Filed: New York County Clerk 12/13/2016 01:10 Pm Index No

FILED: NEW YORK COUNTY CLERK 12/13/2016 01:10 PM INDEX NO. 656492/2016 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 12/13/2016

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------x : 270 NOSTRAND LENDER LLC, : : Index No. : : COMPLAINT FOR Plaintiff, : DECLARATORY JUDGMENT : AND BREACH OF PAYMENT n against n : GUARANTY : NNRC PROPERTIES LLC, : JOEL LANDAU, : SOLOMON RUBIN, and : MARVIN RUBIN, : : Defendants. : : ------x

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upon personal belief with respect to its own acts and upon information and belief with respect to

all others as follows:

NATURE OF THE CLAIMS

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Mortgage and Promissory Note between Nostrand and NNRC, which obtained a $20 million loan

from Nostrand. A copy of the Mortgage, Security Agreement and Fixture Filing, dated as of

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Exhibit A and a copy of the Promissory Note, dated as of June 30, 2015 is attached hereto as

Exhibit B and their terms, conditions, definitions, exclusions, and endorsements are fully

incorporated herein.

1 of 18 2. Individual Defendants Joel Landau, Solomon Rubin, and Marvin Rubin

'R^[[TRcXeT[h) l? d PaP]c^abm( TgTRd cTS P _Tab^]P[HPh\ T]c? d PaP]ch V d PaP]cTTX]V) inter alia, repayment of the loan. A copy of the Payment Guaranty is attached hereto as Exhibit C and its terms, conditions, definitions, exclusions, and endorsements are fully incorporated herein.

3. NNRC has defaulted multiple times in its obligations under the Mortgage, including by failing to repay the $20,000,000 Mortgage when it became due on June 29, 2016.

4. The Guarantors have also failed to honor the terms of the Payment Guaranty and have refused to repay the loan and guaranteed obligations, despite demand from Nostrand.

5. The Mortgage provides Nostrand with the right to exercise a Purchase Option if, among other things, NNRC fails to repay the loan or is otherwise in default. The Purchase

Option grants Nostrand the ability to require NNRC to sell to Nostrand the premises and land located at 270 Nostrand Avenue in Brooklyn (the lHa^_Tachm( U^a&.1\ X[[X^]* F^bcaP]SWPb tried to exercise its Purchase Option, but NNRC has refused to honor it.

6. NNRC has not only improperly refused to fulfill its obligations pursuant to the

Purchase Option, it has also improperly attempted to exercise a Put Right that would require

Nostrand to purchase the property for $40 million. The Mortgage provides that the Put Right may only be exercised by NNRC if (among other conditions) no Event of Default has occurred under the Mortgage. Because NNRC has indisputably defaulted on the Mortgage, NNRC cannot validly exercise the Put Right.

7. Due to the disputes between the parties, Nostrand seeks a declaratory judgment that NNRC cannot exercise the Put Right and must honor Nostrand's Purchase Option.

8. Nostrand also seeks a judgment that Defendants are obligated to make their payments and guaranty payments under the Mortgage, Promissory Note and Payment Guaranty.

2 of 18 THE PARTIES

9. Plaintiff 270 Nostrand Lender LLC is a Delaware limited liability company with its principal place of business at 126 East 56th Street, New York, New York 10022.

10. Defendant NNRC Properties LLC is a New York limited liability company with its principal place of business at 199 Lee Avenue, Suite 182, Brooklyn, New York 11211.

11. Upon information and belief, NNRC is part of the Allure Group, a consortium that owns several properties in New York.

12. Upon information and belief, Defendant and Guarantor Joel Landau is a citizen and resident of New York. He is a principal of NNRC and maintains an office at 199 Lee

Avenue, Suite 182, Brooklyn, New York.

13. Upon information and belief, Defendant and Guarantor Solomon Rubin is a citizen and resident of New York. He is a principal of NNRC and maintains an office at 199 Lee

Avenue, Suite 182, Brooklyn, New York.

14. Upon information and belief, Defendant and Guarantor Marvin Rubin is a citizen and resident of New York. He is a principal of NNRC and maintains an office at 199 Lee

Avenue, Suite 182, Brooklyn, New York.

JURISDICTION AND VENUE

15. The Court has jurisdiction over NNRC pursuant to CPLR 301, because NNRC is a New York limited liability company, with a principal place of business in New York.

16. The Court has jurisdiction over Guarantors because they are citizens and residents of New York who transact business in New York and because they have submitted in the

Payment Guaranty to the jurisdiction of the courts of the state of New York for any claim, action, or dispute arising under the Payment Guaranty.

3 of 18 17. The Court has jurisdiction over declaratory judgment actions pursuant to CPLR

3001 and over actions involving real property pursuant to RPAPL Article 15. The Court also has jurisdiction over this matter because the property giving rise to this action is situated at 270

Nostrand Avenue, Brooklyn, New York 11205 in Kings County.

18. Venue is proper in this Court pursuant to CPLR 503 because Plaintiff maintains its principal place of business in this county.

FACTUAL ALLEGATIONS

A. Defendant NNRC Purchases the CABS Nursing Home at 270 Nostrand Avenue

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WTP[cW RPaT_a^V aP\ d ]STacWT ]P\ T l; F@ D^]V KTa\ @^\ T @TP[cW Ha^VaP\ m Pc cWT _aT\ XbTb located at 270 Nostrand Avenue in Brooklyn, New York.

20. After years of struggling financial performance, CABS agreed to sell the Property to NNRC and its operating certificate and personal property to an NNRC affiliate, NNRC LLC.

21. In 2014, CABS executed an Asset Purchase Agreement and an Agreement for the

Sale of Real Property with NNRC LLC and NNRC, respectively. CABS was to receive

$15,600,000 for the Property, and a 2-year promissory note in the principal amount of

$5,000,000 for the operating certificate and other assets. The aggregate purchase price was

$20,600,000.

22. Because CABS was a New York not-for-profit corporation and the transaction

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4 of 18 23. In its Petition, CABS stated that the Guarantors, who are principals of NNRC and

FFI; DD; ) f TaTlTg_TaXT]RTS ^f ]Tab P]S^_TaPtors of residential health care facilities in the

JcPcT ^U FTf M^aZ*m ; 8 9J Ud acWTabcPcTS cWPc lXcXb N;8 9JkOd ]STabcP]SX]V cWPc cWT NFFI; O will lease the Premises to [NNRC LLC], who will continue to operate a residential health care facility at the PremibTb*m

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Home Co., Inc., Index No. 2719/2015 (Demarest, J.).

B. Plaintiff Nostrand Loans Defendant NNRC $20 Million to Facilitate the Purchase of 270 Nostrand Avenue

25. On June 30, 2015, NNRC executed a loan agreement with Nostrand in a principal amount oU &.,), , , ), , , 'cWT lD^P]m(*

26. The Loan is secured by a Mortgage, Security Agreement and Fixture Filing, dated

Pb ^U Bd ]T/, ) ., -1 Qh P]SQTcf TT]F^bcaP]SP]SFFI; 'cWT lE ^acVPV Tm(* See Exhibit A.

27. The Loan is evidenced by a Note (as defined in the Mortgage) made by Nostrand in favor of NNRC. See Exhibit B.

C. Key Terms of the Loan, Promissory Note, and Mortgage

28. Under the Promissory Note, Nostrand loaned $20,000,000 to NNRC. The loan matured on June 29, 2016.

29. NNRC was obligated to pay interest on the loan amount on a monthly basis, at an interest rate of 5.5% per annum. See Exhibit B, Section 1. If any interest payment was made late, NNRC was liable for late charges at an amount equal to four cents ($.04) for each dollar that is overdue. See Exhibit B, Section 4.

5 of 18 30. If NNRC defaulted on any of its obligations, all sums due and secured by the

Loan Documents became immediately due and payable. Those accelerated amounts would bear interest at a default interest rate of 6.5% in excess of the regular 5.5% interest rate, for a total default interest rate of 12%. See Exhibit B, Sections 5-6.

31. On the maturity date, NNRC was obligated to repay to Nostrand the $20 million principal loan amount. See Exhibit B, Section 1. Section 2.02 of the Mortgage required that

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The failure of [NNRC] to pay any installment of principal, interest or principal and interest, or any other sum required to be paid under any Loan Document on the due date of such payment, which failure shall remain uncured for five (5) business days after written notice thereof from [Nostrand]

The failure of [NNRC] to pay Impositions [defined in the Mortgage to include real estate and other taxes] and insurance premiums as and when provided hereunder.

33. Under Section 1.01 of the Mortgage, in order to secure repayment of the Note,

NNRC granted Nostrand a security interest in the property located at 270 Nostrand Avenue,

Brooklyn, New York, as defined in Schedule A of the Mortgage.

34. L]STaJTRcX^].*, /) FFI; f PaaP]cb lcWPc XcW^[Sb \ arketable and indefeasible fee simple absolute title to [270 Nostrand Avenue], and that it has the right and is lawfully

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35. Under Section 11.07 of the Mortgage, NNRC is required to reimburse Nostrand for all expenses, costs, charges and legal fees incurred by Nostrand in collecting any of the loan or enforcing performance of the obligations of the Loan Documents.

6 of 18 D. The Guarantors Execute a Payment Guaranty Whereby They Agreed to be Jointly and Severally Liable for NNRC’sLoan and Mortgage Obligations

36. Guarantors Joel Landau, Marvin Rubin and Solomon Rubin are the principals of

NNRC and executed a Payment Guaranty, dated as of June 30, 2015. See Exhibit C.

37. Pursuant to the Payment Guaranty, the Guarantors agreed to be personally liable,

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(a) all interest payments due and owing under the Note and the other Loan Documents (including, interest payments due at the Default Rate) as and when the same shall become due;

(b) payment of the outstanding principal amount of the Loan and any other amounts payable by Borrower under the Note and the other Loan Documents, including any surviving obligations of Borrower following the consummation of the Put Right or Purchase Option, as and when the same shall become due, whether at the stated maturity thereof, by acceleration, demand or otherwise; and

(c) payment and performance of any indemnification obligations of Borrower under the Loan Documents, including any surviving obligations of Borrower following the consummation of the Put Right or Purchase Option, as and when the same shall become due, whether at the stated maturity thereof, by acceleration, demand or otherwise.

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39. JTRcX^]-*4 ^U cWT HPh\ T]c? d PaP]ch aT`d XaTb ? d PaP]c^ab c^ _Ph F^bcaP]Skb[TV P[ fees and expenses associated with enforcing the Guaranty:

7 of 18 In the event that Guarantor[s] should breach of fail to timely perform any provisions of this Guaranty, Guarantor[s] shall, immediately upon demand by Lender, pay Lender all actual out of- _^RZ Tc R^bcb P]STg_T]bTb 'X]R[dSX]V R^d acR^bcb P]SPccâ]Thbk fees) incurred by Lender in the enforcement hereof or the _aTbTaePcX^]Û DT]STakbaXVWcb WTaTd ]STa* KWT RêT]P]cR^]cPX]TS in this Section shall survive the payment and performance of the Guaranteed Obligations.

E. NNRC Grants Nostrand a Purchase Option in the Mortgage

40. Section 14.02 of the Mortgage grants Nostrand a Purchase Option whereby it can call the Mortgage and purchase the Property:

Lender [(OâXcb STbXV]TT( bWP[[WPeT P]^_cX^]'cWT lHdaRWPbT G_cX^]m() bd QYTRc c^ cWT bPcXbUPRcX^]Û cWT Hdc+; P[[; ^]SXcX^]b) c^ purchase the Property from [NNRC] (i) at any time after the occurrence of an Event of Default, (ii) on the Maturity Date, or (iii) at any time after the Maturity Date for so long as the Loan is outstanding, for a purchase price in the amount of $25,000,000, on no less than ten (10) days _aXâf aXccT]]^cXRTj *d ][Tbb cWT Property has been vacated of all tenants and occupants and there is no pending litigation regarding the same, in which event the purchase price shall be $40,000,000.

Mortgage, Section 14.02 (emphasis added).

41. If Nostrand egTaRXbTb Xcb HdaRWPbT G_cX^])cWT l_d aRWPbT _aXRT _PhPQ[TQh

[Nostrand] at the closing of the Purchase Option shall be set off against, and reduced dollar for dollar by, the then outstanding principal balance of the Loan, accrued interests thereon and any

^cWTaP\ ^d ]cb ^f X]V d ]STacWT D^P]<^Rd \ T]cj m Id.

42. NNRC also received a limited Put Right pursuant to Section 14.01 of the

Mortgage. By its terms, the Put Right exists only “provided that no Event of Default has occurred.” Mortgage, Section 14.01 (emphasis added).

43. FFI; kbHdc IXVWc Xb Ud acWTa[X\ XcTS c^ X]bcP]RTb X]f WXRW cWT lHa^_Tach bWP[[ have been legally vacated of all tenants and occupants and no litigation shall be pending with aTb_TRc cWTaTc^*m

8 of 18 44. In the event that NNRC attempts to exercise the Put Right, it is required to

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14.03(h)(vi) of the Mortgage. NNRC is fuacWTa^Q[XVPcTS c^ R^]UXa\ cWPc XclWPb ]^Z ]^f[TSV T ^U any fact that has bot [sic] been disclosed to Lender which materially adversely affects or might

\ PcTaXP[[hPSeTabT[hPUUTRc cWT Ha^_Tach*m Id. at Section 2.03(d).

45. If any actions or claims affecting the Property arise, NNRC is obligated to notify

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46. KWT XcP[XRXiTS [P]Vd PV T `d ^cTS PQ^eT X]_PaPV aP_Wb 0, P]S0. aTU[TRc cWT _PacXTbk agreement that the rights to exercise the put and call options contained in the Mortgage depend on, among other things, whether an Event of Default has occurred. The occurrence of an Event of Default both nullifies the Put Right and triggers the right to exercise the Purchase Option.

F. NNRC Defaults Under the Mortgage, Refusesto Honor Nostrand’sPurchase Option and Attempts to Exercise its Invalid Put Option

a. NNRC Fails to Pay Required Taxes and Impositions

47. NNRC defaulted in its obligations to pay real estate taxes and other Impositions.

48. On March 15, 2016, NNRC tried to exercise its Put Option and require Nostrand to purchase and close on the Property within 30 days. A copy ^U FFI; kb[TccTaSPcTS E PaRW -1)

2016 is annexed hereto as Exhibit D.

49. On April 5, 2016, Nostrand notified NNRC that it was in default of its obligations d ]STacWT D^P]P]SE ^acVPV T QTRPd bT ^U FFI; kbUPX[daTc^ _Ph f WT]Sd T RTacPX]A\ _^bXcX^]b)

9 of 18 including ti\ T[h_Ph\ T]c^U aTP[TbcPcT cPgTb 'l>Xabc F^cXRT ^U

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50. 8 b P aTbd [c^U FFI; kbSTUPd [cb) F^bcaP]SX]U^a\ TS FFI; cWPc XcSXS not have the right to exercise the Put Right.

51. NNRC did not dispute that it was in default of the Mortgage. Thereafter it arranged for payment of some of the outstanding Impositions.

b. NNRC Improperly Tries to Exercise its Put Right Even Though it Was In Default

52. Even though NNRC had defaulted under the Mortgage and did not fully cure its default, NNRC attempted again to exercise its Put Right by letter dated May 18, 2016, demanding that the parties establish a closing date of June 21, 2016. A copy of NNRCkb[TccTa dated May 18, 2016 is annexed hereto as Exhibit F.

53. In the spring of 2016 numerous news articles appeared about multiple ongoing investigations into whether NNRC, its principals, or the Allure Group, a consortium to which

NNRC belongs, had misled state health officials about their intent to continue operating 270

Nostrand Avenue as a nursing home facility and the process whereby it moved residents out of

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1 These investigations have been widely reported. See, e.g., G. Smith, New York AG Eric Schneiderman rejects expansion plans by nursing home provider under investigation,NEW YORK DAILY NEWS, June 6, 2016, available at http://www.nydailynews.com/new-york/ag-schneiderman-rejects-expansion-plans-nursing-home-provider-article- 1.2663311; see also G. Smith, EXCLUSIVE: AG investigating nursing home operator to see if it misled health officials before it turned Bedford-Stuyvesant property into luxury condos,NEW YORK DAILY NEWS, April 7, 2016, available at http://www.nydailynews.com/new-york/ag-probing-nursing-home-turned-condos-bed-stuy-article- 1.2592560.

10 of 18 54. On June 6, 2016, Nostrand notified NNRC that it was again in default of its obligations under the Loan and Mortgage. These unpaid Impositions totaled over $21,000. A

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55. For that and other reasons, Nostrand informed NNRC that it did not have the right to exercise the Put Right.

56. On that same date, Nostrand requested that NNRC provide certain information needed in order to purchase the Property. This included documentation demonstrating that the

New York State Department of Health approved the closure of the nursing facility at 270

F^bcaP]S8 eT]dT P]ScWPc cWT Ha^_Tach f Pb [TV P[[hePRP]c* 8 R^_h ^U F^bcaP]SkbBd ]T2) ., -2 letter request is annexed hereto as Exhibit H.

57. This confirmation was particularly significant because the Department of Health

WPS _d Q[XR[hX]SXRPcTS Xcf Pb R^]cT\ _[PcX]V [TV P[PRcX^]PV PX]bc FFI; kb_aX]RX_P[b X] connection with the shut down and sale of another health care facility in the Lower East Side of

Manhattan called Rivington House.2

58. Nostrand therefore requested that NNRC confirm whether it was in a position to

PUUXa\ aT_aTbT]cPcX^]bP]Sf PaaP]cXTb R^]cPX]TS X]cWT E ^acVPV T) X]R[dSX]V cWPc FFI; WPS l]^ knowledge of any fact that has not been disclosed to Lender which materially adversely affects or might materXP[[hPSeTabT[hPUUTRc cWT Ha^_Tach*m See Exhibit H.

2 Acf Pb _d Q[XR[haT_^acTS cWPc

11 of 18 59. Nostrand supplemented its information requests in a letter dated June 7, 2016, in which Nostrand identified additional news accounts from the New York Times, Wall Street

Journal, and Daily News, among others, indicating that the New York Attorney General had objected to NNRC or its principals purchasing two nursing homes on the basis that allegedly misleading statements had been made in connection with the purchase and shutdown of the

Rivington House and .3, F^bcaP]S8 eT]dT* 8 R^_h ^U F^bcaP]SkbBd ]T3) ., -2 [TccTaaT`d Tbc Xb annexed hereto as Exhibit I.

60. F^bcaP]STg_aTbb[hbcPcTS cWPc lNXO][XVWc ^U cWT 8 cc^a]Th ? T]TaP[kb^]V^X]V investigation and his objection to your proposed purchase of additional nursing home facilities, we ask you once again whether there is any limitation or encumbrances on you[r] ability to sell

.3, F^bcaP]S8 eT]dT Pc cWXb cX\ T*m Id.

61. FFI; aTb_^]STS c^ F^bcaP]S^]Bd ]T5) ., -2* 8 R^_h ^U FFI; kbBd ]T5) ., -2 letter request is annexed hereto as Exhibit J. NNRC did not dispute that it was under investigation by various New York state and federal governmental agencies, but it refused to

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62. FFI; P[b^ UPX[TS c^ PSSaTbb F^bcaP]SkbR^]RTa]bPQ^d c f WTcWTaXcWPS _a^_Ta[h closed the nursing facility at 270 Nostrand Avenue in compliance with the Closure Plan.

12 of 18 63. At no time did NNRC affirmatively notify Nostrand of any material matter or claim affecting the Property, as it was required to do under Section 2.08(a) of the Mortgage.

64. Nostrand responded by letter dated June 10, 2012* 8 R^_h ^U F^bcaP]SkbBd ]T-, )

2016 letter request is annexed hereto as Exhibit K. Nostrand noted, among other matters,

FFI; kbUPX[daTc^ PSSaTbb SXaTRc[hf WTcWTacWTaTXb P]h[X\ XcPcX^]^aT]Rd \ QaP]RT ^]Xcb PQX[Xch to sell 270 Nostrand Avenue, and Nostrand renewed its request for relevant documents.

65. NNRC ultimately canceled the closing that it had purported to set in its May 18,

2016 letter.

c. NNRC Fails to Repay the Mortgage When it Comes Due and Nostrand Exercises its Purchase Option

66. On June 29, 2016, the Mortgage came due and payable. Nostrand demanded that

NNRC repay the Mortgage, but NNRC did not make any payment.

67. On August 1, 2016, Nostrand notified NNRC that it was electing to purchase the

Property pursuant to its Purchase Option for a purchase price of $25,000,000 and set a closing date of August 22, 2016. A copy of the Notice of Exercise of Purchase Option is attached hereto as Exhibit L and its terms, conditions, definitions, exclusions, and endorsements are fully incorporated herein.

68. FFI; aTUd bTS c^ W^]^aF^bcaP]SkbHdaRWPbT G_cX^]*

69. On November 15, 2016, Nostrand notified NNRC that it continues to be in default under the loan. A copy of the Notice of Continued Default is attached hereto as Exhibit M and its terms, conditions, definitions, exclusions, and endorsements are fully incorporated herein.

d. The Guarantors Fail to Repay the Mortgage Pursuant to the Payment Guaranty

70. On November 11, 2016, Nostrand demanded in writing that the Guarantors fulfill their obligations under the Payment Guaranty and repay the Mortgage and the amounts

13 of 18 guaranteed. A copy of the Demand Letter is attached hereto as Exhibit N and its terms, conditions, definitions, exclusions, and endorsements are fully incorporated herein.

71. The Guarantors did not repay the Mortgage or any of the other of the Guaranteed

Obligations.

72. On information and belief, the Guarantors have assets sufficient to satisfy the

HPh\ T]c? d PaP]ch* 8 RRâSX]V c^ P aT_âcXbbd TS Qh cWT FTf MâZ ; Xch ; ^\ _ca^[[TakbGUUXRT dated August 1, 2016, Mr. Landau and Marvin Rubin made a $72 million profit in 2016 on their purchase and sale of Rivington House, another nursing home they purchased, closed and flipped for its residential real estate value.3

e. NNRC Refuses to Fulfill Its Obligations and Again Purports to Exercise its Invalid Purchase Option

73. FFI; aTb_^]STS c^ F^bcaP]SkbF^eT\ QTa-- [TccTaQh [TccTaSPcTS F^eT\ QTa./)

2, -2 f WXRW XV]âTS FFI; kbR^]cX]dX]V STUPd [cb P]S_d a_âcTS c^ TgTaRXbT cWT Hdc IXVWc P]Sc^ bRWTSd [TP R[^bX]V Uâ

November 23, 2016 letter is attached hereto as Exhibit O and its terms, conditions, definitions, exclusions, and endorsements are fully incorporated herein.

74. F^bcaP]SaTb_^]STS ^]F^eT\ QTa/, ) ., -2 Qh aTYTRcX]V FFI; kbPccT\ _c c^ exercise the Put Right while being in default. Nostrand reminded NNRC that NNRC had attempted twice before to improperly exercise its Put Right while indisputably being in default, and that NNRC twice withdrew its Put when notified that it was in default. Nostrand informed

NNRC that its continued defaults precluded it from exercising the Put Right, and that NNRC did

]^caPXbT P eP[XS STUT]bT c^ cWT ? d PaP]c^abk^Q[XVPcX^]bd ]STacWT HPh\ T]c? d PaP]ch* 8 R^_h ^U

3 8 R^_h ^U cWT ; ^\ _ca^[[TakbIT_^acXb PePX[PQ[T^][X]TPc http://comptroller.nyc.gov/wp- content/uploads/documents/Rivington_Report_8-1-16.pdf.

14 of 18 F^bcaP]SkbF^eT\ QTa/, ) ., -2 [TccTaXb PccPRWTS WTaTc^ Pb Exhibit P and its terms, conditions, definitions, exclusions, and endorsements are fully incorporated herein.

75. Accordingly, repayment of the principal loan amount of $20,000,000 is now overdue by more than five months.

FIRST CAUSE OF ACTION (Declaratory Judgment)

76. Nostrand repeats and realleges the allegations in paragraphs 1 through 75 above as if fully set forth herein.

77. Under the terms of the Mortgage, Nostrand is permitted to exercise its Purchase

Option at a purchase price of $25 million, and NNRC is not entitled to exercise the Put Option and require Nostrand to purchase the Property for $40 million.

78. Nostrand has complied with all of its obligations under the Mortgage and associated loan agreements. Pursuant to Section 14.02 of the Mortgage, Nostrand is entitled to purchase the Property from NNRC for $25 million at any time after the occurrence of an Event of Default, on the maturity date of the loan (i.e., June 29, 2016), or any time after the maturity date for so long as the loan is outstanding.

79. There is no dispute that multiple Events of Default have occurred, including

FFI; kbUPX[daT to pay taxes and other Impositions, failure to repay the loan, and failure to pay default interest and late charges. Nostrand is therefore entitled to exercise its Purchase Option.

Nostrand notified NNRC of its election to exercise the Purchase Option on August 1, 2016, but

NNRC has refused to honor it.

80. Instead, NNRC has improperly attempted to exercise a Put Right, even though there indisputably have been Events of Default, they have not demonstrated that the Property is legally vacated, and NNRC and its principals are subject to multiple ongoing investigations.

15 of 18 81. By reason of the foregoing, there now exists an actual, justiciable controversy between the parties regarding the Purchase Option and Put Right contained in the Mortgage.

This Court is vesteS f XcW cWT _^f TaP]SPd cW^aXch c^ PSYd SXRPcT cWT _PacXTbkaTb_TRcXeTaXVWcb) duties and obligations with respect to the issues raised by this cause of action for declaratory judgment.

SECOND CAUSE OF ACTION (Breach of Payment Guaranty)

82. Nostrand restates and incorporates by this reference the allegations set forth in paragraphs 1 through 81 above as if fully set forth herein.

83. On June 30, 2015, Guarantors executed a Payment Guaranty unconditionally guaranteeing the payment and performance of the obligation to make all interest payments due and owing under the Note and Loan Documents and payment of the outstanding principal amount of the Loan.

84. Pursuant to the Payment Guaranty, Guarantors agreed to be jointly and severally liable for these payment obligations.

85. 9h aTPb^]^U FFI; kbUPX[daTc^ aT_Ph cWT E ^acVPV T P]S_Ph ^cWTa_Ph\ T]c obligations thereunder, Guarantors each became personally jointly and severally indebted to

Nostrand for the principal loan amount of $20,000,000, plus any unpaid taxes and Impositions, interest payments due and owing, including interest payments due at the Default Rate.

86. Nostrand fully complied at all times with its obligations under the Mortgage,

Note, and Loan Documents.

87. Nostrand has demanded payment pursuant to the Payment Guaranty, but the principal loan amount of $20,000,000, the default interest, late charges, legal fees and other costs all remain unpaid and outstanding.

16 of 18 88. By reason of the foregoing, each of the Guarantors has breached the Payment

Guaranty.

89. 8 b P aTbd [c^U ? d PaP]c^abkbreach of the Payment Guaranty, Nostrand has been damaged in the amount of at least $20,000,000, plus past due Impositions, default interest, late charges, legal fees and other costs, with interest thereon from all applicable dates.

WHEREFORE, Nostrand prays for the following relief:

i. For a declaration that Nostrand is permitted to exercise its Purchase Option under

the Mortgage and purchase the Property from NNRC for $25 million;

ii. For a declaration that NNRC is not permitted to exercise its Put Right under the

Mortgage because Events of Default have occurred, the property is not legally

vacant, and there are ongoing investigations regarding NNRC and its principals;

iii. For a declaration that Nostrand is not required to purchase the Property from

NNRC pursuant to the Put Right;

iv. For a judgment that Joel Landau, Solomon Rubin, and Marvin Rubin are jointly

and severally personally liable for the payment of all amounts due under the Loan

and Note, including the principal loan amount of $20,000,000, plus all unpaid

interest, Impositions, costs and fees, with interest thereon due at the Default rate

from July 1, 2016 onward (less interest already paid);

v. >^aF^bcaP]Skb[TV P[P]S^cWTaR^bcb X]Rd aaTS X]cWXb PRcX^]7P]S

17 of 18 vi. For any such other and further relief as this Court may deem just and equitable.

December 13, 2016 New York, New York DENTONS US LLP

By: /s/ Avi Schick Avi Schick Justin Kattan Kristen B. Weil 1221 Avenue of the Americas New York, NY 10020 Phone: (212) 398-5213 Fax: (212) 768-6800 [email protected] [email protected] [email protected]

Attorneys for Plaintiff 270 Nostrand Lender LLC

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