Our ref: 2650215IFA21JAC I Agreement between The Royal Bank of Scotland and Wall Work Project Ltd. THIS IS AN IMPORTANT DOCUMENT. YOU SHOULD TAKE INDEPENDENT LEGAL ADVICE BEFORE SIGNING AND SIGN ONLY IF YOU WANT TO BE LEGALLY BOUND. THIS AGREEMENT is made between:- (1) (2) The Royal Bank of Scotland (the "Bank"); and Wall Work Project Ltd. Company Number 03712171 (the "Customer") to set out the terms and conditions on which the Bank is pleased to make available to the Customer a loan of ?1,300,000 (the "Loan"). 1 2.1 Purpose The Loan shall be utilised to refinance existing indebtedness in respect of Netherconesford, 93/95 King Street, Norwich (the "Property") and to replenish the Customer's resources utilised towards the development of the Property. Preconditions The Bank shall not be obliged to provide the Loan unless the following conditions are satisfied by the date on which the Loan is drawn:- the Bank has received a Certified Resolution from the recorded Minutes of the Meeting of the Directors of the Customer at which it was resolved to accept the terms of this Agreement. the Bank has received the duplicate of this Agreement signed on behalf of the Customer. any security to be granted in terms of Clause 8 is valued and completed to the satisfaction of the Bank. the availability as security for the Loan of any existing security is confirmed to the satisfaction of the Bank. the insurance referred to in Clause 11.8 has been effected to the satisfaction of the Bank. the Bank has received a professional valuation of the Property which:- has been carried out by a surveyor/valuer acceptable to the Bank. (ii) is addressed to the Bank or is accompanied by written confirmation to theBank from the surveyor/valuer that it can be fully relied upon by the Bank. indicates a value acceptable to the Bank. (iv) is othenrvise acceptable to the Bank in form and substance. the Bank is satisfied that the Customer has entered into an interest rate hedging instrument acceptable to the Bank at a level, for a period and for a notional amount acceptable to the Bank. the Bank has received and is satisfied with the assets and liabilities statements of Andrew Robert Gibbs. the Bank has received and is satisfied with an up to date statement of Andrew Robert Gibbs' income and expenditure. the Bank has received and is satisfied with the information provided in respect of the proposed tenant of the caf? at the Property. the Bank is satisfied that no default event as outlined in Clause 13 (an "Event of Default") (or event which may result in an Event of Default) has occurred or may occur as a consequence of the Loan being drawn. 3.2 3.3 4.1 4.2 4.3 5.1 5.2 6.1 Drawdown The Loan will require to be drawn down in one amount within 3 months from the date this Agreement is signed on behalf of the Bank. If the Customer maintains a current account with the Bank then the Bank may credit the Loan proceeds to such account. Otherwise the Loan will be drawn in accordance with the Customer's instructions. If the Loan is not drawn down in accordance with Clause 3.1 the Bank shall not be obliged to provide the Loan. Interest The Customer shall pay to the Bank interest at a rate which is equivalent to 1.5% per annum above the Bank's Base Rate. As at 14 April 2008 this formula produced a rate of 6.5% per annum. The Bank's Base Rate may vary from time to time. lnterest on the Loan shall be calculated on a daily basis and a year of 365 days and shall be compounded quarterly on the penultimate business day of March, June, September and December in each year (or on such other dates as the Bank may advise from time to time) and on final repayment of the Loan. If an Event of Default occurs, the Bank may until either it is remedied to the Bank's satisfaction or the Loan is repaid in full (whichever is the earlier) charge interest on the aggregate of the Loan and any outstanding interest at a rate of 3.5% per annum above the Bank's Base Rate (or such other rate as may be determined by the Bank from time to time). Interest shall be payable at the rate both before and after demand, court decree or judgment. Charges The Customer shall pay to the Bank:- an administration fee of ?26,000 either on the date the Loan is drawn or 7 days after the date on which this Agreement is signed on behalf of the Customer, whichever is earlier (or such other date as the Bank at its discretion may agree); all legal/security expenses and valuation/survey fees (including the fees and expenses of any legal and other professionals whether directly employed by the Bank or who provide other services to the Bank) in connection with this Agreement and the creation and discharge of the security detailed in Clause 8 (the "Security") when they are incurred and the actual amount ascertained; any charge incurred in terms of Clause 10; and any expenses incurred by the Bank in enforcing or preserving its rights under this Agreement and the Security, with interest thereon at the rate applicable to the Loan. Such expenses shall include (but not be limited to) the cost of communicating with the Customer after any Event of Default and also any internal management and administrative costs of the Bank. The Customer shall remain liable for any outstanding charges detailed in Clause 5.1 if this Agreement is cancelled by the Bank. Repayment The Bank agrees to make the Loan available for the period commencing on the date on which the Loan is drawn and ending 60 months thereafter (the "Term") at which time the Loan together with interest thereon shall be repaid in full. The Bank, however, may at its sole discretion agree to extend the Term for a further period provided that the Bank may in its absolute discretion vary or amend the terms and conditions upon which the Loan is made available and the Borrower shall execute such further documentation as the Bank may require to extend the availability of the Loan. 6.2 6.3 6.4 7.1 7.2 7.3 8.1 9.1 9.2 The Customer shall during the Term make repayments lo the Loan and interest by 59 payments at 29,565.57 (calculated on a 20 year capital and interest repayment programme) or by such other amounts as the Bank may notity lo the Customer from time to time to reflect any variation in the Bank's Base Rate together with a tinal lump sum repayment bl such amount as shall be required to repay the Loan and interest thereon in lull on the last day Ul the Term. The first instalment shall be paid 1 month alter the Loan is drawn with subsequent instalments being paid thereafter. The Customer may by giving 7 days' nDliDe in writing to the Bank (or such shorter period as the Bank may agree) prepay the Loan in whole or in part at any time. No amount repaid or prepaid may be redraWn under this Agreement. Method of Payment It the Customer maintains a current account with the Bank then the Bank will be entitled to debit the payments at capital and interest and any other amounts payable by the Customer under this Agreement to such current account. It the Customer does not maintain a current account with the Bank then the Customer will be required to make such arrangements as the Bank may require, including. without limitation, the maintenance oi payment instructions acceptable to the Bank, in respect of payments at capital and interest required under this Agreement. All payments made by the Customer under this Agreement shall be made without any deduction or withholding (whether in respect oi set-oft, counterclaim, duties. taxes. charges or othenlvise) unless the Customer is required by law to do so in which case the Customer will pay to the Bank such additional sums as will make the net sum received by the Bank equal to the tuil sum payable had there been no deduction or withholding. Secuer The Customer's obligations to the Bank under this Agreement shall be secured by way oi:- all existing security. ii any, held by the Bank lor the Customer's liabilities. security in the Bank's preterred term as tollowsz-- a Debenture by the Customer. (ii) a iirst Legal Charge over the Property and its associated assets. a Guarantee iol ?300,000 by Andrew Robert Gibbs. (iv) a second Legal Charge over --. Norwich and its associated assets. to) such further security as the Bank may at any time hereafter hold in respect ot the Customers liabilities to the Bank of any kind. Financial iniormation The Customer will provide to the Bank:- as soon as they become available but in any event within 270 days trom the end at the Customer's tinancial year, the statutory tinancial statements for that year of the Customer and any company which is or becomes a subsidiary or the Customer within the meaning of Section 736 ot the Companies Act 1985 ("Subsidiary"). (tn) all notices or other documents sent by the Customer to its shareholders and/or its creditors. such turther intorrnalion regarding the Customer's financial condition and operation as the Bank may reasonably request (including audited financial statements where not already supplied). All accounts and other financial information provided to the Bank will be prepared consistently and in accordance with generally accepted accounting standards. 10 11 11.1 11.2 11.3 11.6 11.7 Change of Circumstances The Customer shall pay to the Bank within 3 days of demand a charge representing the amount certified by the Bank as sufficient to compensate the Bank if as a result of any change in the law or its interpretation or administration or compliance with any requirement of the Bank of England or other regulatory or fiscal authority the cost to the Bank of making the Loan available is increaSed (including any tax other than a tax imposed on the Bank's overall net income) or the Bank?s expected rate of return under this Agreement is reduced. The Bank's certificate shall in the absence of manifest error be conclusive. Undertakings The Undertakings in this clause shall remain in force until the Loan has been repaid in full. The Customer shall immediately notify the Bank in the event of an Event of Default occurring. The Customer shall not, nor shall it permit any Subsidiary, to:- grant any security to any third party. other than in the ordinary course of business, sell, transfer, lease or otherwise dispose of any assets, including the Property (other than assets which are disposed of in the ordinary course of business, provided they are not subject to a fixed charge in favour of the Bank). (0) enter into any obligation, whether by way of borrowing from another source, leasing commitments, factoring of debts, granting of guarantees or by any other means. make any change in the nature of business conducted. without the prior written consent of the Bank. The Customer shall, and shall procure that any Subsidiary shall:- comply with all applicable environmental laws, regulations or practices. obtain, renew and comply with all environmental licences, permits or authorisations required for the purposes of its business. conduct its business in a manner which will ensure that no environmental claim is made against it. The Customer shall, and shall procure that any Subsidiary and any person who holds a licence in connection with the Customer's business shall, as necessary:- obtain, renew, retain and comply with all necessary certificates, licences, permits, consents or other authorisations required for the purposes of its business. comply with all applicable laws, regulations or other legal requirements. The Customer shall use the Loan for the purpose specified in Clause 1. The Customer shall ensure that an interest rate hedging instrument(s) acceptable to the Bank and at a level, for a period and for a notional amount acceptable to the Bank, is entered into and maintained. Without prejudice to the provisions of any security held in terms of this Agreement, the Customer shall:- keep the Property fully insured against fire and other reasonable risks (including, if required by the Bank, terrorism cover) for its full reinstatement value with an insurer acceptable to the Bank and when called upon to do so produce to the Bank the relative policy (or where the Bank agrees a copy of it) and premium receipts. comply with all applicable fire, health and safety laws and regulations in respect of the Property. (0) maintain the Property in good and sufficient repair, permit after seven days clear notice in writing the Bank or its agents to enter the Property to examine its condition and make good any defects undertake any repairs within such reasonable period as the Bank may require. 11.9 The Customer will ensure that any Precondition in Clause 2.1 which the Bank agrees to defer until after drawdown is satisfied within the period specified by the Bank. 11.10 The Customer undertakes at all times to comply with the Bank?s account opening 'know your 12 12.1 customer? requirements procedures and to on request, supply to the Bank (or procure the supply to the Bank of) such documentation information as is required to enable the Bank to comply (or continue to comply) with these requirements procedures. Property Covenants For the purposes of Clause 12.2 the following definitions shall apply:- "Bank Borrowing" means, at any relevant time, all the liabilities of the Customer to the Bank of any kind (whether present or future, actual or contingent and whether incurred alone or jointly with another). "Bank Borrowing Costs" means, in relation to each Testing Period, the aggregate of all repayments scheduled to be made in respect of Bank Borrowing and (ii) Interest Payable. ?Gross Rental Income" means, in relation to each Testing Period, the income received by the Customer from the rental of the Property. "Interest Payable" means, in relation to each Testing Period, the interest payable by the Customer on Bank Borrowing. "Property Value? means the market value of the Property as evidenced by the most recent valuation(s) received by the Bank, as determined by a valuer(s) acceptable to the Bank. "Testing Date" means in the case of Clause the final date of each Testing Period and (ii) Clause each date on which an updated valuation of the Property is delivered to the Bank pursuant to Clause "Testing Period" means each 3 month period commencing from 1 June 2008. 12.2 The Customer undertakes that in relation to each Testing Date/Testing Period:- Gross Rental Income Bank Borrowing Costs the ratio of Gross Rental Income to Bank Borrowing Costs shall not be less than 1.05:1. Loan Property Value . the Loan expressed as a percentage of the Property Value shall not exceed 85%. 12.3 To enable the Bank to calculate compliance with the covenant(s) in Clause 12.2 and/or assist in complying with the Bank?s requirements relative to the Loan, the Customer:- shall as soon as they become available but in any event within 30 days after the end of the period to which they relate supply to the Bank a schedule of current lettings, in a format acceptable to the Bank, to include details of the term of each lease, the tenants and the rent review dates together with a schedule of rental income in respect of the Property for the three month period commencing 1 June 2008 and quarterly thereafter. shall ensure that all rental income received in respect of the Property is paid to the Bank. If the Customer does not maintain a suitable account with the Bank a collection account will be opened for the purpose of depositing rental income. authorises the Bank from time to time to obtain an up to date professional valuation of the Property from a valuer/surveyor acceptable to the Bank and the Customer shall meet the cost of any valuations obtained by the Bank. 13 Default 13.1 If any Event of Default occurs, then the Bank may by written notice to the Customer declare the Loan, all interest accrued and all other sums payable by the Customer under this Agreement to be immediately due and payable and/or terminate the obligations of the Bank under this Agreement. Each of the following events is an Event of Default:- (61) (C) the Customer fails to pay any amount payable under this Agreement on the due date. the Customer fails to comply with any provision of this Agreement and, where capable of remedy, such failure is not remedied to the reasonable satisfaction of the Bank within 7 days of the Bank giving notice to the Customer requiring the Customer to remedy the same. the Customer or any other grantor of the Security fails to comply with any provision of the Security and, where capable of remedy, such failure is not remedied to the reasonable satisfaction of the Bank within 7 days of the Bank giving notice to the Customer/other grantor requiring the Customer/other grantor to remedy the same. any information given or warranty or representation made by, or on behalf of, the Customer to the Bank proves inaccurate. any resolution is passed, petition presented, proceedings commenced or other procedure or step taken in any jurisdiction for the liquidation of the Customer or any Subsidiary. any procedure is used against the Customer or any Subsidiary to attach or take possession of any property for payment of a debt. a receiver or other similar official is appointed in respect of any of the property of the Customer or any Subsidiary. any application or petition for an administration order is made or there is given to the Bank or any other person a notice (whether formal or informal) of intention to appoint an administrator or any such appointment is made in relation to the Customer or any Subsidiary. a default arises under any other liability of the Customer or any Subsidiary to the Bank or to any other creditor or any such liability is not paid when due or when a demand has been made. the Property is destroyed. the Property is sold, transferred or otherwise disposed of (save in the case of the proceeds of such disposal being directed to the Bank in permanent reduction repayment of the Loan). if applicable the cancellation of, or failure to renew, for whatever reason, any Policy(ies) of Assurance effected in connection with the Loan or any premium payable thereunder remains unpaid for a period of 7 days or more or there is any reduction in the amount of any premium payable thereunder. there is a significant drop in the value of the Customer's business or the Security or any guarantor or other grantor of security serves notice to discontinue the security. any other circumstances arise which may reasonably lead the Bank to believe that the Security might be prejudiced or that the Customer's obligations to the Bank under this Agreement will not be met. 14 Miscellaneous 14.1 Without any obligation upon the Bank to do so, the Bank shall be entitled to allow the Customer extended time to pay or grant any other indulgence to the Customer without affecting any of the rights of the Bank in whole or in part. 14.2 Unless the context otherwise requires, words denoting the singular only shall include the plural and vice versa. 14.3 Any notice or demand for payment made by the Bank under this Agreement shall be sent to the registered office of the Customer. 14.4 14.5 14.6 Date The Bank may allow another person to take over any of Its rights and duties under this Agreement and the Customer authorises the Bank to give that persun any financial or other Information about the Customer. The Customer's rights under this Agreement will not be affected. in addition to any other rights 10 which it may be entitled, including rights under any guarantee or security the Bank may retain. set all or appropriate any credit balances in the name of the Customer (whether current or not yet due) against the Customer's obligations to the Bank under this Agreement. The Bank may exercise any at these rights without prior notice both betore and after demand and in so doing may convert to sterling at the prevailing market rate of exchange any balance which is in a currency other than sterling. If a change in the currency ml the United Kingdom occurs (including where there is more than one currency or currency unit recognised at the same time as the iawiul currency). this Agreement will be amended to the extent the Bank determines is necessary to reliect the change. ll-Stofi The Customer hereby accepts the above terms and conditions Signed tor and on behalf Ol the Customer in accordance with the authority held by the Bank Date 201?? Resolution re Loan Agreement Extract lrorn the Minutes of a Meeting oi the Directars oi Wall Work Prniect Ltd. (the "Company/W "Afler due consideration oi all the Circumstances and on being satislied that t! is lor the benefit oi the Company and tn the interests 0f the Company lor the purpose cl on its business to enter into a loan agreement (the "Agreement") in the term now produced in respect oi a Loan oi ?1,300,000lrom The Royal Bank of Scotland (the "Bank') it was resolved that RNDHEW Glbfie be authorised to sign on behalf al the Company the Agreement and any other documents required bythe Bank in connection with the Agreement." hereby certify that the foregoing is a true extract lrom the Mtnutes ol a Meeting at the Directors at the Company at which (all appro riale interests having declared) a uorum entitled to vote was present duly held on the 1 day ol and lhal a true copy of the Agreement has been retaineu by pany. m! Please complete