Motion for Writ in Arbor Realty Sr, Inc. v. Aleksandr Kogan| Trellis.Law

On March 13, 2024 a Exhibit,Appendix was filed involving a dispute between Arbor Realty Sr, Inc., and Aleksandr Kogan, for Commercial Division - Contract in the District Court of Nassau County.

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FILED: NASSAU COUNTY CLERK 03/13/2024 08:36 PM INDEX NO. 604499/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/13/2024

EXHIBIT 1
FILED: NASSAU COUNTY CLERK 03/13/2024 08:36 PM INDEX NO. 604499/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/13/2024

LOAN AGREEMENT

$11,325,000.00 MORTGAGE LOAN

ARBOR REALTY SR, INC.,
Lender

FOREST CREEK APARTMENT COMMUNITIES, LLC
Borrower

Dated: As of September 9, 2021

PROPERTY:

Forest Creek Apartments
4663 and 4711 Waldrop Drive, Forest Park, Georgia 30297

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TABLE OF CONTENTS

Page

ARTICLE I. DEFINED TERMS ................................................................................................................. 1
Section 1.01 Defined Terms ............................................................................................................. 1
Section 1.02 General Construction................................................................................................. 19

ARTICLE II. LOAN .................................................................................................................................. 20
Section 2.01 Loan........................................................................................................................... 20
Section 2.02 Computation and Payment of Interest ....................................................................... 20
Section 2.03 Payment of Principal ................................................................................................. 22
Section 2.04 Method of Payment ................................................................................................... 23
Section 2.05 Application of Payments ........................................................................................... 23
Section 2.06 Extension of Term ..................................................................................................... 23
Section 2.07 Late Fee ..................................................................................................................... 24
Section 2.08 Prepayments .............................................................................................................. 24
Section 2.09 Exit Fee ..................................................................................................................... 25
Section 2.10 Usury Limitation ....................................................................................................... 25
Section 2.11 Note ........................................................................................................................... 26
Section 2.12 Use of Proceeds ......................................................................................................... 26

ARTICLE III. REPLACEMENT LOANS ................................................................................................ 26
Section 3.01 Replacement Loan ..................................................................................................... 26

ARTICLE IV. BORROWER’S REPRESENTATIONS, WARRANTIES AND COVENANTS ............ 28
Section 4.01 Payment of Debt ........................................................................................................ 29
Section 4.02 Representations, Warranties and Covenants Regarding Borrower ........................... 29
Section 4.03 Anti-Terrorism Law .................................................................................................. 33
Section 4.04 Recording of Mortgage, Etc ...................................................................................... 33
Section 4.05 Representations, Warranties and Covenants as to the Property ................................ 33
Section 4.06 Payment of Impositions, Utilities and Taxes, Etc ..................................................... 37
Section 4.07 Ownership of Property .............................................................................................. 38
Section 4.08 Transfer ..................................................................................................................... 38
Section 4.09 Removal of Liens ...................................................................................................... 38
Section 4.10 Cost of Defending and Upholding the Mortgage Lien .............................................. 39
Section 4.11 Use of the Property .................................................................................................... 39
Section 4.12 Maintenance and Repair ............................................................................................ 39
Section 4.13 Alterations ................................................................................................................. 39
Section 4.14 Changes Affecting the Property ................................................................................ 40
Section 4.15 Permits, Laws and Restrictive Covenants ................................................................. 40
Section 4.16 Plans and Specifications ............................................................................................ 40
Section 4.17 Estoppel Statement .................................................................................................... 40
Section 4.18 Compliance with Legal Requirements ...................................................................... 40
Section 4.19 Compliance with Insurance Requirements ................................................................ 40
Section 4.20 Compliance with Property Agreements; No Modifications ...................................... 41
Section 4.21 Right of Inspection .................................................................................................... 41
Section 4.22 Financial Reports....................................................................................................... 41
Section 4.23 Information to Lender ............................................................................................... 43
Section 4.24 General Reporting Requirements .............................................................................. 43
Section 4.25 Rate Cap Agreement ................................................................................................. 43

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Section 4.26 Right of Entry ............................................................................................................ 44
Section 4.27 Deduction from Value ............................................................................................... 44
Section 4.28 No Joint Assessment ................................................................................................. 44
Section 4.29 No Credits on Account of the Debt ........................................................................... 45
Section 4.30 Documentary Stamps ................................................................................................ 45
Section 4.31 Publicity .................................................................................................................... 45
Section 4.32 Representations Generally......................................................................................... 45
Section 4.33 ERISA ....................................................................................................................... 45
Section 4.34 Sale of Assets ............................................................................................................ 45
Section 4.35 Distributions .............................................................................................................. 45
Section 4.36 Authority Documents ................................................................................................ 45
Section 4.37 Name, Address and Structure .................................................................................... 45
Section 4.38 Litigation ................................................................................................................... 45
Section 4.39 Property Management Agreement............................................................................. 46
Section 4.40 Major Contracts ......................................................................................................... 46
Section 4.41 Leases ........................................................................................................................ 46
Section 4.42 Issuance of Equity ..................................................................................................... 46
Section 4.43 Budget ....................................................................................................................... 46
Section 4.44 Survival of Representations....................................................................................... 46
Section 4.45 Borrower’s Knowledge ............................................................................................. 46

ARTICLE V. INSURANCE ...................................................................................................................... 47
Section 5.01 Conditions of Property .............................................................................................. 47
Section 5.02 Required Insurance .................................................................................................... 47
Section 5.03 Terms of Insurance Policies ...................................................................................... 49
Section 5.04 Compliance with Requirements of Insurance Policies .............................................. 50
Section 5.05 Insurance Reporting Requirements ........................................................................... 51
Section 5.06 Assignment To Lender .............................................................................................. 51

ARTICLE VI. CASUALTY, CONDEMNATION AND RESTORATION ............................................. 52
Section 6.01 Borrower’s Representations ...................................................................................... 52
Section 6.02 Insurance Proceeds .................................................................................................... 52
Section 6.03 Restoration ................................................................................................................ 53
Section 6.04 Event of Default During Restoration......................................................................... 55
Section 6.05 Application of Proceeds to Debt Reduction .............................................................. 55
Section 6.06 Condemnation ........................................................................................................... 56
Section 6.07 Application ................................................................................................................ 56
Section 6.08 Award ........................................................................................................................ 57

ARTICLE VII. LEASES AND OTHER AGREEMENTS AFFECTING THE PROPERTY ................... 57
Section 7.01 Borrower’s Representations and Warranties ............................................................. 57
Section 7.02 Assignment of Leases................................................................................................ 59
Section 7.03 Performance of Obligations....................................................................................... 59
Section 7.04 Subordinated Leases .................................................................................................. 59
Section 7.05 Leasing Commissions................................................................................................ 60
Section 7.06 Future Leases............................................................................................................. 60
Section 7.07 Security Deposits....................................................................................................... 60

ARTICLE VIII. ENVIRONMENTAL HAZARDS .................................................................................. 60
Section 8.01 Representations and Warranties ................................................................................ 60
Section 8.02 Covenants .................................................................................................................. 61
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Section 8.03 Indemnity .................................................................................................................. 63

ARTICLE IX. INDEMNIFICATION COVERING PROPERTY............................................................. 64
Section 9.01 Indemnification ......................................................................................................... 64

ARTICLE X. DEFAULTS ........................................................................................................................ 65
Section 10.01 Events of Default ....................................................................................................... 65
Section 10.02 Remedies ................................................................................................................... 67
Section 10.03 Possession of the Property......................................................................................... 71
Section 10.04 No Cure or Waiver .................................................................................................... 71
Section 10.05 Borrower’s Actions After Default ............................................................................. 71
Section 10.06 Control by Lender After Default ............................................................................... 71
Section 10.07 Right to Cure Defaults............................................................................................... 72
Section 10.08 Recovery of Sums Required to Be Paid .................................................................... 72
Section 10.09 Marshalling and Other Matters.................................................................................. 73
Section 10.10 Waivers...................................................................................................................... 73
Section 10.11 Tax Reduction Proceedings ....................................................................................... 73
Section 10.12 Costs of Collection .................................................................................................... 73
Section 10.13 Cumulative Rights ..................................................................................................... 73
Section 10.14 General Provisions Regarding Remedies .................................................................. 73

ARTICLE XI. RESERVES ....................................................................................................................... 74
Section 11.01 Tax and Insurance Reserve........................................................................................ 74
Section 11.02 Intentionally Omitted ................................................................................................ 75
Section 11.03 Renovation Reserve................................................................................................... 75
Section 11.04 Replacement Reserve ................................................................................................ 78
Section 11.05 Interest Reserve ......................................................................................................... 79
Section 11.06 Intentionally Omitted ................................................................................................ 80
Section 11.07 General Provisions Regarding Reserves ................................................................... 80

ARTICLE XII. CASH MANAGEMENT PROVISIONS ......................................................................... 81
Section 12.01 Collection Account .................................................................................................... 81
Section 12.02 Security Deposit Account.......................................................................................... 82
Section 12.03 Payments into Collection Account ............................................................................ 82
Section 12.04 Disbursements from Collection Account .................................................................. 83
Section 12.05 Disbursements from Central Account ....................................................................... 84
Section 12.06 Security Interest......................................................................................................... 85

ARTICLE XIII. MISCELLANEOUS........................................................................................................ 86
Section 13.01 Further Assurances .................................................................................................... 86
Section 13.02 Participation and Sale of Loan .................................................................................. 86
Section 13.03 Replacement of Note ................................................................................................. 88
Section 13.04 Contest of Certain Claims ......................................................................................... 88
Section 13.05 Notices....................................................................................................................... 89
Section 13.06 Estoppel Certificate ................................................................................................... 89
Section 13.07 Sole Discretion of Lender.......................................................................................... 90
Section 13.08 Waiver of Notice ....................................................................................................... 90
Section 13.09 Remedies of Borrower............................................................................................... 90
Section 13.10 Actions and Proceedings ........................................................................................... 90
Section 13.11 Subrogation ............................................................................................................... 90
Section 13.12 Applicable Law ......................................................................................................... 90
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Section 13.13 Waiver of Counterclaim and Trial By Jury ............................................................... 91
Section 13.14 Consent to Jurisdiction .............................................................................................. 91
Section 13.15 Successors and Assigns ............................................................................................. 92
Section 13.16 Severability................................................................................................................ 92
Section 13.17 Captions..................................................................................................................... 92
Section 13.18 Time of the Essence .................................................................................................. 92
Section 13.19 No Oral Change ......................................................................................................... 92
Section 13.20 Entire Agreement ...................................................................................................... 92
Section 13.21 Fees and Expenses ..................................................................................................... 92
Section 13.22 Waiver of Bankruptcy Stay ....................................................................................... 92
Section 13.23 No Joint Venture; No Third-Party Beneficiaries ....................................................... 93
Section 13.24 Joint and Several Obligations .................................................................................... 93
Section 13.25 Duplicate Originals; Counterparts ............................................................................. 93
Section 13.26 Exculpation .............................................................................................................. 93
Section 13.27 Conflict; Construction of Documents; Reliance........................................................ 96
Section 13.28 Set-Off ....................................................................................................................... 96

Exhibit A – Legal Description
Exhibit B – Initial Budget
Exhibit C – Rent Roll
Exhibit D – Renovations Budget
Exhibit E – Request for Disbursement from Renovation Reserve
Exhibit F – Request for Disbursement from Replacement Reserve
Exhibit G – Form of Tenant Notice Letter

Schedule A – Organizational Chart

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LOAN AGREEMENT

THIS LOAN AGREEMENT (this “Agreement”) is made as of this 9th day of September, 2021
by FOREST CREEK APARTMENT COMMUNITIES, LLC, a Georgia limited liability company,
having a principal place of business at c/o Forest Creek Manager, LLC, 932 Ashland Ave., Wilmette, IL
60091 (“Borrower”), and ARBOR REALTY SR, INC., a Maryland corporation, having a principal place
of business at 333 Earle Ovington Boulevard, Suite 900, Uniondale, New York 11553 (together with its
successors and assigns, collectively, “Lender”).

Recitals

WHEREAS, Borrower has requested that Lender make a loan to Borrower in the original
principal amount of $11,325,000.00. Lender is willing to make such loan to Borrower on the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of such loan and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, Borrower and Lender agree as follows:

ARTICLE I.
DEFINED TERMS

Section 1.01 Defined Terms. For this Agreement, the following terms shall have the meanings
hereinafter set forth.

“Acceptable Counterparty” means a Person that is the counterparty to a Rate Cap Agreement
and has at all times that the applicable Rate Cap Agreement is in effect a long-term unsecured debt credit
rating of not less than “A-” from S & P and not less than A3 from Moody’s Investor Services, Inc.

“Account Agreement” means that certain Deposit Account Control Agreement dated as of the
Execution Date among Borrower, Lender and Bank, as hereafter amended, consolidated or modified from
time to time.

“Account Collateral” means (i) the Collection Account, (ii) the Central Account and all Sub-
Accounts, (iii) all cash, checks, drafts, securities entitlements, certificates, instruments and other property,
including, without limitation, all deposits and/or wire transfers from time to time deposited or held in,
credited to or made to the Collection Account, the Central Account and all Sub-Accounts; (iv) all interest,
dividends, cash, instruments, securities entitlements and other property from time to time received,
receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing items; and (v)
to the extent not covered by clauses (i) through (iv) above, all proceeds (as defined under the UCC) of any
or all of the foregoing.

“Actual Borrower Payment” has the meaning specified in Section 11.05.

“Additional Collateral Account” means a Reserve account established and held by Lender into
which excess funds are required to be deposited pursuant to Article 11 and held by Lender as additional
collateral for the Loan.

“Additional Information” has the meaning specified in Section 3.01(a).

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“Affiliate” of any specified Person means any other Person directly or indirectly Controlling or
Controlled by or under direct or indirect common Control with such specified Person.

“Agreement” means this Agreement, as hereafter amended, or modified from time to time.

“Alternative Index Rate” means the Benchmark Replacement.

“Alternative Rate” has the meaning specified in Section 2.02.

“Alternative Rate Spread” means the sum of (1) the Spread and (2) the Benchmark
Replacement Adjustment.

“Anti-Terrorism Law” means any Law relating to terrorism or money-laundering, including
Executive Order No. 13224 and the USA Patriot Act.

“Applicable Interest Rate” means (A) prior to a Benchmark Replacement Date, as determined
by Lender in its sole discretion, (i) the greater of (1) three and seventy-five hundredths percent (3.75%)
per annum, and (2) the LIBOR Rate plus the Spread per annum or (ii) the Default Rate, whichever is
applicable at the time of determination, and (B) from and after a Benchmark Replacement Date, as
determined by Lender in its sole discretion, (i) the Alternative Rate or (ii) the Default Rate, whichever is
applicable at the time of determination.

“Appraisal” means the appraisal of the Property and all supplemental reports or updates thereto
previously delivered to Lender in connection with the closing of the Loan, and any new or updated
appraisal obtained by Lender.

“Approved Bank” means a bank, trust company, or other depository institution insured by the
Federal Deposit Insurance Corporation which has a minimum long-term unsecured debt rating of at least
“A” by S&P (and, in the event of a Securitization of the Loan, “P-1 by Moody’s and “F1” by Fitch) and a
minimum short-term unsecured debt rating of at least “A-1” by S&P (and, in the event of a Securitization
of the Loan, “A” by Fitch and “A2” by Moody’s. For the purposes of this Agreement, Bank shall be
deemed to be an Approved Bank.

“Architect” has the meaning specified in Section 6.03(a).

“ARRC Recommendations” means the “ARRC Recommendations Regarding More Robust
Fallback Language for New Issuances of Libor Securitizations” published by the Alternative Reference
Rates Committee (ARRC) of the Federal Reserve Bank of New York, dated May 31, 2019, as such
recommendations may be amended or updated from time to time.1

“Asbestos O&M Plan” has the meaning specified in Section 8.02(i).

“Assignment and Subordination of Property Management Agreement” means that certain
Assignment and Subordination of Property Management Agreement dated as of the Execution Date,
executed by Borrower and Property Manager for the benefit of Lender, as hereafter amended,
consolidated, supplemented or modified from time to time.

1
https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/2019/Securitization_Fallback_Language.pdf

2
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“Assignment of Leases” means that certain Assignment of Leases and Rents dated as of the
Execution Date, executed by Borrower in connection with the Loan, as hereafter amended, consolidated,
supplemented or modified from time to time.

“Assignment of Rate Cap Agreement” means the Assignment of Interest Rate Cap as Collateral
in form and substance satisfactory to Lender in its sole discretion to be executed and delivered by
Borrower and consented to by the Acceptable Counterparty under the Rate Cap within ten (10) days after
Lender’s demand therefor in connection with the Loan, as thereinafter amended, consolidated,
supplemented or modified from time to time.

“Authority Documents” means, with respect to any Person, all documents and agreements
providing for, or related to, the formation, organization and governance of such Person, including such
Person’s partnership certificate, partnership agreement, certificate of incorporation, by-laws,
stockholder’s agreement, certificate of formation, operating, membership or limited liability company
agreement, or other similar organization or governing documents, as applicable.

“Bank” means BankUnited, N.A., a national banking association.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as
amended from time to time, and any successor statute or statutes and all rules and regulations from time
to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or
creditors’ rights.

“Bankruptcy Law” has the meaning specified in Section 10.01(f).

“Benchmark” means, initially, LIBOR; provided that if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to LIBOR or the then-current
Benchmark, then “Benchmark” shall mean the applicable Benchmark Replacement.

“Benchmark Replacement” means a floating rate index identified by Lender as the “Unadjusted
Benchmark Replacement” in accordance with the ARRC Recommendations.

“Benchmark Replacement Adjustment” means the spread identified by Lender as the
“Benchmark Replacement Adjustment” in accordance with the ARRC Recommendations.

“Benchmark Replacement Date” means

(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event” set forth in
this Section 1.01, the later of (a) the date of the public statement or publication of information referenced
therein and (b) the date on which the administrator of the relevant Benchmark permanently or indefinitely
ceases to provide such Benchmark, or

(2) in the case of clause (3) of the definition of “Benchmark Transition Event” set forth in this
Section 1.01, the date of the public statement or publication of information,

(3) in the case of an Early Opt-in Election, the date specified in the notice of such Early Opt-in
Election but in no event less than ten (10) Business Days after the notice of such Early Opt-in Election
has been provided to the Borrower;

provided, however, that in the case of clauses (1) and (2) above, on or after the sixtieth (60th) day
preceding the date on which such Benchmark Replacement Date would otherwise occur (if applicable),

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Lender may give written notice to Borrower in which Lender designates an earlier date (but not earlier
than the thirtieth (30th) day following such notice) and represents that such earlier date will facilitate an
orderly transition of the transaction to the Benchmark Replacement, in which case such earlier date shall
be the Benchmark Replacement Date.

“Benchmark Transition Event”2 means the occurrence of one or more of the following events
with respect to LIBOR (or the then-current Benchmark):

(a) a public statement or publication of information by or on behalf of the administrator of
LIBOR (or the then-current Benchmark) announcing that the administrator has ceased or will cease to
provide LIBOR (or the then-current Benchmark) permanently or indefinitely, provided that, at the time of
such statement or publication, there is no successor administrator that will continue to provide LIBOR (or
the then-current Benchmark);

(b) a public statement or publication of information by the regulatory supervisor for the
administrator of LIBOR (or the then-current Benchmark), the central bank for the currency of LIBOR (or
the then-current Benchmark), an insolvency official with jurisdiction over the administrator for LIBOR
(or the then-current Benchmark), a resolution authority with jurisdiction over the administrator for
LIBOR (or the then-current Benchmark) or a court or an entity with similar insolvency or resolution
authority over the administrator for LIBOR (or the then-current Benchmark), which states that the
administrator of LIBOR (or the then-current Benchmark) has ceased or will cease to provide LIBOR (or
the then-current Benchmark) permanently or indefinitely, provided that, at the time of such statement or
publication, there is no successor administrator that will continue to provide LIBOR (or the then-current
Benchmark); or

(c) a public statement or publication of information by the regulatory supervisor for the
administrator of LIBOR (or the then-current Benchmark) announcing that the Benchmark is no longer
representative.

“Borrower” has the meaning specified in the introductory paragraph of this Agreement.

“Borrower’s Operating Account” means any bank account designated by Borrower in writing
to Lender as the Borrower’s operating account.

“Budget” has the meaning specified in Section 4.43.

2
On March 5, 2021, ICE Benchmark Administration Limited and the Financial Conduct Authority of the UK
announced that all LIBOR settings will either cease to be provided by any benchmark administrator, or no longer
be representative immediately after June 30, 2023, for one-month US dollar LIBOR (the “FCA Announcement”).
On March 8, 2021, the ARRC stated that the FCA Announcement resulted in a “Benchmark Transition Event”
and triggered the calculation and fixing of the spread adjustment. Nevertheless, the Note will continue to bear
interest at the stated LIBOR rate until the related Benchmark Replacement Date, which is expected to be on or
immediately after June 30, 2023, for one-month LIBOR (although could occur sooner in accordance with the
definition of Benchmark Replacement Date or as a result of the occurrence of other Benchmark Transition
Events or an Early Opt-in Election).

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“Business Day” means any day other than (a) a Saturday or Sunday, or (b) a day on which
banking and savings and loan institutions in the State of New York are authorized or obligated by Law or
executive order to be closed.

“Business Income” has the meaning specified in Section 5.02(b)(3).

“Capital Expenditures” means, for any period, the amount actually expended for items
capitalized under GAAP.

“Capital Leases” means any Lease which has been or should be capitalized on the books of the
lessee in accordance with GAAP.

“Casualty” means any casualty, damage, destruction or loss occurring to all or any part of the
Property.

“Casualty Insurance Proceeds” means all insurance proceeds which Borrower is entitled to
receive as a result of a Casualty pursuant to the insurance policies maintained by Borrower.

“Central Account” has the meaning specified in Section 12.04(b).

“CERCLA” has the meaning specified in the definition of “Environmental Laws” in this Section
1.01.

“Code” means the United States Internal Revenue Code of 1986, as amended and in effect from
time to time.

“Collection Account” has the meaning specified in Section 12.01(a).

“Collection Period” means the period from the first (1st) Business Day of each calendar month to
the last Business Day of each month.

“Competing Offer” has the meaning specified in Section 3.01(a).

“Completion Guaranty” means that certain Guaranty of Completion dated as of the Execution
Date made by Guarantor(s) for the benefit of Lender in connection with the Loan, as hereafter amended,
consolidated, supplemented or modified from time to time.

“Condemnation” means any temporary or permanent taking or requisition of any or all right,
title and interest in all or any part of the Property or any change of grade which affects the Property or any
roadway providing access to the Property, in each case, as a result of the exercise of any right of
condemnation or eminent domain.

“Condemnation Proceeds” means all funds or proceeds received as a result of, in connection
with, in anticipation of, or as a settlement of a Condemnation.

“Control” means, with respect to any Person, the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person, through the ownership of
voting securities, by contract or otherwise, and the terms “Controlled”, “Controlling” and “Common
Control” shall have correlative meanings.

“Controlling Party” means, if Borrower is a partnership, the general partner of Borrower and, if
Borrower is a limited liability company, the manager or managing member of Borrower.
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“Credit Parties” or “Credit Party” means Borrower, and Guarantor, or either or both of the
foregoing, all as the context may require.

“Debt” means the aggregate amount of the unpaid principal amount evidenced by the Note, all
accrued and unpaid interest, and all other sums evidenced by the Note or secured by the Mortgage and/or
any other Loan Documents, including any Prepayment Fee and/or Exit Fee, as well as any additional
advances under the Mortgage that may be made to or on behalf of Borrower by Lender following the
Execution Date.

“Debt Service” means, as of the date of determination, the total of all the principal and interest
payments (with interest calculated at the greatest of (a) the then Applicable Interest Rate, (b) the then
prevailing market constant for Fannie Mae, and (c) the then prevailing market constant for conduit ten-
year fixed rate loans) and required reserve payments required to be made on the Note and the other Loan
Documents during the applicable period.

“Debt Service Coverage Ratio” means, with respect to any period as set forth in this Agreement,
the ratio calculated by Lender, in its sole and absolute discretion, of (i) the Net Operating Income for such
period to (ii) the Debt Service with respect to such period. Notwithstanding the foregoing, if Borrower
shall fail to provide any of the information necessary for Lender to calculate the Debt Service Coverage
Ratio, Lender shall have the right to make such calculation based upon such figures or assumptions as
Lender determines in its sole and absolute discretion.

“Default” means any event that would constitute an Event of Default if all requirements in
connection therewith for the giving of notice, the lapse of time, and the occurrence of any further
condition, event or act, had been satisfied.

“Default Rate” means the lesser of (a) twenty-four percent (24%) per annum and (b) the
Maximum Legal Rate.

“Development Laws” means all applicable subdivision, zoning, environmental protection,
wetlands protection, or land use Laws or ordinances, and any and all applicable rules and regulations of
any Governmental Authority promulgated thereunder or related thereto.

“Disbursement” means a disbursement of Loan Proceeds under this Agreement, including,
without limitation, the Initial Disbursement and all Renovation Reserve Advances.

“Dollars” and the sign “$” means lawful money of the United States of America.

“DSCR Rebalance Date” has the meaning specified in Section 2.03.

“DSCR Rebalance Prepayment” has the meaning specified in Section 2.03.

“Early Opt-in Election” shall mean an election by the Lender to trigger a fallback from LIBOR
to the Alternative Index Rate.

“Early Prepayment Date” has the meaning specified in Section 2.08.

“Engineer” has the meaning specified in Section 6.03(a).

“Environmental Law(s)” means any effective, applicable or relevant federal, state or local
statute, ordinance, rule or regulation, any judicial or administrative order (whether or not on consent) or

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FILED: NASSAU COUNTY CLERK 03/13/2024 08:36 PM INDEX NO. 604499/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/13/2024

judgment applicable to Borrower including, without limitation any judgment or settlement based on
common law theories, and any provisions or condition of any Permit, license or other authorization
binding on Borrower relating to (a) the protection of the environment, the safety and health of persons
(including employees) or the public welfare from actual or potential exposure (or effects of exposure) to
any actual or potential release, discharge, disposal or emission (whether past or

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Sharon Gianelli Track Judge’s New Case

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March 13, 2024

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March 13, 2024

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Exhibit,Appendix: Arbor Realty Sr, Inc. v. Aleksandr Kogan

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