CARVEOUT GUARANTY

THIS CARVEOUT GUARANTY (this “Guaranty”) is dated March 13, 2020, by SUTTON HILL
PROPERTIES, LLC, a Nevada limited liability company qualified to do business in
New York, having its principal place of business at 5995 Sepulveda Boulevard,
Suite 300, Culver City, California 90230 (the “Borrower”) and READING
INTERNATIONAL, INC., a Nevada corporation, having its principal place of
business at 5995 Sepulveda Boulevard, Suite 300, Culver City, California 90230
(“Reading” and, together with Borrower, collectively referred to as the
“Guarantor”), for the benefit of VALLEY NATIONAL BANK, a national bank with an
address at 1455 Valley Road, Wayne, New Jersey 07470 (the “Lender”).

W I T N E S S E T H:

WHEREAS, Lender is about to make a first mortgage loan to Borrower in the
principal amount of TWENTY-FIVE MILLION AND 00/100 DOLLARS ($25,000,000.00) (the
“Loan”) to be evidenced by a Consolidated, Amended and Restated Mortgage
Promissory Note of even date herewith (the “Note”), and secured by, among other
things, (i) a Mortgage Consolidation, Extension and Modification Agreement of
even date herewith (the “Mortgage”), encumbering certain land and improvements
located at 1001-1007 Third Avenue, New York, New York (the “Property”), as more
fully described in the Mortgage, and (ii) various other documents executed in
connection with the Note and Mortgage (the Note, Mortgage, and such other
agreements executed in connection therewith are hereinafter collectively
referred to as, the “Loan Documents”); and

WHEREAS, Reading is the owner of direct or indirect interests in Borrower, and
Reading will directly or indirectly and substantially benefit from the Lender
making the Loan to Borrower.

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower, and for
other good and valuable consideration, the receipt and legal sufficiency of
which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE I

DEFINITIONS

﻿

1.1    Definitions.  As used herein, the following terms shall have the
following meanings:

(a)    “ADA and Environmental Indemnity” means that certain ADA and
Environmental Indemnity Agreement of even date herewith executed by Borrower and
Reading in favor of Lender.

(b)    “Bankruptcy Code” means Title 11 of the United States Code, as amended
from time to time.

(c)    “Carveout Obligations” means all losses incurred by Lender (such losses
to include, without limitation, the failure to recover any or all Loan
Obligations) resulting from any of the following:

1

--------------------------------------------------------------------------------

 

i.    any fraud or intentional misrepresentation by Borrower in connection with
the Loan;

ii.   any willful misconduct of Borrower (including, without limitation, any
valid claim brought against Borrower under the Racketeer Influenced and Corrupt
Organizations Act, (18 U.S.C. Sections 1961-1968), as such may be amended from
time to time);

iii.  the breach in any material respect of any representation, warranty, or
covenant in the ADA and Environmental Indemnity or in the Mortgage concerning
Environmental Laws (as defined in the ADA and Environmental Indemnity),
Hazardous Substances (as defined in the ADA and Environmental Indemnity) or
asbestos, and any indemnification of Lender with respect thereto in either
document;

iv.  the removal or disposal of any portion of the Property other than
(1) obsolete property, (2) in the ordinary course of business of owning,
operating or managing the Property, or (3) as otherwise permitted in the Loan
Documents;

v.   the misapplication or conversion by Borrower of any monies, including
(1) insurance proceeds paid by reason of any loss, damage or destruction to the
Property, (2) awards or other amounts received in connection with the
condemnation of all or a portion of the Property, (3) any Rents following an
Event of Default, or (4) any funds that are to be disbursed into or from any
accounts or lockbox established under the Loan Documents;

vi.  physical waste of any portion of the Property resulting from intentional or
fraudulent acts or omissions by Borrower (other than physical waste resulting
from insufficient cash flow from the Property);

vii. any security deposits, advance deposits or any other deposits collected
with respect to the Property which are not delivered to Lender, any receiver or
any Person purchasing the Property in connection with a foreclosure or action in
lieu thereof, except to the extent any such security deposits were applied in
accordance with the terms and conditions of any of the Leases prior to the
occurrence of the Event of Default that gave rise to such foreclosure or action
in lieu thereof;

viii. except as otherwise expressly provided under the Loan Documents, failure
by Borrower to obtain Lender’s prior written consent to any subordinate
financing or other voluntary lien (other than Permitted Encumbrances);

ix.  intentionally omitted;

2

--------------------------------------------------------------------------------

 

x.    Borrower’s failure to comply with the provisions of Section 5.10 of the
Mortgage; and

xi.  failure to comply with any legal requirements of any Governmental Authority
(other than a failure resulting from the non-payment of money) resulting in a
forfeiture by Borrower of the Property, or any material portion thereof.

(d)    “Event of Default” means any default under this Guaranty or any of the
Loan Documents and the continuance of such default beyond any applicable notice
or grace period for such default contained herein or in the Loan Documents.

(e)    “Governmental Authority” means any of the following:  (i) the federal
government, (ii) any state or local government or any political subdivision of
any state or local government, or (iii) any agency, court or body of either the
federal government, or any state or local government or any other political
subdivision of any state or local government, exercising executive, legislative,
judicial, regulatory or administrative functions.

(f)    “Guaranteed Obligations” means the Loan Obligations and the Carveout
Obligations.

(g)    “Guarantor Claims” shall have the meaning set forth in Section 5.1 of
this Guaranty.

(h)    “herein,” “hereof,” “hereunder,” and “herewith” shall be deemed to refer
to this entire Guaranty and not any particular provision of this Guaranty.

(i)    “Including” or “including” means “including, without limitation.”

(j)    “Leases” means all leases, licenses, concessions, occupancy agreements,
and other agreements affecting the use or occupancy of the Property or any
portion thereof, now or hereafter entered into and all guarantees of any of the
foregoing.

(k)    “Loan Obligations” means (i) the due and punctual payment of
(1) principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loan or any other loans or other financial accommodations made to Borrower
by Lender, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, and (2) all other monetary
obligations, including fees, commissions, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Borrower to Lender, or that are otherwise
payable to Lender, under the Note, Mortgage and the other Loan Documents, and
(ii) the due and punctual performance of all covenants, agreements, obligations
and liabilities of Borrower to Lender under the Note, Mortgage and the other
Loan Documents.

3

--------------------------------------------------------------------------------

 

(l)    “Loan Obligations Trigger Event” means any of the following:  (i) a
voluntary bankruptcy or insolvency proceeding is commenced by Borrower under the
Bankruptcy Code or any other federal or state bankruptcy or insolvency law,
(ii) the filing by a Person other than Lender of an involuntary bankruptcy or
insolvency proceeding against Borrower under the Bankruptcy Code or any other
federal or state bankruptcy or insolvency law provided that Borrower colludes in
conjunction with filer, which proceeding remains undismissed for a period of
sixty (60) days, (iii) Borrower filing an answer consenting to or otherwise
acquiescing or joining in, or Borrower (or a Person on behalf of Borrower)
soliciting (or causing to be solicited) petitioning creditors to commence or
acquiesce or join in, any involuntary bankruptcy or insolvency proceeding filed
against Borrower by any Person other than Lender under the Bankruptcy Code or
any other federal or state bankruptcy or insolvency law, (iv) Borrower (or a
Person on behalf of Borrower) consenting to or acquiescing in or joining in (or
soliciting or causing to be solicited petitioning creditors to consent to or
acquiesce or join in) an application for the appointment of a custodian,
receiver, trustee, or examiner for Borrower or any portion of the Property other
than an application made by Lender, (v) Borrower making an assignment for the
benefit of creditors, or admitting, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due, and (vi) the
intentional interference by Borrower (or a Person on behalf of Borrower) with
Lender’s exercise of any of its enforcement rights or other remedies under the
Loan Documents, including contesting foreclosure or asserting counterclaims in
any action to foreclose or any other action.

(m)    “Permitted Encumbrances” means any exceptions to title in that certain
commitment of title insurance bearing Title No.:  19-31665 and issued by New
York Metro Title Agency, Inc., as agent for Chicago Title Insurance Company,
which insures the lien of the Mortgage.

(n)    “Person” means an individual, corporation, partnership, limited liability
partnership, limited liability company, trust, unincorporated association,
government, governmental authority, or other entity.

(o)    “Rents” means all rents, issues and profits of the Property or any part
thereof

1.2    Other Defined Terms.  Any capitalized term utilized herein shall have the
meaning as specified in the Mortgage unless such term is otherwise specifically
defined herein.

ARTICLE II

NATURE AND SCOPE OF GUARANTY

﻿

2.1    Guaranty of Obligation.  Subject to the terms hereof, (a) effective
immediately upon the occurrence of a  Loan Obligations Trigger Event (and
without any notice or further act or condition of any kind) and continuing at
all times thereafter, Guarantor hereby irrevocably and unconditionally
guarantees to Lender (and its successors and assigns with respect to any
interest in the Loan) the payment and performance of all Loan Obligations then
outstanding or at any time thereafter incurred, as and when the same shall be
due and payable, whether by lapse of time, by acceleration of maturity or
otherwise, and (b) effective immediately on the date hereof (and without any
notice or further act or condition of any kind), Guarantor hereby irrevocably
and unconditionally agrees that it shall be liable to Lender (and its successors
and assigns of an interest

4

--------------------------------------------------------------------------------

 

in the Loan) for the payment and performance of all Carveout
Obligations.  Guarantor hereby irrevocably and unconditionally covenants and
agrees that it is liable for the Guaranteed Obligations as a primary obligor.

2.2    Nature of Guaranty.  This Guaranty is an irrevocable, absolute,
continuing guaranty of payment and performance, and is not a guaranty of
collection.  This Guaranty may not be revoked by Guarantor, and shall continue
to be effective with respect to any Guaranteed Obligations arising or created
after any attempted revocation by Guarantor and after Guarantor’s dissolution
(and in any such event, this Guaranty shall be binding upon such Guarantor’s
successors and assigns).  The fact that, at any time, or from time to time, the
Loan or the Guaranteed Obligations may be increased or reduced, shall not
release or discharge the obligation of Guarantor to Lender with respect to the
Guaranteed Obligations.  This Guaranty may be enforced by Lender and any
subsequent holder of the Note, and shall not be discharged by the assignment or
negotiation of all or part of the Note.  This Guaranty shall survive any
reinstatement of the Loan.

2.3    Guaranteed Obligations Not Reduced by Offset.  The Guaranteed
Obligations, and the liabilities and obligations of Guarantor to Lender
hereunder, shall not be reduced, discharged or released because, or by reason,
of any existing or future offset, claim or defense of Borrower (other than the
defense of payment) or any other Person against Lender or against payment of the
Loan or the Guaranteed Obligations, whether such offset, claim or defense arises
in connection with the Loan or the Guaranteed Obligations (or the transactions
creating the Loan or the Guaranteed Obligations) or otherwise.

2.4    Payment by Guarantor.  If all or any part of the Guaranteed Obligations
shall not be punctually paid when due, whether at demand, maturity, acceleration
or otherwise, Guarantor shall, upon demand by Lender and without presentment,
protest, notice of protest, notice of non-payment, notice of intention to
accelerate the maturity, notice of acceleration of the maturity or any other
notice whatsoever, pay in lawful money of the United States of America, the
amount then due on the Guaranteed Obligations, to Lender at Lender’s address as
set forth herein.  Such demand(s) may be made at any time coincident with or
after the time for payment of all or part of the Guaranteed Obligations pursuant
to the terms of the Loan Documents.  Such demand shall be deemed made, given and
received in accordance with the notice provisions hereof.

2.5    No Duty to Pursue Others.  It shall not be necessary for Lender (and
Guarantor hereby waives any rights which Guarantor may have to require Lender),
in order to enforce the obligations of Guarantor hereunder, first to
(a) institute suit or exhaust its remedies against Borrower or others liable on
the Loan or the Guaranteed Obligations or any other Person, (b) enforce Lender’s
rights against any collateral which shall ever have been given to secure the
Loan or the Guaranteed Obligations, (c) enforce Lender’s rights against any
other guarantors of the Loan or the Guaranteed Obligations, (d) join Borrower or
any other Person liable on the Loan or the Guaranteed Obligations in any action
seeking to enforce this Guaranty, (e) exhaust any remedies available to Lender
against any collateral which shall ever have been given to secure the Loan or
the Guaranteed Obligations, or (f) resort to any other means of obtaining
payment of the Loan or the Guaranteed Obligations.  Lender shall not be required
to mitigate damages or take any other action to reduce, collect or enforce the
Loan or the Guaranteed Obligations.

5

--------------------------------------------------------------------------------

 

2.6    Waivers.  Guarantor agrees to the provisions of the Loan Documents, and
hereby waives notice of (i) any loans or advances made by Lender to Borrower,
(ii) acceptance of this Guaranty, (iii) any amendment, extension, increase,
waiver, consent or other modification of the Note, Mortgage, or any other Loan
Documents, (iv) the execution and delivery by Borrower and Lender of any other
loan or credit agreement or of Borrower’s execution and delivery of any
promissory notes or other documents arising under the Loan Documents or in
connection with the Loan or the Guaranteed Obligations, (v) the occurrence of
any breach by Borrower or an Event of Default or Loan Obligations Trigger Event,
(vi) Lender’s transfer or disposition of the Loan or the Guaranteed Obligations,
or any part thereof, (vii) sale or foreclosure (or posting or advertising for
sale or foreclosure) of any collateral for the Loan or the Guaranteed
Obligations, (viii) protest, proof of nonpayment or default by Borrower, or
(ix) any other action at any time taken or omitted by Lender and, generally,
except to the extent expressly required by the terms hereof, all demands and
notices of every kind in connection with this Guaranty, the Loan Documents, any
documents or agreements evidencing, securing or relating to any of the Loan or
the Guaranteed Obligations.

2.7    Payment of Expenses.  In the event that Guarantor should breach or fail
to timely perform any provisions of this Guaranty, Guarantor shall, immediately
upon demand by Lender, pay Lender all costs and expenses (including court costs
and reasonable attorneys’ fees and disbursements) incurred by Lender in the
enforcement hereof or the preservation of Lender’s rights hereunder.  All costs
and expenses will accrue interest at the highest default rate in any instrument
evidencing the Loan Obligations until payment is actually received by the
Lender.  The covenant contained in this Section shall survive the payment and
performance of the Guaranteed Obligations.

2.8    Effect of Bankruptcy.  In the event that, pursuant to any insolvency,
bankruptcy, reorganization,  receivership or other debtor relief law, or any
judgment, order or decision thereunder, Lender must rescind or restore any
payment or any part thereof received by Lender in satisfaction of the Loan or
the Guaranteed Obligations, as set forth herein, then any prior release or
discharge from the terms of this Guaranty, or credit, given to Guarantor by
Lender shall be without effect and this Guaranty shall be restored and remain in
full force and effect.  It is the intention of Borrower and Guarantor that
Guarantor’s obligations hereunder shall not be discharged except by Borrower’s
indefeasible payment and performance in full of the Loan and, if and to the
extent payable hereunder, the Guaranteed Obligations, or Guarantor’s performance
of such obligations, and then only to the extent of such performance; and that
in the event of any such rescission or restoration by the Lender with respect to
any payment as provided above in this paragraph, then to the extent of such
rescission or restoration the Guaranteed Obligations shall also be restored and
shall remain in effect.

2.9    Waiver of Subrogation, Reimbursement and Contribution.  Notwithstanding
anything to the contrary contained in this Guaranty, Guarantor hereby
unconditionally and irrevocably defers, until the indefeasible payment in full
of the Loan and, if and to the extent payable hereunder, the Guaranteed
Obligations, all rights it may now or hereafter have under any agreement, at law
or in equity (including, without limitation, any law subrogating Guarantor to
the rights of Lender), to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from Borrower, or any other
Person liable for payment of any or all of the Guaranteed Obligations, for any
payment made by Guarantor under or in connection with this Guaranty.

6

--------------------------------------------------------------------------------

 

2.10    Borrower.  The term “Borrower” as used herein shall include any new or
successor corporation, association, partnership (general or limited), limited
liability company, joint venture, trust or other individual or organization
formed as a result of any merger, reorganization, sale, transfer, devise, gift
or bequest of Borrower.

2.11    Other Guaranties.  This Guaranty is separate, distinct and in addition
to any liability or obligations that Borrower or any guarantor may have under
any other guaranty or indemnity executed by Borrower or any guarantor in
connection with the Loan.

ARTICLE III

EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTORS OBLIGATIONS

﻿

Guarantor hereby (i) consents and agrees to each of the following, and agrees
that Guarantor’s obligations under this Guaranty shall not be released,
diminished, impaired, reduced or adversely affected by any of the following,
except to the extent expressly required by the terms hereof, and (ii) waives any
common law, equitable, statutory or other rights (including without limitation,
except to the extent required by the terms hereof, rights to notice) which
Guarantor might otherwise have as a result of or in connection with any of the
following:

3.1    Modifications.  Any amendment, renewal, extension, increase,
modification, alteration or rearrangement of all or any part of the Loan, the
Loan Obligations, the Note, Mortgage, and the other Loan Documents or any other
document, instrument, contract or understanding between Borrower and Lender or
any other Person pertaining to the Loan or the Loan Obligations, or any failure
of Lender to notify Guarantor of any such action.

3.2    Adjustment.  Any adjustment, indulgence, forbearance or compromise that
might be granted or given by Lender to Borrower.

3.3    Condition of Borrower or Guarantor.  The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution or
lack of power of Borrower, Guarantor or any other Person at any time liable for
the payment of all or part of the Loan or the Guaranteed Obligations; or any
death or dissolution of Borrower or Guarantor or any sale, lease or transfer of
any or all of the assets of Borrower or Guarantor or any changes in the
shareholders, partners or members of Borrower or Guarantor; or any
reorganization of Borrower or Guarantor.

3.4    Invalidity of Guaranteed Obligations.  The invalidity, illegality or
unenforceability against Borrower or any other Person at any time liable for the
payment of all or part of the Loan or the Guaranteed Obligations or any document
or agreement executed in connection with the Loan or the Guaranteed Obligations
for any reason whatsoever, including, without limitation, the fact that (a) the
Loan or the Guaranteed Obligations or any part thereof exceeds the amount
permitted by law, (b) the act of creating the Loan or the Guaranteed Obligations
or any part thereof is ultra vires, (c) the officers or representatives
executing the Note, Mortgage, or the other Loan Documents or otherwise creating
the Loan or the Guaranteed Obligations acted in excess of their authority,
(d) the Loan or the Guaranteed Obligations violate applicable usury laws,
(e) Borrower or any other Person at any time liable for the payment of all or
part of the Loan or the Guaranteed Obligations has valid defenses (other than
payment of the Guaranteed Obligations), claims or

7

--------------------------------------------------------------------------------

 

offsets (whether at law, in equity or by agreement) which render the Loan or the
Guaranteed Obligations wholly or partially unenforceable against or
uncollectible from Borrower or any other Person at any time liable for the
payment of all or part of the Loan or the Guaranteed Obligations, (f) the
creation, performance or repayment of the Loan or the Guaranteed Obligations (or
the execution, delivery and performance of any document or instrument
representing part of the Loan or the Guaranteed Obligations or executed in
connection with the Loan or the Guaranteed Obligations or given to secure the
repayment of the Loan or the Guaranteed Obligations) is illegal, uncollectible
or unenforceable, or (g) the Note, Mortgage or any of the other Loan Documents
have been forged or otherwise are irregular or not genuine or authentic, it
being agreed that Guarantor shall remain liable hereon regardless of whether
Borrower or any other Person be found not liable on the Loan or the Guaranteed
Obligations or any part thereof for any reason.

3.5    Release of Obligors.  Any full or partial release of the liability of
Borrower on the Loan or the Guaranteed Obligations or any part thereof, or of
any co-guarantors, or any other Person now or hereafter liable, whether directly
or indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Loan or the Guaranteed Obligations, or
any part thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other Person, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that any other Person will be liable to pay or perform in the Loan
or the Guaranteed Obligations, or that Lender will look to any other  Person to
pay or perform the Loan or the Guaranteed Obligations.

3.6    Other Collateral.  The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Loan or the Guaranteed Obligations.

3.7    Release of Collateral.  Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including without limitation
negligent, willful, unreasonable or unjustifiable impairment) by any Person of
any collateral, property or security at any time existing in connection with, or
assuring or securing payment of, all or any part of the Loan or the Guaranteed
Obligations.

3.8    Care and Diligence.  The failure of Lender or any other Person to
exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of any
collateral, property or security, including but not limited to any neglect,
delay, omission, failure or refusal of Lender (a) to take or prosecute any
action for the collection of any of the Loan or the Guaranteed Obligations,
(b) to foreclose, or initiate any action to foreclose, or, once commenced,
prosecute to completion any action to foreclose upon any security therefor, or
(c) to take or prosecute any action in connection with any instrument or
agreement evidencing or securing all or any part of the Loan or the Guaranteed
Obligations.

3.9    Unenforceability.  The fact that any collateral, security, security
interest or lien contemplated or intended to be given, created or granted as
security for the repayment of the Loan or the Guaranteed Obligations, or any
part thereof, shall not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or lien, it being
recognized and agreed, as between Lender and Guarantor, that Guarantor is not
entering into this

8

--------------------------------------------------------------------------------

 

Guaranty in reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectability or value of any of the collateral for the Loan or
the Guaranteed Obligations.

3.10    Offset.  Any existing or future right of offset, claim or defense of
Borrower (other than the defense of payment) against Lender, or any other
Person, or against payment of the Loan or the Guaranteed Obligations, whether
such right of offset, claim or defense arises in connection with the Loan or the
Guaranteed Obligations (other than the indefeasible payment in full of the Loan
and, if and to the extent payable hereunder, the Guaranteed Obligations and full
satisfaction of all of the terms, provisions and conditions of Guarantor under
this Guaranty) or the transactions creating the Loan and the Guaranteed
Obligations.

3.11    Merger.  The reorganization, merger or consolidation of Borrower into or
with any other Person.

3.12    Preference.  Any payment by Borrower to Lender that is returned,
recovered or otherwise paid, in whole or in part, in settlement of a suit, claim
or other demand seeking avoidance and recovery of such payment as a preference
or fraudulent conveyance under bankruptcy laws or applicable state law, or if
for any reason Lender is required to refund such payment or pay such amount to
Borrower or any other Person.

3.13    Other Actions Taken or Omitted.  Any other action taken or omitted to be
taken with respect to the Loan Documents, the Guaranteed Obligations, or the
security and collateral therefor, whether or not such action or omission
prejudices Guarantor or increases the likelihood that Guarantor will be required
to pay the Guaranteed Obligations pursuant to the terms hereof; and it is the
unambiguous and unequivocal intention of Guarantor that Guarantor shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, which obligation shall be deemed satisfied only upon the
indefeasible payment in full of the Loan and, if and to the extent payable
hereunder, the Guaranteed Obligations.

﻿

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

﻿

To induce Lender to enter into the Note, Mortgage and the other Loan Documents,
and extend and maintain credit to Borrower, Guarantor represents and warrants to
Lender as follows:

4.1    Benefit.  Reading is an Affiliate of Borrower, and is the owner of direct
or indirect interests in Borrower, and has received, or will receive, direct or
indirect and substantial benefit from the Loan.

4.2    Familiarity and Reliance.  Guarantor is familiar with, and has
independently reviewed books and records regarding, the financial condition of
Borrower, and is familiar with the value of any and all collateral intended to
be created as security for the payment of the Loan or Guaranteed Obligations;
however, as between Lender and Guarantor, Guarantor is not relying on such
information, or the financial condition of Borrower, the collateral or any other
condition, as an inducement to enter into this Guaranty.

9

--------------------------------------------------------------------------------

 

4.3    No Representation by Lender.  Neither Lender, nor any other Person on
Lender’s behalf, has made any representation, warranty or statement to Guarantor
in order to induce Guarantor to execute this Guaranty.

4.4    Guarantor’s Financial Condition.  As of the date hereof, and after giving
effect to this Guaranty and the contingent obligation evidenced hereby,
Guarantor is solvent and has, and will have, assets which, fairly valued, exceed
its obligations, liabilities (including contingent liabilities fairly estimated)
and debts, and has property and assets sufficient to satisfy and repay its
obligations and liabilities, as and when the same become due.

4.5    Legality; Due Authorization; Enforceability.  The execution, delivery and
performance by Guarantor of this Guaranty, and the consummation of the
transactions contemplated hereunder, do not and will not contravene or conflict
with any law, statute or regulation whatsoever to which Guarantor is subject, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the breach of, any indenture,
mortgage, charge, lien, or any contract, agreement or other instrument to which
Guarantor is a party or which may be applicable to Guarantor.  This Guaranty is
a legal and binding obligation of Guarantor and is enforceable in accordance
with its terms, except as limited by bankruptcy, insolvency or other laws of
general application relating to the enforcement of creditors’ rights and
subject, as to enforceability, to general principals of equity regardless of
whether enforcement is sought in a proceeding in equity or at law.

4.6    Litigation.  There are no actions, suits or proceedings at law or in
equity by or before any Governmental Authority or other agency now pending or,
to Guarantor’s knowledge, threatened, against or affecting Guarantor which would
reasonably be expected to materially adversely affect the ability of Guarantor
to perform its obligations under this Guaranty.

4.7    Survival.  All representations and warranties made by Guarantor herein
shall survive the execution hereof.

ARTICLE V

SUBORDINATION OF CERTAIN INDEBTEDNESS

﻿

5.1    Subordination of All Guarantor Claims.  As used herein, the term
“Guarantor Claims” shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of any Person in whose
favor such debts or liabilities may, at their inception, have been, or may
hereafter be, created, or the manner in which they have been or may hereafter be
acquired by Guarantor.  The Guarantor Claims shall include, without limitation,
all rights and claims of Guarantor against Borrower (arising as a result of
subrogation or otherwise) as a result of Guarantor’s payment of all or a portion
of the Guaranteed Obligations.  After the occurrence and during the existence of
an Event of Default, or the occurrence of an event which would, with the giving
of notice or the passage of time, or both, constitute an Event of Default,
Guarantor shall not receive or collect, directly or indirectly, from Borrower or
any other Person,

10

--------------------------------------------------------------------------------

 

any amount upon the Guarantor Claims, until the indefeasible payment in full of
the Loan and, if and to the extent payable hereunder, the Guaranteed
Obligations.

5.2    Claims in Bankruptcy.  In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving Borrower as debtor, Lender shall have the right to prove its claim in
any such proceeding so as to establish its rights hereunder and receive
directly, from the receiver, trustee or other court custodian, dividends and
payments which would otherwise be payable upon Guarantor Claims.  Guarantor
hereby assigns such dividends and payments to Lender.  Should Lender receive,
for application against the Guaranteed Obligations, any dividend or payment
which is otherwise payable to Guarantor, and which, as between Borrower and
Guarantor, shall constitute a credit against the Guarantor Claims, then, upon
the indefeasible payment and performance in full to Lender of the Loan and, if
and to the extent payable hereunder, the Guaranteed Obligations, Guarantor shall
become subrogated to the rights of Lender to the extent that such payments to
Lender on the Guarantor Claims have contributed toward the liquidation of the
Guaranteed Obligations, and such subrogation shall be with respect to that
proportion of the Guaranteed Obligations which would have been unpaid if Lender
had not received dividends or payments upon the Guarantor Claims.

5.3    Payments Held in Trust.  In the event that, notwithstanding anything to
the contrary in this Guaranty, Guarantor should receive any funds, payment,
claim or distribution which is prohibited by this Guaranty, then Guarantor
agrees to hold in trust for Lender an amount equal to the amount of all funds,
payments, claims or distributions so received, and Guarantor further agrees that
it shall have absolutely no dominion over (or equitable or beneficial ownership
of) the amount of such funds, payments, claims or distributions so received, and
Guarantor covenants promptly to pay the same to Lender.

5.4    Liens Subordinate.  Guarantor agrees that any liens, security interests,
judgment liens, charges or other encumbrances upon Borrower’s assets securing
payment of the Guarantor Claims shall be and remain inferior and subordinate to
any liens, security interests, judgment liens, charges or other encumbrances
upon Borrower’s assets securing payment of the Loan or the Guaranteed
Obligations, regardless of whether such liens, security interests, judgment
liens, charges or other encumbrances in favor of Guarantor or Lender presently
exist or are hereafter created or attach.  Without the prior written consent of
Lender, Guarantor shall not (i) exercise or enforce any right it may have
against Borrower, or (ii) foreclose, repossess, sequester, or otherwise take
steps, or institute any action or proceeding (judicial or otherwise, including,
without limitation, the commencement of, or joinder in, any liquidation,
bankruptcy, rearrangement, debtor’s relief or insolvency proceeding), to enforce
any liens, mortgages, deeds of trust, security interests, collateral rights,
judgments or other encumbrances on assets of Borrower securing payment of the
Guarantor Claims held by Guarantor.

ARTICLE VI

COVENANTS

﻿

6.1    Financial Information.  The Guarantor hereby represents and warrants that
all financial statements of the Guarantor heretofore delivered to the Lender by
or on behalf of the Guarantor are true and correct in all material respects and
fairly present the financial condition of the Guarantor as of the respective
dates of such financial statements.  No material adverse change

11

--------------------------------------------------------------------------------

 

has occurred in any financial condition reflected in any such financial
statement since the date of such financial statement.  In addition, the
Guarantor covenants that so long as the Loan Obligations remain outstanding and
unpaid, then the Guarantor will furnish to the Lender, unless otherwise
consented to in writing by the Lender:

(a)    annually, a copy of Form 10-K annual report of Guarantor, including all
schedules thereto, within 30 days after filing of same;

(b)    a certificate signed by the CFO (as defined in the Mortgage) certifying
on the date of such certificate that, to the CFO’s actual knowledge, after due
inquiry:  (i) such financial statement is true, correct and complete, and
(ii) no default, and no event which upon notice or lapse of time or both would
constitute a default, has occurred under this Guaranty or, if such default
exists, the nature thereof and the period of time it has existed (such
certificate being called, a “Certification”); and

(c)    within ten (10) days after request by the Lender, such further detailed
financial and other information as may be requested by the Lender with respect
to either the Guarantor, or any affiliate of, or entity controlled by the
Guarantor, as of a date not earlier than that specified by the Lender in such
request, together with a Certification with respect to such financial and other
information.

(d)    In the event Guarantor does not comply with any or all of the financial
information reporting requirements set forth herein, in addition to any other
remedy which the Lender may possess in connection with Guarantor’s failure to
comply with said reporting requirements, the Lender may impose a charge of Fifty
and 00/100 ($50.00) Dollars per day upon Guarantor which charge shall commence
ten (10) days after notice to Guarantor that Guarantor is in default with
respect to Guarantor’s obligations to supply said financial reporting
information to Lender.

ARTICLE VII

RIGHT OF SETOFF

﻿

7.1    Right of Setoff.  As further security for payment of the Guaranteed
Obligations and any other obligations of Guarantor to the Lender, Guarantor
hereby grants to the Lender a security interest in all money, securities and
other property of Guarantor in the actual or constructive possession or control
of the Lender or its affiliates including without limitation all deposits and
other accounts owing at any time by the Lender or any of its affiliates in any
capacity to Guarantor in any capacity (collectively, the “Accounts”).  The
Lender shall have the right to set off Guarantor’s Accounts against any of
Guarantor’s obligations to the Lender, including, without limitation, the
Guaranteed Obligations.  Such set-off shall be deemed to have been exercised
immediately at the time the Lender or such affiliate elect to do so.  The Lender
shall also have all of the rights and remedies of a secured party under the
Uniform Commercial Code, as the same may be in effect in the State of New York,
as amended from time to time, in addition to those under this Guaranty and other
applicable law and agreements.

12

--------------------------------------------------------------------------------

 

ARTICLE VIII

MISCELLANEOUS

﻿

8.1    Waiver.  No failure to exercise, and no delay in exercising, on the part
of Lender, any right hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right.  The rights of Lender hereunder
shall be in addition to all other rights provided by law.  No modification or
waiver of any provision of this Guaranty, nor any consent to departure
therefrom, shall be effective unless in writing, and no such consent or waiver
shall extend beyond the particular case and purpose involved.  No notice or
demand given in any case shall constitute a waiver of the right to take other
action in the same, similar or other instances without such notice or demand
except to the extent such a notice or demand is required by the terms hereof.

8.2    Notices.  All notices, consents, approvals and requests required or
permitted hereunder shall be in writing, and shall be either hand delivered or
sent, by (a) certified or registered U.S. mail, Return Receipt Requested, first
class postage prepaid, or (b) expedited prepaid delivery service, either
commercial (e.g., Federal Express or comparable national courier) or U.S. Postal
Service, with proof of attempted delivery.  All notices to any party shall be
addressed to such party at its following address:

﻿

If to Lender:

Valley National Bank

1455 Valley Road

Wayne, New Jersey 07470

Attention:  Commercial Loan Department

With a copy to:

Romer Debbas LLP

275 Madison Avenue, Suite 801

New York, New York 10016

Attention:  Hugh P. Finnegan, Esq.

If to the Guarantor.

Sutton Hill Properties, LLC

500 Citadel Drive, Suite 300

Commerce, California 90040

Reading International, Inc.

6100 Center Drive

Los Angeles, California 90045

With a copy to: 

Marcus Rosenberg & Diamond LLP

488 Madison Avenue, 17th Floor

New York, New York 10022

Attention:  Jeffrey M. Diamond, Esq.

﻿

13

--------------------------------------------------------------------------------

 

Any party may give notice, in the manner permitted by this Section, designating
a new address in the United States for all notices to such party pursuant to
this Section, and such notice shall become effective upon receipt of such notice
by the other party or parties to this Guaranty.

8.3    Governing Law; Submission to Jurisdiction.  THIS GUARANTY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE
OF NEW YORK AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  ANY LEGAL
SUIT, ACTION OR PROCEEDING AGAINST LENDER OR GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE
COUNTY IN WHICH THE PROPERTY IS LOCATED IN, AND EACH OF LENDER (BY ITS
ACCEPTANCE HEREOF) AND GUARANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND EACH OF LENDER (BY ITS ACCEPTANCE HEREOF) AND
GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUIT, ACTION OR PROCEEDING.  FURTHERMORE, THE GUARANTOR AGREES AND CONSENTS
THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER
APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING
REFERRED TO ABOVE MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID,
RETURN RECEIPT REQUESTED, DIRECTED TO GUARANTOR AT THE ADDRESS INDICATED IN THIS
GUARANTY FOR SUCH PARTY, AND SERVICE SO MADE SHALL BE COMPLETE AND FOR ALL
PURPOSES DEEMED BY THE GUARANTOR TO BE GOOD AND SUFFICIENT SERVICE FIVE DAYS
AFTER THE SAME SHALL HAVE BEEN SO MAILED.  SUBJECT TO THE REQUIREMENTS FOR A
CASE TO BE HEARD IN THE COMMERCIAL DIVISION OF THE NEW YORK STATE SUPREME COURT,
THE PARTIES AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COMMERCIAL
DIVISION OF THE NEW YORK STATE SUPREME COURT, AND TO THE APPLICATION OF SAID
COURT’S ACCELERATED PROCEDURES PURSUANT TO RULE 9 OF SECTION 202.70(G) OF THE
UNIFORM RULES FOR NEW YORK STATE TRIAL COURTS.

8.4    Invalid Provisions.  If any provision of this Guaranty is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Guaranty, then such provision shall be fully severable, and
this Guaranty shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Guaranty, and the
remaining provisions of this Guaranty shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Guaranty.

8.5    Amendments and Waivers.  No term or provision of this Guaranty may be
amended, waived or otherwise modified except pursuant an instrument in writing
executed by the party (or an authorized representative of the party) against
whom enforcement of such amendment, waiver or modification is sought.

8.6    Parties Bound; Assignment; Joint and Several.  This Guaranty shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives; provided, however, that Guarantor
may not, without the prior written consent of

14

--------------------------------------------------------------------------------

 

Lender, assign any of its rights, powers, duties or obligations hereunder.  If
Guarantor consists of more than one Person, the obligations and liabilities of
each such Person shall be joint and several.

8.7    Headings.  Section headings are for convenience of reference only and
shall in no way affect the interpretation of this Guaranty.

8.8    Recitals.  The “WHEREAS” introductory paragraphs hereof are a part
hereof, form a basis for this Guaranty and shall be deemed to be represented and
warranted by the Guarantor as prima facie evidence of the facts and documents
referred to therein.

8.9    Counterparts.  To facilitate execution, this Guaranty may be executed in
as many counterparts as may be convenient or required.  It shall not be
necessary that the signature of, or on behalf of, each party, or that the
signature of all Persons required to bind any party, appear on each
counterpart.  All counterparts shall collectively constitute a single
instrument.  It shall not be necessary, in making proof of this Guaranty, to
produce or account for more than a single counterpart containing the respective
signatures of, or on behalf of, each of the parties hereto.  Any signature page
to any counterpart may be detached from such counterpart, without impairing the
legal effect of the signatures thereon, and thereafter attached to another
counterpart identical thereto except having attached to it additional signature
pages.

8.10    Rights and Remedies.  If Guarantor becomes liable for any indebtedness
owing by Borrower to Lender, by endorsement or otherwise, other than under this
Guaranty, then such liability shall not be in any manner impaired or affected
hereby, and the rights of Lender hereunder shall be cumulative of any and all
other rights that Lender may ever have against Guarantor.  The exercise by
Lender of any right or remedy hereunder or under any other instrument, or at law
or in equity, shall not preclude the concurrent or subsequent exercise of any
other right or remedy.

8.11    Entirety.  THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF
GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED
OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF, EXCEPT AS PROVIDED IN THE LOAN DOCUMENTS.  THIS GUARANTY
IS INTENDED BY GUARANTOR AND LENDER AS A FINAL AND COMPLETE EXPRESSION OF THE
TERMS OF THE GUARANTY, AND NO COURSE OF DEALING BETWEEN GUARANTOR AND LENDER, NO
COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC
EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY
ANY TERM OF THIS GUARANTY AGREEMENT.  THERE ARE NO ORAL AGREEMENTS BETWEEN
GUARANTOR AND LENDER RELATING TO THE GUARANTEED OBLIGATIONS.

8.12    Waiver of Right To Trial By Jury.  GUARANTOR, AND BY ITS ACCEPTANCE
HEREOF, LENDER, EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
GUARANTY OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH.  THIS

15

--------------------------------------------------------------------------------

 

WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH OF
LENDER AND GUARANTOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE.  EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.

8.13    No Third Party Beneficiaries.  This Guaranty is solely between the
Guarantor and the Lender, and solely for the benefit of the Lender and any
subsequent holder or holders of the Note, and nothing in this Guaranty, whether
express or implied, shall be construed to give any other Person any legal or
equitable right, remedy or claim under or in respect of this Guaranty.

IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the date
above set forth.

﻿

Citadel Cinemas, Inc.,
a Nevada corporation,
its Manager

Name:  Gilbert Avanes

Treasurer

 

﻿

SUTTON HILL PROPERTIES, LLC,

a Nevada limited liability company

Qualified to do business in New York

 

By:    Citadel Cinemas, Inc.,

a Nevada corporation,

its Manager

 

By:  /s/ Gilbert Avanes               

Name:  Gilbert Avanes

Title:    EVP, Chief Financial Officer and Treasurer

 

﻿

READING INTERNATIONAL, INC.,

A Nevada corporation

 

By:  /s/ Gilbert Avanes               

Name:  Gilbert Avanes

Title:    EVP, Chief Financial Officer and Treasurer

﻿

 

﻿

[acknowledgment page to follow]

 

16

--------------------------------------------------------------------------------

 

CALIFORNIA JURAT WITH AFFIANT STATEMENTGOVERNMENT CODE § 8202

☒  See Attached Document (Notary to cross out lines 1-6 below)

☐  See Statement Below (Lines 1-6 to be completed only by document signer[s],
not Notary)

Signature of Document Signer No. 1Signature of Document Signer No. 2 (if any)

A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

State of California

County of   Los Angeles     

 

 

 

 

 

 

Seal

Place Notary Seal Above

Subscribed and sworn to (or affirmed) before me

on this   11th   day of   March  ,  2020    ,

DateMonthYear

by

(1)__Gilbert Avanes_____________________

(and (2)___________________________).

Name(s) of Signer(s)

Proved to me on the basis of satisfactory evidence to be the person(s) who
appeared before me.

Signature /s/ Michael James Conroy________

Signature of Notary Public

﻿

_____________________________     OPTIONAL    _________________________

Though this section is optional, completing this information can deter
alteration of the document or fraudulent reattachment of this form to an
unintended document.

Description of Attached Document

Title or Type of Document:  _____________________  Document Date: 
____________________

Number of Pages:  __________________  Signer(s) Other Than Named Above: 
______________

©2014 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY
(1-800-876-6827) Item #5910

17

 

--------------------------------------------------------------------------------