sublease- new haven - final draft to aldermen 4-21-10

8/7/2019 Sublease- New Haven - Final Draft to Aldermen 4-21-10

1/66

TSH DRAFT APRIL 21, 2010 FOR DISCUSSION

PURPOSES ONLY ALL RIGHTS RESERVED

SUBLEASE

BY AND BETWEEN

PARKING REAL ESTATE FUND II, LP

AND

THE CITY OF NEW HAVEN

Dated as of __________ _____, 2010

71338089.1


2/66

TABLE OF CONTENTS

Article and Section Page

ARTICLE IRECITALS .............................................................................................................. 5

ARTICLE IIDEFINITIONS ........................................................................................................ 7

ARTICLE IIIDEMISE OF PARKING METER OPERATIONS; REPRESENTATIONS,WARRANTIES, AND COVENANTS OF THE CITY .......................................... 7

Section 1 Demise............................................................................................................ 7Section 2 Representations and Warranties of the City................................................... 7

ARTICLE IV

TITLE AND CONDITION ..................................................................................... 9Section 1 Condition of Parking Meter Operations..........................................................9Section 2 As Is Delivery.............................................................................................. 9Section 3 Condition of Title.......................................................................................... 10Section 4 Assignment................................................................................................... 10Section 5 Transfer of Equipment and Books and Records........................................... 10

ARTICLE VTRANSACTION CHARACTERIZATION ..........................................................10

Section 1 Sublease Transaction.................................................................................... 10Section 2 Fair Market Rental. .................................................................................... 11

Section 3 No Partnership or Joint Venture. ............................................................... 11Section 4 Material Inducement. ................................................................................. 11

ARTICLE VIBASIC LEASE TERMS ....................................................................................... 11

Section 1 Sublease Term............................................................................................... 11Section 2 Rents and Other Payments............................................................................ 12Section 3 Late Payments............................................................................................... 12Section 4 Absolute Net Lease....................................................................................... 12Section 5 Sublease Structure. ......................................................................................13

171338089.1


3/66

ARTICLE VIIGROSS RECEIPTS ACCOUNT ...........................................................................14

ARTICLE VIIICOMPLIANCE CERTIFICATES .........................................................................16

ARTICLE IXTAXES AND ASSESSMENTS ............................................................................16

ARTICLE XUTILITIES ............................................................................................................ 16

ARTICLE XIINSURANCE ........................................................................................................ 16

ARTICLE XIITAX AND INSURANCE IMPOUND ..................................................................17

ARTICLE XIIIUSE OF PARKING METER OPERATIONS ...................................................... 17

Section 1 Use................................................................................................................ 17Section 2 Affirmative Covenants of the City Regarding Use.......................................17Section 3 Compliance with Laws Generally.................................................................18Section 4 Alterations and Replacements...................................................................... 18Section 5 Alterations and Replacements Automatically Part of Parking Meter

Operations.................................................................................................. 18Section 6 No Obligation of PREF II to Maintain or Repair......................................... 19

ARTICLE XIVMAINTENANCE .................................................................................................. 19

ARTICLE XVALTERATIONS .................................................................................................... 19

ARTICLE XVIINDEMNIFICATION ........................................................................................... 19

ARTICLE XVIIQUIET ENJOYMENT .......................................................................................... 20

ARTICLE XVIIICASUALTY AND CONDEMNATION ...............................................................20

Section 1 Event of Casualty or Condemnation............................................................. 20Section 2 Replacement or Substitution of Parking Meter Operations..........................20

271338089.1


4/66

ARTICLE XIXINSPECTIONS ...................................................................................................... 21

ARTICLE XXDEFAULTS ...........................................................................................................21

Section 1 Default.......................................................................................................... 21Section 2 Remedies and Measure of Damages............................................................. 23Section 3 Obligations of the City Following Event of Default .....................................26Section 4 PREF IIs Rights Cumulative and Simultaneous ..........................................26

Section 4 . All powers and remedies given by this Article XX to PREF II, subject toApplicable Regulations, shall be cumulative and not exclusive of oneanother or of any other right or remedy or of any other powers andremedies available to PREF II under this Sublease, by judicial proceedingsor otherwise, to enforce the performance or observance of the covenantsand agreements of the City contained in this Sublease, and no delay oromission of PREF II to exercise any right or power accruing upon theoccurrence of any Event of Default shall impair any other or subsequentEvent of Default or impair any rights or remedies consequent thereto.Every power and remedy given by this Article XX, or by ApplicableRegulations to PREF II may be exercised simultaneously or from time to time, and as often as may be deemed expedient, by PREF II, subject at alltimes to PREF IIs right in its sole judgment to discontinue any workcommenced by PREF II or change any course of action undertaken byPREF II...................................................................................................... 26

Section 5 No Power of Sale. Notwithstanding anything to the contrary set forth in thisSublease, in no event shall PREF II or Lender have the right or power toinstitute any judicial foreclosure proceedings with respect to Citysunderlying fee interest in the Parking Meter Operations or any portion thereof, nor shall PREF II or Lender have the right to exercise of anypower of sale with respect to Citys fee simple interest in the ParkingMeter Operations or any portion thereof................................................... 26

ARTICLE XXILIENS, LENDER COLLATERAL DOCUMENTS, SUBORDINATION,NONDISTURBANCE AND ATTORNMENT .................................................... 27

Section 1 No Liens........................................................................................................ 27Section 2 Subordination................................................................................................ 27Section 3 Default Notices............................................................................................. 28

ARTICLE XXIIESTOPPEL CERTIFICATES ............................................................................... 28

Section 1 Delivery of Estoppel Certificates.................................................................. 28

ARTICLE XXIIIASSIGNMENT AND SUBLETTING ..................................................................29

Section 1 PREF IIs Rights........................................................................................... 29Section 2 Prohibited Transfers by the City................................................................... 29

371338089.1


5/66

Section 3 PREF IIs Consent to Prohibited Transactions............................................. 30

ARTICLE XXIVSUBSTITUTION OF COLLATERAL .................................................................30

Section 1 Substitution of Collateral.............................................................................. 30

Section 2 If City gives the Substitution Notice.............................................................31Section 3 Conditions to Substitution........................................................................... 31Section 4 Expenses....................................................................................................... 33

ARTICLE XXVPERMITTED PREPAYMENTS; EARLY TERMINATION; ADDITIONALPARKING METERS ............................................................................................. 33

Section 1 Permitted Prepayments................................................................................. 33Section 2 Early Termination. ........................................................................................ 34Section 3 Additional Parking Meters............................................................................ 34

ARTICLE XXVI

HOLDING OVER .................................................................................................34

ARTICLE XXVIIFUNDS LIEN AND SECURITY INTEREST .....................................................34

Section 1 Security Interest............................................................................................ 34Section 2 Security Agreement...................................................................................... 35

ARTICLE XXVIIIFINANCIAL STATEMENTS ............................................................................... 35

ARTICLE XXIX

CONSENT OF PREF II .........................................................................................36

ARTICLE XXXBANKRUPTCY ....................................................................................................36

Section 1 Reliance by PREF II..................................................................................... 36Section 2 Treatment...................................................................................................... 37Section 3 No Waiver..................................................................................................... 37Section 4 All Payments Rent........................................................................................ 38Section 5 Identity of the City........................................................................................ 38Section 6 Non-Divisibility in the Event of Insolvency................................................. 38

ARTICLE XXXIMISCELLANEOUS PROVISIONS ..................................................................... 38

Section 1 Recitals.......................................................................................................... 38Section 2 Notices.......................................................................................................... 38Section 3 Waiver and Amendment............................................................................... 39Section 4 Interpretation................................................................................................. 40Section 5 Numbers and Gender.................................................................................... 40Section 6 PREF II Liability; the Citys Liability.......................................................... 40Section 7 Severability................................................................................................... 41

471338089.1


6/66

Section 8 No Strict Construction.................................................................................. 41Section 9 No Third Party Beneficiaries........................................................................ 41Section 10 Other Documents........................................................................................ 41Section 11 Attorneys Fees........................................................................................... 42Section 12 Entire Agreement........................................................................................ 42

Section 13 Forum Selection; Jurisdiction; Venue; Choice of Law. .............................42Section 14 Counterparts................................................................................................ 42Section 15 Binding Effect............................................................................................. 42Section 16 Waiver of Jury Trial and Punitive, Consequential, Special and Indirect

Damages..................................................................................................... 43Section 17 Time of the Essence.................................................................................... 43Section 18 No Merger................................................................................................... 43Section 19 No Contractual Rights................................................................................ 43Section 20 No Commissions......................................................................................... 44Section 21 Waiver of Sovereign Immunity.................................................................. 44Section 22 Document Review....................................................................................... 44

SUBLEASE

THIS SUBLEASE (this Sublease) is dated as of _____________ ___, 2010 (theEffective Date), by and between PARKING REAL ESTATE FUND II, LP, a Delaware limitedpartnership (PREF II), whose address is 6120 Parkland Boulevard, Suite 202, MayfieldHeights, OH 44124 and the CITY OF NEW HAVEN, a Connecticut municipal corporation,whose address is 165 Church Street, New Haven, CT 06510 (the City).

ARTICLE I

RECITALS

WHEREAS, PREF II has approached the City with a financing alternative to free up theCitys equity in the Parking Meter Operations (as defined below) and to monetize untapped valuein the Parking Meter Operations, and the City desires to accept PREF IIs proposal as analternative method of financing; and

WHEREAS, Gates Group Capital Partners, LLC responded to the Citys RFQ, and PREFII is the Party contracting with the City; and

WHEREAS, the financing mechanism that PREF II has designed to free up the Citysequity in the Parking Meter Operations, and to monetize untapped value in the Parking Meter

Operations, is known as a lease-leaseback transaction, as more fully described in the MasterLease and this Sublease (the Lease-Leaseback Transaction); and

WHEREAS, pursuant to the Lease-Leaseback Transaction, the City will lease the ParkingMeter Operations to PREF II by the execution and delivery of the Master Lease; and

571338089.1


7/66

WHEREAS, the next step in the Lease-Leaseback Transaction is a lease of the ParkingMeter Operations back to the City via this Sublease, so that the City continues to have fullpossession and control over the Parking Meter Operations; and

WHEREAS, the structure of the Lease-Leaseback Transaction allows the City to:

(a) Manage the daily operations, personnel and fee structure of the ParkingMeter Operations with its own personnel;

(b) Gain potential upside through real growth and fee increases; and

(c) Selectively take back and substitute portions of the Parking MeterOperations when needed for a higher and better use; and

(d) Expand and add additional parking meters in the Citys sole discretion thatwill not be subject to the Master Lease or this Sublease; and

WHEREAS, notwithstanding the terms of the Master Lease, so long as the City complieswith all of the terms and conditions set forth herein and in the Master Lease, the Cityspossession and control of the Parking Meter Operations will not be disturbed; and

WHEREAS, at the expiration of the Sublease Term, if the City has timely honored all ofits obligations under this Sublease and the Master Lease, and made all payments required underthis Sublease, PREF II has agreed with the City that it will terminate the Master Lease and theSublease for $1.00 so that the City will be in the same economic and legal position as before theLease-Leaseback Transaction occurred; and

WHEREAS, this Sublease is what is known as a Absolute Net Lease under which PREFII has no financial, operational or other responsibilities whatsoever, and the City is responsiblefor payment of all operating and other expenses of the Parking Meter Operations; and

WHEREAS, this Sublease requires the payment of Base Rent as an obligation of the Cityto be paid monthly by the City under any and all circumstances (including damage, destructionor condemnation of any part of the Parking Meter Operations), without setoff, recoupment oroffset, all as more fully set forth in this Sublease; and

WHEREAS, the Base Rent set forth in this Sublease increases in accordance with a fixedschedule and, provided no Event of Default has occurred and is continuing, the City shall retainall revenue from the Parking Meter Operations, without sharing such revenue with PREF II; and

WHEREAS, the City has agreed that even if the net revenues from the operating of theParking Meter Operations are less than are necessary to cover the Rent, the Citys obligation tomake such payments is in no way limited to or by the availability of such Parking Revenues, andthe City shall be unconditionally committed to pay such Rent as an obligation of the City; and

WHEREAS, in addition, in order to facilitate the financing by PREF II of the ParkingMeter Operations, PREF II has entered into the Third Party Financing Arrangements (as definedbelow), under the terms of which both PREF II and the City will be required to collaterally

671338089.1


8/66

assign to the Lender (as defined below) their respective rights hereunder to receive Rent and theGross Receipts and Parking Revenues from the Parking Meter Operations, it being understoodthat if the City timely pays the Rent and other obligations of the City under this Sublease, neitherPREF II nor the Lender will have any rights to those funds, and the Citys possession and controlof the Parking Meter Operations will not be disturbed.

NOW, THEREFORE, PREF II agrees to lease to the City, and the City agrees to acceptand lease from PREF II, the Parking Meter Operations. It is the intention of the parties that theMaster Lease, this Sublease and all exhibits thereto, and any other certificates, instruments, oragreements to be delivered hereunder, will constitute a single and indivisible contract, and thatthe lease of the Parking Meter Operations pursuant to the Master Lease and this Sublease will beconsidered a single integrated transaction; provided, however, that nothing contained in theMaster Lease or this Sublease shall be deemed to create, permit, or suffer any merger of PREFIIs and the Citys respective estates herein. It is also the intention of the parties that the Citysobligations with respect to the Parking Meter Operations hereunder are indivisible and notseverable.

ARTICLE II

DEFINITIONS

All capitalized terms used in this Master Lease and not otherwise defined shall have themeanings set forth on Exhibit C attached hereto and made a part hereof.

ARTICLE III

DEMISE OF PARKING METER OPERATIONS; REPRESENTATIONS,

WARRANTIES, AND COVENANTS OF THE CITY

Section 1 Demise.

In consideration of the Rent and other sums to be paid by the City and of the otherterms, covenants and conditions on the Citys part to be kept and performed, PREF II herebyexclusively leases, assigns, pledges and licenses to the City, and the City leases from PREF II,the Parking Meter Operations, subject to the terms of this Sublease.

Section 2 Representations and Warranties of the City.

The City makes the following representations and warranties to PREF II andacknowledges that PREF II and the Lender are relying upon such representations and

warranties in entering into this Sublease:

(a) The City is a municipal corporation , duly organized and existing under theConstitution and laws of the State of Connecticut.

(b) The City holds legal and equitable title to the Parking Meter Operations free andclear of all liens and encumbrances, except for restrictions, easements, rights of way,reservations, limitations, interests and other matters that do not adversely affect the Citys

771338089.1


9/66

ability to operate the Parking Meter Operations in accordance with the terms hereof. No

indebtedness for borrowed money of the City is or will be secured by any right or interest in

the Parking Meter Operations or the revenues or income therefrom and no judgment lien existsor shall exist in any revenue derived from or generated with respect to the Parking Meter

Operations.

(c) The Board of Aldermen of the City has (i) duly authorized and approved theexecution and delivery of this Sublease and the Other Documents and (iii) duly authorized

and approved the performance by the City of its obligations contained in this Sublease and theOther Documents. The City has the power and authority to enter into this Sublease and to do

all acts and things and execute and deliver all other documents as are required hereunder to

be done, observed or performed by it in accordance with the terms hereof .

(d) This Sublease, the Other Documents, and the Lease-Leaseback Transaction havebeen duly authorized, executed and delivered by the City and constitute valid and legally

binding obligations of the City, enforceable against the City in accordance with the terms

hereof and thereof, subject only to applicable bankruptcy, insolvency and similar laws

affecting the enforceability of the rights of creditors generally and to general principles ofequity.

(e) All rights and security interests granted by the City herein in and to the ParkingMeter Operations are valid and binding upon the City; and

(f) The obligation of the City to pay Rent hereunder and all other amounts requiredpursuant to the Other Documents is a valid and enforceable obligation of the City for the benefitof PREF II and the Lender.

(g) The consummation of the Lease-Leaseback Transaction (including the

operation of the Parking Meter Operations in accordance with the terms of this Sublease),and the performance by the City of the terms, conditions and provisions hereof has not and

will not contravene or violate or result in a breach of (with or without the giving of noticeor lapse of time, or both) or acceleration of any material obligations of the City under (i)

any Applicable Regulations or (ii) any agreement, instrument or document to which the City

is a party or by which it is bound.

(h) No Consent is required to be obtained by the City from, and no notice or filingis required to be given by the City to or made by the City with, any Person (including anyGovernmental Authority) in connection with the execution, delivery and performance by

the City of this Sublease or the consummation of the transactions contemplated hereby.

(i) The City has operated and is operating the Parking Meter Operations incompliance, in all material respects, with all Applicable Regulations and the City is not in

breach of any Applicable Regulations. There are no authorizations from any GovernmentalAuthority necessary for the operation of the Parking Meter Operations as currently being

operated.

(j) There is no action, suit or proceeding, at law or in equity, or before or by anyGovernmental Authority, pending nor, to the best of the Citys knowledge, threatened against

871338089.1


10/66

the City with respect to the Parking Meter Operations. As of the Effective Date , there is no

action, suit or proceeding, at law or in equity, or before or by any Governmental Authority,

pending nor, to the best of the Citys knowledge, threatened against the City which couldmaterially affect the validity or enforceability of this Sublease.

(k) The financial information of the City relating to the Parking Meter Operations previously delivered to PREF II fairly and accurately presents the revenues, operatingexpenses and net revenues of the Parking Meter Operations as of the dates and for the periods

stated in such financial information.

The foregoing representations and warranties shall be deemed made as of the Effective Date andeach Due Date thereafter, and shall survive the expiration or earlier termination of this Sublease.

ARTICLE IV

TITLE AND CONDITION

Section 1 Condition of Parking Meter Operations.

The Parking Meter Operations are leased, assigned, pledged, and licensed to the City subject to(a) all Applicable Regulations, including any existing violations thereof; and (b) the existingcondition of the Parking Meter Operations as of the Effective Date of this Sublease, withoutrepresentation or warranty of any kind by PREF II.

Section 2 As Is Delivery.

THE CITY IS THE OWNER OF THE PARKING METER OPERATIONS AND AS THETENANT AND ASSIGNEE HEREUNDER ACKNOWLEDGES THAT PREF II HAS NOTMADE AND WILL NOT MAKE ANY INSPECTION OF ANY OF THE PARKING METER

OPERATIONS, AND PREF II LEASES, ASSIGNS, PLEDGES AND TRANSFERS TO THECITY, AND THE CITY LEASES, ASSUMES, AND WILL TAKE THE PARKING METEROPERATIONS AS IS (INCLUDING ALL ENVIRONMENTAL CONDITIONS), AND THECITY ACKNOWLEDGES THAT PREF II (WHETHER ACTING AS LANDLORD AND/ORASSIGNOR HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILLNOT MAKE, NOR WILL PREF II BE DEEMED TO HAVE MADE, ANY WARRANTY ORREPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THEPARKING METER OPERATIONS, INCLUDING ANY WARRANTY ORREPRESENTATION AS TO ITS FITNESS FOR USE OR PURPOSE, DESIGN ORCONDITION FOR ANY PARTICULAR USE OR PURPOSE, AS TO THE QUALITY OFTHE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, AS TO PREF

IIS TITLE THERETO, OR AS TO VALUE, COMPLIANCE WITH SPECIFICATIONS,LOCATION, USE, CONDITION, MERCHANTABILITY, QUALITY, DESCRIPTION,DURABILITY OR OPERATION, IT BEING AGREED THAT ALL RISKS INCIDENTTHERETO ARE TO BE BORNE BY THE CITY. THE CITY ACKNOWLEDGES THAT THEPARKING METER OPERATIONS ARE OF ITS SELECTION AND TO ITSSPECIFICATIONS, AND THAT THE PARKING METER OPERATIONS HAVE BEENINSPECTED BY THE CITY AND ARE SATISFACTORY TO IT. IN THE EVENT OF ANYDEFECT OR DEFICIENCY IN ANY OF THE PARKING METER OPERATIONS OF ANY

971338089.1


11/66

NATURE, WHETHER LATENT OR PATENT, PREF II WILL NOT HAVE ANYRESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANYINCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY INTORT). THE PROVISIONS OF THIS ARTICLE IV, SECTION 2 HAVE BEEN NEGOTIATED, AND THE FOREGOING PROVISIONS ARE INTENDED TO BE A

COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY PREF II,EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PARKING METEROPERATIONS, ARISING PURSUANT TO THE UCC OR ANY OTHER APPLICABLEREGULATION.

Section 3 Condition of Title.

The City acknowledges and agrees that the Parking Meter Operations are, immediately prior tothe execution and delivery of this Sublease and the Master Lease, owned, operated andcontrolled entirely by the City, free and clear of all liens and encumbrances.

Section 4 Assignment.

PREF II hereby assigns, without recourse or warranty whatsoever, to the City, all Accounts,Deposit Accounts, Intangible Property, Books and Records, and Equipment, subject to PREF IIssecurity interest therein. Such assignment shall remain in effect until the expiration or earliertermination of this Sublease. PREF II hereby agrees to execute and deliver, at the Citysexpense, such further documents, including powers of attorney, as the City may reasonablyrequest in order that the City may have the full benefit of the assignment effected or intended tobe effected by this Article IV, Section 4. Any monies collected by the City under any of theIntangible Property, Books and Records and Equipment after the occurrence of and during thecontinuation of an Event of Default shall be held in trust by the City and promptly paid over toPREF II.

Section 5 Transfer of Equipment and Books and Records.

On the Effective Date, PREF II will transfer possession of the Equipment and Books andRecords to the City, to the extent not already in the possession of the City.

ARTICLE V

TRANSACTION CHARACTERIZATION

Section 1 Sublease Transaction.

PREF II and the City intend that this Sublease constitutes a single lease of all, but not less than

all, of PREF IIs right, title, and interest in and to the Parking Meter Operations and that PREF IIand the City have executed and delivered this Sublease with the understanding that this Subleaseconstitutes a unitary, unseverable instrument pertaining to all, but not less than all, of PREF IIsright, title, and interest in and to the Parking Meter Operations, and that neither this Sublease northe duties, obligations or rights of the City may be allocated or otherwise divided among theParking Meter Operations by the City. It is the intent of the parties hereto that the businessrelationship created by this Sublease and any related documents is solely that of a long-term

1071338089.1


12/66

commercial lease between PREF II and the City and has been entered into by both parties inreliance upon the economic and legal bargains contained herein.

Section 2 Fair Market Rental.

The City represents and warrants to PREF II that, to the best of the Citys knowledge, theBase Rent is the fair market value for the use of the Parking Facilities and was agreed to by PREFII and the City on that basis.

Section 3 No Partnership or Joint Venture.

None of the agreements contained herein, is intended, nor shall the same be deemed orconstrued, to create a partnership between PREF II and the City, to make them joint venturers, tomake the City an agent, legal representative, partner, subsidiary or employee of PREF II, nor tomake PREF II in any way responsible for the debts, obligations or losses of the City. The Citywill support the intent of the parties that this Sublease does not create a partnership or jointventure or the like, if, and to the extent that, any challenge occurs.

Section 4 Material Inducement.

The expressions of intent, the waivers, the representations and warranties, the covenants,the agreements and the stipulations set forth in this Article V are a material inducement to PREFII to enter into this Sublease.

ARTICLE VI

BASIC LEASE TERMS

Section 1 Sublease Term.

The term of this Sublease for all of the Parking Meter Operations shall commence as of theEffective Date and shall expire on ____________, 20___ [25 years] (the Expiration Date)unless terminated sooner as expressly provided elsewhere in this Sublease. The time periodduring which this Sublease shall actually be in effect is referred to herein as the SubleaseTerm. Notwithstanding anything to the contrary herein, following an Event of Default by theCity hereunder, PREF II shall have the right, with the prior written consent of the Lender, toextend the Sublease Term (the Extension Option) for such additional period as may berequired by PREF II or the Lender for the City to pay the unamortized portion of principal andthe interest component payable as Base Rent, as scheduled under Exhibit B, including theamount of Base Rent in default at the Default Rate, not to exceed twenty-five (25) years, asdesignated by PREF II or the Lender in their sole discretion (the Extension Term).

Alternatively, following an Event of Default by the City hereunder, PREF II shall have the right,with the prior written consent of the Lender, to declare the full Make Whole Amount ascalculated under Exhibit G due and payable. The City acknowledges and agrees that theExtension Option shall be fully assignable to PREF IIs Lender at any time on or after theEffective Date in connection with any Third Party Financing Arrangement and that PREF IIsLender shall have the unilateral right to exercise the Extension Option.

1171338089.1


13/66

Section 2 Rents and Other Payments.

(a) If the Effective Date is a date other than a Due Date, the City will pay PREF II onthe Effective Date the applicable Base Rent installment prorated on the basis of the ratio thatthe number of days from the Effective Date through the last day of the month containing the

Effective Date bears to the total number of days in such period. Thereafter, on or before eachsucceeding Due Date, the City will pay PREF II in advance the applicable Base Rentinstallment.

(b) All sums of money required to be paid by the City under this Sublease which arenot specifically referred to as Base Rent (Additional Rent) shall be considered Rent althoughnot specifically designated as such. PREF II will have the same remedies for nonpayment ofAdditional Rent as those provided herein for the nonpayment of Base Rent.

(c) Upon execution of this Sublease, the City will authorize PREF II to establisharrangements whereby payments of the Base Rent are transferred by Automated ClearingHouse Debit directly to a Trustee; provided, however, upon notice from Lender to the City and

PREF II delivered in the manner set forth in Article XXXI, Section 2 - Notices, the City willdeliver all payments of Base Rent as specified in such notice from Lender.

Section 3 Late Payments.

Any delinquent payment (that is, any payment not made within ten (10) calendar days after thedate when due) shall, in addition to any other remedy of PREF II, incur a late charge of 5%(which late charge is intended to compensate PREF II for the cost of handling and processingsuch delinquent payment and should not be considered interest) and bear interest at the DefaultRate, such interest to be computed from and including the date such payment was due throughand including the date of the payment.

Section 4 Absolute Net Lease.

(a) The intention of the parties is that this Sublease be a Absolute Net Lease, whichmeans that, except as otherwise expressly provided in this Sublease, the Base Rent payablehereunder and all Additional Rent shall be absolutely net to PREF II without Setoff, and allcosts, expenses and obligations of every kind and nature whatsoever relating to the ParkingMeter Operations, including all Operating Expenses and Capital Improvements, shall be theexclusive obligation of, and payable and paid by, the City alone.

(b) Except as otherwise expressly provided in this Sublease, this Sublease shall notterminate, and the City will not have any right to terminate this Sublease, during the SubleaseTerm. It is the intention of the parties hereto that: (i) the obligations of the City under thisSublease shall be separate and independent covenants and agreements; (ii) Base Rent,Additional Rent, and all other sums payable by the City hereunder shall continue to be payablein all events (or, in lieu thereof, the City will pay amounts equal thereto); and (iii) theobligations of the City under this Sublease shall continue unaffected, unless this Sublease shallhave been terminated pursuant to an express provision of this Sublease.

1271338089.1


14/66

(c) Except as otherwise expressly provided in this Sublease, the obligations of theCity under this Sublease shall not be affected by any interference with the Citys use of any ofthe Parking Meter Operations for any reason, including but not limited to: (i) any damage to ordestruction of any of the Parking Meter Operations or the interruption of any Utility services tothe Parking Meter Operations by any cause whatsoever; (ii) any Condemnation; (iii) the

prohibition, limitation or restriction of the Citys use of any of the Parking Meter Operations;(iv) any eviction by paramount title or otherwise; (v) the Citys acquisition of ownership of anyof the Parking Meter Operations other than pursuant to an express provision of this Sublease;(vi) any default on the part of PREF II under this Sublease or under any other agreement; (vii)any latent or other defect in, or any theft or loss of any of the Parking Meter Operations; (viii)the breach of any warranty of any seller or manufacturer of any of the Equipment; or (ix) anyother cause, whether similar or dissimilar to the foregoing, any Applicable Regulations to thecontrary notwithstanding.

(d) The City agrees that it will remain obligated under this Sublease in accordancewith its provisions and that, except as otherwise expressly provided herein, it will not take anyaction to terminate, rescind or void this Sublease, notwithstanding: (i) the bankruptcy,insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding-up orother proceeding affecting PREF II; (ii) the exercise of any remedy, including foreclosure,under the Third Party Financing Arrangements; or (iii) any action with respect to this Sublease(including the disaffirmance hereof) which may be taken by PREF II under the BankruptcyCode or by any trustee, receiver or liquidator of PREF II or by any court under the BankruptcyCode or otherwise.

(e) This Sublease is the absolute and unconditional obligation of the City. The Citywaives all rights which are not expressly stated in this Sublease but which may now or hereafterotherwise be conferred by law: (i) to quit, terminate or surrender this Sublease or any of theParking Meter Operations; (ii) to any Setoff of or to Base Rent, Additional Rent or any other

sums payable under this Sublease; and (iii) for any statutory lien or offset right against PREF IIor its assets or property.

(f) Anything to the contrary notwithstanding, without limiting the generality of theforegoing, the City acknowledges that PREF II has absolutely no obligation to perform anyservices or pay any funds, directly or indirectly, by reason of this Sublease or any OtherAgreements.

Section 5 Sublease Structure.

The City and PREF II acknowledge that the City is the owner of the Parking Meter Operations

and that the City, pursuant to the Master Lease, has leased the Parking Meter Operationsexclusively to PREF II. Accordingly, the parties hereto acknowledge and agree as follows:

(a) PREF II and the City hereby acknowledge and agree that this Sublease is subjectand subordinate to all terms, conditions and covenants of the Master Lease, and to allamendments thereto and modifications thereof now or hereafter in effect. Except as otherwiseexpressly provided herein, the City covenants and agrees to comply with and perform each andevery obligation of PREF II as the tenant under the Master Lease. The City shall defend and

1371338089.1


15/66

hold PREF II harmless from and against any and all claims, losses, costs, damages, liabilitiesand expenses (including, without limitation, reasonable attorneys fees and expenses) arising byreason of any acts or omissions by the City which give rise to a default under the Master Lease.In the event that the Master Lease shall be terminated, this Sublease shall, at the election ofPREF II, terminate effective as of the date of termination of the Master Lease.

(b) The City shall in no event have any greater rights or remedies under this Subleasethan PREF II has under the Master Lease. In the event that any provisions of the Master Leaseimpose a higher standard or greater obligation with respect to the obligations of PREF II, astenant under the Master Lease, than those imposed upon the City under this Sublease, then theCity shall be held to the higher standard or greater obligation imposed under the Master Lease.In the event that any provisions of this Sublease grant to the City greater rights (including,without limitation, longer periods of time in which to perform) than the provisions of theMaster Lease grant to PREF II as tenant under the Master Lease, then the City shall be limitedto the rights (and the shorter periods of time in which to perform) as set forth in the MasterLease. In addition, if any right or remedy is granted to the City under this Sublease, which rightor remedy is expressly prohibited under the Master Lease, then the City may not exercise suchright or remedy under this Sublease, notwithstanding anything in this Sublease to the contrary.The City expressly waives any and all claims against PREF II, its officers, directors,shareholders, members, agents and employees, arising by reason of PREF IIs failure toperform its obligations, covenants and agreements if such failure is due to PREF II not havingthe right to perform such obligations, covenants or agreements under the terms and conditionsof the Master Lease, or due to any action, inaction or hindrance on the part of the City or itsemployees, agents or any independent contractors working for or on behalf of the City.

ARTICLE VII

GROSS RECEIPTS ACCOUNT

Section 1 Gross Receipts Account.

(a) On or prior to the Effective Date, the City shall establish, and shall maintainduring the Sublease Term, an Eligible Account (the Gross Receipts Account) at an EligibleInstitution acting as custodian for the benefit of the City, PREF II, and the Lender (the GrossReceipts Account Bank). As additional security for the obligations of the City under thisAgreement, the City hereby pledges, transfers and assigns to PREF II, and grants to PREF II, acontinuing perfected first security interest in and to, and a first lien upon, the Gross Receipts andthe Gross Receipts Account (which security interest and lien PREF II may assign to Lender) andfurther agrees not to grant, permit or otherwise allow any other liens, security interests, orencumbrances of any kind to be placed on the Gross Receipts or Gross Receipts Account. The

City agrees to execute, acknowledge and deliver all other agreements or other instruments asPREF II or Lender may reasonably require in order to effectuate and secure unto PREF II andLender any of the rights granted hereunder, and to more fully perfect and protect the securityinterest in the Gross Receipts and the Gross Receipts Account granted hereby, including, withoutlimitation, an account security agreement (the Gross Receipts Account Security Agreement).The Gross Receipts Account shall be a separate custodial account and shall not constitute a trustfund. PREF II and the City acknowledge and agree that, following the occurrence of an Event ofDefault hereunder, the Lender, its authorized agents or designees shall be entitled to exercise all

1471338089.1


16/66

of the Lenders rights and remedies available to it pursuant to and under the Gross ReceiptsAccount Security Agreement. Neither PREF II nor the City shall have the right to make anywithdrawal from the Gross Receipts Account. The funds held in the Gross Receipts Accountshall be invested in accordance with the terms of the Gross Receipts Account SecurityAgreement; provided, that prior to the occurrence of an Event of Default, and so long as the

balance of funds on deposit in the Gross Receipts Account exceeds the Minimum Gross ReceiptsAccount Balance, the City shall be entitled to all interest on funds deposited into the GrossReceipts Account in accordance with the Gross Receipts Account Security Agreement, andfollowing an Event of Default, PREF II and/or Lender shall be entitled to all interest on fundsdeposited into the Gross Receipts Account in accordance with the Gross Receipts AccountSecurity Agreement, and consistent with Article XX, Section 2 Remedies and Measure ofDamages.

(b) On the Effective Date, the City shall deposit into the Gross Receipts Account anamount equal to the Minimum Gross Receipts Account Balance plus (ii) an amount equal to theaggregate Gross Receipts for the calendar month immediately preceding the calendar month inwhich the Effective Date occurs. Thereafter, at all times during the Sublease Term, all GrossReceipts shall be deposited directly into the Gross Receipts Account and PREF II shall have afirst security interest in and to the Gross Receipts and the Gross Receipts Account, and the Cityagrees not to grant, permit or otherwise allow any other liens, security interests, or encumbrancesof any kind to be placed on the Gross Receipts or Gross Receipts Account.

(c) The City shall cause all Gross Receipts to be deposited directly into the GrossReceipts Account, without exception, both before and after any Event of Default hereunder. If,notwithstanding the foregoing, PREF II, the City or any Operator receives any Gross Receipts,then (i) such amounts shall be held in trust for prompt deposit into the Gross Receipts Account,(ii) such amounts shall not be commingled with any other funds or property of PREF II, the Cityor any Operator, and (iii) PREF II, the City or the Operator, as the case may be, shall deposit

such amounts in the Gross Receipts Account within five (5) Business Days of receipt. There areno other accounts maintained by PREF II, the City or any other Person into which GrossReceipts are deposited, and neither PREF II nor the City nor any other Person shall open anyother such account for the deposit of Gross Receipts during the Sublease Term.

(d) So long as no Event of Default or Disqualifying Default has occurred hereunder,and so long as the balance of funds on deposit in the Gross Receipts Account is greater than theMinimum Gross Receipts Account Balance, on or prior to the date that is three (3) BusinessDays following the date on which PREF II or Lender, as the case may be, has received paymentin full of the monthly Base Rent for the then current calendar month (each such date, aDistribution Date) the Gross Receipts Account Bank shall distribute to the City from the Gross

Receipts Account an amount equal to the Gross Receipts for the calendar month immediatelypreceding the then current calendar month; provided, that the amount so distributed to the Cityon any Distribution Date shall not exceed an amount equal to (i) the then current balance offunds on deposit in the Gross Receipts Account minus (ii) the sum of (A) the Minimum GrossReceipts Account Balance plus (B) the aggregate Gross Receipts for the calendar month in thewhich such Distribution Date occurs then on deposit in the Gross Receipts Account.

1571338089.1


17/66

(e) Notwithstanding anything to the contrary contained herein, if an Event of Defaultor Disqualifying Default has occurred hereunder, (i) any amounts deposited into or remaining inthe Gross Receipts Account shall be for the account of Lender and may be withdrawn by Lenderto be applied in any manner as Lender may elect in Lenders discretion, and (ii) the City shallhave no further rights with respect to the Gross Receipts Account until the earlier of (A) payment

to PREF II of all amounts owing pursuant to Article XX, Section 2 Remedies and Measure ofDamages or (B) the expiration of the Sublease Term, as the same may be extended pursuant toArticle VI, Section 1 of the Master Lease.

Section 2 Collection of Gross Receipts. The City represents and warrantsthat the Citys current procedures for collecting Gross Receipts are set forth on Exhibit Eattached hereto (the Collection Procedures). The City covenants and agrees that the City shallnot modify the Collection Procedures without the prior written consent of PREF II and the Cityshall take all steps necessary to ensure that the deposit of all Gross Receipts into the GrossReceipts Account shall not be interrupted for any reason, including but not limited to an Event(s)of Default hereunder.

ARTICLE VIII

COMPLIANCE CERTIFICATES

INTENTIONALLY DELETED.

ARTICLE IX

TAXES AND ASSESSMENTS

The City represents and warrants to PREF II that the City is not currently obligated to payany Taxes with respect to the Parking Meter Operations or the Parking Revenues. In the unlikelyevent that any Taxes are imposed during the term of this Sublease or the Master Lease, the City

will pay, prior delinquency, all such Taxes. It is the intention of the parties that neither PREF IInor Lender shall have any liability or responsibility to pay Taxes under any circumstances. TheCity covenants and agrees that, following an Event of Default hereunder, it shall not take anyaction or position which would result in the imposition of liability on PREF II or Lender for thepayment of any Taxes.

ARTICLE X

UTILITIES

The City will contract, in its own name, for and pay when due all charges for theconnection and use of Utility services supplied to the Parking Meter Operations during the

Sublease Term, including, without limitation, connection fees, deposits, installation fees, thecost and maintenance of meters, and usage fees and charges. Under no circumstances will PREFII be responsible to the City or any other Person for any interruption of any Utility service.

ARTICLE XI

INSURANCE

The parties acknowledge and agree that, as of the Effective Date, the City has in place aself-insurance program for liability and casualty coverage. So long as (a) no Event of Default or

1671338089.1


18/66

Disqualifying Default has occurred hereunder, (b) the City maintains a Moodys credit rating ofBaa3 or better and a Standard and Poor credit rating of BBB- or better, and (c) the City has netassets of not less than One Hundred Million Dollars ($100,000,000.00) (collectively, the Self-Insurance Conditions), the City shall have the right to continue to self-insure with respect toliability and casualty arising from, affecting or relating to this Sublease and the Parking Meter

Operations, and there shall be no requirement for the City to carry any additional insurance. TheCity shall deliver to PREF II and Lender satisfactory evidence of Citys required net assetsherein upon request, but not more than twice during any calendar year unless an Event of Defaultor Disqualifying Default has occurred and is continuing. In the event that the City fails tocomply with the Self-insurance Conditions at any time during the term of this Sublease, then theCity shall immediately obtain such insurance coverage and upon such terms, in such amounts(and, in the case of casualty insurance, for full replacement cost, with no co-insurance), andsubject to such limitations as PREF II and/or Lender shall require in their commerciallyreasonable discretion, from third party insurers acceptable to PREF II and Lender in theircommercially reasonable discretion, naming PREF II and Lender as additional insureds, and inthe event that the City shall fail to procure such insurance, then PREF II and/or Lender shall have

the right, but not the obligation, to obtain such insurance on the Citys behalf and the City shallpromptly reimburse PREF II and/or the Lender for the cost thereof.

ARTICLE XII

TAX AND INSURANCE IMPOUND

INTENTIONALLY DELETED

ARTICLE XIII

USE OF PARKING METER OPERATIONS

Section 1 Use.

The City will at all times operate, keep and maintain each of the Parking Meter Operations forthe Permitted Use in accordance with the standards set forth on Exhibit E attached hereto (theOperating Standards) and all Applicable Regulations and to make all Capital Improvementsrequired to maintain the Parking Meter Operations in good condition and repair, all at the Cityssole cost and expenses. Not later than sixty (60) days prior to any proposed modification of theOperating Standards by the City, the City shall provide to PREF II a detailed summary of suchmodifications.

Section 2 Affirmative Covenants of the City Regarding Use.

The City covenants that at all times during the Sublease Term, regardless of whether an Eventof Default has occurred hereunder and regardless of whether PREF II or the Lender hasexercised any of the remedies set forth in Article XX, the City shall:

(a) pay all Operating Expenses of every kind and nature relating to the Parking MeterOperations.

1771338089.1


19/66

(b) not take, cause to be taken, permit, or suffer any act or omission that has or couldbe expected to have a Material Adverse Effect on PREF II, the Lender, the Parking MeterOperations or any Parking Revenue derived from the Parking Meter Operations.

(c) not enter into any Operating Agreement without PREF IIs prior written consent,

which consent shall not be unreasonably withheld. With respect to any permitted OperatingAgreement, the City shall include in such Operating Agreement the right of PREF II and theLender to unilaterally terminate such Operating Agreement without penalty and withoutliability to the Operator at any time after an Event of Default hereunder, to the extent necessaryor desirable to cure such Event of Default. In no event shall any Operating Agreement,Operator or any action taken in connection with either serve to modify, amend, abrogate, or inany way limit, reduce, or affect (i) the Operating Standards or Collection Procedures, (ii) theCitys obligations hereunder or under the Other Agreements, or (iii) the rights and remedies ofPREF II and/or the Lender hereunder or under the Other Agreements.

Section 3 Compliance with Laws Generally.

The Citys use of each of the Parking Meter Operations, and the condition thereof, shall, at theCitys sole cost and expense, comply with all Applicable Regulations now or hereafter in effect,including but not limited to all applicable Environmental Laws. Without limiting the generalityof the other provisions of this Article XIII, the City will comply with the ADA, and allregulations promulgated thereunder, as it affects any of the Parking Meter Operations. The Citywill maintain in full force and effect all Licenses required to use and operate the Parking MeterOperations. The obligations of the City and the rights and remedies of PREF II under thisArticle XIII, Section 3 shall survive the termination, expiration and/or release of this Sublease, tothe extent that the Master Lease survives the termination or earlier expiration of this Sublease.

Section 4 Alterations and Replacements.

The City will have the right, at its sole expense and without the prior written consent of PREFII (but upon not less than sixty (60) days prior written notice to PREF II), to make Alterationsand/or replacements to the Parking Meter Operations, to the extent such Alterations and/orreplacements (a) are constructed, operated, repaired and maintained in accordance with theOperating Standards, (b) do not result in any lien or liens on or against any of the Parking MeterOperations or the public rights of way upon which the Parking Meter Operations are located andare subject to no liens or encumbrances or subordinate to any leases, except those approved byPREF II and Lender in their sole discretion, and (c) do not have a Material Adverse Effect onremainder of the Parking Meter Operations. In the event that the City does not pay off, bondover, or otherwise remove any such lien within five (5) days after receiving notice thereof, PREF

II shall have the right to declare an immediate default under this Sublease.

Section 5 Alterations and Replacements Automatically Part of ParkingMeter Operations.

Any Alterations and/or replacements of any of the Parking Meter Operations shallautomatically be deemed a part of the Parking Meter Operations and belong to PREF II and thisSublease shall be deemed to be automatically amended to include such Alterations and/or

1871338089.1


20/66

replacements as part of the Parking Meter Operations. The City authorizes PREF II to prepareand file UCC Financing Statements evidencing and perfecting PREF IIs first security interest inand to such Alterations and/or replacements, and the City will execute and deliver to PREF IIsuch further instruments as PREF II or the Lender may require to evidence the interest of PREFII in and to such Alterations and/or replacements, including but not limited to an amendment to

this Sublease and/or a UCC policy of title insurance or an amendment to the existing UCC policyor policies covering the Alterations and/or replacements of the Parking Meter Operations, inform satisfactory to PREF II.

Section 6 No Obligation of PREF II to Maintain or Repair.

The City waives any right to require PREF II to maintain, repair, replace or rebuild all or anypart of any of the Parking Meter Operations or make repairs or replacements of any kind at theexpense of PREF II pursuant to any Applicable Regulations at any time in effect. PREF II WILL NOT BE REQUIRED TO MAKE ANY REPAIR OR REPLACEMENT, WHETHERFORESEEN OR UNFORESEEN, OR TO MAINTAIN ANY OF THE PARKING METEROPERATIONS OR ADJOINING PROPERTY IN ANY WAY, AND THE CITY HEREBYEXPRESSLY WAIVES THE RIGHT TO MAKE REPAIRS OR REPLACEMENTS AT THEEXPENSE OF PREF II, WHICH RIGHT MAY BE PROVIDED FOR IN ANY APPLICABLEREGULATION.

ARTICLE XIV

MAINTENANCE


ARTICLE XV

ALTERATIONS


ARTICLE XVI

INDEMNIFICATION

The City will, at its sole cost and expense, protect, defend, indemnify, release and holdharmless each of the Indemnified Parties for, from, and against any and all Losses (including anyLosses resulting from any Indemnified Partys negligence, excluding intentional tort or grossnegligence of such Indemnified Party; provided, however, that the term gross negligence shallnot include gross negligence imputed as a matter of law to any of the Indemnified Parties solelyby reason of PREF IIs or Lenders interest in any of the Parking Meter Operations, PREF IIs orLenders failure to act in respect to matters which are or were the obligation of the City underthis Sublease, or imputed to such Indemnified Party as a result of the action or inaction of theCity, it being further agreed that the burden of proof with respect to any alleged gross negligenceshall be on the City), including costs of environmental remediation (whether or not performedvoluntarily), engineers fees, environmental consultants fees, and costs of investigation(including but not limited to sampling, testing, and analysis of soil, water, air, building materialsand other materials and other materials and substances whether solid, liquid or gas), when such

1971338089.1


21/66

Losses are determined or claimed to be caused by, incurred, or resulting from the Citysoperations of or relating in any manner to, any of the Parking Meter Operations, whetherrelating to the design, construction, latent defects (whether or not discoverable), Alterations,Capital Improvements, maintenance, modification, reconstruction, repair, restoration,replacement, use, non use, possession, or operation of any of the Parking Meter Operations (or

portion thereof) by the City or any Person thereon, supervision or otherwise, or from the grantingby PREF II at the Citys request of easements, licenses, or any rights with respect to all or anypart of the Parking Meter Operations, or from any breach or default under, or failure to perform,any term or provision of this Sublease by the City, its officers, employees, agents, or otherpersons, or to which any Indemnified Party is subject because of PREF IIs or Lenders interestin any of the Parking Meter Operations. The provisions of this Article XVI shall survive theexpiration or earlier termination of this Sublease.

ARTICLE XVII

QUIET ENJOYMENT

So long as the City will pay the Rent and other sums herein provided and will keep andperform all of the terms, covenants and conditions on its part herein contained, the City willhave, subject and subordinate to PREF IIs rights herein, the right to the peaceful and quiet useand enjoyment of the Parking Meter Operations. Notwithstanding the foregoing, however, in noevent will the City be entitled to bring any action against PREF II to enforce its rights hereunderif an Event of Default will have occurred and be continuing.

ARTICLE XVIII

CASUALTY AND CONDEMNATION

Section 1 Event of Casualty or Condemnation.

In the event of either (a) any damage to or destruction of the Parking Meter Operations byfire, the elements, or other casualty during the Term (a Casualty) or (b) any proceeding forcondemnation or eminent domain with respect to the Parking Meter Operations (aCondemnation), the City shall give PREF II and Lender, if any, prompt written notice thereof.In the event of any such Casualty (whether or not insured against) or Condemnation, the Termshall continue and there shall be no abatement or reduction of Base Rent, Additional Rent or ofany other sums payable by the City hereunder. If such Casualty or Condemnation affects morethan an Immaterial Portion of the Parking Meter Operations, then the City shall promptly restoreand/or repair the Parking Meter Operations (such restoration or repair of the Parking MeterOperations, whether in connection with a Casualty or Condemnation, as the context requires,herein called a Restoration), at Citys sole cost and expense, including any Alterations

previously made by City hereunder.

Section 2 Replacement or Substitution of Parking Meter Operations.

Notwithstanding anything to the contrary in this Article XVIII, if a Casualty orCondemnation occurs that, either by itself or when combined with other events or any series ofother events occurring during the Sublease Term, results in an aggregate decrease in ParkingRevenues of thirty-three percent (33%) or more from the total Parking Revenues for fiscal year

2071338089.1


22/66

2010-2011 (a Major Event), then not later than thirty (30) days after the occurrence of suchMajor Event, the City shall, at the Citys option, elect one of the following: (a) fully repair andreplace the portion of the Parking Meter Operations subject to the Casualty or Condemnation; (b)deliver Substitute Facilities to PREF II having substantially the same economic value as theportion of the Parking Meter Operations subject to the Casualty or Condemnation, and otherwise

acceptable to PREF II and the Lender in their sole discretion, as more particularly set forth inArticle XXIV; or (c) pay to PREF II the applicable Make Whole Payment as set forth on ExhibitG, and thereafter to terminate this Sublease. If, following the occurrence of a Major Event, theCity either (i) elects option (a) or (b) above and fails to complete all required replacements orsubstitutions within twelve (12) months after the date of such Major Event (or within suchadditional time as may be reasonably necessary, provided the City promptly commences anddiligently pursues such replacements or substitutions) or (ii) elects option (c) above and fails topay the applicable Make Whole Payment within thirty (30) days after the date of such MajorEvent, then PREF II shall have the right (which right shall be in addition to, and not exclusive of,any other rights and remedies of PREF II and/or Lender hereunder), exercisable at any timethereafter upon thirty (30) days prior written notice to the City, to require the City to pay to PREF

II the applicable Make Whole Payment as set forth on Exhibit G, and thereafter to terminate thisSublease..

ARTICLE XIX

INSPECTIONS

PREF II and its authorized representatives shall have the right, not more than twice in anycalendar year (or at any time and from time to time following an Event of Default hereunder) toenter any land or buildings associated with any of the Parking Meter Operations or any partthereof during normal business hours in order to inspect the Parking Meter Operations and makephotographic or other evidence concerning the Citys compliance with the terms of this Subleaseor in order to show the Parking Meter Operations to the Lender. The City hereby waives any

Claim for damages for any injury or inconvenience to or interference with the Citys business,any loss of occupancy or quiet enjoyment of any of the Parking Meter Operations and any otherloss occasioned by such entry so long as PREF II will have used reasonable efforts not tounreasonably interrupt the Citys normal business operations. The City will keep and maintain atthe Citys corporate headquarters full, complete and appropriate books of account and records ofthe Citys business relating to the Parking Meter Operations in accordance with GAAP (orequivalent standards applicable to municipal entities) consistently applied. The Citys Booksand Records will at all times be open for inspection by PREF II, Lender and their respectiveauditors or other authorized representatives and shall show such information as is reasonablynecessary to determine compliance with PREF IIs obligations under the Lender CollateralDocuments.

ARTICLE XX

DEFAULTS

Section 1 Default.

Each of the following, after expiration of the specified notice and/or cure period, if any, shall bean event of default under this Sublease (each, an Event of Default):

2171338089.1


23/66

(a) if any representation or warranty of the City set forth in this Sublease is false inany material respect, or if the City renders any statement or account which is false in anymaterial respect, which falsehood is not corrected by the City within twenty (20) days after theCity obtains knowledge thereof (by notice or otherwise, provided that neither PREF II or theLender shall be under any obligation to provide notice to the City in connection therewith);

(b) if any Base Rent, Additional Rent or other monetary sum due under this Subleaseis not paid within ten (10) calendar days after the applicable Due Date;

(c) if the City fails to pay prior to delinquency, any Taxes, if applicable, which failureis not corrected by the City within twenty (20) days after the City obtains knowledge thereof(by notice or otherwise, provided that neither PREF II or the Lender shall be under anyobligation to provide notice to the City in connection therewith);

(d) the occurrence of an event of default by the City under the Master Lease, afterpassage of all applicable notice and cure or grace periods set forth therein, which event ofdefault continues for at least twenty (20) days;

(e) if City (i) admits, in writing, that it is unable to pay its debts as such becomedue, (ii) makes an assignment for the benefit of creditors, (iii) files a formal written

application for approval to file a voluntary petition under Title 9 of the U.S. Code, or if

such petition is filed against it and an order for relief is entered, which petition, if notwithdrawn, or petition and order are not dismissed within ten (10) days after filing, or if

the City files any petition or answer seeking, consenting to or acquiescing in any

reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar

relief under the present or any future U.S. bankruptcy code, any similar provisions under thelaws of the State of Connecticut, or any other present or future Applicable Regulations, or shall

seek or consent to or acquiesce in or suffer the appointment of any trustee, receiver, custodian,

assignee, sequestrator, liquidator or other similar official of the City, or of all or anysubstantial part of its properties (in each case, to the extent applicable to a municipality), or (iv)

takes any action in furtherance of any action described in this Subsection (e) ;

(f) except for Temporary Closings, if the City vacates or abandons any portion of theParking Meter Operations, or if any portion of the Parking Meter Operations becomes unusableor unavailable for any reason and the City fails to provide Substituted Facilities acceptable toPREF II and the Lender pursuant to Article XXIV below within twenty (20) days.

(g) if the City repudiates in writing any of its obligations under this Sublease;

(h) if the City shall fail to maintain insurance in accordance with the requirements ofArticle XI Insurance of this Sublease, and such failure continues for twenty (20 days;

(i) if the City shall assign or transfer its interest in this Sublease in violation of theterms of Article XXIII Assignment and Subletting;

(j) if the City fails to observe or perform any of the covenants, conditions, orobligations of this Sublease (other than for defaults or breaches not otherwise specificallyaddressed in clauses (a) (i) and (k) (o) of this Article XX - Section 1 ); provided, however, if

2271338089.1


24/66

any such failure is not willful or intentional, does not place any rights or property of PREF II inimmediate jeopardy, and is within the reasonable power of the City to promptly cure afterreceipt of notice thereof, all as determined by PREF II in its reasonable discretion, then suchfailure shall not constitute an Event of Default hereunder, unless otherwise expressly providedherein, unless and until PREF II shall have given the City notice thereof and a period of twenty

(20) days shall have elapsed, during which period the City may correct or cure such failure,upon failure of which an Event of Default shall be deemed to have occurred hereunder withoutfurther notice or demand of any kind being required. If such failure cannot reasonably be curedwithin such twenty (20)-day period, as determined by PREF II in its reasonable discretion, andthe City is diligently pursuing a cure of such failure, then the City will have a reasonable periodto cure such failure beyond such twenty (20)-day period, which shall in no event exceed sixty(60) days after receiving notice of such failure from PREF II. If the City shall fail to correct orcure such failure within such sixty (60)-day period, an Event of Default shall be deemed to haveoccurred hereunder without further notice or demand of any kind being required;

(k) if there is an Event of Default, or a breach or default, after the passage of allapplicable notice and cure or grace periods, of or under any of the Other Agreements, and suchEvent of Default, breach or default continues for twenty (20) days;

(l) if a court of competent jurisdiction enters a final and non-appealablejudgment order against the City in any action, suit or proceeding brought against the City,which action, suit or proceeding was not brought by or supported in any way by PREF II, and

as a result of such final and non-appealable judgment order (A) it becomes unlawful for the

City to comply with or observe any material obligation, covenant, agreement, term orcondition in this Sublease or the Other Documents or there is a Material Adverse Effect on the

operation of any of the Parking Meter Operations, or (B) any material obligation, covenant,

agreement, term or condition of the City under this Sublease becomes unenforceableagainst the City; and (C) the parties, acting in good faith and within a reasonable time, are

unable to reform this Sublease and/or the Other Documents to conform to the requirements ofsuch judgment orde r;

(m) if the City enters into any Operating Agreement without the prior written consentof PREF II;

(n) if there is a breach or default, after the passage of all applicable notice and cure orgrace periods, under any Operating Agreement, and such breach or default continues for twenty(20) days; or

(o) if the City fails to cause all Gross Receipts to be deposited into the Gross Receipts

Account in accordance with the terms of Article VII Gross Receipts Account of this Sublease.

Section 2 Remedies and Measure of Damages.

Upon the occurrence of an Event of Default, with or without notice or demand, except thenotice prior to default required under certain circumstances by Article XX, Section 1 - Defaultabove or such other notice as may be required by statute and cannot be waived by the City (allother notices being hereby waived), all Rent payments which shall be in default for ten days or

2371338089.1


25/66

more shall accrue interest at the Default Rate and such default interest shall be deemed to beAdditional Rent hereunder. In addition, PREF II will be entitled to exercise, at its option,concurrently, successively, or in any combination, the following (the Remedies):

(a) to terminate this Sublease, whereupon this Sublease, except as to the Citys

liabilities and responsibilities hereunder which shall expressly survive, shall be terminated;

(b) to recover from the City all Rent and other monetary sums then due and owingunder this Sublease, in each case together with interest thereon at the Default Rate from the duedate thereof to and including the date of Sublease termination, and, subject to Article XX Section 2(j) below, to accelerate and recover from the City all Rent scheduled to become dueand owing under this Sublease after the date of such breach for the entire original scheduledSublease Term;

(c) to recover from the City all costs and expenses, including attorneys fees, courtcosts, expert witness fees, costs of tests and analyses, travel and accommodation expenses,deposition and trial transcripts, copies and other similar costs and fees, paid or incurred by

PREF II as a result of such breach, regardless of whether or not legal proceedings are actuallycommenced;

(d) to appoint Wells Fargo Bank, N.A., an affiliate thereof, or any successors andassigns of either of them, as receiver (the Receiver) for Gross Receipts and the GrossReceipts Account without resorting to judicial process, or, if required, to make application, exparte, to a court of competent jurisdiction for appointment of the Receiver and without regard tothe adequacy of the Parking Meter Operations for the repayment of the indebtedness securedhereby or the solvency of the City or any person or persons liable for the payment of theindebtedness secured hereby, and the City does hereby irrevocably consent to any suchappointment, waives any and all notices of and defenses to such appointment and agrees not to

oppose any application therefor by PREF II, but nothing herein is to be construed to deprivePREF II of any other right, remedy or privilege PREF II may now have under ApplicableRegulations to have a receiver appointed; provided, however, that the appointment of theReceiver by virtue of any court order, statute or regulation shall not impair or in any mannerprejudice the rights of PREF II to receive payment of the Gross Receipts and Parking Revenuespursuant to other terms and provisions of this Sublease. The Receiver will have all of the usualpowers and duties of receivers in similar cases, upon such terms and conditions as the Receivermay deem to be prudent and reasonable under the circumstances. Such receivership shall, atthe option of PREF II, continue until full payment of all of the Rent secured hereby;

(e) to immediately or at any time thereafter, at PREF IIs sole option but without any

obligation to do so, correct such breach or default and charge the City all costs and expensesincurred by PREF II therein. Any sum or sums so paid by PREF II, together with interest at theDefault Rate, shall be deemed to be Additional Rent hereunder and shall be immediately duefrom the City to PREF II. Any such acts by PREF II in correcting the Citys breaches ordefaults hereunder shall not be deemed to cure said breaches or defaults or constitute anywaiver of PREF IIs right to exercise any or all remedies set forth herein;

2471338089.1


26/66

(f) to immediately or at any time thereafter, and with or without notice, set off anymoney of the City held by PREF II under this Sublease against any sum owing by the Cityhereunder;

(g) to exercise any and all rights of PREF II or the Lender with respect to the Gross

Receipts Account, and any rights of PREF II or the Lender pursuant to the Gross ReceiptsAccount Security Agreement;

(h) to bring an action against the City for any damages sustained by PREF II or toseek any equitable relief available to the Fund, including the right of specific performance; or

(i) to pursue any other rights or remedies available pursuant to ApplicableRegulations.

(j) In addition to the foregoing remedies, PREF II and/or the Lender shall have theright, at any time after the occurrence of an Event of Default upon forty-five (45) days priorwritten notice to the City, to require the City to pay the applicable Make Whole Payment set

forth on Exhibit G, together with (i) all costs and expenses, including reasonable attorney fees,incurred by PREF II and/or the Lender in connection with such default, (ii) all costs andexpenses relative to any other uncured Events of Default by the City, and (iii) interest on all theforegoing amounts at the Default Rate.

Notwithstanding anything herein to the contrary, and subject to the provisos contained inthis paragraph below, in connection with any Event of Default under Article XX - Section 1(b)(a Monetary Default), PREF II shall not have the right to accelerate Rent and other monetarysums scheduled to become due and owing under this Sublease in accordance with Article XX Section 2(b) unless the City fails to make the defaulted payment(s), plus interest thereon at theDefault Rate from the original due date to the date of payment, on or prior to the date that is

sixty (60) days after the occurrence of such Event of Default (the Acceleration Grace PeriodDate); provided, that (i) any such payment by the City shall be made from City fundsindependent and separate from the Gross Receipts Account and from Gross Receipts, ParkingMeter Operations and Metered Parking Fees and (ii) the foregoing grace period shall apply tonot more than three (3) Monetary Defaults in the aggregate during the Sublease Term, and notmore than one (1) Monetary Default in any period of sixty (60) consecutive months during theSublease Term, and in all other instances PREF II shall have the right to accelerate rent andother monetary sums scheduled to become due and owing under this Sublease in accordancewith Article XX Section 2(b) immediately upon the occurrence of an Event of Defaulthereunder; provided, further, that (1) the Citys right to cure a Monetary Default pursuant tothis paragraph shall not in any way abridge, modify, restrict or delay the rights of PREF II

and/or the Lender to exercise any other rights or remedies available to them hereunderfollowing an Event of Default, including, without limitation, rights with respect to the GrossReceipts Account set forth in Article VII Section 1(e), and (2) in the event that PREF IIand/or the Lender shall have exercised its rights pursuant to Article VII - Section 1(e) followinga Monetary Default, and the City has the right to cure such Monetary Default pursuant to thisparagraph (j) and does so cure such Monetary Default on or prior to the related AccelerationGrace Period Date, and no other Event of Default or Disqualifying Default is then continuing,then the City shall thereafter be entitled to distributions from the Gross Receipts Account as per

2571338089.1


27/66

Article VII - Section 1(d) until and unless a subsequent Event of Default or DisqualifyingDefault shall have occurred.

Section 3 Obligations of the City Following Event of Default

. No expiration or termination of the Sublease Term pursuant to Section 2 of this Article XX, byoperation of law or otherwise, and no other remedy pursued by PREF II and/or Lender pursuantto Section 2 of this Article XX or otherwise shall relieve the City of its liabilities and obligationshereunder, all of which shall survive such expiration, termination, or other remedy. The Cityshall, at all times before or after and Event of Default, (i) enforce all existing ApplicableRegulations with respect to the Parking Meter Operations, (ii) continue to enact and diligentlyenforce procedures for enforcement of parking rules and regulations, and adjudication andpunishment of Persons that violate such rules and regulations, that are consistent with theOperating Standards and designed to deter parking violations, including procedures for thecollection of unpaid parking tickets and immobilization of vehicles by such means as then permitted by Applicable Regulations, and (iii) continue to cause all Gross Receipts to bedeposited into the Gross Receipts Account in accordance with Article VII of this Sublease.

Section 4 PREF IIs Rights Cumulative and Simultaneous

Section 4. All powers and remedies given by this Article XX to PREF II,subject to Applicable Regulations, shall be cumulative and not exclusive of one another or of anyother right or remedy or of any other powers and remedies available to PREF II under thisSublease, by judicial proceedings or otherwise, to enforce the performance or observance of thecovenants and agreements of the City contained in this Sublease, and no delay or omission ofPREF II to exercise any right or power accruing upon the occurrence of any Event of Defaultshall impair any other or subsequent Event of Default or impair any rights or remediesconsequent thereto. Every power and remedy given by this Article XX, or by Applicable

Regulations to PREF II may be exercised simultaneously or from time to time, and as often asmay be deemed expedient, by PREF II, subject at all times to PREF IIs right in its sole judgmentto discontinue any work commenced by PREF II or change any course of action undertaken byPREF II.

Section 5 No Power of Sale. Notwithstanding anything to the contrary setforth in this Sublease, in no event shall PREF II or Lender have the right or power to instituteany judicial foreclosure proceedings with respect to Citys underlying fee interest in the ParkingMeter Operations or any portion thereof, nor shall PREF II or Lender have the right to exerciseof any power of sale with respect to Citys fee simple interest in the Parking Meter Operations orany portion thereof.

Section 6 No Obligation to Mitigate

. Notwithstanding anything contained in this Article XX, under no circumstances shall PREF IIbe deemed to have any affirmative obligation to mitigate its damages under this Sublease after anEvent of Default by the City.

2671338089.1


28/66

ARTICLE XXI

LIENS, LENDER COLLATERAL DOCUMENTS, SUBORDINATION,

NONDISTURBANCE AND ATTORNMENT

Section 1 No Liens.

PREF IIs interest in this Sublease and/or any of the Parking Meter Operations shall not besubordinate to any liens, security interests, claims, or encumbrances placed upon any of theParking Meter Operations by or resulting from any acts of the City, whether voluntarily orinvoluntarily, and nothing herein contained shall be construed to require such subordination byPREF II. The City will keep the Parking Meter Operations free from any liens for workperformed, materials furnished or obligations incurred by the City, and take any and all otheractions necessary to maintain PREF IIs interest in this Sublease and/or any of the Parking MeterOperations as a first lien and security interest on the Parking Meter Operations, and the Cityfurther agrees not to grant, permit or otherwise allow any other liens, security interests, orencumbrances of any kind to be placed on the Parking Meter Operations. NOTICE IS HEREBYGIVEN THAT THE CITY IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE PLACEDANY LIEN, SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL ORANY PART OF ANY OF THE PARKING METER OPERATIONS, THE EQUIPMENT ORTHE CITYS INTEREST IN THE PARKING METER OPERATIONS, AND ANY SUCHPURPORTED TRANSACTION SHALL BE VOID. FURTHERMORE, ANY SUCHPURPORTED TRANSACTION SHALL BE DEEMED A TORTIOUS INTERFERENCEWITH PREF IIS RELATIONSHIP WITH THE CITY AND PREF IIS INTEREST IN THEPARKING METER OPERATIONS.

Section 2 Subordination.

(a) This Sublease at all times shall automatically be subordinate to the Third Party

Financing Arrangements and to the lien of any and all liens and security interests now orhereafter placed upon any of the Parking Meter Operations by PREF II and/or the Lender, andthe City covenants and agrees to execute and deliver, upon demand, such further instrumentssubordinating this Sublease to the lien of the Third Party Financing Arrangements and any orall such liens and security interests as shall be desired by PREF II or Lender, upon the conditionthat the City will have the right to remain in possession of the Parking Meter Operations underthe terms of this Sublease so long as no Event of Default shall have occurred and be continuing(the Nondisturbance Provision).

(b) If Lender or any other secured party validly exercises its right to elect to have thisSublease and the interest of the City hereunder be superior to the Third Party Financing

Arrangements or any other lien or security interest and evidences such election by writtennotice given to the City, then this Sublease and the interest of the City hereunder shall bedeemed superior to any such Third Party Financing Arrangements, lien or security interest,whether this Sublease was executed before or after such Third Party Financing Arrangements,lien or security interest and in that event Lender or such other secured party will have the samerights with respect to this Sublease as if it had been executed and delivered prior to theexecution and delivery of such Third Party Financing Arrangements, lien or security interestand had been assigned to Lender or such other secured party.

2771338089.1


29/66

(c) In the event any purchaser or assignee of Lender succeeds to PREF IIs positionwith respect to any of the Parking Meter Operations, or in the event Lender or any assigneeotherwise succeeds to the rights of PREF II as landlord under this Sublease, the City will attornto Lender or such purchaser or assignee, as the case may be (a Successor Landlord), andrecognize the Successor Landlord as the landlord und