You are on page 1of 37

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA


700 NORTH DELAWARE, LLC
2711 Centerville Road, Ste. 400
Wilmington, Delaware,
Plaintiff,

Civil Action No.

-----

V.

ELI WEINSTEIN
805 Cross Street, Building 2
Lakewood, New Jersey,
Defendant.

COMPLAINT
Plaintiff 700 North Delaware, LLC brings this action against Defendant Eli Weinstein
and, in support thereof, avers as follows:

A.
1.

THE PARTIES

Plaintiff, 700 North Delaware, LLC ("Plaintiff '), is a Delaware Corporation with a registered
office address of 2711 Centerville Road, Suite 400, Wilmington, Delaware.

2.

Defendant, Eli Weinstein ("Weinstein") is an adult individual with an address of 805 Cross
Street, Building 2, Lakewood, New Jersey.

B.
3.

JURISDICTION AND VENUE

Jurisdiction is proper under 28 U.S.C. 1332, as the parties are diverse, and the amount in
controversy is over $75,000, exclusive of interest and costs.

4.

Venue is proper under 28 U.S.C. 1391(a)(2), since the property that is the subject of this action
is situated in this district.

C.

BACKGROUND
5.

PHIL! 736103-1

On or about March 21, 2007, Plaintiff and Weinstein entered into a certain

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 8 of 41

Contribution and Sale Agreement (the "CSA"), a hue and correct copy of which is attached
hereto as Exhibit "A," and is incorporated by reference. The exhibits to the CSA are not
attached, as they are voluminous.
6.

Pursuant to the CSA, Weinstein agreed, inter alia, to purchase Plaintiff s interest in certain
property that is situated in Philadelphia County, Pennsylvania (the "Premises"), which has been
commonly referred to as 700 N. Delaware Avenue.

7.

Plaintiff does not currently own the Premises. Rather, Plaintiff is the assignee of the contract
purchaser of the Premises. More specifically, on or about January I, 2005, Plaintiff s assignor,
West Bank Realty, Inc., d/b/a The Hoboken Brownstone Company ("Brownstone") entered into
a certain Agreement of Sale (the "AOS") with the current owners of the Premises: Mount
Corporation, Terminal Industrial Corp., and Plant Realty Co., Inc. (collectively, the "Current
Owners").

8.

On or about August 3, 2005, Brownstone assigned all rights, title, and interests in and related to
the AOS to Plaintiff.

D.
9.

THE CONTRIBUTION AND SALE AGREEMENT

Pursuant to the CSA, Plaintiff assigned its rights and interests in and to the AOS to Weinstein,
who in turn, was to cause a newly-formed special-purpose entity (the "N LLC") to purchase or
assume said rights. The JVC LLC was to be formed for the sole purpose of acquiring, owning,
improving and operating the Premises, and in which Plaintiff was to have a 10% interest, and
Weinstein was to have a 90% interest. See CSA at 1.1 and 3.2 (Ex. A).

10.

Upon execution of the CSA, Weinstein assumed all obligations of Plaintiff (more particularly, of
Plaintiff s assignor, Brownstone) under the AOS. See id. at 1.2 and 1.3.

11.

Weinstein agreed to pay Plaintiff $5,000,000 in excess of the purchase price set forth in the AOS,
payable as follows: (a) $2,500,000 due upon execution of the CSA, see id. at
2
PH!Ll 736103-1

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 9 of 41

2.l(a); and (b) $2,500,000 due at the earlier of: (i) the Closing Date defined in the AOS; (ii)
December 31, 2007; or (iii) thirty days following Plaintiff s receipt of the zoning permit and
site plan approval for the Premises, see id. at 2.l(c).
12.

Weinstein also agreed to reimburse Plaintiff for all sums paid or incurred by Plaintiff in
connection with the development of the Premises, which at the time of the execution of the
CSA totaled $2,203,288.50. See id. at 2.l(b). These funds were due upon execution of the
CSA.

13.

In addition, Weinstein agreed to fund, upon execution of the CSA, an escrow account in the
amount of $300,000 (the "Development Escrow"), in order to fund the ongoing development
costs in connection with the development of the Premises. See id. at 6.2.

14.

In the event Plaintiff were able to negotiate with the Current Owners to achieve a reduction in
the purchase price of the Premises, Weinstein agreed to pay Plaintiff, at closing, the difference
between the new purchase price negotiated by Plaintiff and the purchase price in the AOS (the
"Discount Consideration"). See id. at 2.1(d). In a Side Agreement entered into concurrently
with the CSA ("Side Agreement"), Plaintiff agreed to pay Weinstein 25% of the Discount
Consideration at closing. A true and correct copy of the Side Agreement is attached hereto as
part of Exhibit "A," and is incorporated by reference. Thus, the parties in effect agreed that
Weinstein was obligated to pay Plaintiff 75% of the Discount Consideration at closing.

15.

Plaintiff was successful in negotiating an $11,500,000 reduction in the purchase price of the
Premises, from $37,500,000 to $26,000,000.
16.

Thus, at closing, Weinstein is also obligated to pay Plaintiff 75% of $11,500,000,

i.e., $8,625,000.

3
PHIL! 736103-1

Case 2:07-cv-02252-JG

17.

Document 1 Filed 06/04/07 Page 10 of 41

In sum, Weinstein agreed to pay Plaintiff the following amounts, at the following

times:
(i) Upon execution of the CSA (i.e. on or about March 21, 2007) (collectively, the
"Execution Funds"):

$2,500,000 (see CSA at 2.l(a) (Ex. A));

$2,203,288.50 (see id. at 2.l(b));

$300,000 (see id. at 6.2(a));

(i) At closing:

$8,625,000 (see id. at 2.l(d)); and

(iii) At the earlier of: (a) the Closing Date defined in the AOS; (b) December 31,
2007; or (c) thirty days following Plaintiff s receipt of the zoning permit and site
plan approval for the Premises:

18.

$2,500,000 (see id. at 2.l(c)).

As set forth in more detail below, to date Weinstein has paid Plaintiff only

$2,000,000 in deposits.

E.
19.

WEINSTEIN'S BREACHES OF THE CONTRIBUTION AND SALE


AGREEMENT

Before negotiating with Weinstein for the purchase of the Premises, Plaintiff required a $1,000,000
good-faith deposit, which Weinstein paid Plaintiff in or about February 2007.
20.

Upon execution of the CSA, Weinstein therefore owed Plaintiff a balance of

$4,003,288.50 on the Execution Funds (see Paragraph 17 above for an itemization of the
Execution Funds; $5,003,288.50 - $1,000,000.00 = $4,003,288.50).
21.

At the time the CSA was executed, Weinstein delivered two checks totaling

$4,003,288.50 to Plaintiff.
22.

Surprisingly, and contrary to Section 2.2 of the CSA, Weinstein requested at the time of
delivering the checks that Plaintiff not deposit the checks, since he was still waiting for

4
PHILl 736103-1

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 11of 41

funds to be deposited into the account (on which the checks were written) by one of his
investors. Absent said deposit, there would be insufficient funds to honor the checks.
23.

In April 2007, Weinstein advised Plaintiff that he had received the expected wire from his investor,
and that the checks could be cashed.
24.

25.

The checks, however, were not honored.

Weinstein thereafter made numerous representations to Plaintiff that he would soon be in a


position to "make good" on the overdue payment of the Execution Funds.

26.

For example, Weinstein represented that he was waiting to receive funds from another investor in
another deal, that he intended to use that investor's funds to pay Plaintiff the balance of the
Execution Funds, and that he expected to receive the funds within a few days.

27.

When no such funds materialized, Weinstein then represented to Plaintiff that he would pay a
portion of the outstanding balance of the Execution Funds by borrowing against his personal line
of credit.
28.

29.

Weinstein, however, made no such payment to Plaintiff.

Following this series of broken promises, on April 30, 2007, Plaintiff sent Weinstein written notice
of default, as required under Section 7.2 of the CSA, for failure to pay the Execution Funds as
agreed. A true and correct copy of the notice of default is attached hereto as Exhibit "B," and is
incorporated by reference.
30.

That same day, April 30, 2007, Weinstein wired to Plaintiff the sum of

$1,000,000, as a partial payment on his overdue obligation to pay the Execution Funds.
31.

On or about May 9, 2007, Weinstein sent Plaintiff two checks, in the amount of

$500,000 each.

5
PHIL! 736103-l

Case 2:07-cv-02252-JG

32.

Document 1 Filed 06/04/07 Page 12 of 41

The following day, Weinstein instructed Plaintiff to deposit one of the $500,000 checks, assuring
Plaintiff that he had sufficient funds in his account to cover the check.

33.

On or about May 11, 2007, Plaintiff deposited one of the $500,000 checks, per Weinstein's
instructions, but it too was dishonored for insufficient funds.

34.

In response to Plaintiff s notice of default, and as an apparent excuse to explain his non-payment
of the Execution Funds, on May 18, 2007, Weinstein's attorney sent Plaintiff s attorney a letter,
claiming that one of Plaintiff s representatives "entered into an arrangement that mooted or cured
any alleged default on the part of Mr. Weinstein." A true and correct copy of this letter is
attached hereto as Exhibit "C," and is incorporated by reference.

35.

None of Plaintiff s representatives entered into any such "arrangement" with Weinstein and, in any
event, the CSA explicitly provides that any modification thereto must be in writing, signed by
both parties. See CSA at 8.4 (Ex. A).

36.

By response letter dated May 18, 2007, Plaintiff s counsel informed Weinstein's counsel that no
such "arrangement" was ever made, and reaffirmed that Weinstein was in default of the CSA.
A true and correct copy of this letter is attached hereto as Exhibit "D," and is incorporated
by reference.

37.

To date, Weinstein remains in default of the CSA, on account of, inter alia, his failure to pay
$3,003,288.50 of the Execution Funds.

38.

The CSA provides that "Time is of the essence of this Agreement, specifically including, without
limitation...all obligations and performance time periods of [Weinstein]." See CSA at 8.6
(Ex. A).

6
PHIL! 736103-1

Case 2:07-cv-02252-JG

39.

Document 1 Filed 06/04/07 Page 13 of 41

The CSA further provides that the prevailing party in any lawsuit brought in connection
therewith "shall be entitled to recover reasonable attorneys' fees, costs and expenses incurred in
such suit (or in the appeal of such suit)." See id. at 8.7.

COUNT I -BREACH OF CONTRACT


40.

The foregoing paragraphs are incorporated as if fully set forth herein.

41.

Weinstein and Plaintiff entered into the CSA.

42.

Plaintiff has satisfied and complied with all material terms and conditions of the

43.

As set forth above, Weinstein has materially breached the CSA by, inter alia,

CSA.

failing to remit all monies due Plaintiff.


44.

As a direct and proximate result of Weinstein's breaches, Plaintiff has suffered, and will continue
to suffer, damages, which include but are not limited to: (i) the $3,003,288.50 balance of the
Execution Funds; (ii) $2,500,000 payable under Section 2.l(c) of the CSA; (iii)
$8,625,000 payable under Section 2.l(d) of the CSA; (iv) the value of Plaintiff s 10% interest in
the JV LLC, pursuant to Section 3.2 of the CSA; (v) future sums needed to obtain the
necessary permits and approvals for the development of the Premises, payment of which was
Weinstein's responsibility under Section 6.2 of the CSA; and (vi) the value of Plaintiff s time
and effort related to performance under the CSA (collectively, the "Damages").
WHEREFORE, Plaintiff 700 North Delaware, LLC demands judgment in its favor and
against Defendant Eli Weinstein, in the amount of the Damages, together with interest, attorneys'
fees, costs and expenses of suit, and such other relief as this Court deems appropriate.

7
PHIL! 736103- 1

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 14 of 41

COUNT II - DECLARATORY RELIEF


45.

The averments set forth above are incorporated as if set forth herein at length.

46.

Plaintiff requests a determination by this Court that:

Weinstein is in material breach of the CSA;

The CSA is deemed terminated and void, and shall have no further
effect;

Plaintiff shall have no further obligation to perform under the CSA;

The assignments effected pursuant to the CSA are deemed


terminated and void, and shall have no further effect;

All rights in and to the AOS have reverted to Plaintiff; and

Plaintiff is awarded the Damages set forth above.

WHEREFORE, Plaintiff 700 North Delaware, LLC seeks the entry of an Order
consistent with the relief stated herein.

KLEHR, HARRISON, HARVEY,


BRANZBURG & ELLERS LLP
Dated: June 4,
2007

vw

William R. Hinchman, Esquire


William T. Hill, Esquire
260 South Broad Street
Philadelphia, PA 19102
(215) 569-2796
Attorneys for Plaintiff, 700 North Delaware, LLC

8
PHIL! 736103-1

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 15 of 41

EXHIBIT

"A"

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 16 of 41

I 56450v8

CONTRIBUTION AND SALE AGREEMENT

BY AND BETWEEN

700 NORTH DELAWARE, LLC

("SELLER")
ANO

ELI WEINSTEIN
("PURCHASER")

REL\TING TO REAL PROPERTY


KNOWN AS

700 NORTH DELAWARE AVENUE


PHILADELPHIA, PENNSYLVANIA

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 17 of 41

Table of Contents

Article 1 CONTRIBUTION AND SALE...........................................................................................1


Art icle 2 CONSIDERATION........................................................................................................... 2
Article 3 CONCERNING THE JV LLC......................................................................................3
Article 4 DELIVERIES.......................................................................................................................4
Article

5 CLOSJNG ......................................................................................................................... S

Article 6 DEVELOPMENT PROCESS..............................................................................................5


Article 7 DEFAULT AND REMEDIES .........................................................................................6
Article 8 MISCELLA NEOUS............................................................................................................7

EXHIBIT A

Legal Description of Real Estate

EXHIBIT B

Development Documents EXHIBIT

Assignment and Assumption

EXHTBTT D

Reimbursable Costs and Expenses

EXHIBTT E

A mended Operating Agreement

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 18 of 41

CQNJRIBJJrT.PN AND SA LE AGREEMl NI


This Contribution and Sale Agreement (together will Exhibits hereto and as hereafter
amended, this "Agreement") is made and entered into as of 21st day of March, 2007, by and
between 700 NORTH DELAWARE, LLC, a Delaware limited liability company ("Seller") and
ELI WEINSTEIN, an individual ("Purchaser"). For purposes hereof, Seller and Purchaser shall
each be referred to individually as a "Party" and shall be collectively referred to as the "'Parties".

RECITALS
A. Seller is the current contract purchaser of certi1in real properly located in Phi ladelphia,
Pennsylvania, and more particularly described on Exhibit A attached hereto (the "Real
Property") pursuant to the terms of a certain Agreement of Sale dated January l , 2005 (as
thereafter amended, supplemented and assigned from time to time, the "RE AOS") between
Mount Corporation, Terminal Industrial Corp. and Plant Realty Co., Inc. (collectively, the
"Current Owner"), as Seller thereunder, and West Bank Realty, Inc., cl/b/a The Hoboken
Brownstone Company ("Hoboken Brownstone"), as Buyer thereunder. The Real Prope1ty
and all improvements, rights and other personal property related thereto and included in
the "Premises" as defined in and to be conveyed pursuant to the terms of the RE AOS shall
be referred to herein as the "Property".

B. The RE AOS was assigned by Hoboken Brownstone to Seller effective August 3, 2005, pursuant to
the terms of a certain Assignment Agreement between Hoboken Brownstone, as Assignor, and
Seller, as Assignee.
C. Seller has agreed to contribute and assign any and all of Seller's rights and interest in and to the R.E
AOS, together with any and all of Seller's rights and interest in and to the agreements, plans,
approvals, permits and other development documentation as listed on Exhibit B hereto
(collectively, "Development Documents") contracted for by Seller in connection with the
development of the Real Property as a mixed use commercial and residential development (the
"Development Project") to Purchaser's affiliate for the consideration and on the terms and
conditions set forth is this Agreement.
NOW THER.EFORE, the Par1ies, intending to be legally bound hereby, agree as follows:
ARTICLE l

CONTRIBUTION AND SALE

SECTION l .l Subject to the term and provisions of this Agreement, Seller agrees
to sell, contribute and assign to a newly formed Pennsylvania l imited l iability company (the
"JV LLC"), and Purchaser agrees to cause the JV LLC to purchase and assume from
Seller, all of Seller's rights and interest in and to the RE AOS and the Development
Documents (except as otherwise retained by Seller).

Case 2:07-cv-02252-JG Document 1 Filed 06/04/07 Page 19 of 41

SECTION l .2 Effective as of the Assignment Date (as defined below), Purchaser will
accept the assignment of all of Seller's rights and interest in and to the RE AOS and the
Development Documents, and Purchaser shall be entitled to all rights and benefits accruing
thereunder, and shall assume all obligations thereunder arising on or after the Assignment Date.
The assignment and assumption contemplated by this Section shalt be effected pursuant to an
Assignment and Assumption Agreement, the fc.m11 of which is attached hereto as .Exhibit C.
SECTION l .3 The assignment described herein shall be effected on the date of this
Agreement (such date shall be hereinafter be referred to as the "Assignment Date").
SECTION 1 .4 Purchaser shall cause the JV LLC to submit all information and to remit
all payments required to submitted or remitted to the Current Owner under the RE AOS to Seller,
and Seller hereby covenants and agrees to rem it and submit the same to the Current Owner.
SECTION 1.5 If Seller shall expend any funds in connection with curing a breach by
Purchaser under the RE AOS, or shall expend funds in connection with the Development Project
in excess of those deposited in accordance with Section 6.2 of this Agreement, Purchaser shall
reimburse Seller for such expenditure within thirty (30) days after such expenditure is made,
together with interest therein from the date expended by Seller until paid at a rate equal to 3% in
excess of the rate announced by Wachovia Bank from time to time as its "prime rate".
ARTICLE 2
CONSIDERATION
SECTION 2.1 The consideration for the Assignment provided herein shall be
following amounts, payable as follows:

the

(a) On the Assignment Date, Purchaser shall (or shall cause the JV LLC to) rem it to Seller an amount
equal to Two Million Five Hundred Thousand Dollars ($2,500,000).
(b) On the Assignment Date, Purchaser shall (or shall cause the JV LLC to) rem it to Seller an amount
equal to the sum of all documented expenditures, costs and liabilities made or incurred by Seller
in connection with the Development Project, as specifically set forth on Exhibit D.
(c) On the date that is the earliest of the (i) Closing Date (as hereinafter defined), (ii) December 31, 2007,

or thirty (30) days following Purchaser's receipt of zoning pem1it and site plan approval for the
Development (hereafter referred to as the "L&J Permit"), Purchaser shall (or shall cause the JV
LLC to) remit to Seller an additional amount equal to Two Million Five Hundred Thousand Dollars
($2,500,000).
(d) At Closing, Purchaser shall (or shall cause the JV LLC to) pay to Seller the amount by which the
Purchase Price of $37,500,000 payable under the RE AOS is discounted or otherwise reduced
as a result of negotiations between Seller and Current Owner (the "Discount Consideration"),
Purchaser hereby acknowledging and authorizing Seller to seek such reduction in such
Purchase Price in Seller's sole discretion.
(e) At Closing (as hereinafter defined), Purchaser shall convey to Seller a ten percent (I 0%) interest in
the JV LLC.

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 20 of 41

SECTlON 2.2 Al l payments required hereunder shall be made by wire transfer of


immediately available funds to an account designated by Seller.
SECTION 2.3 Seller and Purchaser intend that the transactions contemplated by t his
Agreement will be treated for federal income tax purposes as (a) a sale of the Seller's interest
in the RE AOS in exchange for Five Million Dollars ($5,000,000) plus the Discount
Consideration in cash, pursuant to Section 707 of the Internal Revenue Code of 1986, as
amended (the "Code"),
(b) a tax-free contribution of an amount equal to the value of Seller's interest in the JV LLC
(which the parties hereby agree to be $I 00) pursuant to Section 72 l of the Code, and (c) a
reimbursement of pre-formation expenses pursuant to Treasury Regulation 707-4(d). Seller and
Purchaser agree to file their respective federal, state and local tax returns, and agree to cause the
fV LLC to tile its federal, state and local tax returns, in a manner consistent with such treatment.
ARTICLE 3
CONCERNING THE JV LLC
SECTION 3.1 Prior to the Assignment Date, Purchaser shall form the JV LLC. The N
LLC shall be a bankruptcy-remote, special purpose entity, the sole purpose of which shall be the
acquisition, ownership, improvement and operation of the Property and the performance of the
Development Project.
Section 3.2 At Closing the parties shall execute and deliver an amended operating
agreement for the JV LLC in the form attached hereto as Exhibit E. The Parties agree that the
Amended Operating Agreement shall include the following provisions:
(a)

management of the JV LLC shall be vested in Purchaser or its designated

manager;
(b)

Seller shall have no obligation to make any capital contributions:

(c) distributions shall be made as follows: (i) first, to pay to Purchaser any accrued "Preferred
Return"; (ii) second, to Purchaser as a return of Purchaser's capital; and (iii) last, 10% to Seller
and 90% to Purchaser; provided however, that the N LLC shall distribute annually to each
member an amount sufficient to pay such member's tax liability for its allocable share of the
JV LLC' s net taxable income;
(d) The JV LLC shall not enter into any agreement for the leasing, sale, operation or development of the
Property with any Affiliates (other than for agreements relating to the management of the JV
LLC and the development of the Development Project, the foes for which shall not, in the
aggregate, exceed three percent (3%) of the total costs of the Development Project) except (i)
upon terms and conditions that are substantially the same as those that would be included in an
agreement with a party that is not an Affiliate, and (ii) except with Seller's prior written consent;
{e) Any principal or interest paid on account of a loan that is not made by an
institutional lender on arms-length tem1s and any fees paid to Purchaser or its Affiliates in excess
of three percent (3%) of the total costs of the Development Project shall constih1te distributions
on account of the return of Purchaser's capital;

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 21 of 41

{f)
the Parties shall be prohibited from transferring any portion of their
interests, and each member shall indemnify the other against any realty transfer tax that may
be payable as a result of any transfer;
{g) the Amended Operating Agreement may not be amended without

the

unanimous written approval of all members.


SECTION 3.3 For purposes of this Section and the Amended Operating Agreement,
the following terms shall have the following meanings:
(a) "Affiliate" shall mean with respect to any party, any other person, firm or entity (a) that directly or

indirectly owns or is owned by such party in whole or in part; {b) that, directly or indirectly,
controls or is controlled by such pa1ty; {c) that is the parent or subsidiary of such party; (d) in
which such party has any interest, direct or indirect, whatsoever, except as creditor; or (e)
from which such party receives or shall receive any remuneration directly or indirectly.

(b) "Preferred Return'' shall mean a return of eight percent

(8%) per annum on Purchaser' s


unreturned capital. Any distribution other than a distribution of the Preferred Return shall
constitute a return of capital.

(c) The terms of the Amended Operating Agreement shall be controlling as to the rights and interests

of its members in the JV LLC. In the event of any conflict between this Agreement and the
Amended Operating Agreement, the Amended Operating Agreement will control.
SECTION 3.4 During the period between the Assignment Date and the Closing Date,
Purchaser shall not cause or permit the JV LLC to do any of the following:

tem1inatc or amend the RE AOS;


(b)

sell, assign, pledge or otherwise transfer any interest in the JV LLC;

(c)

admit any new member; or


(d)

amend its operating agreement or


certificate of formation. ARTICLE 4
DELIVERIES

SECTION 4.1 Seller has delivered to Purchaser copies of the following items, in each
case to the extent the same are currently in Seller's possession or reasonable control (the
"Deliveries"):
(a) any licenses and permits with respect to the ownership and operation of the Property previously
provided to Seller by the Current Owner or otherwise previously obtained by Seller, including,
but not limited to, zoning letters, certificates of occupancy, building permits, letters or
applications regarding water, waste water, or sewage capacities, building pcm1its, site plan

approvals, and platting applications or approvals;

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 22 of 41

(b) the ad valorem property tax statement with respect to the Property for calendar years 2005 and 2006;

thereof); and

(c)

all environmental and soils reports pertaining to the Property;

(d)

the RE AOS (including all amendments thereto and assignments

(e) the Development Agreement between the Company and Northern Liberties Neighborhood Association
and any other agreements pertaining to the Development Project.

SECTION 4.2 Purchaser acknowledges that other than as may be expressly set forth
herein , Seller has not made and does not make any representation or warranty regarding the truth,
accuracy or completeness of the Deliveries or the sources thereof, and Seller has not undertaken
any independent investigation as to the truth, accuracy or completeness of the Deliveries. In the
event this Agreement terminates for any reason prior to the Closing Date, Purchaser shall return
to Seller all copies and/or originals of all documents, tiles and records previously delivered to
Purchaser by Seller or the Current Owner pursuant Lo this Agreement or otherwise in connection
with the transaction contemplated herein, including the Deliveries.
ARTICLE 5
CLOSING
The consummation of the conveyance of the Property ("Closing") shall take place on the
date (the "Closing Date") that is the earlier to occur of (i) the date that is thirty (30) days
following Purchaser' s receipt of the L&l Permit, or (ii) the closing date set forth in the RE AOS.
Closing shall take place at the location required for Closing pursuant to the RE AOS or at such
other place as the Parties may mutually agree in writing. Purchaser or the JV LLC shall remit to
the Current Owner at Closing, all sums required under the RE AOS, and shall simultaneously
remit to Seller the Discount Consideration.
ARTICLE 6
DEVELOPMENT PROCESS
SECTION 6.1 Purchaser hereby delegates (and shall cause the JV LLC to delegate) to
Seller all rights and powers necessary and/or desirable to proceed with the Development Project
and to obtain the L&I Penn it.
SECTION 6.2 To implement the foregoing, the Parties agree as follows:
(a) On the Assignment Date, Purchaser shall deposit (or shall cause the JV LLC to deposit) with
Seller, the sum of Three Hundred Thousand Dollars ($300,000) (the "Development Escrow"),
representing the Parties' good faith estimate of development costs of the Development Project
for four (4) months. The foregoing funds shall be used exclusively to fund the development
costs of the Development Project, and may include an expediting fee payable to White Acre
Equities in a reasonable amount to be agreed to by Seller and Purchaser. Seller shall establish
and maintain a separate account for the Development Escrow in a financial
5

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 23 of 41

institution. Seller shall provide Purchaser with a monthly statement of the Development Escrow,
including copies of invoices or other evidence of expenditures for services paid from the
Development Escrow.
(b) Purchaser shall replenish (or shall cause the JV LLC to replenish) the Development Escrow to a

balance of One Hundred Thousand Dollars ($100,000) when the balance of the Development
Escrow reaches Ten Thousand Dollars ($10,000).
(c) Purchaser shall have no obligation to fund the Development Escrow after Closing and any funds
remaining in the Development Escrow on the Closing Date shall be paid or otherwise credited to
Purchaser or the JV LLC at Closing.
ARTICLE 7

DEFAULT AND REMEDIES


SECTION 7.1 If Purchaser shall default in any of its obligations under the RE AOS,
Seller shall have the right, but not the obligation, to cure such default by the payment and/or
performance of such obligations, and Purchaser shall promptly reimburse Seller in accordance
with Section 1.4 hereof.
SECTION 7.2 If Purchaser shall default in any of its obligations hereunder, Seller
may proceed against Purchaser for its actual damages or for specific performance. If such
default constitutes (or would, with the giving of notice, the passage of time, or both, be) a
default under the R.E AOS, and if Seller chooses to proceed for damages, this Agreement
shall be tem1inated and of no further force or effect, and the assignments of the RE AOS
and the Development Documents effected pursuant to this Agreement shall be deemed
terminated and void, and all rights under the RE AOS and the Development Documents shall
revert to Seller. Prior to taking any such remedy, Seller shall afford Purchaser an opportunity
to cure such default, which shall consist of a cure period that' is the shorter of (i) 15 days after
notice from Seller of the default, or (ii) the period afforded to !he buyer under the RE AOS for
such default or breach.
SECTION 7.3 If Seller shall default in its obligations to effect the assignments
contemplated by this Agreement, Purchaser may proceed against Seller for its actual damages or
for specific performance.
SECTION 7.4 I n the event that following a default by Purchaser and the termination
and reversion of rights set forth above, Purchaser and/or any of its Affiliates may not negotiate
the purchase of the Property or an interest therein with the Current Owner. I f following such
default and reversion, Seller defaults under the RE AOS, then, no earlier than two (2) years after
the date of the occurrence of Purchaser's default, Purchaser and/or its Affiliates may negotiate
with the Current Owner (or its successor or assign) to purchase the Property or an interest therein.
Purchaser acknowledges that damages to Seller resulting from a breach of this provision will be
difficult, if not impossible, to compute. Therefore, Purchaser agrees that it shall hold (or cause its
Affiliates to hold) the Property or any interest therein purchased in violation of this provision in
trust for Seller, and Seller may purchase the Property or such interests from Purchaser and/or its
Affiliates, at any time, thereafter, for One Hundred Dollars ($100).

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 24 of 41

ARTICLE 8
MISCELLANEOUS
SECTION 8.1 All notices, demands, or other communications of any type (herein
collectively referred to as "Notices") given by Sellers to Purchaser or by Purchaser to Sellers,
whether required by this Agreement or in any way related to the transact ion contracted for
herein, shall be void and of no effect unless given in accordance with the provisions of this
Article 13 (provided, failure to send a copy of the Notice to the person designated below as
entitled to receive a copy of the Notice shall not render the Notice void or ineffective. though
both pa1tics hereto agree to use their reasonable efforts to provide copies of such notices as
provided below). Any or the Notices may be delivered by the parties hereto or by their
respective attorneys. All Notices shall be in writing and shall be effective when forwarded via
facsimile transmission to the fax numbers indicated below or via electronic transmission (email) to the e-mail addresses indicated below (provided if the fax or e-mail is received by the
addressee, as evidenced by the fax confirmation or e-mail confirmation of the addressee, after
5:00 p.m. on the day the fax or e mail is sent, such Notice shall be deemed effective on the
next business day), when person ally delivered, or three (J) business days after being deposited
in an official United States Postal Service Office or branch or official deposito1y maintained
by the United States Postal Service, by certified or registered mail, postage prepaid, return
receipt requested, addressed as follows:
IF TO SELLERS:
885 Second Avenue
34111 Floor
New York, NY 10017
Attention:
Leon Silvera
Telephone:
2 12-6193700
Facsimile:
212-619-8062
E-mail:
leon@surrev quities. com

885 Second Avenue


1
34 " Floor
New York, NY l 0017
Attention:
Jacob Frydman
Telephone:
212-732-3900
Facsimi
2 12-732-0300
le: E-mail:
frvdrnan(l'.il.waeguiti_i.com
WITH A COPY TO:
Greenberg Traurig, LLP
2700 Two Commerce
Square 200 I Market Street
Philadelphia, PA 19103
Attention:
Rachel Kipnes, Esquire
Telephone:
215-988-7819
Facsimile:
2 15-717-5243
E-mail:
k ipnesr@gtlaw.com
7

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 25 of 41

IF TO PURCHASER:

805 Cross Street, Building 2


Lakewood, NJ 0870 I
Attention:
Eli Weinstein
Telephone:
732-370-332
l

Facsimile:
Email:

732-370-881 l
eli0870 l@gmail.com

WITH A COPY TO:


Fox Rothschild

LLP

997 Lenox Drive


Lawrenceville, NJ 08648
Attention:
Anthony Argiropoulos, Esquire
Telephone:
609-896-3600
Facsimile:
609-896-1469
Email:
aargiropoulos@foxrothschild.com
Either party hereto may change the address for notice specified above by giving the other party
ten ( I 0) days advance written notice of such change of address.
SECTION 8.2 This Agreement may not be assigned by Purchaser without Seller's
express prior writ1en consent, which may be withheld in Sellers' sole discretion . Any such
permitted assignment will be effective only upon assignee's written assumption of all of
Purchaser's obligations and duties hereunder. No such assignment by Purchaser shall release the
Purchaser named herein from the liabilities, duties, obligations, covenants, and agreements of
Purchaser under this Agreement.

SECTION 8.3 This Agreement shall be construed and interpreted in accordance with
the laws of the Commonwealth of Pennsylvania and the obligations of the parties hereto are and
shall be performable in the county in which the Property is located. Where required for proper
interpretation, words in the singular shall include the plural; the masculine gender shall include
the neuter and the feminine, and vice versa. The terms "heirs, executors, administrators and
assigns" shall include "successors, legal representatives and assigns."
SECTION 8.4 This Agreement may not be modified or amended,
agreement in writing signed by Seller and Purchaser.

except by

an

SECTION 8.5 Each person executing this Agreement warrants and represents that he is
fully authorized lo do so.
SECTION 8.6
Time is of the essence of this Agreement, specifically including,
without I imitation, with respect to all obl igations and performance time periods of Purchaser.

SECTION 8.7 In the event it becomes necessary for either Party hereto to file a suit to
enforce this Agreement or any provisions contained herein, the Party prevailing in such action
shall be entitled to recover reasonable attorneys' fees, costs and expenses incurred in such suit (or
in the appeal of such suit).

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 26 of 41

SECTION 8.8 The descriptive headings of the several Articles, Sections and Paragraphs
contained i n this Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
SECTION 8.9 This Agreement, including the Exhibits hereto, constitutes the entire
agreement between the Parties pertaining to the subject matter hereof and supersedes all prior
and contemporaneous agreements and understandings of the Parties in connection herewith.
No representation, warranty, covenant, agreement or condition not expressed in this Agreement
shall be binding upon the parties hereto or shall affect or be effective to interpret, change or
restrict the provisions of this Agreement.
SECTION 8.10 Numerous counterparts of this Agreement may have been executed by
the parties hereto. Each such executed counterpart shall have the full force and effect of an
original executed instrument.
SECTION 8. 1 1 Unless expressly provided for herein, the representations, warranties,
covenants, or conditions contained in this Agreement shall not survive the Closing.
SECTION 8.12 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, legal representatives, successors, and pem1itted
assigns.
SECTION 8.13 If any date of performance hereunder falls on a Saturday, Sunday, or
legal holiday in the Commonwealth of Pennsylvania, such date of performance shall be
deferred to the next day which is not a Saturday, Sunday, or legal holiday in the
Commonwealth of Pennsylvania. A "business day" shall be any day that is not a Saturday,
Sunday or a legal holiday in the Commonwealth of Pennsylvania.
SECTJON 8.14 In case any one or more or the provisions contained in this Agreement
shall for any reason be held lo be invalid, illegal, or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other
provisions hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision is severed and deleted from this Agreement; provided, however, if
such invalid, illegal or unenforceable provision has the effect of diluting or hindering the
economic benefit to Sellers of this Agreement, then Sellers shall have the right to terminate
this Agreement at any time upon notice within fifteen (15) days of Sellers' receipt of actual
knowledge thereof

case 2:07-cv-02252-JG Document 1 Filed 06/04/07 Page 27 of 41

EXECUT.ED on this the

>la r 2 2007

F ax:609896l4fi9

day of

P.20

15: 2

..; 2007, by Seller.

700 NORTH.DELAWARE, L
a

Delaware limited liability

By:

700 PHILLY, LLC


By:.

Name:
Title:

-1-- --

Jacob Frydman

Managing Member

By: HBC NOR'IH DELAWARE

COMPANY, L.L.C.

By:.
Na.me:

HOLD ING

- -

Title;

EXECUTED On this the 2nd day of March 2007, by Purchaser.


.Purchaser:

..., .,, :._:c.::::,.;.;

ELI WEINSTEIN
JOINDER: For purposes of being legally bound
by those provisions concerning the JV LLC:
700 NORTH DELAWARE DEVELOPMENTGROUP,LLC

By.

Name: Eli Weinstein

Title: Managing Member

Corluibuoon ,rid SJ!lc Ai;rc,,mem -slgn:,tart;

SD3C'Ocld 3Nld

---- -------

=-=---J..

Case 2:07-cv-02252-JG Document 1 Filed 06/04/07 Page 28 of 41

EXECUTED

on this the .. 21

_ day of

MAR

' 2007, by Seller.

700 NORTH DELA WARE, LLC,


a Delaware limited liability company

By:

By:

HBC NORTH DELA WARE HOLDfNG


COMPANY, L.L.C.
By:
_
Name: George Vallone
Title: Managing Member

EXECUTED on this the ......------ day of -------' 2007, by Purchaser.


PURCHASER:

ELI WEINSTEIN
JOINDER: For purposes of being legally bound
by those provisions concerning the JV LLC:
700 NORTH DELAWARE DEVELOPMENT GROUP, LLC

By:

Name: Eli Weinstein


Title: Managing Member

Co111rib111ion and Sale Agrcemcni - Sig_natur(; P:ig


PHI 316156550v8 3121200 7

Case 2:07-cv-02252-JG

EXECUTED on

Document 1 Filed 06/04/07 Page 29 of 41

this the

day of

_._, 2007, by Seller.


SELLER:

700 NORTH DELAWARE, LLC,


a Delaware limited liability company
By:

700 PHILLY, LLC


By:
Name: Jacob Frydman
Title: Managing Member

By:

EXECUTED on

this the

day of

HBC NORTH DELAWARE HOLDING


rl, L.L.C.
Name: George Vallone
Title:

, 2007, by Purchaser.
PURCHASER:

ELI WEINSTEIN
JOINDER: For purposes of being legally bound
by those provisions concerning the N LLC:
700 NORTH DELAWARE DEVELOPMENT GROUP, LLC
By:
Name: Eli Weinstein
Title: Managing Member

__

Conlribution and Sak Agreement - SifJlalur f'age

Pl-// 316156550v8 312/2007

__

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 30 of 41

15813Sv2

SIDE AGREEMENT
st

This Agreement is made this 21 day March 2007, by and between 700 NORTH DELAWARE,
LLC ("Assignor") and ELI WEINSTElN (''Weinstein").
RECITALS
A.

By Assignment And Assumption Agreement of even date herewith (the "Assignment"), Assignor is
assigning or has assigned to 700 North Delaware Development Group, L.P. ("Assignee") Assignor's
right, title and interest in and to a certain Agreement of Sale dated January I , 2005, relating to real
property in Philadelphia, Pennsylvania {the "Agreement").

B.

The Assignment will be or was entered into pursuant to a Contribution and Sale Agreement dated March
21, 2007, by and between Assignor and Weinstein (the "Contribution
Agreement"). All capitalized terms used herein and not otherwise defined shall have the meanings given
to them in the Contribution Agreement.

C.

Under the terms of the Assignment, Assignor has retained certain rights under the Agreement,
including the right to negotiate with the Current Owners concerning a reduction in the purchase
price to be paid under the Agreement.

D.

Assignor has agreed to pay to Weinstein or his affiliated entity a brokerage and finder's fee of $2.250,000
(the "Professional Fee") upon the execution and delivery of the Contribution Agreement andl to include
and schedule such fee as a "Cost and Expense" of the Development Project on
_Exhibit D to the Contribution Agreement (the ';Schedule").
NOW THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
1. On the Assignment Date, Assignor will pay the Professional Fee to Weinstein , but such
Professional Fee is due and payable only if and on the condition that the Contribution Agreement be
executed by Weinstein and delivered to Assignor, together with all payments and reimbursements due
thereunder. Assignor hereby authorizes Weinstein to make such payments to Assignor net of the
Professional Fee. Weinstein hereby acknowledges that the Professional Fee is being included on the
Schedule at Weinstein's request.

2.

On the Closing Date, Assignor will pay to Weinstein twenty-five percent (25%) of the Discount
Consideration.

3.

In the event that Assignee fails to close under Agreement, then, on the business day following the date on
which Assignee was required to close under the Agreement, Weinstein shall reimburse half of the
Professional Fee and shall pay such sum ($ l , 125,000) to Assignor as liquidated damages for Assignee's
failure to proceed to Closing. The forgoing obligation shall be a personal obligation of Weinstein and may
not be delegated or assigned by Weinstein to any other person or entity.

Pl-II 316158238v2 314/ 2007

Case 2:07-cv-02252-JG Document 1 Filed 06/04/07 Page 31 of 41

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ASSIGNOR:
700 NORTH DELA WARE, LLC, a Delaware
limited liability company
By:

700 PHILLY,
By: _
Name: Jacob
Title: Mangaing

By:

HBC NORTH DELAWARE HOLDING


COMPANY, L.L.C.
By:
Name: George Vallone
Title: Managing Member

700 NORTH DELAWARE DEVELOPMENT


GROUP,
company LLC, a Pennsylvania limited liability

.....

By:_

..----------- ---

Name:
----------Title:
Manager

PHI 316157602!/1 2126/2007

...

.....

__

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 32 of 41

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
ASSIGNOR:

700 NORTH DELAWARE, LLC, a Delaware


limited liability company
By:

700 PHILLY, LLC

By:

Name: Jacob Frydman


Title: Managing Member

By:

HBC NORTH DELAWARE


HOLDING COMPANY , , L.L.C.
By:
Name: George Vallone
Title: Managing Member

700 NORTH DELAWARE DEVELOPMENT


GROUP, LLC, a Pennsylvania limited liability
company
By:
Name:
Title: Manager

- -

case 2:07-cv-02252-JG Document 1 Filed 06/04/07 Page 33


of 41

lia r 2 2007

Fax:6098!161469

15: 0

P. 06

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day

And year first above written.

ASSIGNOR:

700 NORTH DELAWARE, LLC, a


Delaware
limited liability company

By:

700 PH!I..LY, LLC


By.

1--

Name: Jacob Frydman

Title: Managing Member

By:
B.
Name:

---+-

Title:

700 NORTH DELAWARE D

LOPMENT

GR.OUl', LLC, a Pennsylvania limited


liability company
By:

Name:

_..,.
, .1:

Title: Manager

EXHIBIT

"B"

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 35 of 41

700 NORTH DELAWARE, LLC


885 Second.Avenue, 341h Floor
New York, New York 1001.7
April 30, 2007
VIA EMAIL AND FEDEX [eli0870l@gmaiJ.com)
Mr. Eli Weinstein
805 Cross Street, Building 2
Lakewood, NJ 08701
Re:

Contribution and Sale Agreement dated March 21,

2007 Dear Eli:


This letter will constitute notice from 700 North Delaware, LLC of your default, in your
capacity as purchaser, under that certain Contribution and Sale Agreement dated March 21, 2007
(the "Agreement"), and entered into in connection with the real property known as 700 North
Delaware LLC (the "Property"), located in Philadelphia, Pennsylvania.
[n particular, your failure to make the deposit and reimbursement payments due under the
Agreement (as a result of the dishonor of your checks) in the aggregate amount of $4,003,288.50
constitutes a default under the Agreement. Therefore, by this letter, we demand payment of that
sum. ln addition, we reserve all of our rights.
We appreciate your prompt attention to this matter.

Very truly yours,

cc:

Anthony Argiropoulos, Esquire


Rachel Kipnes, Esquire (via

email)

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 36 of 41

EXHIBIT

"C"

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 37 of 41

05/18/2007 13:47 FAX SOS 898 1469

FOX ROTHSCHIL D

la] 002/003

Fox Rothschild

LLr

ATIOflN!YS AT LAW

Moll: P.O. 8ox 5231, Prin:eton, NJ 08543 5231

P11nceto11 Pil<e Cofporate Center


997 Lenox. Drive, Bulldln1.3
LoWrencevillf!,NJ 08648 23ll
Tel 609.U6.3600 Fax (09.896.1<!69
w11w.lu,.,vtM<.h1lrJ.(.om

Anthony Argfropou 101,


Dfroct Dial: (609) 1295-6702
Email Address: ae1g'iropoulos@foxxoth,;c:hild.com

May 18, 2007

YJA FACSIMT,E - (21 5) 988-7801


Rachel Kipnes Esquire
Greenberg Traurig LLP
2001 Market S t eet
Suite 2700
Philadelphia, PA 19103
Re:

700 Delaware Avenue North


Philadelphia P = A - -

Dear Ms. Kipnes:


I am writing to confirm what my client Eli Weinstein has already confirmed with Leon
Silvera, specifically that he and Mr. Silvera had entered into an arrangement that mooted
or cured any alleged default on the part of Mr. Weinstein. To the extent that any notice of
default may have been issued by 700 North Delaware Avenue, LLC or any member(s)
thereof, such notice is rejected.

Mr. Weinstein respectfully suggest that 700 North Delaware, LLC and its respective
members have an open discussion concerning this matter in order to resolve any confusion or
miscommunication between 1.hem.
In addition, my office has independently obtained some rather distressing information
concerning the status of zoning approval for the development project. I understand that at
an appearance before Philadelphia 's Zoning Board of Adjustment on Wednesday, May
16, the Planning Commission withdrew its support for the project and a person
representing himself as an "owner" disrupted the proceedings insulted the chairman
of the Zoning Board of Adjust ment and publicly stated that he had no obligation to
provide parking at the project and publicly st at ed that he wou ld change his plans to
remove parking facilities at the project. Since this is a rather large condominium project,
that threat does not make

New York

Case 2:07-cv-02252-JG
05/18/2007 13:47 FAX 608 896 1469

Document 1 Filed 06/04/07 Page 38 of 41


FOX BOTHSCHILO

@003/003

Fox Rothschild
ATrDAN YS

LLP

AT LAY/

Rachel Kipnes, Esquire


May 18, 2007
Page 2
sense and frankly, since these statements were made in the public hearing, it is rather
distressing to Mr. Weinstein.
Please provide me with an update as to where matte1s stand with respect to the
development projects zoning approvals and explain what happened at Wednesday's
appearance before the Zoning Board Adjustment.

AA:hp

cc:

Edward Friedmann, Esquire


Eli Weinstein

L V I 483997v I 05/U!lt'/

Case 2:07-cv-02252-JG

Document 1 Filed 06/04/07 Page 39 of 41

EXHIBIT
D

Case 2:07-cv-02252-JG Document 1 Filed 06/04/07 Page 40 of 41

Greenberg
Traurig
Rachel Kipnes
Tel. 215.988.7819
Fax 215.988.7601
KipnesR@gUaw.com

May 18, 2007

VlA EMAIL AND FEDEX


,\ til ,M'f

Anthony Argiropoulos, Esquire


Fox Rothschild LLP
Princeton Pike Corporate Center
997 Lenox Drive, Bt1ilding 3
Lawrenceville, NJ 08648

,,rll,!,:r:,

I (',.:...-....-:. ;-

Re:
700 North Delaware
Avenue

1I
f,\,.l,.U,f,S

Dear Anthony:
I am writing in response to your May 1 8, 2007 letter, and on the basis of conversations
with my client, 700 North Delaware LLC (the "Seller") concerning the statements you made
in that letter.
First, there is no agreement between Mr. Weinstein and Mr. Silvera that cures or otherwise
moots Mr. Weinstein' s defaults under the Contribution and Assignment Agreement
(the "Agreement"). The fact remains that M r. Weinstein has failed to pay the amounts owed under
the Agreement in consideration for the Seller's delivery of assignment documents, and that failu

re to pay has been compounded by Mr. Weinstein' s repeated promises to make good, none of
which has yet been fulfilled.

H)P.7

:;.u,,";;:.\i'.

t(HJ\.T(I'.,

J t /,\ 1S(,;,::O

j :;.1 ft:R,f
lf.:

! ,..:::..:- :
, ,: ..: -

Second, your letter contains unfounded accusations concerning the behavior of the Seller in
its dealings with the Philadel phia Zoning Board of Adjustment. The facts simply do not support
your statements. Furthermore, we believe that any accusation such as this is a misguided attempt to
divert attention from Mr. Weinstein 's misbehavior. In fact, we have been told that your client has
been involved in a number of transactions in which he has been accused of behaviors identical
to those that have caused the current default - that is, failure to pay timely his obligations
and submission of checks that will not be honored. We are also aware that Mr. Weinstein is
involved i n one or more lawsuits alleging serious misdoings on his part in connection with
real estate
transactions.

t j(. ,.:.

....... 1

Pli/ 316205832v-/
Gf.:i:iibc,,J TrJ:Jiig. ( LP I A toroy :,1. I.aw 1

2:;roo Tvvo Ct)rnmirr.E: Sq1are I ;:<Xt'! :,1<td ,1. Stn:,:H ) Phi!


a0.::\p!1i::t p,; Y 03 Tt;i ?15.9-'38./H(;o I F ;.; ?.. i}.988.780 1

v:. v. .g :. t,1Y,.f.'vn,
1

Anthony Argiropoulos, Esquire


May 18, 2007
Page 2

ln short, 700 North Delaware, LLC reiterates that your client, Eli Weinstein, is in default of his
obligations under the Contribution and Sale Agreement and continues owe the Seller
$3,003,288.50. Until all remaining sums are paid, Mr. Weinstein should not consider himself to be the owner
of the rights to purchase the Property (as defined in the Agreement). ln addition, the Seller reserves all of
its rights, in law and in equity, including the right to terminate the Agreement.
Very truly yours,
Rachel Kipnes
RK!lsl
cc:

Jacob Frydman, via email


Leon Silvera, via email
Edward Friedman (via Facsim ile - 323-653-302 I )

IN THE U.S.DISTRICT
COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
700 NORTH DELAWARE, LLC
2711Centerville Ro Ste.400

Wilmington, Delaware

vs.

CIVJL ACTION NO. 07-2252

ELI WEINSTEIN
805 Cross Street, Building 2
Lakewood, New Jersey
Defendant.
CONSENT JUDGMENT
WHEREAS

Plaintiff

700

North

Delaware,

LLC

and

Defendant

Eli

Weinstein (collectively, the Parties) have entered into a Settlement Agreement


("Agreement) a true and correct copy of which is attached hereto);

WHEREAS Pursuant to 1he Agreement the Parties have stipulated. and agreed to
the
entry of a consent Judgment by the Court, in favor of 700 North Delaware, LLC and

against

Eli Weinstein upon the occurrence of a Default (as that term is defined in the Agreement);
WHEREAS upon consideration of the Certification (the "Certification of 700
North Delaware, LLC to the Court of the occurrence of a Default, and for good cause

shown, it is hereby:
ORDERED that Judgment shall be and hereby is entered in favor of 700 North

Delaware, LLC and against Eli Weinstein in 1heamount of $ 7,500,000 consisting of the
sum of $8,000,000 less any payments previously made by Eli Weinstein to 700 North

case 2:07-cv-02252-JG _ Document 42 Filed 08/05/08 Page 2 of 2

05/0S/200B 20:47

000-000-0000

Delaware, LLC in accordance with the Certification, with interest to

PAGE 01/02

accrue from the date the Parties sign this Consent Judgment, at the
statutory post judgment rate, and seasonable costs of collection.

The Parties hereby consent to the form and substances of the


above Consent Judgment. The Parties further agree that this Honorable
Court may record the Consent Judgment upon the occurrence of a
Default.

Eli Weinstein