FILED: KINGS COUNTY CLERK 03/14/ :44 PM INDEX NO /2016 NYSCEF DOC. NO. 4 RECEIVED NYSCEF: 03/14/2016

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1 FILED: KINGS COUNTY CLERK 03/14/ :44 PM INDEX NO /2016 NYSCEF DOC. NO. 4 RECEIVED NYSCEF: 03/14/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS THE FOXSTONE GROUP, LLC and VODA BAUER REAL ESTATE LLC, Plaintiffs, Index No.: /2016 THIRD PARTY SUMMONS - against - CALVARY PENTECOSTAL CHURCH, INC., a/k/a CALVARY CATHEDRAL OF PRAISE, MARCUS ROBERTS, and JOHN DOES and JANE DOES 1-100, being persons whose identities are currently unknown to Plaintiffs, Defendants, CALVARY PENTECOSTAL CHURCH, INC, a/k/a CALVARY CATHEDRAL OF PRAISE, -against- Defendant/Counterclaim-Plaintiff, THE FOXSTONE GROUP, LLC and VODA BAUER REAL ESTATE LLC, Plaintiffs/Counterclaim-Defendants, JASON BAUER and ABRAHAM ZEIGERMAN, Counterclaim-Defendants. To the above-named Counterclaim Defendants Jason Bauer and Abraham Zeigerman: YOU ARE HEREBY SUMMONED to answer die Verified Complaint in this action and to serve a copy of your answer, or, if the Verified Complaint is not served with this summons, to serve a notice of appearance, on the plaintiffs' attorneys within (20) days after the service of this summons, exclusive of the day of service; or within thirty (30) days after completion of service 1 of 24

2 made in any other manner than by personal delivery within the State. In case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the Verified Answer with Counterclaim and Third Party Complaint. Dated: New York, New York February 22, 2016 PRYQS1 P By: Eric D. Sherman Jared D. Newman 7 Times Square New York, New York (212) Attorneys for Defendant- Counterclaim Plaintiff To: Jason Bauer do Voda Bauer Real Estate LLC 196 East 75 th Street, Apt. 3B New York, New York Abraham Zeigerman cio The FoxStone Group, LLC 1053 East 2 nd Street Brooklyn, New York of 24

3 FILED: KINGS COUNTY CLERK 02/22/ :48 PM NYSCEF DOC. NO. 2 INDEX NO. S01142/2016- RECEIVED NYSCEF: 02/22/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS X THE FOXSTONE GROUP, LLC and VODA BAUER REAL ESTATE LLC, Index No / against - Plaintiffs, VERIFIED ANSWER WITH COUNTERCLAIM AND THIRD-PARTY COMPLAINT CALVARY PENTECOSTAL CHURCH, INC., a/k/a CALVARY CATHEDRAL OF PRAISE, MARCUS ROBERTS, and JOHN DOES and JANE DOES 1-100, being persons whose identities are currently unknown to Plaintiffs, Defendants. CALVARY PENTECOSTAL CHURCH, INC. a/k/a CALVARY CATHEDRAL OF PRAISE, -against- Defendant/Counterclaim-Plaintiff, THE FOXSTONE GROUP, LLC and VODA BAUER REAL ESTATE LLC, Plaintiffs/Counterclaim-Defendants, JASON BAUER and ABRAHAM ZEIGERMAN, Counterclaim-Defendants. X Defendant and Counterclaim-Plaintiff Calvary Pentecostal Church, Inc, a/k/a Calvary Cathedral of Praise ("Calvary") and Defendant Marcus Roberts ("Roberts" and with Calvary, collectively "Defendants") by their attorneys, Pryor Cashman LLP, as and for their Verified Answer and Counterclaim to the Verified Complaint' ("Complaint") of Plaintiffs/Counterclaim- Defendants submit this Answer without prejudice to Calvary's Motion to Dismiss, dated January 27, 2016, in The Foxstone Group, LLC and Voda Bauer Real Estate LLC v. Calvary Pentecostal Church. inc. a/k/a Calvary Cathedral 3 of 24

4 Defendants The FoxStone Group, LLC ("FoxStone") and Voda Bauer Real Estate LLC ("Voda" and with FoxStone, collectively "Plaintiffs"), allege as follows; 1. Object to the allegations contained in paragraph 1 of the Complaint because said paragraph violates the requirements of CPLR Rules 3014 and 3024 by failing to "consist of plain and concise statements" and be limited to "a single allegation" per paragraph; to the extent a response is required, deny the allegations contained in paragraph 1 of the Complaint. 2. Deny the allegations contained in paragraph 2 of the Complaint. 3, Object to the allegations contained in paragraph 3 of the Complaint because said paragraph violates the requirements of C.PLR Rules 3014 and 3024 by failing to "consist of plain and concise statements" and be limited to "a single allegation!' per paragraph; to the extent a response is required, deny the allegations contained in paragraph 3 of the Complaint. 4. Deny the allegations contained in paragraph 4 of the Complaint. 5. Deny knowledge or information sufficient to form a belief as to the allegations contained in paragraph 5 of the Complaint. 6. Deny knowledge or information sufficient to form a belief as to the allegations contained, in paragraph 6 of the Complaint. 7. Admit the allegations contained in paragraph 7 of the Complaint. 8. Admit the allegations contained in paragraph 8 of the Complaint. 9. Deny knowledge or information sufficient to form a belief as to the allegations contained in paragraph 9 of the Complaint. 10, Admit the allegations contained in paragraph 10 of the Complaint, of Praise, Index No, /2015, through which Calvary seeks to dismiss that action with prejudice and on the merits, including with respect to and as it applies to the instant Complaint, because Plaintiffs failed to timely serve a complaint pursuant to CPLR 3012(b) in response to Calvaty's Notice of Appearance and Demand for Complaint, dated December 23, of 24

5 11. Deny the allegations contained in paragraph 11 of the Complaint to the extent Plaintiffs purport to characterize the Mortgage and/or foreclosure action and the purported "default" identified in said paragraph 11, and respectfully refer the Court to those documents and proceedings, respectively, for a full and accurate recitation of their terms and contents. 12. Deny the allegations contained in paragraph 12 of the Complaint to the extent that Plaintiffs allege the parties entered into a joint venture, and otherwise admit the allegations contained in paragraph 12 of the Complaint. 13. Deny the allegations contained in paragraph 13 of the Complaint to the extent that Plaintiffs allege the parties entered into a joint venture, and otherwise admit that Calvary was proposed to serve as the limited partner and Plaintiffs as the general partner in the proposed joint venture. 14. Deny the allegations contained in paragraph 14 of the Complaint, and respectfully refer the Court to the non-binding letter of intent for a full and accurate recitation of its terms and content. 15. Object to the allegations contained in paragraph 15 of the Complaint because said paragraph violates the requirements of CPLR Rules 3014 and 3024 by failing to "consist of plain and concise statements" and be limited to "a single allegation" per paragraph; to the extent a response is required, deny the allegations contained in paragraph 15 of the Complaint as inaccurate and incomplete, and respectfully refer the Court to the non-binding letter of intent for a full and accurate recitation of its terms and content. 16. Object to the allegations contained in paragraph 16 of the Complaint because said paragraph violates the requirements of CPLR Rules 3014 and 3024 by failing to "consist of plain and concise statements" and be limited to "a single allegation" per paragraph; to the extent a 3 5 of 24

6 response is required, deny the allegations contained in paragraph 16 of the Complaint to the extent Plaintiffs purport to characterize the terms of the non-binding letter of intent referred to in this paragraph, and respectfully refer the Court to the non-binding letter of intent for a full and accurate recitation of its terms and content. 17. Deny the allegations contained in paragraph 17 of the Complaint to the extent Plaintiffs purport to characterize the terms of the non-binding letter of intent referred to in this paragraph, including with respect to the allegations that the "letter agreement" became binding, and respectfully refer the Court to the non-binding letter of intent for a full and accurate recitation of its terms and content. 18. Deny the allegations contained in paragraph 18 of the Complaint to the extent that Plaintiffs allege the "letter agreement" was binding or that Roberts, the Board or Calvary believed the "letter agreement" was binding, and otherwise admit the allegations contained in paragraph 18 of the Complaint. 19. Deny the allegations contained in paragraph 19 of the Complaint as inaccurate and incomplete, and respectfully refer the Court to the non-binding letter of intent for a full and accurate recitation of its terms and content. 20. Deny the allegations contained in paragraph 20 of the Complaint, and respectfully refer the Court to the non-binding letter of intent for a full and accurate recitation of its terms and content. 21. Deny the allegations contained in paragraph 21 of the Complaint. 22. Deny the allegations contained in paragraph 22 of the Complaint. 23. Deny the allegations contained in paragraph 23 of the Complaint, including that the "AG Petition" states the parties "agreed to the terms fa joint venture," as that petition states 4 6 of 24

7 no such thing, and respectfully refer the Court to the "AG Petition" for a full and accurate recitation of its terms and contents, which expressly states, among other things: (i) "In order to rescue its encumbered assets by paying off Foundation and putting an end to the ongoing foreclosure action, Petitioner [Calvary] is proposing to engage in a joint venture with a reputable and qualified real estate developer, the Developer [Plaintiffs], to develop the Subject Premises into a stabilized income-producing asset," and which repeatedly refers to the relationship as a "proposed joint venture." 24. Deny knowledge or information sufficient to form a belief as to the allegations contained in paragraph 24 of the Complaint. 25. Deny knowledge or information sufficient to form a belief as to the allegations contained in paragraph 25 of the Complaint. 26. Deny knowledge or information sufficient to form a belief as to the allegations contained in paragraph 26 of the Complaint. 27. Deny the allegations contained in paragraph 27 of the Complaint to the extent that Plaintiffs incorrectly allege that Plaintiffs acted in reliance, that the documents circulated reflected material terms or anything else customary or necessary to effectuate a joint venture, and respectfully refer the Court to the draft Operating Agreement, draft Contribution Agreement, and non-binding letter of intent identified in this paragraph for a full and accurate recitation of their terms and contents. 28, Deny the allegations contained in paragraph 28 of the Complaint. 29. Object to the. allegations contained in paragraph 29 of the Complaint because said paragraph violates the requirements of CPLR Rules 3014 and 3024 by failing to "consist of plain 5 7 of 24

8 and concise statements" and be limited to "a single allegation" per paragraph; to the extent a response is required, deny the allegations contained in paragraph 29 of the Complaint. 30. Deny the allegations contained in paragraph 30 of the Complaint, 31. Deny the allegations contained in paragraph 31 of the Complaint. 32. Object to the allegations contained in paragraph 32 of the Complaint because said paragraph violates the requirements of CPLR Rules 3014 and 3024 by failing to "consist of plain and concise statements" and be limited to "a single allegation" per paragraph; to the extent a response is required, deny the allegations contained in paragraph 32 of the Complaint. 33. Deny the allegations contained in paragraph 33 of the Complaint and respectfully refer the Court to the November 4, 2015 letter for a full and accurate recitation of its terms and contents. 34. Deny the allegations contained in paragraph 34 of the Complaint. 35. Deny the allegations contained in paragraph 35 of the Complaint. 36. Repeat and reallege each and every allegation above as if set forth fully herein. 37. Deny the allegations contained in paragraph 37 of the Complaint. 38. Deny the allegations contained in paragraph 38 of the Complaint. 39, Deny the allegations contained in paragraph 39 of the Complaint. 40. Deny the allegations contained in paragraph 40 of the Complaint. 41. Deny the allegations contained in paragraph 41 of the Complaint. 42. Deny the allegations contained in paragraph 42 of the Complaint. 43. Repeat and reallege each and every allegation above as if set forth fully herein. 44, Deny the allegations contained in paragraph 44 of the Complaint. 45. Deny the allegations contained in paragraph 45 of the Complaint. 6 8 of 24

9 46, Deny the allegations contained in paragraph 46 of the Complaint. 47. Deny the allegations contained in paragraph 47 of the Complaint. 48. Repeat and reallege each and every allegation above as if set forth fully herein. 49. Deny the allegations contained in paragraph 49 of the Complaint. 50, Deny the allegations contained in paragraph 50 of the Complaint. 51. Deny the allegations contained in paragraph 51 of the Complaint. 52. Deny the allegations contained in paragraph 52 of the Complaint. 53, Deny the allegations contained in paragraph 53 of the Complaint, 54. Deny the allegations contained in paragraph 54 of the Complaint. 55. Repeat and reallege each and every allegation above as if set forth fully herein. 56. Deny the allegations contained in paragraph 56 of the Complaint, 57. Deny the allegations contained in paragraph 57 of the Complaint. 58. Deny the allegations contained in paragraph 58 of the Complaint. 59. Deny the allegations contained in paragraph 59 of the Complaint. 60. Deny the allegations contained in paragraph 60 of the Complaint. 61. Repeat and reallege each and every allegation above as if set forth fully herein, 62. Deny the allegations contained in paragraph 62 of the Complaint. 63. Deny the allegations contained in paragraph 63 of the Complaint. 64. Deny the allegations contained in paragraph 64 of the Complaint. 65. Deny the allegations contained in paragraph 65 of the Complaint. 66, Deny the allegations contained in paragraph 66 of the Complaint. 67. Repeat and reallege each and every allegation above as if set forth fully herein. 68. Deny the allegations contained in paragraph 68 of the Complaint, 7 9 of 24

10 69. Deny the allegations contained in paragraph 69 of the Complaint. 70. Deny the allegations contained in paragraph 70 of the Complaint, 71. Deny the allegations contained in paragraph 71 of the Complaint, AS AND FOR A FIRST AFFIRMATIVE DEFENSE 72. The Complaint and this action in its entirety should be dismissed with prejudice because, as set forth in Calvary's Motion to Dismiss, dated January 27, 2016, in The FoxStone Group, LLC and Voda Bauer Real Estate LLC v. Calvary Pentecostal Church. Inc. a/k/a Calvary Cathedral of Praise, Index No /2015, Plaintiffs failed to timely serve a complaint pursuant to CPLR 3012(b) in response to Calvary's Notice of Appearance and Demand for Complaint, dated December 23, 2015, and the decision on that motion will have collateral estoppel and res judicata effect on this action. AS AND FOR A SECOND AFFIRMATIVE DEFENSE 73, The allegations in the Complaint should be dismissed as they fail to state a cause of action upon which relief can be granted. AS AND FOR A THIRD AFFIRMATIVE DEFENSE 74. The allegations in the Complaint should be dismissed based upon the documentary evidence. AS AND FOR A FOURTH AFFIRMATIVE DEFENSE 75. The Complaint is barred, in whole or in part, by the doctrines of unclean hands, laches, and/or estoppel. AS AND FOR A FIFTH AFFIRMATIVE DEFENSE 76, Plaintiffs' claims are barred, in whole or in part, to the extent that they have not suffered any actual injury or damages as a result of the allegations in the Complaint of 24

11 AS AND FOR A SIXTH AFFIRMATIVE DEFENSE 77. Plaintiffs' claims are barred, in whole or in part, on the basis of Plaintiffs' breaches of contract. AS AND FOR A SEVENTH AFFIRMATIVE DEFENSE 78. Plaintiffs' claims are barred, in whole or in part, on the basis of Plaintiffs' fraud, which induced Defendants to execute the "Joint Venture Proposal Regarding 58 and 72 Caton Place, Brooklyn, NY," dated June 30, 2015 (the "Non-Binding L01"), thereby rendering the Non-Binding LOT void ab MUM and a nullity. AS AND FOR AN EIGHTH AFFIRMATIVE DEFENSE 79. Plaintiffs' claims are barred, in whole or in part, on the basis of Plaintiffs' negligent misrepresentations which induced Defendants to execute the Non-Binding LOI, thereby rendering the Non-Binding LOI void ab Mille and a nullity. AS AND FOR A NINTH AFFIRMATIVE DEFENSE 80. Plaintiffs' claims are barred, in whole or in part, on the basis of Plaintiffs' anticipatory repudiation of the Non-Binding LOI. AS AND FOR A TENTH AFFIRMATIVE DEFENSE 81. The Complaint is barred, in whole or in part, on the basis that Plaintiffs would be unjustly enriched if allowed to recover all or any portion of the damages alleged. AS AND FOR AN ELEVENTH AFFIRMATIVE DEFENSE 82. To the extent that Plaintiffs are entitled to any damages, which Defendants deny, Plaintiffs have failed to mitigate their damages. AS AND FOR A TWELFTH AFFIRMATIVE DEFENSE 83. The claims in the Complaint are barred, in whole or in part, to the extent they are 9 11 of 24

12 the result of Plaintiffs' own acts and/or omissions. AS AND FOR A THIRTEENTH AFFIRMATIVE DEFENSE 84. The claims in the Complaint are barred, in whole or in part, on the basis that the Non-Binding LOT is, in fact, not a binding agreement and is simply an unenforceable agreement to agree. RESERVATION OF RIGHTS 85. Defendants reserve the right to amend this Answer to assert any additional affirmative defenses that may become apparent through discovery or otherwise. COUNTERCLAIM AND THIRD-PARTY COMPLAINT Counterclaim-Plaintiff, as and for its counterclaim against Plaintiffs/Counterclaim Defendants Voda and FoxStone, and against Counterclaim-Defendants Jason Bauer ("Bauer") and Abraham Zeigerman ("Zeigerman" and with Voda, FoxStone, and Bauer, collectively, "Counterclaim-Defendants"), alleges as follows: A. The Parties FACTS COMMON TO THE COUNTERCLAIM AND ALL COUNTERCLAIM-DEFENDANTS 1. Counterclaim-Plaintiff Calvary is a New York not-for-profit religious corporation, with a place of business located at 45 E. 8' Street, Brooklyn, New York. 2. Upon information and belief, Counterclaim-Defendant FoxStone is a New York limited liability company, with a principal place of business located at 1053 East 2 nd Sheet, Brooklyn, New York, Upon information and belief, Counterclaim-Defendant Voda is a New York limited liability company, with a principal place of business located at 196 East 75 th Street, Apt. 3B, New York, New York 10021, of 24

13 11. Upon information and belief, Counterclaim-Defendant Jason Bauer is a natural citizen residing in New York. 5. Upon information and belief, Counterclaim-Defendant Abraham Zeigerman is a natural citizen residing in New York. B. The Calvary Church 6. Calvary was formed in 1970 as a not-for-profit religious organization, and since inception, Calvary has served as a central and fundamental place of worship and spiritual growth for many members of the Brooklyn community. 7. Starting in a small building at 1627 Broadway, Calvary's membership grew at a rapid and prosperous rate, so that by 1978, with nearly 200 members, Calvary relocated to 151 'Woodruff Avenue, where, to this day, Calvary still has a branch. 8. With membership continuing to grow, on or about June 18, 1990, Calvary purchased the real property known as and located at 58 Caton Place, Brooklyn, New York, and on or about August 17, 1.993, purchased the neighboring parcel known as and located at 72 Caton Place, Brooklyn, New York (collectively, the "Premises"). 9. A few years later, Calvary broke ground and in September 2001, opened a brandnew 2500-seat facility where its devoted membership could worship (the "Church Facility"). 10. Calvary's membership has grown from seven members in 1970 to nearly 2,200 today. C. The Mortgage With Foundation Capital Resources, Inc. 11. As a part of the purchase and construction of the Premises and Church Facility, Calvary took on a mortgage and related debt obligations. 12. Specifically, Calvary, on or about July 30, 2012, borrowed $10,101,875 from Ii 13 of 24

14 Foundation Capital Resources, Inc. ("FCR"). 13. Subsequently (and without proper basis), FCR declared the loan to be in default and commenced a foreclosure proceeding against Calvary, captioned Foundation Capital Resources. Inc. v. Calvary Pentecostal Church. Inc. a/k/a Calvary Cathedral of Praise et al., Index No /2015 (the "Foreclosure Proceeding"), 14. Calvary, however, lacked the funds necessary to pay FCR the amounts claimed to be due under the terms of the controlling loan documents. D. Counterclaim-Defendants Fraudulently Represent Themselves As Capable of Rescuing Calvary from Foreclosure 15. As such, shortly after FCR commenced the Foreclosure Proceeding, and in an effort to stave-off foreclosure, Calvary elected to identify potential business partners with sufficient expertise and financial resources to engage in a joint undertaking for the development of the property owned by Calvary and expressly for the purpose of securing sufficient capital to pay FCR what it was due, 16. Calvary elected to compile a "request for proposals" ("RFP") pursuant to which it would secure proposals from qualified and experienced large-scale property developers with the financial wherewithal to capitalize and develop the Premises into a stabilized income producing property and reconstituted home for the church. 17. Amongst other things, the RFP placed significant emphasis on the experience of the proposed developer-partners and required that said developer furnish a portfolio of prior similar projects completed by the developer as a precondition to being considered by Calvary as a potential development partner. 18. When informed of Calvary's plan, FOR agreed to enter into a Pre-Negotiation Agreement, dated April 24, 2015, pursuant to which FOR agreed to forebear from taking any of 24

15 further steps with respect to the Foreclosure Proceeding while Calvary pursued potential business partners. 19. Calvary received proposals from a number of potential business partners. 20. One such proposal came jointly from Jason Bauer the principal of Voda and Abraham Zeigerman the principal of Fox Stone (Le. the Counterclaim-Defendants). 21. Bauer and Ziegerman, on behalf of FoxStone and Voda, represented to Calvary that they jointly had the requisite development experience of projects similar in scale and size as well as sufficient capital in order to fund and successfully complete the redevelopment of the Premises as required by Calvary, 29. Indeed, Bauer and Ziegerman personally negotiated and interacted with Calvary on behalf of FoxStone and Voda with respect to all aspects of the proposed joint venture with Calvary, 23, After Counterclaim-Defendants and Calvary exchanged various communications regarding Counterclaim-Defendants' financial condition and development experience, each time with Counterclaim-Defendants representing they had ample capital and experience, Calvary requested that Counterclaim-Defendants (i) draft and circulate a non-binding letter of intent for a proposed joint venture among FoxStone, Voda, and Calvary, and (ii) produce a list of the new developments that FoxStone and Voda have developed as required by the RFP so that Calvary could accurately vet and evaluate their ability to carry out the needs of the redevelopment. 24. On or about June 9, 2015, in response to Calvary's RFP requirement that they furnish information regarding prior projects of similar character,. size, and scale successfully completed by them as a precondition to any serious engagement, Counterclaim-Defendants sent to Calvary a portfolio they referred to as "new projects" they purportedly had developed in both of 24

16 Manhattan and Brooklyn, which included the following properties: (i) 150 Nassau Street, New York, New York; (ii) 100 West 58 th Street, New York, New York; (iii) 109 Norfolk, New York, New York; (iv) Crescent Street, new York, New York; (v) 5 West 120 th Street, New York, New York; (vi) 110 Duane Street, New York, New York; (vii) 342 Bond Street, 346 Bond Street, and 361 Carroll Street, Brooklyn, New York; (viii) 111 Steuben Street, Brooklyn, New York; (ix) 825 Classon Avenue, Brooklyn, New York; (x) 91 Grand Avenue, Brooklyn New York; (xi) 384 Maple, Brooklyn, New York; and (xii) 185 Ocean Avenue, Brooklyn, New York (collectively, the "Purported Developments"). 25. Shortly thereafter, Counterclaim-Defendants circulated a draft non-binding letter of intent which generally outlined the terms and framework under which negotiations would proceed for creating a joint venture among Calvary, FoxStone, and Voda to re-develop the Premises and Church Facility. E. Calvary, FoxStone, And Voda Execute A Nan-Binding Letter Of Intent 26. Relying on Counterclaim-Defendants' repeated representations about their financial condition and the past development projects in which they participated, Calvary set aside all other proposals they had received from other qualified investors and developers and executed a non-binding Letter of Intent, dated June 30, 2015, with FoxStone and Voda (the "Non-Binding LOP'). 27. These other qualified investors and business partners, which Calvary elected not to pursue due to FoxStone and Voda's misrepresentations, included, among others: GDG Capital; Bon Jour Capital; and Tri-Basco Inc. 28. For each, Calvary conducted meetings and site inspections, and exchanged documents and other financial information concerning the project of 24

17 29. Based on Counterclaim-Defendants' representations, Calvary halted discussions with these other developers in order to pursue FoxStone and Voda. 30. Pursuant to the Non-Binding LOT, Calvary and FoxStone/Voda agreed to negotiate the terms of a potential joint venture whereby (i) the new joint venture would be owned 60% by FoxStoneNoda and 40% by Calvary, and (ii) Calvary would contribute to the proposed joint venture the Premises while FoxStoneNoda agreed to contribute sufficient funds in order to first pay off the existing mortgage with FOR and other debt on the property, followed by funds to develop the project itself. 31. After execution of the Non-Binding LOT, the parties began negotiating the terms of the definitive agreements that would memorialize the joint venture and the parties' contributions thereto. F. FCR Terminates the Standstill Agreement 32, As part of the process outlined in the Pre-Negotiation Agreement, FCR requested that Calvary provide the Non-Binding LOT and otherwise present evidence of Counterclaim- Defendants' financial condition and their proposal for paying off the loan with FOR and to redevelop the Premises. 33. However, when Calvary sent the Non-Binding LOT to FCR, FCR, upon information and belief, became immediately concerned with FoxStone and Voda's intentions and ability to develop the project because there was no specific deadline for their performance in the Non-Binding LOI. 34. :Additionally, FCR, upon information and belief, was quite troubled and concerned with FoxStone and Voda as potential joint venturers because, as set forth below, it took them three months from execution of the Non-Binding LOT to develop and provide their of 24

18 financial plan to redevelop the Premises, which, as alleged below, was woefully deficient and problematic, 35. As a result, upon information and belief, FCR subsequently concluded that FoxStone and Voda were not appropriate joint venturers to participate in this redevelopment because there were material and significant questions and doubts concerning their ability to actually pay off the FCR loan and redevelop the Premises as necessary. 36. Accordingly, on or about August 11, 2015, FCR terminated the parties' forbearance agreement. G. Calvary Learns That FoxStone and Voda Lack the Necessary Capital to Fund the Development and Misrepresented Their Past Deals 37. During the course of negotiating the terms of the definitive agreements that would in fact form a joint venture, it became evident that FoxStone and Voda grossly and intentionally misrepresented (i) their financial condition and ability to finance the necessary funds for the project (ii) their intention to maintain a 60/40 ownership split in the proposed joint venture, and (iii) their experience and development of past development projects, all of which FoxStone and Voda knew, or should have known, were absolutely crucial to Calvary's decision to execute the Non-Binding LOI and forego all other potential deals. 38. First, in the months following the execution of the Non-Binding LOT, Counterclaim-Defendants began circulating draft operating and contribution agreements which showed that they sought to dilute Calvary's 40% ownership interest in the joint venture. 39. Indeed, under Counterclaim-Defendants' proposed terms, Calvary's membership interest could eventually be diluted to zero. 40. Second, reflecting that Counterclaim-Defendants intentionally misrepresented their financial condition and ability to pay the debt due to FCR and then develop the Premises of 24

19 with remaining capital, when it came time for Counterclaim-Defendants to present proof of their financial condition, Counterclaim-Defendants instead sent Calvary a loan proposal from "Paradigm Capital Group" pursuant to which FoxStone and Voda were obtaining their funds from a hard-money lender (i) with a 12 month maturity date, (ii) eye-watering interest rates, and (iii) which required the establishment of a sinking fund to be capitalized with over $1,000,000 at closing. 41. To make matters worse, Counterclaim-Defendants presented no evidence of any resources to (i) address the expenses associated with the sinking fund itself or pre-development costs, or (ii) repay the hard-money loan with Paradigm Capital Group in full in 12 months. 42. Thus, rather than being the money partner necessary for Calvary to avoid foreclosure, it became clear that Counterclaim-Defendants fabricated their financial condition and their concomitant ability to finance this project. 43. Third, Calvary learned that, contrary to Counterclaim-Defendants' express representations that they developed the Purported Developments, in reality they actually only served as brokers for the Purported Developments and lied about their participation in order to induce Calvary to select them to participate as a potential joint venturer. 44. Indeed, it became quite clear that rather than have any development experience, Counterclaim-Defendants were simply real estate brokers who intended to try to unite Calvary with a third-party developer. Calvary Terminates the Non-Binding LOI 45. Realizing that Counterclaim-Defendants had intentionally misrepresented their financial condition and experience, Calvary served FoxStone and Voda with a letter, dated November 4, 2015, pursuant to which Calvary terminated the Non-Binding LOT (the of 24

20 "Termination Notice"). 46. During the five months between when Counterclaim-Defendants fraudulently induced Calvary to execute the Non-Binding LOT and when Calvary served the Termination Notice, interest continued to accrue on the amounts due to FCR. 47. Additionally, as a result of Counterclaim-Defendants fraudulent misrepresentations, Calvary disregarded a number of business proposals from other potential joint venturers and lost at least five months during which period Calvary could have been taking other steps to avoid foreclosure by FCR. 48. Instead, by reason of the foregoing, Counterclaim-Defendants had placed Calvary in a materially worse financial position than it had been prior to executing the Non-Binding LOT. AS AND FOR THIEIR COUNTERCLAIM AND CAUSE OF ACTION (Fraud As Against All Counterclaim-Defendants) 49. Counterclaim-Plaintiff repeats and realleges paragraphs 1 through 48 above as it set forth fully herein. 50. Before executing the Non-Binding LOI, Counterclaim-Defendants knew that (i) they lacked the financial resources to pay off the loan with FOR and thereafter fund the redevelopment of the Premises, (ii) they intended to dilute Calvary of its 40% membership in the proposed joint venture, and (iii) they had not developed any of the Proposed Developments. 51. Additionally, Counterclaim-Defendants knew that their only function and purpose in the proposed joint venture was to provide the funding necessary to pay off the FCR loan and to provide the development expertise to convert the Premises into an income producing property, as well as a church for Calvary. 52. With this knowledge, Counterclaim-Defendants intentionally misrepresented to of 24

21 Calvary that (i) they had the financial resources to pay off the loan with FCR and thereafter fund the redevelopment of the Premises, (ii) they were going to maintain a 60/40 ownership split in the proposed joint venture, and (iii) they had developed each of the Proposed Developments. 53. Calvary reasonably relied on these misrepresentations of fact in electing to forego the other potential investors and instead execute the Non-Binding LOI with FoxStone and Voda. 54. These other qualified investors and business partners, which Calvary elected not to pursue due to FoxStone and Voda's misrepresentations, included, among others: GDG Capital; Bon Jour Capital; and Tri-Basco Inc. 55. Had Counterclaim-Defendants not misrepresented their financial condition and development experience, Calvary would have pursued one of these other business partners, who actually had the resources, experience and foresight to avoid foreclosure and redevelop the Premises, 56. By the time that Calvary learned that Counterclaim-Defendants fraudulently induced Calvary to execute the Non-Binding LOI, Calvary had lost five months and the Premises was on the brink of foreclosure. 57. Indeed, the Premises remains on the brink of foreclosure and FOR is aggressively pursuing the Foreclosure Proceeding. 58. If Calvary is foreclosed upon, it is the direct result of Counterclaim-Defendants' fraudulent conduct because, absent those fraudulent misrepresentations, Calvary would have selected to pursue an alternative business partner and would have had sufficient time to stave off foreclosure. 59. Additionally, Calvary expended time and money pursuing the proposed joint venture with FoxStone and Voda only to realize that such a joint venture was an intentionally of 24

22 misrepresented farce. 60. As a direct result of Counterclaim-Defendants affirmative misrepresentations concerning their financial condition and development experience, Calvary is entitled to an order (0 awarding damages in an amount to be determined at trial, but in no event less than $10,500,000, plus costs and interest, and (ii) declaring that the Non-Binding LOI was void ab in/i/o by reason of Counterclaim-Defendants' fraudulent inducement of 24

23 WHEREFORE, Defendant/Counterclaim Plaintiff Calvary Pentecostal Church, Inc. a/k/a Calvary Cathedral of Praise and Defendant Marcus Roberts (i) demand that the Complaint be dismissed in its entirety, (ii) that the Counterclaim and Third-Party Complaint be granted in its entirety, including by (a) awarding damages in an amount to be determined at trial, but in no event less than $10,500,000, plus costs and interest, and (b) declaring that the Non-Binding LOI was void ab initio, and (iii) that they be granted such other and further relief as the Court deems just and proper. Dated: New York, New York February 22, 2016 PRYOR CASFIMAN LLP By Brie D. rman Jared D. Newman 7 Times Square New York, New York (212) Attorneys for Defendants and Counterclaim-Plaintiff of 24

24 VERIFICATION STATE OF NEW YORK. COUNTY OF KINGS ) ss.: Marcus Roberts, being duly sworn, deposes and says that I am the Chief Executive Officer of Calvary Pentecostal Church, Inc. a/k/a Calvary Cathedral of Praise, one of the defendants and counterclaim-plaintiff in this action. I have read the annexed Answer with Counterclaim and Third-Party Complaint, know the contents thereof and the same are true to my knowledge, except those matters which are stated to be alleged upon information and belief, and as to those matters I believe them to be true. The source of my knowledge is the files and business records of the above-stated defendant. Sworn to before me this of February, 2016 Marcus Roberts of 24