ASSOCIATION OF CORPORATE ASSOCIATION OF CORPORATE COUNSEL – AMERICACOUNSEL – AMERICA

DELAWARE VALLEY CHAPTERDELAWARE VALLEY CHAPTER

FEBRUARY 21, 2007FEBRUARY 21, 2007

MANAGING CORPORATE REAL MANAGING CORPORATE REAL ESTATE AND LEASING ISSUESESTATE AND LEASING ISSUES

LEASING ISSUESLEASING ISSUES

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1.1. Lease Requirements for ValidityLease Requirements for Validity

a.a. execution by party to be bound, description of premises; execution by party to be bound, description of premises; identification of rent; and termidentification of rent; and term

b.b. oral leases can be binding for leases less than three yearsoral leases can be binding for leases less than three years

2.2. Parties to Lease/Date of LeaseParties to Lease/Date of Lease

a.a. Title searchTitle search

3.3. Description of Premises/Statement of DemiseDescription of Premises/Statement of Demise

4.4. Term of LeaseTerm of Lease

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5.5. RentRent

a.a. Base Rent/Fixed Minimum RentBase Rent/Fixed Minimum Rent

b.b. Additional RentAdditional Rent

i.i. for retail: percentage rent for retail: percentage rent

ii.ii. rent escalationrent escalation

iii.iii. rent concessionsrent concessions

c.c. Triple net lease versus gross leaseTriple net lease versus gross lease

i.i. Real estate taxes, insurance, common area charges, operating Real estate taxes, insurance, common area charges, operating expenses, maintenance and other pass thrusexpenses, maintenance and other pass thrus

ii.ii. Audit RightsAudit Rights

d.d. Utilities/HVACUtilities/HVAC

e.e. Security DepositSecurity Deposit

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6.6. Use of PremisesUse of Premises

a.a. Exclusives/non-competeExclusives/non-compete

7.7. Tenant ImprovementsTenant Improvements

a.a. Condition of premisesCondition of premises

i.i. ““as is”as is”

ii.ii. Build-outBuild-out

b.b. Moving costsMoving costs

i.i. WiringWiring

ii.ii. FurnitureFurniture

iii.iii. MoverMover

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8.8. Covenant of Quiet EnjoymentCovenant of Quiet Enjoyment

9.9. Landlord ServicesLandlord Services

a.a. HVACHVAC

b.b. ElevatorElevator

c.c. JanitorialJanitorial

10.10. Repairs and AlterationsRepairs and Alterations

11.11. Compliance with lawsCompliance with laws

12.12. Casualty and CondemnationCasualty and Condemnation

13.13. Assignments and SubleasesAssignments and Subleases

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14.14. OptionsOptions

a.a. RenewalRenewal

b.b. PurchasePurchase

c.c. ExpansionExpansion

d.d. ContractionContraction

e.e. Early TerminationEarly Termination

15.15. Lease Guarantees/Non-Recourse LeasesLease Guarantees/Non-Recourse Leases

16.16. Subordination and Non-DisturbanceSubordination and Non-Disturbance

17.17. Signage/ParkingSignage/Parking

18.18. Events of DefaultEvents of Default

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19.19. Landlord’s RemediesLandlord’s Remedies

a.a. Confession of judgmentConfession of judgment

b.b. Recovery of possessionRecovery of possession

c.c. Acceleration of rent Acceleration of rent

d.d. Tenant’s remedies for landlord defaultTenant’s remedies for landlord default

20.20. Recording the Lease/Memorandum of LeaseRecording the Lease/Memorandum of Lease

21.21. Execution of Lease by Appropriate SignatoriesExecution of Lease by Appropriate Signatories

Due-Diligence Checklist – Due-Diligence Checklist – Acquisition/SaleAcquisition/Sale

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1.1. General Corporate Materials – Seller/BuyerGeneral Corporate Materials – Seller/Buyer

a.a. Formation DocumentsFormation Documents

b.b. ResolutionsResolutions

2.2. Environmental MattersEnvironmental Matters

a.a. Copy of all environmental reports, permits, licenses, operating Copy of all environmental reports, permits, licenses, operating approvals, citations, suits and claimsapprovals, citations, suits and claims

b.b. Phase-1 Environmental Report (and Phase II, if warranted)Phase-1 Environmental Report (and Phase II, if warranted)

3.3. Other Permits, Licenses and Operating ApprovalsOther Permits, Licenses and Operating Approvals

a.a. ZoningZoning

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4.4. Title ReportTitle Report

a.a. Review of prior deeds, easements, covenants, conditions and Review of prior deeds, easements, covenants, conditions and restrictions and other underlying title documentsrestrictions and other underlying title documents

b.b. bulk sale issues – escrow/indemnitybulk sale issues – escrow/indemnity

5.5. Other Property Included in SaleOther Property Included in Sale

a.a. List of fixed assets, machinery and equipment included in saleList of fixed assets, machinery and equipment included in sale

6.6. Insurance PoliciesInsurance Policies

a.a. Copies of Seller’s liability, casualty and other insuranceCopies of Seller’s liability, casualty and other insurance

b.b. Purchaser’s insurance of equitable interest and risksPurchaser’s insurance of equitable interest and risks

c.c. Renewal datesRenewal dates

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7.7. Service ContractsService Contracts

a.a. Third-party vendors (e.g., security, janitorial, landscaping, fire alarm Third-party vendors (e.g., security, janitorial, landscaping, fire alarm monitoring, trash removal)monitoring, trash removal)

b.b. Employment agreements/labor contractsEmployment agreements/labor contracts

c.c. Property manager/brokersProperty manager/brokers

d.d. Consultants (architects, engineers)Consultants (architects, engineers)

e.e. Construction contractsConstruction contracts

f.f. Building warranties and guaranteesBuilding warranties and guarantees

g.g. Intellectual property/websiteIntellectual property/website

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8.8. PlansPlans

9.9. LitigationLitigation

a.a. Copies of all pleadings of any litigation affecting the property.Copies of all pleadings of any litigation affecting the property.

10.10. Real Estate Tax Bills and Receipts for Prior YearsReal Estate Tax Bills and Receipts for Prior Years

a.a. Notices of changes in assessmentNotices of changes in assessment

b.b. Estoppel CertificatesEstoppel Certificates

11.11. Tenant InformationTenant Information

a.a. Lease, amendments and guaranteesLease, amendments and guarantees

b.b. Estoppel CertificatesEstoppel Certificates

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12.12. Property OperationsProperty Operations

a.a. Current certified rent rollCurrent certified rent roll

b.b. Certified operating statementsCertified operating statements

c.c. Monthly rental delinquency reportMonthly rental delinquency report

13.13. Consultant ReportsConsultant Reports

a.a. EnvironmentalEnvironmental

b.b. StructuralStructural

c.c. Mechanical, electrical, plumbing HVAC, life safetyMechanical, electrical, plumbing HVAC, life safety

d.d. AppraisalAppraisal

e.e. Market StudyMarket Study

14.14. Document StorageDocument Storage