5. RENT - INITIAL TERM
(a) Tenant shall pay to Landlord throughout the Initial Term of
this Lease as rental for the Premises the Base Rent specified
in Item 16 of the Term Sheet. In addition to the Base Rent, Tenant
shall pay monthly to Landlord on the same due date as the Base
Rent commencing on the first anniversary of the Term Commencement
Date (i) an amount equal to the product obtained by multiplying
Tenant's Percentage Share times the remainder obtained by subtracting
the Base Operating Expenses specified in Item 7 of the Term Sheet
from the Operating Expenses for the Calendar Year in questions
and (ii) an amount equal to the product obtained by multiplying
Tenant's Percentage Share times the remainder obtained by subtracting
the Base Property Taxes specified in Item 9 of the Term Sheet
from the Property Taxes for the Calendar Year in question. Such
Base Rent, and Tenant's Percentage Share of increased Operating
Expenses and Property Taxes shall herein collectively be referred
to as "Rent".
(b) The adjustments to the annual Rent amount contemplated under
paragraph (a) above shall be made in accordance with the following
procedures:
- (i) Forty-five (45) days prior to the end of each Calendar Year,
Landlord shall give Tenant notice of its reasonable estimate of
the amounts payable under paragraph (a) above for the ensuing
Calendar Year. on or before the first day of the month following
completion of the first twelve months of the Initial Term and
thereafter on or before the first day of each month during the
ensuing Calendar Year, Tenant shall pay to Landlord one-twelfth
(1/12th) of such estimated amounts; provided, however, that if
notice of Landlord's estimate of Tenant's Percentage Share of
Operating Expenses and Property Taxes is not given at least twenty
(20) days prior to the end of such Calendar Year, during the next
Calendar Year, Tenant shall continue to pay the monthly payment
based on the Tenant's Percentage Share of Operating Expenses and
Property Taxes computed for the previous Calendar Year until the
second month after such notice is given.
- (ii) Within one hundred twenty (120) days after the close of each
Calendar Year subsequent to the first twelve months of the Initial
term of this Lease, Landlord shall deliver to Tenant a statement
of the adjustments to be made pursuant to paragraph (a) above
for the preceding Calendar Year prepared by Landlord. No adjustment
shall be made with respect to the first twelve months of the Initial
Term of the Lease. Landlord shall include in this statement a
reasonably detailed description of the Operating Expenses and
Property Taxes and a description of how the Operating Expenses
were grossed up, if applicable. In the event Landlord fails to
deliver to tenant such statement within one hundred twenty (120)
days after the close of each Calendar Year, Landlord shall be
precluded from recovering any shortage from Tenant. If, on the
basis of such statement, Tenant owes an amount that is less than
the estimated payments for such Calendar Year previously made
by Tenant, Landlord shall, at Tenant's option, either pay to Tenant
the entire amount of such excess amount within thirty (30) days
from the date of delivery of the statement or credit such excess
to Tenant's next monthly payment of Rent or, if applicable, Extended
Term Rent. If, on the basis of such statement, Tenant owes an
amount that is more than the estimated payments for such Calendar
Year previously made by Tenant, Tenant shall pay the deficiency
to Landlord within thirty (30) days after delivery of the statement.
- (iii) If this Lease shall commence on a day other than the first
day of a Calendar Year or terminate a day other than the last
day of a Calendar Year, the amount of adjustment to be made pursuant
to paragraph (a) above that is applicable to the Calendar Year
in which such commencement or termination shall occur shall be
prorated on the basis of the number of calendar days within such
year as are within the Initial Term or any applicable Extended
Term of this Lease. Tenant's liability for Tenant's Proportionate
Share of Operating Expenses and Property Taxes for the last Calendar
Year falling entirely or partly within the Initial Term or any
applicable Extended Term of this Lease shall survive the expiration
of the Initial Term or any applicable Extended Term of this Lease.
Similarly, Landlord's obligation to refund to Tenant excess Operating
Expenses and Property Taxes, if any, paid by Tenant to Landlord
shall survive the expiration of the Initial Term or any applicable
Extended Term of this Lease.
- (iv) Operating Expenses shall be reduced by reimbursements, credits,
discounts, reductions or other allowances received or receivable
by Landlord for items of cost included in Operating Expenses,
except reimbursements to the Landlord by tenants under additional
rent provisions.
- (v) Landlord shall use reasonable efforts to keep Operating Expenses
at reasonable amounts, while maintaining a first class office
building.
- (vi) Any costs incurred by Landlord because of a change of policy
or practice in operating the Building or Premises that causes
an increase in Operating Expenses over Base Operating Expenses
shall be included as Operating Expenses only if the change in
policy or practice would have been made by reasonably prudent
operators of comparable office buildings in the area where the
Leased Premises are located.
- (vii) In determining the amount of any increases in Property Taxes
after the first Calendar Year of the Lease, the Base Year and
Base Property Taxes shall be as specified in Item 9 of the Term
Sheet provided that in that Base Year there is an assessment based
upon a fully completed Building, otherwise the Base Year shall
be the first year thereafter in which there is an assessment based
upon a fully completed Building.
- (viii) Landlord agrees to provide Tenant with notice of increases
greater than ten percent in the amount of Property Taxes due with
respect to the Premises. Landlord shall so notify Tenant within
thirty (30) days after its receipt of any such notice.
- (ix) If the tenant occupies more than 50% of the buildings total
rentable area, Landlord agrees to arrange with proper tax officials
an initial meeting, and, upon written request of Tenant, meetings
thereafter throughout the Initial Term, and if applicable, any
Extended Term of this Lease, for the purposes of negotiating the
first, and any subsequent, Property Tax assessment against the
Premises, and that it shall extend to Tenant a timely opportunity
to participate in all such negotiations. Landlord agrees that
it shall not negotiate any assessment, nor concur therein, unless
Tenant has participated as aforesaid, or has declined in writing
to do so.
- (x) If the Tenant occupies more than 50% of the building's total
rentable area, tenant or its designee shall have the unrestricted
right in its name, or in the name of Landlord if required, to
pursue such administrative and judicial procedures as may be necessary
to contest and appear from any assessment or valuation, and pay
under protest any billing of Property Taxes all or part of which
are borne by Tenant under the terms of this Lease. Landlord agrees
to cooperate in all reasonable ways to further any such procedure
by Tenant.
- (xi) Any increase in the amount of Property Taxes specifically
attributed and allocated to any improvements or additions made
by other tenants to the Building shall not be included in determining
Tenant's share of Property Taxes. If Tenant performs improvements
which Increase Property Taxes, then Tenant shall reimburse Landlord
for any such increase in Property Taxes.
- (xii) If Landlord receives a refund of any portion of Property
Taxes that were included in the Initial Term Rent, or any applicable
Extended Term Rent, then Landlord shall, at Tenant's option, either
pay to Tenant its pro rata share of such refund within thirty
(30) days from its receipt of same or credit Tenant's pro rata
share of such refund to Tenant's next monthly payment of Rent
or, if applicable, Extended Term Rent, less any expenses that
Landlord reasonably incurred to obtain the refund.
- (xiii) Landlord hereby agrees that the calculation of Additional
Rent under this Article 5 shall be made in a fair and reasonable
manner consistent with calculations of rent for other tenants
in the Building.
- (xiv) If Landlord increases the Building's rentable square feet
after the Building was fully assessed as a completed and occupied
unit and the Lease was signed, then the Operating Expenses and
Property Taxes attributable to the additional rentable square
feet shall be included in the Operating Expenses and Property
Taxes in an amount per rentable square foot not to exceed the
rentable square foot cost of Operating Expenses and Property Taxes
of the original Building. But Tenant's Percentage Share shall
be reduced using the same formula described in Section 1(j).
- (xv) Upon at least three (3) business days' notice to Landlord,
Tenant shall be entitled to examine Landlord's books and records
within forty-five (45) days after Tenant's receipt of Landlord's
statement under subparagraph(ii) above. Unless Tenant takes written
exception to any item in Landlord's statement within sixty (60)
days after the furnishing of the statement, such statement shall
be considered as final and accepted by Tenant. Any amount due
Landlord as shown on any such statement shall be paid by tenant
within thirty (30) days after it is furnished to Tenant. If Tenant
shall dispute in writing any specific item or items in Landlord's
statement of Operating Expenses and Property Taxes, and such dispute
is not resolved between Landlord and Tenant within sixty (60)
days after the date the statement was tendered, either party may,
during the thirty (30) days next following the expiration of the
sixty (60) days, refer such disputed item or items to an independent
certified public accountant selected by Landlord and reasonably
acceptable to Tenant, for a determination which shall be final,
conclusive and binding upon Landlord and Tenant. Tenant agrees
to pay all costs involved in such determination unless it is determined
that Landlord's original calculation of Property Taxes and/or
Operating Expenses (whichever was challenged by Tenant) was in
error by more than five (5%) percent in which event Landlord shall
pay the entire amount of the costs involved in such determination.
Pending the determination of any dispute with respect to the statement
submitted by Landlord, Tenant shall pay when due the sums shown
as due on such statement. If it shall be determined that any portion
of such sums were not properly chargeable to Tenant, then Landlord
shall promptly credit or refund the appropriate sum to Tenant.
(c) The installment of the Base Rent for the first month of the
Initial Term of the Lease shall be paid by Tenant to Landlord
on the Term Commencement Date. Rent shall be paid to Landlord
on or before the first day of each and every successive calendar
month after the first month during the Initial Term of this Lease.
In the event the Term Commencement Date is other than the first
day of a calendar month or the Term Expiration Date is other than
the last day of a calendar month, then the monthly Rent for the
first and last fractional months of the Initial Term or any applicable
Extended Term shall be prorated by multiplying the monthly Rent
by a fraction, the numerator of which is the number of days of
the partial month included in the Initial Term or any applicable
Extended Term and the denominator of which is the total number
of days in the full calendar month.
(d) Rent shall be paid to Landlord at Landlord's address for notices
hereunder or to such other person or entity or at such other place
as Landlord may from time to time designate in writing.
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