produce, or did you do other parts of the inventory? No, just the produce only. So the other inventory was done by that company? Correct. Do you contend that their inventory was incorrect? A. Well, finding, as I mentioned just now, because the merchandise wasn't on the right place, so I have to redo the whole store. ~tnd the thing wasn't on the place, so we rearrange everything on the right place. So there was like lot of stuff, I would say about 30, 40 percent things they was misplaced. Q. Well, did you have to do another inventory then? A. No, I didn't do it. Q. Did you discuss this with Mr. Swati? A. I did discuss with him. Q. Did he come to the store? 58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Ao NO. What did he tell you? He said, well, the employees that working for you, they know I didn't do anything. I said, well, that was your store at that time, it wasn't mine. And they wasn't working for me that time. Q. Do you remember him sayLng anything else about the inventory? A. I really don't remember. (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLI;uMS: Q. Mr. Chaudhry, did you talk with Mr. Swati after you took possession of the store? A. Yeah. Broker, I talked to the broker. And he says, okay, we'll go and we'll talk Mr. Swati. Me, Mr. Warraich, and broker went his store. Amd broker ask him that this kind of problem, they're saying, and let's do whatever you can do. He says, give me first $11,000 -- which we stop the payment -- and after that we'll think. A_nd I said, okay, I said, think. And we came out the store, that's it. Oo time? A. Q. What exactly was discussed with him at that Exactly we said -- Well, I don't mean exactly. 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. I mean, that's we said that stuff was inappropriate places that's expensive and behind that was cheaper stuff. And guess that one -- MR. WARRAICH: The cooler problem, the cash register problems and everything. MR. CH_AUDHRY: And he said first, give my staff inventory first, then we'll see what I can do. A_nd you ask him, okay, we'll let you know. We'll see what we can do. A~nd we came after that, I have no contact with him. (Whereupon, Mr. Warraich testified as follows.) BY MR. WILLI~MS: Q. Mr. Warraich, you mentioned the cash registers you discussed with him? A. Correct. Q. The cooler you discussed with him? A. Correct. Q. The inventory you discussed with him? A. Correct. Q. What else, if anything? A. The dairy case. Not dairy case, I'm sorry, deli case, the lunch meat stuff. Q. What else, if anything? MR. CHAUDHRY: Sale, he ask us sale too, on that mid March he show the tape for one week, it show 27, to 6O 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 $3,000. even close to. anything? else. And after that it not come up even one day not MR. WILLI~uMS: MR. CHAUDHRY: MR. WILLIAi~S: You mean after you took over? Yeah. What else was discussed, if MR. CHAUDHRY: That's it to me. MR. WARRAICH: I really don't remember anything (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLIAMS: Q. When you left that meeting, that was at his other store? A. Yeah. Q. When you left that meeting, what was he supposed to do, if anything? A. He supposed to be negotiate with us because that sale was not much. We had the other problems, cooler problems, register problems. So we ask him that negotiate with us, the money we owe you. As I mention earlier, that is first gave me the $11,000, the rest of then we'll see what I can do for you. Go Have you talked to him at any time since? No, I didn't talk with him. From that point forward whatever dealings, were 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 they with Mr. Warraich? A. That's correct. (Whereupon, Mr. Warraich testified as follows.) BY MR. WILLIAMS: Q. Mr. Warraich, let me ask you about the deli case then, did we cover that already? Was that part of the -- you referred to a meat case. A. No, that's -- that's lunch meat case. Q. Tell me what the problem was with the deli case. A. Freon was leaking. Q. Amd who fixed that? A. Well, there was Thermotech and a couple other people that was trying to fix the leak, they cannot find it. They said they did came up in here before that to fill up the freon every like two or three months. They call it again because the freon is iow, so they come up and fill up the freon. So freon was like I think $36, $37 a pound. So can't afford it, so I shut off the cooler completely. Q. Mr. Warraich, you understood this was used equipment, did you not? A. Correct. Q. Was there any kind of a warranty that Mr. Swati gave to you? A. Not anything by written, just word what we talk with him and everything. 62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Uo A. condition. When he said everything was working? Everything was working, everything in perfect He did all kind of repair what he need to be done, so you guys don't have to worry a~out anything. Q. That was the first day you met him? A. That day we took over and inventory, that day he was saying all these things. Q. The day that he said everything was in perfect condition, was that the day -- A. That time he says again about everything is -- well, my younger brother promise you're never going to have any kind of problem in that place. Everything that he said again to me. Everything is working properly in here, all the equipment and everything. If anything ever goes wrong with it, get the insurance on it and they will take care of it. What insurance? I don't know. He said your building insurance and your equipment insurance extra you get on it so they can repair the stuff. Q. Did you buy insurance on this equipment? A. Insurance is already with the buildings and all the inventory and equipment is in there. We do have insurance. Q. When did Mr. Swati tell you that all the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 equipment was in perfect condition? A. Very first time when we met him. And after that, and especially on that day when we took over, he said you guys are my younger brother, you're never going to regret you bought this place and never have any kind of problems. Q. A. Q. Amd that was April 12th or 13th? 12th. 13 was the day I opened the store. So the 12th was the day that you settled on the papers and took the inventory? A. Correct. Q. Worked out the money exactly? A. Yes, sir. Q. And what exactly do you recall him telling you about the equipment on that day? A. Basically mention every single thing, all the equipment is in there, everything is working fine. Even take me back to the office and he said, that's the back office computer. That's where you change your prices and everything on the cash register. MR. CHAUDHRY: And that cost is 40,000 he said. He said that main computer in the back, he said everything works, and the cost was $40,000 that he mentioned -- MR. WARRAICH: Cash register because you cannot -- I call, they broke down, I call Penn Central. They are 64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the local company repair all the systems through NCR. They're the dealer around here for NCR Cash Register. And I call them, they said, well, this cash register has been out of market long time. You can't find even parts. They're going to send someone in here to repair it. If it's possible, if I get lucky, they can repair it. Manufacture doesn't make any parts anymore. (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLI~uMS: Q. Mr. Chaudhry, let me follow-up on what you just said. The number 40,000 that you mentioned, what was that for? A. Plus that main computer. They have I believe four register or five run and one main computer in the back. And then they can post and change the prices on there. This whole package he said $40,000 now in market. Q. Let me make sure I understood you correctly. There were four or five cash registers out front? Ao $40,0007 Yeah. Plus a main computer in the back office? That's true. Amd altogether that was worth, in his opinion, MR. WARRAICH: I'm sorry. Not in his opinion. 65 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 That's what we spent on those things. MR. CHAUDHRY: That time he said this was worth 40,000. MR. WARRAICH: But I spent that much money to replace that equipment. MR. CHAUDHRY: That time he said this was worth 40,000, all of this. When we -- we was going to buy that and before that to which was mid March. He said this one is -- MR. WILLIAMS: He said it would cost you $40,000 to replace that? MR. C~LAUDHRY: No. Right now he said the system is working. The system is working and that's the cost for $40,000. The value is right now the market. If you go to the market to buy the system like this, it will cost you $40,000. MR. WILLIAMS: When you say buy a system like that, you mean buy a used system or a new system? MR. CFuAUDHRY: That time I consider it used because that was used. (Whereupon, Mr. Warraich testified as follows.) BY MR. WILLIAMS: Q. A_nd, Mr. Warraich, you were saying that you spent what? A. I spent about like $36-, $37,000 because those 66 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 cash register does not work at all. prices at all. Central. Q. A. Q. A. YOU cannot change the So I bought the system from the Penn So you bought a new system? I bought a new system. And it cost you about 36,000? Between 30 -- I didn't have an exact figure, I can get exactly how much it cost. Q. What's your best estimate? A. Between 28 to 30 including their labors and the training modems and everything, what they train us. Q. A_nd where did you buy that? A. Penn Central. Q. Where are they located? A. Mechanicsburg. Q. Is that a computer store? What kind of store is it? Ao dealer. Q. A. Q. A. Q. A. They're like the super market, they're NCR Did you buy NCR equipment? Correct. New equipment? Brand new. And now it does everything you want? Everything. 67 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Oo What did you do with the old equipment? They pick it up. Do you remember the name of a person you may have dealt with there, a salesman? A. Well, there's Dave Crossly and John Crossly. Dave Crossly is the father, who owns the company, and John Crossly is the son. They both came over to look at it. A_nd they work on the numbers, and then they sold the new equipment to me. ~tnd they do give me 1,000 for the old equipment. I'm not sure we finished the deli case. It was leaking freon there? A. Q. A. Q. A. Q. A. Correct. And it's still leaking? Still leaking. Is that the problem with the deli case -- Right. -- or is there more than that? That's what the mechanic said. Because when they fill up the freon every like two month, three month it's somewhere slow leaking. So freon leak. We drop the temperature, get like hot, pull the meat out of it. So I closed that unit down permanently, and I bought a small unit, compared to that one very small, and put that one right next to it. 68 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. THOMPSON: Off the record for a second. (Exhibit No. 8 was marked.) (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLIAMS: Q. I'm going to show you what we've marked as Exhibit Number 8, Mr. Chaudhry. Do you recognize that as the answer and new matter and counterclaim that you filed in this case? A. Yeah. Q. If you would turn to the second from the last page. That's your signature on there? A. Yeah, it's on there. Q. I'm going to ask you some questions concerning this. And, Mr. Warraich, if you want to jump in at any time, you can, because I think this is exactly the same as you filed also. Referring to number four you've denied that the inventory is worth $111,000. Do you see that? A. Yeah. MR. WARRAICH: Correct. BY MR. WILLIAMS: Q. What is it worth? A. I would say about 65 to 70. Q. A_nd is that your opinion or do you have somebody that said that? 69 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. No, that's my opinion. Q. There's also a reference to 27 percent in the last sentence of paragraph four. Do you see that? A. Yeah. I mean, that's about 65 to 70 net. That's 27 percent, that's 27 percent of the mark-up on that grocery. Q. So if it cost a dollar to buy, you sell it for $1.277 A. That's correct. Q. And therefore you would reduce it by 27 percent to find out what you would pay for it? A. That's correct. Q. Over the -- A. Over the -- Q. The cost you would sell it for, less 27 percent is what you paid for it? A. That's correct. Q. And that's where you came up with $111,0007 A. That's right. Q. I'm going to ask you about paragraph 10. It states there that Mr. Swati fraudulently misrepresented to you that the inventory was not outdated. Do you see that? inventory? That's right. When did you ask him about the dating of the 70 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. When we took -- when was going to take over the store, that day and before we come to look at the store in mid March that we ask him the equipment and inventory, he said, my inventory there's no outdated inventory. Q. Are you saying that in mid March he told you there was no outdated inventory? A. Yeah. Q. Did you ask him that or did he volunteer that? A. No. Because some employee said that probably is outdated inventory too. Q. They told you that in mid March? A. Yeah. And when we came, we ask him about that inventory and even we ask that broker. I ask broker, said talk with Mr. Swati that the people I heard that, he said okay, and for that equipment. And so you asked Mr. Swati that -- Yeah, broker mentioned to him. Oo A. there. Q. A. Q. You were there? Yeah. Was Mr. Warraich there? MR. WARRAICH: No, I wasn't there. walking around smoking a cigarette. BY MR. WILLIAMS: Q. Yeah, I was I was And the broker asked Mr. Swati that some of the 71 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 employees said the inventory was outdated? A. That's right. Q. And he responded what? A. He said, no, I just put all the inventory now. Q. Do you recall a discussion with Mr. Swati about keeping the inventory as low as possible when you purchased it so you would pay less? A. That's correct. Q. When did that discussion take place? A. That's when we give our $5,000 down payment about mid March. We said keep it low inventory. Q. Who said? A. I said. Q. And why did you say that? A. I don't want to pay much more money on that part if I get the credit by the company, it will something one week or two weeks. Q. To restock the store? A. Yeah, yeah. MR. WA~RRAICH: To deliver grocery to you, later on they're going to take the money out from your account. So basically you're using their money to run the store. MR. WILLIAMS: I want to go down to paragraph 13 then. In paragraph 13 you aver that Mr. Swati represented to you that the equipment, the four items there that are 72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 listed, were in working condition. And I just want to make sure we've covered them all. First, the meat room cooler, we covered that, did we? that? cooler? MR. WARRAICH: MR. CHAUDHRY: MR. WILLIAMS: Correct. Yeah. The daily freezer, did we cover MR. WARRAICH: We did discuss that. MR. WILLIAMS: Is that what you call the meat MR. WARRAICH: See, there's the lunch meat where you get like the cheese, macaroni cheese, the slice of the meat that's different. These are everything done so you make sandwiches and eat it. I'm talking about. MR. WILLIAMS: covered. MR. WA~RRAICH: MR. WILLIAMS: did we cover that? MR. CHAUDHRY: that -- corner. MR. WAiRB3tICH: It was working. Probably you know exactly what And the cash register system we Correct. And the additional freezer cases, NO. Because he prepare for That's the freezer it was in the And when I was trying to put the 73 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 merchandise in there, the employee say that doesn't work. The temperature is not right. So I call, there's a company out of Mechanicsburg, they came up there. There was no freon in there at all. And the freon, they say we can put the freon what is out of market. That costs like 40 to 55 bucks a pound. If you converted it to the latest model, it costs you less money including the labor in putting the freon in there. If we just put the old freon in there, it costs you lot more to converting to the new one. So they convert to the new one. That's out of market. So basically according to the health, the state or whatever this is, they cannot put that freon in any more. (Whereupon, Mr. Warraich testified as follows.) BY MR. WILLIAMS: Q. So there were three freezer cases that did not have freon in. Is that what you're saying? A. The three of them did not have it, but they don't need a lot. But one does take I think 40 or 60 pounds. Q. So one out of the three had to be replace? A. They repair it just like the other one. The other one it that was four pound, five pound, so that was 74 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 worth to put the same kind instead of comparing putting 40 pounds in there. Q. So you had to have one of them repaired? A. Ail three of them get repaired. They did find the leak, where the leak was, then put the freon, and they're working fine. Then one of them they find the leak and they put the old freon in there, that costs a lot more money. So they said the future you got a leak again, it's going to cost you a lot more money, so you can change it to the cheap freon. Q. So all three had to be repaired? A. Ail three have to be repaired. Q. A_nd was one of them replaced? A. No, one of them -- see, the case is still there. Okay. The pipe lines and freon need to be replaced. Q. I see. A. Call those people that can work -- MR. CHAUDHRY: Excuse me. They convert it to the new system, which then new freon can be used. MR. WILLIAMS: MR. CHAUDHRY: MR. WILLIAMS: have leaks repaired? MR. CPiAUDHRY: MR. WARRAICH: One of them had to be converted? Yeah, that's what he meant. And the other two just had to Yeah. Correct, and they put I think 75 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it's called R-12, or I don't know which one is the old one. There's like two or three different kind of freons. BY MR. WILLIAMS: Q. Just go to paragraph 14. I want to make sure I understand the monies that are indicated there. You have $30,000 for the new cash register computer system from NCR with Crossly's. You've testified to that? A. Q. Correct. The 2,900 what you just were explaining a minute ago about the three freezer cases? A. Yes. Q. And then the meat cooler, which a lot of that was done by your father-in-law, was $3,000? A. I did pay him. But I meant pay him what normally people charge. I didn't pay him all the money, complete labor of what people was asking outside to replace it. Q. And then the deli freezer needs monthly repairs at $500 to $600? A. That time it was leaking every month, I had to put freon in there, so I closed down after like two months I close that one down permanently. That's the 18 foot deli case, the one we're talking about. Q. Going back to 17, you have the inventory in the 76 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 back room coolers $15,000. Are you saying you lost that inventory? A. No. There was no inventory back in there. The inventory, according to when I got this copy when I was talking through Mr. Fisherman, and he provide this copy, and I looked at it. There's the back order inventory I cannot read very well. And this I don't know how much exactly is, about $15,000. And I close the cooler. There's a freezer back there. I had three people that was with him. And we throw the stuff outside. Even when Hughes had it '96-'94, and here we were being charged for $15,000 back cooler inventory. I don't know what back cooler is. If that's the back cooler, that's all the way back there, that's the one there wasn't anything for the inventory in there. You said that was empty since Hughes had it in '967 A. No, it wasn't empty. The stuff was in there whatever the merchandise was in there, that was expired. And they had the labels since Mr. Hughes had it. And I'll get the employees together, turn that freezer off and clean it up to use that as storage. And I do have witness for those helping me to clean that cooler. So everything pretty much was Hughes. And whatever it was 77 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in there, it was already outdated. Q. The first time you went to the store, did you go into the meat room? MR. CHAUDHRY: MR. WARPJ~ICH: Yeah. Very first day we went walk in there, yeah, we did look at everything. MR. WILLIi~MS: You probably tried to look at everything? MR. WA_RRAICH: Just open the door, see what's in there. Open the door, see what's in there. MR. WILLIAMS: Were they at that time cutting and preparing meat? MR. CHAUDHRY: No. MR. WARRAICH: No. BY MR. WILLIAMS: Q. You mentioned here in paragraph 18 that the State Health Inspector shut down the meat room in December 2000. Do you see that? A. Yes. Q. Where did you get that information from? A. That's the lady she work for him, Diane Mear, and she give me the whole summary so I can find that one. And her previously manager, the one he fired her, ask her to cut the meat from the other location to bring it up here. A_nd she deny. She said, well, I'm not going to cut 78 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the meat. That's against the law. You cannot cut the meat from one location, take it to the other location. And he fired her because she wasn't cutting the meat. Q. You're alleging that the meat room was shut down from December of 2000 until after you bought the store? A. Correct. Q. In paragraph 19 -- A. Actually her name is Nancy, the manager he fired her, her name is Nancy. Q. Nancy? A. Yeah. I don't know what's her last name. Q. Did you talk to Nancy? A. I spent quite a bit hours with her talking to her going through all the things once we had it in there. I went to her home and talked to her, me and my wife actually, she was with me, my wife was with me too. Q. In paragraph 19 you refer to lost revenue of 4,500 and $5,000 for the upgrades to the meat room. Where did you get that number from? A. Well, including the material and whatever, there's the cutting boards in there, there's a plastic cutting board about that thick. I think they cost like 275 a piece, so I have to buy four of them. Q. Well, Mr. Warraich, that comes under the heading of repairs to the cooler, correct? 79 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. I'm sorry. I didn't get what do you mean by that? Q. revenue. A. This allegation number 19 refers to lost Lost revenue, you mean the money we didn't make, Qo A. since my meat case is up and running. that much. that's what you mean? That's 45 to 5,000 a month, that's not a day. If we had the meat case up and running, we would make that much money. Is that your opinion or do you have somebody -- No, that's my opinion, because I've worked there So I'm making money, MR. WILLIAMS: Why don't we take a short break. (Whereupon, a brief recess was taken from 5:32 to 5:40.) (Whereupon, Mr. Chaudhry testified as follows.) BY MR. WILLIAMS: Q. Just one more question, and it pertains to the agreement, Exhibit Number 1 there. If you would turn to the last page there's someone who signed as a witness. Do you see that on the left side? A. Yeah. Q. Who is that, do you know? A. No, we don't know. I think the place what he took us over there, that guy's. I don't know. 8O 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. that's my attorney. We just assume it. Q. You what? A. I assume it that probably he's the attorney. took in the office. I don't know. Q. Why would you assume that? A. That's attorney's office. He took in front of that. Q. A. Q. agreement? A. Q. A. Q. A. Are you sure he's an attorney where he took you? Well, we're not sure. According to him, he said Did it have law offices? Yeah, that was law offices, yeah. ~und that was the first time you saw the He Yeah. A_nd you read it? Yeah, I read it. Did you ask for any changes to be made in it? I ask one changes that any prior debit, we are not liable for that. Q. Where's that? A. Let me see. Q. Let me ask you this, was this something that was taken out of the agreement? A. No. Let me see, I don't know where I wrote it. I said in case he owes money somebody, any vendor, 81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 something like that, we are not liable for that. pay. Q. He has to Was there something taken out of the agreement? MR. WARRAICH: No, it wasn't taken out. It was just added in there. Starting from April 12th -- MR. WILLIAMS: Where was it added in? MR. C~LAUDHRY: That's where I'm looking. MR. WARRAICH: Here the column number three. MR. WILLIAMS: The last couple lines, I mean the last sentence? MR. WARRAICH: Yep. Afzal, did you read it? three? MR. CHAUDHRY: MR. W~RRAICH: MR. CHAUDHRY: MR. WILLIAMS: MR. WA_RRAICH: MR. CHAUDHRY: I'm reading. Number three right here. Right, that's it number three. What was changed with number It wasn't any change. It was not there. The borrower shall be fully and solely responsible for all debts incurred after April 13. And Seller shall be fully and solely responsible for all the debt incurred before April 12. That one. It was not -- they add it. BY MR. WILLIAMS: Q. It was not in the original? 82 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 his word processor? A. Q. there? A. Q. A. A. Yeah. When first time when they give us this agreement, it was not. So they add it. And when you read it, you wanted it to be added? Yeah. And they did add it? Yeah. And the attorney, whoever it was, had this on He had to reprint it? Yeah. With the extra language that you wanted in Yeah, I said add this one here. Did you ask him to make any other changes? NO. MR. WARRAICH: Well, we just had only one thing in our heads. So in case if he owes something to anybody, so they won't come to us. That's the only one thing we know. Being working for someone else, that's the only thing we know that should be in there. Other than that, I don't know anything about it. MR. WILLIAMS: That's all the questions I have. Did you have anything? MR. THOMPSON: I have no questions. (Whereupon, the deposition was concluded at 5:44 p.m.) 83 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMONWEALTH OF PENNSYLVANIA ) ) SS. COUNTY OF CUMBERLAND ) I, JILL L. ROTH, a Court Reporter-Notary Public authorized to administer oaths and take depositions in the trial of causes, and having an office in Carlisle, Pennsylvania, do hereby certify that the foregoing is the testimony of AFZAL H. CHAUDHRY and SAJID M. WJkRRAICH. I further certify that before the taking of said deposition the witnesses were duly sworn; that the questions and answers were taken down stenotype by the said Reporter-Notary, approved and agreed to, and afterwards reduced to computer printout under the direction of said Reporter. I further certify that the proceedings and evidence are contained fully and accurately in the notes taken by me on the within deposition, and that this copy is a correct transcript of the same. In testimony whereof, I have hereunto inscribed my hand this 26th day of April, 2002. ~ No ~ub 1 ic :"'/~ ;~'~L~!~"i~ t' 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page Line File # 02073E ERRATA SHEET to the deposition of AFZAL H. CHAUDHRY April 8, 2002 Correction/Reason AF~ H. CHAUDHRY 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page Line File # 02073E ERRATA SHEET to the deposition of SAJID M. WARRAICH April 8, 2002 Correction/Reason SAJID M. WARRAICH AGREEMENT OF SALE SELLER: MOHAMMED SWATI BUYER: AFZAL H. CHAUDHRY and SAJID M. WARRAICH LOCATION: KING FOOD MART, Mount Holly Springs, PA ITEMS PURCHASED: Equipment and inventory SALES PRICE: $72,500.00 plus inventory Buyer shall pay to Seller the sum of Seventy-two Thousand Five Hundred Dollars ($72,500.00) in 24 constant monthly payments in the amount of $3,793.00. This represents an annual interest rate of 9. %. The first payment shall be due and payable on the 15th day of April, 2001. Each subsequent payment shall be due and payable on the 15th day of each successive month. The value of the inventory shall be paid in full at the time of the valuation. Buyer shall pay a broker's fee in the amount of $5,000.00 at the time of the payment of the inventory. WITNESSETH: AGREEMENT, made this 11th day of April, 2001, by and between the above Seller and Buyer, the terms of which are as follows: 1. Seller shall sell and Buyer shall purchase all of the Seller's right, title and interest in the above described property in exchange for the above sale price. 2. Seller hereby grants to Buyer the exclusive right to use the current trade name of the business and guarantee to Buyer that Seller currently has the right to use of said trade name. 3. Seller hereby warrants and guarantees that he has good and marketable title to all of the Assets free and clear of all liens and encumbrances. Seller shall be fully and solely responsible for all debts incurred by the business through April 12, 2001. Buyer shall be fully and solely responsible for all debts incurred after on and after April 13, 2001. 4. All information relating to Seller, the assets and the business has been provided to the Buyer. 5. Seller hereby agrees to assign all leases to Buyer and guarantees that he has the right to do so. 6. All warranties and guarantees contained in this Agreement shall remain in full force and effect and shall survive the closing. 7. Upon the execution of this Agreement by all parties, Seller agrees that he will not compete with the Buyer in any manner in any phase of the retail grocery sale business for a period of three years within a five (05) mile radius of the business. 8. Until the execution of this Agreement by all parties, the Business shall continue to be conducted in a manner similar to its current manner. 9. This Agreement sets forth the entire understanding of the Seller and Buyer with respect to the subject matter of this Agreement and supersedes and replaces all prior agreements, arrangements, representations, letters of intent and memoranda of understanding between Seller and Buyer. 10. Title and full ownership shall revert to Seller if Buyer fails to pay any monthly payment when due or if Buyer's check is returned to Seller. Seller shall retain all funds paid as liquidated damages. 11. Buyer shall pay Seller in sequential checks beginning with check number 1001 and ending with check number 1024. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written. WITNESS I~I~)HAMMED SWATI WITNESS WITNESS AF~A~. CHAUDHRY S/i~5ID M. WARR~CH · RGIS SPECIALISTS COVER SiI[ET OATE: HOLLY ,.:,k"~ ,4,t.tS TS iN¥OIC~ - ,.,. J.~82 ¢~LF..ASE REMIT TO: .c,..~., D¢~X. i7631 ','~ETROI'r, MICHIGAN 48277 7t 7/7~1-965.t I~MS -- NET ,c, OAYS -t SPECI.~LIS PLEASE RENtI'F 'TO: F:O. 5OX 77631 OETROIT, MICHIGAN 452?7 iNVOICE TERMS ,-- NET' 10 DAYS SERVICE CH'ARCE, WI~ERE PERMITyEO, W~L ~ BE 'h5% PgR MONT~ SERvlCir. CHARGg ON ~A~r D~i' BA[~S ($2.00 MINIMUM} !~% ANNUAL RATE OR AT i'NE HICHEST ~ATE PERMI~ ~y LAW D~',TR~(' ~ MT HOLt.. FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE ivrr HOLLY SPRINGS, PA 17065 PAY TO THE Omtral PA DATE 1005 60'-1273/313 171 DOLLARS PAY TO THE ORDER OF { ).PNCBAN< FOR ""OD MT HOLLY FOODMART GENERAL ACCOUNT 12 N BALTIMORE AVE MT HOLLY SPRINGS, PA 17065 1006 DATE /¢) - [' O I ¢~1273/313171 I$ DOLLARS I~1--~""~.~. [ J 500 5 2r, q 22?.~ EXHIBIT Lease: Iselin & GaronzikJA.M. Siddqui. et al. Page~ LEASE AGREEMENT THIS LEASE AGREEMENT is made and entered into by and between ANN G. ISELIN of 10,802 North Sand Canyon Place, Tucson, AZ 85737; and HARRY L. GARONZIK, of 8035 South 116th Street, Seattle, WA 98178; with mailing address in care of Ann G. Isclin, 10,802 North Sand Canyon Place, Tucson, AZ 85737; hereinafter referred to collectively as "Lessor", AND " ~" ~ ~' . SWATI, of 1134 PA County ~ide Drive, Harrisburg, .:- ~ ,~'-'. :~- ~~ereinafter re ' ' ; '-'~'; . ~ ', and is as follows: WHEREAS, Lessee is in the business of operating grocery supermarkets with related activities; and WHEREAS, Lessee desires to lease from Lessor a certain tract of real property as more fully described below, with the improvements thereon erected; and WHEREAS, Lessor desires to lease the said tract of real property to Lessee under the terms, conditions and provisions as set out herein; NOW THEREFORE, for and in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both parties, it is agreed as follows: ARTICLE I DEMISE OF LEASED PREMISES 1.01. Leased Premises. Lessor for and in consideration of the rents, covenants and conditions herein contained to be kept, performed and observed by Lessee, does lease and demise to Lessee, and Lessee does rent and accept from Lessor, the real and personal property, referred to herein as "Leased Premises", now known as Hughes Supermarket and intended to become known as King's Market, located on the northern and western portions of a larger tract of land situate in the Borough of Mount Holly Springs, Cumberland County, Pennsylvania, which larger tract of land is bounded and described as follows: On the South by Pine Street; on the West by Baltimore Avenue; on the North by Harman Alley; and on the East by Mountain Creek, on which larger tract of land there is erected the store building occupied by Hughes Supermarket which is to become known as King's Market and adjacent parking area, and in addition adjoining the same on the south and east are the premises known as Dolly's Washhouse and Car Wash. The Hughes Supermarket which is to become known as King's Market has the mailing address of 2 North Baltimore Avenue, Mt. Holly Springs. The portion of the premises known as Dolly's Washhouse and Car Wash is NOT included in the leased premises. 1.02. Lessor's Warranty of Title. Lessor hereby represents and warrants that Lessor is the owner in fee simple absolute of the Leased Premises subject to covenants, conditions, restrictions, easements and other matters of record or on the ground. ~.~£,; Ise~ii_r~_&__C_4arqnzik_.~A.M~Siddq~_~ et al. __ ~t.03. Lessor's Warranty of Quiet Enjoyment. Lessor covemmts and agrees that Lessee ~':,a paying t~te rent and other charges herein provided k>r and observing and keeping the covenants, c'.::?dific.~ns crud terms of this Lease on Lessee's part to be kept or performed, shall law~lly and quietly hold, occupy and enjoy the Leased Premises during ae te~ of t~s Le~e without ~ndr~ce , '.' rt:olestafion of Lessor or m~y person claiming under Lessor. .!.04. Lessor's .Right to Mortgage. Lessor does not have a current mortgage, or other ;i,::*~ [~gainst the Leased Presses. Lessor resei~es the right to encumber the properW fu~her in any a, rnounrs as Lessor in its sole discretion shall decide. Should Lessor default in making any p:~yment on any such mortgage or encumbrance Lessee shall have the right to m~e such payment and de(it~ct th.e ;m~ount paid fi'om rent due or to become due under tlfis Lease. ' , ........ . ..... ~: doff five 3 easbe 1 c:?:tsent of'the L es~0?; Sueh tenah'eY shall be deemed ~i.ekarCig~ ~fthd Ceftin tt?axte~a this i~d''~:: e ' :. 2103'; LeaSe 5~ear. The term Lease Year shall mean any twelve month period ~gmmng on "~qe Be~ji~fing Date or an an~versai~ of ttie Begirm~ng Date~ 2.04. OPtion to Extend Lease. [f this Lease is stU1 in th!! force and effect on September 30,.2005, ~n :such event the Lessee shall have the right and option to extend this Lease for five (5) .::,ne-year periods beginning October 1, 2005, ~d therea~er on October 1 of each year through 5epten'~ber 30, 2010, on the s~e terms and conditions :~ heroin set fogh except that the rate of rent f,~: each additional year beginning October 1, 2005 shall be at the rate of $4,200.00 per month ~ ~ ".:'ceased by .,e~'~-- percent of increase in the Consmner Price ~dex compiled by the U~ted States g~'>vernment. 5or all urban consu~ners (CPI-'U) all items, by the percentage of increase in said Index -'-},~' ~ctoaer t, 2C~0 to October 1, 2005, and from October 1, 2~ toOctober 1 of eaCh ad~5onM .,,-,ie:~se..-,Ye:ar, ~anti[.,. the fi. fth amd. final one-ye~ .extensi°n. begi~ing October 1, 20~ t~ough. September ::,v, ~:,)Id, .ou.t w suct~ Index ts n0 longer maintained by the Umted Stales government then the rate of ~ncreq~;(.sl'm~t be determined to be as nearly equal to the amount ofin-k~e~ WN. Ch that Index ~6~1d nave ~.im~.camd had it sail been m~ra~ned. : .: ~ ..... . .: " 3.0i2: Lease. remai? ia ford.e, Lessee agrees to pay to .I]e~0~'.::js.mtit fo-~ thi~;Leas~d.~pmmf~e~:~ th~ ~dm 'd~:Thke6 'Fh0u&and Seven Hundred Fiay and nc:,/~O0 --- (,.~,750.00) --- Dollars pet'month, in advance, for the first lease year beginning October [. 20i30; and at the rate.of $3,900.00 per month for the secm~d lease year beginning October 1, ....': o',c:.., and at the rate of $4,000.00 per month for the tkird lease year beg~ning OctOber 1, 2002 and {or th,,. k:;m'r5 lease year at the rate of $4, ! 00.00 per month beginning October !, 2003, and for,the tSf:h t¢~:tse: yea[ ar the rare of $4,200.00 per ~zonth beginning Oet%e~ i, 200~, until and i~,eiOdin, Le e.'~er r zi ./A.M. ' ' e . ending September 30, 2005. 3.02. Lessor to Pay Taxes. Lessor agrees to pay all real property taxes, special taxes, or assessments, including street improvement liens or assessments, if any, levied or assessed upon or against the Leased Premises and any improvements or fixtures erected or situate thereon, during the Lease Term. Lessee agrees to pay all property taxes on its personal p.r,o_perty located on the Leased Premises. Until such time as the Leased Premises occupied by Dolly s Washhouse and Car Wash are separately assessed from the adjoining grocery store and adjacent parking area, Lessee shall pay eighty (80%) percent of all real estate taxes applicable to the total property as the tOtal property now exists (should any improvements be made which cause an increase in the assessment, the taxes attributable to such increased assessment shall be paid by the tenant who possesses such improvements). At such time as the property which constitutes the demised or leased premises is separately assessed, Lessee shall thereafter pay ali of the taxes attributable to the property constituting the leased premises herein and the remainder of the taxes attributable to the other property now occupied by PAC Industries, Inc. shall be paid by Lessor. Lessee shall pay its share of the taxes as set forth herein to the Lessor no later than five (5) days prior to the expiration of the discount period for paying same and Lessor shall thereafter immediately pay to the Tax Collector all taxes due on the leased premises and any other property assessed against Lessor of which the Leased Premises are a part. 3.03. Installment Payment. In the event any special tax or assessment is levied or assessed on the Leased Premises which becomes due and payable during, and the delinquency date for which falls within, the Lease Term, or any extension, which tax or assessment may be legally paid in installments, Lessor shall have the option to pay such tax or assessment in installments. 3.04. Excluded Taxes. Lessee shall not be required to pay any franchise, estate, inheritance, succession, capital levy or transfer tax of Lessor, or any income, excess profits, or revenue tax, or any other tax, assessment, charge, or levy upon the rent payable by Lessee under this Lease, and all such taxes, assessments, charges and levies shall be payable by Lessor. Lessor shall not, without consent of Lessee, do any act which will cause the taxes and assessments on the Leased Premises to be increased. 3.05. Contest. Lessee shall have the right to contest the assessment, account or validity of any tax which is Lessee's obligation under the temts of this Lease by appropriate legal proceedings. Lessor shall, upon request, join in any such proceedings if Lessee detefmines that it shall be necessary or convenient for Lessor to do so in order for Lessee to prosecute such proceedings properly. 3.06. Utility Charges. Lessee shall pay or cause to be paid all charges for water, heat, gas, electricity, sewers, and any and all other utilities used upon the Leased Premises throughout the tetxn of this Lease, including any connection fees. ARTICLE IV USE OF PREMISES 4.01. Permitted Use. Lessee shall have the right to use the Leased Premises for the continuation of the business of a supermarket and related activities for which it is currently being used, and for any and all natural extensions or renovations of those uses. All uses described in this Section shall be permitted, but none shall be required, except as set forth in Section 4.04 of this Agreement. ese: Is ' 'k M. id let . 4.02. Signs. Lessee shah have the fight to erect and maintain upon the improvements and on the Leased Premises such signs as it deems appropriate to the conduct of its business. Lessee shall have no right to erect or maintain any sign used for the purpose of advertising any business, activity, or position other than the business or businesses of Lessee carried on on the Leased Premises. Each sign erected shall comply with any requirements imposed by the Borough of Mount Holly Springs or other governmental authority. 4.03. Waste and Nuisance. Lessee shall not commit, or suffer to be committed, any waste on the Leased Promises or any improvements erected or situate thereon, nor shall it maintain, commit, or permit the maintenance or commission of any nuisance on the Leased Premises or use the Leased Premises or improvements for any unlawful purpose. 4.04. Illegal Activity. Lessee shall not engage in, permit, nor suffer anyone else to permit, any illegal or criminal activity or status to be carried on or exist at the premises. Should Lessee not cease any such illegal or criminal activity, or correct any such illegal or criminal status, then Lessee shall be in default and Lessor shall be entitled to the remedies set forth at Section 11.01 of this Agreement upon giving the thirty (30) day notice provided for therein. 4.05. Arbitration. Any dispute between Lessor and Lessee as to what constitutes a permitted or prohibited use, or waste or nuisance, all as provided in this Article IV of this Agreement, shall be submitted to arbitration as hereinafter provided for. ARTICLE V LESSEE IMPROVEMI~,NTS AND PROPERTY 5.01. Ownership of Lessee Improvements. All fixtures, and any replacements of existing personal property, installed in or placed upon the Leased Premises by Lessee, shall be and remain the property of Lessee. ARTICLE VI RIGHT OF FIRST REFUSAL AND TRANSFER 6.01 Transfer. In the event of any proposed transfer of any interest in the Leased Premises by Lessor after April 30, 2001 (a fight of first refusal is presently held by PAC Industries, Inc., which right expires on May 1, 2001), Lessee shall have the fight of fu'st refusal to purchase on the same terms and conditions as offered by or to the proposed transferee, Provided However, that this Right of First Refusal shall not apply to any transfer to a person who is related by blood or marriage to the Lessor. The right of first refusal must be exercised, in writing, within ten (10) business days after receipt of written notices of the proposed transfer (to include all terms and conditions thereof and the identity of the proposed transferee), with settlement to take place within ninety (90) days thereafter. Should any of the temts or conditions of any proposed transfer involve circumstances other than the amount and timing of monetary payments, then Lessee may provide the reasonable equivalent thereof in cash. 6.02. Transfer. In the event of any proposed or completed transfer of any interest in the Leased Premises by Lessor, Lessee agrees to be bound by the terms of this Lease to the new owner. Lease: Iselin & Garonzik./A.M. Siddqui. et al. P~e~ ARTICLE VH REPAIRS AND RESTORATION 7.01. Lessee's Duty to Repair. Lessee, at Lessee's own cost and expense at all times during the tem~ of this Lease, agrees to keep and maintain, or cause to be kept and maintained, all buildings and improvements erected upon the Leased Premises in a good state of appearance and repair, reasonable wear and tear excepted. 7.02. Repairs to Sidewalk and Parking Area. Lessee, at Lessee's own cost and expense at all times during the term of this Lease shall pay eighty (80%) per cent of the cost for repair or improvement of the sidewalk along Pine Street extending from North Baltimore Avenue eastward and shall pay eighty (80%) per cent of the cost of repairing or improving the portion of the parking area which is shared with the operator of Dolly's Washhouse and Car Wash and shall · pay 100% of the cost of repairing or improving the portion of the parking area which is appurtenant to the former Hughes Supermarket which is now known as King's Market building which is erected on the leased premises and used exclusively by Lessee. Lessee shall in addition pay 100% of the cost of repairing or improving the sidewalk along North Baltimore Avenue between Pine Street and Hat'n~n Alley. 7.03. Sixty Percent Damage - Termination Option. If, by fire, flood, explosion, public ~e~ne~Y..,.n~o~4~cgil_c_o__rn~n~ o~,.on: or act o.f .,God th..e pre .ses during.the te,m shall be damaged in excess ,.,, ~,,,,ty [uu-/oj percent, tins Lease, at me opnon ol Lessee, to be exercised by notice to Lessor in writing, shall cease and terminate. The te~m "damaged in excess of sixty (60%) percent" shall be construed to mean such damage to the buildings or improvements occupied by Lessee (excluding damage caused solely by water used in extinguishing fire), as will require an expenditure in excess of sixty (60%) percent of the market value (prior to the damage) of the buildings or improvements, in order to make repairs. 7.04 Removal of Ice, Snow, and Debris. Lessee, at Lessee's own cost and expense at all times during the term of this Lease shall keep the sidewalk along the east side of North Baltimore Avenue extending from Pine Street northwardly to Harman Alley, free of ice, snow and debris and shall likewise keep the paved areas which are a part of the Leased Premises free of ice, snow and debris. 7.05. Damage Less than Sixty Percent. Repairs. If, by fire, flood, explosion, public enemy, riot, civil commotion, or act of God the premises during the term, shall be damaged to an .extent less than sixty (60) pement (or in excess of sixty (60) percent and Lessee shall not exemise ~ts option to terminate this Lease) Lessee shall repair (with Lessee's funds or any insurance funds) the premises with due diligence, and this Lease shall continue in full force and effect. 7.06. Inspection by Lessor. Lessee shall permit Lessor and its agents to enter into and upon the Leased Premises and any improvements erected thereon at all reasonable times for the purpose of inspecting the same or for the purpose of maintaining or making repairs to the improvements which Lessor elects to do pursuant to this Article. 7.07. Delivery of Property. Lessee shall throughout the Lease Term maintain the Leased Premises and all improvements erected or situate thereon as provided in Section 7.01 of this Agreement and shall, at the termination of this Lease, deliver up the premises in a clean and sanitary Lease: Iselin & Garonzik./A.M. Sidrtn.i. et al. condition in substantially the same condition that existed on the Beginning Date, reasonable wear and tear, damage by the elements, acts of God, war and any act of war, excepted, Provided, However, tha. t any insurance proceeds for any such casualty not used to repair or replace the Leased Premises or improvements shall be paid over to the Lessor and Lessee shall be responsible to Lessor for any deficiencies in insurance or lack of coverage or deductible. 7.08. Lessor's Right to Repair. In the event Lessee should neglect to reasonably maintain the Leased Premises and all improvements erected or situate thereon, Lessor shall have the right, but not the obligation, to cause repairs or corrections to be made, and any reasonable costs therefore shall be payable by Lessee to Lessor as additional rental on the next monthly rental payment due after notice from Lessor to Lessee of the cost of such repairs or corrections, Provided However, that prior to making or causing to be made any such repair, maintenance, or corrections, Lessor shall give Lessee thirty (30) days written notice, within which time Lessee shall have the opportunity to perform such repairs, maintenance, or corrections, or object to the necessity or · desirability of such repair, maintenance, or corrections, and if Lessor and Lessee shall be unable to agree on the extent of repairs, maintenance, or corrections to be made, if any, within thirty (30) days following notice of such objection, then the dispute shall be submitted to arbitration as provided in Section 7.09 of this Agreement. 7.09. Arbitration. Any dispute between Lessor and Lessee as to what constitutes sufficient repair and maintenance shall be submitted to arbitration as hereinafter provided for. ARTICLE VIH MECHANIC'S LIENS 8.01. Prohibition of Liens on Fee or Leasehold Interest. Lessee shall not suffer or permit any mechanic's liens or other liens to be filed against the fee of the Leased Premises nor against Lessee°s leasehold interest in the Leased Premises, by reason of any work, labor, services or materials supplied or claimed to have been supplied to Lessee or anyone holding the Leased Premises or any part thereof through or under Lessee. 8.02. Removal of Liens by Lessee. If any such mechanic's liens or materialman's lien shall be recorded against the Leased Premises, or any improvements thereof, Lessee shall cause the same to be removed or, and in the alternative, if Lessee in good faith desires to contest the same, Lessee shall be privileged to do so but in such case Lessee hereby agrees to insure, defend, indemnify and save Lessor harmless from all liability for damages occasioned thereby and shall, in the event of a judgment of foreclosure upon said mechanic's hen, cause the same to be discharged and removed prior to the execution of such judgment. ARTICLE IX CONDEMNATION 9.01. Interests of Parties on Condemnation. In the event the Leased Premises or any part thereof shall be taken for public purposes by condemnation as a result of any action or proceeding in eminent domain, or shall be transferred in lieu of condemnation to any authority entitled to exercise the power of eminent domain, the interests of Lessor and Lessee in the award or consideration for such transfer and the effect of the taking or transfer upon this Lease shall be as provided by this Article. 9.02. Total Taking - Termination. In the event the entire Leased Premises is taken or Lease: Iselin & GaronzJkJA.M. Siddaui. et ~11. Page '/ so transferred, this Lease and all of the fight, rifle, and interest thereunder shall cease on the date title to such Leased Premises vests in the condemning authority, and the proceeds of such eondemnarion shall be divided as follows: (a) Lessee shall receive any and all awards for the unexpired Lease Term, plus moving expenses, and any other sums to which a Lessee would be properly and lawfully entitled (except any awards or proceeds allocated pursuant to sub-section (b) hereafter). (b) Lessor shall receive all of the said other condemnation proceeds. 9.03. Partial Taking - Termination. In the event of the taking or transfer of only a part of the Leased Premises leaving the remainder of the premises in such location, or in such loom, shape, or reduced size as to be not effectively and practicably usable for the purpose of operation thereon of Lessee's business, this Lease and all right, rifle, and interest thereunder shall cease on the date title to the Land or the portion thereof so taken or transferred vests in the condemning authority. On or before the date of said vesting in the condemning authority, Lessee shall notify Lessor that it considers the partial taking to render the Leased Premises practicably unusable in its opinion and that it will consider the Lease to be temdnated upon said vesting. Should"Lessor disagree with Lessee's detemdnation that the taking renders the Leased Pr~mises practicably unusable, Lessor shall in turn notify Lessee within twenty (20) days of receipt of Lessee's notice and thereafter the matter may be submitted by either of the parties to arbitration as hereinafter provided. The proceeds of such condemnation shall be divided according to the provisions of Section 9.02 of this Lease. 9.04. Partial Taking. Continuation With Rent Abatement. In the event of a taking or transfer of only a part of the Leased Premises, leaving the remainder of the premises in such location and in such form, shape, or size as to be used effectively and practicably in the opinion of the Lessee for the purpose of operation thereon of Lessee's business, this Lease shall terminate and end as to the portion of the premises so taken or transferred as of the date title to such portion vests in the condemning authority, but shall continue in full force and effect as to the portion of the Leased Premises not so taken or transferred. From and after such date, the rental required to be .paid by Lessee to Lessor shall be reduced in the proportion to which the value of the area and ~mprovements so taken or transferred bears to the total value of the area and improvements of the Leased Premises and easement area. The proceeds of such condemnation shall be divided according to the provisions of Section 9.02 of this Lease. 9.05. Voluntary Conveyance. A voluntary conveyance by Lessor to a public utility, agency, or authority under threat of a taking under the power of eminent domain in lieu of formal proceedings shall be deemed a taking within the meaning of this Article IX. 9.06. Arbitration. If any condemnation award does not distinguish between the classes of property and interests as described in Section 9.02 of this Agreement, the parties shall negotiate and agree as to such allocation and, failing such agreement within forty-five (45) days, the matter shall be submitted to arbitration. ARTICLE X ASSIGNMENT AND SUBLEASE 10.01. Consent of Lessor Required. Lessee, or any subsequent Lessee, may assign, Lease: Iselin & Garonzik./A.M. Siddqui, et al. P~e ~ convey or transfer Lessee's interest in this Lease and the leasehold estate created hereby, or a portion of said interest, only with the written consent of Lessor to such assignment, which consent shall not be unreasonably withheld but which consent may be conditioned upon the Lessee guaranteeing payment and compliance with the requirements of this Lease Agreement by the Lessee's transferee. ARTICLE XI DEFAULT AND REMEDIES 11.01. Default by Lessee. If Lessee shall allow any monthly rent to be in arrears for a period of thirty (30) days after written notice from Lessor, or shall remain in default under any other condition of this lease for a period of thirty (30) days after written notice from Lessor, or should any other person than Lessee secure possession of the premises, or any part thereof, by operation of law in any manner whatsoever, Lessor may at its option, without notice, or filrther notice, to Lessee: (a) Terminate this lease and recover from Lessee damages as provided for in this Section i 1.01 of this Agreement, or (b) Continue to hold the Lessee obligated to this Lease and recover by suit or otherwise from the Lessee any and all damages, including all rent due for the remainder of the Term, or (c) Enter upon the Leased Premises and'any improvements erected or situate thereon to cause repairs or corrections to be made, or correct or rectify any breach and any reasonable costs therefore shall be payable by Lessee to Lessor as additional rental on the next monthly rental payment due after notice from Lessor to Lessee of the cost of such actions, or (d) Otherwise satisfy the breach of Lessee's duty or obligation by the payment of money due or the taking of action and any reasonable costs thereof shall be payable by Lessee to Lessor as additional rental on the next monthly rental payment due after notice from Lessor to Lessee of the cost of such actions, or, (e) Reenter and take possession of said premises and remove all persons and property therefrom, without being deemed guilty of any manner of trespass, and relet the premises or any part thereof, for all or any part of the remainder of said term, t° a party satisfactory to Lessor, and at such monthly rental as Lessor may with reasonable diligence be able to secure. Should Lessor be unable to relet after reasonable efforts to do so, or should such monthly rental be less than the rental Lessee was obligated to pay under this lease, plus the expense of reletting, then Lessee shall pay the amount of such deficiency to Lessor, or (f) Avail itself of any other remedy at law or equity. The said rights and remedies of Lessor shall be cumulative and not in the alternative. Lessor shall have the right to effect the remedies set forth in sub-section (c) and (d) of this Section i 1.01 of this Lease upon less than thirty (30) days notice if a shorter period is required so as to prevent irreparable injury to the Leased Premises or the motel and restaurant business conducted thereon. 11.02. Landlord's Lien. Sale of Lessee's Property. It is expressly agreed that in the event of default by Lessee hereunder, Lessor shall have a lien on all goods, chattels, or personal property of any description belonging to Lessee which are placed in, or become a part of, the Lease: Iselin & Garonz~k./A.M, Siddqui, et al, Pac~ 0 Leased Premises, as security for rant due and to become due for the remainder of the current Lease Term, which lien shall not be in lieu of or in any way affect the statutory Lessor's lien given by law, but shall be cumulative thereto; and Lessee hereby grants to Lessor a security interest in all such personal property placed in or on said Leased Promises for such purposes, Provided However, that no security interest or Financing Statement shall be filed nor shall such lien be perfected in any manner, until default by Lessee and thirty (30) days written notice from Lessor to Lessee of Lessor's intent to so file or perfect. This shall not prevent the sale by Lessee of any merchandise or inventory in the ordinary course of business free of such lien to Lessor. In the event Lessor exercises the option provided in sub-sections (a), (b), (e), Or (0 of Section 11.01 of this Agreement, then Lessor may take possession of ail of Lessee's property on the Leased Premises and sell same at public or private sale after giving Lessee reasonable notice of the time and place of any public sale or of the' time after which any private sale is to be made, for cash or on credit, or for such prices and terms as Lessor deems best, with or without having the property present at such sale. The proceeds of such sale shall be applied first to the necessary and proper expense of removing, storing, and selling such property, then to the payment of any rent due or to become due under this Lease, or any damages as calculated under Section 11.01 or 11.02 of this Agreement, with the balance, if any, to be paid to Lessee. The provisions of this Section shall not prevent, nor shall they prohibit, the Lessee or its Operation Manager from disposing of any assets free and clear of any lien provided for in this Section, until such time as the said lien should be perfected. 11.03. Remedies Cumulative. All fights and remedies of Lessor under this Lease shall be cumulative, and none shall exclude any other right or remedy at law. Such fights and remedies may be exercised and enforced concurrently and whenever and as often as occasion therefore arises. 11.04. Mitigation of Damages. In the event of any default, Lessee shall be given credit against any damages, for any rent actually received upon the re-rental of the Leased Premises by the Lessor. ARTICLE XH TERMINATION AND SURRENDER 12.01. No Right to Terminate. Neither Lessor nor Lessee shall have the right to terminate this Lease for any reason during the Lease Term except as specifically provided in this Agreement. 12.02. Automatic Termination. This Lease shall automatically terminate at the end of the Lease Term. 12,03. Surrender of Possession. Unless otherwise mutually agreed in writing by the parties prior to the termination of the Lease, either pursuant to Section 12.02 or any option expressly provided for in Sections of this Agreement, Lessee agrees to redeliver possession of the Leased Premises, and the improvements, fixtures and property thereon which are to become the property of the Lessor pursuant to Section 5.01 of this Agreement, in substantially the same condition that existed on the Beginning Date, reasonable wear and tear, damage by the elements, acts of God, war and any act of war, excepted, all as provided in Section 7.05 of this Agreement. 12.04. Other Acts and Effects of Termination. Upon Termination, if applicable, all financing statements and mortgages executed by Lessor or Lessee shall be satisfied, terminated and released in full by Lessee, then this Agreement shall be of no further force and effect except as to those rights, obligations and remedies as may have arisen prior to termination or which may arise thereafter as a result of acts or events occurring prior to termination. Lease: Iselin & Garonzik./A.M. Sidrtr? ~!, et al. Pa_~e ARTICLE XHI WARRANTIES, INDEMNITY, LIABILITY & INSURANCE 13.01. Indemnity of Lessor. Lessee agrees to insure, defend, indemnify and hold Lessor harmless against any and all claims, demands, damages, costs and expenses, including attorney's fees for the defense thereof, arising from the conduct or management of Lessee's business at the Leased Premises, or from any breach on the part of Lessee of any conditions of this Lease, or condition created by the Lessee, or from any act or negligence of Lessee, its agents, contractors, employees, subtenants, concessionaires, or licensees in or about the Leased Premises, or in connection with any accident, personal injury or damage to personal Property arising from or out of any occurrence in, upon or at the Leased Premises during the Lease Term, unless same shall result on account of any negligence on the part of Lessor. In case of any action or proceeding brought against Lessor by reason of any such claim, Lessee, on notice from Lessor, covenants to defend such action or proceeding by counsel acceptable to Lessor. 13.02. Insurance. Lessee agrees that at all times during the Term of this Lease or any extensions, it shall keep in effect a policy of public liability and property damage insurance issued by a reliable insurance company with reasonable limits of liability and naming the Lessor and Lessee herein as the insureds, insuring them against any and all claims of personal injury or property damage arising from the demised premises or activities thereon, and in addition the Lessee shall keep in effect fire insurance with extended coverage issued by a reliable insurance company in an amount equal to 100% of the insurable value of the Leased Premises, naming the Lessor and Lessee herein as insureds and in addition Lessee shall carry fire legal liability insurance, and improvements and betterments insurance in such amounts as the parties may agree to from time to time, or, failing such agreement, in reasonable amounts determined by arbitration. All said insurance policies shall provide for the payment for any losses to either Lessor or Lessee, as their interest may appear under this Lease. 13.03. Insurance - Proof of Coverage. The original policies may be retained by the insured, but the other party shall have the right to inspect and copy any and ail such policies, and Lessee, on demand, agrees to furnish the Lessor with prOof of payment of the premium or premiums on any policies provided for in this Agreement. 13.04. Other Insurance. Lessee shall not obtain any other insurance on any property or matter which is the subject of this Agreement without also naming Lessor as an additional insured as their interests may appear. 13.05. Insurance - Protection Against Cancellation. Each insurance policy provided for in this Agreement shah expressly provide that the policy shall not be canceled or altered without thirty (30) days' pr/or written notice to the other party. 13.06. Insurance - Failure to Secure. If Lessee at any time during the Term hereof should fail to secure or maintain the foregoing insurance, Lessee shall be in default under the terms of this Agreement, and Lessor shall have the right but not the obligation, to obtain such insurance in Lessee's name or as the agent of the Lessee, and any reasonable costs therefore shall be payable by Lessee to Lessor as additional rental on the next monthly rental payment due after notice from Lessor to Lessee of the cost of such insurance. Lease: Iselin & Garonzik./A.M. Sidd~ui. et al. Paqe 11 13.07. Compliance with Insurance Requirements. Lessee, at its sole cost, shall effect compliance with all requests of any fire insurance carrier of Lessee or Lessor concerning Leased Premises or operations modifications. All insurance proceeds received by any party hereto arising out of damage to the property shall be utilized for the prompt restoration of the property to its preexisting, or better, condition. ARTICLE XIV ARBITRATION 14.01. Agreement to Submit. In the event Lessor and Lessee cannot agree on any point in this Lease that is expressly Subject to arbitration, or should they hereafter stipulate in writing that any dispute between them be submitted to arbitration, such controversy between the parties involving rights and obligations arising under the terms of this agreement is subject to arbitration, except controversies involving less than $2,500.00, Provided However, that either party shall have the right to appeal any arbitration award to Court, de novo. The arbitration shall comply with and be governed by the provisions of this agreement and the Pennsylvania Uniform Arbitration Act, Sections 7301 through 7320 of Title 42 of the Pennsylvania Consolidated Statutes. 14.02. Demand for Arbitration. In the event Lessor and Lessee cannot agree on any point in this Lease that is expressly subject to arbitration, either party may make a demand for arbitration by filing a demand in writing with the other by notice. ' 14.03. Appointment of Arbitrators. The parties may agree on one arbitrator. However, if they cannot so agree, three arbitrators shall be appointed as follows: Within twenty (20) days of a Demand for Arbitration, each party shall name one arbitrator in writing and give notice to the other party of the name and address of the arbitrator. In case of the failure of either party hereto to name an arbitrator the other party shall have the right to apply to the Court of Common Pleas for the County of Cumberland, Pennsylvania, to appoint an arbitrator to represent the defaulting party. The two arbitrators thus appointed (in either manner) shall select and appoint in writing a third arbitrator and give written notice to Lessor and Lessee, or if within twenty (20) days after the appointment of said second arbitrator, the two arbitrators shall fail to appoint a third, then either party hereto shall have the right to make application to the Court of Common Pleas for the County of Cumberland, Pennsylvania, to appoint such third arbitrator. 14.04. Qualifications of Arbitrators. All of the arbitrators appointed must have no financial or personal interest in the result of the arbitration. 14.05. Vacancies and Substitutions. If an appointed arbitrator fails to act or is unable to act, the parties may appoint a successor as follows: whether or not a single arbitrator was chosen initially, the parties may agree on another single arbitrator; or if the Parties can not agree on a single arbitrator, the successor shall be appointed by the party or by the arbitrators who selected the arbitrator who is no longer participating. If the method provided in this Section 14.05 or Section 14.03 of this Agreement fails or cannot be followed, one or more arbitrators may be appointed by a court having jurisd/ction on application of either party. 14.06. Time and Place of Hearing. All arbitration hearings conducted under this agreement shall take place in Cumberland County, Pennsylvania. The arbitrators shall set the time and place of the arbitration hearings, and they shall deliver to each party by personal service or registered mail written notice stating the time, location, and subject matter of the arbitration hearing. Lease: Iselin & GaronzikJA,M. Sidd(~ui. et al. Page 14.07. Powers of Arbitrators. The arbitrators shall have the power to: decide all procedural issues; interpret and detemfine questions of both law and fact; base conclusions on their reading of the Agreement; adjourn or postpone the hearing for good cause to a time not later than the date for making the award unless the parties consent to a later date; and hear and detetafine the controversy on the evidence presented even though a duly notified party fails to appear. All powers of the arbitrators shall be exercised only by a majority of the arbitrators. 14.08. Evidence. The arbitrators may issue subpoenas for the attendance of witnesses and the production of other evidence, permit depositions to be taken of witnesses who cannot be served with a subpoena or who cannot attend the hearing, and administer oaths as provided by law. 14.09. Award. The arbitration award shall be binding if made by a majority of the arbitrators, It shall be in writing and signed by the arbitrators joining in the award. The arbitrators shall deliver a copy of their award to each party by the methods provided for notice by one party to another in this Agreement. The award shall be made within ninety (90) days from the date of the appointment of the last arbitrator unless the parties consent in writing to extend this period before or after it expires. The award may be confitmed by any court having jurisdiction on application of either party. 14.10. New Arbitrators. If the arbitrators appointed pursuant to Section 14.03 of this Agreement fail to make an award within ninety (90) days from the date of the appointment of the last arbitrator, they shall be discharged unless the parties consent in writing to extend this period. New arbitrators (or an arbitrator) shall be appointed and shall proceed in the same manner as specified in this Agreement. The process shall be repeated until a final award is made by a single arbitrator or a majority of the arbitrators. 14.11. Costs of Arbitration. The costs and expenses of arbitration, including the fees of the arbitrators and any attorney's fees, shall be paid by the loosing party or by both parties in the proportions dete~-fined by the arbitrators in their award. ARTICLE XV THIRD PARTY BENEFICIARII~S 15.01. No Third Party Beneficiaries. It is the intention of the parties hereto that no provision of this Lease shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person a third party beneficiary of such Agreement or of any one or more of the terms thereof or otherwise give rise to any cause of action in any person not a party to such Agreements, except as hereinbefore specifically provided. ARTICLE XVI GENERAL PROVISIONS 16.01. Conditions and Covenants: Ail of the provisions of this Lease shall be deemed as running with the land, and construed to be "conditions" as well as "covenants" as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. Lease: Iselin & Garonzik./A.M. Siddaui. et al, Page 1__3 16.02. No Waiver of Breach. No failure by either Lessor or Lessee to insist upon the strict .performance by the other of any covenant, agreement, term, or condition of this Lease or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreement, term, or condition. No waiver of any breach shall affect or alter this Lease, but each and every covenant, condition, agreement, and term of this Lease shall continue in full rome and effect with respect to any other then existing or subsequent breach. 16.03. Time of Essence. Time is of the essence of this Lease, and of each provision. 16.04. Computation of Time. Except where this Lease gives a date upon which an act is to be performed, the time in which any act provided by this Lease is to be done is computed by excluding the first day and including the last, unless the last day is a Saturday, Sunday, or legal holiday, and then it is also excluded. 16.05. Successors in Interest. Each and all of the covenants, conditions, and restrictions in this Lease shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, assigns, or other successors in interest. 16.06. Entire Agreement. This Lease contains the entire agreement of the parties with respect to the matters covered by this Lease, and no other agreement, statement, or promise made by any party, or to any employee, officer, or agent of any party, which is not contained in this Lease shall be binding or valid. 16.07. Partial Invalidity. If any term, covenant, condition, or provision of this Lease is held .b.y a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the prov~stons shall remain in full force and effect and shall in no way be affected, impaired, or invalidated. 16.08. Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties or by any third person to create the relationship of principal and agent or of partnership or joint venture or of any association between Lessor and Lessee, and neither the method of computation of rent nor any other provisions contained in this Lease nor any acts of the parties shall be deemed to create any relationship between Lessor and Lessee, other than the relationship of Lessor and Lessee. 16.09. Interpretation of Language. The language in all parts of this Lease shall in all cases be simply construed according to its fair meaning and not strictly for or against Lessor or Lessee. 16.10. Pennsylvania Law to Apply. This agreement shall be construed under and in accordance with the laws of the Commonwealth of Pennsylvania, and all obligations of the parties created hereunder are performable in Cumberland County, Pennsylvania. 16.11. Definitions - Construction. Unless otherwise provided in this Lease, or unless the context otherwise requires, the following definitions and rules of construction shall apply to this Lease, regardless of whether the terms are capitalized or not in any given instance: (a) Number and Gender. In this Lease the neuter gender includes the feminine Lease: Iselin & GaronzikJA.M Siddeui. et al. Page 1~. and masculine, and the singular number includes the plural, and the word "person" includes corporation, partnership, f'u'm, or association wherever the context so requires. (b) Mandatory and Permissive. "shall," "will," and "agrees" are mandatory; "may" is permissive. (c) Term Includes Extensions. All references to the term of this Lease or the Lease Term shall include any extensions of such Term. (d) Land and Premises. Leased Premises, Land, Leased Premises, or Premises shall have one and the same meaning and shall include, where the context so requires, the improvements to the Land. In the event of a partial t~ing or condemnation, these terms shall be redefined as provided in Section 9.07 of this Agreement. (e) Parties. Parties shall include the Lessor and Lessee named in this Lease and successors in interest to them as provided in Section 13.05 of this Agreement. (f) Sublessee. As used herein, the word "sublessee" shall mean and include in addition to a sublessee and subtenant, a licensee, concessionaire, or other occupant or user of any portion of the Leased Premises or buildings or improvements thereon. 16.12. Captions. Captions of the articles, Sections, and paragraphs of this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation, construction, or meaning of the provisions of this Lease. 16.13. Attorney's Fees. In the event either Lessor or Lessee shall bring any action or proceeding for damages for an alleged breach of any provision of this Lease, to recover rents, or to enforce, protect, or establish any right or remedy of either party, the prevailing party shall be entitled to recover as a part of such action or proceedings reasonable attorney's fees and court costs. 16.14. Interest. Any sum accruing to Lessor or Lessee under the provisions of this Lease which shall not be paid when due shall bear interest at the rate hereinafter specified from the date written notice specifying such nonpayment is served on the defaulting party, or the date that any rent payment was first due, until paid. Interest shall be at the rate of the larger of six (6%) per cent per annum or the New York Prime Rate as published in The Wall Street Journal. 16.15. Modification. No amendment, modification, or alteration of the terms hereof shall be binding unless the same be in writing, dated subsequent to the date hereof, and duly executed by the parties hereto. 16.16. Notices. Method and Time. All notices, demands, or requests from one party to another shall be either personally delivered or sent by United State or private mail, certified or registered, with provision for the execution of a receipt by the recipient, postage prepaid, to the addresses stated in Section 16.17 of this Agreement and shall be deemed to have been given at the time of personal delivery or at the time of mailing or sending. 16.17. Notices - Addresses. Ali notices provided to be given under this Agreement shall be addressed to the addresses of the parties at the respective addresses set forth in the preamble to this Agreement, or at any other address that may subsequently be specified by written notice delivered in Lease: Iselin & Garonzik./A.M. Sidd(~ui. et al. accordance with this Agreement. Any assignee or successor of any interest in this Lease Agreement shall immediately notify the the other party of its address for the purpose of receipt of notice. 16.18. Payment of Rent. Ail rents and other sums payable by Lessee to Lessor shall be by check payable to Lessor, delivered in person or mailed to Lessor at the address set forth in the preamble, and until further notice to "Ann G. Iselin. and Harry L. Garonzik" and mailed to Ann G. Iselin at 10,802 North Sand Canyon Place, Tucson, AZ 85737. Lessor may at any time change the provisions of this Section by notice to the Lessee. 16.19. Broker's Commissions. Each of the parties represents and warrants that there are no claims for broker's commissions or finder's fees in connection with the execution of this Lease, and each of the parties agrees to indemnify the other against all liabilities arising from any such claim. 16.20. Recording. At the request of either party, the parties shall, execute, acknowledge, and record a memorandum of lease. Contemporaneously with any such memorandum, Lessee shall prepare and execute an acknowledgement of the termination of the Lease, in vecordable form, which shall be held by Lessor and not recorded until such time as this Lease is finally detetL~rined to be terminated. The party so requesting the memorandum shall bear the cost of preparing and recording the same and the acknowledgement of the tet'L~fination. 16.21. Counterparts. This Lease has been executed by the parties in several counterparts, each of which shall be deemed to be an original copy. 16.22. Execution. This Lease has been executed by the Lessor on September 28, 2000, and by the Lessee on ,2000 /'? , Lessee: M.G. Swati Pennsylvania Department of Agriculture INSPECTION REPORT Bureau of Food Safety and Laboratory Services 01 May 2001 01 May200l 8:55:06 Eat 509 Estab g64071-RT Agmit864 MT HOLLY FOOD MARKET Reason Surveillance County CUMB~ License MT HOLLY FOOD MARKET Expires SAJID WARRAICH (PRES) 12 N BALTIMORE AVENUE MTHOLLY SPRINGS PA 17065 ,.- Interviewed JENNIFER. WARRAICH Phone 717-486-3944 Est~b Typ~ for corrections spe~ifitxt in this notico nmy result in cessatim of your Food Servico operatimm. Violation I Item I Line Weight Narrative I Wt0 I~SPECTION FOR CHANGE OF OWNER PD $60 CIc~2574 FINIAL CLEANING AND SANITIZING OF FOOD CONTACT SURFACES NEEDED BEFORE OPERATING THE MEAT DEPT. THIS NE'vV OWNER IS WORKING VERY HARD TO COMPLY WITH FOOD SAFETY STANDARDS. 2 14 FOOD EQUlP- Food (ice) contact surfaces; designed, constructe~ maintained, installed, located Wt 2 - Galvaniz.~d hood in the kitchen hn$ pitted mst and white powder on the surfaces, Does not meet NSF standards. - Pitted mst on the produce prep sink. - Deep cuts in the white plastic cutting boards in th~ meat and deli dept. New boards on order. Just placed a refinished one in the meat dept. 3 39 VENTILATION - Rooms and equipment vented as required Wt I The exlmuat hood in the deli dept due~ not me~t NFl)A//96. 4 38 LIGHTING - Lighting provided as required, fLxturea shielded Wt I Lights not all of the safety type in the deli service area and in the deli service case. ........................................... o ........................................ $ 37 FLOORS, WALLS, Cg. II.INGS - Walls ceiling, attached equipment constructed, good repair, clean sur~ces, dustless cleaning methods Wt I - Wall covering seams not all sanitary sealed ia the walk-in meat cooler and the walk.in produce cooler. Panels warping in the coolers. Panels placed in the walk-in coolen not satisfactory for the enviroranetal conditions - Rods through the ceiling in the meat prep room ceiling not all sanitary - Shortening on the floor under the fryer in the deli dept. Said flyer is leaking. Grease soaked cardboard on floor in theis area. - Grease build-up on the back dock and around the grease barrel on the back dock Tuesday, May 0 I, 2001 Establishment Copy Pag~ I of 2 INSPECTION REPORT 20 APRIL,2001 PENNSYLVANIA DEPARTMENT OF AGRICULTURE FOOD SAFETY NEW OWNER, LICENSE NOT APPROVED. VIOLATIONS LISTED BELOW FOR CORRECTION. MEAT DEPT STII.I. CLOSED. FOUND NOT IN A SANITARY CONDITION MT HOLLY FOOD MARKET SAJID WARRAICH (PRES) 12 N BALTIMORE AVENUE MT HOLLY SPRINGS, PA 17065 · " Meat walk-in cooler -- Mold like material on equipment, floor, dried blood on shelving, and dried meat on the grinder. ,~' Deli dept using a clean~ for a sanitizex. ~' Food equipment not clean is not sanitized. v' Galvanized hood in the kitchen has pitted rust and white powder on the surfaces. Hood does not meet oai-eail NSF, NFPA/~96, standards. ~' Lights not all of the safety type in the meat prep room, deli service case, deft service area. ~' Pitted rust on the lights in the meat prep room. ~' Walk-in door to tho meat room from the deli dept has exposed wood and not finished with a ~' smooth easy to clean material. ~ Ceiling tile not properly seated to the fi~me in the food area~. V Wall coverin~ sean~ not all sanita~ sealed in the produce walk-in cooler, meat walk-in cooler. Panels warping in the coolers. Panels placed in the walk-in coolers not ~atisfactory for the eovironmental condition expo~d. v' Exposed wood behind the deli slicer~, and in the meat prep room not a smooth easy to clean, material. · / No splash guard between the hand wash sink and the produce prep sink. · ~ Produce p~p ~ is used ~ a utility sink. Mop strin~ in the sink drain. V Dark material in the deep knife cuts and contact surface~ on the plastic t~e cutting boards in the meat and deli depts.. v Shortening on the floor under the fryer in the kitchen. Said that the fi~er i~ leaking. Grease soaked cardboard on the floor. V Grebe build-up on the back dock and items around the inedible barrel. v Dirt on the floor under mine shelving in the walk-in f~eezer. Also storage on the floor. ~ No utility sink to dump mop water into. Use toilet for now. ~' Basement area in disorder. V Doors to tho rest room in disorder. V No lids oo the traah can~ in the food prep/service arens. 0utside of trash cer~ dirty. ~' Store packed foods not ali properly labeled with the name and addre~ of the mfi or dist, type product, ingred, weight. The correct ~tore name is not on the lahels. v Mop buckets with dirty water idle in the food prep and food storage areas. Compliance assured. GARRY R~ ORNER FOOD SANITARIAN 864 TIME 2:ISHR PHONE CALL FOR REINSPECTION 717- 728- 2570 EXHIBIT EXHIBIT A MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA : NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDE~J'~'4'~ c--,:~ ;:-';- ',~ NOTICE You have been sued in court. If you w~sh to defend agmnst the clmms ~ fo~ ~n~e following pages, you must take action within twenty (20) days a~er this Answer with N~w Matter and Counterclaim and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiffs. 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 CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP: Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 Telephone (717) 249-3166 MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TRIAL DEMANDED DEFENDANT'S ANSWER WITH NEW MATTER AND COUNTERCLAIM TO PLAINTIFF'S COMPLAINT AND NOW, comes Defendant Afzal H. Chaudhry, (hereinafter "Defendant"), by and through his attorney, SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C., and files this Answer to Plaintiff Mohammed G. Swati's Complaint as follows: After reasonable investigation, the Defendant, Afzal H. Chaudhry, is without information or knowledge sufficient to form a belief as to the truth of the averments asserted in Paragraph No. 1, and proof thereof is demanded. Admitted in part and denied in part. It is specifically denied that the principal place of business is at the Mt. Holly Grocery Store. To the contrary, the principal place of business is at the Mt. Holly Food Market. The remaining averments in Paragraph No. 2 are admitted. Denied. The allegations are conclusions of law and/or fact to which no answer is required. To the extent that an answer may be required, the allegations are denied on the basis that the Agreement is a written document which speaks for itself and, therefore, any attempt to characterize, summarize, interpret or paraphrase the Agreement is denied. Admitted in part and denied in part. It is admitted that Defendants paid $100,000.00 for inventory. It is denied that the inventory was for the amount of $111,000.00. To the contrary, the parties agreed that the cost of the inventory would be the valuation of the inventory less a customary discount of twenty-seven percent (27%). Denied. The allegations are conclusions of law and/or fact to which no answer is required. To the extent that an answer may be required, the allegations are denied on the basis that the Agreement and checks are written documents which speaks for itself and, therefore, any attempt to characterize, summarize, interpret or paraphrase the Agreement and checks is denied. 6. Admitted. 7. Admitted. WHEREFORE, Defendant, Afzal H. Chaudhry, respectfully requests that this Honorable Court dismiss Plaintiff's Complaint and that judgment be entered in Defendant's favor without costs. NEW MATTER Defendant hereby incorporates his answers to reference as if fully set forth herein. Paragraphs 1 through 7 by The Agreement entered into by the parties was not supported by adequate consideration on the part of the Plaintiff. 10. The Plaintiff fraudulently misrepresented to the Defendant that the inventory was not outdated and the equipment was in working condition. 11. Plaintiff received full payment for the value of the inventory. COUNTER CLAIM 12. Defendant hereby incorporates his answers to Paragraphs 1 through 11 by reference as if fully set forth herein. 13. Plaintiff represented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that the following items were in working condition: Meat room cooler Daily freezer NCR cash register/computer system Three (3) additional freezer cases 14. The items listed in Paragraph 13 were not working causing Defendant to incur approximately $37,700.00 in additional costs as follows: $30,000.00 for a new cash register/computer system, $2,900.00 for the repairs to the daily freezer and, $3,000.00 in repairs to the meat cooler in the meat room, and $1,800.00 for repairs to the three (3) additional freezer cases. 15. The daily freezer continues to need repairs monthly at the rate of $500.00 to $600.00. 16. The Plaintiff misrepresented to the Defendant, and the Defendant reasonably relied on the representation to his detriment, that inventory in the backroom coolers was merchantable when in fact the items had expired in 1996 through 1998. 17. The inventory in the backroom coolers was valued at approximately $15,000.00 and was included in the $100,000.00 which Defendant paid Plaintiff. 18. The Plaintiff misrepresented to the Defendant, and the Defendant .reasonably relied on the representation to his detriment, that the store could sell meat cut and prepared in the meat room. However, to the contrary, the Defendant discovered that the State health inspector had shut down the meat room in December 2000, 23. Plaintiff has retained $3,750.00 in rent deposits that were to be applied to the Defendant's property lease. 24. The parties were mistaken as to the essential and material terms of the Agreement in that: a. The Plaintiff did not disclose to the Defendant that the inventory was unmarketable and outdated. b. The Plaintiff did not disclose to the Defendant that the equipment was inoperable and in need of repairs and/or replacement. c. The Defendant entered the Agreement with the intention to sell the inventory and use the equipment in his store. d. The Plaintiff did not disclose the closure of the meat room which Defendant believed to be operable. e. The Plaintiff did not disclose overdue vendor accounts which Defendant believed to be included in the sale of the business. 25. In the alternative, the Plaintiff breached the contract as follows: a. Failure to provide adequate consideration. b. do Failure to provide marketable inventory. · · Failure to provide operable equipment. Failure to disclose the shut down of the meat room by the State Health Department. Failure to disclose overdue vendor accounts. WHEREFORE, the Defendant respectfully requests judgment in his favor in an amount of $157,250.00 and against Plaintiff including attorneys fees and costs of suit. Date: Respectfully Submitted, SALZMANN, DePAULIS, FISHMAN & MORGENTHAL, P.C. Norma J. Bartko, Esquire Attorney ID No. 80135 455 Phoenix Drive, Suite A Chambersburg, PA 17201 Telephone (717) 263-2121 Fax (717) 263-0663 Attorney for Defendants VERIFICATION I verify that all the statements made in the foregoing Complaint are true and correct to the best of my knowledge, infoi-i~ation and belief and that any false statements made are subject to the penalties of 18 Pa.C.S. Section 4904 relating to unswom falsification to authorities. Afzal .I-~haud~ and the meat room continued to be closed at the time of execution of the Agreement and the sale of the business. 19. The Defendant was required to make certain upgrades to the meat room in order to pass State inspection. In addition, the Plaintiff suffered lost revenue of $4,500.00-$5,000.00 for the time that the upgrades were being done. 20. The Plaintiff has exercised control of approximately $4,500.00-$5,000.00 in credit card sales from the Defendant that were automatically deposited in Plaintiff's account since the sale of the business. Plaintiff has refused and continues to refuse to release the funds to the Defendant. 21. Due to outdated inventory, the Harrisburg Newspaper Company refused to issue a credit for magazines which Defendant paid $800.00 to the Plaintiff and which was a pm~ of the $100,000.00 payment to the Plaintiff. 22. Due to Plaintiff's overdue accounts with grocery wholesalers; Defendant was not allowed to enter into any agreements with wholesalers and had to purchase inventory at a higher price from a convenience store retailer aL a cost of $15,000.00 per month in lost profits from April 12, 2001 until October 22, 2001. CERTIFICATE OF SERVICE I hereby certify that on this ~day of-~,e~, 2001, I served a true and correct copy of the foregoing Defendant's Answer with New Matter and Counterclaim by first class mail, postage pre-paid to the following: Thomas J. Williams, Esquire MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 SALZMANN & DePAULIS, FISHMAN & MORGENTHAL, P.C. By: ,,/~~ ~. Bryan(S~, E~uire Attorney ~ 61935 ~,~ Norma J. Bartko, Esquire Attorney ID # 80135 455 Phoenix Drive; Suite A Chambersburg, PA 17201 (717) 263-2121 MOHAMMED G. SWATI,: Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH,: Defendants : IN THE COURT F COMMON PLEAS OF O ' CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 01-5763 CIVIL TERM 1N RE: PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT BEFORE HOFFER, P.J., OLER and GUIDO, JJ. ORDER OF COURT AND NOW, this 3 1st day of October, 2002, upon consider of Plaintiff's Motion for Summary Judgment, and no answer having been filed to the motion, the motion is granted and summary judgment is entered in favor of Plaintiff Mohammed G. Swati, and against Defendants, Afzal H. Chaudhry and Sajid M. Warraich, in the amount of $83,500.00 plus interest and costs. Furthermore, Defendants' Counter-Claim is dismissed with prejudice. Thomas J. Williams, Esq. Ten East High Street Carlisle, PA 17013-3093 Attorney for Plaintiff G. Bryan Salzmann, Esq. 455 Phoenix Drive Suite A Chambersburg, PA 17201 Attorney for Defendants BY THE COURT, J.~esle~, ol~r, -~,.'sj. MOHAMMED G. SWATI, Plaintiff AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5763 CIVIL ACTION - LAW JURY TKIAJL DEMANDED TO: PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AFZAL H. CHAUDHRY and SAJID M. WARRAICH, Defendants, and their attorney, G. BRYAN SALZMANN, ESQUIRE YOU ARE HEREBY DIRECTED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED MOTION FOR SUMMARY JUDGMENT IN ACCORDANCE WITH Pa. R.C.P. 1035.3. AND NOW, comes Plaintiff, Mohammed G. Swati, by and through his attorneys, MARTSON DEARDORFF WILLIAMS & OTTO, and moves this Honorable Court for summary judgment, pursuant to Pa. R.C.P. 1035.2, and, in support thereof, avers as follows: 1. The moving party is PlaintiffMohammed G. Swati. c~ ~ discovery period in the above captioned ~"~c:~ ~..c~ 2. The case has closed. -',~ -~-, ~ 3. On April 11, 2001, Plaintiff entered into a contract with Defendants~he;eb~lainti,~ was, inter alia, to sell certain equipment and inventory at a supermarket being operated by,Plaintiff at 12 North Baltimore Avenue, Mt. Holly Springs, PA 17065. A copy of the greement ~ attachg4t' hereto and marked as Exhibit "A ,, t' ,"~ '~/" ' 4. The Agreement contains an integration clause conspicuously stating: This Agreement sets forth the entire understanding of the Seller and Buyer with respect to the subject matter of this Agreement and supersedes and replaces all prior agreements, arrangements, representations, letters of intent and memoranda of understanding between Seller and Buyer. 5. Defendant Chaudhry came to the store in mid-March with his broker to visually inspect the store. See Defs.' Dep. p. 14. 6. Defendant Chaudhry returned to the store a few days after the mid-March visit accompanied by Defendant Warraich and their broker to visually inspect the store a second time and review register tapes. See Defs.' Dep. p. 14-15. 7. Plaintiff hired an inventory specialist company to take inventory of the store. A copy of the RGIS Inventory Specialists Records is attached hereto and marked as Exhibit "B." 8. Defendants and their broker were present when RGIS took the inventory of the store. See Defs.' Dep. p. 23-24. The taking of inventory did not begin until Defendants arrived at the store. See Defs.' Dep. p. 28. 10. Defendant Chaudhry participated in taking inw~ntory of the deli section, and did not find any problems with the inventory of the deli section. See Defs.' Dep. p. 23. 11. Defendant Warralch participated in taking inventory of the produce section, and did not find any problems with the inventory of the produce section. See Defs.' Dep. p. 23-24. 12. Defendants read the Agreement before signing. See Defs.' Dep. p. 79-82. 13. Defendants requested revisions to the Agreement before signing. Specifically, Defendants requested a provision stating: "Seller is responsible for all debts incurred through April 12,2001, and Buyer is responsible for debts incurred from April 13,2001 forward." See Defs.' Dep. p. 80-82. 14. The additional provision was added into the Agre. ement before signing the Agreement. See Defs.' Dep. p. 80-82. See also Agreement. 15. For the following reasons, and as more fully discussed in the forthcoming Brief, the undisputed facts establish that Movants are entitled to summary judgment as a matter of law because: a. Plaintiff and Defendants signed an Agreement with an integration clause stating any prior agreements or representations are superseded by the Agreement, and the Agreement represents the entire contract. b. Defendants visually inspected the inventory and used-equipment. c. Defendants do not allege that any prior representations made by Plaintiff as to the quality of the inventory or used-equipment were fraudulently, accidently, or mistakenly omitted from the integrated written contract. WHEREFORE, PlaintiffMohammed Swati respectfully requests this Court grant his Motion for Summary Judgment. Respectfully submitted, MARTSON DE~MRDORFF WILLIAMS & OTTO Date: September 18, 2002 mas J. Williams, Esquire I.D. No. 17512 Ten East High Street Carlisle, PA 17013-3093 (717) 243 -3341 Attorneys for Plaintiff AGI~EMENT OF ~qI,~ SELLER: MOHAMMED SWATI BUYER: AFZAL H. CHAUDHRY and SAJID M. WARRAICH LOCATION: KING FOOD MART, Mount Holly Springs, PA ITEMS PURCHASED: Equipment and inw;ntory SALES PRICE: $72,500.00 plus inventory Buyer shall pay to Seller the sum of Seventy-two Thousand Five Hundred Dollars ($72,500.00) in 24 constant monthly payments in the amount of $3,793.00. This represents an annual interest rate of 9. %. The first payment shall be due and payable on the 15th day of April, 2001. Each subsequent payment sha]~ be due and payable on the 15th day of each successive month. The value of the inventory shall be paid in full at the time of the valuation. Buyer shall pay a broker's fee in the m~ount of $5,000.00 at the time of the payment of the inventory. WITNESSETH: AGREEMENT, made this 11th day of April, 2001, by and between the above Seller and Buyer, the terms of which are as follows: 1. Seller shall sell and Buyer shall purchase all of the Seller's right, title and interest in the above described property in exchange for the above sale price. 2. Seller hereby grants to Buyer the exclusive right to use the current trade name of the business and guarantee to Buyer that Seller currently has the right to use of said trade name. 3. Seller hereby warrants and guarantees that he has good and marketable title to all of the Assets free and clear of all liens and encumbrances. Seller shall be fully and solely responsible for all debts incurred by the business through April 12, 2001. Buyer shall be fully and solely responsible for all debts incurred after on and after April 13, 2001. EXHIBIT "A" 4. All information relating to Seller, the assets and the business has been provided to the Buyer. 5. Seller hereby agrees to assign all leases to Buyer and guarantees that he has the right to do so. 6. All warranties and guarantees contained in this Agreement shall remain in full force and effect and shall survive the closing. 7. Upon the execution of this Agreement by all parties, Seller agrees that he will not compete with the B~-er in any manner in any phase of the retail grocery sale business for a period of three years w/thin a five {05) mile radius of the business. 8. Until the execution of this Agreement by all parties, the Business shall continue to be conducted in a manner similar to its current manner. 9. This Agreement sets forth the entire understanding of the Seller and Buyer with respect to the subject matter of this Agreement and supersedes and replaces all prior agreements, arrangements, representations, letters of intent and memoranda of understanding between Seller and Buyer. 10. T/fie and full ownership shall .revert to Seller if Buyer fails to pay any monthly payment when due or if Buyer's check is returned to Seller. Seller shall retain all funds paid as 1/quidated damages. 11. Buyer shall pay Seller in sequential checks beginning with check number 1001 and ending with check number 1024. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written. WITNESS 6H^MMED SW^TI WITNESS WITNESS ~Z'A~g~I. CHAUDHRY ~ S,~iD M. WARRAiCH !i .m ~tor~ ~q~ b;jLF~ ::E2~ "7 CE~I EXHIBIT "B" ;-' O. BOX ?7631 iNVOICE No, ~ - 530382 O~ AT TH~ !~ ;N~ .4: ;4AT~ PERMITTED ISy L~W ~0 SPEClAUSr$ PLEASE REMIT TO: P,O. BOX 7753! f3'ETROIT, MICHIGAN 4827;, INVOICE 7t7/731-~$1 u^~, ~r'~1. 16,2001 TERMS ,-- NET 10 DAYS SERVICE C~ARGE, WHERE ~ERMI~FED. wit Not ;0 ANNUAL RATE CERTIFICATE OF SERVICE I, Tricia D. Eckenroad, an authorized agent for Martse,n Deardorff Williams & Otto, hereby certify that a copy of the foregoing Motion for Summary Judgn~tent was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: G. Bryan Salzmann, Esquire Salzmarm, DePaulis, Fishman & Morgenthal, P.C. 455 Phoenix Drive; Suite A Chambersburg, PA 17201 MARTSON DEA~RDORFF WILLIAMS & OTTO -- T~ ~aDs t' HE :gk;]~r;eaedt Carlisle, PA 17'013 (717) 243-3341 Dated: September 18, 2002