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HomeMy WebLinkAbout08-4407COURT (F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO. d$ _ yg07 a-tvl( Plaintiff V? CONFESSION OF JUDGMENT SNS BUDDIES,jINC., DBA UNI-MART, PREVIOUSLY ASSIGNED TO: N/A CONFESSION OF JUDGMENT Pursuant which is judgment in Date: July 2 Respectfully submitted, McNees Wallace & Nurick LLC By:. ley S. S ff, Esquire pre Co ID #24848 100 Pine eet, PO Box 1166 Harrisb g, PA 17108-1166 (717) 7-5439 Attorneys for Plaintiff TOTAL: $383,164.21, plus interest, other expenses, fees and costs D the authority contained in the warrant of attorney, the original or a copy of to the Complaint filed in this action, I appear for the Defendant and confess of the Plaintiff and against the Defendant as follows: Principal $325,508.57 Interest to July 14, 2008 $ 20,687.16 Late Charges $ 2,348.91 Attorneys' Fees $ 4,619.57 COURT ?F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, : DOCKET NO. O$ - IN 07 C-to -- ett-t vi CONFESSION OF JUDGMENT SNS BUDDIES, INC., DBA UNI-MART, efendant PREVIOUSLY ASSIGNED TO: N/A COMPLAINT FOR CONFESSION OF JUDGMENT UNDER RULE 2951 1. The Plaintiff, PNC Bank, National Association, is a national banking association organized and a fisting under the laws of the United States of America with a principal regional office located at 01 Penn Avenue, Scranton, PA 18503 (the "Plaintiff'). 2. The Defendant, SNS Buddies, Inc., dba Uni-Mart, is a Pennsylvania corporation with a last known address of 94 South Pennsylvania Avenue, Wilkes Barre, PA 18702 (the "Defendant") 3. The Defendant executed and delivered to the Plaintiff a U.S. Small Business Administration 1 ote dated April 11, 2005, in the original principal amount of Seven Hundred Seventy-Five T40usand Five Hundred Dollars ($775,500) (the "Note"), a true and correct photostatic reproduction of the original of which is attached hereto as Exhibit "A" and made a part hereof. 4. a Defendant executed and delivered to the Plaintiff a Disclosure for Confession of Judgment, a e and correct photostatic reproduction of the original of which is attached hereto as Exhibit "B" n made a part hereof. 5. Defendant is in default of Defendant's obligations to make payment to the Plaintiff as required in the Note, and the Plaintiff has demanded payment in full of all outstanding amounts as provided in tl a Note. A copy of the Plaintiffs demand dated February 27, 2008, is attached hereto as Exhibit "C" and made a part hereof 6. J?dgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 7. There has not been any assignment of the Note. 8. J dgment has not been entered on the Note in any jurisdiction. 9. Tie amount due to the Plaintiff as a result of the Defendant's default is as follows: a. Principal $325,508.57 b. Interest to July 14, 2008 $ 20,687.16 C. Late Charges $ 2,348.91 d. Attorneys' Fees $ 4,619.57 TOTAL DUE: $383,164.21 10. ln?erest continues to accrue at a rate equal to the Prime Rate in effect on the first business day of e month in which an interest rate change occurs, as published in the Wall Street Journal on the next business day, plus two and one-half percent (2.50%), adjusted monthly. WHEREFORE, Plaintiff, PNC Bank, National Association, demands judgment against the Defendant, SNS Buddies, Inc., dba Uni-Mart, in the amount of Three Hundred Eighty-Three Thousand One Hundred Sixty-Four and 21/100 Dollars ($383,164.21), plus interest at a rate equal to the Prime Rat in effect on the first business day of the month in which an interest rate change occurs, as published in the Wall Street Journal on the next business day, plus two and one-half percent (2.50%adjusted monthly, through the date of payment, including on and after the date of entry of judgm t on this Complaint, and for other expenses, fees and costs to which the Plaintiff may be entitled. i i Date: Julyl? 08 Respectfully submitted, McNees Wallace & Nurick LLC By: Court ID #24848 100 Pine Stree , PO Box 1166 Harrisburg, .A 17108-1166 (717) 237-5439 Attorneys for Plaintiff COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NA IONAL ASSOCIATION, DOCKET NO. Plaintiff v. CONFESSION OF JUDGMENT SNS BUDDIES, C., DBA UNI-MART, D fendant PREVIOUSLY ASSIGNED TO: N/A VERIFICATION I, Kyra E Zoranski, Assistant Vice President for PNC Bank, National Association, being authorized to do o on behalf of PNC Bank, National Association, hereby verify that the statements made in the fore 7nd ing pleading are true and correct to the best of my information, knowledge and belief. I underst that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, to unsworn falsification to authorities. PNC BANK, NATIONAL ASSOCIATION Date: lq' 0 By: Kyra El Zoranski Assist t Vice Pi U.S. Small Business Administration &MV NOTE SBA Loan # PLP 868-078-4005 SBA Loan Name SNS Buddies Inc. dba Uni-Mart Date Loan Amount 775,500.00 Interest Rate FLOATING AT WSJ PRIME PLUS 2.50% RESULTING IN AN INITIAL RATE OF 8.00% Borrower NS Buddies Inc. dba Uni-Mart Operating Company Lender NC Bank, National Association 1. PROMISE TO PAY: In return for the oan, Borrower promises to pay to the order of Lender the amount of SEVEN HUNDRE SEVENTY FIVE THOUSAND FIVE HUNDRED -- interest on the un?aid principal balance, and all other amounts required by this Note. 2. DEFINITIONS: Dollars, "Collateral" means any property taken as security for payment of this Note or any guarantee of this Note. "Guarantor" mean; each person or entity that signs a guarantee of payment of this Note. "Loan" means the loan evidenced by this Note. "Loan Documents means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collatera . "SBA" means the mall Business Administration, an Agency of the United States of America. SBA Form 147 (06103!02) Ve Ion 4.1 Page 1!6 Bankers Systems, Inc., St. Cloud, MN )( ?, k 10 1 ' ( 'c N)) 3. PAYMENT Borrower mustlmake all payments at the place Lender designates. The payment terms for this Note are: This Note will mature in 10 years from date of Note. The initial interest to on this Note will fluctuate. The initial interest rate is 8.00% per year. This initial rate is the prime rate on the ate SBA received the loan application, plus 2.50%. The interest rate must remain in effect until the first change period begins. Borrower must pa interest on the disbursed principal balance, plus principal of $6,462.50 every month, beginning one month from th month this Note is dated; payments must be made on the first calendar day in the months they are due. Lender will apply a ch installment payment first to pay interest accrued to the day Lender receives the payment, then to bring princi al current, then to pay any late fees, and will apply any remaining balance to reduce principal. The interest rate wi?l be adjusted monthly (the "change period"). The "Prime Rate" i the prime rate in effect on the first business day of the month in which the an interest rate change occurs, as ublished in the Wall Street Journal on the next business day. The adjusted intere t rate will be 2.50% above the Prime Rate. Lender will adjust the interest rate on the first calendar day of ea change period. The change in interest rate is effective on that day whether or not Lender gives Borrower notice of a change. The initial interest rate must remain in effect until the first change period begins. Lender must adjust he payment amount at least annually as needed to amortize principal over the remaining term of the note. If SBA purchase th guaranteed portion of the unpaid principal balance, the interest rate becomes fixed at the rate in effect at the time f the earliest uncured payment default. If there is no uncured payment default, the rate becomes fixed at th rate in effect at the time of purchase. All remaining principlal and accrued interest is due and payable 10 years from date of Note. Late Charge: If a pa ment on this Note is more than 10 days. late, Lender may charge Borrower a late fee of up to 5% of the unpaid po 'on of the regularly scheduled payment. Loan Prepayment: Notwithstanding any Orovision in this note to the contrary: Borrower may preps this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Bo ower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must: a. Give Lender written notice; b. Pay all accrued Interest; and c. If the prepayment i received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days interest from the date Lender receives the notice less any interest accrued during the 21 days and paid Ice- ?ii-. I-A SBA Fonn 147 (08/03/02) Ve Ion 4.1 fr Page 2/8 Bankers Systems, Inc., St. Cloud, MN SBA 147: Note Page 2 Continuation Continuation of ".. ' under subparagrap b., above. If Borrower does nc}t prepay within 30 days from the date Lender receives the notice, Borrower must give Lender a new notic Page 1 Bankers Systems, Inc., St. Cloud, MN 4. DEFAULT: Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company: A. Fails to do anything required by this Note and other Loan Documents; B. Defaults on any other loan with Lender; C. Does not preserve, or account to Lender's satisfaction for, any of the Collateral or its proceeds; D. Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA; E. Makes, or ar. yone acting on their behalf makes, a materially false or misleading representation to Lender or SBA; F. Defaults on ny loan or agreement with another creditor, if Lender believes the default may materially affect Borrower's bility to pay this Note; G. Fails to pay y taxes when due; H. Becomes the subject of a proceeding under any bankruptcy or insolvency law; I. Has a receiver or liquidator appointed for any part of their business or property; J. Makes an assignment for the benefit of creditors; K. Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower's ability to pay this Note; L. Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender's prior written consent; or M. Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this Note. 5. LENDER'S RIGHTS IF THERE IS A DEFAULT: Without notice or demand and without giving up any of its rights, Lender may: A. Require imm fate payment of all amounts owing under this Note; B. Collect all amounts owing from any Borrower or Guarantor; C. File suit and o tain judgment; D. Take possession of any Collateral; or E. Sell, lease, or 6therwise dispose of, any Collateral at public or private sale, with or without advertisement 6. LENDER'S GENORAL POWERS: Without notice and without Borrower's consent, Lender may: A. Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses; B. Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney's fees and costs. f Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance; C. Release anyone obligated to pay this Note; D. Compromise, release, renew, extend or substitute any of the Collateral; and E. Take any action necessary to protect the Collateral or collect amounts owing on this Note. SBA Form 147 (06/03/02) Ve ion 4.1 Page 3/6 Bankers Systems, Inc., St. Cloud, MN 7. WHEN FEDERAL LAW APPLIES: When SBA is a holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and othe purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any ob 'gation, defeat any claim of SBA, or preempt federal law. 8. SUCCESSORS AND ASSIGNS: Under this Not , Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns. 9. GENERAL A. All individuals and entities signing this Note are jointly and severally liable. B. Borrower waives all suretyship defenses. C. Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral. D. Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay r forgo enforcing any of its rights without giving up any of them. E. Borrower m y not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note. F. If any part o this Note is unenforceable, all other parts remain in effect. G. To the exten allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender id not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; o did not obtain the fair market value of Collateral at a sale. II ?I SBA Forth 147 (06!03102) V7ion 4.1 Page 418 Bankers Systems, Inc., St. Cloud, MN 10. STATE-SPECIFIC PROVISIONS: 1. POWER T CONFESS JUDGMENT. UNDERSIGNED HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF ECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER OR ANY HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE, ALL ACCRUED INTEREST AND ALL OTHER AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF 10% OF SUCH PRINCIPAL AND INTEREST ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO, THIS NOTE R A COPY VERIFIED BY AFFIDAVIT SHALL B E A SUFFICIENT WARRANT. THE UNDERSIGNED HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FOR E OR HEREAFTER ENACTED. JUDGMENT Y BE CONFESSED FROM TIME TO TIME UNDER THE AFORESAID POWER TO CONFESS JUDGMENT ND NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF J DGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISES ALL BE HELD BY ANY COURT TO BE INVALI D, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE U DIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE LENDER SHALL ELEC UNTIL SUCH TIME AS THE LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST, COSTS AND FEES. 2. Governing Law; Jurisdiction. This Note will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the Commonwealth of Pennsylvania, excluding its conflict of laws rules. The Undersign hereby irrevocably consents to the exclusive jurisdiction of the Courts of Common Pleas of the Commonwealth of Pennsylvania and the United States District Court for the Western District of Pennsylvania; provided that nothing co tained in this Note will prevent the Lender or any holder hereof from bringing any action, enforcing any award or judg ent or exercising any rights against the Undersigned, against any security or against any property of the Undersign d within any other county, state or other foreign or domestic jurisdiction. The Undersigned agrees that the venue prov ded above is the most convenient forum for both the Lender and the Undersigned and the Undersigned waives any obj ion to venue and any objection based on a more convenient forum in any action instituted under this Note. The Un rsigned agrees that service of process in any such proceeding may be duly effected upon the Undersigned b mailing a copy thereof by registered mail, postage prepaid, to the Undersigned. 3. WAIVER OF JURY TRIAL. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE UNDERSIGNED MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO HIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTIO CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE UNDERSIGNED ACKNOWLEDGES THAT THE FO EGGING WAIVER IS KNOWING AND VOLUNTARY. SBA Form 147 (W03102) V?Non 4.1 Page 518 Bankers Systems, Inc., St. Cloud, MN SBA F Disclosure Undersigned: Lender: The undersigr the undersigned is obli; 1. Us Small Busi tor Confession of Judgment PNCBANK SNS BUDDIES, INC. DBA UNI-MART PA AVENUE & NORTHAMPTON STREET WILKES BARRE, PA 18702 PNC BANK, NATIONAL ASSOCIATION 8800 TINICUM BOULEVARD PHILADELPHIA, PA 19153 has executed, and/or is executing, on or about the date hereof, the following document(s) under which ;d to repay monies to Lender: Administration Note. A. THE UNDE SIGNED ACKNOWLEDGES AND AGREES THAT THE ABOVE DOCUMENTS CONTAIN PROVISIONS UNDER WHICH LENDER MAY E R JUDGMENT BY CONFESSION AGAINST THE UNDERSIGNED. BEING FULLY AWARE OF ITS RIGHTS TO PRIOR NOTICE AND A G ON THE VALMrIY OF ANY JUDGMENT OR OTHER CLAIMS THAT MAY BE ASSERTED AGAINST IT BY LENDER THEREUNDER B RE JUDGMENT LS ENTERED, THE UNDERSIGNED HEREBY FREELY, KNOWINGLY AND INTELLIGENTLY WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT AGAINST IT BY CONFESSION PURSUANT THE TERMS THEREOF. B. THE UND IGNED ALSO ACKNOWLEDGES AND AGREES THAT THE ABOVE DOCUMENTS CONTAIN PROVISIONS UNDER WHICH LENDER Y, AFTER ENTRY OF JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, FORECLOSE UPON, ATTACH, LEVY, TAKE P SESSION OF OR OTHERWISE SEIZE PROPERTY OF THE UNDERSIGNED IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. BEING FULLY AWARE OF ITS RIGHTS AFTER JUDGMENT IS ENTERED (INCLUDING THE RIGHT TO MOVE TO OPEN OR STRIKE THE JUI GMENT), THE UNDERSIGNED HEREBY FREELY, KNOWINGLY AND INTELLIGENTLY WAIVES ITS RIGHTS TO NOTICE AND A HEARING AND EXPRESSLY AGREES AND CONSENTS TO LENDER'S TAKING SUCH ACTIONS AS MAY BE PERMITTED UNDER APP ICABLE STATE AND FEDERAL LAW WITHOUT PRIOR NOTICE TO THE UNDERSIGNED. C. The undersi tied certifies that a representative of Lender specifically called the confession of judgment provisions in the above documents to the attention of the undersigned, and/or that the undersigned was represented by legal counsel in connection with the above documents. D. The undersigned hereby certifies: that its annual income exceeds $10,000; that all references to Athe undersigned above refer {o all persons and signing below; and that the undersigned received a copy hereof at the time of signing. Dated: ?? r d 5 SNS BUDDIE , ItNC. DBA UNI-MART By: '.t tuil 'p Sunil Khanna, President X ?" b ?Q Form 8M - PA Rev. 3/99 N BA NK 27, 2008 {:'ertihed and Regular Mail SNS Bu dies Inc d/b/a Uni-mart SUnil Khanna, President 94 South Pennsylvania Avenue Wilkes- arre, Pennsylvania 18702 RE: I Lan #321673151/602522191 Dear MrAhanna: You area 'n default of your obligations to PNC Barik (the "Bank.") fir failure to make payment,: on the $175,500.00 loan (the "Loan") as required in the Promissory Note that evidence. the Loan and the Guaranty Agreement(s) that secures the Loan. As a result of the defau' t of your obligations to the Bank, the entire outstanding amount of the Loan has been acc lerated and is now due and payable immediately in full. The amounts that are due and l }able to the Bank are as follows: Principal $325,508.57 fnterest $ 10,571.87 (as of 2/27/08) Late Char es $Q?1.0 Total $337,124.40 Interest c ntinues to accrue at the rate of $86.95 per day through the date on whicl) payment is received by the Bank. In addition to the amounts set Earth above, you will be responsible for payment or reimburse lent to the Bank for all attorneys' fees incurred or paid by the Bank with respect to his matter. Please make arrangements for payment in full of your obligations to the Bank by contacting he Bank, as :follows: Lyra E. Z,oranski Assistant Vice= President 201 Penrr Avenue Scranton, PA 18503 Phone: (570) 961-6266 Marra er of The PNC Financial Services iih*)w (570) 961-6240 201 P nn Avenue Scranton Pennsytvanie 18503 WWW nc.carn Page; 2 Neither this letter nor anything contained herein waives, limits or otherwise affects in any ay the Bank's rights to exercise and enforce its rights and remedies for collecti n of your obligations to the Bank, all of which are reserved by the Bank, and remain in full force and effect, enforceable by the Bank at any time on or after the date of this letter. We loo forward to receiving payment in full of your obligations to the Bank in the immcdi c future.. Otherwise, the Bank may have no alternative but to initiate collection If you ha e any questions please call me at 570.061-6266. 'T'hank you in advance for yetu:r e:o oration in this matter. S f? Kyra ti. ' oransk.i Assistant Vice 1, esie cc: St nit Khanna, Guarantor eru, Khanna, Guarantor 1 r 00 .O _p .f , C-D . 40 COURT F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, : DOCKET NO. O$ - g407 Civi l -Ferr1 CONFESSION OF JUDGMENT SNS BUDDIES, IINC., DBA UNI-MART, efendant : PREVIOUSLY ASSIGNED TO: N/A NOTICE UNDER RULE 2958.1 OF JUDGMENT AND EXECUTION THEREON NOTICE OF DEFENDANT'S RIGHTS TO: SNS Buddies, Inc., dba Uni-Mart A judgment in a amount of $383,164.21, plus interest, other expenses, fees and costs has been entered against you and in favor of the plaintiff without any prior notice or hearing based on a confession of judgment contained in a written agreement or other paper allegedly signed by you. The sheriff may take your money or other property to pay the judgment at any time after thirty (30) days after t date on which this notice is served on you. You may have 1 gal rights to defeat the judgment or to prevent your money or property from being taken. YOU MUST FILE A PETITION SEEKING RELIEF FROM THE JUDGMENT AND PRESENT' IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE DATE ON WHICH THIS NOTICE IS SERVED ON YOU OR YOU MAY LOSE YOUR RIGHTS. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANN T AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO LIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 (717) 249-3166 or 1-800-990-9108 Respectfully submitted, McNees Wallace & Nurick LLC Date: July By: Qu!p-roemKe o Sh , Esquire Co ID #24848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff -zi -r-; C-0 COURT PNC BANK, N v SNS BUDDIES, TO THE PRC Ido c SNS Buddies, COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION TONAL ASSOCIATION, :DOCKET NO. 08 - ggD7 011v; t Terot ntiff CONFESSION OF JUDGMENT , DBA UNI-MART, [ant : PREVIOUSLY ASSIGNED TO: N/A AFFIDAVIT OF NON-MILITARY SERVICE ONOTARY: fy, to the best of my knowledge, that Defendant in the above-captioned action, dba Uni-Mart, is not presently on active or nonactive military status. Respectfully submitted, McNees Wallace & Nurick LLC Date: JulyZt Te y,?' Shuff, Es 're e Court ID 4848 Street, P, Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff CZ +v -_ CA.) J 1? P { -LLB ?=- T COURT CAF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, v SNS BUDDIES, ., DBA UNI-MART, DOCKET NO. OB - qyp7 ivil (ern CONFESSION OF JUDGMENT PREVIOUSLY ASSIGNED TO: N/A CERTIFICATE OF ADDRESSES I hereby . Penn Avenue, Inc., dba Uni- Respectfully submitted, McNees Wallace & Nurick LLC Z Date: July Z, 20 8 B that the precise address of Plaintiff, PNC Bank, National Association, is 201 PA 18503; and that the last known address of Defendant, SNS Buddies, is 94 South Pennsylvania Avenue, Wilkes Barre, PA 18702. 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff ca f-s n't i t_ f ? COURT OAF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO. ()$ - H'407 c ivi t (errs Plaintiff : V. CONFESSION OF JUDGMENT SNS BUDDIES, C., DBA UNI-MART, D fendant PREVIOUSLY ASSIGNED TO: N/A PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Please en?er my appearance on behalf of Plaintiff, PNC Bank, National Association. Papers m*y be served at the address set forth below. Geoffrey S. Shuff, Esquire McNees Wallace & Nurick LLC 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Date: Jule Respectfully submitted, McNees Wallace & Nurick LLC By: S. Shu ,Esquire 'Supreme Co ID #24848 100 Pine S eet, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff n N rn y I v+V ' t f i COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, v SNS BUDDIES,JINC., DBA UNI-MART, DOCKET NO. Qg 41407 C iv; i Te r m CONFESSION OF JUDGMENT PREVIOUSLY ASSIGNED TO: N/A To: SNS Buddies, Inc., dba Uni-Mart, Defendant You are ereby notified that on 93 , 2008, judgment by confession was entered against y :)u in the sum of $383,164.21, in the a e-captioned c DATE: Pr onotary 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 32 South Bedford Street Carlisle, PA 17013 (717) 249-3166 or 1-800-990-9108 I hereby J residence: that the following is the address of the Defendant stated in the certificate of SNS Buddies, Inc., dba Uni-Mart 94 South Pennsylvania Avenue Wilkes arre, PA 18702 A, SNS Por este registrado contra Fecha: el dia Inc., dba Uni-Mart, Demandado(s) sea avisado que en el dia de de 2008, un fallo por admision fue por la contidad de $383,164.21, del caso antes escrito. de 2008 Protonotario LLEVE STA DEMANDA A UN ABODAGO IMMEDIATAMENTE. SI NO TIENE ABOGADO O I NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA A LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUENTRA SCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 (717) 249-3166 or 1-800-990-9108 Por este I medio certifico que to siguiente es la direccion del demandado dicho en el certificado de re idencia: SNS Bu ies, Inc., dba Uni-Mart 94 South Pennsylvania Avenue Wilkes Barre. PA 18702 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, Plaintiff V. SNS BUDDIES, INC., DBA UNI-MART, Defendant : DOCKET NO. 08-4407 Civil Term : CONFESSION OF JUDGMENT : PREVIOUSLY ASSIGNED TO: N/A RETURN OF SERVICE PURSUANT TO PA. R.C.P. No. 2958.1(c) Plaintiff, PNC Bank, National Association, hereby files this Return of Service and swears and affirms that the person or persons listed below was or were served pursuant to Pa. R.C.P. No. 2958.1(b) with the Notice of Judgment and Execution Required by Rule 2958.1 by certified mail, return receipt requested, as provided by Pa. R.C.P. No. 403. A copy of each receipt for certified mail is attached hereto. SNS Buddies, Inc., dba Uni-Mart 94 South Pennsylvania Avenue Wilkes Barre, PA 1870 Respectfully submitted, McNees Wallace & Nurick LLC Date: August 4, 2008 By: Geo e ff, Esquire e Court ID 424848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff I , A 7160 3901 9845 2641 1612 TO: SNS Buddies, Inc., dba Uni-Mart 94 South Pennsylvania Avenue Wilkes Barre, PA 18702 SENDER: Geoffrey S. Shuff REFERENCE: PNC Bank PS Form 3800. January 2005 RETURN Postage , Lk Z RECEIPT Certified Fee 2-77 SERVICE Return Receipt Fee Restricted Delivery Total Postage & Fees 0- US Postal Service POS A Receipt for Certified Mail No Insurance Coverage Provided t ? Do Not Use for International Mail u7 Geoffrey S. Shuff ? Agent [] Addressee ? Yes ? No I ? :'> ? ? ?; , v, _ 1 } ?i r ?? _? t ? y? , .,ri.,, i.- ? Robert C. Nowalis, Esquire Attorney Identification Number 21970 Doran, Nowalis & Doran 69 Public Square, Suite 700 Wilkes-Barre, Pennsylvania 18701-2588 570-823-9111 Attorneys for SNS Buddies, Inc. d/b/a Uni-Mart PNC Bank, National Association, $ Plaintiff, $ V. SNS Buddies, Inc. d/b/a Uni-Mart, $ Defendant. $ In the Court of Common Pleas of Cumberland County Civil Action Confession of Judgment No. 08-4407 Petition to Strike and/or Open Judgment SNS Buddies, Inc. d/b/a Uni-Mart ("Petitioner") by and through its counsel, Doran, Nowalis & Doran, hereby prays for an Order of Court striking and/or opening this judgment and cites the following reasons therefore. 1. On July 23, 2005 the Plaintiff, PNC Bank, National Association ("PNC"), filed its Complaint for Confession of Judgment Under Rule 2951 in the Office of the Prothonotary of Cumberland County. 2. On the same day the Prothonotary of Cumberland County entered judgment in favor of PNC and against Petitioner in the amount of $383,164.21. 3. The registered office and principal place of business of the Petitioner is in Luzerne County. 4. Petitioner does not conduct any business in Cumberland County Pennsylvania. 5. PNC's alleged cause of action did not arise in Cumberland County Pennsylvania. 6. No transaction or occurrence took place in Cumberland County Pennsylvania out of which PNC's cause of action arose. 7. No property is located in Cumberland County Pennsylvania which is the subject of this action. 8. Venue is not proper in Cumberland County Pennsylvania and this judgment should be stricken and/or opened. 9. The confession of judgment provisions of the Note provides, in part: JUDGMENT MAY BE CONFESSED FROM TIME TO TIME UNDER THE AFORESAID POWER TO CONFESS JUDGMENT AND NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXCERCISED FROM TIME TO TIME AS OFTEN AS THE LENDER SHALL ELECT UNTIL SUCH TIME AS THE LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST, COSTS AND FEES. [Emphasis added.] 10. The foregoing provision violates public policy and the judgment confessed under that provision of the Note should be stricken and/or opened. 11. The Note was made when Petitioner purchased a Uni-Mart store in Wilkes-Barre, Pennsylvania from Uni-Marts, LLC ("Uni-Marts"). 12. In 2004 Uni-Marts owned several hundred convenience stores. 13. The sale to Petitioner was part of Uni-Marts' effort, beginning in 2004, to sell 255 of its stores. 14. As part of its sales effort Uni-Marts engaged the services of Kuber Financial Services, LLC ("Kuber") to promote the store sales. 15. Kuber advised Petitioner and other buyers that PNC, Unity Bank, M & T Bank, and Community South Bank (the "Banks") where "preferred SBA lenders" who were prepared to finance the purchase of the stores. 16. Kuber further advised Petitioner and other purchasers that the Banks had examined the financial statements of the stores and had done their due diligence. Petitioner and other purchasers were also told that the Banks had in some cases even obtained SBA's pre-approval for certain legal documents related to the sale. 17. Kuber also conducted seminars, one of which Petitioner attended, at which Kuber indicated that representatives of the Bank were present. Kuber repeated the representation contained in ¶ 16 at the seminar. 18. Upon information and belief one or more representatives of PNC were present at the seminar Petitioner attended and at which Kuber's representations were made. 19. Neither at the seminar nor at any other time did PNC ever cause Petitioner to doubt that PNC examined the financial statements of the store Petitioner eventually purchased and had done PNC's due diligence with respect to that store. Nor did PNC ever deny it had obtained SBA's pre-approval for certain legal documents related to the sale. 20. On information and belief PNC never examined the financial statements of the store SNS eventually purchase nor did PNC do any due diligence with respect to the store nor did it have SBA pre-approval for certain legal documents related to the sale. 21. Petitioner relied on the foregoing representations and the conduct of PNC. In reliance on the representations and the conduct of PNC Petitioner purchased the Wilkes-Barre Uni-Mart store. 22. Petitioner trusted PNC throughout the purchase of the Wilkes-Barre store. 23. PNC was aware that Petition was placing its trust in PNC and PNC acknowledged that trust. 24. In fact, the representations made with regard to the Wilkes-Barre store were materially inaccurate. 25. Petitioner has suffered losses which exceed the amount PNC claims to be due on the Note. Wherefore, Petitioner prays that the judgment of PNC be stricken and/or opened and that all proceeding be stayed pending a determination of the Rule. Doran, Now ' & D B: Robert C. Nowalis, Esquire Attorney ID 21970 69 Public Square, Suite 700 Wilkes-Barre, Pennsylvania 18701 Attorneys for SNS Buddies, Inc. d/b/a Uni- Mart VERIFICATION The undersigned, Sunil Khanna, is the President of SNS Buddies, Inc. doing business as Uni-Mart, and is authorised to make this verification on behalf of Defendant. The undersigned has read the foregoing and hereby states that the facts set forth therein are true and correct to the best of his knowledge, information and belief. This statement is made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsification to authorities. SNS Buddies, Inc. doing business as Uni-Mart Wv` BY: Sunil Khanna, President Certification of Service The undersigned, Robert C. Nowalis, Esquire, hereby certifies that a true and correct copy of the foregoing was served on the following persons by placing a copy of the same in the first class U.S. mail on August 21, 2008, postage prepaid, addressed as follows: Geoffrey S. Shuff, Esquire McNees Wallace & Nurick 100 Pine Street P.O. Box 1166 Harrisburg, Pennsylvania 17108-5439 C. Nowalis, Esquire ? c`?r -n s^ Cr -i yJ AUG 2 5 2008 PNC Bank, National Association, Plaintiff, V. SNS Buddies, Inc. d/b/a Uni-Mart, Defendant. In the Court of Common Pleas of Cumberland County Civil Action Confession of Judgment No. 08-4407 Order to Show Cause AND NOW, this Z?' day of August, 2008, upon consideration of the foregoing petition, it is hereby ordered that (1) a rule is issued upon the respondent to show cause why the petitioner is not entitled to the relief requested; (2) the respondent shall file an answer to the petition within VO days of this date; (3) the petition shall be decided under Pa.R.C.P. No. 206.7; (4) depositions shall be completed within 6 0 days of this date; (5) argument shall be held on `2. 6 , "o in Courtroom y of the 11""?County Courthouse; ?' / s 3 0',0,1-n . (6) all proceeding to be stayed pending determination of this rule; and (7) notice of the entry of this order shall be provided to all parties by the petitioner. RV T 4FR CURT: 1.1141 J. 'j r 31 L.3 . = ,t COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO. 08-4407 Civil Term Plaintiff V. CONFESSION OF JUDGMENT SNS BUDDIES, INC., DBA UNI-MART, Defendant PREVIOUSLY ASSIGNED TO: JUDGE KEVIN A. HESS ANSWER OF PNC BANK, NATIONAL ASSOCIATION, TO PETITION TO STRIKE AND/OR OPEN JUDGMENT PNC Bank, National Association ("PNC" ), by and through its counsel, McNees Wallace & Nurick LLC, Geoffrey S. Shuff, Esquire, files this Answer of PNC Bank, National Association, to Petition to Strike and/or Open Judgment, alleging in support hereof the following: 1. Admitted. 2. Admitted. 3. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, (a) Section 10 of the U.S. Small Business Administration Note attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONER] HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER [PNC]..., and (b) when an instrument contains such language, Pennsylvania law authorizes the entry of judgment by an attorney in any jurisdiction, and (c) PNC has a principal regional office in Cumberland County, Pennsylvania, and (d) Petitioner has not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioner has not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 4. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, (a) Section 10 of the U.S. Small Business Administration Note attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONER] HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER [PNC]..., and (b) when an instrument contains such language, Pennsylvania law authorizes the entry of judgment by an attorney in any jurisdiction, and (c) PNC has a principal regional office in Cumberland County, Pennsylvania, and (d) Petitioner has not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioner has not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 5. Denied. This averment constitutes a legal conclusion to which no answer is required. However, to the extent an answer may be required, or to answer further, (a) Section 10 of the U. S. Small Business Administration Note attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONER] HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER [PNC]..., and (b) when an instrument contains such language, Pennsylvania law authorizes the entry of judgment by an attorney in any jurisdiction, and (c) PNC has a principal regional office in Cumberland County, Pennsylvania, and (d) Petitioner has not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioner has not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 6. Denied. This averment constitutes a legal conclusion to which no answer is required. However, to the extent an answer may be required, or to answer further, (a) Section 10 of the U.S. Small Business Administration Note attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONER] HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER [PNC]..., and (b) when an instrument contains such language, Pennsylvania law authorizes the entry of judgment by an attorney in any jurisdiction, and (c) PNC has a principal regional office in Cumberland County, Pennsylvania, and (d) Petitioner has not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioner has not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 7. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, (a) Section 10 of the U.S. Small Business Administration Note attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONER] HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER [PNC]..., and (b) when an instrument contains such language, Pennsylvania law authorizes the entry of judgment by an attorney in any jurisdiction, and (c) PNC has a principal regional office in Cumberland County, Pennsylvania, and (d) Petitioner has not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioner has not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 8. Denied. This averment constitutes a legal conclusion to which no answer is required. However, to the extent an answer may be required, or to answer further, (a) Section 10 of the U.S. Small Business Administration Note attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONER] HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER [PNC]..., and (b) when an instrument contains such language, Pennsylvania law authorizes the entry of judgment by an attorney in any jurisdiction, and (c) PNC has a principal regional office in Cumberland County, Pennsylvania, and (d) Petitioner has not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioner has not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 9. Admitted. 10. Denied. This averment constitutes a legal conclusion to which no answer is required. However, to the extent answer may be required, or to answer further, (a) the same and/or similar language has been contained in document provisions authorizing confession of judgment that have been considered by Pennsylvania Courts, and the Courts have upheld the validity of such provisions, and (b) PNC is unaware of any case in which the language emphasized by the Petitioner has been determined to violate public policy. Further, Section 9.F of the Note provides that, "If any part of this Note is unenforceable, all other parts remain in effect", and such provisions are held to be effective by Pennsylvania Courts. Therefore, even if the provision emphasized by Petitioner were determined to violate public policy and be declared invalid, which PNC denies should occur, the remainder of the provisions authorizing confession of judgment, and therefore the judgment, would remain effective. 11. Denied. PNC made a $775,500.00 SBA-guaranteed loan to assist the Petitioner in the purchase of a business operated as a Uni-Mart store in Wilkes-Barre, Pennsylvania. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 12. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 13. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 14. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 15. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 16. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 17. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 18. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 19. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. However, it is denied that PNC had any duty to Petitioner regarding any of the matters described in this averment. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 20. Denied. PNC underwrote the loan according to its practices, policies and procedures for such loans. It is denied that PNC had any duty to Petitioner regarding any of the matters described in this averment. It was Petitioner's responsibility alone to perform such due diligence as Petitioner determined to be necessary for the transaction and Petitioner's decision alone to purchase the business from Uni-Marts. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioner has alleged any ground for the judgment to be stricken, and (c) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 21. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) Petitioner alleges any representations or conduct by PNC in any previous averment upon which Petitioner could have relied, and (b) PNC made any representations or engaged in any conduct upon which Petitioner could have relied with respect to Petitioner's decision to purchase a business from Uni- Marts, and (c) Petitioner had any right at any time to rely on any representation or conduct of PNC, and (d) PNC had any duty to the Petitioner regarding Petitioner's decision to purchase a business from Uni-Marts, and (e) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (f) Petitioner has alleged any ground for the judgment to be stricken, and (g) Petitioner has stated any meritorious defense to the judgment that would justify striking or opening the judgment. Further, Petitioner was responsible to, and did, perform Petitioner's own due diligence and make Petitioner's own decision to purchase a business from Uni-Marts. 22. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. Further, PNC denies that (a) Petitioner had any right to trust PNC regarding Petitioner's decision to purchase a Uni-Mart business, and (b) PNC had any duty to Petitioner with respect to Petitioner's decision to purchase a business from Uni-Marts, and (c) PNC had any relationship with Petitioner other than borrower and lender with respect to Petitioner's decision to purchase a business from Uni-Marts, and (d) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (e) Petitioner has alleged any ground for the judgment to be stricken, and (f) Petition has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 23. Denied. PNC denies that PNC was aware that Petitioner was placing any trust in PNC. PNC denies that PNC acknowledged any such trust. Further, PNC denies that (a) Petitioner had any right to trust Petitioner regarding Petitioner's decision to purchase a Uni-Mart business, and (b) PNC had any duty to Petitioner with respect to Petitioner's decision to purchase a business from Uni-Marts, and (c) PNC had any relationship with Petitioner other than borrower and lender with respect to Petitioner's decision to purchase a business from Uni-Marts, and (d) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (e) Petitioner has alleged any ground for the judgment to be stricken, and (f) Petition has stated any meritorious defense to the judgment that would justify striking or opening the judgment. 24. Denied. PNC denies that PNC made any representations to Petitioner "with regard to the Wilkes-Bare store". The answers to paragraphs 20 and 21 are incorporated herein as if set forth in full. 25. Denied. After reasonable investigation, PNC is without knowledge or information sufficient to form a belief as to the truth of this averment. However, PNC denies that Petitioner has suffered any losses for which PNC is responsible. The answers to paragraphs 20 and 21 are incorporated herein as if set forth in full. WHEREFORE, PNC respectfully requests this honorable Court to deny the relief requested by the Petitioner and dismiss the Petition, with prejudice. Respectfully submitted, McNees Wallace & Nurick LLC Date: September 16, 2008 By: ?? huff, Esquire Supreme ourt ID #24848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, : DOCKET NO. 08-4407 Civil Term Plaintiff V. SNS BUDDIES, INC,, DB.A UNI-MART, Defendant CONFESSION OF JUDGMENI. PREVIOUSLY ASSIGN[ I)TO: JUDGE KEVIN A. I IISS VERIFICATION I, K}°ra E. roranski, Assistant Vice President for I'NC Bank, National :Association, being authorized to do so on behalf of PNC Bank-, National Association, hereby verify that the statements made in the foregoing pleading are true and correct to the best of my information, knowledge and belief. I understand that false statements herein are made subject to the penalties; of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. Date: PNC BANK, NATIONAL ASSOCIATION COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO. 08-4407 Civil Term Plaintiff V. SNS BUDDIES, INC., DBA UNI-MART, Defendant CONFESSION OF JUDGMENT PREVIOUSLY ASSIGNED TO: JUDGE KEVIN A. HESS CERTIFICATE OF SERVICE AND NOW, this 16th day of September, 2008, the undersigned, of the firm of McNees Wallace & Nurick LLC, hereby certify that I this day served a true and correct copy of the Answer Of PNC Bank, National Association, to Petition to Strike and/or Open Judgment as addressed below via United States Mail, postage prepaid, addressed as follows: Robert C. Nowalis, Esquire Doran, Nowalis & Doran 69 Public Square, Suite 700 Wilkes-Barre, PA 18701-2588 Date: September 16, 2008 Respectfully submitted, McNees Wallace & Nurick LLC By: cY'S. uff, Esquire Supreme Court ID #24848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff c?. ? ° oo i ? ? rn nr ; t p m? t '' --- `? ?' _ ??y .?_. cx'? C? ? y -.? .?., _ mac` ? ,?` C ? ? ORIGINAL 71 PNC BANK, NATIONAL ASSOCIATION, Plaintiff, VS. SNS BUDDIES, INC., d/b/a UNI-MART, Defendants. PNC BANK, NATIONAL ASSOCIATION, Plaintiff, VS. SUNIL KHANNA and NEERU KHANNA, Defendants. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION - LAW NO. 08-4407 J IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION - LAW NO. 08-4409 D E P O S I T I O N Transcript of the Deposition of SUNIL KHANNA, taken on Friday, October 24, 2008, at the Law Offices of DORAN, NOWALIS & DORAN, 69 Public Square, Suite 700, Wilkes-Barre, Pennsylvania, commencing at 2:15 p.m. LOIS THOMAS COURT REPORTER 33 Highland Drive Wilkes-Barre, PA 18706-4106 (570) 825-2982 FAX (570)825-0343 2 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 P P E A R A N C E S: McNEES, WALLACE & NURICK, LLC BY: GEOFFREY S. SNUFF, ESQUIRE 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 Counsel for Plaintiff DORAN, NOWALIS & DORAN BY: ROBERT C. NOWALIS, ESQUIRE 69 Public Square, Suite 700 Wilkes-Barre, PA 18701-2588 Counsel for Defendant INDEX EXAMINING ATTORNEY ROBERT NOWALIS GEOFFREY SHUFF DIRECT CROSS REDIRECT 3 24 EXHIBITS RECROSS EXHIBIT NO. DESCRIPTION PAGE PNC No. 1 Complaint for Confession of Judgment 24 PNC No. 2 Complaint for Confession of Judgment 25 PNC No. 3 Commercial Guaranty 26 PNC No. 4 Promissory Note 27 PNC No. 5 Commercial Guaranty 27 PNC No. 6 Amendment to Loan Documents 28 3 1 ATTORNEY SHUFF: We are agreeing to the usual 2 stipulations, subject to a few qualifying remarks that 3 we want to state for the record: First, as to the 4 testimony of Mr. Khanna as an individual in the case of 5 PNC Bank versus Sunil Khanna and Neeru Khanna, No. 6 08-4409. Judge Ebert's Order does not refer to the 7 taking of depositions; in fact, his Order is clear that 8 since PNC's Answer has been filed, "The Court will 9 determine if a hearing status conference or further 10 order of the court is required." So there is no 11 authority for Mr. Khanna's deposition and testimony in 12 this case, the individual case. For these reasons, it 13 is PNC's position that while the deposition may proceed 14 in order possibly to save the parties additional 15 effort, time, and expense in the future to the extent 16 that the deposition purports to include the testimony 17 of Mr. Khanna as an individual in the case before Judge 18 Ebert, PNC objects to the deposition and testimony for 19 the record today and reserves its rights to object to 20 submission to the Court and use of the deposition and 21 testimony in the Khanna case. 22 Second: Practice under Pa.R.C.P, Pennsylvania 23 Rule of Civil Procedure 2006.7, it is unique in that a 24 deposition taken under Rule 206.7 will be submitted 25 directly to the Court for consideration rather than 4 1 used in an evidentiary hearing with the deponent 2 present as a witness; therefore, in this context we are 3 reserving the right to and will make objections for the 4 record today so that the Court will have ease of 5 reference in the text of the deposition and testimony 6 to the Bank's objections. 7 Third, in that regard, we'll note before 8 proceeding that to the extent the testimony today 9 alleges that PNC Bank is in any way liable to the 10 Petitioner, particularly the allegations in paragraphs 11 12 through 25 of the Petition in the case of PNC Bank 12 versus SNS Buddies, d/b/a Uni-Mart, No. 08-4407, or in 13 paragraphs 18 through 32 of the Petition in the case of 14 PNC Bank versus Sunil Khanna and Neeru Khanna, No. 08- 15 4409, PNC hereby states for the record its objections 16 to any such testimony on the grounds that it is 17 irrelevant in an action for Confession of Judgment and 18 to the issues before the Court in that context and 19 because much, if not all, of such testimony is either 20 hearsay or concerning matters that are outside the 21 Petitioner's knowledge or statements concerning matters 22 about which the Petitioner is not competent to testify. 23 Finally, of course, we reserve the right to 24 make these and other objections during the course of 25 the deposition today for the reasons previously stated, 5 1 then we reserve the right to make these and other 2 objections to the deposition and the testimony at any 3 future stage of either of these cases. 4 Thank you for your patience. 5 *** 6 SUNIL KHANNA, having been duly sworn, 7 testified as follows: 8 DIRECT EXAMINATION by ATTORNEY NOWALIS: 9 Q. Sir, would you state your full name for 10 the record and spell it? 11 A. Sunil Khanna, S-U-N-I-L K-H-A-N-N-A. 12 Q. Sir, are you related in any way to Neeru 13 Khanna? 14 A. Yes, she's my wife. 15 Q. Would you please spell her name? 16 A. Neeru, N-E-E-R-U K-H-A-N-N-A. 17 Q. When were you married to Neeru? 18 A. 1984. 19 Q. Where do you and your wife reside, sir? 20 A. 3 Cherokee Square, Wilkes-Barre, 21 Pennsylvania 18702. 22 Q. Sir, do you know where Cumberland 23 County, Pennsylvania is? 24 A. I just because of this case, but before 25 that I didn't know where it is. 0 6 1 Q. Is it generally next to Harrisburg? 2 A. Yes, Harrisburg. 3 Q. Have you ever been in Cumberland County? 4 A. Never. 5 Q. Has SNS Buddies, Inc. d/b/a Uni-Mart 6 ever conducted any business in Cumberland County? 7 A. No, never. 8 Q. Do you or SNS Buddies have any property 9 in Cumberland County? 10 A. No, not at all. 11 Q. In 2004, sir, did you explore investing 12 in any in any business ventures? 13 A. Pardon me. 14 Q. In 2004, did you explore and enter into 15 any business investment? 16 A. Yes. 17 Q. What investment was that? 18 A. It was Uni-Mart. Their ads were on the 19 TV, Uni-Mart stores and gasoline stations. 20 Q. And what were the advertisements saying? 21 A. Well, they were Indian and Pakistani 22 channels; mos tly it's a big opportunity, Uni-Mart is 23 selling their property stores, only the businesses, and 24 they are very profit making and it's a lifetime 25 opportunity f or you. 7 1 Q. These were TV advertisements? 2 A. TV advertisements. 3 Q. And they were carried on Indian and 4 Pakistani TV channels? 5 A. Right. 6 Q. What is SNS Buddies, Inc.? 7 A. That's the company name. 8 Q. Do you have any interest in that 9 company? 10 A. Yes, I'm the owner. 11 Q. Do you own shares in that company? 12 A. Yes. 13 Q. What percentage? 14 A. 85 percent. 15 Q. Who owns the other 15 percent? 16 A. My wife, Neeru. 17 Q. When you saw the ads on the TV for the 18 sale of the Uni-Marts, what did you do? 19 A. And they were also saying that they were 20 going to hold seminars at different places and anybody 21 is welcome to attend those seminars. 22 Q. And where were you physically located at 23 that time? 24 A. New York City. 25 Q. And for how long had you been there? 8 1 A. Five years at that time. 2 Q. Were you employed at that time? 3 A. Yes, I was. 4 Q. Was your wife employed at that time? 5 A. Yes, she was. 6 Q. Did you explore investing in the 7 purchase of a Uni-Mart with your wife? 8 A. We used to see those ads and we wanted 9 to do something, and then I attended the seminars 10 because I was interested in doing a business. 11 Q. So you were attending on your own behalf 12 and on behalf of your wife? 13 A. Yes. 14 Q. Where is the registered office of SNS 15 Buddies? 16 A. It is 94 South Pennsylvania Avenue, 17 Wilkes-Barre, Pennsylvania, in Luzerne County. 18 Q. Does SNS Buddies do any business in 19 Cumberland County, Pennsylvania? 20 A. No. 21 Q. Does SNS Buddies conduct any 22 transactions or occurrences in Cumberland County, 23 Pennsylvania? 24 A. No. 25 Q. Does it have any property in C 9 1 Pennsylvania? 2 A. No. 3 Q. You mentioned the advertisements 4 indicated there were going to be seminars held. Did 5 you attend any seminar? 6 A. Yes, I did. 7 Q. Where was it? 8 A. That was in Summit Hill, New Jersey, 9 Edison, or somewhere around there. I don't exactly 10 remember the place now. 11 Q. Do you know approximately when that was? 12 A. That was in October or November, 2004. 13 Q. Who conducted the seminar? 14 A. Uni-Mart was conducting the seminars 15 with Kuber Corporation. 16 Q. Would you spell Kuber, please. 17 A. K-U-B-E-R. And Kuber eventually was the 18 broker for PNC Bank and was promoting sales for Uni- 19 Mart. 20 Q. Now when you say "broker", what do you 21 mean, or what is your understanding of the term 22 "broker"? 23 ATTORNEY SHUFF: Excuse the interruption, but 24 we're already at the point that I didn't think we would 25 get to so quickly. I'd like to reiterate our objection 10 1 to his line of questioning as it relates to any 2 liability to PNC Bank to the Petitioner, particularly 3 the allegations that I previously referred to. I mean 4 he's saying that this outfit was a broker for PNC Bank, 5 which is just not true. Again, I just want to 6 reiterate the objection. 7 ATTORNEY NOWALIS: Okay. 8 Q. Now what is your understanding of the 9 term "broker"? 10 A. Like he had his charges, he representing 11 PNC Bank as if he was PNC Bank, and he was saying 12 things on behalf of PNC Bank, and he was charging them 13 percent commission or his charges on the loan amount. 14 Q. Now in 2004, are you aware of 15 approximately how many convenience stores Uni-Mart had? 16 A. More than 200. 17 Q. Do you recall how many they were 18 selling? 19 A. They sold about 160 or 170. 20 Q. Did you explore purchasing one or more 21 of those stores? 22 A. Yes, a few stores, like there was a 23 preference place. I went to those stores and we were 24 not allowed to go deep into it. We were allowed just 25 to go there as a customer and relied upon their • 11 1 numbers, the balance sheet, the profit and loss that 2 they gave us, and Kuber also said they were all 3 verified by the bank. 4 Q. Now what stores did you first visit? 5 A. I was to the one which I have now. 6 Q. Which is where? 7 A. 94 South Pennsylvania Avenue, and the 8 one on Kidder Street in Wilkes-Barre, and there's one 9 in Hazleton, Hamburg, and one in the Village of Effort, 10 one in East Stroudsburg. 11 Q. Now you said you were in receipt of some 12 financial information about the stores. 13 A. Yes. 14 Q. Describe that. 15 A. Yes. I received financial information 16 I would describe only for this store which gave me a 17 yearly profit of $360,000.00, and it showed salaries, 18 $155,000.00 per year, but then I took over the store 19 and I was talking to Kuber on behalf of PNC that the 20 things are verified. They said that everything is 21 verified, that the bank will never give you a loan if 22 they are not satisfied that the stores are good, that 23 they're profit making, but when I took over the store, 24 only the salaries part was $400,000.00, which took off 25 all the profit. 9 12 1 Q. Let's take a step back one second. Who 2 provided you with that financial information? 3 A. Uni-Mart. 4 Q. And what part did Kuber play, if any, 5 in commenting on the financial information that Uni- 6 Mart gave you? 7 A. All that financial information was 8 passed on to PNC through Kuber, and it was discussed 9 with them. They said they had verified the stores were 10 very good and these are accurate. 11 Q. Now who verified that the stores were 12 very good? 13 A. That is what the bank broker told me, 14 and it was in the seminars where they were announcing 15 we could get PSP properties, a specific package, from 16 another broker, NRC Realty Advisor; they were the main 17 brokers selling these stores. We could get those 18 properties, a specific package from them, to see what 19 the profit and losses are and how the stores are, their 20 numbers for the last three years, and he would give us 21 all the details about the store in that booklet. 22 Q. The booklet was provided by Uni-Mart 23 through Kuber? 24 A. Through NRC. 25 Q. Did you eventually make a bid for the 13 1 Wilkes-Barre store? 2 A. Yes. 3 Q. And is the note which is attached to 4 the Confession of Judgment Complaint of SNS Buddies, 5 the note you executed with regard to the purchase of 6 that store. 7 A. What is that? 8 Q. The note, the Promissory Note that was 9 attached to the Complaint of SNS Buddies, was that the 10 Promissory Note you executed on behalf of the 11 corporation to the Bank as financing for this purchase? 12 A. Yes. 13 Q. Did you and your wife guarantee that 14 obligation? 15 A. Yes. 16 Q. And is the Guaranty attached to the 17 Confession of Judgment clause against yourself and your 18 wife to No. 08-4409, the Guaranty you and your wife 19 executed in connection with this purchase transaction? 20 A. Yes. 21 Q. The seminar that you attended, I think 22 you've already indicated that was presented by Uni- 23 Mart. 24 A. Um-hum, and they were clearly saying 25 that members from PNC Bank, Unity Bank, although they 0 14 1 were not identified there, we cannot give their name, 2 but they are present in the seminar. 3 Q. Who said that? 4 A. Uni-Mart announced it from the ... 5 Q. To the whole assembly? 6 A. Yes. 7 Q. They said that representatives of PNC, 8 Unity Bank, M & T, and Community South Bank were 9 present? 10 A. Yes, they were all present and they were 11 closely monitoring everything. 12 Q. Were any representations made with 13 respect to whether those lenders were preferred SBA 14 lenders? 15 A. Yes. 16 Q. What was your understanding of a 17 preferred SBA lender? 18 A. They said the preferred SBA lender, it 19 is easier for anybody to go through them, and some of 20 the loans they already got pre-approved from SBA. 21 Q. Were you advised by anyone whether or 22 not the banks, including PNC Bank, had reviewed the 23 proposed sales transactions? 24 A. Yes. 25, Q. And what were you told and by who? 0 15 1 A. They were told they were publicly 2 announced when they said the PNC, M & T, and all those 3 people were also in that hall, but they will not 4 announce their names and they were publicly announced 5 there. 6 Q. Who made that announcement? 7 A. Uni-Mart, their president. 8 Q. Was there any mention of the term, "due 9 diligence"? 10 A. "Due diligence", yes, that term was 11 there. 12 Q. In what context was that discussed? 13 A. It was discussed in the context that 14 PNC Bank has done and M &T Bank, all the banks have 15 done their due diligence", that's why they're ready to 16 give these loans, unsecured loans. 17 Q. Was there any reference to PNC having 18 some aspects of the SBA financing pre-approved? 19 A. Yes. 20 Q. What was said? 21 A. As I said, they only said they have 22 certain stores and most of the stores were already pre- 23 approved by SBA. 24 Q. Pre-approved for sale and financing? 25 A. Yes. C? J 16 1 Q. Did anyone announce at the seminar or 2 at any subsequent time that they were a representative 3 of PNC and that PNC had not done due diligence with 4 regard to the sales, had not reviewed the financial 5 statements? 6 A. No, this impression was given to all the 7 buyers, I would say, that the banks are so much 8 satisfied that they're ready to give these unsecured 9 loans, and that is what they did. On first 10 application, everything was approved. There were no 11 objections. They wanted some collateral. I didn't 12 have any collateral. I asked Mr. Roper of Kuber 13 Financial that I don't want to give any collateral on 14 that because I have just one apartment. He said, "We 15 will get that bid." I remember even one officer from 16 PNC Bank, Mr. Ubaid Khan, he was a loan officer, and 17 for some clarifications he called me once, and I asked 18 him whether everything was okay. He said, yeah, you're 19 very luck. You'll go miles forward. These stores are 20 very good. The bank is very satisfied to finance these 21 stores. 22 Q. So he volunteered that himself? 23 A. Exactly. 24 Q. What branch of PNC was he at, if you 25 know? 17 1 A. That is again in New Jersey. I can pull 2 out those papers, where the closing was. The closing 3 was at their place in New Jersey. I think it is in 4 Edison, New Jersey or New Brunswick. It was in the PNC 5 Building there, a big building, and the closing and 6 everything was there. 7 Q. Why did you go forward with the purchase 8 of the Uni-Mart store in Wilkes-Barre? 9 A. Because there were other stores which I 10 was interested in. They went for a very high price, 11 and this was the one that was allotted to me. You had 12 to give preference wise, like you go and see ten stores 13 and then you give a preference. I need only one store, 14 but my preference is this, number one, I want this one, 15 number two ... if I can't buy one, I will go for two, 16 so a preference was I was offered the store by Uni- 17 Mart. 18 Q. Did the representations with respect to 19 due diligence and review of financial statements by the 20 banks, in particular PNC, play any part in you going 21 forward with the purchase? 22 A. As I told you, when I talked to Kuber, 23 he said the bank has already verified, and they had the 24 Uni-Mart corporate office also to verify all the 25 information. 0 18 1 Q. Did you rely upon that representation? 2 A. Absolutely. One would think that if the 3 bank is giving a loan, a bank will not give a loan to a 4 place which is not visible. 5 Q. What was the name of the loan officer in 6 New Jersey again? 7 A. Ubaid Khan. 8 Q. Did you indicate to Mr. Khan when he 9 made that representation that you were relying upon and 10 trusting PNC with respect to the information they were 11 giving you? 12 A. Yes, of course. I told him that since 13 the banks are so happy, we need not do anything, you 14 can't verify everything, and if the bank is happy, the 15 bank is saying you are lucky to get the store, that 16 it's a profit-making thing and it will go miles in your 17 life, so that is where you are convinced, the banks are 18 giving loans, it's a good business. 19 Q. Do you recall approximately when you 20 closed on the sales transaction? 21 A. It was 11 April 2005. There was a bank 22 closing and the store closing for Uni-Mart was the next 23 day. 24 Q. Did you come to learn that some of the 25 representations made to you were not correct? 19 1 A. Yes. 2 Q. Specifically what did you discover was 3 incorrect? 4 A. Specifically, when you got that store, 5 Uni-Mart, they were giving a two-week training to you 6 and one of their managers was giving us a training. 7 When he was training me, I just asked him, what are the 8 salaries here? But before that, I was not allowed to 9 ask that question to anybody, but when I asked him what 10 the salaries are, he told me about $32,000.00 to 11 $34,000.00 a month, and I was shocked, because Uni-Mart 12 had showed like $15,000.00, $16,000.00 a month on the 13 balance sheets, and it was $400,000.00, a difference of 14 $230,000.00 on the salaries, and then we had to pay two 15 cents per gallon to Uni-Mart on the gas, which comes to 16 about $35,000.00; that whole $300,000.00 profit goes 17 just like that. 18 Q. So were there any other components that 19 adversely affected the bottom line profit that you were 20 told to expect? 21 A. Yes. I was given the car wash sales 22 worth $300,000.00 a year; the car wash sale was never 23 $300,000.00 a year. 24 Q. What was it? 25 A. You should have between $150,000.00 to • 20 1 $180,000.00, so eventually it was loss from day one. 2 Q. Did you and your wife and SNS Buddies 3 suffer any loss with respect to the conduct of this 4 business? 5 A. We lost everything. 6 Q. Give me more specifics, please. 7 A. That question, I don't ... 8 Q. You can take a break if you need to. 9 A. We put all of our savings into it, about 10 $350,000.00, and she had a job, $100,000.00 a year, and 11 I had a job, $60,000.00 a year. We left those jobs and 12 put everythi ng to it. Two months later, we were in all 13 the debts. All the credit cards were maxed. The bank 14 is after me, everyone is after me. I borrowed money 15 from all my relatives just to see that something would 16 happen and I will be able to share some land or 17 something wi th that landlord and don't go bankrupt. 18 Q. Did you confront Uni-Mart with the 19 misrepresent ations you discovered? 20 A. Yes, I did. 21 Q. About when was that? 22 A. That was about September of the same 23 year, 2005. 24 Q. And what was their reaction? 25 A. Their reaction was ... I wanted them E 21 1 to pay all my loans and lower the rent. They said they 2 would not lower the rent a penny, and after three or 3 four meetings with all the top bosses, they promised me 4 that they would give me $400,000.00 back, and I 5 requested them, I wanted to pay $350,000.00, at least, 6 to PNC, so that the monthly installment goes down, that 7 was my intention, and $50,000.00 I wanted to pay my 8 credit cards and everything, but even at that time I 9 had to pay the vendors, which was overdue. With that 10 $50,000.00, I paid the vendors. I couldn't even pay my 11 credit cards. I had to sell my second apartment in New 12 York. I took all the money from there and put that 13 into the business. I took another $50,000.00 line of 14 credit from PNC Bank and paid all those losses from 15 there. 16 Q. Let's take one step back so that we have 17 it clear on the record: What did you end up paying for 18 the store? 19 A. $830,000.00. 20 Q. Is it your testimony that after 21 confronting Uni-Mart with the inaccurate information 22 they provided you with, they agreed to give you 23 $400,000.00 back? 24 A. Yes. 25 Q. And of the $400,000.00, you paid • 22 1 $350,000.00 to PNC? 2 A. To PNC. 3 Q. And that would have been in late 2005 4 or early 2006? 5 A. It was December, 2005. I think it was 6 the 31st of December or 30th of December, 2005. 7 Q. Did Uni-Mart concede in those 8 negotiations that the information they provided you was 9 inaccurate? 10 A. No, they would never say that. 11 Q. But, yet, they gave back almost half the 12 purchase price. 13 A. Yes, and even at that time, they said, 14 this is the deal, either you take it or you leave it. 15 I had no other option but to take it. 16 Q. Are you aware that a class action of 17 dealers or purchasers similar to yourself was 18 instituted? 19 A. Before that, one more thing: Even at 20 that time, they said that we will review everything 21 after one year, which they never did. I had went to 22 their place, had meetings, and they said, we are doing 23 nothing. 24 Q. Are you aware of the class action that 25 was instituted in Luzerne County by other purchasers 0 23 1 similar to yourself? 2 A. Yes. 3 Q. Was that before or after your 4 negotiations with Uni-Mart? 5 A. It was going on side by side. 6 Q. Are you aware whether or not Uni-Mart 7 settled that litigation? 8 A. They did. 9 Q. And were similar allegations and 10 misrepresentation made by the dealers in that 11 litigation? 12 A. Exactly. 13 Q. Sir, are there some slight inaccuracies 14 in the petition we filed in this case that you pointed 15 out to me? 16 A. Yes, the date on page one. 17 Q. Page one, paragraph one, in both 18 petitions, we indicate July 23, 2005. What should that 19 date be? 20 A. The same day, but the year is 2008. 21 Q. Are there other corrections to be made 22 with respect to Kuber and who actually conducted the 23 seminars? 24 A. Yes. Actually Uni-Mart conducted the 25 seminars. 0 24 1 Q. But Kuber was there, the broker? 2 A. Kuber was there as broker and a 3 representative of the bank. 4 ATTORNEY NOWALIS: That's all I have on 5 direct. 6 *** 7 CROSS-EXAMINATION by ATTORNEY SHUFF: 8 Q. Sir, I have given you a copy of the 9 Complaint for Confession of Judgment that was filed in 10 the SNS Buddies case, which I have marked for the 11 record as PNC Bank Exhibit No. 1, and I ask that you 12 turn to the copy ... well, actually you have already 13 confirmed for your attorney that the note that is 14 attached to that Complaint you did sign for the 15 $775,500.00 loan. 16 A. Um-hum. 17 Q. Then I asked you to turn to Exhibit "B" 18 of the Complaint, which is a copy of the Disclosure for 19 Confession of Judgment, and I ask whether that is your 20 signature on that document that was signed in 21 connection with the $775,500.00 SBA loan? 22 A. Yes. 23 Q. And then the page after that Exhibit "C" 24 is a copy of the default and acceleration letter that 25 was sent to you. It indicates it was sent by Certified E 25 1 and Regular Mail. Do you recall receiving a copy of 2 that and signing the Certified Mail receipt for it? 3 ATTORNEY NOWALIS: I object to the form of 4 the question. I'm not sure what counsel means by 5 "you". Mr. Khanna is here on both an individual basis 6 with respect to the one petition and as an officer of 7 SNS Buddies with respect to the other. 8 ATTORNEY SNUFF: 9 Q. Did SNS Buddies receive and sign for the 10 Certified Mail? 11 A. The employees must have signed it, if it 12 was signed. I personally never signed anything. 13 Q. I have given you a copy of the Complaint 14 for Confession of Judgment in the Khanna case, which 15 has been marked for the record as PNC Bank Exhibit No. 16 2. I believe you've also confirmed in response to your 17 attorney's question that the SBA Unconditional 18 Guarantee, which is attached to it, you did sign, 19 guaranteeing the loan to SNS Buddies. 20 A. Yes. 21 Q. I would ask that you turn to Exhibit 22 "C" in that Complaint. Exhibit "C" is a copy of the 23 Disclosure for Confession of Judgment, and I ask 24 whether that is your signature above your printed name 25 on that document that was signed in connection with the 0 26 1 $775,500.00 SBA loan? 2 A. Yes. 3 Q. I ask that you turn to Exhibit "D", 4 which is the next page, and ask if you are aware that 5 someone signed a Certified Mail Receipt for the copies 6 of this letter that were sent to you and Neeru as 7 guarantors of the loan? 8 A. No. 9 Q. Would you go back to the Disclosure for 10 Confession of Judgment. 11 A. Exhibit "C"? 12 Q. Exhibit "C", correct. Please note in 13 the first paragraph that in addition to the SBA 14 Guaranty, a Commercial Guaranty is referred to, and 15 this will be PNC Bank Exhibit No. 3. I have given you 16 a copy of the Commercial Guaranty that is referred to 17 and ask whether that is your signature above your 18 printed name on that document that was signed in 19 connection with the $775,500.00 SBA loan to SNS 20 Buddies? 21 A. Yes. 22 Q. In addition to the $775,500.00 loan that 23 you received on April 11th, 2005, SNS Buddies later 24 obtained a $50,000.00 SBA Express loan also, is that 25 correct? 27 1 A. Yes. 2 Q. I am giving you a copy of a $50,000.00 3 Promissory Note, which has been marked for the record 4 as PNC Bank Exhibit No. 4, that identifies PNC Bank as 5 the Lender and SNS Buddies as the Borrower and ask 6 whether that is your signature on the note signed on 7 behalf of SNS Buddies for obtaining the $50,000.00 SBA 8 express loan? 9 A. Yes. 10 Q. I've given you a copy of a Commercial 11 Guaranty, which has been marked for the record as PNC 12 Bank Exhibit No. 5, that identifies SNS Buddies as the 13 Borrower and you as the Guarantor, and ask whether that 14 is your signature on that document that was signed in 15 connection with your guarantee of the $50,000.00 SBA 16 Express loan? 17 A. Yes. 18 Q. And the $50,000.00 loan was initially 19 scheduled to expire on October 18th, 2007, is that 20 correct? 21 A. Yes. 22 Q. But the Bank agreed to extend the 23 expiration date, is that correct? 24 A. Yes, as a term loan. 25 Q. I'll show you a copy of an Amendment to 28 1 Loan Documents between SNS Buddies and ANC Bank, which 2 has been marked for the record as PNC Bank Exhibit No. 3 6, and ask whether or not that is your signature on 4 page 3 on that document that you signed on behalf of 5 SNS Buddies for the extension of the expiration date of 6 the loan to October 18th, 2015? 7 A. Yes. 8 Q. And please turn to the last page of that 9 document, which is entitled, Consent of Guarantor, and 10 I ask whether that is your signature on that document? 11 A. Yes. 12 Q. And pursuant to these documents, SNS 13 Buddies borrowed and agreed to repay to PNC Bank the 14 $775,500.00 loan and the $50,000.00 loan, correct? 15 A. Yes. 16 Q. And also pursuant to the Guaranty 17 documents, you and/or Neeru Khan guaranteed the 18 repayment of those loans? 19 A. Yes. 20 Q. When was the last time a payment was 21 made on these loans? 22 A. On the larger one, the last, I think it 23 was December of 2007 or January of 2007. 24 Q. Would it surprise you to learn that the 25 Bank's records indicate that you were past due for a 9 29 1 partial payment in December of 2007 and that no 2 payments were made after December, 2007 on the large 3 loan. 4 A. Yes, maybe that's the date. 5 Q. And on the small loan? 6 A. On the small loan, I was overdue by 7 $2,330 something for the past three months. They were 8 deducting an installment of $772 from my account at 9 PNC, but they froze my accounts there, and I have still 10 about $3,600.00 in those accounts and I have been 11 requesting Kyra Zoranski to adjust my smaller loan, all 12 the installments from that, but she said she won't do 13 that. 14 Q. Would it surprise you to learn that the 15 Bank's records indicate that you were past due for the 16 payment due in August and all payments after that? 17 ATTORNEY NOWALIS: Objection to the form of 18 the question and relevance. 19 ATTORNEY SHUFF: I guess you can answer. 20 ATTORNEY NOWALIS: Do you understand the 21 question? I think it's irrelevant whether or not he's 22 surprised. It has no bearing on any issue in this 23 litigation. 24 A. Is this $50,000.00 loan involved with 25 this other loan? I can't understand whether we are 0 30 1 dealing with the bigger loan, which is the main loan of 2 $775,500, outstanding $300,000 something. 3 Q. I'm treating those separately. I'm done 4 with the big loan. If I told you that the Bank's 5 records indicate that you are due for August on the 6 small loan and all payments after August, would that 7 sound correct? 8 A. Right, for that I have requested Kyra 9 to adjust those installments for the money I still have 10 in PNC Bank in my checking account, but it is frozen, 11 and she doesn't know whether she can do it. She says, 12 no, we will adjust against the bigger loan, neither she 13 adjusted the smaller loan, so ultimately, today, in the 0 14 morning, I mailed them a check for $1,500.00 against 15 that loan. 16 Q. Is SNS Buddies still operating the 17 business? 18 A. Yes. 19 Q. So the business has been in operation 20 for approximately three and a half years since April of 21 2005. 22 A. Yes. 23 Q. And it's still operating. 24 A. On the verge of closure, I would say. 25 Q. And just a couple questions on the 0 31 1 seminar that you referred to in direct. I'm not clear. 2 Who presented the seminar? 3 A. Uni-Marts. 4 Q. And what was Kuber's role? 5 A. Kuber was the bank's broker present in 6 the seminar. 7 Q. Were there any banks present at the 8 seminar? 9 A. I was told that, that high officials 10 from all the banks are sitting in the hall, but they 11 were not identified due to certain reasons. 12 Q. So no representative of a bank made any 13 kind of representation or presentation at the seminar 14 in the seminar room. 15 A. Not directly, but ... 16 ATTORNEY NOWALIS: Excuse me. Objection to 17 the form of the question. We get into the legal 18 concept of representation by failure to correct a 19 representation, so I don't think that question is 20 entirely clear. 21 ATTORNEY SNUFF: 22 Q. No officer or employee of the bank was 23 present making representations at the seminar in the 24 room. 25 ATTORNEY NOWALIS: Same objection. C? 32 1 ATTORNEY SNUFF: 2 Q. You were told that representatives of 3 the banks were there, but they were not identified to 4 you, is that correct? 5 A. They were not identified,,but Kuber was 6 as he was representing PNC Bank. Before, when I 7 applied for the loan, it was all through him as he's 8 from the bank. He got all the paperwork, he got all 9 the signatures. I never signed any application in 10 front of a bank. The only time I talked to Mr. Ubaid 11 Khan was when he wanted some papers from me, and he 12 said everything was very good, that I was lucky. 13 Q. Do you know if Kuber had a contract with 14 PNC Bank? 15 A. He should be having a contract with PNC 16 Bank because he was taking all the PNC Bank cases. 17 Q. Well, didn't you say he was a broker? 18 A. He is a broker. 19 Q. And wouldn't he have been performing his 20 functions as a broker to assist in the closings? 21 A. Yes. 22 Q. And do you know whether or not Kuber had 23 a contract with Uni-Marts? 24 A. I have no idea. 25 Q. And you don't know if he had a contract • 33 1 with PNC either. 2 A. But he was representing PNC, because he 3 was getting all the papers on behalf of PNC. He was 4 getting everything signed on behalf of PNC. 5 Q. As a broker, is that correct? 6 A. As a broker. I would say as a broker, 7 or like he was representing PNC all the time. 8 Q. Did he not also present the financial 9 information from Uni-Marts? 10 A. No, he did not. 11 Q. He did not? 12 A. No. Financial information was obtained 13 from NRC Realty. 14 Q. okay, there was another broker. Did 15 Uni-Marts present any financial information directly at 16 this seminar? 17 A. No, there were so many stores, so they 18 could not give you everything for all the stores at one 19 seminar. If you're interested in purchasing a store, 20 you had to call NRC to get that information from them. 21 Q. So the final information that you were 22 relying on to purchase the store was Uni-Mart's 23 financial information that was presented through NRC 24 Realty. 25 A. NRC Realty, and then it was said that 34 • 11 ill 2 11 7 8 9 10 11 121 131 14 15 16 17 18 19 20 21 22 23 24 25 everything is okay, the bank has visited the place, and they would not do a loan if they're not happy with their financial thing. Q. But you're saying the financial information that you got was not correct. A. It wasn't. Q. Do you know what financial information the banks were relying on to make these loans? A. The same, PSP. ATTORNEY SNUFF: I have nothing further. ATTORNEY NOWALIS: No redirect. (Deposition concluded at 3:05 p.m.) 0 35 • • 1 2 3 4 5 6 7 8 9 10l 11 12 13 14 15 16I 17 18 19 20 21 22 23 24 25 C E R T I F I C A T I O N I, Lois Thomas, a Court Reporter and Standing Commissioner for the County of Luzerne, Pennsylvania, do hereby certify the foregoing to be a true and accurate transcript of my original stenographic notes taken at the time and place hereinbefore set forth. LOIS THOMAS Court Reporter Standing Commissioner • uo or d?- , -5 f, J- e), r-I l_J 0 • s SUN1L $1,500.00[1) 30:14 $100,000.00 [1) 20:10 $15,000.00 p1 19:12 $150,000.00(11 19:25 $155,000.00[1111:18 $16,000.00 p) 19:12 $180,000.00 [1) 20:1 $2,330[11 29:7 $230,000.00 [ll 19:14 $3,600.00[11 29:10 $300,000 [1] 30:2 $300,000.00 [31 19:16 19:22,23 $32,000.00 [11 19:10 $34,000.00[1] 19:11 $35,000.00 [1l 19:16 $350,000.00 [3) 20:10 21:5 22:1 $360,000.00[1] 11:17 $400,000.00[5) 11:24 19:13 21:4,23,25 $50,000.00 pot 21:7 21:10,13 26:24 27:2,7,15 27:18 28:14 29:24 $60,000.00111 20:11 $772 (1l 29:8 $775,500 (11 30:2 $775,500.00 [6) 24:15 24:21 26:1,19,22 28:14 $830,000.00 [1) 21:19 -0- 08 [1) 4:14 08-4407[11 4:12 08-4409 (21 3:6 13:18 -1- 1 [11 24:11 11 [1] 18:21 11th (1) 26:23 12 (11 4:11 15 [1l 7:15 160 [1) 1o:19 170 [ll 10:19 18 (1) 4:13 18702 [1) 5:21 18th [2) 27:19 28:6 1984 (11 5:18 -2- 2 [1l 25:16 200[11 10:16 2004 [41 6:11,14 9:12 10:14 2005 (81 18:21 20:23 22:3 22:5,6 23:18 26:23 30:21 2006 p1 22:4 10/24/08 2006.7 [1) 3:23 2007 [51 27:19 28:23,23 29:1,2 2008 [1) 23:20 2015 [11 28:6 206.7 (11 3:24 23 p1 23:18 25 [11 4:11 -3- 3 (3) 5:20 26:15 28:4 30th pl 22:6 31st[ll 22:6 32 p) 4:13 3:05 (11 34:12 -4- 4 [1] 27:4 4409 [11 4:15 -5- 5 (1) 27:12 -6- 6 [il 28:3 85 [ll 7:14 -9- 94 [21 8:16 11:7 -A- able p1 20:16 above [2) 25:24 26:17 Absolutely p) 18:2 acceleration [11 24:24 account (2) 29:8 30:10 accounts [2) 29:9,10 accurate p) 12:10 action [3] 4:17 22:16,24 addition [21 26:13,22 additional [1) 3:14 adjust [31 29:11 30:9112 adjusted [11 30:13 ads [3] 6:18 7:17 8:8 adversely p) 19:19 advertisements [41 6:20 7:1,2 9:3 advised [1) 14:21 Advisorp) 12:16 affected [11 19:19 again [31 10:5 17:1 18:6 against [3] 13:17 30:12 30:14 agreed [3) 21:22 27:22 28:13 agreeing p1 3:1 (;w Ikmaslc (31 4:10 10:3 alleges [1] 4:9 allotted [i1 17:11 allowed [31 10:24,24 19:8 almost (1l 22:11 Amendment pi 27:25 amount [ll 10:13 announce (2) 15:4 16:1 announced m 14:4 15:2 15:4 announcement [11 15:6 announcing [1] 12:14 answer [21 3:8 29:19 apartment [21 16:14 21:11 application [2) 16:10 32:9 applied p1 32:7 approved [21 15:23 16:10 April [31 18:21 26:23 30:20 aspects [I1 15:18 assembly [ll 14:5 assist [1) 32:20 attached (sl 13:3,9,16 24:14 25:18 attend [21 7:219:5 attended [21 8:9 13:21 attending [11 8:11 attorney pal 3:1 5:8 9:23 10:7 24:4,7,13 25:3,8 29:17,19,20 31:16,21,25 32:1 34:10,11 attorney's [1) 25:17 August [3] 29:16 30:5,6 authority [11 3:11 Avenue [21 8:16 11:7 aware [51 10:14 22:16,24 23:6 26:4 -B- B p1 24:17 balance [21 11:1 19:13 bank [521 3:5 4:9,11,14 9:18 10:2,4,11,11,12 11:3 11:21 12:13 13:11,25,25 14:8,8,22 15:14,14 16:16 16:20 17:23 18:3,3,14,15 18:2120:13 21:14 24:3 24:11 25:15 26:15 27:4,4 27:12,22 28:1,2,13 30:10 31:12,22 32:6,8,10,14,16 32:16 34:1 bank's [51 4:6 28:25 29:15 30:4 31:5 bankrupt [1] 20:17 banks [1o) 14:22 15:14 16:7 17:20 18:13,17 31:7 31:10 32:3 34:8 basis [11 25:5 bearing [1) 29:22 behalf [91 8:11,12 10:12 11:19 13:10 27:7 28:4 33:3,4 between [21 19:25 28:1 bid [21 12:25 16:15 big [3l 6:22 17:5 30:4 bigger [2) 30:1,12 booklet (2) 12:21,22 borrowed [2l 20:14 28:13 Borrower [2] 27:5,13 bosses [1) 21:3 bottom [ll 19:19 branch [11 16:24 break (1l 20:8 broker [171 9:18,20,22 10:4,9 12:13,16 24:1,2 31:5 32:17,18,20 33:5,6,6 33:14 brokers [11 12:17 Brunswick [1) 17:4 Buddies [231 4:12 6:5,8 7:6 8:15,18,21 13:4,9 20:2 24:10 25:7,9,19 26:20,23 27:5,7,12 28:1,5,13 30:16 building [21 17:5,5 business (101 6:6,12,15 8:10,18 18:18 20:4 21:13 30:17,19 businesses [1) 6:23 buy [il 17:15 buyers [11 16:7 -C- C (51 24:23 25:22,22 26:11 26:12 Cannot [1] 14:1 Car [21 19:21,22 cards [31 20:13 21:8,11 carried [1] 7:3 case p 11 3:4,12,12,17,21 4:11,13 5:24 23:14 24:10 25:14 Cases [21 5:3 32:16 cents [1] 19:15 Certain [2] 15:22 31:11 Certified (41 24:25 25:2 25:10 26:5 channels (2) 6:22 7:4 charges [21 10:10,13 charging [11 10:12 check [1] 30:14 checking (11 30:10 Cherokee pl 5:20 City [1] 7:24 Civil [11 3:23 clarifications [11 16:17 Class [2) 22:16,24 clause [1) 13:17 clear [41 3:7 21:17 31:1 $1,500.00 - course 31:20 Clearly [1) 13:24 closed [ll 18:20 Closely [11 14:11 Closing [51 17:2,2,5 18:22 18:22 Closings [1] 32:20 Closure [t] 30:24 Collateral [31 16:11,12 16:13 commenting [1) 12:5 Commercial [31 26:14 26:16 27:10 commission [11 10:13 Community [1) 14:8 company [31 7:7,9,11 competent [1] 4:22 Complaint [7] 13:4,9 24:9,14,18 25:13,22 components (11 19:18 concede p1 22:7 concept [ll 31:18 concerning [2) 4:20,21 concluded [11 34:12 conduct (21 8:21 20:3 conducted [41 6:6 9:13 23:22,24 conducting [11 9:14 conference [11 3:9 Confession [s) 4:17 13:4,17 24:9,19 25:14,23 26:10 confirmed (21 24:13 25:16 confront (11 20:18 Confronting [11 21:21 connection [51 13:19 24:2125:25 26:19 27:15 Consent [1] 28:9 Consideration [1) 3:25 COnteat [4) 4:2,18 15:12 15:13 contract [4) 32:13,15,23 32:25 convenience p1 10:15 convinced [1) 18:17 copies [1] 26:5 COPY [11] 24:8,12,18,24 25:1,13,22 26:16 27:2,10 27:25 Corporate [1] 17:24 corporation (2) 9:15 13:11 correct (u1 18:25 26:12 26:25 27:20,23 28:14 30:7 31:18 32:4 33:5 34:5 Corrections [11 23:21 counsel [1] 25:4 County [81 5:23 6:3,6,9 8:17,19,22 22:25 Couple [1) 30:25 Course pl 4:23,24 18:12 LV15 -1-11VMAJ, UUUK1- REPOKFER (570) 825-2982 FAX (570) 825-0340 Index Page 1 • • SUNIL KHANNA, 10/24/08 C&I Basic"' court - means Court [61 3:8,10,20,25 4:4 4:18 credit [41 20:13 21:8,11 21:14 CROSS-EXANUNA17ON (i) 24:7 Cumberland [6) 5:22 6:3,6,9 8:19,22 customer [11 10:25 -D- D [il 26:3 d/b/a (21 4:12 6:5 date [51 23:16,19 27:23 28:5 29:4 deal [1l 22:14 dealers [21 22:17 23:10 dealing [1] 30:1 debts (11 20:13 December [61 22:5,6,6 28:23 29:1,2 deducting [1] 29:8 deep (1l 10:24 default [1l 24:24 deponent [1) 4:1 deposition (101 3:11,13 3:16,18,20,24 4:5,25 5:2 34:12 depositions [1) 3:7 describe [2) 11:14,16 details 111 12:21 determine [1l 3:9 difference [1) 19:13 different [1) 7:20 diligence [sl 15:9,10,15 16:3 17:19 direct [3) 5:8 24:5 31:1 directly [3) 3:25 31:15 33:15 Disclosure [3) 24:18 25:23 26:9 discover [1l 19:2 discovered [1) 20:19 discussed [3l 12:8 15:12 15:13 document [7) 24:20 25:25 26:18 27:14 28:4,9 28:10 documents [3) 28:1,12 28:17 doesn't [11 30:11 done [4) 15:14,15 16:3 30:3 down [1] 21:6 due [1o1 15:8,10,15 16:3 17:19 28:25 29:15,16 30:5 31:11 duly (1l 5:6 during [11 4:24 -E- E-E-R-U [1) 5:16 11l 22:4 ease [1) 4:4 easier [1l 14:19 East[11 11:10. Ebert [11 3:18 Ebert's [11 3:6 Edison (21 9:9 17:4 effort [21 3:1511:9 either [4) 4:19 5:3 22:14 33:1 employed [2) 8:2,4 employee [1l 31:22 employees [11 25:11 end [1l 21:17 enter [1] 6:14 entirely [1) 31:20 entitled [11 28:9 eventually [31 9:17 12:25 20:1 evidentiary [1) 4:1 exactly [31 9:9 16:23 23:12 EXAMINATION 11) 5:8 Excuse [21 9:23 31:16 executed (3l 13:5,10,19 Exhibit [131 24:11,17,23 25:15,21,22 26:3,11,12 26:15 27:4,12 28:2 expect [1] 19:20 expense [1) 3:15 expiration (21 27:23 expire [11 27:19 explore (41 6:11,14 8:6 10:20 express (31 26:24 27:8 27:16 extend [1] 27:22 extension [1) 28:5 extent [21 3:15 4:8 -F- fact [1] 3:7 failure [1) 31:18 few [21 3:2 10:22 filed [3) 3:8 23:14 24:9 final [11 33:21 Finally (1) 4:23 finance [11 16:20 financial [1s) 11:12,15 12:2,5,7 16:4,13 17:19 33:8,12,15,23 34:3,4,7 financing [31 13:11 15:18,24 first [4) 3:3 11:4 16:9 26:13 Five [1) 8:1 follows (11 5:7 form [3) 25:3 29:17 31:17 forward [31 16:19 17:7 17:21 Inc. 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Sentemher E • meetings [2) 21:3 22:22 October [3) 9:12 27:19 penny [1] 21:2 provided [a) 12:2,22 representation [s) 18:1 .members p) 13:25 28:6 people [1) 15:3 21:22 22:8 18:9 31:13,18,19 mention [1) 15:8 off [11 11:24 per [2) 11:18 19:15 PSP [2) 12:15 34:9 representations [a) mentioned [1) 9:3 offered [1) 17:16 percent [3) 7:14,15 10:13 Publicly [2) 15:1,4 14:12 17:18 18:25 31:23 Miles (21 16:19 18:16 office (2) 8:14 17:24 percentage [1] 7:13 pull [1) 17:1 representative [3) 16:2 misrepresentation [11 officer (s) 16:15,16 18:5 performing [1] 32:19 Purchase [s) 8:7 13:5,11 24:3 31;12 23:10 25:6 31:22 personally [1) 25:12 13:19 17:7,21 22:12 33:22 representatives [2) misrepresentations 20 19 officials (1) 31:9 petition [a) 4:11,13 purchasers [21 22:17,25 14:7 32:2 representing [a) 10:10 [1) : once (1) 16:17 23:14 25:6 purchasing [2) 10:20 32:6 33:2 7 money [3) 20:14 21:12 30:9 one [26) 10:20 11:5,8,8,9 Petitioner [3) 4:10,22 11:10 12:1 16:14,15 17:11 10:2 33:19 purports (1) 3:16 , requested (2) 21:5 30:8 Monitoring (11 14:11 17:13,14,14,1518:219:6 Petitioners [1) 4:21 20 1 21 16 22 19 21 23 16 pursuant [2] 28:12,16 requesting [1) 29:11 month (2) 19:11,12 : : : , : bons [1) 23:18 23:17 P 17 25:6 28:22 33:18 put [3) 20:9,12 21:12 uired(1) 3:10 req monthly [1) 21:6 , h sicall [1 7:22 i reserve (21 4:23 5:1 y y ] Operat ng (z) 30:16,23 p reserv 3 19 months [2) 20:12 29:7 operation [1) 30:19 place (6) 9:10 10:23 17:3 -Q- es [1] : mornin [1) 30:14 g 18:4 22:22 34:1 opportunity [z) 6:22,25 qualifying (1) 3:2 reserving (i) 4:3 reside [1) 5:19 most (1) 15:22 places [1) 7:20 Option [1) 22:15 questioning [1) 10;1 mostly [1) 6:22 play (21 12:4 17:20 order (a) 3:6,7,10,14 questions [1) 30:25 ct respect [71 14:13 17:18 18:10 20:3 23:22 25:6 7 must (1) 25:11 Outfit [1) 10:4 4;14PNC [s1) 8 10:2,4,,4,1111 ,15 9:11810:,11 quickly [1) 9:25 , response [1) 25:16 outside [1) 4:20 10:12 11:19 12:8 13:25 t t di 2 1 30 -R- review [2) 17:19 22:20 ou s an ng [1] : 4:7,22 15:2,14,17 16:3,3 reviewed [2) 14:22 16:4 N (1) 5:16 Overdue (21 21:9 29:6 16:16,24 17:4,20 18:10 rather [1] 3:25 right [5) 4:3,23 5:17: 5 name [7) 5:9,15 7:7 14:1 18:5 25:24 26:18 Own [2) 7:11 8:11 21:6,14 22:1,2 24:11 25: 15 26:15 reaction (2) 20:24,25 30:8 names (1) 15:4 30:10 0 32;6 owner (1) 7:10 28:1 ,2,13 29::9 9 30: 7 15 ready[2) 15:15 16:8 rights [11 3:19 role 31 4 need (3) 17:13 18:13 20:8 owns [1) : 32:14,15,16 33:1,2,3,4,7 Realty [41 12:16 33:13 [1) : Neeru [s) 3:5 4:14 5:12 PNC'S [2) 3:8,13 33:24,25 room [2) 31:14,24 5:16 17 7:16 26:6 28:17 _p_ point [1) 9:24 reasons [3] 3:12 4:25 Ro [11 16:12 , negotiations [2) 22:8 P•m (1) 34:12 pointed [1] 23:14 31:11 recei t 3 11 11 25 2 Rule [2) 3:23,24 23:4 22 Position (1) 3:13 Pa R P C 3 p [ ) : : . . 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Zoranski settled [11 23:7 submission [1l 3:20 share [11 20:16 submitted [11 3:24 shares [11 7:11 subsequent [1l 16:2 sheet [1) 11:1 such [2) 4:16,19 Sheets [1l 19:13 suffer [11 20:3 shocked [1) 19:11 Summit [1) 9:8 show [11 27:25 Sunil [41 3:5 4:14 5:6,11 showed [21 11:17 19:12 surprise [21 28:24 29:14 SHUFF [s] 3:19:23 24:7 surprised [1) 29:22 25:8 29:19 31:21 32:1 sworn [1l 5:6 34:10 side [2) 23:5,5 _T_ sign [3) 24:14 25.9,18 signature [7) 24:20 25:24 26:17 27:6,14 28:3 28:10 signatures [11 32:9 signed [121 24:20 25:11 25:12,12,25 26:5,18 27:6 27:1428:432:933:4 j signing [11 25:2 similar [31 22:17 23:1,9 sitting [11 31:10 slight [1) 23:13 Small [31 29:5,6 30:6 smaller [21 29:11 30:13 SNS [231 4:12 6:5,8 7:6 8:14,18,21 13:4,9 20:2 24:10 25:7,9,19 26:19,23 27:5,7,12 28:1,5,12 30:16 sold [1) 10:19 T(31 14:8 15:2,14 taking [21 3:7 32:16 ten [11 17:12 term [s] 9:21 10:9 15:8 15:10 27:24 testified [1l 5:7 testify [11 4:22 testimony [111 3:4,11,16 3:18,214:5,8,16,19 5:2 21:20 text [11 4:5 Thank [1) 5:4 therefore [1) 4:2 Third [1l 4:7 three [4) 12:20 21:2 29:7 30:20 through [81 4:11,13 12:8 12:23,24 14:19 32:7 33:23 someone [1) 26:5 today [51 3:19 4:4,8,25 somewhere [11 9:9 30:13 sound [1l 30:7 took [51 11:18,23,24 21:1: South [31 8:16 11:7 14:8 21:13 specific [21 12:15118 top [1l 21:3 Specifically [21 19:2,4 training [3) 19:5,6,7 Specifics [11 20:6 transaction [21 13:19 Spell [31 5:10,15 9:16 18:20 transactions [2) 8:22 Square [1] 5:20 14:23 stage [1l 5:3 treating [1l 30:3 state [21 3:3 5:9 true [11 10:5 statements [3) 4:21 16:5 trusting [1) 18:10 17:19 turn [51 24:12,17 25:21 states [11 4:15 26:3 28:8 stations [11 6:19 TV [51 6:19 7:1,2,4,17 Status [11 3:9 two [41 17:15,15 19:14 step [21 12:1 21:16 20:12 Still [41 29:9 30:9,16,23 two-week [11 19:5 Stipulations [11 3:2 store [151 11:16,18,23 -U- 12:21 13:1,6 17:8,13,16 18:15 22 19:4 21:18 33:19 Ubaid [31 16:16 18:7 , 33:22 32:10 stores [211 6:19,23 10:15 ultimately [11 30:13 10:21,22,23 11:4,12,22 Um-hum [2) 13:24 24:16 12:9,11,17,19 15:22,22 Unconditional [1l 16:19,21 17:9,12 33:17 25:17 33:18 under [21 3:22,24 Street [1l 11:8 understand [2) 29:20,25 Stroudsburg [1i 11:10 Uni [41 9:18 12:5 13:22 subject [11 3:2 17:16 Uni-Mart [24) 4:12 6:5 6:18,19,22 8:7 9:14 10:15 12:3,22 14:4 15:7 17:8,24 18:22 19:5,11,15 20:18 21:2122:7 23:4,6,24 Uni-Mart's [11 33:22 Uni-Marts [51 7:18 31:3 32:23 33:9,15 unique [1l 3:23 Unity [2l 13:25 14:8 unsecured [21 15:16 16:8 up [1l 21:17 used [21 4:18:8 usual [11 3:1 vendors [21 21:9,10 ventures [1l 6:12 verge [1) 30:24 verified [61 11:3,20,21 12:9,11 17:23 verify [21 17:24 18:14 versus [31 3:5 4:12,14 Village [11 11:9 visible [1l 18:4 visit [1] 11:4 visited [1] 34:1 volunteered [11 16:22 _W_ wash 121 19:21,22 welcome [1l 7:21 whole [2] 14:5 19:16 wife [1o1 5:14,19 7:16 8:4 8:7,12 13:13,18,18 20:2 Wilkes-Barre [51 5:20 8:17 11:8 13:1 17:8 wise [1l 17:12 witness [11 4:2 worth [1l 19:22 -Y- year [s) 11:18 19:22,23 20:10,11,23 22:21 23:20 yearly [1l 11:17 years [3) 8:1 12:20 30:20 yet [1l 22:11 York [21 7:24 21:12 Yourself [31 13:17 22:17 23:1 -Z- Zoranski [11 29:11 LOIS THOMAS, COURT REPORTER (570) 825-2982 FAX (570) 825-0340 Index Page 4 • E x ?, b; t-s E 11 • COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, Plaintiff :DOCKET NO. (38 - 41407 o'-wi m v. SNS BUDDIES, INC., DBA UNI-MART, Defendant n CONFESSION OF JUDGMENT r7 PREVIOUSLY ASSIGNED TO: 11{x- COMPLAINT FOR CONFESSION OF JUDGMENT UNDER RULE 2951 F.! L? r-- w h7 U? Q -n J :zt .`z7 1. The Plaintiff, PNC Bank, National Association, is a national banking association 0 organized and existing under the laws of the United States of America with a principal regional office located at 201 Penn Avenue, Scranton, PA 18503 (the "Plaintiff") 2. The Defendant, SNS Buddies, Inc., dba Uni-Mart, is a Pennsylvania corporation with a last known address of 94 South Pennsylvania Avenue, Wilkes Barre, PA 18702 (the "Defendant"). 3. The Defendant executed and delivered to the Plaintiff a U.S. Small Business Administration Note dated April 11, 2005, in the original principal amount of Seven Hundred Seventy-Five Thousand Five Hundred Dollars ($775,500) (the "Note"), a true and correct photostatic reproduction of the original of which is attached hereto as Exhibit "A" and made a part hereof. 4. The Defendant executed and delivered to the Plaintiff' a Disclosure for Confession E of Judgment, a true and correct photostatic reproduction of the original of which is attached hereto as Exhibit "B" and made a part hereof m t t . U1V0? Las s 5. Defendant is in default of Defendant's obligations to make payment to the Plaintiff as required in the Note, and the Plaintiff has demanded payment in full of all outstanding amounts as provided in the Note. A copy of the Plaintiffs demand dated February 27, 2008, is attached hereto as Exhibit "C" and made a part hereof. 6. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 7. There has not been any assignment of the Note. 8. Judgment has not been entered on the Note in any jurisdiction. 9. The amount due to the Plaintiff as a result of the Defendant's default is as follows: a. Principal $325,508.57 b. Interest to July 14, 2008 $ 20,687.16 C. Late Charges $ 2,348.91 d. Attorneys' Fees . 14,51 IM 7 TOTAL DUE: $383,164.21 10. Interest continues to accrue at a rate equal to the Prime Rate in effect on the first business day of the month in which an interest rate change occurs, as published in the Wall Street Journal on the next business day, plus two and one-half percent (2.500/o), adjusted monthly. WHEREFORE, Plaintiff, PNC Bank, National Association, demands judgment against the Defendant, SNS Buddies, Inc., dba Uni-Mart, in the amount of Three Hundred Eighty-Three Thousand One Hundred Sixty-Four and 21/100 Dollars ($383,164.21), plus interest at a rate equal to the Prime Rate in effect on the first business day of the month in which an interest rate change occurs, as published in the Wall Street Journal on the next business day, plus two and one-half 0 percent (2.50%), adjusted monthly, through the date of payment, including on and after the date of entry of judgment on this Complaint, and for other expenses, fees and costs to which the Plaintiff may be entitled. Respectfully submitted, McNees Wallace & Nurick LLC Date: July?008 By; 'Wreme Court #24848 % PO Box 1166 100 Pine Str Harrisburg, A 17108-1166 (717) 237-5439 Attorneys for Plaintiff 0 is 0 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, Plaintiff V. DOCKET NO. CONFESSION OF JUDGMENT SNS BUDDIES, INC., DBA UNI-MART, Defendant : PREVIOUSLY ASSIGNED TO: N/A VERIFICATION I, Kyra E. Zoranski, Assistant Vice President for PNC Bank, National Association, being 11 Section 4904, relating to unsworn falsification to authorities. authorized to do so on behalf of PNC Bank, National Association, hereby verify that the statements made in the foregoing pleading are true and correct to the best of my information, knowledge and belief. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. PNC BANK, NATIONAL ASSOCIATION Date: By: ham' Kyra E Zoranski Assist t Vice Pi 0 U.S. Small Business Administration NOTE SBA Loan # PLP 868-078-4005 SBA Loan Name SNS Buddies Inc. dba Uni-Mart Date Loan Amount 775,500.00 Interest Rate FLOATING AT WSJ PRIME PLUS 2.50% RESULTING IN AN INITIAL RATE OF 8.00% Borrower SNS Buddies inc. dba Uni-Mart Operating Company Lender PNC Bank, National Association 1. PROMISE TO PAY: In return for the Loan, Borrower promises to pay to the order of Lender the amount of SEVEN HUNDRED SEVENTY FIVE THOUSAND FIVE HUNDRED --- ---- Dollars, interest on the unpaid principal balance, and all other amounts required by this Note. 2. DEFINITIONS: "Collateral" means any property taken as security for payment of this Note or any guarantee of this Note. "Guarantor" means each person or entity that signs a guarantee of payment of this Note. "Loan" means the loan evidenced by this Note. "Loan Documents" means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral. 0 SBA Form 147 (OW08/02) Verabn 4.1 "SBA" means the Small Business Administration, an Agency of the United States of America. Page 1/6 Bankers Systems, Inc., St. Cloud, MN r,(?,k16 tk `A1) 3. PAYMENT TERMS: . Borrower must make all payments at the place Lender designates. The payment terms for this Note are: r This Note will mature in 10 years from date of Note. The initial interest rate on this Note will fluctuate. The Initial Interest rate is 8.00% per year. This Initial rate is the prime rate on the date SBA received the loan application, plus 2.50%. The interest rate must remain in effect until the first change period begins. Borrower must pay interest on the disbursed principal balance, plus principal of $6,462.50 every month, beginning one month from the month this Note Is dated; payments must be made on the first calendar day in the months they are due. Lender will apply each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal. The interest rate will be adjusted monthly (the "change period"). The "Prime Rate" is the prime rate in effect on the first business day of the month in which the an interest rate change occurs, as published in the Wall Street Journal on the next business day. The adjusted interest rate will be 2.50% above the Prime Rate. Lender will adjust the interest rate on the first calendar day of each change period. The change in interest rate is effective on that day whether or not Lender gives Borrower notice of the change. The initial interest rate must remain in effect until the first change period begins. Lender must adjust the payment amount at least annually as needed to amortize principal over the remaining term of the note. If SBA purchase the guaranteed portion of the unpaid principal balance, the interest rate becomes fixed at the rate in effect at the time of the earliest uncured payment default. If there is no uncured payment default, the rate becomes fixed at the rate in effect at the time of purchase. All remaining principal and accrued interest is due and payable 10 years from date of Note. Late Charge: If a payment on this Note is more than 10 days. late, Lender may charge Borrower a late fee of up to 5% of the unpaid portion of the regularly scheduled payment. Loan Prepayment: Notwithstanding any provision in this note to the contrary: Borrower may prepay this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must: a. Give Lender written notice; b. Pay all accrued Interest; and c. If the prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days Interest from the date Lender receives the notice less any interest accrued during the 21 days and paid SBA Form 147 (08/03/02) Version 4.1 Page 2/8 Bankers Systems, Inc., St. Cloud, MN SBA 147: Note Page 2 Continuation Continuation of..." under subparagraph b., above. If Borrower does not prepay within 30 days from the date Lender receives the notice, Borrower must give Lender a new notice. 0 0 Page 1 Bankers Systems, Inc., St. Cloud, MN 4. DEFAULT: Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company: A. Fails to do anything required by this Note and other Loan Documents; B. Defaults on any other loan with Lender; C. Does not preserve, or account to Lender's satisfaction for, any of the Collateral or its proceeds; D. Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA; E. Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA; F. Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower's ability to pay this Note; G. Fails to pay any taxes when due; H. Becomes the subject of a proceeding under any bankruptcy or insolvency law; I. Has a receiver or liquidator appointed for any part of their business or property; J. Makes an assignment for the benefit of creditors; K. Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower's ability to pay this Note; L. Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender's prior written consent; or M. Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this Note. • 5. LENDER'S RIGHTS IF THERE IS A DEFAULT: Without notice or demand and without giving up any of its rights, Lender may: A. Require immediate payment of all amounts. owing under this Note; B. Collect all amounts owing from any Borrower or Guarantor; C. File suit and obtain judgment; D. Take possession of any Collateral; or E. Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement. 6. LENDER'S GENERAL POWERS: Without notice and without Borrower's consent, Lender may: A. Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses; B. Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney's fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance; C. Release anyone obligated to pay this Note; D. Compromise, release, renew, extend or substitute any of the Collateral; and E. Take any action necessary to protect the Collateral or collect amounts owing on this Note. E SBA Form 147 (06/03102) Version 4.1 page 3/6 Bankers Systems, Inc., St. Cloud, MN 0 7. WHEN FEDERAL LAW APPLIES: When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law. 8. SUCCESSORS AND ASSIGNS: Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns. 9. GENERAL PROVISIONS: A. All individuals and entities signing this Note are jointly and severally liable. B. Borrower waives all suretyship defenses. C. Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral. D. Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them. E. Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note. . F. If any part of this Note is unenforceable, all other parts remain in effect. G. To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale. SBA Form 147 (06/03/02) Version 4.1 page 4/0 Bankers Systems, Inc., St. Cloud, MN 10. STATE-SPECIFIC PROVISIONS: 1. POWER TO CONFESS JUDGMENT. UNDERSIGNED HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER OR ANY HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE, ALL ACCRUED INTEREST AND ALL OTHER AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF 10% OF SUCH PRINCIPAL AND INTEREST ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO, THIS NOTE OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE UNDERSIGNED HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. JUDGMENT MAY BE CONFESSED FROM TIME TO TIME UNDER THE AFORESAID POWER TO CONFESS JUDGMENT AND NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE LENDER SHALL ELECT UNTIL SUCH TIME AS THE LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST, COSTS AND FEES. C 0 2. Governing Law; Jurisdiction. This Note will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the Commonwealth of Pennsylvania, excluding its conflict of laws rules. The Undersigned hereby Irrevocably consents to the exclusive jurisdiction of the Courts of Common Pleas of the Commonwealth of Pennsylvania and the United States District Court for the Western District of Pennsylvania; provided that nothing contained in this Note will prevent the Lender or any holder hereof from bringing any action, enforcing any award or judgment or exercising any rights against the Undersigned, against any security or against any properly of the Undersigned within any other county, state or other foreign or domestic jurisdiction. The Undersigned agrees that the venue provided above is the most convenient forum for both the Lender and the Undersigned and the Undersigned waives any objection to venue and any objection based on a more convenient forum in any action Instituted under this Note. The Undersigned agrees that service of process in any such proceeding may be duly effected upon the Undersigned by mailing a copy thereof by registered mail, postage prepaid, to the Undersigned. 3. WAIVER OF JURY TRIAL. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE UNDERSIGNED MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY. DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE UNDERSIGNED ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. SBA Fonn 147 (08/03102) Version 4.1 Page 5/8 Bankers Systems, Inc., St. Cloud, MN 11. BORROWER'S NAME(S) AND SIGNATURE(S): By signing below, each individual or entity becomes obligated under this Note as Borrower. SNS Buddies Inc. dba Uni-Mart SUNIL KHANNA, PRESIDENT • • SBA Form 147 (08103102) Verslon 4.1 Page 8/8 Bankers Systems, Inc., St. Cloud, MN Disclosure for Confession of Judgment Undersigned: SNS BUDDIES, INC. DBA UNI-MART PA AVENUE & NORTHAMPTON STREET WILKES BARRE, PA 18702 Lender: PNC BANK, NATIONAL ASSOCIATION 8800 TE41CUM BOULEVARD PHILADELPHIA, PA 19153 PNCB.AtNK The undersigned has executed, and/or is executing, on or about the date hereof, the following document(s) under which the undersigned is obligated to repay monies to Lender: Us Small Business Administration Note. • A. THE UNDERSIGNED ACKNOWLEDGES AND AGREES THAT THE ABOVE DOCUMENTS CONTAIN PROVISIONS UNDER WHICH LENDER MAY ENTER JUDGMENT BY CONFESSION AGAINST THE UNDERSIGNED. BEING FULLY AWARE OF ITS RIGHTS TO PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THATMAYBE ASSERTED AGArwIT BY LENDER THEREUNDER BEFORE JUDGMENT IS ENTERED, T HE UNDERSIGNED RUtEBY FREELY, KNOWINGLY AND INTELLIGENTLY WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT AGAINST IT BY CONFESSION PURSUANT TO TEE TERMS THEREOF. B. THE UNDERSIGNED ALSO ACKNOWLEDGES AND AGREES THAT THE ABOVE DOCUMENTS CONTAIN PROVISIONS UNDER WHICH LENDER MAY, AFTER ENTRY OF JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, FORECLOSE UPON, ATTACH, LEVY, TAKE POSSESSION OF OR OTHERWISE SEIZE PROPERTY OF THE UNDERSIGNED IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. BEING FULLY AWARE OF ITS RIGHTS AFTER JUDGMENT IS ENTERED (INCLUDING THE RIGHT TO MOVE TO OPEN OR STRIKE THE JUDGMENT), THE UNDERSIGNED HEREBY FREELY, KNOWINGLY AND INTELLIGENTLY WAIVES ITS RIGHTS TO NOTICE AND A HEARING AND EXPRESSLY AGREES AND CONSENTS TO LENDER'S TAKING SUCH ACTIONS AS MAY BE PERMITTED UNDER APPLICABLE STATE AND FEDERAL LAW WITHOUT PRIOR NOTICE TO THE UNDERSIGNED. C. The undersigned certifies that a representative of Lender specifically called the confession of judgment provisions in the above documents to the attention of the undersigned, and/or that the undersigned was represented by legal counsel in connection with the above documents. D. The undersigned hereby certifies: that its annual income exceeds $10,000; that all references to Athe undersigned above refer to all persons and signing below; and that the undersigned received a copy hereof at the time of signing. -??? ?.7 Dated: • SNS BUDDIE, INC. DBA UNI-MART By: -? (kt;l e Sunil , President rc `?l X <" i Q Form 8M - PA Rev. 3/99 u WNCBAN'K MIse ruary 27, 2008 Certified and Regular Mail SNS Buddies Inc d/b/a Uni-.Mart Suni1 Khanna, President 94 South Pennsylvania Avenue Wilkes-Barre, Pennsylvania 18702 RI: Loan #32167351/602522191 Dear Mr. Khanna: You are in default of your obligations to PNC Bank (the "Bank") for failure to make payments on the $775,500.00 loan (the "Loan") as required in the Promissory Note that evidences the Loan and the Guaranty Agreetnent(s) that secures the Loan. As a result of the default of your obligations to the Bank, the entire outstanding amount of the Loan. has • been accelerated and is now due and payable immediately in full. The amounts that are due and payable to the Hank are as follows: Principal $325,508.57 Interest $ 10,571.87 (as of 2/27/618) Late Charges 1043,96 Total $337,124.40 Interest continues to accrue at the rate of $86.95 per day through the date can which payment is received by the Bank. In addition to the amounts set forth above, you will be responsible for payment or reimbursement to the Bank for all attorneys' fees incurred or paid by the Hank with respect to this matter. Please make arrangements for payment in full of your obligations to the Bwlk by contacting the Bank, as follows: Kyra E. Zoranski Assistant Vice President 201 Penn Avenue Scranton, PA 18503 Phone: (570) 961-6266 Member of YMe PNC Financial Services Cm (570) 961-6240 101 Penn Avenue Scranton Pennsylvania 18503 www.Pnc.rom E X?, tLI't ?,C 11 • Page 2 Neither this letter nor anything contained herein waives, limits or otherwise affects in any way the Bank's rights to exercise and enforce its rights and remedies for collection of your obligations to the .Bank, all of which are reserved by the hank, and remain in full force and effect, enforceable by the Bank at any time an or after the date of this letter. We look forward to receiving payment in full of your obligations to the Bank in the immediate future. Otherwise, the Bank may have no alternative but to initiate collection proceedings. If you have any questioans.p.lease call me at 570-961-6266. Thank you in advance for your cooperation in this matter. Sincerely, y Kyra Iorans? Assistant. Vice esident 1] cc: Sunit Khanna, Guarantor Ne cru, Khanna, Guarantor 0 P/u 6??Jlc ? I Pdj-f 0 0 1] COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO. ggbg &Ivil-lem Plaintiff V. CONFESSION OF JUDGMENT _ SUNIL KHANNA and NEERU KHANNA, e ;; 1 Defendants PREVIOUSLY ASSIGNED TO: N/,A_.- irif" COMPLAINT FOR CONFESSION OF JUDGMENT UNDER RULE 2951 ate- 1. The Plaintiff, PNC Bank, National Association, is a national banking association organized and existing under the laws of the United States of America with a principal regional office located at 201 Penn Avenue, Scranton, PA 18503 (the "Plaintiff'). 2. The Defendants, Sunil Khanna and Neeru Khanna, are adult individuals whose last known address is 3 Cherokee Square, Wilkes-Barre, PA 18702 (the "Defendants"). 3. The Defendants executed and delivered to the Plaintiff a U.S. Small Business Administration Unconditional Guarantee (the "Guarantee"), a true and correct photostatic reproduction of the original of which is attached hereto as Exhibit "A" and made a part hereof 4. Under the Guarantee, the Defendants guaranteed to the Plaintiff the payment of all amounts due to the Plaintiff by SNS Buddies, Inc., dba Uni-Mart (the "Debtor") under a U.S. Small Business Administration Note dated April 11, 2005, in the original principal amount of Seven Hundred Seventy-Five Thousand Five Hundred Dollars ($775,500) (the "Note"), a true and correct photostatic reproduction of the original of which is attached hereto as Exhibit "B" and made a part hereof. IBR o? I ?? L oL u 5. The Defendants executed and delivered to the Plaintiff a Disclosure for Confession of Judgment, a true and correct photostatic reproduction of the original of which is attached hereto as Exhibit "C" and made a part hereof 6. The Debtor is in default of the Debtor's obligations to make payment to the Plaintiff as required in the Note and the Defendants are in default of the Defendants' obligations to make payment to the Plaintiff under the Guarantee. As a result of the Debtor's and the Defendants' defaults, the Plaintiff has demanded payment of all outstanding amounts as provided in the Note, which are now due and payable in full. A copy of the Plaintiffs demand dated February 27, 2008, is attached hereto as Exhibit "D" and made a part hereof. 7. Judgment is not being entered by confession against a natural person in connection 0 with a consumer credit transaction. 8. There has not been any assignment of the Guarantee or the Note. 9. Judgment has not been entered on the Guarantee in any jurisdiction. 10. An itemized computation of the amount due to the Plaintiff by the Defendants as a result of the Defendants' defaults under the Guarantee is as follows: a. Principal $325,508.57 b. Interest to July 14, 2008 $ 20,687.16 C. Late Charges $ 2,348.91 d. Attorneys' Fees t 34,61()-57 TOTAL DUE: $383,164.21 11. Interest continues to accrue at a rate equal to the Prime Rate in effect on the first business day of the month in which an interest rate change occurs, as published in the Wall Street Journal on the next business day, plus two and one-half percent (2.50%), adjusted monthly. 0 WHEREFORE, Plaintiff, PNC Bank, National Association, demands judgment against the Defendants, Sunil Khanna and Neeru Khanna, in the amount of Three Hundred Eighty-Three Thousand One Hundred Sixty-Four and 21/100 Dollars ($383,164.21), plus interest at a rate equal to the Prime Rate in effect on the first business day of the month in which an interest rate change occurs, as published in the Wall Street Journal on the next business day, plus two and one-half percent (2.50%), adjusted monthly, through the date of payment, including on and after the date of entry of judgment on this Complaint, and for other expenses, fees and costs to which the Plaintiff may be entitled. Respectfully submitted, L -I McNees Wallace & Nurick LLC Date: July2--2008 By 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff 0 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO, Plaintiff V. CONFESSION OF JUDGMENT SUNIL KHANNA and NEERU KHANNA, : Defendants : PREVIOUSLY ASSIGNED TO: N/A VERIFICATION 1, Kyra E. Zoranski, Assistant Vice President for PNC Bank, National Association, being t?J authorized to do so on behalf of PNC Bank, National Association, hereby verify that the statements made in the foregoing pleading are true and correct to the best of my information, knowledge and Section 4904, relating to unsworn falsification to authorities. belief. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Date: C, PNC BANK, NATIONAL ASSOCIATION U.S. Small Business Administration UNCONDITIONAL GUARANTEE f? 0 SBA Form 148 (10198) Previous editions obsolete. SBA Loan # PLP 868-078-4005 SBA Loan Name SNS Buddies Inc. dba Uni-Mart Guarantor SUNIL KHANNA NEERU KHANNA Borrower SNS Buddies Inc, dba Uni-Mart Lender PNC Bank, Natio al Association Date - _? Note Amount 775,500.00 1. GUARANTEE: Guarantor unconditionally guarantees payment to Lender of all amounts owing under the Note. This Guarantee remains in effect until the Note is paid in full. Guarantor must pay all amounts due under the Note when Lender makes written demand upon Guarantor. Lender is not required to seek payment from any other source before demanding payment from Guarantor. 2. NOTE: in the principal amount of The "Note" is the promissory note dated SEVEN HUNDRED SEVENTY FIVE THOUSAND FIVE HUNDRED ---- Dollars, from Borrower to Lender. It includes any assumption, renewal, substitution, or replacement of the Note, and multiple notes under a line of credit. 3. DEFIMTIONS: "Collateral" means any property taken as security for payment of the Note or any guarantee of the Note. "Load" means the loan evidenced by the Note. "Loan Documents" means the documents related to the Loan signed by Borrower, Guarantor or any other guarantor, or anyone who pledges Collateral. "SBA" means the Small Business Administration, an Agency of the United States of America. Pape 1/5 Bankers Systems, Inc., St. Cloud, MN 4. LENDER'S GENERAL POWERS: Lender may take any of the following actions at any time, without notice, without Guarantor's consent, and without making demand upon Guarantor: A. Modify the terms of the Note or any other Loan Document except to increase the amounts due under the Note; B. Refrain from taking any action on the Note, the Collateral, or any guarantee; C. Release any Borrower or any guarantor of the Note; D. Compromise or settle with the Borrower or any guarantor of the Note; E. Substitute or release any of the Collateral, whether or not Lender receives anything in return; F. Foreclose upon or otherwise obtain, and dispose of, any Collateral at public or private sale, with or without advertisement; G. Bid or buy at any sale of Collateral by Lender or any other lienholder, at any price Lender chooses; and H. Exercise any rights it has, including those in the Note and other Loan Documents. These actions will not release or reduce the obligations of Guarantor or create any rights or claims against Lender. 5. FEDERAL LAW: When SBA is the holder, the Note and this Guarantee will be construed and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Guarantee, Guarantor may not claim or assert any local or state law against SBA to deny any obligation, defeat any claim of SBA, or preempt federal law. 0 6. RIGHTS, NOTICES, AND DEFENSES THAT GUARANTOR WAIVES: To the extent permitted by law, A. Guarantor waives all rights to: 1) Require presentment, protest, or demand upon Borrower; 2) Redeem any Collateral before or after Lender disposes of it; 3) Have any disposition of Collateral advertised; and 4) Require a valuation of Collateral before or after Lender disposes of it. B. Guarantor waives any notice of 1) Any default under the Note; 2) Presentment, dishonor, protest, or demand; 3) Execution of the Note; 4) Any action or inaction on the Note or Collateral, such as disbursements, payment, nonpayment, acceleration, intent to accelerate, assignment, collection activity, and incurring enforcement expenses; 5) Any change in the financial condition or business operations of Borrower or any guarantor, 6) Any changes in the terms of the Note or other Loan Documents, except increases in the amounts due under the Note; and 7) The time or place of any sale or other disposition of Collateral. C. Guarantor waives defenses based upon any claim that: 1) Lender failed to obtain any guarantee; 2) Lender failed to obtain, perfect, or maintain a security interest in any property offered or taken as Collateral; 3) Lender or others improperly valued or inspected the Collateral; 4) The Collateral changed in value, or was neglected, lost, destroyed, or underinsured; SBA Form 148 (10188) Previous editions obsolete. Page 216 Bankers Systems, Inc., St. Cloud, MN 5) Lender impaired the Collateral; . 6) Lender did not dispose of any of the Collateral; 7) Lender did not conduct a commercially reasonable sale; 8) Lender did not obtain the fair market value of the Collateral; 9) Lender did not make or perfect a claim upon the death or disability of Borrower or any guarantor of the Note; 10) The financial condition of Borrower or any guarantor was overstated or has adversely changed; 11) Lender made errors or omissions in Loan Documents or administration of the Loan; 12) Lender did not seek payment from the Borrower, any other guarantors, or any Collateral before demanding payment from Guarantor: 13) Lender impaired Guarantor's suretyship rights; 14) Lender modified the Note terms, other than to increase amounts due under the Note. If Lender modifies the Note to increase the amounts due under the Note without Guarantor's consent, Guarantor will not be liable for the increased amounts and related interest and expenses, but remains liable for all other amounts; 15) Borrower has avoided liability on the Note; or 16) Lender has taken an action allowed under the Note, this Guarantee, or other Loan Documents. 0 0 7. DUTIES AS TO COLLATERAL: Guarantor will preserve the Collateral pledged by Guarantor to secure this Guarantee. Lender has no duty to preserve or dispose of any Collateral. 8. SUCCESSORS AND ASSIGNS: Under this Guarantee, Guarantor includes heirs and successors, and Lender includes its successors and assigns. 9. GENERAL PROVISIONS: A. ENFORCEMENT EXPENSES. Guarantor promises to pay all expenses Lender incurs to enforce this Guarantee, including, but not limited to, attorney's fees and costs. B. SBA NOT A CO-GUARANTOR. Guarantor's liability will continue even if SBA pays Lender. SBA is not a co-guarantor with Guarantor. Guarantor has no right of contribution from SBA. C. SUBROGATION RIGHTS. Guarantor has no subrogation rights as to the Note or the Collateral until the Note is paid in full. D. JOINT AND SEVERAL LIABILITY. All individuals and entities signing as Guarantor are jointly and severally liable. E. DOCUMENT SIGNING. Guarantor must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral. F. FINANCIAL STATEMENTS. Guarantor must give Lender financial statements as Lender requires. G. LENDER'S RIGHTS CUMULATIVE, NOT WAIVED. Lender may exercise any of its rights separately or together, as many times as it chooses. Lender may delay or forgo enforcing any of its rights without losing or impairing any of them. H. ORAL STATEMENTS NOT BINDING. Guarantor may not use an oral statement to contradict or alter the written terms of the Note or this Guarantee, or to raise a defense to this Guarantee. 1. SEVERABILITY. If any part of this Guarantee is found to be unenforceable, all other parts will remain in effect. J. CONSIDERATION. The consideration for this Guarantee is the Loan or any accommodation by Lender as to the Loan. SBA Form 148 (10/98) Previous editions obsolete. Pape 316 Bankers Systems, Inc., St. Cloud, MN • 10. STATE-SPECIFIC PROVISIONS: • r? U 1. POWER TO CONFESS JUDGMENT. UNDERSIGNED HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER OR ANY HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY, ALL ACCRUED INTEREST AND ALL OTHER AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF 10% OF SUCH PRINCIPAL AND INTEREST ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO, THIS GUARANTY OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE UNDERSIGNED HEREBY FOREVER WANES AND RELEASES ALL ERRORS IN SAID PROCELDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEM ENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. JUDGMENT MAY BE CONFESSED FROM TIME TO TIME UNDER THE AFORESAID POWER TO CONFESS JUDGMENT AND NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE LENDER SHALL ELECT UNTIL SUCH TIME AS THE LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST, COSTS AND FEES. 2. Governing Law; Jurisdiction. This Guaranty will be Interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the Commonwealth of Pennsylvania, excluding its conflict of laws rules. The Undersigned hereby irrevocably consents to the exclusive jurisdiction of the Courts of Common Pleas of the Commonwealth of Pennsylvania and the United States District Court for the Western District of Pennsylvania; provided that nothing contained in this Guaranty will prevent the Lender or any holder hereof from bringing any action, enforcing any award or judgment or exercising any rights against the Undersigned, against any security or against any property of the Undersigned within any other county, state or other foreign or domestic jurisdiction. The Undersigned agrees that the venue provided above is the most convenient forum for both the Lender and the Undersigned and the Undersigned waives any objection to venue and any objection based on a more convenient forum in any action Instituted under this Guaranty. The Undersigned agrees that service of process in any such proceeding may be duly effected upon the Undersigned by mailing a copy thereof by registered mail, postage prepaid, to the Undersigned. 4. WAIVER OF JURY TRIAL. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE UNDERSIGNED MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS GUARANTY, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE UNDERSIGNED ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. SBA Forth 148 (10/98) Previous editions obsolete. Page 4/8 Bankers Systems, Inc., St. Cloud, MN LJ 11. GUARANTOR ACKNOWLEDGMENT OF TERMS. Guarantor acknowledges that Guarantor has read and understands the significance of all terms of the Note and this Guarantee, including all waivers. 12. GUARANTOR NAME(S) AND SIGNATURE(S): By signing below, each individual or entity becomes obligated as Guarantor under this Guarantee. Sunil Khanna © Neeru Khanna 0 r SBA Form 148 (10198) Previous editions obsolete. Pegs 618 Bankers Systems, Inc., St. Cloud, MN U.S. Small Business Administration NOTE 0 SBA Loan # PLP 868-078-4005 SBA Loan Name SNS Buddies Inc. dba Uni-Mart Date Loan Amount 775,500.00 Interest Rate FLOATING AT WSJ PRIME PLUS 2.50% RESULTING IN AN INITIAL RATE OF 8.00% Borrower SNS Buddies Inc. dba Uni-Mart Operating Company Lender PNC Bank, National Association 1. PROMISE TO PAY: In return for the Loan, Borrower promises to pay to the order of Lender the amount of SEVEN HUNDRED SEVENTY FIVE THOUSAND FIVE HUNDRED -- - Dollars, interest on the unpaid principal balance, and all other amounts required by this Note. 2. DEFINITIONS: "Collateral" means any property taken as security for payment of this Note or any guarantee of this Note. "Guarantor" means each person or entity that signs a guarantee of payment of this Note. "Loan" means the loan evidenced by this Note. "Loan Documents" means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral. "SBA" means the Small Business Administration, an Agency of the United States of America. 0 SBA Forth 147 (08/03102) Version 4.1 Page 1/8 Bankers Systems, Inc., St. Cloud, MN F X?%,bl-?- cc Q'1 I? U 0 i 3. PAYMENT TERMS: Borrower must make all payments at the place Lender designates. The payment terms for this Note are: This Note will mature in 10 years from date of Note. The initial interest rate on this Note will fluctuate. The initial interest rate is 8.00% per year. This initial rate is the prime rate on the date SBA received the loan application, plus 2.50%. The Interest rate must remain in effect until the first change period begins. Borrower must pay interest on the disbursed principal balance, plus principal of $6,462.50 every month, beginning one month from the month this Note is dated; payments must be made on the first calendar day in the months they are due. Lender will apply each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal. The interest rate will be adjusted monthly (the "change period"). The "Prime Rate" is the prime rate in effect on the first business day of the month in which the an interest rate change occurs, as published in the Wall Street Joumal on the next business day. The adjusted interest rate will be 2.50% above the Prime Rate. Lender will adjust the interest rate on the first calendar day of each change period. The change in interest rate is effective on that day whether or not Lender gives Borrower notice of the change. The initial interest rate must remain in effect until the first change period begins. Lender must adjust the payment amount at least annually as needed to amortize principal over the remaining term of the note. if SBA purchase the guaranteed portion of the unpaid principal balance, the interest rate becomes fixed at the rate in effect at the time of the earliest uncured payment default. If there is no uncured payment default, the rate becomes fixed at the rate In effect at the time of purchase. All remaining principal and accrued interest is due and payable 10 years from date of Note. Late Charge: if a payment on this Note is more than 10 days. late, Lender may charge Borrower a late fee of up to 5% of the unpaid portion of the regularly scheduled payment. Loan Prepayment: Notwithstanding any provision in this note to the contrary: Borrower may prepay this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must: a. Give Lender written notice; b. Pay all accrued interest; and c. If the prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days interest from the date Lender receives the notice less any interest accrued during the 21 days and paid SBA Form 147 (08/03/02) Version 4.1 Paps 2/8 Bankers Systems, Inc., St. Cloud, MN SBA 147; Note Page 2 Continuation Continuation of "..." under subparagraph b., above. If Borrower does not prepay within 30 days from the date Lender receives the notice, Borrower must give Lender a new notice. 0 Page 1 Bankers Systems, Inc., St. Cloud, MN 4. DEFAULT: Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company: A. Fails to do anything required by this Note and other Loan Documents; B. Defaults on any other loan with Lender; C. Does not preserve, or account to Lender's satisfaction for, any of the Collateral or its proceeds; D. Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA; E. Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA; F. Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower's ability to pay this Note; G. Fails to pay any taxes when due; H. Becomes the subject of a proceeding under any bankruptcy or insolvency law; 1. Has a receiver or liquidator appointed for any part of their business or property; J. Makes an assignment for the benefit of creditors; K. Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower's ability to pay this Note; L. Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender's prior written consent; or M. Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this Note. 5. LENDER'S RIGHTS IF THERE IS A DEFAULT: Without notice or demand and without giving up any of its rights, Lender may: A. Require immediate payment of all amounts owing under this Note; B. Collect all amounts owing from any Borrower or Guarantor, C. File suit and obtain judgment; D. Take possession of any Collateral; or E. Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement. 6. LENDER'S GENERAL POWERS: Without notice and without Borrower's consent, Lender may: A. Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses; B. Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney's fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance; C. Release anyone obligated to pay this Note; D. Compromise, release, renew, extend or substitute any of the Collateral; and E. Take any action necessary to protect the Collateral or collect amounts owing on this Note. SBA Form 147 (OSM3/02) Version 4.1 Pape 918 Bankers Systems, Inc., St. Cloud, MN 0 7. WHEN FEDERAL LAW APPLIES: When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law. 8. SUCCESSORS AND ASSIGNS: Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns. 9. GENERAL PROVISIONS: A. All individuals and entities signing this Note are jointly and severally liable. B. Borrower waives all suretyship defenses. C. Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral. D. Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them. E. Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terns of this Note. F. If any part of this Note is unenforceable, all other parts remain in effect G. To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale. r SBA Form 147 (06/03/02) Version 4.7 Page 416 Bankers Systems, Inc., St. Cloud, MN 10. STATE-SPECIFIC PROVISIONS: 1. POWER TO CONFESS JUDGMENT. UNDERSIGNED HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE UNDERSIGNED IN FAVOR OF THE LENDER OR ANY HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE, ALL ACCRUED INTEREST AND ALL OTHER AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY-S COMMISSION OF 10% OF SUCH PRINCIPAL AND INTEREST ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO, THIS NOTE OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE UNDERSIGNED HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. JUDGMENT MAY BE CONFESSED FROM TIME TO TIME UNDER THE AFORESAID POWER TO CONFESS JUDGMENT AND NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE LENDER SHALL ELECT UNTIL SUCH TIME AS THE LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST, COSTS AND FEES. 11 • 2. Governing Law; Jurisdiction. This Note will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the Commonwealth of Pennsylvania, excluding its conflict of laws rules. The Undersigned hereby irrevocably consents to the exclusive jurisdiction of the Courts of Common Pleas of the Commonwealth of Pennsylvania and the United States District Court for the Western District of Pennsylvania; provided that nothing contained In this Note will prevent the Lender or any holder hereof from bringing any action, enforcing any award or judgment or exercising any rights against the Undersigned, against any security or against any property of the Undersigned within any other county, state or other foreign or domestic jurisdiction. The Undersigned agrees that the venue provided above is the most convenient forum for both the Lender and the Undersigned and the Undersigned waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note. The Undersigned agrees that service of process in any such proceeding may be duly effected upon the Undersigned by mailing a copy thereof by registered mail, postage prepaid, to the Undersigned. 3. WAIVER OF JURY TRIAL. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE UNDERSIGNED MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY. DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE UNDERSIGNED ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. SBA Form 147 (08/03102) Verson 4.1 Page us Bankers Systems, Inc., St. Cloud, MN . y 11. BORROWER'S NAME(S) AND SIGNATURE(S): By signing below, each individual or entity becomes obligated under this Note as Borrower. SNS Buddies Inc. dba Unt-Mart SUNIL KHANNA, PRESIDENT Ile, n 1?J • SSA Forth 147 (06/03102) Version 41 Page 6/6 Bankers Systems, Inc., St. Cloud, MN Disclosure for Confession of Judgment I* (Guarantor) Undersigned: NEERU I HANNA SUNIL IG ANNA 6115 98TH STREET REGO PARK, NY 11374 Lender: PNC BANK, NATIONAL ASSOCIATION 8800 THN ICUM BOULEVARD PHILADELPHIA, PA 19153 PNCBANK The undersigned has executed, and/or is executing, on or about the date hereof, a US Small Business Administration Guaranty and Commercial Guaranty, in respect of the obligations owed to Lender by SNS Buddies, Inc. dba Uni-Mart, under which the undersigned is obligated to repay monies to Lender. A. THE UNDERSIGNED ACKNOWLEDGES AND AGREES THAT THE ABOVE DOCUMENT CONTAINS PROVISIONS UNDER WHICH LENDER MAY ENTER JUDGMENT BY CONFESSION AGAINST THE UNDERSIGNED. BEING FULLY AWARE OF ITS RIGHTS TO PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT MAYBE ASSERTED AGAINST IT BY LENDER THEREUNDER BEFORE JUDGMENT IS ENTERED, THE UNDERSIGNED HEREBY FREELY, KNOWINGLY AND INTELLIGENTLY WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT AGAINST rr BY CONFESSION PURSUANT TO THE TERMS THEREOF. B. THE UNDERSIGNED ALSO ACKNOWLEDGES AND AGREES THAT THE ABOVE DOCUMENT CONTAINS PROVISIONS UNDER WHICH LENDER MAY, AFTER ENTRY OF JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, FORECLOSE UPON, ATTACH, LEVY, TAKE POSSESSION OF OR OTHERWISE SEIZE PROPERTY OF THE UNDERSIGNED IN FULL OR PARTIAL PAYMENT OF . THE JUDGMENT. BEING FULLY AWARE OF ITS RIGHTS AFTER JUDGMENT IS ENTERED (INCLUDING THE RIGHT TO MOVE TO OPEN OR STRIKE THE JUDGMENT), THE UNDERSIGNED HEREBY FREELY, KNOWINGLY AND INTE LIGENTLY WAIVES rr3 RIGHTS TO NOTICE AND A DARING AND EXPRESSLY AGREES AND CONSENTS TO LENDER'S TAKING SUCH ACTIONS AS MAY BE PERMITTED UNDER APPLICABLE STATE AND FEDERAL LAW WITHOUT PRIOR NOTICE TO THE UNDERSIGNED. C. The undersigned certifies that a representative of Lender specifically called the confession of judgment provisions in the above document to the attention of the undersigned, and/or that the undersigned was represented by legal counsel in connection with the above document. D. The undersigned hereby certifies: that its annual income exceeds $10,000; that all references to Athe undersigned above refer to all persons and entities signing below; and that the undersigned received a copy hereof at the time of signing. Dated: Neeru Khanna Oki Sunil Khanna 0 r )l C:\DOCUME-l\FE2040-1.PNC\LOCALS-l\Temp\C.Notes.Data\conf.guarantor.doc (1).doc Form 9C - PA Rev. 3/99 PNCBANK ire ruary 27, 2008 Certified and Regular Mail SNS Buddies Inc d/b/a Uni-Mart Sunil Khanna, President 94 South Pennsylvania Avenue Wilkes-Barre, Pennsylvania 18702 RE: Loan #32167351/602522191 Dear Mr. Khanna: You are in default of your obligations to PNC Bank (the "Bank") for failure to make payments on the $775,500.00 loan (the "Loan") as required in the Promissory Note that evidences the Loan and the Guaranty Agreement(s) that secures the. Loan. As a result of the default of your obligations to the Bank, the entire outstanding amount of the Loan: has been accelerated and is now due and payable immediately in full. The amounts that are due and payable to the Bank are as follows: Principal $325,508.57 Interest $ 10,571.87 (as of 2/27/08) Late Crhargcs $ 1,043.96 Total $337,124.40 Interest continues to acente at the rate of $86.95 per day through the date can which payment is received by the Bank. In addition to the amounts set forth above, you will be responsible for payment or reimbursement to the Bank for all attorneys' fees incurred or paid by the rank with respect to this matter. Please make arrangements for payment in full of your obligations to the Ralik by contacting the Bank, as follows: Kyra E. Zoranski Assistant Vicc.President 201 Penn Avenue Scranton, PA 18503 Phone: (570) 961-6266 Member of The PNC Ftns"ciat Services f119QD (570)961-6240 70t Pan" Avenue Scranton Pennsylvania 18503 WWW pnc,com E:, X "* L \., i -\- r < 0 7l 0 Page 2 Neither this letter nor anything contained herein waives, limits or otherwise affects in any way the Bank's rights to exercise and enforce its rights and •remedies for collection of your obligations to the Bank, all of which are reserved by the Bank, and remain in full force and effect, enforceable by the Bunk at any time on or after the date of this letter. We look forward to receiving payment in full of your obligations to the Bank in the immediate future. Otherwise, the Basile may have no alternative but to initiate collection proceedings. If you have any questions please call me at 570-961-6266. 'Thank you in advance for your cooperation in this matter. Sincerely,, 1, j Kyra lorans?,esident Assistant Vice cc: Sund Khanna, Guarantor Necru, Khanna, Guarwitor 0 P-11 L 614 v 3 0 'OMMERCIAL GUARANTY References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing """"" has been omitted due to text length limitations. Borrower: SNS BUDDIES, INC. DBA UN(-MART (TIN- 20-2234681) PA AVENUE & NORTHAMPTON STREET WILKES BARRE, PA 18702 Guarantor: SUNIL KHANNA (SSN: 104-88-1447) NEERU KHANNA (SSN: 098-88-0832) 61195 98TH STREET REGO PARK, NY 11374 Lender: PNC Bank, National Association Business Banking - SBA 8800 Tinicum Boulevard Philadelphia, PA 19153 . i00 a4\oYNO jj' onm AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited. CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, SUNIL KHANNA and NEERU KHANNA ("Guarantor") absolutely and unconditionally guarantees and promises to pay, jointly and severally, to PNC Bank, National Association ("Lender") or its order, in legal tender of the United States of America, the Indebtedness (as that term is defined below) of SNS BUDDIES, INC. DBA UNI-MART ("Borrower") to Lender on the terms and conditions set forth in this Guaranty. Under this Guaranty, the liability of Guarantor Is unlimited and the obligations of Guarantor are continuing. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes any and all of Borrower's Indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower's liabilities, obligations and debts to Lender, now existing or hereinafter incurred or created, including, without limitation, all loans, advances, interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease obligations, other obligations, and liabilities of Borrower, or any of them, and any present or future judgments against Borrower, or any of them; and whether any such Indebtedness is voluntarily or involuntarily incurred, due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily, or as guarantor or surety; whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever; and whether the Indebtedness arises from transactions which may be voidable on account of infancy, insanity, ultra vires, or otherwise. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have een performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of vocation must be mailed .to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. ritten revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term new Indebtedness" does not include Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of Indebtedness, even to zero dollars (50.00), prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though the Indebtedness guaranteed may from time to time be zero dollars ($0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or COMMERCIAL GUARANTY (Continued) Page 2 • threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses arising by reason of (A) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness;. (C) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's'liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. LENDER'S RIGHT OF SETOFF. To the extent permitted by applicable law, Guarantor grants Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges and transfers to Lender all of Guarantor's right, title and interest in and to Guarantor's accounts with Lender (whether checking, savings or some other account), including without limitation all accounts held jointly with someone else and all accounts Guarantor may open in the future, excluding however all IRA and Keogh accounts, and all trust accounts for which the grant of a security interest would be prohibited by law. Guarantor authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by, construed and enforced in accordance with federal law and the laws of the Commonwealth of Pennsylvania. This Guaranty has been accepted by Lender in the Commonwealth of Pennsylvania. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Philadelphia County, Commonwealth of Pennsylvania. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the onnortunity to hR adviser) by Gwkmntnr's attornev with rn-npnt to thin Guaranty: thR Guaranty filly rwflPrtc Miarantnr'n intantinne and narnl COMMERCIAL GUARANTY (Continued) Page 3 • evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (including Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any Loan indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. The terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. WAIVER OF JURY TRIAL. GUARANTOR IRREVOCABLY WAIVES ANY AND ALL RIGHT GUARANTOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS GUARANTY, ANY RELATED DOCUMENTS, OR ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. GUARANTOR ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. LIMITED RECOURSE AS TO NON-APPLICANT SPOUSE. Notwithstanding anything contained herein to the contrary, it is agreed that, unless an exception to the requirements of Regulation B of the Board of Governors of the Federal Reserve System applies in connection with the extension of the Indebtedness and the execution of this Guaranty, the spouse who is deemed not to be the "applicant for credit" for purposes of such regulation (the "Non-Applicant Spouse") shall be personally liable under this Guaranty only with respect to assets held jointly as of the date hereof or hereafter acquired, and the lien of any judgment, order or other relief against the Non-Applicant Spouse shall be limited thereto. Nothing herein, however, shall limit the Lender's rights against any person, firm or entity other than the Non-Applicant Spouse. AUTHORIZATION TO OBTAIN CREDIT REPORTS. If the Guarantor is/are an individual(s), by signing below, the undersigned individual(s), provides written authorization to Lender or its designee (and any assignee or potential assignee hereof) to obtain his/her/their personal credit profile(s) from one or more national credit bureaus. Such authorization shall extend to obtaining a credit profile(s) in considering any extension of credit to the Borrower or the Guarantor and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account. A photocopy or facsimile copy of this authorization shall be valid as the original. By signature below, i/we affirm mylour identity as the respective individual/s identified in this Guaranty. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means SNS BUDDIES, INC. DBA UNI-MART and includes all co-signers and co-makers signing the Note. Guarantor. The word "Guarantor" means each and every person or entity signing this Guaranty, including without limitation SUNIL KHANNA and NEERU KHANNA. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Borrower's indebtedness to Lender as more particularly described in this Guaranty. Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note, or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Guaranty or under any of the Related Documents. In addition, the word "Indebtedness" includes all other obligations, debts and liabilities, plus interest thereon, of Borrower, or any one or more of them, to Lender, as well as all claims by Lender against Borrower, or any one or more of them, whether existing now or later; whether they are voluntary or involuntary, due or not due, direct or indirect, absolute or contingent, liquidated or unliquidated; whether Borrower may be liable individually or jointly with others; whether Borrower may be obligated as a guarantor, surety, accommodation party or otherwise; whether recovery upon such indebtedness may be or hereafter may become barred by any statute of limitations; and whether such indebtedness may be or hereafter may become otherwise unenforceable. Lender. The word "Lender" means PNC Bank, National Assoclati n, i/tsJ succs?;ors and assigns. Note. The word "Note" means the promissory note dated -1-5 _ in the original principal amount of $775,500.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. eelere,l nr.r„monto Tho %n,nrric "Rolatori nnr,%montc" moan all nrnmiccnrv nntgc r-mrilt nnrP.ArnPntc Inan anroamantc on%A-nmontal COMMERCIAL GUARANTY (Continued) Page 4 . agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.. CONFESSION OF JUDGEMENT. THE GUARANTOR HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR THE GUARANTOR AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE GUARANTOR IN FAVOR OF LENDER OR ANY HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY, ALL ACCRUED INTEREST AND ALL OTHER AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF THE GREATER OF 10% OF SUCH PRINCIPAL AND INTEREST OR $1,000 ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO, THIS NOTE OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE GUARANTOR HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. INTEREST ON ANY SUCH JUDGMENT SHALL ACCRUE AT THE DEFAULT RATE. NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS LENDER SHALL ELECT UNTIL SUCH TIME AS LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST AND COSTS. NOTWITHSTANDING THE ATTORNEY'S COMMISSION PROVIDED FOR IN THE PRECEDING PARAGRAPH (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF ESTABLISHING A SUM CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT LENDER MAY RECOVER FROM THE GUARANTOR SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED BY LENDER. GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROV SIONS OF,4HIS COMMERCIAL GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY IS DATED --//-OS THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: X ock, (Seal) SUNIL KHANNA X 4-", (Seal) NEERU KHANNA USER PRO LaWl,,, V- 5.24.10.002 CW. PAemd R-d Sdu%e , Rw. M7, 2005. AN R10Rb R-d. - PA TACK LPL%12aFC 7R-00019206 PA-1 fl 6WI& .614 ?(l 3 q PROMISSORY NOTE I References in the shaded area are for Lender's use only and do not limit the applicability of this document to any partic Any item above containing """•' has been omitted due to text length limitations. h? Borrower: SNS BUDDIES INC DBA UNI-MART (TIN: Lender: PNC Bank, National Associatio 20-2234681) Business Banking NO, 94 S PENNSYLVANIA AVENUE 201 Penn Avenue '?? WILKES-BARRE, PA 18702 Scranton, PA 18503 LOtS TT S Principal Amount: $50,000.00 Initial Rate: 9.750% Date of Note: October 18, 2005 PROMISE TO PAY. SNS BUDDIES INC DBA UNI-MART ("Borrower") promises to pay to PNC Bank, National Association ("Lender"), or order, in lawful money of the United States of America, the principal amount of Fifty Thousand & 00/100 Dollars (550,000.00) or so much as may be outstanding, together with Interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance. PAYMENT. Borrower will pay this loan in accordance with the following payment schedule: Borrower will pay regular monthly payments of accrued interest beginning NOVEMBER 18, 2005, and aN subsequent Interest payments are due on the same day of each month after that. Borrower will pay this loan in one payment of all outstanding principal pkn all accrued unpaid interest on the Expiration Date. Borrower may borrow, repay and reborrow hereunder until the Expiration Date, subject to the terms and conditions of this Note. The "Expiration Date" shall mean OCTOBER 18, 2007, or such later date as may be designated by written notice from Lender to Borrower. Borrower acknowledges and agrees that in no event will Lender be under any obligation to extend or renew the loan or this Note beyond the initial Expiration Date. In no event shall the aggregate unpaid principal amount of advances under this Note exceed the face amount of this Note. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any unpaid collection costs; and then to any late charges. The annual interest rate for this Note Is computed on a 365/360 basis; that N, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the highest Prime Rate as published in the "Money Rates" section of The Wall Street Journal (the "Index"). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 6.750% per annum. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate of 3.000 percentage points over the Index, resulting in an initial rate of 9.750% per annum. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked 'paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: PNC Bank, National Association, Attn: Doc Prep/Operations Department - BBCAC, 8800 Tinicum Boulevard 5th Floor Philadelphia, PA 19153. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $ 100.00, whichever is less. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, Lender, at its option, may, if permitted under applicable law, increase the variable interest rate on this Note to 8.000 percentage points over the Index. The interest rate will not exceed the maximum rate permitted by applicable law. If judgment is entered in connection with this Note, interest will continue to accrue on this Note after judgment at the interest rate applicable to this Note at the time judgment is entered. DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note: Payment Default. Borrower fails to make any payment when due. Other Defaults. Borrower or Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. • Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfahwe Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate PROMISSORY NOTE (Continued) Page 2 reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. u Insecurity. Lender in good faith believes itself insecure. LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law, declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, without notice, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals and any anticipated post-judgement collection services. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION. PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. GOVERNING LAW. This Note will be governed by federal law applkable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Note has been accepted by Lender In the Commonwealth of Pennsylvania. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Lackawanna County, Commonwealth of Pennsylvania. RIGHT OF SETOFF. In addition to all liens upon and rights of setoff against Borrower's money, securities or other property given to Lender by law, Lender shall have, with respect to Borrower's obligations to Lender under this Note and to the extent permitted by law, a contractual possessory security interest in and a contractual right of setoff against, and Borrower hereby assigns, conveys, delivers, pledges and transfers to Lender all of Borrower's right, title and interest in and to, all of Borrower's deposits, moneys, securities and other property now or hereafter in the possession of or, on deposit with, or in transit to, Lender or any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., whether held in a general or special account or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to Borrower. Every such right of setoff shall be deemed to have been exercised immediately upon the occurrence of an Event of Default hereunder without any action of Lender, although Lender may enter such setoff on its books and records at a later time. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: collateral described in a Commercial Security Agreement dated October 18, 2005. LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested orally by Borrower or as provided in this paragraph. All oral requests shall be confirmed In writing on the day of the request. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borr ower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself insecure. FINANCIAL INFORMATION PROVISION. Borrower agrees to deliver any financial and other business information concerning Borrower that Lender may request from time to time, such as annual and interim financial statements (all of which shall be prepared in accordance with generally accepted accounting principles) and federal income tax returns. DEPOSITORY. Borrower will establish and maintain, with Lender, Borrower's primary depository account(s). If Borrower fails to establish and/or maintain its primary depository account(s) with Lender, Lender may, at its option, upon thirty (30) days notice to Borrower, increase the interest rate payable by Borrower under this Note by up to 1.00 percentage points (1.00%). Lender's right to increase the interest rate pursuant to this paragraph shall be in addition to any other rights or remedies Lender may have under this Note, all of which are hereby reserved, and shall not constitute a waiver, release or limitation upon Lender's exercise of any such rights or remedies. AUTOMATIC DEBIT OF PAYMENTS. The Borrower hereby authorizes the Lender to charge the Borrower's deposit account at the Lender for any payment when due hereunder. If the Borrower revokes this authorization for any reason whatsoever or fails to maintain a deposit account with the Lender which may be charged, the Lender may, at its option, upon thirty 130) days notice to the Borrower, increase the interest rate payable by the Borrower under this Note by twenty-five (25) basis points (0.25%). TERMINATION OF LINE OF CREDIT. Upon sixty (60) days prior written notice to Borrower, Lender may terminate the Line of Credit, with or without cause, and demand full payment of the entire unpaid principal balance of this Note, and all accrued and unpaid interest on the balance, and all other amounts due in accordance with the terms of this Note. Unless Lender's notice provides otherwise, Lender will have no further obligation to advance funds under this Note. CONVERSION TO TERM LOAN. Lender retains the right to convert all or any part of the outstanding indebtedness under this Note into an amortizing term loan, with or without cause, upon providing sixty (60) days prior written notice to Borrower (the "Conversion Notice"). If Lender exercise this right, Lender will compute a new monthly payment with respect to the part of the indebtedness so converted (the "Term Loan Portion"), and Borrower will be advised of such new monthly payment with respect to the Term Loan Portion in the Conversion Notice. Monthly payments on the Term Loan Portion following the Conversion Notice shall be based upon an amortization period specified in the Conversion Notice (the "Amortization Period"). Subsequent payments on the Term Loan Portion shall be determined monthly and shall be in the amounts determined by Lender to be necessary to fully amortize the then outstanding principal balance so converted over the then remaining Amortization Period at the effective interest rate on this Note as of the date the amount of such oavment is calculated by I aria, All PROMISSORY NOTE (Continued) Page 3 outstanding principal and accrued interest will be due on the last day of the Amortization Period. All of the provisions of this Note and any Related Documents shall apply to the Term Loan Portion except to the extent inconsistent with this paragraph. • SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the parry with whom the modification is made. The obligations under this Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGEMENT. THE BORROWER HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR THE BORROWER AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE BORROWER IN FAVOR OF LENDER OR ANY HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE, ALL ACCRUED INTEREST AND ALL OTHER AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF THE GREATER OF 10% OF SUCH PRINCIPAL AND INTEREST OR $1,000 ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO, THIS NOTE OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE BORROWER HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. INTEREST ON ANY SUCH JUDGMENT SHALL ACCRUE AT THE DEFAULT RATE. NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS LENDER SHALL ELECT UNTIL SUCH TIME AS LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST AND COSTS. NOTWITHSTANDING THE ATTORNEY'S COMMISSION PROVIDED FOR IN THE PRECEDING PARAGRAPH (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF ESTABLISHING A SUM CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT LENDER MAY RECOVER FROM THE BORROWER SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED BY LENDER. PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A A1116 SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: SNS BUDDIES IWNC DB UNI-MART By: 60aw',? (Seal) SUNIL K HANNA, President of SNS BUDDIES INC DBA UNI-MART LAR11 HW Lwi02q. V.. 5.27.00.005 CeR• MM-d ft-.W S.WWn,. M. t$97. WN. N %#ft M.-W. . ?A T'UMPL1D20.PC TWBDD20640 FW14 u r C', ON? Ili (?, rr ? 5 COMMERCIAL GUARANT. References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Anv item above containing """"" has been omitted due to text length limitations. Borrower: SNS BUDDIES INC DBA UNI-MART (TIN: 20-2234681) 94 S PENNSYLVANIA AVENUE WILKES-BARRE, PA 18702 Guarantor: SUNIL KHANNA (SSN: 10488-1447) 6 B LENAPE CT WILKESWOOD WILKES-BARRE, PA 18702 Lender: PNC Bank, National Association Business Banking 201 Penn Avenue Scranton, PA 18503 1 "ID, tI? Z'X OW !.a Thomas ,1~+ AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited. CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, SUNIL KHANNA i"Guarantor") absolutely and unconditionally guarantees and promises to pay to PNC Bank, National Association ("Lender') or its order, in legal tender of the United States of America, the Indebtedness (as that term is defined herein) of SNS BUDDIES INC DBA UNI-MART ("Borrower") to Lender on the terms and conditions set forth in this Guaranty. This Guaranty is a guaranty of payment and not a guaranty of collection. Under this Guaranty, the liability of Guarantor is unlimited and the obligations of Guarantor are continuing. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes any and all of Borrower's indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower's liabilities, obligations and debts to Lender, now existing or hereinafter incurred or created, including, without limitation, all loans, advances, interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease obligations, other obligations, and liabilities of Borrower, or any of them, and any present or future judgments against Borrower, or any of them; and whether any such Indebtedness is voluntarily or involuntarily incurred, due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether Borrower may be liable individually or jointly with others, or primarily or secondarily, or as guarantor or surety; whether recovery on the indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever-, and whether the Indebtedness arises from transactions which may be voidable on account of infancy, insanity, ultra vires, or otherwise. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness" does not include Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifications of the indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of indebtedness, even to zero dollars ($0.00), prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though the Indebtedness guaranteed may from time to time be zero dollars ($0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's Iitblity under this Guaranty, from time to tams: (Al prior to revocation as set forth above, to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, Including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result In a default under any agreement or other Instrument binding upon Guarantor nd do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; p) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established COMMERCIAL GUARANTY (Continued) Page 2 adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. LENDER'S RIGHT OF SETOFF. To the extent permitted by applicable law, Guarantor grants Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges and transfers to Lender all of Guarantor's right, title and interest in and to Guarantor's accounts with Lender (whether checking, savings or some other account), including without limitation all accounts held jointly with someone also and all accounts Guarantor may open in the future, excluding however all IRA and Keogh accounts, and all trust accounts for which the grant of a security interest would be prohibited by law. Guarantor authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicible to Lender and, to the extent not preempted by federal law, the laws of the Commonwaalith of Pennsyhrania without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender In the Comrnonweahh of Pennsylvania. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Lackawanna County, Commonwealth of Pennsylvania. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the COMMERCIAL GUARANTY (Continued) Page 3 opportunity to be advised by Guarantor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol eyidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs {including Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it Is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any Loan indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shall be effective when actually delivered, when actually received by taletacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable low, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shalt not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. The terms of this Guaranty shall be binding upon' Guarantor, and upon Guarantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. WAIVER OF JURY TRIAL. GUARANTOR IRREVOCABLY WAIVES ANY AND ALL RIGHT GUARANTOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS GUARANTY, ANY RELATED DOCUMENTS, OR ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. GUARANTOR ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. LIMITED RECOURSE AS TO NON-APPLICANT SPOUSE. Notwithstanding anything contained herein to the contrary, it is agreed that, unless an exception to the requirements of Regulation B of the Board of Governors of the Federal Reserve System applies in connection with the extension of the Indebtedness and the execution of this Guaranty, the spouse who is deemed not to be the "applicant for credit" for purposes of such regulation (the "Non-Applicant Spouse") shall be persoanlly liable under this Guaranty only with respect to assets held jointly as of the date hereof or hereafter acquired, and the lien of any judgment, order or other relief against the Non-Applicant Spouse shall be limited thereto. Nothing herein, however, shall limit the Lender's rights against any person, firm or entity other than the Non-Applicant Spouse. AUTHORIZATION TO OBTAIN CREDIT REPORTS. If the Guarantor is/are an individual(s), by signing below, the undersigned individual(s), provides written authorization to Lender or its designee (and any assignee or potential assignee hereof) to obtain his/her/their personal credit profile(s) from one or more national credit bureaus. Such authorization shall extend to obtaining a credit profile(s) in considering any extension of credit to the Borrower or the Guarantor and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account. A photocopy or facsimile copy of this authorization shall be valid as the original. By signature below, I/we affirm my/our identity as the respective individual/s identified in this Guaranty. DEFINITIONS, The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means SNS BUDDIES INC DBA UNI-MART and includes all co-signers and co-makers signing the Note. Guarantor. The word "Guarantor" means each and every person or entity signing this Guaranty, including without limitation SUNIL KHANNA. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Borrower's indebtedness to Lender as more particularly described in this Guaranty. indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note, or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible udder this Guaranty or under any of the Related Documents. In addition, the word "Indebtedness" includes all other obligations, debts and liabilities, plus interest thereon, of Borrower, or any one or more of them, to Lender, as well as all claims by Lender against Borrower, or any one or more of them, whether existing now or later; whether they are voluntary or involuntary, due or not due, direct or indirect, absolute or contingent, liquidated or unliquidated; whether Borrower may be liable individually or jointly with others; whether Borrower may be obligated as a guarantor, surety, accommodation party or otherwise; whether recovery upon such indebtedness may be or hereafter may become barred by any statute of limitations; and whether such indebtedness may be or hereafter may become otherwise unenforceable. Lender. The word "Lender" means PNC Bank, National Association, its successors and assigns. Note. The word "Note" means the promissory note dated October 18, 2005, in the original principal amount of $50,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. COMMERCIAL GUARANTY (Continued) Page 4 Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.. + CONFESSION OF JUDGEMENT. THE GUARANTOR HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD, AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR THE GUARANTOR AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST THE GUARANTOR IN FAVOR OF LENDER OR ANY HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY, ALL ACCRUED INTEREST AND ALL OTHER AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF THE GREATER OF 10% OF SUCH PRINCIPAL AND INTEREST OR 91,000 ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO, THIS NOTE OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE GUARANTOR HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. INTEREST ON ANY SUCH JUDGMENT SHALL ACCRUE AT THE DEFAULT RATE. NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS LENDER SHALL ELECT UNTIL SUCH TIME AS LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST AND COSTS. NOTWITHSTANDING THE ATTORNEY'S COMMISSION PROVIDED FOR IN THE PRECEDING PARAGRAPH (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF ESTABLISHING A SUM CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT LENDER MAY RECOVER FROM THE GUARANTOR SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED BY LENDER. GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY IS DATED OCTOBER 18, 2005. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: X (Seel) SUNIL KHANNA L--W MM W.&M. Vw. 6.27.OMM Cep. "wbnd An..W 6eWtlmo lee. 1"7.200& M %h11 R-4d. • M TACRU-PU920.iC 7HOD20BM M14 G P? Oct, 3. 2008 2:34PM PNC SPECIAL ASSETS No.2022 P. 2 I* Amendment to Loan Documents Q PNCBAM nHS AMENDMENT TO LOAN DOCUMENTS (this ",Amendment") is made as of October 18, 2007, by and between SNS BUDDIES, INC. DBA UNI-MART (whether one or more, jointly and severally if more than one, the "Borrower"), and PNC BANK, NATIONAL ASSOCIATION (the "Bank"). BACKGROUND A. 71io Borrower bas executed and delivered to the Bank, one or more promissory notes, letter agrements, loan ag =harts, security agreements, mortgages, pledge agreeunetns, collateral assignments, and other agreements, instruments, eertifleates and documents, some or all of which are more fully described on attached Exhibit A, which is made a part of this Amendment (collectively as amended from time to time, the "Loan Documents") which evidence or secure some or all of the Borrower's obligations to the Bank for one or more loans or other extensions of credit (the "Obligations'). B. The Borrower and the Bank desire to amend the Loan Documents as provided for in this Amendment. NOW, THEREFORE, in consideration of the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows: 1. Certain of the Loan Documents are amended as set forth in Exhibit A. Any and all references to any Loan Document in any other Loan Document shall be deemed to refer to such Loan Document as amended by this Amendment. This Amendment is deemed incorporated into each of the Loan Documents. Any initially capitalized terms used in this Amendment without definition shall have the meanings assigned to those terms In the Loan Documents. To the extent that any tam or provision of this Amendment is or may be inconsistent with any term or provision in any Loan Document, the terms and provisions of this Amendment shall control. 2. The Borrower hereby certifies that: (a) all of its representations and warranties in the Loan Documents, as amended by this Amendment, are, except as may otherwise be stated in this Amendmart (i) true and correct as of the date of this Amendment, (ii) ratified and confirmed without condition as if made anew, and (iii) incorporated into this Amendment by reference, (b) no Event of Default or event which, with the passage of time or the giving of notice or both, would constitute an Event of Default, exists under any Loan Document which will not be cured by the execution and effectiveness of this Amendment, (c) no consent, approval, order or authorization of, or registration or filing with, any third party is required in connection with the execution, delivery and carrying out of this Amendment or, if required, has been obtained, and (d) this Amendment has been duly authorized, executed and delivered so that it constitutes the legal, valid and binding obligation of the Borrower, enfirceable in accordance with its terms. The Borrower confirms that the Obligations remain outstanding without defense, set off, counterclaim, discount or charge of any kind as of the date of this Amendment. 3. The Borrower hereby confirms that any collateral for the Obligations, including liens, security interests, mortgages, and pledges granted by the Borrower or third parties (if applicable), shall continue unimpaired and in full force and effect, and shall cover and secure all of the Borrower's existing and ftrture Obligations to the Bank, as modified by this Amendment. 4. As a condition precedent to the effectiveness of this Amendment, the Borrower shall comply with Form 11A - Multistate Rev. 1/02 is Oct. 3. 2008 2:34PM PNC SPECIAL ASSETS No.2022 P. 3 n LJ the terms and condltlons (if any) specified In Exhibit A. 5. To Induce the Bank to enter into this Amendment, the Borrower waives and releases and forever discharges the Bank and the United States Small Business Administration and their respective officers, directors, attorneys, agents, and employees from any liability, damage, claim, loss or expense of any kind that it may have against any of them arising out of or relating to the Obligations. The Boffower further agrees to indemnify and hold the Bank and the United States Small Business Administration and their respective officers, directors, attorneys, agents and employees harmless from any loss, damage, judgment, liability or expense (including attorneys' fees) suffered by or rendered against the Bank or any of them on account of any claims arising out of or relating to the Obligations. The Borrower further states that it has carefully read the foregoing release and Indemnity, knows the contents thereof and grants the same as its own free act and deed. 6. This Amendment may be signed in any number of counterpart copies and by the parties to this Amendment on separate countmpatts, but all such copies shall constitute one and the some instrument. Delivery of-an executed counterpart of a signature page to this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Amendment by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission. 7. This Amendment will be binding upon and inure to the benefit of the Borrower and the Bank and their respective heirs, executors, administrators, successors and assigns. 8. This Amendment has been delivered to and accepted by the Bank and will be dc=cd to be made in the State where the Bank's office indicated in the Loan Documents is located. This Amendment will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State where the Bank's office indicated in the Loan Documents is located, excluding its conflict of laws rules. 9. The Borrower acknowledges and agrees that the Borrower has had the opportunity to consult with an attorney or attorneys prior to execution of this Agreement, and the Borrower has consulted with an attorney or attorneys, or has waived and hereby acknowledges the waiver of the opportunity to do so, and the Borrower has executed this Agreement knowingly, understandingly, intelligently, voluntarily and lutentionally. 10. Except as amended hereby, the terns and provisions of the loan Documents remain unchanged, are and shall remain in full force and effect unless and until modified or amended in writing in accordance with their teens, and are hereby ratified and confirmed. Except as expressly provided herein, this Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of any Loan Document, a waiver of any default or Event of Default under any Loan Document, or a waiver or release of any of the Bank's rights and remedies (all of which are hereby reserved). The Borrower expressly ratifies and confirms the confession of judgment (U applicable), waiver of jury trial and venue or foram selection provisions contained In the Loan Documents. 9 -2- Fong 17A.. Multistate Rev. t/OZ Oct, 3. 2008 2:34PM PNC SPECIAL ASSETS No, 2022 P. 4 i WITNESS the due execution of this Amendment as a document under seal as of the date first written above. BORROWER: SNS BUDDIES, INC. DBA UNI-MART s By: Sunil Khanna President pNC BANK, NATIONAL ASSOCIATION 0 Print Name. 0(?flN ,3- Form 17A - Multistate Rev. 1/02 Oct. 3. 2008 2:35PM PNC SPECIAL ASSETS No.2022 P. 5 FJCMIT A TO AMENDMENT TO LOAN DOCUMENTS DATED AS OF OCTOBER 18, 2007 A. The "Loan Document" that are the subject of this Amendment include the following (as any of them have previously been amended, modified or otherwise supplemented): 1. $50,000 Promissory Note dated October 18, 2005 (the "Note'). 2. Commercial Guaranty ftm Surd Khma dated October 18, 2005. 3. Commercial Security Agreement dated October 18, 2005. 4. SBA Express Rider dated October 18, 2005. 5. All other documents, Instruments, agneznents, and certificates executed and delivered in connection with the Loan Documents listed in this Section A. 11. The Loan Documents are amended as follows: I . The paragraph one the first page of the Note entitled "Payment" is hereby entirely deleted, and the following paragraph is hereby substituted therefor, 0 PAYMENT, Borrower will pay this loan as follows: Borrower acknowledges and agrees that, (A) the principal balance outstanding under this Note as of October 18, 2007, is $50,000, and (B) Borrower is not entitled to borrow, repay and reborrow under this Note, and (C) Borrower is not entitled to receive, and Lender is not obligated to make, any further advance(s) of principal under this Note, and (D) Lender is under no obligation to extend or renew the loan or this Note beyond the Expiration Date (hereinafter defined). Borrower will pay regular monthly payments of principal and interest beginning November 18, 2007, and all subsequent payments are due on the same day of each month after that. All outstanding principal plus all accrued interest and all other amounts due or payable under or in connection with this Note will be due and payable in full on the Expiration Date. The "Expiration Date" shall mean October 18, 2015. Monthly payments shall be determined monthly and shall be in amounts determined by Lender to be necessary to fully amortize the then outstanding principal balance over the then remaining period until the Expiration Date at the effective interest rate on this Note as of the date the amount of such payment is calculated by Lender. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid Interest; then to principal; then to any unpaid collection casts; and then to any We charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360. days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. 2. The paragraph on page 2 of the Note entitled "Line of Credit" is hereby entirely deleted, and any other reference(s) to the loan in the Note or any of the other Loan Documents as a line of credit or A-4 Form 17A, - MakWate Rev. 1/02 Oct. 3. 2008 2:35PM PNC SPECIAL ASSETS No.2022 P. 6 0 revolving line of credit is or are hereby deleted and/or changed to refer to the loan outstanding under the Note, as modified and amended by this Amendment, as the context requires. 3. The paragraph on page 2 of the Note entitled "Termination of Line of Credit" is hereby entirely deleted. 4. The paragraph on page 2 of the Note entitled "Conversion to Term Loan", which carries over to page 3 of the Note„ is hereby entirely deleted, and any other reference(s) in the Note or any of the other Loan Documents to conversion of ft loan to a term loan and/or to any of the defined terms contained in such paragraph is or are hereby deleted and/or changed to refer to the loan outstanding under the Note, as modified and amended by this Agreement, as the context requires. 5. In addition to the financial reporting required to be delivered by the Loan Documents, Borrower shall hereafter deliver the following financial Information to Bank: N/A C. Conditions to Ef betiveness of Amendment: The Bank's willingness to agree to the amendments set forth in this Amendment are subject to the prior satisfaction of the following conditions: Fxeeution by all parties and delivery to the Bank of this Amendment, including the attached Consent(s). 2. Delivery of the financial information referenced in Section B.S. above, if any. 17a-m palm A-5 Form 17A - Multistate Rev. 1/02 Oct. 3, 2008 2:36PM PNC SPECIAL ASSETS No,2022 P, 13 0 CONSENT OF GUARANTOR Each of the undersigned guarantors (whether one or more, jointly and severally if more than one, -the "Guarantor'] consents to the provisions of the foregoing Amendment (the "Amendment') and all prior amendments (if arty) and confirms and agrees that: (a) the Guarantor's obligations under any United States Small Business Administration Unconditional Guarantee, Commercial Guaranty, or other Guaranty and Suretyship Agreement dated October 18, 2003 (whether one or more, collectively if more than one, the "Guaranty"), relating to the Obligations mentioned in the Amendment, shall be unimpaired by the Amendment; (b) the Guarantor has no defenses, set offs, counterclaims, discounts or charges of any kind against the Bank, its officers, directors, employees, agents or attorneys with respect to the Cmaranty; and (c) all of the terms, conditions and cove mts in the Guaranty remain unaltered and in full force and effect and are hereby ratified and confirmed and apply to the Obligations, as modified by the Amendment. The Guarantor eertifles that all representations and warranties made In the guaranty are true and correct. The Guarantor hereby confirms that any collateral for the Obligations, Including liens, security interests, mortgages, and pledges granted by the Guarantor or third parties (if applicable), shall continue unimpaired and in full force and effect, shall cover and secure all of the Guarantor's existing and future Obligations to the Bank, AS modified by this Amendment By signing below, each Guarantor who is an individual provides written authorization to the Bank or its designee (and any assignee or potential assignee hereof) to obtain the guarantor's personal credit profile from one or more national credit bureaus. Such authorization shall extend to obtaining a credit profile for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account. A photocopy or facsimile copy of this authorization shall be valid as the original. By signature below, each such Guarantor affirms his/her identity as the respective individual(s) identified in the Guaranty. The Guaraator ratifies and confirms the indemnification, confession of judgment (if applicable) and waiver of jury trial provisions contained in the Guaranty. WITNESS the due execution of this Consent as a document under seal as of the date of this Amendment, intending to be legally bound hereby. (lndividu><I) (SEAL,) Print Name: Sunil Khanna • Form 17A - Multistate FWv.1/02 r- FL ? LLJ ? ! C-4 - L 6 p N?, GXf?I ? r7 N P PNC BANK, National Assoc.,: Plaintiff V SNS BUDDIES, INC., d/b/a UNI-MART, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-4407 CIVIL TERM CONFESSION OF JUDGMENT IN RE: PETITION TO STRIKE AND/OR OPEN JUDGMENT ORDER OF COURT AND NOW, this 6th day of November, 2008, following oral argument, the plaintiff is given fifteen days within which to file a memorandum of law, and the defendant an additional ten days thereafter within which to file a reply brief. By the Court, " Geoffrey S. Shuff, Esquire For PNC ,Robert C. Nowalis, Esquire For SNS Buddies :bg l.._ I ?E s in v i LL 11r71vig LZI '?4 '9 '?" Kevi A. Hess, J. 7 CD Y C'` p ., f -. ;.rte LL- C3 c r C; PNC BANK, NATIONAL IN THE COURT OF COMMON PLEAS OF ASSOCIATES, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff vs. CIVIL ACTION - LAW NO. 08-4407 CIVIL SNS BUDDIES, INC., d/b/a UNI-MART, Defendant IN RE: MOTION TO STRIKE BEFORE HESS, J. ORDER AND NOW, this •1g , day of January, 2009, the petition of the defendant to strike and/or open judgment is DENIED. BY THE COURT, ZGeoffrey S. Shuff, Esquire For the Plaintiff ? Robert C. Nowalis, Esquire For the Defendant Kevin ¢X'. Hess, J. rlm t F?,S' /riot t (2to F i?aQ?v9 i, 1 C-i PNC BANK, NATIONAL IN THE COURT OF COMMON PLEAS OF ASSOCIATES, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : VS. CIVIL ACTION - LAW NO. 08-4407 CIVIL SNS BUDDIES, INC., d/b/a UNI-MART, Defendant IN RE: MOTION TO STRIKE BEFORE HESS, J. OPINION AND ORDER On July 23, 2008, PNC Bank, National Association, hereinafter "PNC," filed a complaint for confession of judgment under Pa.R.C.P. 2951. Judgment was entered by the Prothonotary in the amount of $383,164.21. The defendant, SNS Buddies, Inc., d/b/a Uni-Mart, hereinafter "SNS," has filed a petition to strike and/or open the judgment. In its petition to strike, SNS contends that venue is not proper in Cumberland County. The petition to open asserts that there is a meritorious defense to the underlying claim. We address, first, the matter of venue. Under Pa.R.C.P. 1006, an action against an individual may only be brought in the county in which the individual may be served, the cause of action arose, or where a transaction or occurrence took place out of which the cause of action arose. According to Pa.R.C.P. 2179, referenced in paragraph (b) of Rule 1006, venue against a corporation exists in those counties in which the corporation's registered office or principle place of business is located, it regularly conducts business, the cause of action arose, or a transaction or occurrence took place out of which the cause of action arose. The venue rules apply where there is "an action." Pa.R.C.P. 1001 defines an action as a claim for relief heretofore asserted in NO. 08-4407 CIVIL assumpsit, trespass, or equity. Venue also applies to other forms of action which incorporate the venue rules by reference. See Pa.R.C.P. 1001(c). In addition, Rule 1006(e) requires that improper venue shall be raised by preliminary objection. The time limit for filing preliminary objections is set out in the notice to defend, the form for which is contained in Pa.R.C.P. 1018.1(b). Under the rules for confession of judgment, the term "action" has a different meaning, encompassing the entry of a judgment pursuant to an instrument which authorizes such confession. The complaint for judgment does not contain a notice to defend nor, according to Pa.R.C.P. 2952(b), is a responsive pleading required. Pa.R.C.P. 2959 provides that relief from a judgment by confession "shall be sought by petition" which may be filed in the county where the judgment was entered, in any county to which a county has been transferred, or in any other county in which the sheriff has received a writ of execution. See Pa.R.C.P. 2959(a)(1). Therefore, regardless of where the confession of judgment is originally filed, it would appear that the defendant preserves the right to challenge the judgment in a county where the defendant has some material connection. The rules with respect to confession of judgment are otherwise silent with respect to incorporating the venue rules and make no mention, specifically, of either Rule 1006 or Rule 2179. Thus, we are satisfied that the traditional rules with regard to venue have no application to the initial filing of a confession of judgment.' Moreover, the confession of judgment in this case provides that jurisdiction shall be in the "Courts of Common Pleas of the Commonwealth of Pennsylvania." It also contains the ' Accordingly, we decline to follow the holding of the Philadelphia Court of Common Pleas in Mountbatten Surety Co. Inc. v. Williams Graphics, Inc., 2004 W.L. 1921110 (Pa. Com. Pl.) wherein the Court granted a petition to strike a confessed judgment on grounds of improper venue. 2 NO. 08-4407 CIVIL rather standard language empowering "any attorney of any court of record" to appear and confess judgment in favor of the lender. Thus, even if venue could be made an issue, there is an argument that it has been waived. We next address the question of whether the judgment should be opened. In support of a petition to open, the petitioner must offer clear, direct, precise and believable evidence of a meritorious defense, sufficient to raise a jury question. See Stahl Oil Co., Inc. v. Helsel, 860 A.2d 508 (Pa.Super. 2004). The petition filed in this case does not deny that the defendant executed the relevant documents in the case, agreed to repay a loan and owes the money. It alleges, simply, that a third party, Kuber Financial Services, LLC, engaged by Uni-Mart to sell 255 of its stores, advised the petitioner that PNC was among the preferred lenders and had reviewed the financial statements of the stores (presumably finding them to be profitable). Kuber also made certain representations concerning the financial integrity of the stores at a seminar attended by the petitioner where, allegedly, representatives of PNC were present. The petition then goes on to allege that the petitioner relied on "representations and the conduct of PNC" to their detriment, though nowhere in the petition is it alleged that PNC, in fact, made any representations. In short, the purported "defense" is neither clear nor precise.2 In addition, the claim of the petitioner is in the nature of an unliquidated set-off. It is well settled that in the absence of fraud, an unliquidated set-off is not ground for opening a confessed judgment. Harrison v. Galilee Baptist Church, 234 A.2d 314, 316 (Pa. 1967) citing numerous 2 This defense was expanded upon during the deposition of Sunil Khanna, majority owner of SNS. The gist of his testimony is that, because a bank should not give a loan to a business which is not profitable, the loan need not be repaid if the business proves to be unprofitable. This is pure sophistry. NO. 08-4407 CIVIL cases. Nowhere in the petition to open is there any description of fraudulent conduct on the part of the plaintiff. Accordingly, the petition to open must be denied. OR DF.R AND NOW, this 2 4 f' day of January, 2009, the petition of the defendant to strike and/or open judgment is DENIED. Geoffrey S. Shuff, Esquire For the Plaintiff Robert C. Nowalis, Esquire For the Defendant rlm 4 BY THE COURT, COMMONWEALTH OF PENNSYLVANIA Superior Court of Pennsylvania Karen Reid BrambleM Esq. Prothonotary James D. McCullough, Esq. Deputy Prothonotary Mr. Curtis R. Long Prothonotary Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 Re: 327 MDA 2009 Middle District February 23, 2009 PNC Bank National Assiodation V. SNS Buddies, Inc. d/b/a Uni-Mart, Appellant Dear Mr. Long: 100 Pine Street. Suite 400 Harrisbure. PA 17101 717-772-1294 www. superior.court.state.pa.us Enclosed please find a copy of the docket for the above appeal that was recently filed in the Superior Court. Kindly review the information on this docket and notify this office in writing if you believe any corrections are required. Appellant's counsel is also being sent a Docketing Statement, pursuant to Pa.R.A.P. 3517, for completion and filing. Please note that Superior Court Dockets are available on the Internet at the Web site address printed at the top of this page. Thank you. Very truly yours, Karen Reid Bramblett, Esq. Prothonotary TP Enclosure 12:56 P.M. Appeal Docket Sheet Docket Number: Page 1 of 2 February 23, 2009 327 MDA 2009 PNC Bank National Association v. SNS Buddies, Inc. d/b/a Uni-Mart, Appellant Initiating Document: Notice of Appeal Case Status: Active Case Processing Status Journal Number: Case Category: February 23, 2009 Civil Awaiting Original Record CaseType: Civil Action Law Consolidated Docket Nos.: Related Docket Nos.: SCHEDULED EVENT Next Event Type: Receive Docketing Statement Next Event Type: Original Record Received Next Event Due Date: March 9, 2009 Next Event Due Date: April 20, 2009 COUNSEL INFORMATION Appellant SNS Buddies, Inc. d/b/a Uni-Mart Pro Se: Appoint Counsel Status: IFP Status: No Appellant Attorney Information: Attorney: Nowalis, Robert C. Bar No.: 21970 Law Firm: Doran, Nowalis & Doran Address: 69 Public Sq Ste 700 Wilkes-Barre, PA 18701-2588 Phone No.: (570)823-9111 Fax No.: (570)829-3222 Receive Mail: Yes E-Mail Address: Rnowalis@dndlegl.com Receive E-Mail: Yes Appellee PNC Bank National Association Pro Se: Appoint Counsel Status: IFP Status: Appellee Attorney Information: Attorney: Shuff, Geoffrey S Bar No.: 24848 Law Firm: McNees, Wallace & Nurick, LLC Address: 100 Pine Street PO Box 1166 Harrisburg, PA 171081166 Phone No.: (717)237-5439 Fax No.: (717)260-1743 Receive Mail: Yes E-Mail Address: gshuff@mwn.com Receive E-Mail: Yes Superior Court of Pennsylvania 2/23/2009 3023 12:56 P.M. Appeal Docket Sheet Docket Number: Page 2 of 2 February 23, 2009 327 MDA 2009 FEE INFORMATION Paid Fee Date Fee Name Fee Amt Amount Receipt Number 2/19/09 Notice of Appeal 60.00 60.00 2009SPRMD000179 TRIAL COURT/AGENCY INFORMATION Court Below: Cumberland County Court of Common Pleas County: Cumberland Division: Civil Date of Order Appealed From: January 29, 2009 Judicial District: 9 Date Documents Received: February 23, 2009 Date Notice of Appeal Filed: February 19, 2009 Order Type: Order Entered OTN: Judge: Hess, Kevin A. Judge Superior Court of Pennsylvania Lower Court Docket No.: 08-4407 ORIGINAL RECORD CONTENTS Original Record Item Filed Date Content/Description Date of Remand of Record: BRIEFS DOCKET ENTRIES Filed Date Docket Entry/Document Name Party Type Filed By February 23, 2009 Notice of Appeal Filed Appellant SNS Buddies, Inc. d/b/a Uni-Mart February 23, 2009 Docketing Statement Exited (Civil) Middle District Filing Office 2/23/2009 3023 `t:» 4f3 Mf^j -TI CR] 6.1 ^4 , j-n Robert C. Nowalis, Esquire Attorney Identification Number 21970 Doran, Nowalis & Doran 69 Public Square, Suite 700 Wilkes-Barre, Pennsylvania 18701.2588 570.823.9111 Attorneys for SNS Buddies, Inc. d/b/a Uni-Mart PNC Bank, National Association, $ In the Court of Common Pleas Plaintiff, $ of Cumberland County V. $ Civil Action SNS Buddies, Inc. d/b/a Uni-Mart, $ Defendant. $ $ No. 08.4407 Notice of Appeal Notice is hereby given that SNS Buddies, Inc. d/b/a Uni-Mart, the Defendant above named, hereby appeals to the Superior Court of Pennsylvania from the order entered in this matter on the 29`' day of January, 2009. The order has been entered in the docket as evidenced by the attached copy of the Order and Opinion. Doran, alis o Bv: Robert C. Nowalis, Esquire Attorney ID 21970 69 Public Square, Suite 700 Wilkes-Barre, Pennsylvania 18701 Attorneys for SNS Buddies, Inc. d/b/a Uni- Mart Certification of Service The undersigned, Robert C. Nowalis, Esquire, hereby certifies that a true and correct copy of the foregoing was served on the following persons by placing a copy of the same in the first class U.S. mail on February 17, 2009, postage prepaid, addressed as follows: The Honorable Kevin A. Hess Cumberland County Courthouse 1 Courthouse Square Carlisle, Pennsylvania 17013 Geoffrey S. Shuff, Esquire McNees Wallace & Nurick 100 Pine Street P.O. Box 1166 Harrisburg, Pennsylvania 17108.5439 Official Court Reporter Cumberland County Courthouse 1 Courthouse Square, 311 Carlisle, Pennsylvania 17013 District Court Administrator Cumberland County Courthouse 1 Courthouse Square, 311 Carlisle, Pennsylvania )1013 C. Nowalis, Esquire Exhibit "A" r PNC BANK, NATIONAL IN THE COURT OF COMMON PLEAS OF ASSOCIATES, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff vs. CIVIL ACTION - LAW NO. 08-4407 CIVIL SNS BUDDIES, INC., d/b/a UNI-MART, Defendant IN RE: MOTION TO STRIKE BEFORE HESS. J. ORDER AND NOW, this .29 * day of January, 2009, the petition of the defendant to strike and/or open judgment is DENIED. BY THE COURT, Kevin . Hess, J. Geoffrey S. Shuff, Esquire For the Plaintiff Robert C. Nowalis, Esquire For the Defendant Am r E COPY FROM RECD" d of wd E3a? Pa, a IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-4407 CIVIL IN RE: MOTION TO STRIKE BEFORE HESS, J. OPINION AND ORDER On July 23, 2008, PNC Bank, National Association, hereinafter "PNC," filed a complaint PNC BANK, NATIONAL ASSOCIATES, Plaintiff vs. SNS BUDDIES, INC., d/b/a UNI-MART, Defendant for confession of judgment under Pa.R.C.P. 2951. Judgment was entered by the Prothonotary in the amount of $383,164.21. The defendant, SNS Buddies, Inc., d/b/a Uni-Mart, hereinafter "SNS," has filed a petition to strike and/or open the judgment. In its petition to strike, SNS contends that venue is not proper in Cumberland County. The petition to open asserts that there is a meritorious defense to the underlying claim. We address, first, the matter of venue. Under Pa.R.C.P. 1006, an action against an individual may only be brought in the county in which the individual may be served, the cause of action arose, or where a transaction or occurrence took place out of which the cause of action arose. According to Pa.R.C.P. 2179, referenced in paragraph (b) of Rule 1006, venue against a corporation dkists in those counties in which the corporation's registered office or principle place of business is located, it regularly conducts business, the cause of action arose, or a transaction or occurrence took place out of which the cause of action arose. The venue rules apply where there is "an action." Pa.R.C.P. 1001 defines an action as a claim for relief heretofore asserted in NO. 08-4407 CIVIL assumpsit, trespass, or equity. Venue also applies to other forms of action which incorporate the venue rules by reference. See Pa.R.C.P. 1001(c). In addition, Rule 1006(e) requires that improper venue shall be raised by preliminary objection. The time limit for filing preliminary objections is set out in the notice to defend, the form for which is contained in Pa.R.C.P. 1018.1(b). Under the rules for confession of judgment, the term "action" has a different meaning, encompassing the entry of a judgment pursuant to an instrument which authorizes such confession. The complaint for judgment does not contain a notice to defend nor, according to Pa.R.C.P. 2952(b), is a responsive pleading required. Pa.R.C.P. 2959 provides that relief from a judgment by confession "shall be sought by petition" which may be filed in the county where the judgment was entered, in any county to which a county has been transferred, or in any other county in which the sheriff has received a writ of execution. See Pa.R.C.P. 2959(a)(1). Therefore, regardless of where the confession of judgment is originally filed, it would appear that the defendant preserves the right to challenge the judgment in a county where the defendant has some material connection. The rules with respect to confession of judgment are otherwise silent with respect to incorporating the venue rules and make no mention, specifically, of either Rule 1006 or Rule 2179. Thus, we are satisfied that the traditional rules with regard to venue have no application to the initial filing of a confession of judgment. 1 Moreover, the confession of judgment in this case provides that jurisdiction shall be in the "Courts of Common Pleas of the Commonwealth of Pennsylvania." It also contains the 'Accordingly, we decline to follow the holding of the Philadelphia Court of Common Pleas in Mountbatten Surety Co. Inc. v. Williams Graphics, Inc., 2004 W.L. 1921110 (Pa. Com. Pl.) wherein the Court granted a petition to. strike a confessed judgment on grounds of improper venue. 2 NO. 08-4407 CIVIL rather standard language empowering "any attorney of any court of record" to appear and confess judgment in favor of the lender. Thus, even if venue could be made an issue, there is -an argument that it has been waived. We next address the question of whether the judgment should be opened. In support of -a petition to open, the petitioner must offer clear, direct, precise and believable evidence of a meritorious defense, sufficient to raise a jury question. See Stahl Oil Co., Inc. v. Helsel, 860 A.2d 508 (Pa.Super. 2004). The petition filed in this case does not deny that the defendant executed the relevant documents in the case, agreed to repay a loan and owes the money. It alleges, simply, that a third party, Kuber Financial Services, LLC, engaged by Uni-Mart to sell 255 of its stores, advised the petitioner that PNC was among the preferred lenders and had reviewed the financial statements of the stores (presumably finding them to be profitable). Kuber also made certain representations concerning the financial integrity of the stores at a seminar attended by the petitioner where, allegedly, representatives of PNC were present. The petition then goes on to allege that the petitioner relied on "representations and the conduct of PNC" to their detriment, though nowhere in the petition is it alleged that PNC, in fact, made any representations. In short, the purported "defense" is neither clear nor precise.2 In addition, the claim of the petitioner is in the nature of an unliquidated set-off. It is well settled that in the absence of fraud, an unliquidated set-off is not ground for opening a confessed judgment. Harrison v. Galilee Baptist Church, 234 A.2d 314, 316 (Pa. 1967) citing numerous z This defense was expanded upon during the deposition of Sunil Khanna, majority owner of SNS. The gist of his testimony is that, because a bank should not give a loan to a business which is not profitable,:the loan need not be repaid if the business proves to be unprofitable. This is pure sophistry. 3 i ' NO. 08-4407 CIVIL cases. Nowhere in the petition to open is there any description of fraudulent conduct on the part of the plaintiff. Accordingly, the petition to open must be denied. ORDER AND NOW, this Z 1?,** day of January, 2009, the petition of the defendant to strike and/or open judgment is DENIED. BY THE COURT, --/? It- - 4, Kevin Hess, J. Geoffrey S. Shuff, Esquire / For the Plaintiff Robert C. Nowalis, Esquire For the Defendant Am 4 1DYS5'1 Cumberland County Prothonotary's Office Page 1 Civil Case Print 2008-04407 PNC BANK NATIONAL ASSOCIATION (vs) SNS BUDDIES INC ET AL Reference No... Filed......... 7/23/2008 Case Type ..... : CONFESSION OF JUDGMENT Judgment..... 383164.21 Time...... . 2:04 Execution Date 0/00/0000 Judge Assigned: Jury Trial.... Disposed Desc.: Disposed Date. 0/00/0000 ------------ Case Comments ------------- Higher Crt 1.: Higher Crt 2.: ********************************************** ********************************** General Index Attorney Info PNC NATIONAL ASSOCIATION PLAINTIFF SHUFF GEOFFREY S 201 PENN AVE SCRANTON PA 18503 L COPI FROM HtWt', SNS BUDDIES INC DEFENDANT 4!11 T!!'WwWwhetW, 1 We Wo go map ha. 94 S PENNSYLVANIA AVE Pa wwft go, d' !M Out at CA"* WILKES BARRE PA 18702 . , ?? 01009 UNI-MART DEFENDANT ., 94 S PENNSYLVANIA AVE WILKES BARRE PA 18702 ******************************************************************************** Judgment Index Amount Date Desc SNS BUDDIES INC UNI-MART 383164.21 7232008 CONFESSION OF JUDG 383,164.21 7/23/2008 CONFESSION OF JUDG ******************************************************************************** * Date Entries ******************************************************************************** - - - - - - - - - - - - - FIRST ENTRY - - - - - - - - - - - - - - 7/23/2008 CONFESSION OF JUDGMENT AND COMPLAINT ENTERED IN THE AMOUNT OF $383164.21 BY GEOFFREY S SHUFF ESQ ------------------------------------------------------------------- 7/23/2008 NOTICE MAILED TO DEFENDANTS ------------------------------------------------------------------- 7/23/2008 NOTICE UNDER RULE 2958.1 OF JUDGMENT AND EXECUTION THEREON BY GEOFFREY S SHUFF ESQ ------------------------------------------------------------------- 7/23/2008 AFFIDAVIT OF NON MILITARY SERVICE BY GEOFFREY S SHUFF ESQ ------------------------------------------------------------------- 7/23/2008 CERTIFICATE OF ADDRESSES BY GEOFFREY S SHUFF ESQ ------------------------------------------------------------------- 7/23/2008 PRAECIPE FOR ENTRY OF APPEARANCE ON BEHALF OF THE PLAINTIFF BY GEOFFREY S SHUFF ESQ ------------------------------------------------------------------- 8/05/2008 RETURN OF SVC PURSUANT TO PA RCP 2958.1 - NOTICE OF JUDGMENT AND EXECUTION - BY GEOFFREY S SHUFF ATTY FOR PLFF ------------------------------------------------------------------- 8/22/2008 PETITION TO STRIKE AND OR OPEN JUDGMENT - BY ROBERT C NOWALIS ATTY FOR PETITIONER ------------------------------------------------------------------- 8/27/2008 ORDER TO SHOW CAUSE - 8/27/08 IN RE: PETITION TO STRIKE AND OR OPEN JUDGMENT - IT IS ORDERED THAT 1- A RULE IS ISSUED UPON THE RESPONDENT TO SHOW CAUSE WHY THE PETITIONER IS NOT ENTITLED TO THE RELIEF REQUESTED 2- THE RESPONDENT SHALL FILE AN ANSWER TO THE PETITION WITHIN 20 DAYS OF THIS DATE 3- THE PETITIONI SHALL BE DECIEDED UNDER PA RCP NO 206.7 4- DEPOSITIONS SHALL BE COMPLETED WITHIN 60 DAYS OF THIS DATE 5- ARGUMENT SHALL BE HELD ON 11/6/08 IN CR4 CUMBERLAND COUNTY COURTHOUSE AT 1:30 PM 6- ALL PROCEEDING TO BE STAYED PENDING DETERMINATION OF THIS RULE AND 7 - NOTICE OF THE ENTRY OF THIS ORDER SHALL BE PROVIDED TO ALL PARTIES BY THE PETITIONER - BY KEVIN A HESS J - COPIES MAILED 8/27/08 ------------------------------------------------------------------- 9/16/2008 ANSWER OF PNC BANK NATIONAL ASSOCIATION TO PETITION TO STRIKE AND OR OPEN JUDGMENT - BY GEOFFREY S SHUFF ATTY FOR PLFF ------------------------------------------------------------------- 11/06/2008 DEPOSITION OF SUNIL KHANNA ------------------------------------------------------------------- 11/07/2008 ORDER OF COURT - 11/6/08 IN RE: PETITION TO STRIKE AND OR OPEN PYS57- Cumberland County Prothonotary's Office Civil Case Print 2008-04407 PNC BANK NATIONAL ASSOCIATION (vs) SNS BUDDIES INC ET AL Page 2 Reference No... Filed......... 7/23/2008 Case Type ..... : CONFESSION OF JUDGMENT Time...... i D 2:04 0/00/0000 Judgment. .... 383164.21 on ate Execut Judge Ass igned: Jury Trial.... Disposed Desc.: Disposed Date. 1 i C 0/00/0000 --------- --- Case Comments -- gher rt .: ----------- H Higher Crt 2.: JUDGMENT - FOLLOWI NG ORAL ARGUMENT THE PLFF IS GIVEN 15 DA YS WITHIN WHICH TO FI LE A MEMORANDUM OF LAW AND THE DEFT AN ADDITIONAL 10 DAYS THEREAFTER WITHIN WENCH TO FILE A REPLY 7 08 1 BRIEF - BY KEVIN A HESS J / / - COPIES MAILED 1 --- --------- 1/29/2009 ------------------ ER AND V N ------------------------------------- RE: PETIT IN - I/ O ION IS VIN BY KE DENIED - COPIES A J HESS - - - - - - - - - - - - - - LAST ENTRY - - - - - - - - - - - - - - ******************************************************************************** * Escrow Information * Fees & Debits Beg Bal Pymts/Ad' End Bal ******************************** ******** ****** ******************************* JDMT/CONFESSION TAX ON CONFESS SATISFACTION AUTOMATION FEE 14.00 14.00 .00 .50 .50 .00 8.00 8.00 .00 5.00 5.00 .00 - --------------- 27.50 --------- --- 27.50 -------- .00 ******************************************************************************** * End of Case Information ******************************************************************************** q,?jL DOPY FROM tits hi in loom" www,1 We two so my two Owd *IMM?, R?. an?d 9.M?Y Ria 'P? ?? .? 00 ?,cy ?? ? 'd may, ?? t:.? -? `c' --? -. ; l..£3 , - t%. ? ` Y.. CERTIFICATE AND TRANSMITTAL OF RECORDS UNDER PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1931 (C) To the Prothonotary of the Apellate Court to which the within matter has been appealed: Superior Court of PA The undersigned, Prothonotary of the Court of Common Pleas of Cumberland County, the said court being a court of record, do hereby certify that annexed hereto is a true and correct copy of the whole and entire record, including an opinion of the court as required by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the proceedings, if any, and the docket entries in the following matter: PNC Bank, National Association VS. SNS Buddies, Inc., DBA Uni-Mart 08-4407 Civil Term 327 MDA 2009 The documents comprising the record have been numbered from No.1 to 181, and attached hereto as Exhibit A is a list of the documents correspondingly numbered and identified with reasonable definiteness, including with respect to each document, the number of pages comprising the document. The date on which the record has been transmitted to the Appellate Court is 031 4 /2009 . Cu is R. rotho otary Regina Lebo An additional copy of this certificate is enclosed. Please sign and date copy, thereby acknowledging receipt of this record. Date Signature & Title Among the Records and Proceedings enrolled in the court of Common Pleas in and for the county of Cumberland in the Commonwealth of Pennsylvania 827 MDA 2009 to No. 2 08-4407 Civil Term, 19 is contained the following: COPY OF Appearance DOCKET ENTRY PNC BANK, NATIONAL ASSOCIATION VS. SNS BUDDIES, INC. DBA UNI-MART **SEE CERTIFIED COPY OF THE DOCKET ENTRIES** `"' Commonwealth of Pennsylvania County of Cumberland ss: Curtis R. Long , Prothonotary In TESTIMONY WHEREOF, I have hereunto this 4th of the Court of Common Pleas in and for said County, do hereby certify that the foregoing is a full, true and correct copy of the whole record of the case therein stated, wherein PNC Bank, National Association Plaintiff, and SNS Buddies, Inc. dba Uni-Mart Defendant , as the same remains of record before the said Court at No. 08-4407 of Civil Term, A. D. 19 . set my han an ffixed the seal of said Court day of A/Q., X2009. rothonotary 1, Edgar B. Bayley President Judge of the Ninth Judicial District, composed of the County of Cumberland, do certify that Curtis R. Long , by whom the annexed record, certificate and attestation were made and given, and who, in his own proper handwriting, thereunto subscribed his name and affixed the seal of the Court of Common Pleas of said County, was, at the time of so doing, and now is Prothonotary in and for said County of CStmhPrl And in the Commonwealth of Pennsylvania, duly commissioned a ied to all of whose acts as such full faith and credit are and ought to be given as well in Courts Judicatur se d that the said record, certificate and attestation are in due form of law a ade by pro offi r. t 11-11 N ALA Commonwealth of Pennsylvania County of Cumberland ss: President Judge I Curtis R. Long , Prothonotary bf the Court of Common Pleas in and for the said County, do certify that the Honorable Edgar B. Bayley by whom the foregoing attestation was made, and who has thereunto subscribed his name, was, at the time of making thereof, and still is President Judge of the Court of Common Pleas, Orphan' Court and Court of Quarter Sessions of the Peace in and for said County, duly Commissioned and qualified; to all whose acts as such full faith and credit are and ought to be given, as well in Courts of judicature as elsewhere. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the seal of said Court this 4th y of March A. D. 89x2009 Prothonotary b 0 0 0 w Q d , ? n 0 d n c i I co ?S 1-4 Np Z z a t 0 I a •-i n 0 I I yvJyy se Print 2008-04407 PNC BANK NATIONAL ASSOCIATION (vs) SNS BUDDIES INC ET AL Reference No... Filed......... Case Type.....: CONFESSION OF JUDGMENT Time.........: Judgment..... : 383164.21 Execution Date Judge Assigned: Jury Trial.... Disposed Desc.: Disposed Date. ------------ Case Comments ------------ Higher Crt 1.: Higher Crt 2.: i -.J- 7/23/2008 2:04 4 0/00/0000 0/00/0000 n 32 7 MD 200 9+ ******************************************************************************** General Index Attorney Info PNC NATIONAL ASSOCIATION 201 PENN AVE SCRANTON'PA 18503 SNS BUDDIES INC 94 S PENNSYLVANIA AVE WILKES BARRE PA 18702 UNI-MART 94 S PENNSYLVANIA AVE WILKES BARRE PA 18702 PLAINTIFF SHUFF GEOFFREY S DEFENDANT DEFENDANT Judgment Index Amount Date Desc SNS BUDDIES INC 383,164.21 7/23/2008 CONFESSION OF JUDG UNI-MART 383,164.21 7/23/2008 CONFESSION OF JUDG * Date Entries 7/23/2008 CONFESSION OF JUDGMENT AND COMPLAINTRENTERED IN THE AMOUNT OF ?+ $383164.21 BY GEOFFREY S SHUFF ESQ ?- --------------------------- ------------------------------------ -- ??,-/ 7 7/23/2008 NOTICE MAILED TO DEFENDANTS 7/23/2008 NOTICEEUNDER RULEE2958.1 OF-JUDGMENT AND EXECUTION THEREON BY ------------------------------------------------------------------- ?O 7/23/2008 AFFIDAVIT OF NON MILITARY SERVICE BY GEOFFREY S SHUFF ESQ --------------------------------------------7---------------------- a / 7/23/2008 CERTIFICATE OF ADDRESSES BY GEOFFREY S SHUFF ESQ ------------------------------------------------------------------- o?c? 7/23/2008 PRAECIPE FOR ENTRY OF APPEARANCE ON BEHALF OF THE PLAINTIFF BY GEOFFREY S SHUFF ESQ ------------------------------------------------ 3-?2 8/05/2008 EXRETURN OF ECUTION SVC PURSUANT REYTO SHUFFPA2958.1 pNOTICE OF JUDGMENT AND ------------------------------------------------------------------- a (?- Ja 8/22/2008 PETITION TO STRIKE AND OR OPEN JUDGMENT - BY ROBERT C NOWALIS ATTY FOR PETITIONER ------------------------------------------------------------------- aS 8/27/2008 ORDER TO SHOW CAUSE - 8/27/08 IN RE: PETITION TO STRIKE AND OR OPEN JUDGMENT - IT IS ORDERED THAT 1- A RULE IS ISSUED UPON THE RESPONDENT TO SHOW CAUSE WHY THE PETITIONER IS NOT ENTITLED TO THE RELIEF REQUESTED 2- THE RESPONDENT SHALL FILE AN ANSWER TO THE PETITION WITHIN 20 DAYS OF THIS DATE 3- THE PETITIONI SHALL BE DECIEDED UNDER PA RCP NO 206.7 4- DEPOSITIONS SHALL BE COMPLETED WITHIN 60 DAYS OF THIS DATE 5- ARGUMENT SHALL BE ; HELD ON 11/6/08 IN CR4 CUMBERLAND COUNTY COURTHOUSE AT 1:30 PM 6- ALL PROCEEDING TO BE STAYED PENDING DETERMINATION OF THIS RULE ,w AND 7 ? NOTICE OF THE ENTRY OF THIS ORDER SHALL BE PROVIDED TO ALL PARTIES BY THE PETITIONER - BY KEVIN A HESS J - COPIES MAILED 8/27/08 ---------------------------------------IATION TO 3-?y 9/16/2008 ORSOPENWER BYTGEOIONAL ATTYPETIFORTPLFFION STRIKE AND --------------------------- ys-1y/ 11/06/2008 DEPOSITION OF SUNIL KHANNA ------------------------------------------------------------------- /za 11/07/2008 ORDER OF COURT 11/6/08 IN RE: PETITION TO STRIKE AND OR OPEN 2008-04407 PNC BANK NATIONAL ASSOCIATION (vs) SNS BUDDIES INC ET AL Reference No..: Filed......... 7/23/2008 Case Type.....: CONFESSION OF JUDGMENT Time........ 2:04 Judgment.. 383164.21 Execution Date 0/00/0000 Judge Assigned: Jury Trial... Disposed Desc.: Disposed Date. 0/00 0000 ------------ Case Comments ------------- Higher Crt 1.: 327 MD 2009 Higher Crt 2.: JUDGMENT - FOLLOWING ORAL ARGUMENT THE PLFF IS GIVEN 15 DAYS WITHIN WHICH TO FILE A MEMORANDUM OF LAW AND THE DEFT AN ADDITIONAL 10 DAYS THEREAFTER WITHIN WENCH TO FILE A REPLY BRIEF - BY KEVIN A HESS J - COPIES MAILED 11/7/08 -------------------------------------------------------------------AND ER - TION TO 1y3.JLI7 1/29/2009 DENIEDN- BY KEDVIN AIHESSOJ INCOPIESRE: 1/29/09 PETITION IS ------------------------------------------------------------------- ??_?? 2/19/2009 DEFTCE OF APPEAL TO SUPERIOR COURT - BY ROBERT C NOWALIS ATTY FOR 2/25/2009 SUPERIOR COURT OF PA NOTICE OF APPEAL DOCKETING TO # 327 MDA 2009 ------------------------------------------------------------------- *- 3/03/2009 TRANSCRIPT-FILED-_-DATED -3/3/09- -BY-KEVIN -A-HESS -J--------------- 3/04/2009 NOTICE OF DOCKET ENTRIES MAILED TO GEOFFREY S SHUFF ESQ AND ROBERT C NOWALIS ESQ - LAST ENTRY - ---: i ?l I'?'l??tora n!- /rt ? ,L3r ' -F * Escrow Information * Fees & Debits Beq Bal Py*mts/Ad End Bal JDMT/CONFESSION 14.00 14.00 .00 TAX ON CONFESS .50 .50 .00 SATISFACTION 8.00 8.00 .00 AUTOMATION FEE 5.00 5:00 .00 APPEAL HIGH CT 48.00 48.00 .00 ------75.50-------75.50- --------.00 ******************************************************************************** * End of Case Information ******************************************************************************** C In Testimon, ?tih t ^f, I here u?-, hand and the seal of said Court at Carl ,, F.3. This ..... ........ day of.... Prothonota I AVN 'i11N bupertor (Court of Venw5p1bania Karen Reid Bramblett, Esq. Prothonotary Milan K. Mrkobrad, Esq. Deputy Prothonotary Pennsylvania Judicial Center Middle District P.O. Box 62435 601 Commonwealth Avenue, Suite 1600 Harrisburg, PA 17106-2435 7724 w ww. s uj!7=or. cowstate. pa.l, s 't71-? ' "?O t, -??t CERTIFICATE OF REMITTAUREMAND OF RECORD TO: Prothonotary RE: PNC Bank, et al v. SNS Buddies, et al 327 MDA 2009 Trial Court: Cumberland County Court of Common Pleas Trial Court Docket No: 08-4407 G`o ? u Annexed hereto pursuant to Pennsylvania Rules of Appellate Procedure 2571 and 2572 is the entire record for the above matter. Original Record contents: Item Filed Date Description Part w/ envelope attached March 4, 2009 Remand/Remittal Date: 04/26/2010 ORIGINAL RECIPIENT ONLY - Please acknowledge receipt by signing, dating, and returning the enclosed copy of this certificate to our office. Copy recipients (noted below) need not acknowledge receipt. Res ectfully, Milan K. Mrkobrad, Esq. Deputy Prothonotary /aas Enclosure cc: Debra P. Fourlas, Esq. The Honorable Kevin A. Hess, President Judge Robert C. Nowalis, Esq. PNC Bank, et al v. SNS Buddies, et al 327 M DA 2009 Letter to: Buell, David D. Acknowledgement of Certificate of RemittaURemand of Record (to be returned): Signature Date Printed Name J. A26003/09 NON-PRECEDE NTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 PNC BANK NATIONAL ASSOCIATION, Appellee V. SNS BUDDIES, INC. d/b/a, UNI-MART, Appellant IN THE SUPERIOR COURT OF PENNSYLVANIA No. 327 MDAOO Q,., Appeal from the Order entered on January 29, 2009 in the Court of Common Pleas of Cumberland County, Civil Division, No. 08-4407 BEFORE: MUSMANNO, SHOGAN, JJ. and McEWEN, P.J.E. MEMORANDUM: FILED: March 19, 2010 SNS Buddies, Inc. d/b/a, Uni-Mart ("SNS") appeals from the trial court's Order denying its Petition to strike and/or open the judgment of $383,164.21 entered in favor of PNC Bank National Association ("PNC Bank"). We affirm. This case arose out of a transaction in which SNS purchased a Uni- Mart store in Wilkes-Barre, Pennsylvania, with financing from PNC Bank. The principals of SNS were Sunil Khanna ("Khanna") and his wife, Neeru Khanna. In 2004, Khanna learned about the impending sale of Uni-Mart stores and decided to attend a seminar concerning the sales that was offered by Uni-Mart in conjunction with Kuber Financial Services, LLC ('"Kuber"). At the seminar, Kuber told the attendees that PNC Bank was one of the preferred lenders in financing the purchase of a Uni-Mart store. However, no 1. A26003/09 banks made a presentation at the seminar. SNS decided to purchase a store and obtained a $775,500.00 loan from PNC Bank. The original loan documents ("SBA Note"), which were executed on April 11, 2005, included a provision allowing for the power to confess judgment and a provision indicating that proper jurisdiction and venue in any action would be in the Courts of Common Pleas of the Commonwealth of Pennsylvania. The SBA Note also provided that SNS would waive any objection to venue and any objection based upon a more convenient venue. Thereafter, SNS o btained a second loan of $50,000 from PNC Bank in 2007. As part of this second loan, SNS and PNC Bank executed an amendment to the loan documents ("Amendment"). The Amendment included a provision that expressly released any claims SNS could have against PNC Bank. The Amendment also stated that except for the amended terms and conditions listed in the document, the SBA Note remained in effect and that SNS expressly confirmed that the confession of judgment and venue as contained in the SBA Note were still in force. SNS defaulted on the loan.' On July 23, 2008, PNC Bank filed a Complaint for confession of judgment in the Court of Common Pleas of Cumberland County. The prothonotary entered judgment in the amount of ' Prior to defaulting, SNS confronted Uni-Mart, LLC alleging Uni-Mart provided inaccurate information regarding the purchase of the store. Uni- Mart agreed to pay SNS $400,000 in 2005, but did not admit to providing SNS with inaccurate information. SNS then paid $350,000 to PNC Bank to lower its monthly payment on the original loan in December 2005. -2- J. A26003/09 $383,164.21. On August 22, 2008, SNS filed a Petition to strike and/or open the judgment. In its Petition, SNS claimed that venue was not proper in Cumberland County, PNC Bank had committed fraud, and the provision for confession of judgment was a violation of public policy. PNC Bank filed an Answer. The trial court held a hearing on November 6, 2008. The trial court issued an Order denying SNS's Petition on January 29, 2009. SNS now appeals, raising the following questions for our review: 1. Did the lower court err in determining that venue in this confession of judgment proceeding was proper in Cumberland County? 2. Did the lower court err in concluding that the record of this case did not support the opening of this judgment? Brief for Appellant at 4. In reviewing a trial court's order on a petition to open a confessed judgment, we have the following standard of review: "A petition to open judgment is an appeal to the equitable powers of the court. As such, it is committed to the sound discretion of the hearing court and will not be disturbed absent a manifest abuse of discretion." Stahl Oil Co., Inc. v. Helsel, 860 A.2d 508, 512 (Pa. Super. 2004) (citation omitted). When reviewing a trial court's order on a petition to strike a confessed judgment, we employ the following standard of review: A petition to strike a judgment by confession will be granted where there is an apparent defect on the face of the record on which the judgment was entered. In reviewing an appeal from a denial of a petition to strike we are limited to determining -3- 1. A26003/09 whether the record as filed by the confessing party is adequate to sustain the judgment. 1BG/Rosenfeld Retail Props. v. Anspach, 803 A.2d 783, 784 (Pa. Super. 2002) (citations omitted). In its first claim, SNS contends that the trial court erred in determining that venue was proper in Cumberland County. Brief for Appellant at 8. SNS argues that it did not have any contact with Cumberland County. Id. SNS further argues that the trial court's holding was not fair as it would cause defendants to defend against judgments in a foreign county. Id. at 9-10. We conclude that this contention is without merit as, in the loan documents, SNS agreed to venue in any county in Pennsylvania.2 Our Supreme Court has held that a forum selection clause is enforceable "when the parties have freely agreed that litigation shall be conducted in another forum and where such agreement is not unreasonable at the time of litigation." Central Contracting Co. v. C.E. Youngdahl & Co., 209 A.2d 810, 816 (Pa. 1965); see also Patriot Commercial Leasing Co., Inc. v. Kremer Restaurant Enters., LLC, 915 A.2d 647, 650-51 (Pa. Super. 2006) (collecting cases demonstrating that forum selection clauses are enforceable where the clauses are clear and unambiguous). The Supreme Court explained that a forum selection clause is unreasonable "only where its z We note that SNS and PNC Bank each raise the interplay between the Pennsylvania Rules of Civil Procedure related to venue and confessed judgments. However, we need not address whether these rules are applicable here because the parties agreed to the venue selection clause. -4- 1. A26003/09 enforcement would, under all circumstances existing at the time of litigation, - 5 - 1. A26003/09 seriously impair [a party's] ability to pursue his cause of action." Central Contracting Co., 209 A.2d at 816. "Mere inconvenience or additional expense is not the test of unreasonableness since it may be assumed that [the party] received under the contract consideration for these things." Id. "If the agreed upon forum is available to [a party] and said forum can do substantial justice to the cause of action then [that party] should be bound by his agreement." Id.; see also Churchill Corp. v. Third Century Inc., 578 A.2d 532, 536 (Pa. Super. 1990) (stating that a forum selection clause is unenforceable where the parties have not freely bargained for the clause under the normal requirements of contract law and there was no consideration for the clause). Therefore, [i]n light of these controlling principles from Central Contracting and prevailing case law, a forum selection clause in a commercial contract between business entities is presumptively valid and will be deemed unenforceable only when: 1) the clause itself was induced by fraud or overreaching; 2) the forum selected in the clause is so unfair or inconvenient that a party, for all practical purposes, will be deprived of an opportunity to be heard; or 3) the clause is found to violate public policy. Patriot Commercial, 915 A.2d at 651. In accepting the loan from PNC Bank, SNS agreed to the following provision, in relevant part: 2. Governing Law; Jurisdiction. ... The Undersigned hereby irrevocably consents to the exclusive jurisdiction of the Courts of Common Pleas of the Commonwealth of Pennsylvania and the United States District Court of the Western District of Pennsylvania. . . . The Undersigned agrees that the venue provided above is the most convenient forum for -6- I A26003/09 both the Lender and the Undersigned and the Undersigned waives any objection to venue and any objection based on a more convenient forum in any action instituted under the Note. SBA Note, 4/11/05, at 5 (emphasis added). Furthermore, in the Amendment, SNS agreed to the following provision, in relevant part: Except as amended hereby, the terms and provisions of the [SBA Note] remain unchanged, are and shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms, and are hereby ratified and confirmed. Except as expressly provided herein, this Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of any Loan Document, a waiver of any default or Event of Default under any Loan Document, or a waiver or release of any of the Bank's rights and remedies (all of which are hereby reserved). The Borrower expressly ratifies and confirms the confession of judgment (if applicable), waiver of jury trial and venue or forum selection provisions contained in the Loan Documents. Amendment, 10/24/08, at 2 (emphasis added). Here, the forum selection clause clearly and unambiguously states that any lawsuit against SNS may be brought in the Courts of Common Pleas of the Commonwealth of Pennsylvania. Furthermore, SNS expressly waived any objection to venue in both the SBA Note as well as the Amendment. Contrary to SNS's argument that confessing judgment in any county would be prejudicial because it would force that party to seek relief from a foreign county, we conclude that SNS freely accepted these clauses. Because the express language of the documents confers venue on any of the courts of common pleas in Pennsylvania and SNS agreed to waive any objection to -7- ]. A26003/09 venue, we conclude that SNS's first claim is without merit. See O'Hara v. First Liberty Ins. Corp., 984 A.2d 938, 942 (Pa. Super. 2009) (concluding that forum selection clause clearly set forth the relevant forum for any legal action and was thus enforceable).3 In its second claim, SNS contends that the trial court erred in failing to open the confessed judgment based upon the evidence demonstrating PNC Bank had committed fraud. Brief for Appellant at 10. SNS specifically points to Khanna's deposition testimony wherein he stated that Kuber advised potential buyers of the Uni-Marts that banks, including PNC Bank, had examined the financial statements of the stores and completed their due diligence regarding purchasing a store. Id. at 11. SNS argues that it relied upon these representations to purchase a store and suffered severe financial losses as a result. Id. at 11-12. SNS further argues that PNC Bank admitted to the misrepresentations in its Answer to the Petitions by making ineffective denials. Id. at 13-14. SNS also argues that PNC Bank's failure to correct any misrepresentations at the Kuber seminars evidenced fraud. Id. at 14. Initially, we note that SNS agreed to release PNC Bank from any claims through the following provision in the Amendment: 3 To the extent that SNS argues that the provision regarding the confession of judgment violates public policy, we conclude that this argument is without merit as SNS did not provide any legal support for such an assertion. See Pa.R.A.P. 2119(a) (stating that argument should be "followed by such discussion and citation of authorities as are deemed pertinent."). -8- 3. A26003/09 To induce the Bank to enter into this Amendment, the Borrower waives and releases and forever discharges the Bank and the United States Small Business Administration and their respective officers, directors, attorneys, agents, and employees from any liability, damage, claim, loss or expense of any kind that it may have against any of them arising out of or relating to the Obligations. The Borrower further agrees to indemnify and hold the Bank and the United States Small Business Administration and their respective officers, directors, attorneys, agents and employees harmless from any loss, damage, judgment, liability or expense (including attorneys' fees) suffered by or rendered against the Bank or any of them on account of any claims arising out of or relating to the Obligations. The Borrower further states that it has carefully read the foregoing release and indemnity, knows the contents thereof and grants the same as its own free act and deed. Amendment, 10/24/08, at 2 ¶ 5. Pursuant to its acceptance of this provision, SNS has waived any and all claims against PNC Bank. Indeed, SNS was aware of the alleged fraud and had negotiated a settlement with Uni-Mart at the time it accepted the above provision in exchange for the additional loan. Based upon SNS's agreement to the above provision, we conclude that its claim is without merit. In any event, even if SNS had not waived all of its claims against PNC Bank, its argument that PNC Bank committed fraud is not supported by the evidence in the record. SNS has provided no proof, aside from Khanna's deposition testimony, to show that PNC Bank committed fraud. However, Khanna did not state or allege that PNC Bank made statements to him that would be considered fraudulent. Khanna stated that representatives from Kuber, not PNC Bank, made various representations regarding the Uni-Mart -9- 1. A26003/09 stores at the seminars. N.T., 10/24/08, at 9-11. Khanna also stated that while representatives from various banks were present, he could not identify them, substantively indicate which banks were represented or which banks made a presentation at the seminar. Id. at 13-14, 16, 31. Khanna additionally admitted that he was unaware of any relationship between Kuber and PNC Bank and that he relied upon the financial information provided by NRC Realty to purchase the Uni-Mart. Id. at 32, 33-34. Khanna further stated that when SNS discovered that it had been misinformed, it confronted Uni-Mart and negotiated a $400,000 refund. Id. at 20-22. Based upon the foregoing, we conclude SNS's contention is without merit as it failed to provide direct proof of fraud by PNC Bank. Because SNS did not provide any evidence of fraudulent conduct, we further conclude that PNC Bank could not admit to any allegations of fraud in its Answer to the Petition to Open/Strike the Judgment.4 Moreover, PNC Bank specifically denied each of the allegations at issue and further stated that it could not properly respond to any alleged averments made by Kuber to SNS. Accordingly, we conclude that SNS's second contention is without merit. Order affirmed. 4 We note that SNS cites to Pa.R.C.P. 1029 to support its allegation that PNC Bank did not properly respond to SNS's Petition to Open/Strike the Judgment. However, it is unclear that this Rule applies to Confessions of Judgment as Rule 1029 applies to Civil Actions. Indeed, Civil Rule 2959 sets -10- 3. A26003/09 judgment Entered. Deputy Prothonotary March 19, 2010 Date: forth the procedure for filing a petition to strike or open a confession of judgment and filing an Answer to the Petition. See Pa.R.C.P. 2959. - 11 - 1 ? . CERTIFICATE AND TRANSMITTAL OF RECORDS UNDER PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1931 (C) To the Prothonotary of the Apellate Court to which the within matter has been appealed: Superior Court of PA The undersigned, Prothonotary of the Court of Common Pleas of Cumberland County, the said court being a court of record, do hereby certify that annexed hereto is a true and correct copy of the whole and entire record, including an opinion of the court as required by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the proceedings, if any, and the docket entries in the following matter: PNC Bank, National Association VS. SNS Buddies, Inc., DBA Uni-Mart 08-4407 Civil Term • 327 MDA 2009 The documents comprising the record have been numbered from No.1 to 181, and attached hereto as Exhibit A is a list of the documents correspondingly numbered and identified with reasonable definiteness, including with respect to each document, the number of pages comprising the document. The date on which the record has been transmitted to the Appellate Court is 03/ 4 /2009 . Cu is R. , roth otary Regina Lebo An additional copy of this certificate is enclosed. Please sign and date copy, thereby acknowledging receipt of this record. sjjP@4()F Court Received in ?,T"a4„ Court Date Signature & Title MAR ?uu? • MIDDLE