Document:

2015 10K Exhibit 1010 Westpac New Zealand Loan Agreement

		
			
		

		
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			Introduction
		

		
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			Westpac NZ has agreed to provide the Borrower with a term loan of $50,000,000 on the terms and conditions of this 
		

		 

		

			 

		

 

		Agreement.
		

		
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			Agreement
		

		
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				 1.
			

			
	
			
			condition precedent

		
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				 1.1
			

			
	
			
			Pre-condition

		
			The obligations of Westpac NZ under this Agreement are subject to the condition precedent that it must have received all of the following in form and substance satisfactory to it:
		

			
	
			
				 a)
			

			
	
			
			the original of this Agreement duly executed by the Borrower;

			
	
			
				 b)
			

			
	
			
			a certificate from a director of the Borrower in the form set out in the first schedule;

			
	
			
				 c)
			

			
	
			
			the Security (where necessary duly registered), the other Bank Documents and any ancillary documentation as may have been notified to the Borrower by Westpac NZ or its solicitors as being related to this Agreement, the Loan, the Security and/or the other Bank Documents;

			
	
			
				 d)
			

			
	
			
			evidence of registration of any financing statement in respect of the Security; and

			
	
			
				 e)
			

			
	
			
			any other documents or evidence (including legal opinions) as Westpac NZ or its solicitors may require.

		
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				 1.2
			

			
	
			
			Failure to Satisfy Pre-condition

		
			If the condition contained in clause 1.1 is not satisfied or waived before 30 June 2015 then Westpac NZ may terminate this Agreement whereupon it shall have no further liability or obligation to the Borrower.
		

		
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				 2.
			

			
	
			
			availability of loan

		
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				 2.1
			

			
	
			
			Loan

		
			Westpac NZ will make the first Advance available to the Borrower during the Availability Period, and will then make the rest of the Loan available to the Borrower, provided that:
		

			
	
			
				 a)
			

			
	
			
			the Borrower has complied with the relevant drawdown procedure;

			
	
			
				 b)
			

			
	
			
			no Event of Default or Potential Event of Default has occurred and is continuing or will occur as a result of the making of the Loan;

			
	
			
				 c)
			

			
	
			
			the First Tranche is utilised to repay the Borrower's existing indebtedness with Westpac NZ (account no. 03- 0104-0786183-91) and any surplus may be utilised for the Borrower's general requirements and CAPEX funding and the first drawdown must occur prior to 30 June 2015;

			
	
			
				 d)
			

			
	
			
			the Second Tranche is utilised to assist the Borrower in completing the Development;

			
	
			
				 e)
			

			
	
			
			prior to the first drawdown under the Second Tranche being made available, the special conditions contained in the  Letter of Offer for Advances of the Second Tranche must have been satisfied in Westpac NZ's absolute discretion.

		
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				 2.2
			

			
	
			
			Termination of Loan

		
			On termination of the Loan:
		

			
	
			
				 a)
			

			
	
			
			Westpac NZ's obligations to make the Loan available will terminate; and

			
	
			
				 b)
			

			
	
			
			the Borrower must immediately pay or repay to Westpac NZ all Outstanding Moneys (notwithstanding that the due date for repayment has not otherwise occurred); and

			
	
			
				 c)
			

			
	
			
			Westpac NZ will have no further obligations to the Borrower.

		
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				 2.3
			

			
	
			
			Effect of Termination

		
			Termination of the Loan will not affect any of the Borrower's obligations to Westpac NZ under this Agreement including obligations under the indemnities in clause 12 or the Borrower's obligations under the Security, which will remain binding upon it until all Outstanding Moneys have been repaid in full.
		

		
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				 3.
			

			
	
			
			procedure for drawdown

		
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			Not later than 2 Banking Days prior to the Banking Day on which the Borrower requires to drawdown all or part of the Loan, the Borrower must deliver to Westpac NZ an unconditional and irrevocable drawdown notice in the form set out in the second schedule signed by an authorised signatory of the Borrower.
		

		
			 
		

		

		

		 

		

			 

		

 

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				 4.
			

			
	
			
			interest

		
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				 4.1
			

			
	
			
			Payment

			
	
			
				 a)
			

			
	
			
			Interest on the Loan will be calculated at the Floating Rate or at the Fixed Rate (if it applies) on the basis of the actual number of days elapsed and a 365 day year, and will accrue from day to day from the Commencement Date until  the Loan is repaid in full, and must be paid by consecutive monthly payments on each Interest Payment Date.

			
	
			
				 b)
			

			
	
			
			The first interest payment on the Loan will be due and payable on the Interest Payment Date which immediately follows the Commencement Date. Each interest payment will be for the period beginning on the Commencement Date or the previous Interest Payment Date (as the case may be) and ending on (but excluding) the next Interest Payment Date.

		
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				 4.2
			

			
	
			
			Telephone Communications

			
	
			
				 a)
			

			
	
			
			validity of instructions

		
			Westpac NZ will be under no obligation to enquire as to the validity of any telephone instructions or acceptance which it receives or to require any evidence as to the authenticity, validity or legality of any telephone advice received or as to the authority of the person giving the telephone advice to act on behalf of the Borrower.
		

		
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				 b)
			

			
	
			
			authority to tape calls

		
			The Borrower acknowledges that Westpac NZ may from time to time keep tape recordings of telephone conversations between Westpac NZ and the Borrower and consents to the recording of those telephone conversations.
		

		
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				 5.
			

			
	
			
			repayment and prepayment of loan

		
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				 5.1
			

			
	
			
			Repayment

		
			The Borrower must pay the Outstanding Moneys on the Termination Date.
		

		
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				 5.2
			

			
	
			
			Prepayment

			
	
			
				 a)
			

			
	
			
			notice and prepayment multiples

		
			The Borrower may prepay all or part of the Loan:
		

			
	
			
				i.
			

			
	
			
			after giving Westpac NZ not less than 5 Banking Days irrevocable notice in writing of its intention to do so and then making payment on the specified date; and

			
	
			
				ii.
			

			
	
			
			in multiples of $10,000.

		
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				 b)
			

			
	
			
			losses

		
			On any prepayment made other than at the end of a Floating Rate Period applying to the amount prepaid, the Borrower must at the time of prepayment pay to Westpac NZ any losses, costs, penalties and expenses certified by Westpac NZ to have been sustained or incurred as a consequence of the prepayment.
		

		
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				 c)
			

			
	
			
			interest ceases

		
			Interest on any amount prepaid will cease to accrue from the date of the prepayment.
		

		
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				 d)
			

			
	
			
			redrawing

		
			Any amount prepaid will be available for redrawing.
		

		
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				 5.3
			

			
	
			
			Payment

		
			The Borrower must not later than 3.00 p.m. on the due date for payment of interest or any other Outstanding Moneys, pay to Westpac NZ an amount equal to the amount due in cleared funds in Dollars to the account and/or in the manner Westpac NZ may from time to time advise.
		

		
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			Amounts due and payable by the Borrower will be debited from the Westpac NZ account nominated by the Borrower. If the Borrower does not nominate an account, Westpac NZ may, at any time, debit from any account of the Borrower with Westpac NZ any amounts due and payable by the Borrower.
		

		
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				 5.4
			

			
	
			
			Banking Days

		
			If any payment by the Borrower falls due on a day which is not a Banking Day it must be made on the following Banking Day.
		

		
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				 6.
			

			
	
			
			fees, charges, expenses and review entitlement

		
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				 6.1
			

			
	
			
			Fees, Charges and Expenses Payable

		
			The Borrower must pay to Westpac NZ the following:
		

			
	
			
				 a)
			

			
	
			
			establishment fee

		
			A non-refundable establishment fee of $75,000 payable in one sum on or before execution of this Agreement.
		

		
			 
		

		

		

		 

		

			 

		

 

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				 b)
			

			
	
			
			line of credit charge

		
			A line of credit charge payable in arrears with the first charge being in respect of the period from the Commencement Date to the last Banking Day of the month in which that date occurs and thereafter monthly on the last Banking Day of each month through to the Termination Date and calculated at 0.40% per annum on the amount of the Loan.
		

		
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				 c)
			

			
	
			
			expenses

		
			The expenses of Westpac NZ and each Officer in relation to:
		

			
	
			
				 i)
			

			
	
			
			the Outstanding Moneys;

			
	
			
				 ii)
			

			
	
			
			the  preparation,  execution  and  completion  of  each  Bank  Document,  and  any  subsequent  consent, approval, waiver, amendment or release;

			
	
			
				 iii)
			

			
	
			
			any contemplated, attempted or actual enforcement of any Bank Document or the actual or contemplated, attempted or actual exercise or defence of any Power; and

			
	
			
				 iv)
			

			
	
			
			any enquiry by a Governmental Agency concerning the Borrower or related to a  Bank Document.

		
			This includes expenses incurred in retaining consultants to evaluate matters of concern to Westpac NZ. It also includes administrative time and costs including the time of Officers and other employees of Westpac NZ (whose time and costs are to be charged at reasonable rates).
		

		
			It will include, in each case, legal fees and expenses on a full indemnity basis plus goods and services tax on those amounts.
		

		
			All these expenses are payable on demand.
		

		
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				 d)
			

			
	
			
			government charges

		
			Any government duties, taxes and charges on the Bank Documents and payments and receipts under them.
		

		
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				 6.2
			

			
	
			
			Review of margin

		
			Westpac NZ may, by 3 Banking Days' notice to the Borrower, increase or decrease the Margin provided no increase will take effect within 12 months of the Commencement Date.
		

		
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				 7.
			

			
	
			
			interest on arrears

		
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				 7.1
			

			
	
			
			Default Interest Payable

		
			If the Borrower does not pay any sum payable on the due date, it must pay interest on that overdue sum at the Default Rate from the due date until the Borrower remedies the default and pays all default interest.
		

		
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				 7.2
			

			
	
			
			Default in Payment of Interest

		
			If the Borrower does not pay any sum on or before 14 days after the date on which payment was due, then the following rules apply:
		

			
	
			
				 a)
			

			
	
			
			Interest on all amounts on which interest is payable will be calculated at the Default Rate;

			
	
			
				 b)
			

			
	
			
			Interest at the Default Rate:

			
	
			
				 i)
			

			
	
			
			will accrue during the period beginning on the date the last payment was due and paid by the Borrower and ending on the date the Borrower remedies the default and pays all default interest. Where no payments have been made by the Borrower, the period begins on the date of drawdown;

			
	
			
				 ii)
			

			
	
			
			will be calculated on a daily basis by reference to successive periods of durations selected by Westpac NZ from time to time. Each period will begin on the last day of the previous period except for the first period which will begin on the due date;

			
	
			
				 iii)
			

			
	
			
			will be payable on the last day of each period and on the date of receipt of the overdue sum by Westpac NZ. Any interest which is not paid when due will be added to the overdue sum and will itself bear interest under this clause.

		
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				 8.
			

			
	
			
			undertakings

		
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				 8.1
			

			
	
			
			General undertakings

		
			The Borrower and the Charging Group (where applicable) undertake to Westpac NZ as follows, except to the extent that Westpac NZ agrees otherwise:
		

		
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				 a)
			

			
	
			
			Personal Property Securities Act 1999

		
			Whenever Westpac NZ asks it to do anything to better secure any property which secures or is intended to secure financial accommodation from Westpac NZ (including, without limitation, the Loan), the Borrower must do it (or procure that it is done) immediately at its own cost. This may include signing and delivering documents and anything else that Westpac NZ requires to ensure that Westpac NZ has perfected security interest(s) under the Personal Property Securities Act 1999 ("PPSA").
		

		
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			The Borrower waives any rights to receive a copy of a verification statement under the PPSA and agrees, to the extent permitted by law, that in respect of any arrangement between the Borrower and Westpac NZ:
		

			
	
			
				 i)
			

			
	
			
			sections 114(1)(a), 133 and 134 of the PPSA shall not apply;

			
	
			
				 ii)
			

			
	
			
			the  Borrower  shall  have  none  of  the  rights  referred  to  in  paragraphs  (c)  to  (e)  and  (h)  to  (j)  of section 107(2) of the PPSA; and

		
			 
		

		

		

		 

		

			 

		

 

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				 iii)
			

			
	
			
			where Westpac NZ has rights in addition to those in Part 9 of the PPSA, those rights shall continue to apply and, in particular, shall not be limited by section 109 of the PPSA.

		
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			The Borrower must, immediately upon request by Westpac NZ, procure from any person considered by Westpac NZ to be relevant to its security position such agreements and waivers (including as equivalent to those above) as Westpac NZ may at any time require.
		

		
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				 b)
			

			
	
			
			project invoices

		
			It must ensure that, until such time as the Development has been completed, it promptly provides to Westpac NZ (and in any event within 7 days after being requested by Westpac NZ) copies of project invoices and the Quantity Surveyor's monthly report, which are to be acceptable to Westpac NZ in its absolute discretion.
		

		
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				 c)
			

			
	
			
			valuation

		
			It must ensure that, within 45 days of a written request being made by Westpac NZ, Westpac NZ is provided with up-to-date valuations for all assets of the Group secured to Westpac NZ (including the leasehold interests in the cinemas).  The valuations must be:
		

			
	
			
				 i)
			

			
	
			
			addressed to Westpac NZ;

			
	
			
				 ii)
			

			
	
			
			provided by a registered valuer acceptable to Westpac NZ;

			
	
			
				 iii)
			

			
	
			
			in a format acceptable to Westpac NZ; and

			
	
			
				 iv)
			

			
	
			
			satisfactory to Westpac NZ in its absolute discretion in all respects.

		
			Westpac NZ will not request such valuations more than once per year unless, in Westpac NZ's reasonable opinion, there has been a material change in the value of the Group's assets.
		

		
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				 d)
			

			
	
			
			reporting and information

		
			It must ensure that the Group provides to Westpac NZ:
		

			
	
			
				 i)
			

			
	
			
			as soon as practicable (and in any event not later than 120 days) after the close of each financial year copies of the Group's consolidated balance sheet and profit and loss account for that financial year all of which must be audited unless Westpac NZ agrees otherwise;

			
	
			
				 ii)
			

			
	
			
			as soon as practicable (and in any event not later than 45 days) after the close of each financial quarter copies of the Group's unaudited management accounts (showing performance against budget for each asset) for that financial quarter;

			
	
			
				 iii)
			

			
	
			
			prior to the start of each financial year, the Group's financial budget for that financial year, which is to show forecast expenditure on capital items and repairs and maintenance for each asset secured to Westpac NZ together with a brief commentary on such expenditure;

			
	
			
				 iv)
			

			
	
			
			at the same time the information required by paragraph 8.1(d)(i) is provided to Westpac NZ, a commentary on the Group's capital expenditure and repairs and maintenance undertaken by the Group for that financial year in respect of each asset secured to Westpac NZ; and

			
	
			
				 v)
			

			
	
			
			promptly (and in any event within 7 days after request by Westpac NZ) any other information in relation to the Group's assets, financial condition or business which Westpac NZ reasonably requests.

		
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				 e)
			

			
	
			
			accounting standards

		
			It must ensure that the financial statements of the Group, at any time delivered to Westpac NZ:
		

			
	
			
				 i)
			

			
	
			
			are prepared in accordance with current accounting practice;

			
	
			
				 ii)
			

			
	
			
			give a true and fair view of the Group's financial position and operations as at the date, and for the period to which the financial statements relate;

			
	
			
				 iii)
			

			
	
			
			together with the notes to them, disclose all liabilities (actual or contingent) of the Group; and

			
	
			
				 iv)
			

			
	
			
			are prepared and delivered to all relevant persons within the period in which they are required by law or under any agreement to be delivered.

		
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				 f)
			

			
	
			
			insurance

		
			It must ensure that insurance is maintained in respect of the Land for full replacement value (or as agreed by Westpac NZ). It must also take out contractor's all risk insurance during the construction of any improvements. Westpac NZ's interest as mortgagee must be noted on all insurance policies. Copies of such policies are to be provided to Westpac NZ and are to be satisfactory to Westpac NZ in all respects in its absolute discretion.
		

		
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				 g)
			

			
	
			
			acquisition of assets

		
			It must, if it uses any part of the Loan to finance the acquisition of an asset in New Zealand in excess of
		

		
			$5,000,000, provide to Westpac NZ details of such assets and any other documents or information in respect of such asset which Westpac NZ reasonably requests.
		

		
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				 h)
			

			
	
			
			consent required to structure/acquisition

		
			No member of the Charging Group can enter into a joint venture, make a material acquisition or provide advances outside the Charging Group (either to related or unrelated parties) without Westpac NZ's prior written consent.
		

		
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				 i)
			

			
	
			
			payments

		
			No member of the Charging Group can make any payments (including but not limited to capital reductions, dividends, repayment of loans, interest payments and management fees) to associated or related parties unless Westpac NZ is satisfied that all covenants contained in the Agreement are and will continue to be met following such payment being made.
		

		
			 
		

		

		

		 

		

			 

		

 

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				 8.2
			

			
	
			
			Financial Covenants

		
			The Borrower undertakes to Westpac NZ as follows, except to the extent that Westpac NZ agrees otherwise:
		

			
	
			
				 a)
			

			
	
			
			equity ratio

		
			It must ensure that the Group maintains, at all times, Shareholders Funds of not less than 40% of Adjusted Tangible Assets. Shareholders Funds is the Group's Adjusted Tangible Assets less Adjusted Total Liabilities. Adjusted Tangible Assets is the aggregate of the consolidated book values of all of the Group's assets excluding assets of an intangible nature, advances to shareholders, investments in related and associate companies and future asset revaluations (except as individually approved by Westpac NZ). Adjusted Total Liabilities is the aggregate of the consolidated book values of all of the Group's liabilities excluding only advances from shareholders. This covenant will be tested quarterly for compliance and will be determined by Westpac NZ in its absolute discretion.
		

		
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				 b)
			

			
	
			
			interest cover ratio

		
			It must ensure that the Group's Earnings for each 12 month period are not less than 2.0 times its Funding Costs for that 12 month period. Earnings is the Group's net profit before Funding Costs, income Tax, Extraordinaries and management costs (on the basis that management costs are accrued only and not paid externally) and amortisation of goodwill for the relevant financial quarter. Funding Costs comprise all interest, charges and fees related to all funding other than interest on shareholder/related party advances provided such interest is capitalised and not paid outside the Group. Extraordinaries are items that are not expected to occur frequently and are distinct from the Group's ordinary operations.
		

		
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				 9.
			

			
	
			
			deductions from payments

		
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				 9.1
			

			
	
			
			Gross-Up of Borrower's Withholding Tax

		
			The Borrower must not make any payment subject to any condition, restriction or claim it may have against Westpac NZ. The Borrower may only make a withholding or deduction from money it pays to Westpac NZ under this Agreement if that withholding or deduction is required by law. If the law requires the Borrower to make a withholding or deduction then the following rules apply:
		

			
	
			
				 a)
			

			
	
			
			the Borrower must make sure that the withholding or deduction is for not more than the minimum amount required by that law;

			
	
			
				 b)
			

			
	
			
			the Borrower must make sure that the withholding or deduction is paid to the relevant revenue or Governmental Agency  by the due date for payment;

			
	
			
				 c)
			

			
	
			
			the Borrower must send Westpac NZ, within 30 days of the withholding or deduction, a receipt showing that the withholding or deduction has been paid to the relevant revenue or Governmental Agency;

			
	
			
				 d)
			

			
	
			
			the Borrower must increase the amount it pays to Westpac NZ so that Westpac NZ receives the amount it would have received had there been no withholding or deduction.

		
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				 9.2
			

			
	
			
			Gross-Up for Westpac NZ's Withholding Tax

		
			If the law requires Westpac NZ to make a deduction or withholding from any amount received or receivable by it under this Agreement or any other Bank Document (including any sum received or receivable under this clause 9.2, and excluding any Tax on its overall net income) then the Borrower must increase the amount it pays to Westpac NZ so that Westpac NZ receives the amount it would have received had there been no withholding or deduction.
		

		
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				 9.3
			

			
	
			
			Indemnity for Tax on Funding

		
			If:
		

			
	
			
				 a)
			

			
	
			
			Westpac NZ (or any person on its behalf) is required by law to make a deduction or withholding for, or on account of, Tax or on any other account from an amount paid or payable to a person from whom it has borrowed or obtained moneys to enable it to fund the Loan or any other payment by it under this Agreement or any other Bank Document; and

			
	
			
				 b)
			

			
	
			
			as a result Westpac NZ is required to increase its payment, or makes an additional payment, to that person or to a taxation authority,

		
			then the Borrower will indemnify and hold Westpac NZ harmless against that increased or additional payment and must, on demand by Westpac NZ, pay to Westpac NZ the amount which, after receiving that amount and making that increased or additional payment, will place Westpac NZ in the same position in which it would have been had no increased or additional payment been made.
		

		
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				 9.4
			

			
	
			
			Tax Credit

		
			If Westpac NZ receives the benefit of a Tax credit, refund or allowance resulting from an increased amount paid by the Borrower under this clause then the following rules apply:
		

			
	
			
				 a)
			

			
	
			
			Westpac NZ will provide the Borrower with that part of the Tax credit, refund or allowance that Westpac NZ determines was obtained as a result of the increased amount the Borrower paid;

			
	
			
				 b)
			

			
	
			
			the amount determined by Westpac NZ will be calculated so Westpac NZ is in no better or worse position than it would have been had no amount been paid by the Borrower under this clause;

			
	
			
				 c)
			

			
	
			
			Westpac NZ is under no obligation to disclose any information relating to the calculation of its Tax liability or benefits;

			
	
			
				 d)
			

			
	
			
			this clause does not interfere with Westpac NZ's right to arrange its Tax affairs as it wishes and, in particular, Westpac NZ may apply Tax credits, refunds and allowances available to it as it likes.

		
			 
		

		

		

		 

		

			 

		

 

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				 10.
			

			
	
			
			events of default

		
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			At any time after an Event of Default and without prejudice to any other remedies, Westpac NZ may immediately by notice to the Borrower terminate the Loan with the consequences set out in clause 2.2.
		

		
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				 11.
			

			
	
			
			change in circumstances

		
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				 11.1
			

			
	
			
			Increased Costs

		
			If as a result of:
		

			
	
			
				 a)
			

			
	
			
			Westpac NZ complying with any law; or

			
	
			
				 b)
			

			
	
			
			any change in or introduction of any law or change in the interpretation or application of any law by any Governmental Agency or court which:

			
	
			
				 i)
			

			
	
			
			imposes, modifies or deems applicable any reserve, capital adequacy, prudential deposit, liquidity or similar requirement against assets of, or deposits with any branch of Westpac NZ;

			
	
			
				 ii)
			

			
	
			
			imposes  on  Westpac  NZ  any  other requirement with respect to this Agreement or any other Bank Document; or

			
	
			
				 iii)
			

			
	
			
			changes the risk weighting for capital adequacy purposes of the Loan;

		
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			any of the following occur:
		

		
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				 c)
			

			
	
			
			the cost to Westpac NZ of making, funding or maintaining the Loan is increased; or

			
	
			
				 d)
			

			
	
			
			the moneys payable to Westpac NZ or the effective return to Westpac NZ under or in connection with this Agreement is reduced; or

			
	
			
				 e)
			

			
	
			
			Westpac NZ makes any payment or foregoes any interest or other return on, or calculated by reference to, any sum received or receivable by it under any Bank Document; or

			
	
			
				 f)
			

			
	
			
			Westpac NZ is unable to obtain the rate of return on capital (including any notional return on capital calculated on a risk adjusted basis) which it would have received at the date of this Agreement;

		
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			then:
		

		
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				 g)
			

			
	
			
			Westpac NZ will use its best efforts promptly to notify the Borrower in writing of those events, provided that failure to do so will not affect Westpac NZ's rights under this clause; and

			
	
			
				 h)
			

			
	
			
			the Borrower must pay on demand, from time to time, for the account of Westpac NZ, the amount certified by an Officer  which will compensate Westpac NZ for its increased cost, reduction, payment or foregone interest or other return.

		
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				 11.2
			

			
	
			
			Survival of Obligations

		
			The obligations of the Borrower under clause 11.1 will survive termination of the Loan and payment or repayment of all Outstanding Moneys.
		

		
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				 11.3
			

			
	
			
			Re-negotiation of Loan

		
			If an additional amount is required to be paid under clause 11.1 then, without limiting the Borrower's obligations under this Agreement, Westpac NZ will, at the request of the Borrower given within 30 days of notice from Westpac NZ, consult with the Borrower with a view to renegotiating the terms of the Loan in order to mitigate or avoid any additional amounts payable under clause 11.1 provided that nothing in this clause will require Westpac NZ to act to its detriment.
		

		
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				 11.4
			

			
	
			
			Illegality

		
			If as a result of:
		

			
	
			
				 a)
			

			
	
			
			the introduction or amendment of any law; or

			
	
			
				 b)
			

			
	
			
			any other circumstance affecting any interbank market or any relevant foreign exchange market generally;

		
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			it is unlawful, impracticable or impossible for Westpac NZ to make, fund or allow to remain outstanding the Loan or to comply with its obligations or exercise its rights under this Agreement, then Westpac NZ will as soon as practicable give written notice to the Borrower and Westpac NZ will be entitled, to terminate the Loan, with effect from the date Westpac NZ specifies and with the consequences set out in clause 2.2.
		

		
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				 12.
			

			
	
			
			indemnity

		
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				 12.1
			

			
	
			
			General Indemnity

		
			The Borrower agrees to indemnify Westpac NZ, every Officer and every employee of Westpac NZ upon demand from against any loss, cost, expense, charge, damage, claim or liability which Westpac NZ, an Officer or an employee of Westpac NZ may suffer or incur as a direct or indirect consequence of:
		

			
	
			
				 a)
			

			
	
			
			an Event of Default or Potential Event of Default;

			
	
			
				 b)
			

			
	
			
			the exercise, contemplated exercise or attempted exercise of any Power or the failure to exercise any Power;

			
	
			
				 c)
			

			
	
			
			the receipt of any amount to be paid under any Bank Document  on a date other than the due date; or

		
			 
		

		

		

		 

		

			 

		

 

		﻿
		

			
	
			
				 d)
			

			
	
			
			the Loan requested under clause 3 not being made for any reason (excluding default by Westpac NZ) on the date notified by the Borrower to Westpac NZ as the drawdown date.

		
			﻿
		

			
	
			
				 12.2
			

			
	
			
			Examples

		
			Without limitation, the indemnity in clause 12.1 will extend to:
		

			
	
			
				 a)
			

			
	
			
			any losses, costs, penalties and expenses incurred by reason of the liquidation or re-employment of deposits or other funds acquired or contracted for by Westpac NZ (including loss of margin); and

			
	
			
				 b)
			

			
	
			
			any losses, costs, penalties and expenses which may be incurred by Westpac NZ in:

			
	
			
				 i)
			

			
	
			
			terminating any options or forward rate agreements or interest or currency swap contracts entered into in connection with the Loan; or

			
	
			
				 ii)
			

			
	
			
			in entering into any new contracts which it deems appropriate to protect the return it would otherwise have expected under this Agreement.

		
			﻿
		

			
	
			
				 12.3
			

			
	
			
			Currency Indemnity

		
			If for any reason:
		

			
	
			
				 a)
			

			
	
			
			Westpac NZ receives or recovers an amount under a Bank Document in a currency other than the currency in which it should have been paid and, after Westpac NZ has converted that other currency to the correct currency there is not enough to pay off the full amount then due under the Bank Document; or

			
	
			
				 b)
			

			
	
			
			Westpac NZ obtains any judgment or court order against the Borrower in a currency other than the currency in which the Outstanding Moneys are due, and Westpac NZ incurs any loss from the conversion of any amount actually received by it from that other currency to the correct currency,

		
			then, as a separate and independent indemnity obligation, the Borrower must pay Westpac NZ the full amount of any shortfall or of any such loss incurred by Westpac NZ.
		

		
			﻿
		

			
	
			
				 12.4
			

			
	
			
			Unconditional Indemnities

		
			The indemnities in this clause 12 are unconditional and irrevocable and will survive termination of the Loan and payment of all Outstanding Moneys and the release of any Security and will not be discharged or impaired by any act, omission, matter or thing which might discharge them but for this provision.
		

		
			﻿
		

		
			﻿
		

			
	
			
				 13.
			

			
	
			
			Set off and combination

		
			﻿
		

		
			﻿
		

			
	
			
				 13.1
			

			
	
			
			Set Off

		
			If the Borrower has any money in any account with Westpac NZ, then Westpac NZ can use it to pay amounts the Borrower owes under this Agreement but need not do so. If the Borrower is in default, Westpac NZ can use money which has not yet matured due and convert money in the account of the Borrower in foreign currencies. To the maximum extent allowed by law, the Borrower gives up any right to set off any amounts Westpac NZ owes it against the Outstanding Moneys.
		

		
			﻿
		

			
	
			
				 13.2
			

			
	
			
			Contingent Amounts

		
			If at any time an amount is contingently due from the Borrower or an amount due is not quantified, Westpac NZ may retain and withhold repayment of any money in any account of the Borrower and the payment of interest or other moneys pending that amount becoming due and/or being quantified and may set off the maximum liability which may at any time be or become owing to Westpac NZ by the Borrower and in each case without prior notice or demand.
		

		
			﻿
		

			
	
			
				 13.3
			

			
	
			
			Combination

		
			Subject to any applicable Bank Document, where the Borrower has two or more accounts with Westpac NZ:
		

			
	
			
				 a)
			

			
	
			
			Westpac NZ may at any time combine any two or more of those accounts.   It may do so without notice and whether or not it has allowed a set-off for a calculation of interest between any of those accounts;

			
	
			
				 b)
			

			
	
			
			Westpac NZ may at any time combine any two or more of those accounts even where one or more of the combined accounts are in different currencies and may effect currency exchanges appropriate to implement that combination; and

			
	
			
				 c)
			

			
	
			
			if Westpac NZ combines two or more accounts, it may decline to pay cheques and it may otherwise act as if the combined accounts had always been one account.

		
			﻿
		

			
	
			
				 13.4
			

			
	
			
			Contractual Rights

		
			Westpac NZ's rights under this clause are contractual rights affecting the terms upon which a credit balance is held and the creation of those rights does not constitute the creation of a security interest in respect of that credit balance.
		

		
			﻿
		

			
	
			
				 13.5
			

			
	
			
			Deposits with Westpac NZ

		
			Any moneys which, pursuant to a Bank Document, are deposited at any time by the Borrower with Westpac NZ (or withheld by Westpac NZ from a payment to the Borrower and retained on deposit with it) must, unless otherwise provided, be held on the following basis:
		

			
	
			
				 a)
			

			
	
			
			each deposit and all rights of the Borrower relating to it must be incapable of assignment by the Borrower or of being the subject of a security interest except:

			
	
			
				 i)
			

			
	
			
			in favour of Westpac NZ; or

			
	
			
				 ii)
			

			
	
			
			with the prior written consent of Westpac NZ; and

			
	
			
				 b)
			

			
	
			
			the Borrower must have no right to withdraw any moneys from a deposit until all obligations of the Borrower under the Bank Documents (present and future, direct and contingent) have been performed and complied with, except:

		
			 
		

		

		

		 

		

			 

		

 

		﻿
		

			
	
			
				 i)
			

			
	
			
			as expressly permitted by the terms of any Bank Documents under which that deposit was made;

			
	
			
				 ii)
			

			
	
			
			for the purpose of complying with its obligations under the Bank Documents; or

			
	
			
				 iii)
			

			
	
			
			with the prior written consent of Westpac NZ.

		
			﻿
		

			
	
			
				 13.6
			

			
	
			
			Interest

		
			Each amount deposited with Westpac NZ under clause 13.5 will (unless otherwise agreed) bear interest calculated by reference to successive deposit periods of a duration agreed by Westpac NZ and the Borrower (or, in the absence of agreement, as Westpac NZ may nominate). The rate of interest applicable to a deposit period will be as agreed by Westpac NZ and the Borrower (or, in the absence of agreement, as Westpac NZ certifies as applicable to deposits of similar size and maturity placed with it by customers). As long as no Event of Default or Potential Event of Default has occurred (in which case interest is to be added to the deposit) and subject to clause 13.1, that interest is to be paid to the Borrower as it may direct.
		

		
			﻿
		

		
			﻿
		

			
	
			
				 14.
			

			
	
			
			protection of officers

		
			﻿
		

		
			﻿
		

		
			To the extent permitted by law, neither Westpac NZ nor any Officer or Attorney will be liable in respect of any conduct, (including but not limited to the agreement to provide the Loan), omission, delay, negligence or breach of duty in the exercise or failure to exercise a Power or for any loss (including consequential loss) which results. However, Westpac NZ and any Officer or Attorney will be liable where liability arises from its own fraud or wilful misconduct.
		

		
			﻿
		

		
			﻿
		

			
	
			
				 15.
			

			
	
			
			no reliance on Westpac NZ

		
			﻿
		

		
			﻿
		

		
			The Borrower confirms that:
		

			
	
			
				 a)
			

			
	
			
			it has not entered into any Bank Document in reliance on, or as a result of any conduct of any kind of or on behalf of  Westpac NZ or any Related Company of Westpac NZ (including any advice, warranty, representation or undertaking); and

			
	
			
				 b)
			

			
	
			
			neither Westpac NZ nor any Related Company of Westpac NZ is obliged to do anything (including disclose anything or give advice),

		
			except as expressly set out in the Bank Documents or in writing signed by or on behalf of Westpac NZ or any Related Company of Westpac NZ.
		

		
			﻿
		

		
			﻿
		

			
	
			
				 16.
			

			
	
			
			assignment

		
			﻿
		

		
			﻿
		

			
	
			
				 16.1
			

			
	
			
			Westpac NZ may assign

		
			Westpac NZ can transfer this Agreement and all or part of the Outstanding Moneys to someone else. If it does, this Agreement and any transferred Bank Document will apply to the transferee as if it was Westpac NZ. To the maximum extent allowed by law, any transfer will be free of any set off, equity or cross claim which the Borrower would have had against Westpac NZ or the transferee of any Bank Document but for this clause.
		

		
			﻿
		

			
	
			
				 16.2
			

			
	
			
			Borrower may not assign

		
			The Borrower may not assign or otherwise transfer or grant any Security Interest over any of its rights and obligations under this Agreement or any other Bank document.
		

		
			﻿
		

			
	
			
				 16.3
			

			
	
			
			disclosure of information

		
			Westpac NZ may disclose to a Related Company, potential assignee or transferee of its rights or obligations under any Bank Document or any other relevant party any information about the Borrower as Westpac NZ considers appropriate. However, before disclosing to any potential assignee or transferee Westpac NZ will, in relation to information which is not publicly available:
		

			
	
			
				 a)
			

			
	
			
			advise the Borrower of its intention; and

			
	
			
				 b)
			

			
	
			
			require an undertaking protecting the confidentiality of that information from any potential assignee or transferee or other relevant party.

		
			﻿
		

		
			﻿
		

			
	
			
				 17.
			

			
	
			
			counterpart execution

		
			﻿
		

		
			﻿
		

		
			This Agreement may be executed in two or more counterparts, all of which will be deemed to constitute the same instrument. Westpac NZ may accept as an original a facsimile copy of this Agreement executed by the Borrower and a facsimile copy, when taken with a counterpart executed by Westpac NZ, will be deemed to be one original copy of this Agreement.
		

		
			 
		

		

		

		 

		

			 

		

 

		

			

		

			- 10 -

		

		

			- 10 -

		

		

		﻿
		

			
	
			
				 18.
			

			
	
			
			anti-money laundering

		
			﻿
		

		
			﻿
		

		
			The Borrower agrees to provide all information to Westpac NZ which Westpac NZ requires in order to manage its anti-money-laundering and countering terrorism financing obligations, to manage its economic and trade sanctions risks or to comply with any laws, rules or regulations in New Zealand or any other country. The Borrower agrees that Westpac NZ may refuse to establish a business relationship with the Borrower, may be required to delay, defer, stop or refuse to process any transaction, or may terminate its business relationship with the Borrower at any time and without notice, if the Borrower fails to provide this information to Westpac NZ in the manner and timeframe specified by Westpac NZ. The Borrower agrees that Westpac NZ may delay, defer, stop or refuse to process any transaction without incurring any liability if Westpac NZ knows or suspects that:
		

			
	
			
				 a)
			

			
	
			
			the transaction will or may breach any laws or regulations in New Zealand or any other country; or

			
	
			
				 b)
			

			
	
			
			the transaction involves any person (natural, corporate or governmental) that is itself sanctioned, or is connected, directly or indirectly, to any person (natural, corporate or governmental) that is sanctioned, under economic and trade sanctions imposed by any country.

		
			﻿
		

		
			Unless the Borrower has disclosed to Westpac NZ that the Borrower is acting in a trustee capacity or on behalf of another party, the Borrower warrants that the Borrower is acting solely on the Borrower’s own behalf in entering into this Agreement.
		

		
			﻿
		

		
			For each transaction conducted under this Agreement, the Borrower represents and warrants to Westpac NZ that, to best of the Borrower’s knowledge, information and belief at the time the transaction takes place, the processing of that transaction by Westpac NZ in accordance with the Borrower’s instructions will not breach any laws or regulations in New Zealand or any other country relevant to the transaction.
		

		
			﻿
		

		
			﻿
		

			
	
			
				 19.
			

			
	
			
			interpretation

		
			﻿
		

		
			﻿
		

			
	
			
				 19.1
			

			
	
			
			Definitions

		
			The following definitions apply, unless the context requires otherwise:
		

		
			﻿
		

		
			Agreement means this agreement and any variations or additions to it agreed in writing between the parties;
		

		
			﻿
		

		
			Attorney means a person appointed as attorney under any Bank Document;
		

		
			﻿
		

		
			Availability Period means the period beginning on the date that Westpac NZ confirms to the Borrower that the condition precedent in this Agreement has been satisfied and expiring on 30 June 2015;
		

		
			﻿
		

		
			Bank Document means a document or agreement:
		

			
	
			
				 a)
			

			
	
			
			to which Westpac NZ and any one or more of the Borrower and/or any Guarantor are or become parties or purport to be or become parties; or

			
	
			
				 b)
			

			
	
			
			under which obligations arise or are intended to arise from any one or more of the Borrower and/or any Guarantor to, or for the benefit of, Westpac NZ;

		
			(in each case whether or not the parties are involved or it arises as a result of an assignment or transfer). It includes this Agreement and any Security;
		

		
			﻿
		

		
			Banking Day means any day (other than a Saturday or Sunday) on which registered banks are open for business of the nature required by this Agreement in Auckland and, if on that day a transfer of funds is to be made under this Agreement, the city to which the funds are to be transferred;
		

		
			﻿
		

		
			Commencement Date means the date the Loan is first drawn down;
		

		
			﻿
		

		
			Default Rate means the aggregate of Westpac NZ's Indicator Lending Rate from time to time and 7% per annum;
		

		
			﻿
		

		
			Development means the development to be carried out on the land at 200 Wakefield Street, Wellington;
		

		
			﻿
		

		
			Dollar and $  means the lawful currency of New Zealand;
		

		
			﻿
		

		
			Event of Default means any of the events described as such in the General Security Agreement, notwithstanding that the General Security Agreement may be wholly or partially satisfied, released, discharged, avoided, replaced, lost or destroyed from time to time;
		

		
			﻿
		

		
			First Tranche means $35,000,000;
		

		
			﻿
		

		
			Floating Rate means, for each Floating Rate Period, the aggregate of the Margin and Westpac NZ's 90 day bank bill bid rate (rounded upwards to the nearest first decimal place) for bills of a comparable amount to the amount of the Loan at the relevant time on the first day of that Floating Rate Period.
		

		
			﻿
		

		
			Floating Rate Period means a period of 3 calendar months provided that:
		

			
	
			
				 a)
			

			
	
			
			the first Floating Rate Period will begin on the Commencement Date;

		
			 
		

		

		

		 

		

			 

		

 

		

			

		

			-  11 -

		

		

			-  11 -

		

		

		﻿
		

			
	
			
				 b)
			

			
	
			
			each subsequent Floating Rate Period will begin at the end of the previous one;

			
	
			
				 c)
			

			
	
			
			any Floating Rate Period which would otherwise end on a day which is not a Banking Day will be extended to the next Banking Day;

			
	
			
				 d)
			

			
	
			
			if any Floating Rate Period would otherwise extend beyond the Termination Date it will end on the Termination Date;

		
			﻿
		

		
			General Security Agreement means the general security agreement entered into by the Borrower and Westpac NZ and dated on or about the date of this Agreement;
		

		
			﻿
		

		
			Governmental Agency means any government or any governmental, semi-governmental or judicial entity or authority including any local government, statutory or self-regulatory organisation established, approved or authorised under law, and any stock exchange, in any case having jurisdiction in relation to the affairs of any party to a Bank Document or to whose control or jurisdiction any party to a Bank Document has consented;
		

		
			﻿
		

		
			Group means Reading New Zealand Limited and its subsidiaries;
		

		
			﻿
		

		
			Guarantee means any guarantee, indemnity, letter of credit, legally binding letter of comfort or suretyship. It includes any obligation or irrevocable offer to be responsible for a debt (as defined below) or for the insolvency or financial condition of another person. It also includes any other obligation or irrevocable offer to pay a debt or to purchase a debt, to provide funds for the payment or discharge of a debt (whether by the advance of money, the purchase of or subscription for shares, stock or other interests issued by another person, the purchase of assets or services, or otherwise), or to indemnify against the consequences of default in the payment of a debt. For the purposes of this definition debt includes any obligation or indebtedness of another person, present or future, actual, prospective or contingent and any capital or premium on shares, stock or other interests issued by another person;
		

		
			﻿
		

		
			Guarantor means any person who creates or enters into a Guarantee in support of any Outstanding Moneys;
		

		
			﻿
		

		
			Interest Calculation Date means the date falling on the day in each calendar month which numerically corresponds to the Commencement Date provided that where there is no numerically corresponding day in any calendar month then it will be the first day in the next calendar month;
		

		
			﻿
		

		
			Interest Payment Date means, unless Westpac NZ shall determine otherwise, the date falling on the day after each Interest Calculation Date provided that:
		

			
	
			
				 (a)
			

			
	
			
			where the Interest Calculation Date would otherwise fall on a non-Banking Day then the Interest Payment Date shall be the Banking Day after the next Banking Day; and

			
	
			
				 (b)
			

			
	
			
			where the Interest Calculation Date would otherwise fall on a Banking Day which immediately precedes a non- Banking Day then the Interest Payment Date shall be the next Banking Day;

		
			﻿
		

		
			Land means any land mortgaged or charged from time to time by any member of the Charging Group to Westpac NZ, together with all buildings and improvements on such land;
		

		
			﻿
		

		
			Letter of Offer means the letter of offer dated 13 April 2015 from Westpac NZ to the Borrower in relation to the Loan;
		

		
			﻿
		

		
			Loan means the sum of $50,000,000 (being the aggregate of the First Tranche and the Second Tranche);
		

		
			﻿
		

		
			Margin means, subject to clause 6.2, 1.75% per annum;
		

		
			﻿
		

		
			Officer includes each employee of Westpac NZ whose title includes the word Manager or occupying an office whose title includes the word Manager and any person (who need not be an employee) authorised by Westpac NZ;
		

		
			﻿
		

		
			Outstanding Moneys means, at any time, the Loan outstanding and all other moneys payable, including contingently payable, by the Borrower under this Agreement including accrued interest (including default interest), fees, costs and other expenses whether or not those sums are then due and owing;
		

		
			﻿
		

		
			Potential Event of Default means any event which, with the giving of notice, lapse of time or satisfaction of any condition or happening of any event would constitute an Event of Default;
		

		
			﻿
		

		
			Power means a power, right, authority, discretion or remedy which is conferred on Westpac NZ, an Officer or an Attorney by a Bank Document or by law in relation to a Bank Document;
		

		
			﻿
		

		
			Quantity Surveyor means any quantity surveyor approved in writing by Westpac NZ;
		

		
			﻿
		

		
			Related Company has the meaning given to that term in the Companies Act 1993 but on the basis that Subsidiary has the meaning given to it in this Agreement and that body corporate includes any entity;
		

		
			﻿
		

		
			Second Tranche means $15,000,000;
		

		
			﻿
		

		
			Security means the General Security Agreement and any other security or undertaking provided by the Borrower or any of the Guarantors or procured by the Borrower to be provided to, or for the benefit of, Westpac NZ from time to time in respect of the Borrower's obligations under this Agreement;
		

		
			﻿
		

		
			Subsidiary has the meaning given to it in the Financial Reporting Act 1993;
		

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		﻿
		

		
			﻿
		

		
			Tax includes any tax, levy, impost, deduction, charge, rate, duty or withholding which is levied or imposed by a Governmental Agency and is required by law to be paid and any related interest, penalty, charge, fee or other amount;
		

		
			﻿
		

		
			Termination Date means 31 March 2018.
		

		
			﻿
		

			
	
			
				 19.2
			

			
	
			
			General

		
			Headings are for convenience only.   They do not affect interpretation.   The following rules apply unless the context requires otherwise:
		

			
	
			
				 a)
			

			
	
			
			Singular includes the plural and the converse;

			
	
			
				 b)
			

			
	
			
			A gender includes all genders;

			
	
			
				 c)
			

			
	
			
			Where a word or phrase is defined, its other grammatical forms have a corresponding meaning;

			
	
			
				 d)
			

			
	
			
			Reference to a clause or schedule is a reference to a clause of, or a schedule to, this Agreement;

			
	
			
				 e)
			

			
	
			
			An example does not limit what else might be included;

			
	
			
				 f)
			

			
	
			
			Reference to a party to this Agreement or another agreement or document includes the party's successors and permitted substitutes or assigns;

			
	
			
				 g)
			

			
	
			
			Reference to an agreement or document is to the agreement or document as amended, novated, supplemented or replaced from time to time, except to the extent prohibited by this Agreement;

			
	
			
				 h)
			

			
	
			
			Reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it;

			
	
			
				 i)
			

			
	
			
			Reference to an asset includes any real or personal, present or future, tangible or intangible property, right or asset and any right, interest, revenue or benefit in, under or derived from any property right or asset;

			
	
			
				 j)
			

			
	
			
			An Event of Default is continuing until it has been waived in writing by Westpac NZ;

			
	
			
				 k)
			

			
	
			
			Reference to cleared funds means funds which are freely transferable and  immediately  available  for disbursement;

			
	
			
				 l)
			

			
	
			
			Reference to a law includes present or future common or customary law and any statute, statutory instrument, subordinate legislation, regulation, by-law, order or other legislative measure or any judgment or judicial or administrative order or determination or decision, in any jurisdiction;

			
	
			
				 m)
			

			
	
			
			Reference to a person includes a natural person, company, corporation, trust, partnership, firm, joint venture or Governmental Agency, in each case whether or not having separate legal personality, and any association of entities;

			
	
			
				 n)
			

			
	
			
			Reference to a security interest includes a mortgage, charge (fixed or floating or otherwise), encumbrance, lien, pledge, trust, financial lease, sale and lease back, sale and repurchase, title retention (other than in respect of goods purchased in the ordinary course of trading), charge or similar interest imposed by law, and a preferential arrangement of any kind, the practical effect of which is to secure a creditor;

			
	
			
				 o)
			

			
	
			
			Reference to Tax on overall net income of Westpac NZ means tax imposed by the jurisdiction in which Westpac NZ's lending branch is located on all or part of its net income, profits or gains(whether worldwide, or only insofar as such net income, profits or gains are considered to arise in or relate to a particular jurisdiction, or otherwise);

			
	
			
				 p)
			

			
	
			
			Reference to writing includes a facsimile transmission and any means of reproducing words in a tangible and

		
			permanently visible form;
		

			
	
			
				 q)
			

			
	
			
			References to the Guarantor are references to each of them severally as well as to any two or more of them jointly, and the obligations and agreements on their part in this Agreement will bind every two or more of them jointly and each of them severally.

		
			﻿2015 10K Exhibit 1011 Santander Bank Loan Agreement

		
			﻿
		

		
			﻿
		

		
			EXHIBIT 10.11
		

		
			﻿
		

		
			Loan Agreement
		

		
			
		

		
			﻿
		

		
			 
		

		
			﻿
		

		
			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").
		

		
			﻿
		

		
			WI TN E S S E T H:
		

		
			﻿
		

		
			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");
		

		
			﻿
		

		
			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") ;
		

		
			﻿
		

		
			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.
		

		
			﻿
		

		
			﻿
		

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

		
			﻿
		

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

		
			Section 1.01Advances.
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

 

		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.
		

		
			﻿
		

		
			Section 1.02Manner of Borrowing.
		

		
			﻿
		

		
			﻿
		

		
			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.
		

		
			﻿
		

		
			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.
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			Article II.      REPRESENTATIONS AND COVENANTS
		

		
			﻿
		

		
			Section 2.01Representations.
		

		
			﻿
		

		
			﻿
		

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

		
			﻿
		

			
	
			
				 (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;

		
			﻿
		

			
	
			
				 (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;
		

		
			 
		

		 

		

			 

		

 

			
	
			
				 (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

		
			 
		

		 

		

			 

		

 

			
	
			
				 (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.

		
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				 (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

		
			 
		

		

		

		 

		

			 

		

 

		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

		
			 
		

		

		

		 

		

			 

		

 

		"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

		
			 
		

		

		

		 

		

			 

		

 

		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:
		

		
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				 (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

		
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				 (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;

		
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				 (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

		
			 
		

		

		

		 

		

			 

		

 

		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;
		

		
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			(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);
		

		
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				 (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;

		
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				 (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;

		
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				 (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

		
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			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.
		

		
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			Section 4.02Effect of Default.
		

		
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				 (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

		
			 
		

		

		

		 

		

			 

		

 

		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.
		

		
			 
		

		

		

		 

		

			 

		

 

		(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.
		

		

		

		 

		

			 

		

 

		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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