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HomeMy WebLinkAbout6.F.(1) Sub-Sublease with Kite Realty Eddy Street Garage(. ~ ~ Staff report Parkin~~ Garage Lcasc 1br Edd~~ Street Commons Preparai by~. Don Inks ] 1-'l~ U~ [n accordance ~~~ith the De~~clopment Agreement for Lddy Street Commons. the Lease and Menu~randum of Lcasc of the Parking Garage to Kite Realty Eddy Strcct Garage. LLC is attached for vour re~~ic~a. The lease term matches the term of the bonds. ?0 years. There arc no lease payments to be made, but Kite will be responsible lbr all maintenance, insurance. properly taxes and operations of the garage, all in accordance ~~~ith the Dc~~elopment Agreement. It is important this Icase be put into place as soon as possible [o mal<c sure the property tax records reflect the nc~~~ly taxable nature of this ~~ropcrty. t\ property tax assessment ~a~ill take place March 1. ?009 ~~~hen the garage «~ill be more than 504=o complete. On that date the property gill need to be leased by a taxable entity so that property taxes can be collected in ?O I 0 to make payment on the Eddv Strcct Bonds. The staff recommendation is to appro~c the Lcasc. SUB-SUBLEASE THIS SUB-SUBLEASE (this "Lease") is made and entered into as of the day of July, 2008, by and between the SOUTII BEND REDEVELOPMENT COMMISSION. governing body of the South Bend Department o£ Redevelopment, hereinafter referred to as "Landlord", and KITE REALTY EDDY STREET' GARAGE, LLC, an Indiana limited liability company, hereinafter referred to as "Tenant". The City of South Bcnd, Indiana, a political subdivision and municipal corporation of the State of Indiana, is a party to this Lease for the purposes stated on the .Toinder hereto. Capitalized terms used in this Lease and not defined in this Lease shall have the meanings ascribed thereto by that certain Development Agreement, dated February 15, 2008, by and among the South Bend Redevelopment Authority, the South Bend Redevelopment Commission, the City of South Bend, Indiana, and Kite Realty Group, L.Y. (the "Development Agreement"). RECITALS WHEREAS, the South Bcnd Redevelopment Authority (the "Master Tenant") has heretofore issued its $36,000,000 aggregate principal amount lease rental revenue bonds, dated as of March 18, 2008 (the '73onds"), which proceeds (together with other resources available to the Master Tenant) shall be used to pay the costs to construct the Public Infrastructure Improvements. WHEREAS, in furtherance of the Bond financing, Kite Realty Eddy Street Garage, LLC (the "Master Landlord") has entered into that certain Lease with respect to the land being described on Exhibit A attached hereto and made a part hereof; dated as of June , 2008 (the "Master Lease"), by and between the Master Landlord, as landlord, and the Master Tenant, as tenant. WIIEREAS, pursuant to the Bond financing, the Master Tenant has entered into that certain Lease with respect to the Demised Premises (defined below), dated as of October l5, 2007 (the "Sublease"), by and between the Master Tenant, as sublandlord, and the South Bend Redevelopment Commission, as subtenant. WHEREAS, Landlord desires to Icase the Demised Premises to Tenant, and "Conant desires to lease the Demised Premises from Landlord, pursuant to the disposition process of Indiana Code 36-7-14-22 and the terms and conditions of this Lease. ARTICLE I. LEASE OF TIIE DEMISED PREMISES Section 1.1. TIIE DEMISE. Landlord hereby leases to T~cnant, and Tenant hereby leases from Landlord, upon and subject to the teens and conditions of this Lease, that certain real estate located in St. Joseph County, Indiana, being described on Exhibit A attached hereto and made a part hereof, together ~~~ith any and all impro~~ements, fixtures, hcrcditamcnts, easements and appuilenances thereunto belonging or in any way appertaining thereto, including without limitation. the Parking Garage (collectively, the "llemised Premises"). 1/Z I H3 186. I Section 1.2. ACCEPTANCI? OP TIIE DEMISED PREMISES. "Tenant accepts the Demised Premises in its "AS IS WHERE IS" condition. Except as expressly provided otherwise in this Lease, Landlord makes no, and Landlord expressly disclaims any, representations or warranties, express or implied, regarding the Demised Premises, including but not limited to the habitability, merchantability, fitness or suitability of the Demised Premises far Tenant's intended use, hazardous materials in, on or under the Demised Premises, or zoning, entitlements or any laws, ordinances. regulations or covenants and resh•ictions which may apply to Tenant's use of the Demised Premises. Section 1.3. PERMI"I~TED EXCEPTIONS. 'Tenant's interest in and right to use the Demised Premises is and shall be subject to all of the following: (A) all easements, restrictions, liens, encumbrances, rights-of-way or other matters of record affecting the Demised Premises (the "Property llocuments"); (B) all matters that would be disclosed by an accurate survey or physical inspection of the Demised Premises; and (C) all present and future ordinances, laws, regulations and orders of all boards, bureaus, commissions and bodies of any municipal, county, state or federal government uow or hereafta~ having or acquiring jurisdiction of the Demised Premises. Section 1.4. PERMITTED USES. Tenant shall have the right to use the Demised Premises for the operation and maintenance of the Parking Garage, and for ancillary uses in connection therewith, but for no other use without the prior written consent of Landlord. In no event shall the Demised Premises be used for any noxious or hazardous business or any unlawful purpose or for any purpose which could invalidate the insurance herein required. ARTICLE II. DEMISED TERM "The term of this Lease shall be for a period commencing on the first to occur of (a) the date that the construction of the Parking Garage is complete, or (b) the date selected by Tenant (the "Commencement Datc") and expiring on the first to occur of (i) February I5, 2033, (ii) the date upon which all outstanding Bonds have been redeemed, or (iii) the date upon which the Master Lease and/or the Sublease expires or is terminated (the "Demised Tcrm"). The covenants, undertakings and agreements of Landlord that as by their nature or under the circumstances can only be or may be performed after the expiration or termination of the Demised Tcrm, including without limitation those set forth in Article VII of this Lease, shall survive the expiration or termination of the Demised Tcrm. ARTICI_,E III. RENT AND IMPOSI7~IONS Section 3.1. BASIC REN"T. Tenant agrees to pay to Landlord, without deduction or demand, basic rent for the Demised Term in the amount of One Dollar and No/100 ($1.00). -2- Such rental shall be prepaid in lull on or before the Commencement Date and shall be referred to hereinafter as the "Basic Rent". Basic Rent shall be paid to Landlord at the South Bcnd Redevelopment Commission, 1200 County-City Building, South Bend, IN 46601, or at such other place as Landlord may direct by notice in writing from time to time. Section 3.2. IMPOSITIONS. Tenant covenants and agrees to pay before delinquency, as additional rent, all real estate taxes, assessments and other governmental charges, general and special, including but not limited to assessments for public improvements or benetlts, which may be laid, levied, assessed or imposed upon the Demised Premises and become due and payable during the Demised Term (all of which taxes, assessments and other governmental charges arc hereinafter referred to as "Impositions") and to fiznush a copy of the paid receipt therefor to Landlord within 10 days after Landlord's written request therefor. Section 3.3. PRORATION OF IMPOSI"PIONS. Any Imposition relating to a fiscal period of the taxing authority, a part of which is included in a period of time subsequent to the expiration or termination of the Demised Term, shall be adjusted as between Landlord and Tenant so that Tenant shall pay that proportion of the Imposition which relates to that proportion of the applicable Ilscal period that falls within the Demised Term and that Landlord shall pay the remainder thereof. Section 3.4. CONTEST Oh IMPOSITIONS. "Tenant shall have the right to contest the amount or validity of any Imposition by appropriate legal proceedings, but this shall not be deemed or construed in any way as relieving Tenant of its covenant to pay any such Imposition. Landlord shall join in any such proceeding to the extent necessary to permit 'T'enant to properly prosecute the same; provided, that Landlord shall not be subjected to any liability Cor the payment of any costs or expenses in connection with any such proceeding brought by `Tenant. Section 3.5. LIMITATION. Nothing contained in this Lease shall require Tenant to pay any franchise, estate; inheritance, succession, capital levy or transfer tax of Landlord, or any income, excess profits or revenue tax or any other tax, assessment, charge or levy upon the Basic Rent payable by Tenant under this Lease. ARTICLI? IV. IMPROVEMENTS Section 4.1. PARKING GARAGE. "The Master Tenant shall construct the Parking Garage in accordance with the terms and conditions of the Development Agreement and the Property Documents. Notwithstanding any provision in the Master Lease, the Sublease or this Lease to the contrary, title to the Parking Garage shall automatically vest in Tenant upon the expiration or termination of the Demised "Term. The foregoing shall be self-operative and shall not require any additional documentation by Landlord, Tenant or the Master Tenant. Notwithstanding the foregoing. in the event that Tenant requests that the conveyance of Landlord's and!or the Master Tenant's interest in the foregoing property to Tenant be evidenced by written con~~eyance documents, Landlord agrees to promptly execute and deliver (or cause to be executed and delivered) any such conveyance documents in form and substance reasonably acceptable to Tenant. -3- Section 4.2. A[; TERATIONS. Any proposed change, alteration or modification to the Demised Premises shall require the prior written consent of the Master Landlord. Section 4.3. MAINTENANCE, REPAIRS AND REPLACI/MI;NTS. Tenant shall promptly perform any and all maintenance and decoration and make any and all repairs and replacements in order to keep the Demised Premises in good condition and repair and in a clean and sightly condition, reasonable use and wear excepted, and shall not cause or permit any nuisance or waste, nor allow any trash to accumulate on the Demised Prcmiscs, and shall provide for the removal of all snow and ice from the Demised Premises. Tenant shall keep the grass, trees, shrubs and other plantings located on the Demised Prcmiscs neatly cut, cultivated or trimmed as reasonably necessary to maintain the same at all times in a good and sightly condition. Section 4.4. COMPLIANCE WITH LAWS AND "THE PROPERTY DOCUMENTS. Tenant shall comply with, and assume and satisfy any and all obligations with respect to, (a) all laws, statutes, ordinances and regulations of all governmental authorities having jurisdiction over the Demised Premises and shall make any and all required alterations or improvements to the Demised Premises which may be necessary to comply with any and all such laws, and (b) the Property Documents. Section 4.5. MF_,CHANICS' LIENS. Tenant shall not pcnnit any mechanic's or other similar lien or liens to be filed against the Demised Premises during the Demised Term for any work done for or materials furnished by, through or under Tenant unless such Lien or liens are being contested in good faith and unless Tenant tither deposits with Landlord an amount equal to the claimed lien, or a surety bond written by sureties approved by Landlord and in an amount sufficient to indemnify Landlord from any loss, expense or damages (including but not limited to court costs and reasonable attorney's fees) which Landlord may sustain in the event that Tenant is unsuccessful in contesting such lien or liens, or Tenant obtains title insurance coverage that is reasonably satisfactory to Landlord. ARTICLE V. U1'ILTTIES Tenant shall pay all charges for sewer, water, gas, electricity, telephone or other utility service used upon the Demised Premises throughout the Demised Term. ARTICLE; VI. INDEMNITY AND INSURANCE Section 6. L GENERAL INDEMNITY. "Tenant shall indemnify, defend and hold Landlord harmless from any loss, cost (including but not limited to reasonable attorneys' fees), claim, liability or damage incurred by Landlord and arising out of, or connected with, any third party claim concerning Tenant's use and occupancy of the Demised Premises. Section 6.2. LIAl3II_1TY INSURANCE. Tenant shall procure and maintain in full force and effect throughout the Demised Term commercial general liability insurance against -4- claims for personal injury, death or property damage occurring upon, in or about the Demised Premises and in or about the adjoining streets and sidewalks, such insurance to afford protection to both Landlord and Tenant, on a per occurrence basis, with a combined single limit of not less than Two Million Dollars and No/100 ($2,000,000). "l~cnant shall also procure and maintain in fiill force and effect throughout the Demised Term worker's compensation insurance with limits as required by the State of Indiana. Section 6.3. CASUALTY INSURANCE. Landlord shall procure and maintain in full force and effect throughout the Demised Term special form cause of loss ("all risk") property insurance upon the Demised Premises for QIe full insurable value thereof (the "Casualty insurance"). Any proceeds of the Casualty Insurance (the "Casualty Insurance Proceeds") shall be payable to and held by U.S. Bank National Association, or its successor or assign, as trustee of the Bond financing (the "Trustee"), to be disbursed as required pursuant to the terms and conditions of this Lease. Section 6.4. BUILDER'S RISK INSURANCE. Landlord shall procure and maintain, or cause Landlord's contractors to procure and maintain, in full force and effect during the continuance of construction on the Demised Premises "all-risk" builder's risk insurance upon the entire construction work to be performed on the Demised Premises to the full insurable value thereof (the "Builder's Risk Insurance"). Any proceeds of the Builder's Risk Insurance (the "Builder's Risk Insurance Proceeds") shall be payable to and held by the Trustee to be disbursed as required pursuant to the terms and conditions of this Lease. Section 6.5. BUSINESS INTERRUPTION INSURANCE. Landlord shall procure and maintain in full force and effect throughout the Demised Term rental value insurance in an amount equal to the full rental value under the Sublease for a period of five years. Any proceeds of insurance received pursuant to the rental value insurance required in this Section 6.5 shall be payable to and held by the Trustee. Section 6.6. WAIVER OF SUBROGA"PION. Landlord hereby waives all rights of recovery against Tenant on account of loss or damage occasioned to Landlord to the extent that such loss or damage is required to be insured against under this Lease. Landlord covenants and agrees that the Casualty Insurance and the Builder's Risk Insurance shall contain a clause whereby the insurer waives its right of subrogation against Tenant. Because the provisions of this Section 6.6 are intended to preclude the assignment of any claim mentioned herein by way of subrogation or otherwise to an insurer or any other person, Landlord shall give to each insurance company which has issued to it one or more of such insurance policies notice of the provisions of this Section 6.6 and have such insurance policies properly endorsed, if necessary, to prevent the invalidation of such insurance by reason of the provisions of this Section 6.6. Section 6.7. GENERAL. All policies contemplated under Sections 6.2 and 63 of this Lease shall be endorsed to include as additional insured parties Tenant and such additional parties as "I~cnant may designate. The insurance policy endorsements shall also provide that all additional insured parties shall be given 30 days' prior written notice of any reduction, cancellation or non-renewal of coverage and shall provide that the insurance coverage afforded to the additional insured parties thereunder shall be primary to any insurance carried independently by said additional insured parties. The policies of insurance shall be placed in -5- such company or companies, be in such form, include such deductibles, be confirmed by such professionals, and cover such risks as may from time to time be reasonably acceptable to Tenant and any mortgagee of Tenant and otherwise consistent with the requirements of the Trust Agreement (as defined below). Upon Tenant's written request, Landlord shall forward to Tenant a paid receipt with respect to all such politics of insurance. If Landlord shall refuse or Lail to procure, pay for or keep in force such policies of insurance or to deliver certificates showing the existence of such insurance, Tenant may, at its election, procure, pay for, keep in force and/or from time to time renew such insurance, and the amounts expended therefor shall be reimbursed to "Conant by Landlord within 10 days after demand therefor. ARTICLE, VII. DAMAGE BY CASUALTY Section 7.1. KESTORATION OBLIGATION. (A) In the event of damage to or destruction of the Demised Premises by fire or other casualty (each, a "Casualty Tvent"), Landlord shall promptly restore the Demised Premises to substantially the same condition as existed prior to the damage or destruction. Landlord shall diligently pursue settlement of the casualty claim, shall commence restoration of the damaged or destroyed portion within 30 days from the date of the Casualty F,vent, and thereafter shall diligently and in good faith pursue the same to completion. (I3) In connection with any such restoration, Landlord shall appoint Tenant (or any afliliate designated by Tenant) as Landlord's construction manager for the purpose of granting to Tenant (or any affiliate designated by Tenant) the sole and exclusive responsibility and authority to manage such restoration in accordance with Indiana law. Section 7.2. INSURANCE PROCEEDS. (A) Landlord and Tenant shall jointly settle, adjust or compromise any claims for loss, damage or destruction under the Casualty Insurance or the Builder's Risk Insurance. (B) In the event of a Casualty Event, then: (i) unless.. in the opinion of an independent registered architect, registered engineer or construction manager jointly selected by Landlord and Tenant (the "Professional"), the cost of restoration exceeds the Casualty Insurance Proceeds or the Builder's Risk Insurance Proceeds plus other moneys available for restoration (including without limitation pursuant to Section 7.2(C) of this Lease), or restoration cannot be completed within five years from the date of the Casualty Event, Landlord shall apply (or cause to be applied) all of the Casualty Insurance Proceeds or the Builder's Risk Insurance Proceeds to the restoration of the Demised Premises, and the balance thereof, if any is remaining, shall be applied in furtherance of the Project; or (ii) if, in the opinion of the Professional, the cost of restoration exceeds the Casualty Insurance Proceeds or the E3uilder's Risk Insurance Proceeds plus other moneys available for restoration (including without limitation pursuant [o Section 72(C) of this -6- Lease), or restoration cannot be completed within five years from the date of the Casualty L;vent, Landlord shall apply (or cause to be applied) the Casualty Insurance Proceeds or the Builder's Risk Insurance Procccds as required by the Trust Agreement, and the balance thereof, if any is remaining, shall be applied in furtherance of the Project. (C) In the event of a determination by the Professional that the cost of restoration exceeds the Casualty hlsurance Proceeds or the Builder's Risk Insurance Proceeds, then Landlord shall take any and all such actions as permitted by and subject to Indiana law to promptly fund the shortfall. Except to the extent provided in Section 7.2(B)(ii) of this Lcasc, Landlord shall take any and all actions required by the "frusl Agreement in order to ensure that the Casualty Insurance Procccds or the Builder's Risk Insurance Proceeds arc applied to the restoration of the Demised Premises. ARTICLL; VIII. EMINhN"I' DOMAIN Section 8.I. "f0"I'AL TAKING. If during the Demised Term the entire Demised Premises shall be taken by an exercise of the power of eminent domain (hereinafter referred to as a "Proceeding"), this Lease shall terminate as of the date of the vesting of title in the taking authority pursuant to such Proceeding. Section 8.2. PARTIAL TAKING. If during the Demised Term less than the entire Demised Premises shall be taken in any such Proceeding, this Lease shall terminate as to the portion of the Demised Premises so taken upon the vesting of title in the taking authority pursuant to the Proceeding and this Lease shall continue as to the remainder of the Demised Premises. Section 83. hI:MPORARY TAKING. If all or any portion of the Demised Premises is taken by the exercise of the right of eminent domain for governmental occupancy for a limited period, this Lease shall not terminate and Tenant shall continue to perform its obligations hereunder as though such taking had not occurred except to the extent that it may be prevented from so doing pursuant to the terms of the order of the authority which made the taking. In the event of such a temporary taking, Tenant shall be entitled to the entire award made for such taking (whether paid by way of damages, rent or otherwise). Section 8.4. AWARD. Tenant shall be entitled to the entire award Isom the condemning authority attributable to the value of the Demised Premises and any improvements located thereon and Landlord shall make no claim. ARTICI,I? [X. ASSIGNMENI~ AND SUBLETTING Landlord shall not assign this Lease or sublet the Demised Premises or mortgage or otherwise encumber any interest therein to any person or entity without Tenant's prior written consent. Landlord acknowledges that (i) the Sublease may not be amended without "tenant's prior written consent, (ii) the term of the Master Lease and the Sublease may not extend beyond -7- the Demised Tcrm, and (iii) upon the expiration or termination of the Demised Terns, all right title, title and interest in and to the Demised Premises shall belong to and immediately vest in Tenant and neither Landlord nor the Master Tenant shall be entitled to any payment or other consideration therefor. Nothing in this Article IX shall be deemed to restrict or otherwise limit Tenant's (or an affiliate of Tenant) right to mortgage the Demised Premises (whether as "Tenant under this Lease or as landlord under the Master Lease). ARTICLE X. DEFAULTS AND REMEDIES Section 10.1. DEFAULTS BY 1TNANT. (A) Each oT the following shall be an "Event of Default" hereunder: (i) the failure of Tenant to pay }3asic Rent or any other amount contemplated hereby within 10 days after receipt of written notice from Landlord that the same is due, or to perform any other of its covenants under this Lease within 30 days after receipt of written notice from Landlord; provided, that if any such claimed failure cannot be cw~ed within 30 days, Tenant shall have such longer period of time as may be necessary to cure such failure so long as Tenant is diligently pursuing appropriate action to cure the failure; and (ii) any breach of a representation of warranty by Tenant under this Lease. (B) If there shall be an Event of Default by Tenant, Landlord, after 10 days following an additional written notice fi-om Landlord to Tenant, may, as its sole and exclusive remedy, cure the Event of Default for the account and at the expense of Tenant. Any money spent or cost or expense incurred by Landlord in curing such default for the account of Tenant shall be reimbursed by Tenant to Landlord within 10 days following demand therefor. In no event shall Landlord have the right to terminate this Lease. ARTICLE XI. ACCESS TO PRL,MISES Landlord shall have the right to enter upon the Demised Premises during all regular business hours for the purpose of inspecting the same to determine that Tenant is fully performing all of its obligations under this Lease. `hhe exercise of the rights of Landlord in this Article XI shall not be an eviction of Tenant. ARI~ICI_,1 Xll. NO"fICES A notice, demand. or other communication under this Lease by either party to the other shall be deemed given or delivered three business days after being deposited for registered or certif ed mail, postage prepaid, return receipt requested, one business day after being deposited overnight delivery, or on the date of personal delivery, and -8- (A) in the case of Tenant, is addressed to or delivered personally to Kite Realty Eddy Street Garage, LLC c/o Kite Realty Group, L.P. 30 South Meridian Street Indianapolis, 1N 46204 Attn: Thomas K. McGowan With a copy to: Ice Miller LLP One American Square, Suite 3100 Indianapolis, IN 46282 Attn: Phillip L. Bayt (B) in the case of Landlord is addressed to or delivered personally to: The South Bend Redevelopment Commission 1200 County-City Building South Bend, IN 4660I Attn: Donald Inks, Director of Economic Development With a copy io: Baker & Daniels LLP 202 S. Michigan Street, Suite 1400 South Bend, IN 46601 Attn: Richard L. IIill, Esq. or at such other address with respect to such party as that party may from time to time designate in writing and forward to the other as provided in this Article X[I. AR"I'ICLE XIII. COVENAN"fS Section 13.1. COVENAN"f OF QUIET ENJOYMENT. Landlord warrants that "fenant, upon making the payments and performing the other covenants and agreements of this Lease on its part to be performed, shall have peaceful and quiet possession of the Demised Premises during the Dcmiscd Term by, through and under Landlord. Section ]3.2. SUBORDINA"LION OF LEASE. This Lease and the Sublease arc subject and subordinate to the lien of any mortgage of Tenant which may now or hereafter encumber the Dcmiscd Premises. If required by the Tenant's mortgagee, Landlord shall (and Landlord shall cause the Master Tenant to), at Tenant's request from time to time, promptly execute any agreement requested by the holder of the mortgage to evidence such subordination. In the event of foreclosure of such mortgage or conveyance in lieu of foreclosure, Landlord agrees to attorn to the mortgagee or to the purchaser at foreclosure or other sale and to recognize same as the new landlord under the Master Lease and the tenant under this Lease. If the Demised Premises or any part thereof or premises of which the Dcmiscd Premises are a part are at an}~ time subject to a mortgage and this Lease or the rentals arc assigned to such mortgagee, trustee or beneficiary by -9- Tenant and Landlord is given written notice thereof, including the post office address of such assignee, then Landlord shall not pursue any remedy for any default on the part of "Tenant without tlrst giving written notice to Tenant and such assignee, specifying the default in reasonable detail, and affording Tenant and such assignee a reasonable opportunity to make performance for and on behalf of Tenant. ARTICLE XIV. INTENTIONALLY DELITE.D ARTICLI' XV. BROKERAGl; COMMISSIONS Mach of Landlord and Tenant represent and warrant that they, respectively, have not retained any broker, agent, tinder or similar party in connection with the transaction contemplated by this Lease, and each of Landlord and Tenant hereby indemnities, defends and holds harmless the other from any liability, cost or expense (including, without limitation, reasonable attorneys' fees and costs of enforcement of the foregoing indemnity, whether arising in any underl}~ing action or in the enforcement of this right of indemnification) arising out of the falsity of the foregoing representation by such party. ARTICLE XVI. GENERAL PROVISIONS Section 16.1. REPRESL,NTA"LIONS AND WARRANTll?S. (A) Landlord represents and wan~ants to Tenant that neither the execution of this Lease by Landlord nor the execution of the Master Lease by the Master Tenant shall conflict with, violate, result in a breach of constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or give rise to any right of termination, cancellation, or acceleration under any provision of any note, license.. contract, commitment, agreement, understanding, or other instrument or obligation to which Landlord is a party, including, without limitation, that certain Trust Agreement, dated as of March ], 2008, 6y and between the Master Tenant and U.S. Bank National Association (the "Trust Agreement") (B) Landlord represents and warrants to Tenant that (i) this Lease satisfies all of the requirements of the Sublease and the Trust Agreement, (ii) the Sublease complies and does not conflict with the terms and conditions of this Lease or the Trust Agreement, and (iii) this Lease is permitted by the terms of the Sublease and the Trust Agreement. (C) Neither Landlord nor, to Landlord's knowledge, the Trustee, is in default under the Trust Agreement nor dots a condition or circumstance exist that would constitute a default under the "trust Agreement but for the giving of notice, the passage of time, or both. (D) The undersigned person executing this Lease on behalf of Landlord represents and warrants to "tenant that such person is an authorized representative of Landlord and has been -10- fully empowered, by proper resolution of the governing body of Landlord, to execute and deliver this Lease. (E) The undersigned person executing this Lease on behalf of Tenant represents and warrants to Landlord that such person is an authorized representative of Tenant and has been fully empowered, by proper resolution of the governing body of Tenant, to execute and deliver this Lease. Section 16.2. TRANSFER BY TENANT. Tenant may transfer the Demised Premises or its interest therein and this Lease shall be assignable by Tenant, upon written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Landlord and Tenant agree that it shall be reasonable for Landlord to withhold, condition or delay consent only if the proposed transferee does not have the ability to reasonably fulfill all of the obligations and responsibilities of the tenant under this Lease. ~~'ithiu 14 days of a request by Tenant, Landlord shall deliver to Tenant written notice that the proposed transferee is approved by Landlord. Notwithstanding the foregoing, (a) Tenant shall have the right, without the consent of Landlord, to transfer the Demised Premises or its interest therein and this Lease shall be assignable by Tenant to (i) any entity that is an affiliate of "I~enant, or (ii) the University of Notre Dame du Lac, and (b) Tenant shall have the right, without the consent of Landlord, to transfer the Demised Premises or its interest therein and this Lease shall be assignable by Tenant to one or more ]enders for security purposes. For the avoidance of doubt, foreclosure of any mortgage or conveyance in lieu of foreclosure, together with any assignment of this Lease, shall not require the consent of Landlord. In the event of any transfer or transfers of the Demised Premises by Tenant or of Tenant's interest in the Demised Premises, or the assignment of this Lease by Tenant, other than a transfer for security purposes only, upon the assumption of this Lease by the transferee as of the date of such transfer, the assignor Tenant shall be automatically relieved of any and all obligations and liabilities accruing from and after the date of such transfer and Landlord shall recognize the transferee. Section 16.3. NON-DISTURBANCE. (A) Landlord agrees that, if Landlord exercises any of its rights under the Sublease such that the Sublease is terminated or 'Tenant's interest in the Demised Premises is in any way threatened, then (a) this Lease shall continue in full force and effect as a direct lease between Tenant and the Master Tenant, and subject to all the terms, covenants and conditions of this Lease, and (b) Tenant's right of quiet possession of the Demised Premises shall not be disturbed. Landlord shall, upon request, execute, acknowledge and deliver to Tenant, an agreement in form reasonably satisfactory to Tenant agreeing to all of the provisions hereof. (I3) If, pursuant to the teens and conditions of this Lease, Landlord mortgages or otherwise encumbers its interest in the Demised Premises, then Landlord shall deliver to Tenant an agreement reasonably acceptable to Tenant that provides that Tenant's occupancy of the Demised Premises shall not be disturbed. Section 16.4. MODIFICA'hION OF LEASE. [f any mortgagee of "fcnant shall request reasonable modifications in this Lease as a condition to the making of a loan or contributing equity in furtherance of the Project, Landlord shall execute an agreement in recordable form so modifying this Lease, to the extent such modification shall not affect the tax-exempt status of any outstanding Bonds or materially affect the rights of the Master 'T'enant and Landlord under the Sublease. Section 16.5. NON-WAIVER. No delay or omission to exercise any right or power by either party shall impair any such right or power, or be construed as a waiver of any default or as acquiescence therein. One or more waivers of any covenant, term or condition of this Lease by either party shall not be construed by the other party as a waiver of a subsequent or continuing breach of the same covenant, term or condition. The consent or approval by either party to or of any act by the other party of a nature requiring consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act. Section 16.6. MEMORANDUM OF LEASE. The parties hereto a~rce to execute a memorandum of lease or short form lease in recordable form setting forth the dates of the Demised Term, a description of the Demised Premises and such other matters which, when such instrument is recorded, will give constructive notice to the world of "T'enant's rights in and to the Demised Premises, but omitting the precise terms of the Lease as to rent and other matters not necessary to give such constructive notice. Section 16.7. COMPLETE AGREEMENT. "The headings of the several Articles and Sections contained herein arc for convenience only and do not define, limit or construe the contents of such Articles and Sections. All negotiations, considerations, representations and understandings between the parties with respect to the subject matter hereof are incorporated herein, and may be modified or altered only by agreement in writing signed by the party to be bound. Section 16.8. CONSTRUCTION OF 'I~ERMS. Whenever the singular or plural number, or masculine, feminine or neuter gender, is used herein, it shall equally include the other, and the tertns and provisions of this instrument shall be construed accordingly. Section 16.9. AGREEMENT BINDING UPON SUCCESSORS. fhe covenants, agreements and obligations herein contained shall extend to, bind and inure to the benefit not only of the parties hereto, but their respective personal representatives, heirs, successors and assigns. Section 16.10. NE"I~ LEASE. Landlord and Tenant acknowledge that this Lease is intended to be an absolutely "Net Lease", which means that 1~enant pays as additional rent, without defense, offset, or deduction, all expenses of every nature and type connected with the Demised Premises. Section 16.11. GOVERNING LAW. This Lease shall be governed by and construed in accordance with the laws of the State of Indiana. Section 16.12. TIML; OF ESSENCE. Time shall be of the essence in the performance of every term, covenant and condition of this Lease. Section 16.13. ATTORNEYS' FEES. If it becomes necessary for either party to retain an attorney to initiate any legal proceedings in order to secure compliance with this Lease, then, in -12- addition to all other sums to which the prevailing party may be entitled to recover, the prevailing party shall also be entitled to recover, from the other party, court costs, reasonable attorneys' fees, prejudgment and post-judgment interest and all other reasonable costs of collection incurred by the prevailing party in connection therewith. Section 16.14. PROPERTY DECLARATION. Landlord covenants and agrees to acknowledge and consent and subordinate its interest in the Demised Premises to (and to cause the Master Tenant to acknowledge and consent and subordinate its interest in the Demised Premises to) a property declaration (and/or related instruments) encumbering the Demised Premises as may be necessary or desirable in Tenant's discretion in furtherance of the development, construction, use and maintenance of the Project. Section 16.15. ESTOPPEL CERTIFICATES. Landlord shall; at any time, at the reduest of Tenant or Tenant's mortgagee, execute, acknowledge, and deliver to Tenant or the mortgagee a written statement certifying that this Lease continues unmodilied and in full force and effect (or if there have been modifications, that this Lease continues in fi>11 force and effect as modil]ed and stating the modifications) and the dates to which the rent have been paid, and stating whether Tcnanl is in default in performing any covenants to this Lease, and, should "hcnant be in default, specifying each and every such dc1'ault, it being intended that any such statement delivered pursuant to this paragraph may be relied on by Tenant or any prospective purchaser or mortgagee or any assignee of any such mortgagee. [Signahn~e Page Follows] -13- IN WITNESS WIIIiREOF, the parties have executed this Lease in several cowrterparts, each of which shall be deemed an original instrwnent, as of the day and year first above written. LANDLOKD: South Bcnd Redevelopment Commission By: President ~TTI;ST: Secretary "ITN~N [": Kite Realty Eddy Sheet Garage, LLC, an Indiana limited liability company I3y: John A. Kite Chief Executive Officer EXIIII3IT A Legal Description A PART OP THE NORTH IIALF OF TIIE NORTHWEST' QUARTER OP SECTION 6, "TOWNSHIP 37 NORTIJ, RANGE 3 LAS"1', PORTAGE TOWNSIIIP, CITY OF SOU"TH BEND, S"1~. JOSEPH COUNTY, INDIANA. DESCRIBED AS FOLLOWS; BEGINNING AT A POINT THAT IS N. 89°50'18" E., 29.87 FEET AND N. 0°38'49" E., 296.52 FEE"T FROM THE NORTHEAST CORNER OF LOT NUMBER 73 OF HARTMAN AND MILLER'S PLA1`, WHICI-I IS RECORDI/D IN PLAT BOOK 7, Pt1GE 29, IN "I~HE OFFICE OF'TIIE RECORDER OF S1'. JOSEPH COUNTY, INDIANA; THENCE N. 89°21'11" W., 712 FEE"I; THENCE S. 00°38'49" W., 139.46 FEE"T; THENCE N. 89°21'I 1" W., 354.71 FF_,ET; "THENCE N. 00°34'51" E., 248.42 FEET; TI~L'NCE S. 89°19'25" L., 426.26 FEET; "THENCE ALONG A CURVE TO THE LEFT HAVING A KADIUS OF 200.00 FEET, AND HAVING AN ARC DISTANCE OF 2.11 FEET, TO THE END OF A CIiORD BEARING S. 00°56'54" W., AND HAVING A DISTANCE OF 2.11 FEET, THENCE S. 00°38'49" W., 106.64 FEET; TO THE POINT OF BEGINNING. JOINDER The City of South Bend, Indiana, a political subdivision and municipal corporation of the State of Indiana, hereby joins in the execution and delivery of this Lease for the purpose of specifically covenanting to Tenant that the City of South Bend, Indiana shall cause Landlord to satisfy and fiilfill the covenants, undertakings and agreements of Landlord set forth in Article VII of this Lcasc. CITY: CITY OP SOUTH BEND, WDIANA Stephen J. Luecke, Mayor ATTEST: John Voorde, Clerk 1613313 H,YI'OYI UIIICIION'Il SW17=C}1 aYgUIllCllti.. I Error! Unknown document property name... MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE (this "Memorandum") is made as of the day of July. 2008, by and between the SOUTII BEND REDEVELOPMENT COMMISSION, governing body of the South Bend Department of Redevelopment ("Landlord"), and KITE REALTY EDDY S"TREE"I~ GARAGE, LLC, an Indiana limited liability company ("Tenant"). REC11'ALS A. Landlord and Tenant entered into that certain Lease, dated July , 2008 (as the same may be hereafter amended, the "Lease"), pursuant to which Landlord leased to Tenant and Tenant Ieased from Landlord that certain real estate located in St. Joseph County, Indiana, being described on I?xhibit A attached hereto and made a part hereof, together with any and ali improvements, fixtures, hereditaments, easements and appurtenances thereunto belonging or in any way appertaining thereto (the "Premises"). B. Landlord and Tenant desire to execute and record a memorandum of the Lease. NOW, THEREFORE, for and in consideration of the foregoing premises, the Lease and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby represent and acknowledge the following: L Capitatizcd terms used in this Memorandum and not defined in this Memorandum shall have the meanings ascribed thereto by the Lease. 2. The term of the Lease is for a period commencing on the first to occur of (a) the date that the construction of the Parking Garage is complete, or (b) the date selected by Tenant (the "Commencement llate") and expiring on the first to occur of (i) February 15, 2033, (ii) the date upon which all outstanding Bonds have been redeemed, or (iii) the date upon which the Master Lease and/or the Sublease expires or is terminated. 3. Landlord and Tenant desire to record this Memorandum for the purpose of placing the public on notice of the Lease, all of the provisions of which are incorporated herein by reference with the same force and effect as if herein set forth in full. Nothing contained in this Memorandum is intended to or does modify or expand in any way any of the terms or provisions of the Lease, and the I_,ease shall determine and govern the rights and duties of Landlord and Tenant in all respects. 4. This Memorandum may be executed by the parties on separate counterparts, each of which shall to be deemed an original, but all of which, taken together, shall constitute one and the same instrument. I/Z 18d2~6.1 IN WITNESS WIIERF,OP, Landlord and Tenant have executed this Memorandum as of the date first hereinabove written. LANDLORD: SOUTH BEND RLDFVEI,OPMENT COMMISSION, governing body of the South Bend Department of Redevelopment Bv: President A"1,TES"1': Secretary S"DATE OP INDIANA COUNTY OF SS. On this day of July, 2008, before me, a notary public for said State and County, personally appeared and ,the President and Secretary of the South Bend Redevelopment Commission, governing body of the South Bend Department of Redevelopment, who acknowledged the execution of the foregoing instrument on behalf of said entity. IN WITNESS WIIEREOP, I hereunto set my hand and official seal. [Notarial Sear (Signature) Notary Public (Printed Name) My Commission Expires County of Residence: TENANT: STATE OP INDIANA COUNTY OF SS. KITE REALTY EDDY STREET UARAGE, LLC. an Indiana limited liability company 13v: John A. Kite Chief Executive Officer On this day of July, 2008, before me, a notary public for said State and County, personally appeared John A. Kite, the Chief Executive Ofliccr of Kite Realty Eddy Street Garage, LLC, an Indiana limited liability company, who acknowledged the execution of the foregoing instrument on behalf of said limited liability company. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notarial Seal] (Signature) Notary Public (Printed Name) My Commission Expires: County of Residence: This instrument was prepared by: Keoini J. Haynes, Esq. Ice Miller LLP, One American Square, Suite 3100, Indianapolis, IN 46282. I ailirm under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document, unless required by law. Keoini J. f Iaynes. EXI IIBIT A Lesal Description A PART OP THE NORTH HALF OF THE NOR"THWESI' QUARTER OF SECI~ION 6, "TOWNSHIP 37 NORTH, RANGE 3 EAST, PORTAGE TOWNSHIP, CITY OF SOUTH BEND, ST. JOSEPH COUNTY, INDIANA. DESCRIBED AS FOLLOWS; BEGINNING AT f1 POINT THAT IS N. 89°50'18" E., 29.87 FEET AND N. 0°38'49" E., 296.52 FEET FROM THI~ NORTHEAST CORNER OF LO"T NUMBER 73 OF HARTMAN AND MILLER'S PLA"I', WHICH IS RECORDED IN PLAT BOOK 7, PAGE 29, IN TIIE OFFICE OF THE RECORDER OF ST. JOSEPH COUNTY, INDIANA; TIIENCE N. 89°21'1 I" W., 71.25 FEET; THENCE S. 00°38'49" W., 139.46 FEE]; "THENCE N. 89°21'11" W., 354.71 FF,ET; "]'HENCE N. 00°34'51" E., 248.42 FEET; TIIENCE S. 89°19'25" E., 426.26 FEET; I~HENCE ALONG A CURVE TO THE LEF"T IIAVING A RADIUS OF 200.00 FEET, AND IIAVING AN ARC DISTANCE OF 2.11 FEET. TO THE END OP A CHORD Bi:ARING S. 00°56'54" W., AND HAVING A DIS"1'ANCI OF 2.11 I'EET, THENCE S. 00°38'49" W., 106.64 FEET; "1~0 THE POINT OF BEGINNING.