Preview
FILED: KINGS COUNTY CLERK 01/26/2020 10:27 PM INDEX NO. 527036/2019
NYSCEF DOC. NO. 29 RECEIVED NYSCEF: 01/26/2020
ARBOR JPM Funding, LLC
333 Earle Ovington Boulevard, Suite 900
Uniondale, New York 11553
April 9, 2019
Via FedEx
564 St. Johns Acquisition LLC
c/o Heritage Equity Partners
679 Driggs Avenue
Brooklyn, New York 11211
Attention: Toby Moskovits
Re: 564 St. Johns Place, Brooklyn, New York
Reference is hereby made to that certain Loan Agreement dated as of August 3, 2018 (the
"Loan Agreement") pursuant to which Arbor Realty SR, Inc., predecessor in interest to Arbor JPM
Funding LLC ("Lender"), made a loan to 564 St. Johns Acquisition LLC, a New York limited
liability company ("Borrower") in the amount of $97,250,000 (the "Loan"), as evidenced by,
among other things, that certain Amended, Restated and Consolidated Promissory Note dated as
of August 3, 2008 ("Note"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Loan Agreement.
As per those certain notices sent to you by Lender on March 6, 2019 and March 22, 2019,
Lender demanded that you pay into the Interest Reserve the sum of $545,502.26. An Event of
Default had occurred as a result of your failure to pay such sum to Lender by March 21, 2019
("Replenishment Default"). On April 8, 2019, Lender received $500,000 for deposit into the
Interest Reserve. On April 9, 2019, Lender received $45,502.26 for deposit into the Interest
Reserve. These payments cured the Replenishment Default as of April 9, 2019. Interest accruing
from March 2019 - April 2019 accrued at the Default and Lender has not waived
22, 8, Rate,
payment of the same.
Pursuant to Section 2.02 of the Loan Agreement, "Interest for each Interest Period shall be
Period."
paid on the Payment Date immediately following each Interest As previously demanded
of you, $1,063,368.24 in interest was due on April 1, 2019. Such amount has yet to be paid in full.
In addition, pursuant to Section 11.01(a) of the Loan Agreement, "on each Payment Date,
Borrower shall pay to Lender, in immediately available funds for deposit into the Tax and
Insurance Reserve an amount equal to one-twelfth (1/12) of the ...Insurance Premiums to become
due during the period commencing on the firstday of the firstmonth following such Payment Date
day."
and ending twelve (12) months following such first As previously demanded of, $7,400.00
was due to be paid into the Tax and Insurance Reserve on April 1, 2019. Such amount has yet to
be paid.
FILED: KINGS COUNTY CLERK 01/26/2020 10:27 PM INDEX NO. 527036/2019
NYSCEF DOC. NO. 29 RECEIVED NYSCEF: 01/26/2020
As a result, this letterserves as written notice to Borrower that an Event of Default pursuant
to Section 10.01 of the Loan Agreement has occurred today as a result of your failure to pay
$1,070,768.24 in full ("April 1 Debt Service Payment"). Please also be advised that Section 2.2 of
the Note specifically provides that during any period when there is an outstanding Event of Default,
the Loan will bear interest at the Default Rate. Section 11.04 of the Loan Agreement states that
"Upon the occurrence and during the continuance of (i) an Event of Default or (ii)a Material
Business Change, Lender may, but shall not be obligated to, apply at any time the balance then
remaining in the Interest Reserve against the Debt in whatever order Lender shall subjectively
determine."
Further, Section 12.05(b) of the Loan Agreement states that "Upon the occurrence of
a Sweep Event which is caused by an Event of Default, without additional notice from Lender to
Borrower, Lender may, in addition to and not in limitation of Lender's other rights, apply allfunds
discretion."
in the Central Account as Lender shall determine in itssole and absolute As of today,
there is $545,502.26 in the Interest Reserve and $190,901.12 in the Central Account - $736,403.38
in total.
Despite the pendency of an Event of Default, and the rights of Lender pursuant to the
aforementioned sections, Lender has chosen to use the $736,403.38 to (i) deposit $7,400.00 into
the Tax and Insurance Reserve; and (ii)pay $729,003.38 towards a partial payment of the April 1
Debt Service Payment - therefore in $334,364.86 of the April 1 Debt Service Payment
resulting
stillbeing past due, with the Event of Default for the failure to pay the full April 1 Debt Service
Payment still in effect. In addition, pursuant to Section 2.07 of the Loan Agreement, a Late Fee
of $53,168.41 is now due and payable. Lender hereby demands payment of $334,364.86 and
$53,168.41 using the attached wiring instructions.
Further, Section 11.04 of the Loan Agreement states that "In the event at any time during
an Interest Reserve Trigger Period the balance of the Interest Reserve is an amount equal to less
months'
than one (1) worth of interest on the Loan at the then Applicable Interest Rate, Borrower
shall, within ten (10) Business Days after demand therefor, pay to Lender for deposit into the
Interest Reserve the amount required to bring the total amount of funds on deposit in the Interest
months' Rate."
Reserve to one (1) worth of interest on the Loan at the then Applicable Interest As
mentioned, the Applicable Interest Rate is currently the Default Rate. This letter shall serve as
Lender's written demand, sent in accordance with the notice requirements set forth in Section
13.05 of the Loan Agreement, that Borrower pay to Lender for deposit in the Interest Reserve the
sum of $1,945,000.00 ("Deposit") within ten (10) Business Days. Please use the wiring
instructions attached hereto. Should Borrower failto make such payment within ten (10) Business
Days, then an Event of Default shall occur pursuant to Section 10.01(a) of the Loan Agreement.
The Guarantors, which guaranteed the Deposit pursuant to that certain Interest Reserve
Replenishment Guaranty dated August 3, 2018 ("Guaranty"), are copied to this letter so that they
are aware of this matter.
Finally, Lender is also providing this notice to remind you of the terms of Section 12.03 of
the Loan Agreement, including but not limited to the agreement that "Borrower shall, and shall
cause Property Manager to, deposit all revenue derived from the Property and received by
basis."
Borrower or Property Manager, as the case may be, into the Collection Account on a daily
No funds should be first deposited in any separate account before being deposited into the
Collection Account.
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FILED: KINGS COUNTY CLERK 01/26/2020 10:27 PM INDEX NO. 527036/2019
NYSCEF DOC. NO. 29 RECEIVED NYSCEF: 01/26/2020
Lender reserves all of its rights and remedies under the Loan Documents, at law or in
equity, including, but not limited to, the right to accelerate the Debt. The recital herein of any
defaults or Events of Default shall not be deemed a waiver of any other defaults or Events of
Default that are existing but not specified herein, regardless of whether the same are known to
Lender, or a waiver of any future defaults or Events of Default. The foregoing does not constitute
a waiver of any tenn, provision, condition, covenant or agreement contained in the Note and the
other Loan Documents, nor a cure, modification or extension thereof, nor shall it (i) operate as a
waiver of any right, remedy, power or privilege thereunder, (ii)prejudice or preclude any other or
further exercise thereof or the exercise of any right or remedy provided by law or in equity, (iii)
entitle Borrower to any other or further notice or demand whatsoever, or (iv) in any way modify,
change, impair, affect, diminish or release any obligation or liability of Borrower under any of the
Loan Documents.
Very truly yours,
ARBOR JPM Funding, LLC,
a Delaware limited liability company
By:
--
WQ
Titl&
cc: Cohen & Gresser LLP
800 Third Avenue
New York, New York 10022
Attention: Nicholas J. Kaiser
Toby Moskovits
c/o Heritage Equity Partners
679 Driggs Avenue
Brooklyn, New York 11211
Yechiel Michael Lichtenstein
c/o Heritage Equity Partners
679 Driggs Avenue
Brooklyn, New York 11211
Shaul Kopelowitz
c/o Fink & Zelmanovitz P.C.
3839 Flatlands Avenue #206
Brooklyn, New York 11234
Attention: Neil Fink, Esq.
attachment
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FILED: KINGS COUNTY CLERK 01/26/2020 10:27 PM INDEX NO. 527036/2019
NYSCEF DOC. NO. 29 RECEIVED NYSCEF: 01/26/2020
Wiring Instructions
Wire Instructions are as follows:
Bank: Bank of America
1185 Avenue of the Americas
New York, NY
ABA #: 026 009 593
Account #: 947-836-8593
Beneficiary: Arbor Multifamily Lending, LLC
Receipts Clearing
Reference: 10917 564 St John's Place
Electronic Funds Transfers (aka ACH Transfers):
Bank: Bank of America
1185 Avenue of the Americas
New York, NY
ABA #: 011 000 138
Account #: 947-836-8593
Beneficiary: Arbor Multifamily Lending, LLC
Receipts Clearing
Reference: 10917 564 St John's Place
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