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HomeMy WebLinkAbout08-4409i COURT ?F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO. D8- N409 Plaintiff V SUNIL KHANN D CONFESSION OF JUDGMENT PREVIOUSLY ASSIGNED TO: N/A CONFESSION OF JUDGMENT Pursuant which is attaches judgment in favoi a. b. C. and NEERU KHANNA, to the authority contained in the warrant of attorney, the original or a copy of l to the Complaint filed in this action, I appear for the Defendants and confess of the Plaintiff and against the Defendants as follows: Principal Interest to July 14, 2008 Late Charges Attorneys' Fees TOTAL: $325,508.57 $ 20,687.16 $ 2,348.91 34,619-57 $383,164.21, plus interest, other expenses, fees and costs Respectfully submitted, McNees Wallace & Nurick LLC Date: July 2Z- 2008 By: o S. S ff, Esquire reme Cy6rt ID #24848 100 Pine treet, PO Box 1166 Harrisb g, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff COURT F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, SUNIL KHA"A and NEERU KHANNA, DOCKET NO. M - yyo9 Civil lerh CONFESSION OF JUDGMENT PREVIOUSLY ASSIGNED TO: N/A COMPLAINT FOR CONFESSION OF JUDGMENT UNDER RULE 2951 1. T?e Plaintiff, PNC Bank, National Association, is a national banking association organized and e?isting under the laws of the United States of America with a principal regional office located at pi Penn Avenue, Scranton, PA 18503 (the "Plaintiff'). 2. The Defendants, Sunil Khanna and Neeru Khanna, are adult individuals whose last known address i? 3 Cherokee Square, Wilkes-Barre, PA 18702 (the "Defendants'). 3. The Defendants executed and delivered to the Plaintiff a U.S. Small Business Administration nconditional Guarantee (the "Guarantee"), a true and correct photostatic reproduction of a original of which is attached hereto as Exhibit "A" and made a part hereof. 4. amounts due to Business Admi Hundred Seven photostatic repr hereof the Guarantee, the Defendants guaranteed to the Plaintiff the payment of all Plaintiff by SNS Buddies, Inc., dba Uni-Mart (the "Debtor") under a U.S. Small Note dated April 11, 2005, in the original principal amount of Seven ve Thousand Five Hundred Dollars ($775,500) (the "Note"), a true and correct of the original of which is attached hereto as Exhibit "B" and made a part 5. a 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 th 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 die and payable in full. A copy of the Plaintiffs demand dated February 27, 2008, is attached beret as Exhibit "D" and made a part hereof. 7. J dgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 8. There has not been any assignment of the Guarantee or the Note. 9. J dgment has not been entered on the Guarantee in any jurisdiction. 10. itemized computation of the amount due to the Plaintiff by the Defendants as a result of the a. b. C. d. 11 business day of Journal on the n ' defaults under the Guarantee is as follows: Principal $325,508.57 Interest to July 14, 2008 $ 20,687.16 Late Charges $ 2,348.91 Attorneys' Fees $. 34,619 57 TOTAL DUE: $383,164.21 serest continues to accrue at a rate equal to the Prime Rate in effect on the first ie month in which an interest rate change occurs, as published in the Wall Street :t business day, plus two and one-half percent (2.50%), adjusted monthly. WHE FORE, Plaintiff, PNC Bank, National Association, demands judgment against the Defendants, S 1 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 Rai a 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, McNees Wallace & Nurick LLC Date: July 20b8 By 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff COURT F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NtIONAL ASSOCIATION, Pl intiff v. SUNIL KHANN,? and NEERU KHANNA, DOCKET NO. CONFESSION OF JUDGMENT 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 belief. I Section 4904, Dater I q l U , pleading are true and correct to the best of my information, knowledge and that false statements herein are made subject to the penalties of 18 Pa. C.S. to unsworn falsification to authorities. PNC BANK, NATIONAL ASSOCIATION 1 U.S. Small Business Administration UNCONDITIONAL GUARANTEE 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 uncon itionally 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 G antor. Lender is not required to seek payment from any other source before demanding payment from Guarantor. 2. NOTE: The "Note" is the promissory note dated " l/ - ? in the principal amount of SEVEN HUNDRED SEVENTY FIVE THOUSAND FIVE HUNDRED --- - Dollars, from Borrower to ender. It includes any assumption, renewal, substitution, or replacement of the Note, and multiple notes under a line of credit. 3. DEFINITIONS: "Collateral" mean any property taken as security for payment of the Note or any guarantee of the Note. "Loan" means the oan 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 mall Business Administration, an Agency of the United States of America. SBA Form 148 (10/98) Pre s editions obsolete. Page 1/5 Bankers Systems, Inc., St. Cloud, MN 4. LENDER'S G) NERAL POWERS: Lender may tak any of the following actions at any time, without notice, without Guarantor's consent, and without making deman 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. Compromis or settle with the Borrower or any guarantor of the Note; E. Substitute o 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 G. Bid or buy 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 LA 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, pe alty, tax, or liability. As to this Guarantee, Guarantor may not claim or assert any local or state law against SBA to d ny any obligation, defeat any claim of SBA, or preempt federal law. 6. RIGHTS, NOTICES, AND DEFENSES THAT GUARANTOR WAIVES: To the extent p itted by law, A. Guarantor waives all rights to: 1) Require resentment, protest, or demand upon Borrower; 2) Redeem any Collateral before or after Lender disposes of it; 3) Have an disposition of Collateral advertised; and 4) Require valuation of Collateral before or after Lender disposes of it. B. Guarantor waives any notice of 1) Any default under the Note; 2) Presentm nt, dishonor, protest, or demand; 3) Executio 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 cha a in the financial condition or business operations of Borrower or any guarantor; 6) Any ch es in the terms of the Note or other Loan Documents, except increases in the amounts due under the Note; an 7) The time r place of any sale or other disposition of Collateral. C. Guarantor waives defenses based upon any claim that: 1) Lender fa led to obtain any guarantee; 2) Lender fa led 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 Colla eral changed in value, or was neglected, lost, destroyed, or underinsured; SBA Form 148 (10/98) Pre loos editions obsolete. Page 2/5 Bankers Systems, Inc., St. Cloud, MN 5) Lende impaired the Collateral; 6) Lende did not dispose of any of the Collateral; 7) Lender did not conduct a commercially reasonable sale; 8) Lend 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 fin ncial 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 id not seek payment from the Borrower, any other guarantors, or any Collateral before demanding payme t from Guarantor: 13) Lender mpaired Guarantor's suretyship rights; 14) Lender odified 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 as taken an action allowed under the Note, this Guarantee, or other Loan Documents. 7. DUTIES AS TO COLLATERAL: Guarantor will p serve 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 Guara?tee, Guarantor includes heirs and successors, and Lender includes its successors and assigns. 9. GENERAL 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 EVERAL 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 an d to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral. F. FINANCIAL TATEMENTS. Guarantor must give Lender financial statements as Lender requires. G. LENDER'S RI GHTS CUMULATIVE, NOT WAIVED. Lender may exercise any of its rights separately or together, as ma ny times as it chooses. Lender may delay or forgo enforcing any of its rights without losin o impairing any g r of them. H. ORAL STATE MENTS NOT BINDING. Guarantor may not use an oral statement to contradict or alter the written terms of the No te or this Guarantee, or to raise a defense to this Guarantee. 1. SEVERABILI Y. If any part of this Guarantee is found to be unenforceable, all other parts will remain in effect. J. CONSIDERA ION. The consideration for this Guarantee is the Loan or any accommodation by Lender as to the Loan. SBA Forth 148 (10198) Previ us editions obsolete. Page 3/5 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, T ANY TIME AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR HE 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 DU HEREUNDER, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF 10% OF SUCH PRI CIPAL AND INTEREST ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO, THIS GUARANTY 011 A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE UNDERSIGNED HEREBY FOR VER WAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL AND LL RELIEF FROM ANY AND ALL APPRAISEM ENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORC OR HEREAFTER ENACTED. JUDGMENT Y BE CONFESSED FROM TIME TO TIME UNDER THE AFORESAID POWER TO CONFESS JUDGMENT AN 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 TI E AS THE LENDER SHALL HAVE RECEIVED PAYMENT IN FULL OF THE DEBT, INTEREST, COSTS AND FEES. 2. Governing La ; Jurisdiction. This Guaranty will be interpreted and the rights and liabilities of the parties hereto determined in ac rdance with the laws of the Commonwealth of Pennsylvania, excluding its conflict of laws rules. The Undersigned her by 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 jud ment or exercising any rights against the Undersigned, against any security or against any property of the Undersign within any other county, state or other foreign or domestic jurisdiction. The Undersigned agrees that the venue p vided 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 J RY 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 TOT IS GUARANTY, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS GUARANTY OR ANY TRANSACTI N CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE UNDERSIGNED ACKNOWLEDGES THAT THE FORE OING WAIVER IS KNOWING AND VOLUNTARY. SBA Form 148 (10198) Prs%io?s editions obsolete. Page 4/5 Bankers Systems, Inc., St. Cloud, MN 11. GUARAN' Guarantor Guarantee, 12. GUARAN. By signing Sunil Khanna Neeru Khanna ACKNOWLEDGMENT OF TERMS. ges that Guarantor has read and understands the significance of all terms of the Note and this all waivers. NAME(S) AND SIGNATURE(S): , each individual or entity becomes obligated as Guarantor under this Guarantee. I av r SBA Form 148 (10/98) Prev s editions obsolete. Page 5/5 Bankers Systems, Inc., St. Cloud, MN U.S. Small Business Administration NOTE SBA Loan # PLP 868-078-4005 SBA Loan Name SNS Buddies Inc. dba Uni-Mart Date -?? - Loan Amount 75,500.00 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 I. PROMISE TO PAY: In return for the SEVEN HUNDR interest on the u 2. DEFINITIONS: "Collateral" mean "Guarantor" mean. "Loan" means the "Loan Documents pledges collatera "SBA" means the SBA Forth 147 (06/03/02) m, Borrower promises to pay to the order of Lender the amount of SEVENTY FIVE THOUSAND FIVE HUNDRED - principal balance, and all other amounts required by this Note. Dollars, any property taken as security for payment of this Note or any guarantee of this Note. each person or entity that signs a guarantee of payment of this Note. Dan evidenced by this Note. means the documents related to this loan signed by Borrower, any Guarantor, or anyone who Business Administration, an Agency of the United States of America. 4.1 Page 1/6 Bankers Systems, Inc., St. Cloud, MN E x 1,, , b i ? `? (3'? 3. PAYMENT URMS: 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 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 p nod 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. 1 Lender will apply each 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 wl?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 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 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 thguaranteed 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 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 Change: 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 po ion of the regularly scheduled payment. Loan Prepayment: Notwithstanding any provision 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 wer 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 frm the date Lender receives the notice less any interest accrued during the 21 days and paid Mao m*?,k-A - - - - N SBA Forth 147 (08/03/02) Ve ion 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 n 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 C mpany: 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 y 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 y taxes when due; H. Becomes the subject of a proceeding under any bankruptcy or insolvency law; I. Has a receiv or liquidator appointed for any part of their business or property; J. Makes an assignment for the benefit of creditors; K. Has any adv se change in financial condition or business operation that Lender believes may materially affect Borrower's ility 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 RIG"TS 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 am unts owing from any Borrower or Guarantor; C. File suit and obtain judgment; D. Take possession of any Collateral; or E. Sell, lease, or ttherwise dispose of, any Collateral at public or private sale, with or without advertisement 6. LENDER'S GENERAL POWERS: Without notice andl without Borrower's consent, Lender may: A. Bid on or buy a 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 Wes, 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, r lease, 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 (06103/02) 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 SB 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 obligation, 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 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 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 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 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. I SBA Form 147 (06/03/02) Ve ion 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 RECORD, AT ANY TIME AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, TO APPEAR FO THE UNDERSIGNED AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF J DGMENTS, 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 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 FOR E OR HEREAFTER ENACTED. JUDGMENT Y BE CONFESSED FROM TIME TO TIME UNDER THE AFORESAID POWER TO CONFESS JUDGMENT D 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 EXERCISE S ALL 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 Low; 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 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 iction to venue and any objection based on a more convenient forum in any action instituted under this Note. The Und 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 TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE UNDERSIGNED ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. SBA Form 147 (08103!02) V?Won 4.1 Page 518 Bankers Systems, Inc., St. Cloud, MN i 11. BORROWERS NAME(S) AND SIGNATURE(S): By signing below, each individual or entity becomes obligated under this Note as Borrower. I i SBA F IN Disclosure for Confession of Judgment (Guarantor) Undersigned: Lender: The undersign Guaranty and Commei which the undersigned NEERU KHANNA SUNIL MANNA 6115 98TH STREET REGO PARK, NY 11374 PNC BANK, NATIONAL ASSOCIATION 8800 TINICUM BOULEVARD PHnADELPHIA, PA 19153 PNCBANK i has executed, and/or is executing, on or about the date hereof, a US Small Business Administration it Guaranty, in respect of the obligations owed to Lender by SNS Buddies, Inc. dba Uni-Mart, under obligated to repay monies to Lender. A. THE UNDE SIGNED ACKNOWLEDGES AND AGREES THAT THE ABOVE DOCUMENT CONTAINS PROVISIONS UNDER WHICH LENDER MAY EN R JUDGMENT BY CONFESSION AGAINST THE UNDERSIGNED. BEING FULLY AWARE OF ITS RIGHTS TO PRIOR NOTICE AND A G ON THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT MAY BE ASSERTED AGAINST IT BY LENDER THEREUNDER B FORE JUDGMENT IS 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 O THE TERMS THEREOF. B. THE UNDE SIGNED ALSO ACKNOWLEDGES AND AGREES THAT THE ABOVE DOCUMENT CONTAINS PROVISIONS UNDER WHICH LENDER Y, AFTER ENTRY OF JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, FORECLOSE UPON, ATTACH, LEVY, TAKE PO ESSION 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 HE G AND EXPRESSLY AGREES AND CONSENTS TO LENDER'S TAKING SUCH ACTIONS AS MAY BE PERMITTED UNDER APP CABLE STATE AND FEDERAL LAW WITHOUT PRIOR NOTICE TO THE UNDERSIGNED. C. The undersi ed certifies that a representative of Lender specifically called the confession of judgment provisions in the above document to th attention of the undersigned, and/or that the undersigned was represented by legal counsel in connection with the above document D. The undersi ed hereby certifies: that its annual income exceeds $10,000; that all references to Athe undersigned above refer to all persons and entitisigning below; and that the undersigned received a copy hereof at the time of signing. Dated: ` - -?? x ?, , ?- Neeru Khanna Sunil Khanna rrC 11 C:\DOCUME-1\FE2040-?.PNC\LOCALS-l\Temp\C.Notes.Data\conf:guarantor.doc (1).doc Form 9C - PA Rev. 3/99 BANK e pfr 27, 200$ illeq and Regular Mail SNS Bu ldies Inc dlbla Uni-Mart Sunil Kl arana, President 94 South Pennsylvania Avenue Wilkes-Barre, Pennsylvania 18702 RE: L, )an 932167351/602522191 . Dear Mr.1 Khanna: You are in default of your obligations to PNC Bank (the "13an1:") for failure to inake payrnent, on the $715,500.00 loan (the "Loan") as required in the Promissory Note; that. evidence the Lean 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 leratr:.d and is now due and payable immediately in full. "I7ac amounts that acre dale and tyable to the Bank are as follows: Principal $325,508.57 Interest $ 10,571.87 (as of 2/27/08) Late Charges $ -7, 1,043.96 Total $33! 24.40 Interest ce rrtinues to accrue at the rate of $86.95 per clay through the date on which payrraeynt i received by the Bank. In additio to the amounts set forth above., you will be responsible for payment or reimburse ent to the Bank for all attorneys' fees incurred or paid by the Bank with respect to his matter. Please mac arrangements for payment in full of your obligations to the Bank by contacting; the Bank, as :follows: kyra E. Loranski Assistant Vice President 201 Penn Avenue Scranton, PA 18503 Phone: (5701) 961-6266 Merner of Ths PNC Financial Services ffim (570) 961-6240 201 P nn Avenue Scranton Pennsylvania 18503 www. nc,co? rc 7l X ? lb 1? 'C] Pale 2 Neither this letter nor anything contained herein waives, limits or othenvise affects in any vay the Bank's rights to exercise and enforce its rights and -remedies for collecti rt of your obligations to the Bank, all of which are reserved by the Bank, and remain in (till force and effect, enforceable by the Bank at any time on or after the date of this letter. We loo forward to receiving; payment in full of your obligations to the Bank in the imme i e future. Otherwise, the Bank may have no alternative but to initiate collection If you have any questions please call me at 5'70-961-6266. Thank you in advance for your cooperation in this matter. Kyra l . &rans.C Assistant Vice 1' esic cc: S nil Khanna, Guarantor N e:ru, Khanna. Guarantor (7) t - t : a -Ti P' .ZI 04 rv } O COURT F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, : DOCKET NO. D$ - yyo9 ePlaintiff v CONFESSION OF JUDGMENT SUNIL KHANNA and NEERU KHANNA, efendants PREVIOUSLY ASSIGNED TO: N/A PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Please enter my appearance on behalf of Plaintiff, PNC Bank, National Association. Papers 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 Respectfully submitted, McNees Wallace & Nurick LLC Date: July2z By: GeotMWS. uff, Esquire _5 *erne 96urt ID #24848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff t: .i.5 4 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNCBANK, N TIONALASSOCIATION, DOCKET NO. 0$ - +44o9 Civl( lerr. v1 : CONFESSION OF JUDGMENT SUNIL KHANN4 and NEERU KHANNA, : PREVIOUSLY ASSIGNED TO: N/A NOTICE UNDER RULE 2958.1 OF JUDGMENT AND EXECUTION THEREON NOTICE OF DEFENDANT'S RIGHTS TO: Sunil KWnna and Neeru Khanna A judgment in the amount of $383,164.21, plus interest, other expenses, fees and costs has been entered against ou and in favor of the plaintiff without any prior notice or hearing based on a confession of ju gment 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 th 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 E?LIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. 44 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 ,2008 By: f, Esquire D #24848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff ? rv r ai C-- (f -7 1 ' W ?._ COURT PNC BANK, SUNIL TO THE PRC Ido c Sunil Khanna AFFIDAVIT OF NON-MILITARY SERVICE )NOTARY: to the best of my knowledge, that Defendants in the above-captioned action, Neeru Khanna, are not presently on active or nonactive military status. Respectfully submitted, McNees Wallace & Nurick LLC F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION f TIONAL ASSOCIATION, DOCKET NO. 08- 440 Cisiot T&rk P aintiff : V. CONFESSION OF JUDGMENT and NEERU KHANNA, efendants PREVIOUSLY ASSIGNED TO: N/A Date: July2Z 2( By: ?yfy ?S<Shuff, Esquire -Supreme' Court ID #24848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff -r7 r?1ji ? 7 `rf f { .. y ;t ) COURT ?F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, v SUNIL KHANN?A and NEERU KHANNA, DOCKET NO. 63- q qoj lei v i 1 Tex.. CONFESSION OF JUDGMENT PREVIOUSLY ASSIGNED TO: N/A CERTIFICATE OF ADDRESSES I hereby e Penn Avenue, and Neeru Date: July2z' Respectfully submitted, McNees Wallace & Nurick LLC By: Geo $huff, Esquire reme Court ID #24848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff ify that the precise address of Plaintiff, PNC Bank, National Association, is 201 PA 18503; and that the last known address of Defendants, Sunil Khanna is 3 Cherokee Square, Wilkes-Barre, PA 18702. c) r?3 l i C°=5 CJ., `; N - :.T?S COURT CAF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, N) P v SUNIL KHANl E To: Sunil Khaiu You are 1 entered against y DATE: [ONAL ASSOCIATION, DOCKET NO. 08 - N4 oq C.iv l terr+? ntiff : CONFESSION OF JUDGMENT and NEERU KHANNA, rndants PREVIOUSLY ASSIGNED TO: N/A and Neeru Khanna, Defendants Eby notified that on N 41" 22, , 2008, judgment by confession was in the sum of $383,164.21, in theAove-captionedAase. 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 residence: that the following is the address of the Defendants stated in the certificate of Sunil Kh a and Neeru Khanna 3 Cherokee Square Wilkes-B irre, PA 18702 O A, Sunil Khanna land Neeru Khanna, Demandado(s) Por este edio sea avisado que en el dia de de 2008, un fallo por admision fue registrado contra usted por la contidad de $383,164.21, del caso antes escrito. Fecha: el dia a 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 medio certifico que to siguiente es la direccion del demandado dicho en el certificado de res dencia: Sunil Kh a and Neeru Khanna 3 Cherk Square Wilkes e, PA 18702 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. $ Sunil Khanna and Neeru Khanna, $ Defendants. $ In the Court of Common Pleas of Cumberland County Civil Action Confession of Judgment No. 08-4409 Petition to Strike and/or Open Judgment Sunil Khanna and Neeru Khanna ("Khannas" or "Petitioners") by and through its counsel, Doran, Nowalis & Doran, hereby pray 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. The complaint was based on an Unconditional Guarantee ("Guarantee") attached to PNC's complaint as Exhibit «A » 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 Khannas reside in Wilkes-Barre, Pennsylvania. 4. The Khannas cannot be served 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. No law authorized venue of this case in Cumberland County Pennsylvania. 8. Venue is not proper in Cumberland County Pennsylvania and this judgment should be stricken and/or opened. 10. Paragraph 1 of the Guarantee provides, in part: "Guarantor must pay all amounts due under the Note when Lender makes written demand upon Guarantor." [Emphasis added.] 11. The confession of judgment provision of the Guarantee authorizes the confession of judgment "At any time after the occurrence of any event of default..." 12. PNC's complaint fails to allege that it provided Petitioners with any written demand. Indeed, PNC's complaint reveals at Exhibit "D" that PNC made demand on only "SNS Buddies Inc. d/b/a Uni-Mart." 13. The confession of judgment entered in this case was not authorized and should be stricken. 14. The confession of judgment provisions of the Guarantee 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.] 15. The foregoing provision violates public policy and the judgment confessed under that provision of the Guarantee should be stricken and/or opened. 16. The Petitioners are the principal of SNS Buddies Inc. d/b/a Uni-Mart ("SNS"). 17. The Guarantee was made when SNS purchased a Uni-Mart store in Wilkes-Barre, Pennsylvania from Uni-Marts, LLC ("Uni-Marts"). 18. In 2004 Uni-Marts owned several hundred convenience stores. 19. The sale to SNS was part of Uni-Marts' effort, beginning in 2004, to sell 255 of its stores. 20. As part of its sales effort Uni-Marts engaged the services of Kuber Financial Services, LLC ("Kuber") to promote the store sales. 21. Kuber advised SNS 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. 22. Kuber further advised SNS and other purchasers that the Banks had examined the financial statements of the stores and had done their due diligence. SNS 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. 23. Kuber also conducted seminars, one of which SNS attended, at which Kuber indicated that representatives of the Bank were present. Kuber repeated the representation contained in ¶ 16 at the seminar. 24. Upon information and belief one or more representatives of PNC were present at the seminar SNS attended and at which Kuber's representations were made. 25. Neither at the seminar nor at any other time did PNC ever cause SNS to doubt that PNC examined the financial statements of the store SNS 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. 26. 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. 27. SNS 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. 28. The Petitioners relied upon the foregoing representations and conduct of PNC. In reliance upon the representations and the conduct of PNC Petitioners signed the Guarantee. 29. Petitioners trusted PNC throughout SNS's purchase of the Wilkes- Barre store. 30. PNC was aware that Petitioners were placing their trust in PNC and PNC acknowledged that trust. 31. In fact, the representations made with regard to the Wilkes-Barre store were materially inaccurate. 32. SNS and Petitioners have suffered losses which exceed the amount PNC claims to be due on the Note and Guarantee. Wherefore, Petitioners pray that the judgment of PNC be stricken and/or opened and that all proceeding be stayed pending a determination of the Rule. Doran, ROberit'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 one of the named Defendants in the above matter and is authorized to make this verification on behalf of Defendants. 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. a Ao."v ? Sunil Khanna 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 Nowalis, Esquire c C ?; . ,.? x . - ?.z -? ?_. r ? ^ t ?.'.? 5\.... N ;r.r 'f"? 1-. -" : !l ??-. -? Vs PNC BANK, National Association, Plaintiff V. SUNIL KHANNA and NEERU KHANNA Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYVANIA NO. 08-4409 CIVIL IN RE: DEFENDANTS' PETITION TO STRIKE AND/OR OPEN JUDGMENT ORDER OF COURT AND NOW, this 26th day of August, 2008, upon consideration of the Petition to Strike and/or Open Judgment filed by the Defendants, IT IS HEREBY ORDERED AND DIRECTED that: 1. A Rule is issued upon the Plaintiff to show cause why the relief requested should not be granted; 2. The Plaintiff will file an answer on or before September 16, 2008; 3. The Prothonotary is directed to forward said Answer to this Court 4. If no answer to the Rule to Show cause is filed by the required date, the relief requested by Defendants shall be granted upon the Court's receipt of a Motion requesting Rule be made Absolute. If the Plaintiff files an answer to this Rule to Show Cause, the Court will determine if a hearing, status conference or further Order of Court is required. By the Court, M. L. Ebert, Jr., ,,-Ko'bert C. Nowalis, Esquire Attorney for Defendants y eoffrey S. Shuff, Esquire Attorney for Plaintiff bas "q:I-- t € ? _z wa qz onv goon 30!:140-0311A r„ COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO. 08-4409 Civil Term Plaintiff V. CONFESSION OF JUDGMENT SUNIL KHANNA and NEERU KHANNA, Defendants PREVIOUSLY ASSIGNED TO: JUDGE M. L. EBERT, JR. 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 Unconditional Guarantee attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONERS] 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) Petitioners have not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioners have not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 4. 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) under appropriate circumstances, the Petitioners can be served in Cumberland County, Pennsylvania, and (b) the Petitioners can be, and were, properly served with PNC's Complaint for Confession of Judgment and related documents from Cumberland County, Pennsylvania, according to the Pennsylvania Rules of Civil Procedure, and (c) Section 10 of the U.S. Small Business Administration Unconditional Guarantee attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONERS] 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 (d) when an instrument contains such language, Pennsylvania law authorizes the entry of judgment by an attorney in any jurisdiction, and (e) PNC has a principal regional office in Cumberland County, Pennsylvania, and (f) Petitioners have not alleged any sufficient ground for the judgment to be stricken, and (g) Petitioners have 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 Unconditional Guarantee attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONERS] 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) Petitioners have not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioners have 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 Unconditional Guarantee attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONERS] 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) Petitioners have not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioners have 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 Unconditional Guarantee attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONERS] 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) Petitioners have not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioners have 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 Unconditional Guarantee attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONERS] 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) Petitioners have not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioners have not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 9. 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 Unconditional Guarantee ("Guarantee") attached to PNC's Complaint for Confession of Judgment provides that, UNDERSIGNED [PETITIONERS] 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) Petitioners have not alleged any sufficient ground for the judgment to be stricken, and (e) Petitioners have not stated any meritorious defense to the judgment that would justify striking or opening the judgment. 10. Admitted in part, denied in part. It is admitted that the Guarantee contains the sentence quoted by Petitioners. However, the averment is denied, as the Petitioners' quote is taken out of context from a document that is a writing that speaks for itself. 11. Admitted in part, denied in part. It is admitted that Section 10 of the Guarantee contains the wording that is within the quotation marks in Petitioners' averment. However, the averment is denied, as the wording is not properly quoted, and as the wording is taken out of context from a document that is a writing that speaks for itself. 12. Denied. It is denied that PNC was required to provide Petitioners with any written demand before confessing the judgment, as PNC was authorized to confess the judgment at any time after the occurrence of any default under the Guarantee, which had, in fact, occurred, and which Petitioners do not deny. However, although not required for PNC's confession of judgment, the Petitioners received a copy of the demand letter attached to PNC's Complaint as Exhibit "D". Further, the Petitioners received the Complaint for Confession of Judgment, the Confession of Judgment, and the Notice of Confession of Judgment from the Cumberland County Prothonotary, and the Notice Under Rule 2958.1 of Judgment and Execution Thereon-Notice of Defendants' Rights from PNC. 13. Denied. The answer to paragraphs 11 and 12 are incorporated herein as if set forth in full. 14. Admitted. 15. 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 Petitioners have been determined to violate public policy. Further, Section 9.1 of the Guarantee provides that, "If any part of this Guarantee is found to be unenforceable, all other parts will remain in effect", and such provisions are held to be effective by Pennsylvania Courts. Therefore, even if the provision emphasized by Petitioners was 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. 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) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. 17. Denied. PNC made a $775,500.00 SBA-guaranteed loan to assist SNS Buddies Inc. dba Uni-Mart ("SNS") in the purchase of a business operated as a Uni-Mart store in Wilkes-Barre, Pennsylvania, and the loan was guaranteed by Petitioners pursuant to the Guarantee. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have 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) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have 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. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. 20. 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) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have 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) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. 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) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. 23. 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) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. 24. 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) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. 25. 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 SNS or Petitioners 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) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. 26. Denied. PNC underwrote the loan to SNS for SNS's purchase of a business from Uni-Marts according to its practices, policies and procedures for such loans. It is denied that PNC had any duty to SNS or Petitioners regarding any of the matters described in this averment. It was SNS's and Petitioners' responsibility alone to perform such due diligence as SNS and Petitioners determined to be necessary for the transaction, and SNS's and Petitioners' respective decisions alone to purchase the business from Uni-Marts and guarantee the loan. Further, PNC denies that (a) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (b) Petitioners have alleged any ground for the judgment to be stricken, and (c) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. 27. 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) Petitioners allege any representations or conduct by PNC in any previous averment upon which SNS or Petitioners could have relied, and (b) PNC made any representations or engaged in any conduct upon which SNS or Petitioners could have relied with respect to SNS's and Petitioners' respective decisions to purchase a business from Uni-Marts and guarantee the loan, and (c) SNS or Petitioners had any right at any time to rely on any representation or conduct of PNC, and (d) PNC had any duty to SNS or Petitioners with respect to SNS's and Petitioners' respective decisions to purchase a business from Uni-Marts and guarantee the loan, and (e) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (fl Petitioners have alleged any ground for the judgment to be stricken, and (g) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. Further, SNS and Petitioners were responsible to, and did, perform SNS's and Petitioners' own due diligence and make SNS's and Petitioners' own respective decisions to purchase a business from Uni-Marts and guarantee the loan. 28. 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) Petitioners allege any representations or conduct by PNC in any previous averment upon which SNS or Petitioners could have relied, and (b) PNC made any representations or engaged in any conduct upon which SNS or Petitioners could have relied with respect to SNS's and Petitioners' respective decisions to purchase a business from Uni-Marts and guarantee the loan, and (c) SNS or Petitioners had any right at any time to rely on any representation or conduct of PNC, and (d) PNC had any duty to SNS or Petitioners with respect to SNS's and Petitioners' respective decisions to purchase a business from Uni-Marts and guarantee the loan, and (e) this averment is relevant or appropriate in a Petition to open and/or strike a confessed judgment, and (f) Petitioners have alleged any ground for the judgment to be stricken, and (g) Petitioners have stated any meritorious defense to the judgment that would justify striking or opening the judgment. Further, SNS and Petitioners were responsible to, and did, perform SNS's and Petitioners' own due diligence and make SNS's and Petitioners' own respective decisions to purchase a business from Uni-Marts and guarantee the loan. 29. 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) Petitioners had any right to trust PNC regarding Petitioners' decision to guarantee the loan for SNS's purchase a Uni-Mart business, and (b) PNC had any duty to Petitioners with respect to Petitioners' decision to guarantee the loan for SNS's purchase a business from Uni-Marts, and (c) PNC had any relationship with Petitioners other than guarantors and lender with respect to Petitioners' decision to guarantee the loan for SNS's purchase of 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) Petitioners have 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. 30. Denied. PNC denies that PNC was aware that Petitioners were placing any trust in PNC. PNC denies that PNC acknowledged any such trust. Further, PNC denies that (a) Petitioners had any right to trust Petitioners regarding Petitioners' decision to guarantee the loan for SNS's purchase of a Uni-Mart business, and (b) PNC had any duty to Petitioners with respect to Petitioners' decision to guarantee the loan for SNS's purchase of a business from Uni-Marts, and (c) PNC had any relationship with Petitioners other than guarantors and lender with respect to Petitioners' decision to guarantee the loan for SNS's purchase of 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) Petitioners have 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. 31. Denied. PNC denies that PNC made any representations to SNS or Petitioners "with regard to the Wilkes-Bare store". The answers to paragraphs 26, 27 and 28 are incorporated herein as if set forth in full. 32. 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 either SNS or Petitioners have suffered any losses for which PNC is responsible. The answers to paragraphs 26, 27 and 28 are incorporated herein as if set forth in full. WHEREFORE, PNC respectfully requests this honorable Court to deny the relief requested by the Petitioners and dismiss the Petition, with prejudice. Respectfully submitted, McNees Wallace & Nurick LLC Date: September 16, 2008 By:° . offre . S , Esquire Su Court 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. 08-4409 Civil Term Plaintiff V. SIJINIL KIIANNA and .NFT.RU KHANNA, Defendants CONFESSION OF JUDGMENT PREVIOUSLY ASSIGNED TO: JUDGE M. L. EBERT, JR VERIFICATION I, Kyra E. Zoranski. Assistant Vice President for PNC 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 unworn falsification to authorities. Date: ? a 1 11 By P'NC BANK, NATIONAL ASSOCIATION COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION PNC BANK, NATIONAL ASSOCIATION, DOCKET NO. 08-4409 Civil Term Plaintiff V. SUNIL KHANNA and NEERU KHANNA, Defendants CONFESSION OF JUDGMENT PREVIOUSLY ASSIGNED TO: JUDGE M. L. EBERT, JR. 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: eo 3 huff, Esquire S e Court ID #24848 100 Pine Street, PO Box 1166 Harrisburg, PA 17108-1166 (717) 237-5439 Attorneys for Plaintiff C/Jr i??E? • (r1 (TI