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1 NTE R <br />n~FICE <br />To: ° Dan Petrusich <br />Cc: Craig Lewis <br />From: Jon Carder <br />Subject: Marion County Ground Lease Form <br />Date: 7/30/98 <br /> <br />Notes from Jon's conversation with Erik Nelson regarding Marion County Ground Lease Form. Erik felt <br />the form was generally okay- with the following comments... <br />- Section 2: Good <br />- Section 3: Well defined. <br />- Section 4.1: "premises may not be used for any other purposes...and not subject to change in <br />concept is ambiguous <br />~ - Minimum th~eshold of 75% occupancy <br />- Would it preclude re~ievelopment and what are the ramifications if it drops below 75%? <br />- Eric suggests consent should not be unreasonably withheld with proper notice & justification <br />- Section 5.1: Is a cumbersomely written sentence- "lease shall have not power to act...to create <br />the foundation (?) for any lien" <br />- Section 7.1: The percentage described in the 2nd paragraph may be in conflict with lenders' <br />language, ~which may require that all of the proceeds go to the lender to reduce the loan balance. <br />Eric suggests the following language..."or as reasonably ~equired based on the ~equirements of <br />the leasehold mortgage." <br />- ~ Section 17.1 8~ 17.2: Is limiting to the primary lessee trying to sublease the improvements to <br />others. Suggestions: should be less one-sided, needs more latitude and reasonableness <br />- Section 21.1: Leasehold mortgages- 15` part is okay. Fou~th sentence gets cumbersome as to <br />who it is benefiting. <br />- Section 23: (Lessors right to encumber). If Lessor can mortgage the property, it will cause <br />problems fo~ Lessee's le~der since there can be a prior claim against the property, diminishing the <br />Lessee's ability to finance their portion of the project. If the County puts a big mortgage on this <br />property, it will be difficult for a retail developer to put any additional debt on the property. <br />