Woodmont v. Lehigh Exhibits

7/29/2019 Woodmont v. Lehigh Exhibits

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Stephen A. SantolaExecutive Vice PresidentGeneral CounselWoodmont Properties, LLC

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

119 Cherry Hill Road, Suite 11 0Parsippany, New Jersey 07054Re: Proposed Sale of Premises at

555 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 fonnal Real Estate Purchase.and Sale Agreement (the "Purchase Agreement") between the Parties:

Real Property The real property, which will be the subject of the PurchaseAgreement is known as Lot 1 in Block 511 on the Official Tax Mapof the Township of Cranford (the "Town"), County of Union, State ofNew Jersey (the "Property").Purchase Price The purchase price . or 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.Deposit Concurrent with the execution of the proposed PurchaseAgreement, Purchaser shall pay to the Seller a deposit of TwoHundred Thousand ($200,000.00) Dollars (the "Deposir) whichshalt 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 title, (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 Sellerterminates the Purchase Agreement as a consequence of the


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Page 2 of 6November 1, 2010

Due Diligence

Termination

occurrence of an Approval Period Termination Event {as hereinafterdefined) or Tolling Period Termination Event {as hereinafterdefined).Purchaser shall be permitted to utilize up to $150,000 of theDeposit to pay reasonable third party costs, fees or municipalescrows necessary to gain the required government approvals todevelop the Property (the ..Approval Costsj. Purchaser 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 fn 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 liDeposit Reductions), 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, Purchasermay_, by written notice to Seller to be given on or before the fifty-fifth{551j day following the execution date of this term sheet, terminatethe Purchase Agreement (the "Due Diligence Termination Eventj.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, instrumentsagreements, memoranda, notes and other analyses developed bythe Purchaser and/or its affiliates, officers, directors, employees,agents, advisors, counsel and auditors collectively, the "ApprovalMaterials").


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Page 3 of 6November 1 201 0

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 andlor having made material misrepresentationstherein, then, within five (5) calendar days of receipt of the ApprovalMaterials, Seller shall 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 thereunderandlor having made material misrepresentations therein, then,within five (5) calendar days of receipt of the Approval Materials,Seller shall reimburse Purchaser for all Third Party Approval Costs,provided, however, such Third Party Approval Costs shall notexceed $150,000.No Payment for 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 havingmade 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 Seller 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 tor 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 afterPurchaser has received the Approvals (as hereinafter defined) toconstruct not less than 139 market rate residential units and 24


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Page 4 of 6November 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") the town adopts an ordinance orredevelopment plan (the "Re-Zoning Plan") codifying the terms ofthe Settlement Agreement between Seller and Town (the "ApprovalPeriod") to obtain preliminary and final site plan approval, countysite plan approval, soli erosion control pennlt and such other permitsand approvals necessary to obtain a building pennit on the site, (butnot including developers agreements, foundation or building permitsand o1her similar approvals and pennits) (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 Evenr).Purchaser may tenninate the Purchase Agreement ff 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 Tennlnation Evenf').The Purchaser may elect, and Seller shall agree, to extend 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 (il) Purchaserpays to the Seller an extension fee in an amount equal to $25,000(the "Extension Feej. The Extension Fee shall not be credited to thePurchase Price. If the Purchaser has not received all Approvals bythe end of the Approval Period, as extended, the PurchaseAgreement shalf 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 offrcer with regard to theprocess to obtain Approvals.

n 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 thopendency of such an appeal, provided, however, with respect to allsuch appeals, the Approval Period shall not tofl, in the aggregate,more than ninety (90) days (the "Tolling Period"}. If the Tolling


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Page 5 of 6November 1, 201 0

ConditionsPrecedsntto Closing

Title

Condition ofProperty

Period exceeds ninety (90) days, the Seller may terminate thePurchase Agreement (the "Tolling Period Termination Evenf') and,withfn fifteen (15) calendar days of the date on which the PurchaseAgreement is terminated, Purchaser shall assign to Seller any andaJI 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 anyclaims asserted against the Seller as a result of any condltfonexisting 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 Intent 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 Ume 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 r e c e i p ~ a Purchase Agreement shall beprepared and forwarded to the Purchaser's counsel for his/her review within 7 days ofreceipt.

ACKNOWLEDGED AND AGREEDWoodmont Properties, LLC

lt/3/loI

Very truly yours,Lehigh Acquisition Corp.

Name: E.dt..vc.rcl so.;".Title: 1 T ~ ~ r e . r


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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 relating to such approvals and comment letters from 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, remedialinvestigations, remedial action workplans, maps, data, conclusions andapprovals5) All surveys of the Property6) All utility infrastructure and provider information including can and will serveletters


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,,FW: 555 Central Ave Cranford Page 1 of 4

Fasciano, TerryFrom: William Gardner [[email protected]]Sent: Monday, November 15, 2010 12:37 PMTo: [email protected]: Louis I. KarpSubject: FW: 555 Central Ave Cranford

Steve,f The Purchase and Sale Agreement does not accurately incorporate the terms and conditions set forth in the LOI. Amongmany other issues are the following:

The LOI requires the deposit to be paid to seller. The Purchase and Sale Agreement requires the deposit be paid to yourattorneyThe Purchase and Sale Agreement does not accurately incorporate the termination provisions. Among other things, thePurchase and Sale Agreement does not define Approval Period Termination Event, fails to accurately set forth whenWoodmont must deliver Approval Materials and when, and under what circumstances, Lehigh is required to pay forWoodmont costs and expenses in connection with Approvals. As you may recall, we agreed these provisions could simplybe copied from the LOI and pasted into the Purchase and Sale Agreement.The Purchase and Sale Agreement fails to accurately incorporate the tolling provisions in connection with an appeal.The Purchase Agreement does not even include a provision requiring payment of the purchase price.I understand Woodmont did not want to circulate the first draft of this agreement. However, you did agree to circulate thefirst draft and the first draft should, at a minimum, incorporate the terms and conditions of the LOI.

I'll give you a ring shortly to discuss. Also, I'll follow-up regarding your request for documents.Bill

4/13/2011


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Klein, Steven

From: Stephen Santola [mailto:[email protected]]Sent: Thursday, November 18, 2010 1:27PMTo: William Gardner; Louis I. KarpSubject: Cranford Purch and Sale Agrmt

Page 1 of2

Gents, attached is a revised P&S utilizing additional provisions from the LOI. I have redlined the attached againstmy initial "attempt" at drafting the agreement. Please review and advise.Since we have now lost 10 days in the back and forth, I would appreciate a quick response to the attached.Many thanks.

Stephen A. SantolaExecutive Vice President & General Counsel

4/13/2011


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,_

W ~ 9 9 t v ' Y . ~ T One Main Street, Second FloorChatham, NJ 07928Direct: 908.988.1156Main: 973.316.9400- Ext: 254Fax: 973.701.0793ssantola@woodmontproperties.comwww.woodmontproperties.com

~ Y o r k v i l l e advisorsWilliam GardnerSenior Counsel, Special Situat ions GroupYorkville Advisors, LLC101 Hudson Street Suite 3700Jersey City, NJ 07302Main 201.985.8300Direct [email protected]. yorkvi ead visors. comJersey City 1 Denver 1 Jupiter I London I Hong Kong

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CONFIDENTIALITY NOTICE: This e-mail message is intended only for the intended recipient(s). Theemail or its attachment(s) may contain documents which are PRIVILEGED, PROPRIETARY,CONFIDENTIAL and MATERIAL NON-PUBLIC INFORMATION. If you are not the intendedrecipient, you are hereby notified that any dissemination, distribution or copying of this e-mail and anyattachment(s) is strictly prohibited. If you have received this e-mail in error, please immediately notifythe sender by replying to this e-mail and delete the message and any attachment(s) from yoursystem. This communication does not reflect an intention by the sender or the sender's client or principalto conduct a transaction or make any agreement by electronic means. Nothing contained in this messageor in any attachment shall satisfY the requirements for writing, and nothing contained herein shallconstitute a contract or electronic signature under the Electronic Signatures in Global and NationalCommerce Act, any version of the Uniform Electronic Transactions Act or any other statute governingelectronic transactions.

4/13/2011


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From: William GardnerSent: Tuesday, November 23, 2010 1:09 PMTo: 'David Bernhaut'Cc: Amir Elbaz; 'Stephen Santola'Subject: Lehigh - Deposit IssueDavid,

Page 1 of 1

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Attached please find an executed copy of the LOI. Please be advised there is a business issue regarding who will holdthe $200K deposit. The LOI provides that "Purchaser shall pay to the Seller a deposit of Two Hundred Thousand($200,000) Dollars (the "Deposit") which shall not be refundable, except as hereinafter set forth, but shall be applied tothe Purchase Price." Accordingly, Lehigh is taking the position that Lehigh should hold the deposit. Woodmont hastaken the position that an escrowagent should hoid the deposit.Please feel free to contact me at the number below with any questions.Regards,

William GardnerSenior Counsel, Special Situations Group

~ Y o r k v i l l e advisorsYorkville Advisors, LLC101 Hudson Street Suite 3700Jersey City, NJ 07302Main 201.985.8300Direct 201.536.5130wgardner@yorkyilleadvisors comwww. yorkv1lleadvisors.comJersey City I Denver 1 upiter I London I Hong Kong

CONFIDENTIALITY NOTICE: This e-mail message is intended only for the intended recipient(s). The emailor its attachment(s) may contain documents which are PRIVILEGED, PROPRIETARY, CONFIDENTIAL andMATERIAL NON-PUBLIC INFORMATION. If you are not the intended recipient, you are hereby notifiedthat any dissemination, distribution or copyingof this e-mail and any attachment(s} is strictly prohibited. Ifyou have received this e-mail in error, please immediately notify the sender by replying to this e-mail anddelete the message and any attachment(s) from your system. This communication does not reflectarr intentionby the sender or the sender's clientor principal to conduct a transaction or make any agreement by electronicmeans. Nothing contained in this message or in any attachment shall satisfy the requirements for writing, andnothing contained herein shall constitute a contract or electronic signature under the Electronic SignaturesinGlobal and National Commerce Act, any version of the Uniform Electronic Transactions Act or any otherstatute governing electronic transactions.

5/1 l/2011


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From: William GardnerSent: Wednesday, November 24, 2010 1!32 PMTo: 'David Bernhaut'Cc: Amir Elbaz; 'Stephen Santola'Subject: RE: Lehigh - Deposit IssueThe Yorkville offices are closed. We will revert to you early next week regarding extending the LOI.We have not yet provided written comments because the drafts circulated by Woodmont contain terms andconditions that differ materially from the terms and conditions set forth in the LOI. We have had several calls todiscuss these differences.In an effort to continue to move the process forward, we will di rect Louis to begin modifying the P&SAgreement. Please note substantial revisions will be required to finalize the P&S Agreement. Withholdingcomments and discontinuing due diligence will only delay the process. We would ask Woodmont to reconsiderits decision.Bill

5/1112011


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From: Stephen Santola [mailto:[email protected]]Sent: Friday, December 03, 2010 1:58 PMTo: William GardnerSubject: RE: Cranford additional due diligence itemsPlease recall Amir has not yet agreed to an extension to the 25 day contract deadline

Stephen A. SantolaExecut ive Vice President & General CounselDirect: [email protected]

5111/2011


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Stephen A. SantolaExecutive Vice PresidentGeneral .CounselWoodmont Properties, LLC

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

December 20, 201 0

119 Cherry Hill Road, Suite 11oParsippany, New Jersey 07054Re: Termination of Negotiations with respect to Sale of Premises

Located at 555 South Avenue, Cranford, New JerseyDear Mr. Santola:

Reference is made to that certain letter of intent dated November 1, 2010 (the"LOI") by and between Lehigh Acquisition Corp. (11Lehigh") and Woodmont Properties,LLC ('Woodmontu). Capitalized terms used but not defined herein shall have themeanings ascribed thereto in the LOI.Please be advised the LOI has terminated in accordance with its terms as a -consequence of Lehigh and Woodmont having failed to execute a binding PurchaseAgreement within twenty five (25) days of the date of the LOI. Furthermore, we regret

to inform you that Lehigh has decided to terminate negotiations with Woodmont withrespect to a sale of the Property.Please feel free to contact Amir Elbaz with any questions (201-9858300).

Very truly yours,Lehigh Acquisition Corp.

Name: Edwar SchinikTitle: Treasurer

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Woodmont v. Lehigh Exhibits

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