SAMPLE Ground Lease Institutional Landlord Negotiated Form CONSTRUCTION AND LEASE AGREEMENT STREET by and between, as Landlord and, as Tenant Dated as of,
CONSTRUCTION AND LEASE AGREEMENT TABLE OF CONTENTS ARTICLE I - Definitions... 2 ARTICLE II - Demise of Premises; Conditions... 11 2.1. Demise of Premises... 11 2.2. Title and Condition of Premises... 11 2.3. Notice of Lease... 11 2.4. Demise of Rights in Drives... 11 ARTICLE III - Term... 11 3.1. Commencement Date... 11 3.2. Term... 12 ARTICLE IV - Rent and Other Charges... 12 4.1. Interim Rent... 12 4.2. Base Rent for Premises... 12 4.3. Percentage Rent for Premises... 12 4.4. Proceeds of Sales and Refinancings... 13 4.5. Payment of Rent... 14 4.6. Additional Rent... 14 4.7. Net Lease... 14 4.8. Taxes and Other Charges... 15 4.9. Permitted Contests... 16 ARTICLE V - Use and Quiet Enjoyment; Surrender... 16 5.1. Use; Conditions... 16 5.2. Quiet Enjoyment... 17 5.3. Compliance with Law... 17 5.4. Compliance with Contractual Requirements... 17 5.5. Tenant's Property and Yield Up... 17 5.6. Ownership of Improvements... 18 5.7. Surrender of Premises... 18 5.8. Permits and Approvals... 18 i
5.9. Construction and Maintenance Easements... 18 ARTICLE VI - Right to Mortgage; Protection of First Mortgages... 19 6.1. Right to Mortgage... 19 6.2. No Subordination of Fee... 20 6.3. Priority of Obligations... 20 6.4. Approved First Mortgagee's Right to Take Possession... 20 6.5. Right of Approved First Mortgagee to Cure Defaults... 21 6.6. Protection of Interests of Approved First Mortgagee... 22 6.7. Obligations and Rights of an Approved First Mortgagee in Possession... 23 6.8. No Modification or Termination By Tenant... 23 6.9. Approved First Mortgagee's Rights To New Lease... 23 6.10. Refinancing... 24 6.11. Cooperation with Lenders... 24 ARTICLE VII Design and Construction of Improvements... 24 7.1. The Improvements... 24 7.2. Schedule for Construction... 24 7.3. Construction Requirements... 24 7.4. Monthly Progress Reports... 24 7.5. Certificate of Compliance... 25 7.6. Inspection... 25 7.7. Alterations of Completed Improvements... 25 7.8. Review Process... 25 7.9. Record of Plans... 27 7.10. Design Documents... 27 7.11. Design Services Construct... 27 7.12. Construction Contract... 27 7.13. Final Construction Documents... 27 7.14. Arbitration of Design Issues... 29 7.15. Responsibilities of the Tenant... 29 7.16. Government Relations... 29 7.17. Cooperation... 30 ii
7.18. Opportunities for the Landlord to Finance... 30 ARTICLE VIII Maintenance, Repair and Operation... 30 8.1. Maintenance and Repair; Operation... 30 8.2. Inspection by the Landlord... 31 8.3. New Hazardous Materials and Oil... 31 8.4. Existing Hazardous Materials and Oils... 31 8.5. Off-Premises Hazardous Materials... 32 ARTICLE IX Indemnity, Liens and Insurance... 32 9.1. Indemnification... 32 9.2. Liens... 33 9.3. Insurance Requirements... 33 9.4. Insurance Provisions... 35 9.5. Waiver of Subrogation... 35 ARTICLE X Casualty... 35 10.1. Collection of Claims... 35 10.3. Restoration... 36 10.4. Original or Modified Plans... 36 10.5. Commencement and Completion of Restoration... 36 10.6. Determination of Whether or Not to Restore... 36 10.7. Allocation of Proceeds... 37 10.8. Tenant s Responsibilities on Termination... 37 10.9. Rent Deferred if Improvements Unusable... 37 10.10. Demolition and Debris Removal Insurance... 38 ARTICLE XI Condemnation... 38 11.1. A Taking... 38 11.2. Special Account... 38 11.3. Total Taking... 38 11.4. Partial Taking Procedures and Criteria for Course of Action... 39 11.5. Restoration... 39 11.6. Termination upon Non-Restoration... 40 11.7. Temporary Taking... 40 iii
11.8. Abatement of Rent... 40 11.9. Demolition and Debris Removal Insurance... 40 ARTICLE XII Default; Remedies... 40 12.1. Events of Default... 40 12.2. Remedies for Default... 42 12.3. Termination of Lease for Tenant s Default... 42 12.4. Rights Upon Termination... 42 12.5. Other Remedies; Management Control... 43 12.6. Performance by the Landlord... 43 12.7. Legal Costs... 43 12.8. Remedies Cumulative... 44 12.9. Waiver as to Surety... 44 12.10. Force Majeure... 44 12.11. Limitations of Tenant s Liability... 44 ARTICLE XIII Restrictions on Assignment and Transfer... 45 13.1. Selection of the Tenant... 45 13.2. Prohibited Transfers... 45 13.3. Permitted Transfers... 45 13.4. Landlord s Consent... 47 13.5. Transfers of Interests in Tenant... 48 ARTICLE XIV Subletting, Estoppel Certificates, and Non-Disturbance and Attornment Agreements... 48 14.1. Subletting... 48 14.2. Rent and Charges to Occupants... 49 14.3. Estoppel Certificates... 49 14.4. Non-Disturbance and Attornment Agreements... 49 ARTICLE XV Landlord s Right of First Refusal... 50 15.1. Landlord s Right of First Refusal... 50 ARTICLE XVI Non-Discrimination and Affirmative Action... 51 16.1. Compliance with Equal Opportunity Laws and Regulations... 51 16.2. Information and Reports... 51 iv