CWTR » Topics » DEMISING CLAUSES AND RENTAL PROVISIONS

This excerpt taken from the CWTR 8-K filed Jan 17, 2006.

DEMISING CLAUSES AND RENTAL PROVISIONS

 

Section 5.1. Demise of Existing Campus, and on and after the Delivery Date, the Expanded Campus. This Lease Agreement constitutes a continuation of the Original Lease, and by this Lease Agreement, the Lessor hereby leases the Existing Campus to the Lessee and the Lessee hereby leases from the Lessor the Existing Campus and, on and from the Delivery Date, the Expanded Campus, all upon the terms and conditions of this Lease Agreement. On the Delivery Date, the Lessee shall execute and deliver a Certificate of Acceptance with respect to the Expansion to the Lessor, which delivery shall constitute Lessee’s acceptance of the Expanded Campus under this Lease Agreement and the Lessee’s confirmation that this Lease Agreement as of the Delivery Date covers and incorporates the Expanded Campus upon the terms and conditions set forth herein.

 

The Lessor hereby grants and conveys unto the Lessee a permanent easement for the construction, erection, maintenance, repair, removal and replacement of any and all structures or improvements situate on the Existing Campus and used in or for the Expansion.

 

Section 5.2. Duration of Lease Term; Quiet Enjoyment.

 

(a) The leasehold estate in the Existing Campus created hereby commenced on the Campus Delivery Date.

 

(b) The Lessor shall deliver to the Lessee sole and exclusive possession of the Expanded Campus (subject to Sections 8.3 and 10.2 hereof), and the leasehold estate created hereby in the Expansion shall commence on the Delivery Date, and the Lessee shall accept possession of the Expanded Campus on the Delivery Date.

 

(c) Except as provided in Section 10.2 and Section 10.3 hereof, the leasehold estate in the Expanded Campus created hereby shall terminate at 11:59 p.m. on to the Expiration Date or on such earlier date as may be permitted by Section 5.3, 11.1 and 11.3 hereof. By definition, if the Delivery Date occurs, the Expiration Date shall be 20 years from the Delivery Date, provided, however, that the aforesaid expiration date may be reduced by a period of up to 30 months upon the request of the Lessee made no less than 45 days prior to the Delivery Date, consent to which request shall not be unreasonably withheld by the Lessor.

 

(d) Except as provided in Sections 8.3 and 10.2 hereof, the Lessor shall neither take nor suffer or permit any action to prevent the Lessee during the Lease Term from having quiet and peaceable possession and enjoyment of the Existing Campus and, on and after the Delivery Date, the Expanded Campus, and will cooperate with the Lessee in order that the Lessee may have quiet and peaceful possession and enjoyment of the Existing Campus and, on and after the Delivery Date, the Expanded Campus, as hereinabove provided. Accordingly, the Lessor shall not grant, pledge, mortgage, hypothecate or otherwise convey any mortgage,

 

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security interest or pledge or permit any encumbrance, except Permitted Encumbrances, to be placed on the Existing Campus and, on and after the Delivery Date, the Expanded Campus, or the Fixtures without the express written consent of the Lessee.

 

Section 5.3. Basic Rent.

 

(a) The Lessee shall make, in advance, monthly payments to Lessor commencing on January 21, 2006, and thereafter payable on the 21st day of each consecutive month over the Lease Term. The Basic Rent payment schedule over the Lease Term of this Lease Agreement is attached hereto as Exhibit E and is incorporated herein by reference.

 

(b) The Lessee, under the provisions of this Section 5.3, agrees to make the above-mentioned payments in immediately available funds and without any further notice in lawful money of the United States of America. In the event the Lessee shall fail to timely make any payment required in this Section 5.3, the Lessee shall pay the same together with any charges from Lender incurred by the Lessor.

 

Section 5.4. Additional Rent. The Lessee shall pay the following amounts as Additional Rent:

 

(a) On demand of the Lessor other amounts payable by the Lessee under this Lease Agreement; and

 

(b) On demand of the Lessor from time to time all tax amounts, together with any interest, penalties and expenses related thereto, not paid by the Lessee pursuant to Section 6.4 and paid by the Lessor or Lender to the appropriate taxing authority,

 

Section 5.5. Prepaid Rent. The Lessee may pay certain amounts, as agreed and determined by Lessor and Lessee, as Prepaid Rent. Any such Prepaid Rent may be allocated over the Lease Term, if appropriate, as determined by Lessee.

 

Section 5.6. Payments by Lessee to Lessor. All rent payments to be made by the Lessee under the terms of this Article shall be made payable to the Lessor and shall be delivered to the Lessor by wire transfer to the credit of the Lessor’s account as approved by Lender.

 

Section 5.7. Security. The Lessee shall provide as security for its obligations under this Lease Agreement an irrevocable standby letter of credit to the Lessor in an amount equal to Four Million Dollars ($4,000,000.00), substantially in the form attached hereto as Exhibit F, draws upon which shall be conditioned upon default by the Lessee in its obligations under this Lease Agreement. This letter of credit shall remain in place commencing on the Commencement Date and expiring on December 31, 2011. As of January 1 of each year beginning January 1, 2008, the principal balance of this letter of credit shall decline by $800,000.00, until extinguished.

 

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(b) Lessee shall not be required to pay any additional security deposit under this Lease Agreement.

 

Section 5.8. Market Rental. The Lessor and the Lessee believe that the Rent payable hereunder constitutes a fair market rental for the lease of the Existing Campus and the Expanded Campus, as applicable, pursuant to the terms hereof.

 

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