woodmont v. lehigh complaint

7/29/2019 Woodmont v. Lehigh Complaint

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GREENBAUM, ROWE, SMITH & DAVIS LLPMetro Corporate Campus OneP.O. Box 5600Woodbridge, New Jersey 07095(732) 549-5600Attorneys for Plaintiff W oodmont Properties, LLC

, , 1 -F I L -: . i f -F. MALONEJ"S,C,

WOODMONT PROPERTIES, LLC SUPERIOR COURT OF NEW JERSEYCHANCERY DIVISIONPlaintiff, UNION COUNTYv. DOCKET NO. UNN-C- -11LEHIGH ACQUISITION CORP. andYORKVILLE ADVISORS, LLC CIVIL ACTION

Defendants.

Plainti ff Woodmont Properties, LLC by way ofComplaint against Defendants LehighAcquisition Corp. andYorkville Advisors, LLC (together the "Defendants"), says:

The Parties1. Plaintiff Woodmont Properties, LLC ("Woodmont") is a New Jersey Limited

Liability Company with offices located at One Main Street, Second FloorChatham, NJ 07928.

2. Defendant Lehigh Acquisition Corp. ("Lehigh") is, upon information and belief, aNevada Corporation authorized to conduct business in New Jersey with its principal place ofbusiness'located at 101 Hudson Street, Suite 3700, Jersey City,New Jersey 07302.

3. Defendant Yorkville Advisors, LLC ("Yorkville") is, upon information and belief, aDelaware Limited Liability Company, with its principal place of business located at 101 HudsonStreet, Suite 3700, Jersey City,New Jersey 07302.

4. Upon information and belief, Yorkville is the majority shareholder ofLehigh.


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5. Yorkville had actual and apparent authority to act as agent for Lehigh in all respectswith regard to the transactions at issue and to bind Lehigh with its representations and promises.

6. With respect to the transactions atissue herein more fully described below, Yorkvilleacted as the agent ofLehigh, and held itself out as Lehigh's agent when dealing with Woodmont.

BackgroundI I7. On or about July 8, 2009, Woodmont met with Defendants in their Jersey City, New

Jersey office for the purposes of discussing a potential joint venture concerning real estatelocated at 555 South Street, Cranford,New Jersey (the "Property'').

8. Upon information and belief, Defendants had financed the purchase of the Property,and Lehigh took title to the Property when the market declined and Defendants' borrowerprovided a deed in lieu of foreclosure.

9. Defendants advised Woodmont that they were seeking a joint venture partner to helpthem obtain approvals for development of the Property, as Defendants had limited developmentexpenence.

10. In late July, 2009, after interviewing several developers that Cushman & Wakefieldintroduced to Defendants including Woodmont, Defendants selected Woodmont as their jointventUre partner and Woodmont thereafter delivered a joint venture term sheet to Defendants .

11. Rather than agree to a joint ventUre agreement, the parties after negotiation elected toform an LLC with the company Operating Agreement defining the parties' rights andobligations.

12. An initial draft of the Operating Agreement was prepared by Defendants' counsel andforwarded to Wood.mont on October 7, 2009.

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13. The parties continued to negotiate the terms of the Operating Agreement during thefall of2009.

14. During these negotiations, Defendants led W oodmont to believe that Woodmont wastheir joint venture partner.

15. Similarly, Defendants held Woodmont out to their professionals and others as'efendants' jo int venture partner.

16. In reliance upon Defendants' commitments and representations that Woodmont wastheir joint venture partner, Woodmont provided extensive project management services withrespect to the Property.

17. For example, Woodmont became the lead developer on the project, and in thiscapacity, Woodmont:

a. Modified the building plans to remove the structured parking;b. Directed the retention ofnew architects with multi-family experience;c. Worked closely with the COAH attorneys and litigation team who filed a builders

remedy action against Cranford;d. Attended many meetings with architects and litigation team to refine the plan and

strengthen the litigation arguments;e. Expended significant amount of funds designing units, the exterior, the parking

and COAH tax credit configurations;f. Consulted heavily before mediation and Court conferences, and were called upon

for advice and opinion during a mediation session;

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g. Reviewed original redevelopment plan, survey, aerials, market conditions, priorsite and architectural plans, prior town and outside agency reports, and siteconstraints;

h. Researched utilities including capacity and applicable connection fees;1. Reviewed the Land Development Code for the Township of Cranford;J. Researched comparable parking criteria outside ofCranford;k. Participated in conference calls with architect, engmeer, parking consultant,

planner and attorneys;1. Reviewed and prepared various proformas and cost benefit analysis;m. Reviewed and prepared multiple in house concept site plans to separate out the

COAH from the market units;n. Engaged in extensive work on developing the site layout with architect and

engmeer;o. Provided assistance in engaging new architect better suited for project;p. Developed program for building including recommended square footages,

bedroom mix, amenities, etc.q. Reviewed and provided comments to conceptual architecture plans, including

initial value engineering;18. Consistent with Defendants' prior representations and actions, by email dated January

7, 2010, Defendants' attorney acknowledged that a deal had been reached.19. On February 4, 2010, Defendants advised Woodmont by email that the Operating

Agreement was on the desk of David Gonzalez, Defendants' General Counsel, awaitingexecution.

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20. On February 16, 2010, Defendants again assured Woodmont that the deal was doneand that they were merely waiting for Mr. Gonzalez to return from a vacation in order to executethe Operating Agreement.

21. While Woodmont was waiting for Defendants to execute the Operating Agreement,Woodmont was asked by Defendants to assist in the mediation of a builders remedy suit that had

'een filed against Cranford with respect to the Property.22. In reliance on Defendants' representations and conduct, W oodmont continued to

assist Defendants with the builders remedy litigation, and various approvals it was seeking fromthe Township.

23. In May 2010, despite all ofthe material terms having been agreed upon, and a writtenagreement having been drafted incorporating those terms, Defendants refused to sign theOperating Agreement and breached their agreement to make Woodmont their joint venturepartner.

24. Woodmont had provided Defendants extensive project management services relatingto the Property because Defendants had agreed to make W oodmont their joint venture partner.

25. Woodmont threatened to bring claims against Defendants as a result of their breach ofthe agreement to make Woodmont their joint venture partner.

26. The broker that was involved in the transaction, David Bernhaut of Cushman &Wakefield, presented W oodmont with an offer from Defendants to sell the Property toWoodmont to resolve the dispute.

27. After negotiations with the broker, the resolution of the dispute between Defendantsand Woodmont culminated in a Letter of Intent.

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28. The Letter of Intent constitutes an accord and satisfaction of Woodmont's claimsagainst Defendants for breach of the agreement to make Woodmont their joint venture partner.

The Letter of Intent29. On or about November 1, 2010, Lehigh offered, and on November 3, 2010

Woodmont accepted, the terms of a Letter of Intent ("LOI") pursuant to which Woodmont would; Ipurchase the Property from Lehigh for $4,000,000 subject to certain adjustments. A true copy of

the LO I is attached hereto as Exhibit A.30. The LOI, inter alia, provided Woodmont with fifty-five (55) days to complete due

diligence.31. The LOI also required that the parties execute a more formal Purchase and Sale

Agreement within twenty-five (25) days.32. The LOI obligated Lehigh and Woodmont to negotiate the formal Purchase and Sale

in good faith.Defendants' Refusal to Sign the Formal Purchase and Sale Agreement

33. Initially, Defendants agreed to have their counsel draft the Purchase and SaleAgreement, and the parties agreed to spli t the cost of the drafting.

34. After approximately one week elapsed, Defendants advised Woodmont that theywould not pay for their lawyer to draft the Purchase and Sale Agreement.

35. On or about November 9, 2010, Woodmont drafted a form of Purchase and SaleAgreement, and sent it to Defendants for review and comment.

36. Defendants refused to issue written comments to the initial draft and refused toredline any suggested changes insisting that they be provided with a "new" draft.

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37. After telephone conferences with Defendants, W oodmont included certain changes tothe draft Purchase and Sale Agreement that had been discussed and agreed upon, and onNovember 18,2010, forwarded the revised Purchase and Sale Agreement to Defendants.

38. During the week of November 22, 2010, the parties and counsel conductedconference calls and discussed a change to the provision concerning the deposit and escrow, and

Ian agreement was reached on the issue.39. In these negotiations, Defendants agreed to extend the 25 day period within which a

formal Purchase and Sale Agreement was required to be signed pursuant to the LOI provided aresolution of the deposit issue was reached.

40. A resolution of the deposit issue that had been discussed was reached on or aboutNovember 23,2010.

41. As a result, the 25 day period was extended by agreement.42. On November 24, 2010, Woodmont asked Defendants to confirm in writing the

extension of the 25 day period within which a formal Purchase and Sale Agreement was requiredto be signed pursuant to the LOI.

43. In response, on November 24, 2010, Defendants finally agreed to have their counselmodify the Purchase and Sale Agreement to incorporate the change to the deposit/escrowprovision to which the parties had agreed during the prior conference calls.

44. On December 2, 2010, Woodmont sent an email to Defendants asking when it couldexpect the revision to the Purchase and Sale Agreement, to which Defendants did not respond.

45. On December 3, 2010, Woodmont again requested comments from Lehigh on thedraft Purchase and Sale Agreement, which Defendants had agreed to provide, and Woodmontagain requested that Defendants confirm in writing the extension of the 25 day period.

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46. In response, on December 3, 2010, Defendants advised, inter alia, that theoutstanding issues on the Purchase and Sale Agreement had only been resolved the week before,and that their counsel who would be making the agreed upon changes to the Purchase and SaleAgreement was on vacation.

47. Defendants did not respond to Woodmont' s request that Lehigh confirm the extension'of he 25 day deadline in writing.

48. Despite numerous requests by Woodmont for Defendants to make the agreed uponchanges to the draft Purchase and Sale Agreement, Defendants took no action to make the agreed

upon changes despite their undertaking to do so.49. Instead, on December 20, 2010, Defendants sent Woodmont a letter purporting to

terminate the LOI on the grounds that Lehigh and Woodmont failed to execute a bindingPurchase and Sale Agreement within 25 days of the LOI.

Woodmont's Due Diligence and Assistance to Defendants on Redevelopment50. After execution of the LOI, Woodmont requested that Defendants provide certain

additional specific due diligence materials relating to the condition of the Property, includingvarious environmental and engineering reports.

51. A list of the initial due diligence materials W oodmont requested of Defendants wasattached to the LO .

52. On December 2, 2010, Woodmont requested v1a email certain additionalenvironmental and geotech reports and other material.

53. On December 8, 2010, Woodmont again requested additional due diligence materials,and again sought the due diligence covered by its initial due diligence request. This requestincluded:

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a. April 1996 Draft Preliminary Assessment/Site Investigation Report prepared byABB Environmental Services, Inc ("ABB") including attachments/appendices;

b. March 13, 1997 Report by ABB with attachments/appendices;c. November 13,2000 Remedial Action Plan with attachments/appendices;d. Information on the sealing/abandoning ofold monitoring wells;e. 1July 17, 2007 addendum 1 to the Subsurface Investigation report by Richard

Kessler with any associated figures;f. The on street parking plan referenced in Henry Ney' s February 26, 2010 report;g. NJDEP Authorization to Discharge Stormwater associated with April 19, 2007

Somerset-Union Conservation District;h. Any other environmental or geotechnical reports, approvals and correspondence

not already provided.54. Despite Woodmont' s requests, Defendants refused to provide the due diligence

Woodmont requested.55. During the time the negotiations of the LOI and draft Purchase and Sale Agreement

were taking place, Defendants also were in the process of obtaining approval of aRedevelopment Plan for the Property.

56. Defendants requested that Woodmont provide comments to the Redevelopment Plan,which would affect the Property being purchased by Woodmont.

57. On or about November 24, 2010, Woodmont provided comments on and suggestedchanges to the Redevelopment Plan to Defendants' counsel in a good faith effort to assistDefendants and move the Redevelopment Plan forward.

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COUNT I(Breach ofContract/Specific Performance)58. Woodmont repeats andre-alleges each and every allegation set forth in the Complaint

above, as if the same were set forth and repeated at length herein.59. In resolution of Woodmont's claim that Defendants breached the agreement to make

Woodmont their joint venture .Partner, Lehigh agreed to sell the Property to Woodmo:qt.60. Lehigh signed the LOI, which required it to negotiate a formal Purchase and Sale

Agreement in good faith.61. Woodmont and Lehigh reached an agreement on the material terms of a Purchase and

Sale Agreement.62. Defendants agreed to have their counsel incorporate those terms into the draft

Purchase and Sale Agreement that Woodmont had drafted.63. Defendants delayed making changes to the draft Purchase and Sale Agreement in an

effort to allow the 25 day period within which a Purchase and Sale Agreement was required to besigned to expire.

64. However, as discussed above, Defendants agreed to extend the 25 day period.65. Lehigh's refusal to incorporate the material terms that had been agreed upon by

Defendants and Woodmont into the Purchase and Sale Agreement and to proceed with a closingof the sale of the Property constitutes a breach of contract.

66. All of the material terms of the Purchase and Sale Agreement had been agreed uponby Defendants and W oodmont.

67. The Property is a unique parcel of real estate.68. Woodmont is ready, willing and able to complete the purchase of the Property in

accordance with the agreement reached by the parties.

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69. As a result of Lehigh's breach of the LOI and refusal to sell the Property toWoodmont, Woodmont has suffered and wil l continue to suffer irreparable harm.

WHEREFORE, Woodmont demands judgment against Lehigh as follows:a For an award of specific performance, requiring Lehigh to convey the Property to

Woodmont pursuant to the terms of the LOI and draft Purchase and SaleIAgreement and the parties' agreements;

b. For consequential and compensatory damages;c. For interest and cost of suit; andd. For such further and additional relief as the Court may deem equitable and just.

COUNTTI(Breach of Covenant ofGood Faith & Fair Dealing)

70. Woodmont repeats andre-al leges each and every allegation set forth in the Complaintabove, as i f he same were set forth and repeated at length herein.

71. Lehigh signed the LOI, which required it to negotiate a formal Purchase and SaleAgreement in good faith.

72. The LOI contains an express and an implied covenant requiring Lehigh to act in goodfaith and to deal with Woodmont fairly.

73. Defendants delayed making changes to the draft Purchase and Sale Agreement in aneffort to allow the 25 day period within which a Purchase and Sale agreement was required to besigned to expire.

74. All of the material terms ofthe Purchase and Sale Agreement had been agreed uponby Lehigh and Woodmont.

75. Defendants' refusal to incorporate the additional material terms that had been agreedupon by Defendants and Woodmont into the Purchase and Sale Agreement and to proceed with a

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closing of the sale of the Property constitutes a breach of the express and implied covenant ofgood faith and fair dealing.

76. The Property is a unique parcel of real estate.77. As a result of Lehigh's breach of the covenant of good faith and fair dealing, and its

refusal to sell the Property to W oodmont, W oodmont has suffered and will continue to sufferIirreparable harm.

WBEREFORE, Woodmont demands judgment against Lehigh as follows:a. For an award of specific performance, requiring Lehigh to convey the Property to

Woodmont pursuant to the terms of the LOI and draft Purchase and SaleAgreement and the parties' agreements;

b. For consequential and compensatory damages;c. For attorneys' fees, interest and cost of suit; andd. For such further and additional relief as the Court may deem equitable and just.

COUNT i l l(Promissory Estoppel)

78. Woodmont repeats andre-alleges each and every allegation set forth in the Complaintabove, as i f he same were set forth and repeated at length herein.

79. Defendants made promises to Woodmont that Woodmont would be their jointventure partner on the Property, and later that Lehigh would sell the Property to Woodmont.

80. Defendants made these promises to Woodmont with the expectation that Woodmontwould rely upon its promises.

81. In reasonable reliance upon Defendants' representations and promises, Woodmontprovided Defendants with extensive project management and development services with respectto the Property.

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82. As a result of the conduct aforesaid, Defendants are estopped from refusing to fulfilltheir promise to sell the Property to W oodmont.

WHEREFORE, Woodmont demands judgment against Defendants as follows:a. Requiring Lehigh to convey the Property to Woodmont pursuant to the terms of

the LOI and draft Purchase and Sale Agreement and the parties' agreements;tb. For consequential, compensatory and punitive damages;

c. For attorneys' fees, interest and cost of suit; andd. For such further and additional relief as the Court may deem equitable and just.

COUNT IV(Fraud)83. Woodmont repeats andre-alleges each and every allegation set forth in the Complaint

above, as i f he same were set forth and repeated at length herein.84. Defendants made representations to Woodmont that Woodmont would be their joint

venture partner on the Property, and after refusing to do so, made additional representations thatLehigh would sell the Property to Woodmont.

85. The aforesaid representations were made by Defendants to induce Woodmont toprovide development and project management services with respect to the Property.

86. At the time it made these representations, Defendants never intended to makeWoodmont their joint venture partner on the Property or to sell the Property to W oodmont.

87. In reliance upon Defendants' representations and promises, Woodmont providedDefendants with extensive project management and development services with respect to theProperty.

88. Defendants' representations and promises to Woodmont constitute legal and equitablefraud.

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89. As a result of Defendants' fraudulent conduct aforesaid, Woodmont has beensignificantly damaged in an amount yet to be determined.

WHEREFORE, Woodmont demands judgment against Defendants as follows:a. For consequential, compensatory and punitive damages;b. For attorneys' fees, interest and cost of suit; and

I Ic. For such further and additional rel ief as the Court may deem equitable and just.

COUNTV(Unjust Enrichment/Quasi-Contract)

90. Woodmont repeats andre-alleges each and every allegation set forth in the Complaintabove, as i f he same were set forth and repeated at length herein.

91. In reasonable reliance on Defendants' representations, promises and assurances thatWoodmont would become a joint venture partner with respect to the project, and subsequentlyDefendants' representations that Lehigh would sell the Property to Woodmont, W oodmontprovided extensive project management services, including but not limited to assistingDefendants in obtaining approvals and prosecuting, mediating and negotiating with Cranfordwith respect to the builders remedy action, and with its counsel with respect to theRedevelopment Plan for the Property.

92. W oodmont was not paid for its services.93. Woodmont reasonably expected to receive the value of its services when it became

the joint venture partner or the owner of the Property.94. Defendants received an economic benefit as a result of Woodmont's services, and

have therefore been unjustly enriched.95. The actions and conduct of the parties created a contract implied by law requiring

Defendants to compensate W oodmont for the services it provided.

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96. Defendants breached this contract implied by law by failing to compensateWoodmont for the work that it performed with respect to various aspects of the Property and itsdevelopment and Redevelopment.

97. As a result of Defendants' breach of the contract implied by law, Woodmont has beendamaged.

WHEREFORE, Woodmont demands judgment against Defendants as follows:a. For an award of quantum meruit consisting of the reasonable value of

Woodmont's services, and compensatory damages;

b. For the imposition of a constructive trust and/or equitable lien on the Property;c. For interest and cost of suit; andd. For such further and additional relief as the Court may deem equitable and just.

Dated: February 3, 2011

GREENBAUM,ROWE, SJ\.flTH & DAVIS LLPAttorneys for PlaintiffB ? < f ~ -aulA. Rowe

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CERTIFICATION PURSUANT TO RULE 4:5-1I hereby certify that, to the best of my knowledge and belief, the matter in controversy is

not the subject of any action pending in any other court or of a pending arbitration proceeding,nor is any other action or arbitration proceeding contemplated. I know of no other parties otherthan the parties set forth in this pleading that should be joined in the above action. I recognize the

( .continuing obligation of each party to file with the Court and serve on all parties a Certificationi f here is a change in the facts stated in the original Certification.


GREENBAUM, ROWE, SMITH & DAVIS LLPAttorneys for Plaintiff

DESIGNATION OF TRIAL COUNSELPlaintiff hereby designates Paul A. Rowe of the fum of Greenbaum, Rowe, Smith &

Davis LLP as trial counsel in this matter.


GREENBAUM, ROWE, SMITH & DAVIS LLPAttorneys for Plaintiff

B y : S i ~ - ~ Paul A. Rowe

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CERTIFICATION PURSUANT TOR. 1:38-7I hereby certify that confidential, personal identifiers have been redacted from documents

now submitted to the Court (i f any) and will be redacted from all documents submitted in thefuture in accordance with R. 1 38-7.


GREENBAUM, ROWE, SMITH & DAVIS LLPAttorneys for PlaintiffB y ~ ~ Paul A. Rowe.

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ExlnBIT A


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Lehigh Acquisition Corp.c/o Yorkville Advisors, LLC101 Hudson Street, Suite 3700Jersey City, New Jersey 07302November 1, 201 0

stephen A. Santo!a~ e c u t i v e Vice PresidentGeneral CounselWoodmont Properties, LLC119 Cherry Hill Road, Suite 11 0Parsippany, New Jersey 07054

Re: Proposed Sale of Premises at555 South Avenue, Cranford, New JerseyDear Mr. Santola:On behalf of Lehigh Acquisition Corp. {the "Seller"), I am pleased to submit thisnon-binding Term Sheet as an offer to sell the above-referenced real property. In thisletter, please find the terms and conditions on which we offer to sell the property.The following provisions shall form the basis of a formal Real Estate Purchaseand Sale Agreement (the "Purchase Agreemenf') between the Parties:

Real Property

Purchase Price

Deposit

The real property, which will be the subject of the PurchaseAgreement is known as lo t 1 in Block 511 on the Official Tax Mapof the Township of Cranford (the "Town"), County of Union, State ofNew Jersey (the "Property").The purchase price for the Property shall be Four Million($4,000,000.00} Dollars (the "Purchase Price"), subject toadjustment as set forth herein. At closing, Purchaser shall deliverto Seller the Purchase Price by wire transfer.Concurrent with the execution of the proposed PurchaseAgreement, Purchaser shall pay to the Seller a deposit of TwoHundred Thousand ($200,000.00) Dollars (the "Deposit") whichshall not be refundable, except as hereinafter set forth, but shall beapplied to the Purchase Price. The Deposit shall be refundableonly if (i) the Seller cannot convey marketable tiDe, (ii) after noticeand an opportunity to cure, if applicable, the Seller defaultspursuant to the Purchase Agreement, {iii) the Purchaser terminatesthe Purchase Agreement as a consequence of the occurrence of aDue Diligence Termination Event (as hereinafter defined) or ReZoning Termination Event (as hereinafter defined) or (iv) the Seilertenninates the Purchase Agreement as a consequence of the


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Page 2 of 6November 1 201 0

Due Diligence

Termination

occurrence of an Approval Period Termination Event (as hereinafterdefined) or Tolling Period Termination Evant (as hereinafterdefined).Purchaser shall be permitted to utilize up to $150,000 of theDeposit to pay reasonable tilird party costs, fees or municipalescrows necessary to gain the required government approvals to

1 develop the Property (the ,.Approval Cost :sj. Purthaser shall bepermitted to draw against the Deposit by submitting to the Sellerinvoices evidencing Approval Costs and Seller shall release to thePurchaser a portion of the Deposit in an amount equal to suchApproval Costs set forth in such involce{s) (all such amountsreleased from the Deposit to pay Approval Costs. in the aggregate.the "Deposit Reductionsj, provided, however, Deposit Reductionsshall not exceed, in the aggregate, $150,000. The Purchase Priceshall be increased by an amount equal to the Deposit Reductions.Purchaser shall have fifty-five (55) days from the date of this termsheet (the "Due Diligence Period") to inspect, or cause to beinspected, the Property with respect to environmental. engineering,and land use Issues. The cost of all such inspections shall be thesole obligation of Purchaser. If the results of the due diligenceinspection of the Property are unsatisfactory to Purchaser, asPurchaser may in Its reasonable discretion determine, Purchsserr n a ~ by written notice to Seller to be given on or before the fifty-fifth(55"1 day following the execution date of this term sheet, terminatethe Purchase Agreement (the "Due Diligence Termination Evenr).The Purchaser shall expressly waive any further right to undertakefurther due diligence of the Property beyond the Due DiligencePeriod.Upon termination of the Purchase Agreement, including, withoutlimitation, upon the occurrence of a Approval Period TerminationEvent, Tolling Period Termination Event, Re-Zoning TerminationEvent or Due Diligence Termination Event, all rights and obligationsof the Parties thereunder shall become null and void, except forindemnifications of the Purchaser as a result of the activities of thePurchaser on the Property. Within fifteen {15) calendar days of thedate on which the Purchase Agreement is terminated, Purchasershall deliver to Seller all information relating to the Approvals,including, without limitation, all documents, instrumentsagreemerr\5, memoranda, notes and other analyses developed bythe Purchaser andior its affiliates, officers, directors, employees,agents, advisors, counsel and auditors collectively, the "'ApprovalMaterials").


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Page 3 of 6November 1, 2010

Closing Date

Payment for ApprovalsIf Seller terminates the Purchase Agreement, including, withoutlimitation, as a consequence of a Approval Period TerminationEvent or Tolling Period Termination Event, other than as aconsequence of Purchaser having breached its obligationsthereunder and/or having made material misrepresentationstherein, than, within five (5) calendar days of receipt of the ApprovalMaterials, Seller sha.ll reimburse Purchaser for all third party costsexpended in obtaining the Approvals (collectively, "Third PartyApproval Costs"}, provided, however, such Third Party ApprovalCosts shall not exceed $150,000.If Purchaser terminates the Purchase Agreement as aconsequence of Seller having breached its obligations thereunderand/or having made material misrepresentations therein, then,within five (5) calendar days of receipt of the Approval Materials,Sellar shall reimburse Purchaser for aU Third Party Approval Costs,provided, however, such Third Party Approval Costs shall notexceed $150,000.No Payment fo r ApprovalsIf Purchaser terminates the Purchase Agreement, including, withoutlimitation, as a consequence of a Due Diligence Termination Eventor Re-Zoning Termination Event, other than as a consequence ofSeller having breached its obligations thereunder and/or havingmads material misrepresentations therein, then, Purchaser shalldeliver to Seller the Approval Materials as set forth above andSeller shall have no obligation to reimburse Purchaser for ThirdParty Approval Costs.If Sellar terminates the Purchase Agreement as a consequence ofPurchaser having breached its obligations thereunder and/orhaving made material misrepresentations therein, then, Purchasershall deliver to Seller the Approval Materials as set forth above andSeller shall have. no obligation to reimburse Purchaser for ThirdParty Approval Costs.If the Purchase Agreement automatically terminates, Purchasershall deliver to Seller the Approval Materials as set forth above andSeller shall have no obligation to reimburse Purchaser for ThirdParty Approval Costs.The closing of .title shall occur no later than seven (7) days afterPurehaser has received the Approvals (as hereinafter defined) toconstruct not less than 139 market rate residential units and 24


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Page4of6November 1, 2010

Approvals

Tolling

affordable house units on the Property (163 total units), withstandard conditions.The Purchaser shall have six (6) months from the date (the"Approval Period Start Date") 1he town adopts an ordinance orredevelol)l'TIGnt plan (the "Re-Zoning Planj codifying the terms ofthe Settlement Agreement between Seller and Town {the "ApprovalPeriod") to obtain preliminary and final Sta plan approval, countysite plan a p p r o ~ l . sol! erosion control permit and such other permitsand approvals necessary to obtain a builcfrng pemnit on the site, (butnot induding developers agreements, foundation or building pennitsand oihar similar approvals and permits) (the "Approvals"). If theApproval Period Start Date does not occur on or before that datethat is ninety (90) days after the date of Purchase Agreement, theSeller may terminate the Purchase Agreement (the "ApprovalPeriod Termination Event'}.Purchaser may terminate the Purchase Agreement if the Re-ZoningPlan contains terms and conditions that, in the aggregate, arematerially different from the terms and conditions of the SettlementAgreement and, within five {5) calendar days of the Approval PeriodStart Date, Seller receives from Purchaser written notice ofPurchaser's intent to terminate the Purchase Agreement (the "ReZoning Termination Evenf').The Purchaser may elect, and Seller shall agree, to emend theApproval Period by no more than two (2) three (3) month periods if,with respect to each three (3) month extension, (i) Purchaser isdiligently pursuing the Approvals and the Purchaser has filed allapplications for Approvals appropriate at that time and (ii) Purchaserpays to the Seller an e ~ e n s i o n fee in an amount equal to $25,000(the ''Extension Feej. The Extension Faa shall not be crecflted to thePurchase Price. If the Purchaser has not received all Approvals bythe end of the Approval Period, as extended, the PurchaseAgreement shall automatically terminate and neither party shall haveany further obligation to the other party. The Purchaser shall use itsbest efforts to file and prosecute applications for Approvals and shalfpromptly comply with all instructions and requests of the appropriateboard, authority, agency and/or hearing officer with regard to theprocess to obtain Approvals.In the event any Approval following the re-zoning of the Property isappealed, the Purchaser shall defend the Approval at its own costand expense. The Approval Period shall be tolled during thependency of such an appeal, provided, however, with respect to allsuch appeals, 1ha Approval Period shall not toll, in the aggregate,more than ninety (90) days (the "Tolling Periodj. If the Tolling


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Page 5of 6November 1, 2010

ConditionsPrecad&ntto Closing

Title

Condition ofProperty

Period exceeds ninety (90) days, the Seller may terminate thePurchase Agreement (the "Tolling Period Tennination Event'') and,within fifteen (15) calendar days of the date on which the PurchaseAgreement is terminated, Purchaser shall assign to Seller any andall appeals.

As a condition precedent to Purchaser's obligations to purchase theProperty, on or before the Closing Date: (i) The Purchaser shall bein receipt of all Approvals; and (li) the Purchaser shall deliver thePurchase Price to the Seller.Title shall be insurable at regular rates by a title insurance companylicensed to do business in the State of New Jersey at regular rates.

The Property is being sold "as is" "where is" with no warranties orrepresentations, including implied warranties of fitness for aparticular purpose. Purchaser shall indemnify the Seller for any claims asserted against the Seller as a result of any conditionexisting on the Property, including environmental conditions.Risk of Loss Remains with Seller until closing.Sellers Consent Seller agrees to execute at the time of signing of PurchaseAgreement, or any time thereafter, at no cost or expense to theSeller, any necessary consents to allow the Purchaser to prosecuteapplications for preliminary site plan approval.

The purpose of this non-binding Letter of lntent is to set forth the key provisionsunder which the Seller makes an offer to sell the Property. The Parties recognize andunderstand that a formal Purchase Agreement is intended to be drafted and executedwithin twenty-five (25) days from the date this Letter of Intent is fully executed. If abinding Purchase Agreement has not been executed within twenty-five (25) days,neither party shall have any further obligation to the other party. By executing thisletter of Intent, the Parties shall be obligated to negotiate in good faith. The termscontained herein shall not be binding until such time a formal, written PurchaseAgreement is negotiated and executed by the parties.


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Should the provisions outlined herein be acceptable, please sign and return onecopy of this letter to my attention. Upon receipt, a Purchase Agreement shall beprepared and forvvarded to the Purchaser's counsel for his/her review within 7 days ofreceipt.

ACKNOWlEDGED AND AGREEDWoodmont Properties, LLC

l f./3/lr>Name: &-tc__ wtf-r.-.c.nct-fTitle: /Vtttf

Very truly yours,Lehigh Acquisition Corp.

Name: E.dLAJcrcl S


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Due Diligence Items

1) All municipal approvals including the latest site plans, resolutions or relatedagreements and comment letters from municipal professionals

2) All county, state and outside agency approvals, including approvals from theNJDEP, Soil Conservation, NJDOT and NJDCA including copies of plans,reports and the applications r e l ~ t i n g to such approvals and comment lettersfrom county and state professionals;3) All geotechnical information including any data, reports, maps and plans;4) All environmental studies conducted on or in relation to the Property includingany Phase I and II reports, preliminary and site assessments, remedial

investigations, remedial action workplans, maps, data, conclusions andapprovals5) All surveys of the Property6) All utility infrastructure and provider information including can and will serveletters

woodmont v. lehigh complaint

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