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Pursuant to the lease agreement dated June 14, 1988, Part-
nership leased Republic Plaza to BCE for a fixed term that
commenced on June 17, 1988, and ends at midnight on June 1, 2013
(lease term), unless extended at the option of BCE, the lessee.
At the time Partnership and BCE entered into the lease agreement,
tenants occupied approximately 71 percent of Republic Plaza
pursuant to existing leases, and approximately 29 percent of that
office building was vacant. Pursuant to the lease agreement, BCE
became the sublessor with respect to those existing tenants and
was given the right to receive rent from them.
In order to satisfy the requirements of TIAA, the mortgagor
of Republic Plaza, the lease agreement required monthly payments
of rent that were to (1) start on July 1, 1989, and terminate on
May 1, 2011, (2) be at least equal to the amounts required to pay
the monthly debt service on the TIAA term loan, and (3) be used
first to satisfy Partnership's obligations under that loan.
Starting on June 1, 2011, after the TIAA term loan was to have
been paid in full, the lease agreement required an annual payment
of rent for each of the last 2 years of the lease term. In order
to service the TIAA term loan during the initial lease period of
approximately 11.5 months that began on June 17, 1988, and ended
on May 31, 1989, during which the rent to be paid according to
the lease agreement was zero (11.5-month period of zero rent),
BCE and PFI agreed in the partnership agreement to make total
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Last modified: May 25, 2011