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EXHIBIT 10.11

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Loan Agreement

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THIS LOAN AGREEMENT (the "Agreement") is made as of  the  26th  day  of  June,
2014, between Santander Bank, N A., with a place of business
at  195  Montague  Street, Brooklyn, New York 11201 (hereinafter referred
to  as  "Lender")  and  Sutton  Hill  Properties, LLC, a Nevada limited
liability company, with a principal place  of business  at  6100  Center Drive,
Suite 900, Los Angeles, California 90045, Attention: Andrzej Matyczynski
(hereinafter referred  to  as  "Borrower").

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WI TN E S S E T H:

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WHEREAS, Lender is the holder of that certain Amended and Restated Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as
of June 28, 2012, made by the Borrower, as borrower, in favor of lender, as
Lender,  in the principal amount of $15,000,000.00, and recorded on July 20,
2012 in the Register's Office of the City and State of New York as CRFN
2012000288512 (together with all extensions, renewals, modifications,
substitutions and amendments thereof the "First Mortgage") which secures that
certain Second Amended and Restated Promissory Note in the original principal
amount of $15,000,000.00 made by Borrower to the order of Lender (together with
all extensions, renewals, modifications, substitutions and amendments thereof,
the "First Note"; the First Note, the First Mortgage and any of the loan
documents which secure and evidence the indebtedness pursuant to the First Note
shall hereinafter be referred to as the "First Mortgage Loan Documents");

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WHEREAS, the Borrower desires to borrow and the Lender desires to lend to the
Borrower, for Borrower' s use, as more particularly set forth herein (the
"Loan") in connection with its ownership of the real property located at
1001-1007 Third Avenue, New York, New York 10022 (the "Property"),
the  principal  amount  of  Six Million  and  001100  Dollars (US

$6,000,000.00), subject and pursuant to the terms of this Agreement and of that
certain Promissory Note in like amount of even date herewith executed and
delivered by the Borrower (the "Note") ;

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WHEREAS, the Note will be secured by, among other things ,  a
Mortgage,  Assignment of Leases and Rents, Security Agreement and Fixture Filing
by and between  Borrower  and Lender (together with all extensions, renewals,
modifications, substitutions and amendments thereof,  the "Security
Instrument")  which upon recording  will encumber  the Property.

﻿

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Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Note.

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NOW, THEREFORE, the parties hereto agree as follows: Article I.THE ADVANCE

Section 1.01Advances.

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The Lender agrees, upon the terms, and subject to the conditions hereof, to make
a  one­ time advance of the proceeds of the Loan (the "Advance") to the Borrower
in an amount not to exceed the aggregate principal amount $6,000,000.00. The
Loan (including principal and accrued and unpaid interest) shall be due and
payable on July 1, 2016 (the "Maturity Date"). Interest on the Advance shall
accrue and be payable in accordance with the terms of the Note.

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Section 1.02Manner of Borrowing.

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When the Borrower desires to obtain the Advance, it shall give the Lender at
least thirty

(30) days' prior written notice (a "Notice to Borrow Funds") in the manner
hereinafter specified in this Agreement, which Notice to Borrow Funds shall
state that it is irrevocable and specify the proposed date of borrowing and the
amount thereof and shall constitute the Borrower's affirmation that all
representations and warranties contained herein are true and correct and that
the Advance shall be subject to all of the Conditions (as hereinafter defined
and set forth in this Agreement).    The  Advance  shall
be  in  a  whole  number  and in the  minimum  amount  of

$200,000.00.  The Notice to Borrow Funds to be given pursuant to this Section
shall be accepted

only from those persons authorized to execute same pursuant to a resolution or
consent of the Borrower's Manager, a certified copy of which shall be delivered
to Lender prior to any request for an Advance which shall include
specimen-signatures of all parties authorized to execute Notices to Borrow
Funds.

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The failure of the Lender to make the Advance on the date set forth in the
Notice to Borrower Funds shall not subject the Lender to any damages whatsoever
provided the Advance is made within a reasonable time after the later to occur
of the date set forth in the Notice to Borrower Funds or the date all Conditions
to the Advance are satisfied; it being expressly acknowledged by the Borrower
that such condition is deemed a material inducement to the Lender for entering
into the arrangement manifested by this Loan Agreement and the Note.

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Article II.      REPRESENTATIONS AND COVENANTS

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Section 2.01Representations.

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The Borrower represents and warrants to the Lender that on the date hereof:

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(a) The Borrower has the power and authority to execute, deliver and perform
this Agreement, and each of the other documents executed in connection
therewith,  to own its properties and to carry on its business as now conducted;

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(b)

The execution, delivery  and performance of the Nate  and this Agreement

(i) have been duly authorized by all requisite action of the Borrower; (ii) to
Borrower's knowledge do not violate any provision of law,  (iii) do not violate
the Borrower's Certificate of Formation or its Operating Agreement; any order of
any court or other agency, or any agreement to which the Borrower is a party or
by which the Borrower is bound; and (iv) will not be in conflict with, result in
a breach of or constitute (with due notice or lapse of time or both) a default
under any such agreement;

 

 

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(c) There are no actions, suits,  or proceedings before or by any federal ,
 state, municipal or other governmental department, commission ,  board, bureau,
agency or instrumentality pending against the Borrower which if determined
adversely to the Borrower, would have a material adverse effect  on the
business, properties, operations or conditions ,  financial or otherwise, of the
Borrower;

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(d) No Event of Default has occurred under this Agreement and no default has
occurred under any of the other Loan Documents beyond the expiration of any
applicable notice, grace or cure period ;

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(e) The Borrower makes no claim that the terms of the Note, including without
limitation the interest rate thereon, is usurious nor that there exists any
offset, deduction or defense with respect to the Borrower's obligations under
the Loan Documents;

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(f) The Property is free and clear of any liens, charges or encumbrances other
than the First Mortgage;

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(g) To Borrower's knowledge ,  there are no outstanding judgments against the
Borrower which have not been paid;

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(h) The most recent Financial Statements heretofore delivered to the Lender are
complete and correct and since the date thereof there has not occurred any
material adverse change in the financial condition or operations of the
Borrower, Guarantor or the Property from that shown on said Financial
Statements;

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(i) Borrower has no knowledge of any impediments to the full and complete
perfom1ance by the Borrower hereunder or under any of the Loan Documents ;

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G)    Neither the Borrower nor any person or entity acting or purporting to act
on the Borrower's behalf has dealt with any broker in connection with the making
of this loan, except as set forth in the, commitment letter of Santander Bank,
N.A. addressed to Borrower and dated as of June 11,  2014, as amended by letter
agreement, if any. Borrower hereby indemnifies Lender, and agrees to hold Lender
harmless, from and against all loss, liability, damage and expense, including
reasonable attorneys' fees and expenses, suffered or incurred by Lender by
reason of a breach of this representation. This provision will survive the
closing and the repayment of the Note;

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(k) The Borrower is a limited liability company duly organized and validly
existing under the laws of the State of Nevada and duly authorized to do
business in the State of New York pursuant to the laws of the State of New York;
and

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(1) That the funds received by the Borrower from the Advance requested hereunder
and pursuant to the Note will be expended exclusively in connection with the
acquisition of floor area rights and/or air rights related to future development
of the Property as same will be more particularly described in the Security
Instrument.

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Section 2.02Certain  Covenants.

 

 

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The Borrower covenants and agrees that so long as this Agreement shall remain in
effect, Borrower shall:

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(a)

Pay all sums due and owing under the Note pursuant to its terms;

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(b)

Do or cause to be done all things necessary to preserve and keep in full force
and effect its existence under the laws of its state of formation;

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(c)

Give prompt notice to the Lender of (i) any proceedings of which the Borrower
has notice instituted by or against the Borrower, and (ii) any other action,
event or condition of any nature which in either case the management of the
Borrower reasonably believes could have, lead to or result in a material adverse
effect upon the business, assets or­ financial condition of the Borrower;

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(d)

Refrain from mortgaging ,  pledging, granting or permitting any security
interest, lien or encumbrance of any nature in any amount to exist with respect
to any of the Borrower's property including without limitation the Property,
except where such security interest, lien or encumbrance is for the benefit of
the Lender or has otherwise been approved by the Lender;

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(e)

Provide to Lender all of the deliverables as and when required pursuant to
Section 2.04 herein (collectively, the "Financial Statements");

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(f)

Perform all of the Borrower's obligations under the First Mortgage encumbering
the Property including without limitation, payment of all sums due thereunder,
in a timely manner. Upon the maturity (by acceleration or otherwise, or upon
prepayment thereof) of the First Mortgage held by Lender (or its assignee)
covering the Property, or upon prepayment thereof, all amounts due hereunder
shall simultaneously become due and payable;

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(g)

Not incur any additional indebtedness except, in the ordinary course of
business, with customary time payment arrangements with vendors and suppliers;
and

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(h)

Pay all sums that may be necessary to be paid in order to enforce the Note and
to enforce and/or to record the Security Instrument and any agreement or any
other documentation executed and delivered in connection with this Agreement,
whether such sums be in the nature of recording fees, mortgage tax or any other
expense in connection with such recording.

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Section 2.03Negative Pledge Covenants.

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The Borrower pledges, covenants and agrees that so long as this Agreement shall
remain in effect it shall not, without the prior written consent of the Lender,
do any of the following:

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(a) Except as otherwise permitted in the Security Instrument and the First
Mortgage, sell, transfer or otherwise convey, either voluntarily or
involuntarily, all or any portion of the Property or any interest or estate
therein; or

 

 

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(b) Grant or suffer to exist any mortgage, pledge, lien, secured interest,
hypothecation or other encumbrances upon the Property including any personal
prope1iy owned by the Borrower now or hereafter placed in or attached to and
necessarily used in connection with the Property except as maybe  approved by
Lender; or

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(c) Except for the Master Lease, enter into any leasing arrangement of any kind
in respect of all or substantially all of the Property;

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(d) Reduce the rent payable by the tenant pursuant to the Master Lease or enter
into any amendments or modifications of the Master Lease;

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(e) Suffer or permit any mechanics' or other statutory lien which  is  filed
against the Property to remain undischarged or not bonded for a period exceeding
sixty (60) days beyond the filing date thereof; or

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(f) Grant or suffer to exist any indebtedness (secured or unsecured), other than
indebtedness owing to Lender, or grant or suffer to exist any Lien on or with
respect to any deposit accounts (other than any Lien in favor of the Lender),
whether now owned or hereafter acquired by the Borrower, or pledge; assign or
transfer any rights to any deposit accounts, except as may be approved in
writing by Lender. "Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority of other security agreement or preferential arrangement of
any kind or nature whatsoever.

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Section 2.04Books and Records. 1

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(a)

Borrower shall keep accurate books and records of account in accordance with
generally accepted accounting principles in which full, true and correct entries
shall be promptly made with respect to Borrower,  the Property and the operation
thereof, and will permit all such books and records (including without
limitation all contracts, statements, invoices, bills and claims for labor,
materials and services supplied for the construction, repair or operation to
Borrower of the Improvements) to be inspected or audited and copies made by
Lender and its representatives during normal business hours and at any other
reasonable times on at least forty­ eight (48) hours advance notice. Borrower
represents that its chief executive office is as set forth in the introductory
paragraph of this Agreement and that all books and records pertaining to the
Property are maintained at the Property or at its chief executive office.
Borrower will furnish, or cause to be furnished, to Lender on or before ninety
(90) calendar days following the end of each calendar year the following items,
each certified by Borrower as being true and correct, in such format and in such
detail as Lender or its servicer may reasonably request:

(i)

a written statement (rent roll) dated as of the last day of each such calendar
year identifying each of the Leases by the term, space occupied, rental required
to be paid (including percentage rents and tenant sales), security deposit paid,
 any rental concessions, all rent escalations, any rents paid more than one (1)
month in advance, any special provisions or inducements granted to tenants, any

﻿

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2.04 same as Section 3.8 of the Mortgage

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taxes, maintenance  and other common  charges paid by tenants, all vacancies and
identifying any defaults or payment  delinquencies  thereunder;

 

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(ii)

year-to-date operating statements prepared for  each  calendar quarter during
each such reporting period detailing the total revenues  received, total
expenses incurred, total cost of all capital improvements, total debt service
and total cash flow; and

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(iii)

a current personal financial statement of each Guarantor, if applicable, in a
form satisfactory to Lender.

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(b) Within ninety (90) calendar days following the end of each calendar year,
Borrower shall furnish a statement of the financial affairs and condition of the
Borrower and the Property including a statement of profit and loss for the
Property in such format  and in such detail as Lender or its servicer may
reasonably request, and setting forth the financial condition and the income and
expenses for the Property for the immediately preceding calendar  year prepared
and audited by an independent certified public accountant. Borrower shall
deliver to Lender copies of all income tax returns, requests for extension and
other similar items contemporaneously with its delivery of same to the Internal
Revenue Service.

﻿

(c) Borrower will permit representatives appointed by Lender, including
independent accountants, agents, attorneys, appraisers and any other persons, to
visit and inspect on at least twenty-four hours  advance notice during its
normal business hours and at any other reasonable times any of the Property or
Borrower's chief executive office and to make photographs thereof, and to write
down and record any information such representatives obtain, and shall permit
Lender or its representatives to investigate and verify the accuracy of the
information furnished to Lender under or in connection with this Agreement or
any of the Loan Documents and to discuss all such matters with its officers,
employees and representatives. Borrower will furnish to Lender at
Borrower's  expense  all evidence  which  Lender may  from time to time
reasonably request as to the accuracy and validity of or compliance with all
representations and warranties made by Borrower in the Loan Documents and
satisfaction of all conditions contained therein. Any inspection or audit of the
Property or the books and records of Borrower, or the procuring of documents and
financial and other information, by or on behalf of Lender, shall be at
Borrower's expense and shall be for Lender's protection only, and shall not
constitute any assumption of responsibility or liability by Lender to
Borrower  or  anyone  else with regard to the condition, construction,
maintenance or operation of the  Property,  nor Lender's approval of any
certification given to Lender nor relieve Borrower  of  any  of Borrower's
obligations. Lender may divulge to any Investor (as hereinafter defined) all
such information, and furnish to such Investor copies of any such reports,
financial statements, certificates, and documents obtained under any provision
of this Agreement,  or  related agreements and documents, provided that  such
information shall be provided on a confidential basis.

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(d) Without limiting Lender's other rights and remedies under this Agreement and
the other Loan Documents, in the event that any statement or document required
to be delivered to Lender pursuant to this Section 2.04 is not delivered within
thirty (30) days of the date when the same is due "Delinquent Reports") upon
fifteen (15) days notice to Borrower, the

 

 

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Interest Rate (as defined in the Note) shall be increased by adding one quarter
percent (0.25%) per annum (i.e. 25 basis points) to the Interest Rate until such
time as all Delinquent Reports, in form and substance reasonably satisfactory to
Lender, have been delivered to Lender.

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Article III.    CONDITIONS TO ADVANCE

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Section 3.01Conditions

The obligation of the Lender to make the Advance is subject to the satisfaction
of all of the following conditions precedent (the "Conditions") (each of which
is deemed material and none of which may be waived except by an instrument
executed by the Lender):

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(i) The Lender shall have received:

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(1)

the irrevocable Notice to Borrow Funds;

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(2)

a certified copy of the resolutions or consent adopted by the membersof
Borrower, in form and substance reasonably satisfactory to Lender authorizing
the execution, delivery and performance of the Security Instrument and all of
the other related Loan Documents required at the time of the Advance, including,
but not limited to  the Notice to Borrow Funds;

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(3)

copies of the most recent year end Financial Statements;

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(4)

a certificate from Borrower that all the representations  and warranties set
forth herein shall be true and correct on and as of such time with the same
effect as though such representations and warranties have been made on and as of
such time, except to the extent such representations and warranties expressly
relate to an earlier date; and

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(5)

a certificate of Borrower, stating no proceedings exist affecting Borrower or
the Property that could have a Material  Adverse Effect on Borrower, the Loan,
the First Mortgage or the Property, and (B) a Certificate from the Guarantors,
to the effect that no proceedings exist affecting any Guarantor which could have
a material adverse effect on such Guarantor, in  each  case,  which have not
been disclosed to Lender in writing.

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(ii) Borrower shall be in compliance with all the terms and provisions set forth
herein on its part to be observed or performed and no "Event of Default" (as
hereinafter defined), nor any event which upon notice or lapse of time or both
would constitute an Event of Default, shall have occurred and be continuing
either at the time of the Advance or as a result of such borrowing, including
but not limited to compliance with all financial reporting requirements  set
forth herein

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(iii) Borrower shall be in compliance with all the terms and provisions set
forth in the First Mortgage  Loan Documents  on its part to be observed or
performed  and no

 

 

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"Event of Default" (as defined in the First Mortgage Loan Documents), nor any
event which upon notice or lapse of time or both would constitute an Event of
Default pursuant to the First Mortgage Loan Documents, shall have occurred and
be continuing either at the time of the Advance or as a result of such
borrowing, including but not limited to compliance with all financial reporting
requirements set forth therein;

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(iv) Lender's computation that the Borrower shall maintain a Debt Yield of no
less than 11% during the term of the Loan. In the event that Lender shall at any
time determine that the Debt Yield is less than 11%, Borrower shall within
thirty (30) days of notice and demand by Lender, either reduce the Loan amount
(by the payment of principal) or pledge such additional collateral as may be
acceptable to Lender in order to maintain the required Debt Yield. Borrower's
failure to either reduce the Loan balance as necessary or satisfy Lender's
demand for additional collateral acceptable to it within thirty (30) days of
notice having been given by Lender, shall be considered an Event of Default
hereunder. "Debt Yield" shall mean, as of any date, the quotient (expressed as a
percentage) obtained by dividing (i) the net operating income for the twelve
(12) month period ending with the most recently completed calendar month by (b)
the outstanding principal balance of the Note and the First Note as of such
date. Lender's calculation of the Debt Yield, and all component calculations,
shall be conclusive and binding on Borrower absent manifest error;

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(v) Immediately prior to the Advance, Lender shall cause title company to file
and record the Security Instrument substantially in form attached hereto as
Exhibit A and related certificates for the Property in the appropriate recording
office in New  York County. The Borrower shall (i) pay any and all expenses of
the Lender incurred in connection with the foregoing matters, including, without
limitation, the costs of any title insurance, recording fees, mortgage recording
tax, survey, environmental reports and the reasonable fees and expenses of the
Lender's counsel and (ii) deliver any documents reasonably requested by the
Lender or the title company in connection with effectuating the foregoing
matters;

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(vi) Lender shall have received a NY ALTA (1992) loan policy of title insurance
(the "Loan Title Policy") in the amount of the Advance, substantially in the
form attached hereto as Exhibit B issued by the title company to Lender,
insuring the Security Instrument as a valid and subsisting second mortgage lien
on the Property subject only to standard and customary permitted exceptions,
including the lien of the First Mortgage. The Loan Title Policy shall contain
such affirmative insurance and endorsements as Lender  shall reasonably require;

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(vii) opinion(s) of counsel as to the authority, due execution, and
enforceability of the Security Instrument and related Loan Documents in form
substantially similar to the opinion given in connection with this Agreement or
otherwise reasonably acceptable to the Bank;

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(viii) a certificate from Borrower and other evidence satisfactory to Lender in
its reasonable discretion, including but not limited to, an agreement of
purchase and sale in
connection  with  the  acquisition   of  floor  area  rights  and/or  air  rights  and/or  other

 

 

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development  or  zoning  rights  that  will  benefit  the  Property  as  same  will  be  more
particularly described in the Security Instrument;

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(ix) payment to Lender of a standby fee equal to one quarter of one percent
(0.25%) of the Unused Portion on the first anniversary of the Loan and every
anniversary thereafter until the Loan is paid in full, provided, however,
Borrower shall pay Lender a pro rata portion of such standby fee if the Loan is
paid in full prior to any given one year anniversary of the Loan. The Unused
Portion shall mean the difference, if any, between the maximum aggregate
principal amount that may be advanced under the Note and the Advance ; and

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(x) payment of all of Lender's expenses in connection with the review and
Borrower's compliance with the Conditions including but not limited to Lender's
reasonable attorneys' fees and expenses.

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Article IV.DEFAULT

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Section 4.01Events of Default.

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Each of the following shall constitute an "Event of Default" under this
Agreement:

﻿

(a) if any representation or warranty of Borrower or of its members, general
partners, principals, affiliates, agents or employees, or of any Guarantor made
herein or in the Environmental Indemnity or in any Loan Document, in any
guaranty, or in any certificate, report, financial statement or other instrument
or document furnished to Lender shall have been false or misleading in any
material respect when made;

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(b) The failure to make any payment of principal or interest under the Note on
or before the tenth (101h) calendar day after the day on which the same is due
(without regard to any applicable cure and/or notice period) or if  the entire
Debt is not paid on or before the Maturity Date, along with applicable
prepayment premiums, if any

﻿

(c) if Borrower, or its general partner, member or manager, if applicable,
violates or does not comply with any of the provisions of Section 3.3, Section
4.3, or Article 8 hereof, or Article 19 of the Note, or fails to deliver any of
the reports required by Section

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(d) if Borrower or any Guarantor shall make an assignment for the benefit of
creditors or if Borrower or any Guarantor shall admit in writing its inability
to pay, or Borrower's or any Guarantor's failure to pay its debts as they become
due;

﻿

(e) if (i) Borrower or any member or manager of Borrower, or any Guarantor shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, conservatorship or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or
its  debts,  or  (B)  seeking  appointment  of  a  receiver,  trustee,  custodian,  conservator  or  other

 

 

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similar official for it or for all or any substantial part of its assets, or
Borrower or any member or manager of Borrower, or any Guarantor shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Borrower or any member or manager of Borrower, or any
Guarantor any case, proceeding or other action of a nature referred to in clause

(i)  above  which  (A)  results  in  the  entry  of  an  order  for
relief  or  any  such  adjudication  or

appointment or (B) remains undismissed, undischarged or unbonded for a period of
ninety (90) calendar days; or (iii) there shall be commenced against Borrower or
any member or manager of Borrower or any Guarantor any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of any order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within ninety (90) calendar days
from the entry thereof; or (iv) Borrower or any member or manager of Borrower,
or any Guarantor shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii) or (iii) above; or (v) Borrower or any member or manager of Borrower,
or any Guarantor shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due;

﻿

(f)    The occurrence of any materially adverse change in the financial
condition of the Borrower or any Guarantor (for purposes of this Agreement, a
"materially adverse change" shall mean one which in the determination of the
Lender that, in its sole judgment, impairs the ability of the Borrower or any
Guarantor with respect to (i) maintaining and/or operating the Property, (ii)
paying all real estate and, related taxes and charges and (iii) meeting all of
its financial obligations to the Lender and all other creditors);

﻿

(g) The occurrence of any default beyond the expiration of any  applicable
notice, grace or cure period under (i) any mortgage(s) now or hereafter covering
the Property, giving rise to a right to accelerate payment thereof regardless of
whether such mortgage(s) is/are held by Lender or a third party or (ii) any
other agreement (loan or otherwise) between Lender and Borrower now existing or
hereafter made;

﻿

(h) The failure to perform any of the other covenants, terms or agreements on
the part of the Borrower to be performed hereunder or under any of the other
Loan Documents beyond any applicable notice and cure period;

﻿

(i) if any federal tax lien is filed against Borrower, any general partner,
member or manager of Borrower, any Guarantor or the Property and same is not
discharged of record within forty-five (45) calendar days after Borrower becomes
aware of such filing;; or

﻿

U) Any "Event  of  Default"  (as  defined  in  the  First  Mortgage  Loan
Documents) or any event which upon notice or lapse of time or both would
constitute an Event of Default occurs pursuant to the First Mortgage Loan
Documents.

﻿

Section 4.02Effect of Default.

﻿

(a) Upon the occurrence of an Event of Default, the Lender, in its sole and
absolute discretion, may (1) temporarily suspend the extension of credit and
refuse to honor any request for an Advance, (2) demand the prepayment of the
Advance, (3) pursue any  other  rights

 

 

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or remedies available to the Lender under this Agreement or the other Loan
Documents, (4) terminate this Agreement and any obligation hereunder to make the
Advance by declaring the loan to be immediately due and payable and/or
exercising such of the other remedies provided for in the Loan Documents  as the
Lender may elect. The costs and expenses of Lender incurred in carrying out any
or all of the above and enforcing the terms of this Agreement or the Note,
including reasonable attorneys' fees, shall be at Borrower's expense.

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(b) Without limiting any remedy otherwise available to the Lender, the Borrower
shall pay a late charge, to the extent permitted by law, of five ($.05) cents
per each dollar ($1.00) of each payment received and accepted by the Lender more
than  ten (10) days after the date it is due, to cover the extra expense
involved in handling such delinquent payment.

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(c) Anything to the contrary herein notwithstanding, Lender shall give written
notice to Borrower with respect to any non-monetary defaults hereunder and
Borrower shall have a period of thirty (30) days from the date of such notice to
cure the default, if Borrower or any Guarantor, as the case may be, shall
continue to be in default under any other term, covenant or condition of this
Agreement or any Loan Documents for thirty (30) calendar days after notice from
Lender; provided that if such default cannot reasonably be cured within such
thirty (30) calendar day period and Borrower (or such Guarantor as the case may
be) shall have commenced to  cure  such default  within  such
thirty  (30)  calendar  day period  and thereafter  diligently  and

expeditiously proceeds to cure the same, such thirty (30) calendar day period
shall be extended  ·

for so long as it shall require Borrower (or such Guarantor as the case may be)
in the exercise of due diligence to cure such default, it being agreed that no
such extension shall be for a period in excess of sixty (60) calendar days after
the notice from Lender referred to above.

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(d) If the Borrower fails to observe or perform any of the covenants or
agreements on the part of the Borrower to be performed hereunder, then the
Lender may, but shall not be obligated to, perform the same and all necessary
and all reasonable costs incurred by the Lender in performing the Borrower's
covenants and agreements,  including  reasonable counsel fees, shall be repaid
by the Borrower upon demand, together with interest thereon at the default rate
under the Note.

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Section 4.03No Waiver.

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(a) Any failure of the Lender to exercise its option to declare the loan
immediately due and payable, or any forbearance by the Lender before or after
any exercise of such option, or any forbearance to exercise any other remedy of
the Lender, or any withdrawal or abandonment of the Lender of any of its rights
in any one circumstance, shall not be construed as a waiver of any option,
power, remedy or right of the Lender hereunder except to the extent, if any, the
action of the Lender constitutes an express waiver with respect to such  one
circumstance. The rights and remedies of the Lender expressed and contained in
this Agreement and in the Loan Documents are cumulative and none of them shall
be deemed to be exclusive of any other or of any right or remedy the Lender may
not or hereafter have in law or in equity. The election of any one or more
remedies shall not be deemed to be an election of remedies under any statute,
rule, regulation or other law.

 

 

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(b) The obligations of the Borrower (and the rights and remedies  of the Lender
against the Borrower) hereunder shall in no way be modified, abrogated,
terminated or adversely affected by (i) any forbearance by the Lender in
collecting any sums due, or (ii) the granting of any extension of time to
perform any obligation hereunder or (iii) any impairment of the collateral, if
any, which may now or hereafter be assigned or delivered to Lender to secure
payment of the amounts due under the Note or hereunder, by reason of any act,
failure to act or negligence of the Lender.

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Article V.MISCELLANEOUS

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Section 5.01Notices.

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All notices to be given hereunder shall be delivered by hand, or sent to the
party to be notified via certified mail, return receipt requested or sent by a
nationally recognized overnight courier which provides evidence of receipt and
shall be deemed given when delivered by hand or one (1) day after delivery to
such nationally recognized overnight courier or three (3) days after being
posted with the United States Postal Service addressed to the parties as
follows:

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If to the Lender at:Santander Bank, N.A.

195 Montague Street

Brooklyn, New York  11201 Attn: Elizabeth Bae

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With a copy to:Windels Marx Lane &  Mittendorf, LLP

156 West 56th Street

New York, New York 10019 Attention: Michele Arbeeny, Esq.

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If to the Borrower at:Sutton Hill Properties,  LLC

6100 Center Drive

Suite 900

Los Angeles, California 90045 Attention: Andrzej Matyczynski

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With a copy to:Marcus Rosenberg &  Diamond LLP 488 Madison Avenue

New York, New York 10022 Attention: Jeffrey M. Diamond, Esq.

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Section 5.02Successors and Assigns.

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The terms Borrower and Lender, shall include the named Borrower and the named
under and their respective legal representatives, successors and any
permitted  assigns.

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Section 5.03Severability.

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If any one or more of the provisions contained in this Agreement or in any of
the Loan Documents shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or enforceability
shall not affect any other provision of this Agreement or of the Note or any
Loan Document.

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Section 5.04Expenses of Lender.

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The Borrower shall pay all out-of-pocket expenses, including but not limited to,
reasonable counsel fees incurred by the Lender in connection with the
preparation execution and delivery of this Agreement and the enforcement or
amendment of any of its rights or provisions hereunder.

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Section 5.05Indemnity.

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The Borrower shall indemnify and hold harmless the Lender from and against any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, proceedings, judgments, costs, expenses and disbursements, including but
not limited to, counsel fees in any way relating to or arising out of the
failure of the Borrower to perform in full its obligations under this Agreement
or under any of the Loan Documents.

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Section 5.06Applicable Law.

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This Agreement shall be governed by and construed in accordance with the laws of
the State of New York without regard to conflict of laws principles.

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Section 5.07Jurisdiction.

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ANY ACTION ORPROCEEDING IN CONNECTION WITH THIS AGREEMENT MAY BE BROUGHT IN A
COURT OF RECORD OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, THE PARTIES HEREBY
CONSENTING TO  THE JURISDICTION THEREOF.

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Section 5.08Waiver of Certain Defenses.

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IN ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS AGREEMENT, OR ANY OTHER LOAN
DOCUMENT, THE BORROWER WAIVES ANY CLAIM THAT NEW YORK IS AN INCONVENIENT FORUM
AND FURTHER WAlVES THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF
LIMITATIONS OR ANY CLAIM OF LACHES AND ANY SET-OFF OR COUNTERCLAIM OF ANY NATURE
OR DESCRIPTION EXCEPT FOR ANY COUNTERCLAIMS  DEEMED  COMPULSORY UNDER APPLICABLE
COURT RULES OR STATUTES.

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Section 5.09Waiver of Jury Trial and Waiver of Certain Damages.

 

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IN ANY ACTION OR PROCEEDING IN CONNECTION  WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, THE LENDER AND BORROWER MUTUALLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY AND BORROWER HEREBY WAlVES, TO THE FULLEST
EXTENT  PERMITTED  BY  LAW, ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL
DAMAGES.

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Section 5.10Joint and Several Liability.

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If this Agreement is executed by  more than one person or entity, all
representations, warranties, obligations and covenants made by the Borrower
hereunder shall be deemed to have been made by each of such persons and entities
and the obligations  and duties of such parties hereunder shall be deemed to be
joint and several in all respects.

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Section 5.11Origination Fee.

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This Agreement shall not become effective unless Lender has received, (a)
payment of Borrower to Lender of the origination fee to Lender and (b) payment
by Borrower of legal fees and expenses incurred by Lender to the Lender's
counsel.

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Section 5.12Counterparts.

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This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which, when taken together, shall
constitute one and the same instrument and shall become effective when copies
hereof, when taken together, bear the signatures of each of the parties hereto
and it shall not be necessary in making proof of this instrument to produce or
account for more than one of such fully executed counterparts.

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Section 5.13Satisfaction of Note.

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At such time as the First Mortgage or any other mortgage(s) covering the
Property, whether held by Lender or another lending institution, becomes due and
payable, whether upon the maturity thereof or by acceleration or otherwise,  or
upon prepayment thereof, the Borrower shall also be required to immediately
repay to Lender all amounts outstanding under the Note and this  Agreement and
if the Advance is not outstanding at such time,  no advance shall be available
hereunder.

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Section 5.14Authorization.

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The execution and delivery of this Agreement and the Note referred to herein
have been duly authorized by the members of Borrower.

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Section 5.15    Cooperation 

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In  the  event  Borrower   determines  that  it  would  be beneficial to have
the proceeds of the Loan in the form of multiple advances, Lender agrees to
reasonably cooperate with Borrower with respect to the modification of the Loan
Documents to provide for multiple advances subject to Borrowers payment of all
costs and expenses in connection with any such modification.

 

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