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HomeMy WebLinkAbout14-2997 Supreme Co ,;` - nnsylvania C011 Q II1:0 leas For Prothonotary Use Only. Docket No: CUMBERL County H_ . The information collected on this form is used solely for court administration purposes. This form does not supplement or replace the filing and service of pleadings or other papers as required bylaw or rules of court. Commencement of Action: S l@ Complaint © Writ of Summons 0 Petition E 0 Transfer from Another Jurisdiction 0 Declaration of Taking C Lead Plaintiff's Name: Lead Defendant's Name: T. AMY PATEL AJIT SMITH T/D/B/A SHRIMADHU, INC. I . Are money damages requested? Yes No Dollar Amount Requested: El within arbitration limits (check one) Ooutside arbitration limits O . N Is this a Class Action Suit? Yes No Is this an MDJAppeal? Yes 0 No A' Name of Plaintiff/Appellant's Attorney: JOHN M. KERR, ESQ. ® Check here if you have no attorney(are a Self-Represented [Pro Se] Litigant) Nature of the Case: Place an"X"to the left of the ONE case category that most accurately describes your PRIMARY CASE. If you are making more than one type of claim, check the one that you consider most important. TORT(do not include Mass Tort) CONTRACT(do not include Judgments) CIVIL APPEALS Intentional 0 Buyer Plaintiff Administrative Agencies © Malicious Prosecution Debt Collection:Credit Card 0 Board of Assessment Motor Vehicle Debt Collection: Other 0 Board of Elections 0 Nuisance 0 Dept.of Transportation 0 Premises Liability Statutory Appeal:Other S 0 Product Liability(does not include E mass tort) © Employment Dispute: Slander/Libel/Defamation Discrimination C Other: 0 Employment Dispute:Other Zoning Board T Other: I 0 Other: O MASS TORT 0 Asbestos N 0 Tobacco 0 Toxic Tort-DES 0 Toxic Tort-Implant REAL PROPERTY MISCELLANEOUS 0 Toxic Waste Other: El Ejectment � Common Law/Statutory Arbitration B 0 Eminent Domain/Condemnation 0 Declaratory Judgment 0 Ground Rent 0 Mandamus © Landlord/Tenant Dispute 0 Non-Domestic Relations Mortgage Foreclosure:Residential Restraining Order PROFESSIONAL LIABLITYQuo Warranto 0 Mortgage Foreclosure:Commercial 0 Dental 0 Partition 0 Replevin 0 Legal 0 Quiet Title 0 Other: 0 Medical 0 Other: 0 Other Professional: E. . Updated 111/1011 AMY V. PATEL, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA t. V. MiT) CIVIL ACTION - LAW ., AJIT SMITH,t/d/b/a SHRIMADHU, INC., �"� �'y -, --��' cam: � Defendant r - s' NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages,you must take action within twenty(20)days after this complaint and notice are served by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW.THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER,THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle, Pennsylvania 17013-3308 (717) 249-3166 /63, -2S- &-4 S&-4 2 3 � 364,0z8 JOHN M. KERR, ESQUIRE ATTORNEY I.D.#26414 JOHN KERR LAW, P.C. 5010 R.ITTER ROAD SUITE 109 MECHANICSBURG, PA 17055 (717)766-4008 (717) 766-4066 (fax) ohn@iohnkerrlawpc.com AMY V. PATEL, : IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION—LAW AJIT SMITH,t/d/b/a SHRIMADHU, INC., NO. Defendant COMPLAINT PARTIES AND VENUE 1. Plaintiff is Amy Patel,an adult individual residing at 6327 Chatham Glenn Way, Harrisburg, Dauphin County, Pennsylvania. 2. Defendant is Ajit Smith,t/d/b/a Shrimadhu, Inc,,a Pennsylvania business corporation with a location of 5114 Maple Leaf Court, Mechanicsburg,Cumberland County, Pennsylvania YO)z-1w;!�err 17055. 5010 Ritter Road SuitE 109 3. The subject matter of the Complaint involves Subway Restaurant No. 26913, a franchise Mechanicsburg,PA 17055 p Y PHONE: 717.766.4008 Fnx:717.766.4066 located at 4910 Louise Drive, Mechanicsburg,Cumberland County, Pennsylvania 17055. Consequently,venue is appropriate in Cumberland County. FACTUAL BACKGROUND 4. On October 29, 2013,an Asset-Purchase Agreement was entered into(see,copy appended to Complaint) between Ajit Smith and Shrimadhu, Inc. as party of the first part, and Ami Patel and Star Subway, Inc.,as party of the second part.. 5. Pursuant to that Asset Purchase Agreement, Ami Patel agreed to purchase various assets connected to Subway Restaurant No. 26913. 6. As part of the Asset Purchase Agreement, Plaintiff Ami Patel was to deposit the sum of $25,000.00 made payable to Defendant Ajit Smith into an escrow account until the consummation of certain transactions(see, para. 3 D) (1)of Asset Purchase Agreement) identified in the Agreement. 7. The sum of$25,000.00 was delivered as required by the Agreement. 8. On or about November 1, 2013,Subway Restaurants, Inc. adopted a new rule requiring that the franchisee's spouse must also be approved by the Company.This meant that Patel's spouse would have to undergo the approval process. 9. This new rule necessitated that the process of approval begin anew and, consequently, altered the timetable for obtaining such approval. 10. Prior to this date, Plaintiff had made arrangements to obtain a commercial bank loan of $200,00.000 from People's Bank,a Codorus Valley Company(see, loan approval letter and term sheet, appended to Complaint). �wceof 11. Because of the change in timetable necessitated by the new Subway Rule,the financing 6010 Ritter Road from People's Bank became an impossibility. Suite 109 MCChaniCsburg,PA 17055 PHONE: 717. ra h 766.4008 12. Para 5A of the Asset Purchase Agreementprovides, as follows: FAX;717.766.4066 Paragraph g Subway Consent.The obligation of Seller and Buyer to perform under this Agreement is explicitly conditioned upon the consent by Subway Restaurants, Inc. ("Subway")to the transfer or assignment of the License agreement with the Business. 13. As a result of the language found at paragraph 5A of the Asset Purchase Agreement and Subway's new rule,Ami Patel as purchaser was relieved of any obligation to perform under the terms of the Agreement. 14. As a consequence,the deposit of$25,000.00 paid by Plaintiff Patel under the terms of paragraph 3D)(1)of the Asset Purchase Agreement was properly returnable to her. . 15. This was confirmed by an electronic message sent to Defendant Ajit Smith on December 30,2013 from Ben Farahani,Chief Operating Officer of Subway(see,copy appended to Complaint), stating as follows: Attached you will find the letter regarding the cancellation of the transfer to Ami Patel.As you know,the transfer was cancelled because the buyer did [not] meet Subway's requirements even before the requirements were changed in November. Per your agreement with Ami,Subway's approval is a precondition for the transfer,and because she was not approved,then her deposit should be refunded. ... (emphasis added) 16. Nevertheless, despite this explicit notice from the Chief Operating Officer of Subway, and notwithstanding the clear language of the Agreement, Defendant Ajit Smith has refused to return Plaintiff Ami Patel's$25,000.00 deposit. 17. In an attempt to avoid further litigation, undersigned counsel forwarded correspondence, dated February 3, 2014 to Defendant Ajit Smith (see,copy of correspondence attached to Complaint). 18. Nevertheless, Defendant Ajit Smith has failed to even acknowledge receipt of said YL:ffil o . err correspondence. 501 O Ritter Road Suite 109 Mechanicsburg,PA 17055 P1 oNE: 717.766.4008 Fnx:717.766.4066 WHEREFORE, it is requested that the Court enter judgment in favor of Plaintiff Ami Patel and against Defendant Ajit Smith and Shrimadhu, Inc., in the amount of$25,000.00, plus taxable costs, including interest at the legal rate from January 1, 2014,when Defendant was aware of his obligation to return said deposit. Respectfully submitted, ow JoM. Kerr, Esquire At rney I.D.#26414 John Kerr Law, P.C. 5010 Ritter Road Suite 109 Mechanicsburg, PA 17055 (717) 766-4008 Dated: May 19, 2014 ohn M.�err 3010 Ritter Road Suite 109 MCChaniCSburg,PA 17055 PHONE: 717.766.4008 FAX:717.766.4066 VERIFICATION The undersigned, Amy Patel, hereby states that she is the Plaintiff in the foregoing matter and, accordingly, is authorized to execute this Verification, and that any factual statements contained in the foregoing Complaint are true and correct to the best of her knowledge, information or belief. She understands that false statements are subject to the penalties prescribed at 18 Pa. C.S. §4904, relating to unsworn falsification to authorities. P�" , �- WJCq Amy Patel ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT(this "Agreement") is made this 29th day of October, 2013 (th-- "Effective Date"),by and between Ajit Smith, 5114 Maple Leaf Court, Mechanicsburg PA 17055, and Shrimadhu, Inc, 5114 Maple Leaf Court, Mechanicsburg, Pa 17055 collectively known as Seller a Pennsylvania business corporation and Ami Patel, 6327 Chatham Glenn Way, Harrisburg PA 17111 and Star Subway, Inc, 6237 Chatham Glenn Way, Harrisburg, Pa 17111 collectively known as Buyer. Background of Agreement Seller is the owner of a Subway restaurant franchise located at 4910 Louise Drive, Mechanicsburg PA 17055 - Store No. 26913 (the "Business"). Seller desire:: to sell, and Buyer desires to purchase, the Business and its'related inventory and equipment maintained at the business location. The parties are entering into this Agreement to set forth their definitive agreement with respect to the tr,nsactions described herein. Agreement NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants herein contained and intending to be legally bound,the parties hereto agree as follows: 1. PURCHASE. OF ASSETS. A. Description of Acquired Assets. At the Closing(as hereinafter defined), Seller will sell, convey, assign,transfer and deliver to the Buyer, and the Buyer will purchase from Seller, all the assets, property and business of every kind and description, tangible and intangible, real,personal and mixed of Seller that are used or intended for use in connection with the operation of the Business as a going concern, free and clear of all liens and encumbrances; which are owned or leased by Seller on the date hereof or acquired or leased by Seller between the date hereof and the Closing Date(as hereinafter defined) such assets, property and business to be acquired being hereinafter called the "Acquired Assets". The Acquired_ Assets are more fully identified in Exhibit "A", attached and incorporated fully herein. 2. NO ASSUMPTION OF LIABILITIES. Buyer does not assume and shall not assume any debt, encumbrance, obligation, contract, lease, or any other liability whatsoever (including tax liabilities) of Seller of any kind or nature, absolute or contingent, known or unknown, incurred or arising out of transactions occurring prior to or after the Closing Date (as defined below). 1 3. PURCHASE PRICE. A. Acquired Assets Purchase Price. Subject to and upon the terms and conditions hereinafter set forth, and in reliance upon the representations, warranties and covenants of Seller thereinafter set forth, Buyer shall pay to Seller an aggregate purchase price of$ 250,000.00 for the Acquired Assets (the "Acquired Assets Purchase Price"). B. Closing Date: C. Payment of the Purchase Price. The Acquired Assets Purchase Price shall be paid as follows: D) The settlement will take place in between time of October 2013 till May 2014. (1) On the Effective Date, Buyer shall deposit the sum of$ 25,000.00 (10%),made payable:to Ajit Smith in the escrow until the consummation of the transactions contemplated herein (the "Deposit"), with such amount to be paid to Seller as part of the Acquired Assets Purchase Price on the Closing Date. (2) On the Closing Date, Buyer shall deliver to Seller a certified check or cashier's check in the amount of$ 225,000.00,plus the additional reimbursements set forth in Paragraph 3(B)(3). (3) In addition to the Purchase Price, Buyer shall reimburse Seller for the following: (a) Food and inventory costs,to be determined. On the date immediately preceding settlement, Buyer and Seller shall jointly review the food and inventory to be transferred with the Business. Buyer shall pay to Seller the list price, as set by the distributor, for all such food and inventory transferred hereunder; (b) Buyer shall be responsible for payment of the transfer fee. (c) All Insurance, Utilities, Operating Expenses will be pro-rated at the time of settlement D. Forfeiture of the Deposit. In the event that Buyer fails to consummate the transactions contemplated herein for any reason other than Seller's breach hereof or as set forth in Paragraph 5(D),the Deposit shall be forfeited and immediately paid to seller. Upon such forfeiture,this,agreement shall terminate and shall be of no further force or effect. Agreement w11 be subject to bank finance and the Buyer can forfeit the agreement in case of not approval. 5. Conditions Precedent to Closing. 2 A. Subway Consent. The obligation of Seller and Buyer to perform under this Agreement is explicitly conditioned upon the consent by Subway Restaurants, Inc. ("Subway")to the transfer or assignment of the license agreement with the Business. B. Sublease of Business Space. The obligations of Seller are contingent the Business' lace of upon Seller being rei eased from its lease or sub-lease sub--lease and execute any and all documents necessary to Buyer shall assume such lease or fulfill this condition. C. Submission of Agreement to Subway. Buyer agrees to submit a fully executed Agreement to Subway's offices within five (5)days of the days of this Agreement. D. This Agreement is contingent upon Buyer obtaining financing of at least$ 222,000.00 (60%). Buyer is required to apply for such financing within ten (10) days of the date of this Agreement. If such application is not made in such time this contingency is waived by Buyer. If financing is not approved by 30th November 2013, Seller may declare this Agreement null and void and have no further duty or obligation hereunder other than, in the event Buyer has acted in good faith in attempting to obtain financing,the return to Buyer's Deposit. 6. REPRESENTATIONS WARRANTIES AND COVENANTS OF SELLER. In order to induce Buyer to consummate the transactions referred to in this Agreement, and with the knowledge that Buyer is relying on the representations d as follows: herein contained, Seller represents,warrants, and covenants to and with Buy A. Corporate Existence. Seller is an individual and a corporation duly organized,validly subsisting and in good standing under the laws of the Commonwealth of Pennsylvania. Seller has corporate power and lawful authority to own its assets/property and to carry on the Business as it is now conducted. B. Power of Seller. Seller has power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Seller and the consummation of the transactions contemplated hereby have been duly and validly authorized r shall constitute a validof Seller, and this Agreement, when executed and delivered by Buy and legally binding obligation of Seller enforceable in accordance with its terms,except to the extent that the same may generally be rendered unenforceable by reason of any bankruptcy, reorganization or insolvency laws generally affecting creditors' rights and remedies. C. Title to the Acquired Assets. Seller owns, or will own as of the Closing Date, good and marketable title to the Acquired Assets and shall convey same to Buyer hereunder free and clear of all pledges, claims, liens and encumbrances. The parties hereto acknowledge that some of the Acquired Assets are subject to one or more security interests and/or liens,which Seller shall cause to be removed, satisfied or terminated on or before the Closing Date. D. Tax Matters. (1) Seller has paid all Taxes (as hereinafter defined) shown thereon 3 or otherwise due, and has provided adequate accruals(without taking into account any reserve for deferred taxes)for any Taxes that have not been paid, whether or not shown as being due on any tax returns. Ocher than Taxes incurred in the ordinary course of business, Seller has no liability for unpaid`faxes accruing after the date hereof. (2) The Acquired Assets are not subject to any liens for Taxes, other than liens for Taxes not yet due and payable; and no audit of any tax r e taxieturn ng Seller is being conducted or,to the knowledge of Seller,threatened, b any app g authority. As used herein,the term "Taxes" shall mean any and all taxes, fees, levies, duties,tariffs, imposts and other charges of any kind (whether or not imposed on Seller), imposed by any tax authority, including, without limitation, penalties and interest. E. No Breach.Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, will constitute a violation of or default under, or con.:flict with or result in a breach or impairment of: (a)the Articles of Incorporation or Bylaws of Seller; (b)the terms of any mortgage, indenture,bond, lease, instrument, contract, agreement,understanding or permit to which Seller is a party or by which its assets or property may be bound (whether immediately or upon notice, lapse of time, or both); or(c) any judgment, order, award, or decree of any court or tribunal or administrative agency or other governmental entity, or any laws. F. Litigation and Judgments. Seller is not a party to any suit, action, charge, litigation,judicial, administrative or arbitration proceeding or governmental investigation, nor is there any outstanding order,writ,unsatisfied judgment, fine, injunction, citation,penalty or decree of any court, governmental agency or arbitration tribunal against Seller or affecting its, assets, property or businesses. G. "AS IS" Condition of the Acquired Assets. The Equipment is in good working order and are suitable for use in the Seller's business as presently conducted. Except as provided above, Seller is conveying the Acquired Assets to Buyer on an "AS-IS" basis H. Brokers. Seller has not retained or otherwise involved, directly or indirectly, any broker or other finder in connection with this Agreement and the transactions contemplated hereby__ 7. OTHER COVENANTS OF SELLER AND BUYER. A. Pre-Closing Operations. Except as otherwise provided herein, from and after the Effective Date through the Closing Date or the termination of this Agreement: (1) Seller shall operate the Business in the ordinary course of business consistent-with past practices. (2) Seller and Buyer shall cooperate with each other in satisfying each other's conditions precedent contained in this Agreement. 4 (3) Seller shall not sell, convey, lease, abandon or otherwise dispose of, or grant, suffer or permit any lien or encumbrance upon, any of the Acquired Assets. (4) Seller shall not incur any damage, destruction or loss,whether or not covered by insurance,which would tend to affect adversely the assets of Seller. 8. REPRESENTATIONS WARRANTIES AND COVENANTS OF BUYER. In order to induce Seller to consummate the transactions contemplated hereby, and with the knowledge that Seller is relying warrant representations and with Sen er awarranties fo tow of Buyer herein contained, Buyer represents and A. Power of Buyer. Buyer and its assigns has power and authority to enter into this Agreement End to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Buyer and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Buyer, and this Agreement, when executed and delivered by Seller, shall obligation of Buyer enforceable in accordance with its constitute a valid and legally binding terms,except to the extent that the same may generally be rendered unenforceable by reason of any bankruptcy,reorganization or insolvency laws generally affecting creditors' rights and remedies. B. Broker. Buyer has not retained or otherwise involved any broker or other finder in connection with this Agreement and the transactions contemplated hereby. 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each representation, warranty, covenant and undertaking contained herein or made pursuant hereto (whether by Buyer or Seller) shall survive the Closing,but shall expire and terminate twelve (12)months after they Closing Date, and the rights of Seller and Buyer to make claims thereon or for indemnifications hereunder shall likewise expire and be extinguished on such date, except for representations and warranties relating to taxes (which representations and warranties shall continue for the applicable statute(s) of limitation). 10. CONSUMMATION OF CLOSING. A. Seller Deliverables. At Closing, Seller, contemporaneously with the performance by Buyer of its obligations to be performed at Closing, shall do and/or deliver the following: (1) Seller shall execute and deliver to Buyer a Bill of Sale with full warranty of title (substantially in the form attached hereto as Exhibit C),titles, and other appropriate instruments of transfer in form and substance reasonably satisfactory to Buyer counsel, and as shall be sufficient to convey and transfer to Buyer the Acquired Assets and all of the right,title and interest of Seller therein and thereto free and clear from all liabilities, liens,restrictions and encumbrances of whatever nature, except as herein provided. 5 B. Buyer Deliverables. At the Closing, Buyer, contemporaneously with the performance by Seller, shall do and/or deliver the following: (1) Buyer shall pay and deliver the Acquired Assets Purchase Price, in accordance with '.ection 3.A. (2) If applicable, A copy of resolutions adopted by the board of g and directors,managers or other governing bodythis Agreement and the onsnmmationf Buyer, if any such exi , nof the authorizing the execution and delivery of � transactions contemplated herein. (3) Such other instruments,documents or certificates required by this Agreement or as Seller or its counsel shall reasonably request. C. Additional Steps After the Closing. At any time and from time to time after the Closing Date,the parties shall cooperate reasonably with each other and do, execute, acknowledge and deliver, or shall cause to be done, executed, acknowledged and delivered, all such further acts, as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the contemplated transactions (to include, without limitation intended, a bill of sale). 11. EXPENSES. Regardless of whether or not the transactions contemplated by this Agreement shall be consummated, except as otherwise provided inatand Agreementcar eaBch p this arty shall pay its own expenses incident to preparing for, entering into, carrying Agreement and the transactions contemplated hereby. 6 IN WITNESS WHEREOF and intending to be legally bound set hereby, re y,rth the parties hereto have executed this Asset Purchase Agreement as of the date fir WITNESS/ATTEST: SELLER: By: Ajit Smith President of Shri Madhu, Inc WITNESS/ATTEST: BUYER: By: Ami Patel Secretary of Star Subway 7 i peopLesGank y��Al Septemb ,2013 Star Subway,Inc. ATTN:Vinod A.Patel 6327 N. Chatham Glenn Way Harrisburg,PA 17111 Dear Mr. Patel: I am pleased to inform you that peoplesBank,A Codorus Valley Company(`Bank")has approved a commercial loan in the amount of$200,000 to finance the purchase of Subway Franchise#26913 located at 4810 Louise Dr.,Mechanicsburg,PA 17055.The attached term sheet does not constitute a complete commitment on the part of the Bank to make the proposed loan. This letter is intended as an outline only and does not purport to summarize all of the terms,conditions,and other provisions which would be contained in definitive legal documentation for the proposed transaction. If you find the proposed terms and conditions generally acceptable,please sign and return this letter along with a term sheet fee of$500 so I can make the necessary arrangements for the Bank to pursue the proposed transaction and issue a firm commitment letter. The term sheet fee isnot an extra fee but instead will be refunded against settlement costs if the loan closes. vane for allowing us to be of service. i Thank you an ad ; Sincerely, ! PeoplesBank,A Codorus Valley Company i i tte S 'or resident/Senior Business Advisor i THIS T E RM SHEET EXPIRES ON 9/30/2013 I have read and understand the attached terms and conditions and request a complete i commitment letter for ray execution. Date: ---------------- KIR - �� 0 �" `:.%r:; `-8N�%�,,,.:� r•<'£::r a� .�;: ,?`+^�"" :��.y r. w....r�. -r���_5�.w'w�:�eo+:.Gt„�.�„�'iL.v-... Y- - .:.��� '��i���{fl�;i3cX�, -ate,-.,Y .,_;-��- ��-: ..� �nx:• �� �-..:�-. _...x�:_ :....Y,..,_...:. .�_.9J,f3a...�._t....:......,�.:... ._...-�...-. .- �.. _.:_...: ...._, -,...-... Y,F-;�-': -'rte -:....,.�,..,... .. , w BORROWER: Star Subway,Inc. GUARANTORS: Vinod A. &Ami V.Patel,Anup& Sonal Patel LOAN AMOUNT: $200,000 PURPOSE: to finance the purchase of Subway franchise#26913 located at 4810 Louise Dr.,Mechanicsburg,PA 17055 COLLATERAL: 11t UCC filing on all business assets of Subway#26913 INTEREST RATE: 5.50% AMORTIZATION: 60 months TERM: 60 months POINTS: 1% CONDITIONS: 1. Default increases interest rate 3%until cured 2. 2%prepayment fee if paid with outside funds 3. Borrower to pay all closing costs and all other reasonable fees associated with closing the credit facility. 4. Annual Financials for borrowers and guarantors 5. Establish a deposit account with Lender for borrower 6. Receipt and satisfactory review of corporate documents 7. All necessary insurances 8. Receipt and satisfactory review of ratified sales contract(in file) 9. Copy of Lease with a term exceeding 5 years 10. DSCR Covenant of 1.25— 11. Documentation of Subway franchise ownership approval 12. Receipt of executed landlords waivers 13.No material adverse changes to the financial condition of the borrowers and/or guarantors prior to closing 14. Any missing documentation from existing loans to be obtained prior to settlement L ar i vi i vinamy20 - Yahoo Mail Ben Farahani (v Dec 30,2013 To Ajit Smith,Me,Mark Surotchak,and 1 More... Hi Ajit Att•3ched you will find the letter regarding the cancelation of the transfer to Ami Patel. As you know,the transfer was canceled because the buyer did may meat Subways requirements even before the requirements were changed in N Dvember.Per your agreement with Ami,Subway's approval is a precondition for the transfer,and because she was not approved,then her deposit should be refunded. I assume you received the attached document by mail. Please let us know if YOU did not because your transfer check was included with it. Regards, Be n Ben R.Farahani Chief Operating Officer 717-540-1045 ext 334 Office 717-540-1448 Fax 2400 Park Drive Harrisburg,PA 17110 This email and any attachments thereto are intended only for use by the addressee(s)named herein and may contain legally privileged and/or confidential information.If you are not the intended recipient of this email, you are hereby notified any dissemination,distribution or copying of this email and any attachments thereto,is strictly prohibited.If you received this email in error please notify me at 717-540-1045 Ext 334,and permanently delete the original copy and any copy of the email and any print out thereof. Begin forwarded message: httos:Hus-mr-Ai7.mail.yahoo.com/neo/launch?.rand=epom sgsnho 1 1/19/2014 1I'i Il r"i�r•cr., 1 �,ct' I ,� '•�'„tel February 3, 2014 VIA ELECTRONIC TRANSMISSION and REGULAR MAIL Agit Smith t/d/b/a Shrimadhu, Inc. 5114 Maple Leaf Court Mechanicsburg, PA 17055 Re: Subway Restaurant No. 26913 Dear Mr. Smith: Please be advised that I have been retained to represent the interests of Ami Patel with regard to the Subway Restaurant franchise located at 4910 Louise Drive, Mechanicsburg, Pennsylvania 17055. As you are aware, you entered into an Asset Purchase Agreement on October 29, 2013 with regard to the sale of Subway Store No. 26913 for which you accepted a deposit of$25,000. On or about November 1, 2013, Subway adopted a new rule requiring that the franchisee's spouse must also be approved by the Company.This new rule necessitated that the process of approval begin anew and changed any timetable for obtaining said approval. On December 30, 2013,you received an e-mail transmission from Ben R. Farahani, Chief Operating Officer, which stated in part: Attached you will find the letter regarding the cancellation of the transfer to Ami Patel. As you know,the transfer was cancelled because the buyer [did not meet]Subway's requirements even before the requirements were changed in November. Per your agreement with Ami, Subway's approval is a precondition for the transfer, and because she was not approved then her deposit should be refunded. (emphasis added) Paragraph 5A of the Asset Purchase Agreement states that"[t]he obligation of Seller and Buyer to perform under this Agreement is explicitly conditioned upon the consent by Subway Restaurants, Inc. ("Subway")to the transfer or assignment of the license agreement with the Business." Consequently,without the approval by Subway, my client had no obligation to perform under the Agreement. In fact, she can assert an impossibility of performance defense. Moreover,since she failed to obtain financing under paragraph 5D of the Agreement, despite a good faith effort to do so, any reliance on the forfeiture provision of paragraph 3 is misplaced. Notwithstanding, Pennsylvania courts do not look with favor on forfeiture, and it is doubtful it would be enforced in any event. 5020 Ititt(l- IZOWI, Stlit( lOr1 M( c lt�tni('slntl;ti, I'�� 17055 I'll()NI{: �17.766-400,8 0 FAN: 717.7(iG.4OG(i • l-^1;\Ii.: KC'CI'l.il\1/(�a'( OItl('�15t.11('1 • �•�'��'\\'..�OI1111;(:1"I'lil\1'.('O111 Agit Smith,t/d/b/a Shrimadhu, Inc. February 3, 2014 Page 2 Accordingly, I,request that you return my client's$25,000 deposit either to myself or directly to her. Failure to do so within ten (10)days will result in further legal action. Thank you for your attention to this matter. Respectfully yours, oh n M. Kerr cc:Ami Patel Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor SHERIFF'S OFFICE OF CUMBERLAND COUNTY HAY 28 NI 2 :57 CUMBERLAND COUNTY PENNSYLVANIA Amy V Patel vs. Ajit Smith t/d /b /a Shrimadhu, Inc. Case Number 2014 -2997 SHERIFF'S RETURN OF SERVICE 05/20/2014 02:50 PM - Deputy Jason Kinsler, being duly sworn according to law, served the requested Complaint & Notice by "personally" handing a true copy to a person representing themselves to be the Defendant, to wit: Ajit Smith t/d /b /a Shrimadhu, Inc. at 5114 Maple Leaf Court, Upper Allen, Mechanicsburg, PA 17055. JASON IN SL tf'UTY SHERIFF COST: $39.79 SO ANSWERS, May 21, 2014 RONR ANDERSON, SHERIFF LAW OFFICES OF ROBERT M. WALKER, LLC Robert M. Walker, Esquire t ',;r1 Jdr 12Ft t ` Attorney I.D. No. 86340 3810 Market Street, Suite B CUMBERLAND C"UUci Camp Hill, PA 17011 PENNSYLVANIA (717) 761-1200 Attorney for Defendant AMY V. PATEL, : IN THE COURT OF COMMON PLEAS , : OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff • • v. : NO. 14-2997 • AJIT SMITH, t/d/b/a SHRIMADHU, INC., • • Defendants : CIVIL ACTION - LAW ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter my appearance in the above matter on behalf of defendants Ajit Smith and Shrimadhu, Inc. Respectfully submitt Date: L� /// Robert M. Walker Attorney I.D. No. 86340 3810 Market Street, Suite B Camp Hill, PA 17011 Telephone: (717) 761-1200 Fax: (717) 761-1201 Email: rmwarmwalkerlaw.com Attorney for Defendants CERTIFICATE OF SERVICE The undersigned hereby certifies that on this date a true and correct copy of the foregoing Entry of Appearance document was served by U.S. Mail, First Class, Postage Prepaid, upon the following: John M. Kerr, Esquire Law Offices of John M. Kerr 5010 Ritter Road, Suite 109 Mechanicsburg, PA 17055 /Date: //,'/ Robert M. ker