AUTOMATIC STAY AND CLAIMS

PREVENTS ANYONE FROM INTERFERING WITH DEBTOR’S PROPERTY OR EFFORTS TO REORGANIZE Includes: Commencement or continuation of lawsuit  Enforcement of judgments (monetary or otherwise)  Obtaining possession of property of estate  Collection efforts  Set off of debts

STAY’S EFFECT ON LANDLORD/TENANT RELATION You cannot:  Evict tenant  Lockout tenant  Seize tenant’s property  Shut off utilities  Show property to prospective tenant  Apply security deposit  Hinder operation of debtor’s business  Change locks  Give eviction notice  Terminate lease  Declare a default  Threaten tenant  Move property of a tenant that has vacated

STAY’S EFFECT ON LANDLORD/TENANT RELATION You Can:  Collect rent and other charges which have accrued since bankruptcy filing  Draw down letter of credit  Take action to continue a security interest in property  Take action to remove tenant whose lease has expired by its own terms prior to or during the bankruptcy case (this should be done carefully)

VIOLATIONS OF STAY  Contempt  Fine / Damages / Attorney Fees  Imprisonment  Bad reputation with Court It is just like violating Court injunction.

WHY FILE A CLAIM?  Only way to get paid  Previous suits, judgments, awards, etc. Make no difference

LANDLORD CLAIMS  Secured – Extent defined by lease. Very rare  Unsecured – Most common  Administrative – Post-petition expense. Highest priority  Prior to rejection  After rejection  Property Tax / Expenses – Pro-rated  Environmental – Did claim arise pre-petition or post-petition?

SOURCES OF PAYMENT  Post confirmation operations of debtor  Sale of property  Recoveries from lawsuits filed on behalf of estate  Fraudulent conveyances  Preferences  Turnover suits  Business tort and related suits

CALCULATION OF CLAIM AMOUNT – PRE-PETITION Include:  All pre-petition amounts owed  All pre-petition reconciliations, if available  All other pre-petition damages to the property Credit:  Security deposition (provisionally)

CALCULATION OF “REJECTION DAMAGES”  Calculate whatever damages are for breach under the lease  Cap the damages at equivalent of one year’s rent reserved in lease Or  Cap the damages at the rent reserved for 15% of the remaining time under the lease not to exceed three years i.e., (10 years x 15% = rent for 1.5 years) (7 years x 15% = rent for 1.05 years)  All amounts are subject to mitigation if new tenant takes possession

Construction costs which Debtor failed to reimburse Claimant prior to filing petition $239, Unpaid charges for after hours HVAC and building use, security, storage, etc. $ 9, Estimated rejection damages (15% of rent reserved in lease, not to exceed 3 years) $5,791, Less credit for pre-petition over payments Total Claim$6,010,983.69

Pre-petition rent and charges (including late fees) from November 1999 to December 5, 1999 less $6, in credit for 1999 recovery reconciliations (see calculation of reconciliation attached as part of this Exhibit). $ 31, , $25, Rent and charges (including late fees) pursuant to 11 U.S.C. § 502(f) from December 16, 1999 to December 27, 1999 $ 8, Damages arising from rejection of lease pursuant to 11 U.S.C. § 502(b)(6) (15% of rent, not to exceed 3 years of remaining term of lease). $391, *Debtor may be entitled to credit of $20, for pre-petition rent due if application of security deposit is approved by court.

* Debtor may be entitled to a credit of $42, on prepetition rent and rejection damages if application of security deposit is approved by the Court. Prepetition rent and charges (including late fees) from March 2000 to July 10, 2000 Unpaid post-petition administrative charge Estimated damages arising from potential rejection of lease pursuant to 11 USC § 502(b)(6) (One year of rent) $21, $ $174,770.16