Common use of Budget; Audit Rights Clause in Contracts

Budget; Audit Rights. (a) On or before June 1 of each calendar year during the Term of this Lease, Landlord shall deliver to Tenant for Tenant’s review and comment, a written estimate in reasonable detail of the projected budget for Operating Expenses and Real Estate Taxes for each Property for the next succeeding calendar year (the “Budget”). The Budget shall show (i) the estimated amount of Operating Expenses, Tenant’s Operating Expense Share, Real Estate Taxes and Tenant’s Tax Share for each Property, for the next succeeding calendar year, (ii) the estimated amount for each major category of expense that is expected to be included in Operating Expenses for each Property during the next succeeding calendar year, including on a Property by Property basis, any items that constitute capital expenditures in accordance with this Lease and the amount thereof to be amortized during such calendar year, (iii) the estimated rates to be charged by Landlord for Above Standard Services for each Property for which Tenant has requested the same during the next succeeding calendar year and (iv) the actual amounts for all such items for the prior calendar year. It is understood and agreed by Landlord and Tenant that the Operating Expenses and Real Estate Taxes in the Budget shall be estimated on a reasonable good faith basis taking into consideration, among other things, the actual Operating Expenses and Real Estate Taxes for the then current calendar year, a good faith estimate of the rate of cost increases during the then current calendar year, the actual known prospective increases to each item in the Budget and a good faith estimate for contingencies for the next succeeding calendar year. Tenant may disapprove a portion of a proposed Budget only if such portion of the Budget fails to reflect the reasonable and necessary Operating Expenses and Real Estate Taxes to operate, repair and maintain the Properties in conformity with the requirements of this Lease and in accordance with the accepted principles of sound management practices as applied to the operation, repair and maintenance of Comparable Buildings; provided that for any Property when Tenant’s Occupancy Percentage is greater than thirty-five percent (35%), (i) Tenant may disapprove Landlord’s decision to replace (and not repair or maintain) any major equipment or system unless Landlord establishes, by certification of a qualified engineer for whom Tenant has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable and (ii) Tenant may require Landlord to replace (and not repair or maintain) any major equipment or system if Tenant establishes, by certification of a qualified engineer for whom Landlord has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable. If Tenant disapproves a portion of a proposed Budget, Tenant shall so notify Landlord in writing, which notification shall state, in reasonable detail, the item or items of the proposed Budget disapproved by Tenant and the basis for such disapproval. Landlord and Tenant shall negotiate in good faith to resolve any differences concerning any proposed Budget. Landlord shall deliver to Tenant the proposed final Budget for the next succeeding calendar year and the calculation of Tenant’s Occupancy Percentage thereof on or before July 15 of each calendar year; provided that if Tenant fails to approve a proposed Budget on or before July 1 of a preceding calendar year, and if the parties have been unsuccessful in their efforts to resolve any disagreements, either Landlord or Tenant may at any time thereafter submit the Budget for the next calendar year (or any portion thereof) to dispute resolution in accordance with the provisions of Article XII of this Lease, and, in such event, Landlord shall deliver the final Budget to Tenant within thirty (30) days following the completion of the dispute resolution process. Notwithstanding the foregoing, (i) if the dispute resolution process regarding the Budget is not completed by January 1 of the calendar year to which such proposed Budget relates, then (A) the costs set forth on the proposed Budget shall be used for all items not the subject of a dispute, and (B) to the extent applicable, the prior year’s budgeted costs shall be used for all items of a proposed Budget that are the subject of a dispute and (ii) in the event that the actual Operating Expenses or Real Estate Taxes incurred by Landlord during a calendar year exceed Landlord’s estimated Operating Expenses and Real Estate Taxes (including contingencies) for such year as set forth on an approved Budget, Landlord may prepare and submit a revised Budget to Tenant for Tenant’s review and approval (but not more frequently than once during any calendar year). Upon completion of the dispute resolution process, the new year’s Budget shall be correspondingly adjusted and Tenant’s monthly payment of Tenant’s Operating Expense Share shall likewise be adjusted. If Landlord determines during the course of a calendar year that a Building is in need of capital repairs, replacements or improvements that are not included in the approved Budget for such Building for such calendar year, Landlord shall so advise Tenant, and Tenant shall review and approve or disapprove the proposed capital repair, replacement or improvement in conformity with the procedures outlined in this Section 2.4(a) as if such repair, replacement or improvement were originally included by Landlord as part of the budget process described above. (b) Tenant, at Tenant’s sole cost and expense, shall have the right, to be exercised by notice given to Landlord within three (3) years after receipt of an Operating Expense Statement, Tax Statement or other invoice, to audit and/or inspect that portion of Landlord’s books and records pertaining to such Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, for such calendar year; provided such audit and/or inspection commences within ninety (90) days after Tenant’s notice to Landlord and thereafter proceeds reasonably to conclusion, and further provided that Tenant may audit any single year only once unless Landlord has subsequently made revisions to any Operating Expense Statement, Tax Statement or other components of Additional Rent that impact Tenant’s Operating Expense Share, Tenant’s Tax Share or other Additional Rent payment. Tenant may conduct such audit and/or inspection of Landlord’s books with Tenant’s own employees, or through an accountant or other agent selected by Tenant, or both in combination. Tenant shall require any accountant or agent selected by Tenant to conduct or assist in such audit and/or inspection to execute and deliver to Landlord a confidentiality agreement substantially in the form attached hereto as Exhibit C. Landlord agrees to cooperate in good faith with Tenant in the conduct of any such audit and/or inspection, and to make Landlord’s books and records of and relating to Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, available to Tenant or Tenant’s agents at one (1) single location. If Tenant’s audit and/or inspection shows that Landlord’s calculation of Tenant’s Operating Expense Share, Tenant’s Tax Share or other components of Additional Rent for the audited/inspected calendar year or years (which shall in no event be prior to the two (2) calendar years immediately preceding the most recently completed calendar year) was overstated by more than four percent (4%) with respect to any Property, then Landlord shall pay, within thirty (30) days after Tenant’s request, Tenant’s actual reasonable audit/inspection out-of-pocket fees applicable to the audit/inspection of said calendar year statements for such Property. Upon completion of the audit and/or inspection, if the calculation of Tenant’s Operating Expense Share, Tenant’s Tax Share or other components of Additional Rent indicates that Tenant overpaid Rent for any audited calendar year, Landlord shall pay Tenant (in the form of a credit against Rent next due or, upon expiration of this Lease, in the form of Landlord’s check within thirty (30) days after the completion of such audit and/or inspection) an amount equal to such overpayment. In the event of any such audit or inspection, Landlord shall cause the books and records to be made available during such normal business hours as are prescribed by Landlord at Landlord’s headquarters or main office, which shall be located in the continental United States. In any case, should Landlord disagree with the results of Tenant’s audit, Landlord and Tenant shall refer the matter to a mutually acceptable independent certified public accountant, who shall work in good faith with Landlord and Tenant to resolve the discrepancy. The fees and costs of such independent accountant to which such dispute is referred shall be borne by the unsuccessful party and shall be shared pro rata to the extent each party is unsuccessful as determined by such independent certified public accountant, whose decision shall be final and binding.

Budget; Audit Rights. (a) On or before June 1 of each calendar year during the Term of this Lease, Landlord shall deliver to Tenant for Tenant’s 's review and comment, a written estimate in reasonable detail of the projected budget for Operating Expenses and Real Estate Taxes for each Property Project for the next succeeding calendar year (the “"Budget”"). The Budget shall show (i) the estimated amount of Operating Expenses, Tenant’s 's Operating Expense Share, Real Estate Taxes and Tenant’s 's Tax Share for each PropertyProject, for the next succeeding calendar year, (ii) the estimated amount for each major category of expense that is expected to be included in Operating Expenses for each Property Project during the next succeeding calendar year, including including, without limitation, on a Property Project by Property Project basis, any items that constitute capital expenditures in accordance with this Lease and the amount thereof to be amortized during such calendar year, (iii) the estimated rates to be charged by Landlord for Above Standard Services for each Property Project for which Tenant has requested the same during the next succeeding calendar year and (iv) the actual amounts for all such items for the prior calendar year. It is understood and agreed by Landlord and Tenant that the Operating Expenses and Real Estate Taxes in the Budget shall be estimated on a reasonable good faith basis taking into consideration, among other things, the actual Operating Expenses and Real Estate Taxes for the then current calendar year, a good faith estimate of the rate of cost increases during the then current calendar year, the actual known prospective increases to each item in the Budget and a good faith estimate for contingencies for the next succeeding calendar year. Tenant may disapprove a portion of a proposed Budget only if such portion of the Budget fails to reflect the reasonable and necessary Operating Expenses and Real Estate Taxes to operate, repair and maintain the Properties Projects in conformity with the requirements of this Lease and in accordance with the accepted principles of sound management practices as applied to the operation, repair and maintenance of Comparable Buildings; provided that for any Property Project when Tenant’s 's Occupancy Percentage is greater than thirty-five percent (35%), (i) Tenant may disapprove Landlord’s 's decision to replace (and not repair or maintain) any major equipment or system unless Landlord establishes, by certification of a qualified engineer for whom Tenant has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable and (ii) Tenant may require Landlord to replace (and not repair or maintain) any major equipment or system if Tenant establishes, by certification of a qualified engineer for whom Landlord has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable. If Tenant disapproves a portion of a proposed Budget, Tenant shall so notify Landlord in writing, which notification shall state, in reasonable detail, the item or items of the proposed Budget disapproved by Tenant and the basis for such disapproval. Landlord and Tenant shall negotiate in good faith to resolve any differences concerning any proposed Budget. Landlord shall deliver to Tenant the proposed final Budget for the next succeeding calendar year and the calculation of Tenant’s 's Occupancy Percentage thereof on or before July 15 of each calendar year; provided that if Tenant fails to approve a proposed Budget on or before July 1 of a preceding calendar year, and if the parties have been unsuccessful in their efforts to resolve any disagreements, either Landlord or Tenant may at any time thereafter submit the Budget for the next calendar year (or any portion thereof) to dispute resolution in accordance with the provisions of Article XII of this Lease, and, in such event, Landlord shall deliver the final Budget to Tenant within thirty (30) days following the completion of the dispute resolution process. Notwithstanding the foregoing, (i) if the dispute resolution process regarding the Budget is not completed by January 1 of the calendar year to which such proposed Budget relates, then (A) the costs set forth on the proposed Budget shall be used for all items not the subject of a dispute, and (B) to the extent applicable, the prior year’s 's budgeted costs shall be used for all items of a proposed Budget that are the subject of a dispute and (ii) in the event that the actual Operating Expenses or Real Estate Taxes incurred by Landlord during a calendar year exceed Landlord’s 's estimated Operating Expenses and Real Estate Taxes (including contingencies) for such year as set forth on an approved Budget, Landlord may prepare and submit a revised Budget to Tenant for Tenant’s 's review and approval (but not more frequently than once during any calendar year). Upon completion of the dispute resolution process, the new year’s 's Budget shall be correspondingly adjusted and Tenant’s 's monthly payment of Tenant’s 's Operating Expense Share shall likewise be adjusted. If Landlord determines during the course of a calendar year that a Building is in need of capital repairs, replacements or improvements that are not included in the approved Budget for such Building for such calendar year, Landlord shall so advise Tenant, and Tenant shall review and approve or disapprove the proposed capital repair, replacement or improvement in conformity with the procedures outlined in this Section 2.4(a) as if such repair, replacement or improvement were originally included by Landlord as part of the budget process described above. (b) Tenant, at Tenant’s 's sole cost and expense, shall have the right, to be exercised by notice given to Landlord within three (3) years after receipt of an Operating Expense Statement, Tax Statement or other invoice, to audit and/or inspect that portion of Landlord’s 's books and records pertaining to such Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, for such calendar year; provided such audit and/or inspection commences within ninety (90) days after Tenant’s 's notice to Landlord and thereafter proceeds reasonably to conclusion, and further provided that Tenant may audit any single year only once unless Landlord has subsequently made revisions to any Operating Expense Statement, Tax Statement or other components of Additional Rent that impact Tenant’s 's Operating Expense Share, Tenant’s 's Tax Share or other Additional Rent payment. Tenant may conduct such audit and/or inspection of Landlord’s 's books with Tenant’s 's own employees, or through an accountant or other agent selected by Tenant, or both in combination. Tenant shall require any accountant or agent selected by Tenant to conduct or assist in such audit and/or inspection to execute and deliver to Landlord a confidentiality agreement substantially in the form attached hereto as Exhibit C. Landlord agrees to cooperate in good faith with Tenant in the conduct of any such audit and/or inspection, and to make Landlord’s 's books and records of and relating to Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, available to Tenant or Tenant’s 's agents at one (1) single location. If Tenant’s 's audit and/or inspection shows that Landlord’s 's calculation of Tenant’s 's Operating Expense Share, Tenant’s 's Tax Share or other components of Additional Rent for the audited/inspected calendar year or years (which shall in no event be prior to the two (2) calendar years immediately preceding the most recently completed calendar year) was overstated by more than four percent (4%) with respect to any PropertyProject, then Landlord shall pay, within thirty (30) days after Tenant’s 's request, Tenant’s 's actual reasonable audit/inspection out-of-pocket fees applicable to the audit/inspection of said calendar year statements for such PropertyProject. Upon completion of the audit and/or inspection, if the calculation of Tenant’s 's Operating Expense Share, Tenant’s 's Tax Share or other components of Additional Rent indicates that Tenant overpaid Rent for any audited calendar year, Landlord shall pay Tenant (in the form of a credit against Rent next due or, upon expiration of this Lease, in the form of Landlord’s 's check within thirty (30) days after the completion of such audit and/or inspection) an amount equal to such overpayment. In the event of any such audit or inspection, Landlord shall cause the books and records to be made available during such normal business hours as are prescribed by Landlord at Landlord’s 's headquarters or main office, which shall be located in the continental United States. In any case, should Landlord disagree with the results of Tenant’s 's audit, Landlord and Tenant shall refer the matter to a mutually acceptable independent certified public accountant, who shall work in good faith with Landlord and Tenant to resolve the discrepancy. The fees and costs of such independent accountant to which such dispute is referred shall be borne by the unsuccessful party and shall be shared pro rata to the extent each party is unsuccessful as determined by such independent certified public accountant, whose decision shall be final and binding.

Budget; Audit Rights. (a) On or before June 1 of each calendar year during the Term of this Lease, Landlord shall deliver to Tenant for Tenant’s review and comment, a written estimate in reasonable detail of the projected budget for Operating Expenses and Real Estate Taxes for each Property for the next succeeding calendar year (the “Budget”). The Budget shall show (i) the estimated amount of Operating Expenses, Tenant’s Operating Expense Share, Real Estate Taxes and Tenant’s Tax Share for each Property, for the next succeeding calendar year, (ii) the estimated amount for each major category of expense that is expected to be included in Operating Expenses for each Property during the next succeeding calendar year, including on a Property by Property basis, any items that constitute capital expenditures in accordance with this Lease and the amount thereof to be amortized during such calendar year, (iii) the estimated rates to be charged by Landlord for Above Standard Services for each Property for which Tenant has requested the ________________________________________________________________________________________________________________________ same during the next succeeding calendar year and (iv) the actual amounts for all such items for the prior calendar year. It is understood and agreed by Landlord and Tenant that the Operating Expenses and Real Estate Taxes in the Budget shall be estimated on a reasonable good faith basis taking into consideration, among other things, the actual Operating Expenses and Real Estate Taxes for the then current calendar year, a good faith estimate of the rate of cost increases during the then current calendar year, the actual known prospective increases to each item in the Budget and a good faith estimate for contingencies for the next succeeding calendar year. Tenant may disapprove a portion of a proposed Budget only if such portion of the Budget fails to reflect the reasonable and necessary Operating Expenses and Real Estate Taxes to operate, repair and maintain the Properties in conformity with the requirements of this Lease and in accordance with the accepted principles of sound management practices as applied to the operation, repair and maintenance of Comparable Buildings; provided that for any Property when Tenant’s Occupancy Percentage is greater than thirty-five percent (35%), (i) Tenant may disapprove Landlord’s decision to replace (and not repair or maintain) any major equipment or system unless Landlord establishes, by certification of a qualified engineer for whom Tenant has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable and (ii) Tenant may require Landlord to replace (and not repair or maintain) any major equipment or system if Tenant establishes, by certification of a qualified engineer for whom Landlord has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable. If Tenant disapproves a portion of a proposed Budget, Tenant shall so notify Landlord in writing, which notification shall state, in reasonable detail, the item or items of the proposed Budget disapproved by Tenant and the basis for such disapproval. Landlord and Tenant shall negotiate in good faith to resolve any differences concerning any proposed Budget. Landlord shall deliver to Tenant the proposed final Budget for the next succeeding calendar year and the calculation of Tenant’s Occupancy Percentage thereof on or before July 15 of each calendar year; provided that if Tenant fails to approve a proposed Budget on or before July 1 of a preceding calendar year, and if the parties have been unsuccessful in their efforts to resolve any disagreements, either Landlord or Tenant may at any time thereafter submit the Budget for the next calendar year (or any portion thereof) to dispute resolution in accordance with the provisions of Article XII of this Lease, and, in such event, Landlord shall deliver the final Budget to Tenant within thirty (30) days following the completion of the dispute resolution process. Notwithstanding the foregoing, (i) if the dispute resolution process regarding the Budget is not completed by January 1 of the calendar year to which such proposed Budget relates, then (A) the costs set forth on the proposed Budget shall be used for all items not the subject of a dispute, and (B) to the extent applicable, the prior year’s budgeted costs shall be used for all items of a proposed Budget that are the subject of a dispute and (ii) in the event that the actual Operating Expenses or Real Estate Taxes incurred by Landlord during a calendar year exceed Landlord’s estimated Operating Expenses and Real Estate Taxes (including contingencies) for such year as set forth on an approved Budget, Landlord may prepare and submit a revised Budget to Tenant for Tenant’s review and approval (but not more frequently than once during any calendar year). Upon completion of the dispute resolution process, the new year’s Budget shall be correspondingly adjusted and Tenant’s monthly payment of Tenant’s Operating Expense Share shall likewise be adjusted. If Landlord determines during the course of a calendar year that a Building is in need of capital repairs, replacements or improvements that are not included in the approved Budget for such Building ________________________________________________________________________________________________________________________ for such calendar year, Landlord shall so advise Tenant, and Tenant shall review and approve or disapprove the proposed capital repair, replacement or improvement in conformity with the procedures outlined in this Section 2.4(a) as if such repair, replacement or improvement were originally included by Landlord as part of the budget process described above. (b) Tenant, at Tenant’s sole cost and expense, shall have the right, to be exercised by notice given to Landlord within three (3) years after receipt of an Operating Expense Statement, Tax Statement or other invoice, to audit and/or inspect that portion of Landlord’s books and records pertaining to such Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, for such calendar year; provided such audit and/or inspection commences within ninety (90) days after Tenant’s notice to Landlord and thereafter proceeds reasonably to conclusion, and further provided that Tenant may audit any single year only once unless Landlord has subsequently made revisions to any Operating Expense Statement, Tax Statement or other components of Additional Rent that impact Tenant’s Operating Expense Share, Tenant’s Tax Share or other Additional Rent payment. Tenant may conduct such audit and/or inspection of Landlord’s books with Tenant’s own employees, or through an accountant or other agent selected by Tenant, or both in combination. Tenant shall require any accountant or agent selected by Tenant to conduct or assist in such audit and/or inspection to execute and deliver to Landlord a confidentiality agreement substantially in the form attached hereto as Exhibit C. Landlord agrees to cooperate in good faith with Tenant in the conduct of any such audit and/or inspection, and to make Landlord’s books and records of and relating to Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, available to Tenant or Tenant’s agents at one (1) single location. If Tenant’s audit and/or inspection shows that Landlord’s calculation of Tenant’s Operating Expense Share, Tenant’s Tax Share or other components of Additional Rent for the audited/inspected calendar year or years (which shall in no event be prior to the two (2) calendar years immediately preceding the most recently completed calendar year) was overstated by more than four percent (4%) with respect to any Property, then Landlord shall pay, within thirty (30) days after Tenant’s request, Tenant’s actual reasonable audit/inspection out-of-pocket fees applicable to the audit/inspection of said calendar year statements for such Property. Upon completion of the audit and/or inspection, if the calculation of Tenant’s Operating Expense Share, Tenant’s Tax Share or other components of Additional Rent indicates that Tenant overpaid Rent for any audited calendar year, Landlord shall pay Tenant (in the form of a credit against Rent next due or, upon expiration of this Lease, in the form of Landlord’s check within thirty (30) days after the completion of such audit and/or inspection) an amount equal to such overpayment. In the event of any such audit or inspection, Landlord shall cause the books and records to be made available during such normal business hours as are prescribed by Landlord at Landlord’s headquarters or main office, which shall be located in the continental United States. In any case, should Landlord disagree with the results of Tenant’s audit, Landlord and Tenant shall refer the matter to a mutually acceptable independent certified public accountant, who shall work in good faith with Landlord and Tenant to resolve the discrepancy. The fees and costs of such independent accountant to which such dispute is referred shall be borne by the unsuccessful party and shall be shared pro rata to the extent each party is unsuccessful as determined by such independent certified public accountant, whose decision shall be final and binding.. ________________________________________________________________________________________________________________________

Budget; Audit Rights. (a) On or before June 1 of each calendar year during the Term of this Lease, Landlord shall deliver to Tenant for Tenant’s review and comment, a written estimate in reasonable detail of the projected budget for Operating Expenses and Real Estate Taxes for each the Property for the next succeeding calendar year (the “Budget”). The Budget shall show (i) the estimated amount of Operating Expenses, Tenant’s Operating Expense Share, Real Estate Taxes and Tenant’s Tax Share for each the Property, for the next succeeding calendar year, (ii) the estimated amount for each major category of expense that is expected to be included in Operating Expenses for each Property during the next succeeding calendar year, including on a Property by Property basis, any items that constitute capital expenditures in accordance with this Lease and the amount thereof to be amortized during such calendar year, (iii) the estimated rates to be charged by Landlord for Above Standard Services for each the Property for which Tenant has requested the same during the next succeeding calendar year and (iv) the actual amounts for all such items for the prior calendar year. It is understood and agreed by Landlord and Tenant that the Operating Expenses and Real Estate Taxes in the Budget shall be estimated on a reasonable good faith basis taking into consideration, among other things, the actual Operating Expenses and Real Estate Taxes for the then current calendar year, a good faith estimate of the rate of cost increases during the then current calendar year, the actual known prospective increases to each item in the Budget and a good faith estimate for contingencies for the next succeeding calendar year. Tenant may disapprove a portion of a proposed Budget only if such portion of the Budget fails to reflect the reasonable and necessary Operating Expenses and Real Estate Taxes to operate, repair and maintain the Properties Property in conformity with the requirements of this Lease and in accordance with the accepted principles of sound management practices as applied to the operation, repair and maintenance of Comparable Buildings; provided that for any Property when provided, however, if Tenant’s Occupancy Percentage of the Property is greater than thirty-five percent (35%), (i) Tenant may disapprove Landlord’s decision to replace (and not repair or maintain) any major equipment or system unless Landlord establishes, by certification of a qualified engineer for as to whom Tenant has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable and (ii) Tenant may require Landlord to replace (and not repair or maintain) any major equipment or system if Tenant establishes, by certification of a qualified engineer for as to whom Landlord has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable. If Tenant disapproves a portion of a proposed Budget, Tenant shall so notify Landlord in writing, which notification shall state, in reasonable detail, the item or items of the proposed Budget disapproved by Tenant and the basis for such disapproval. Landlord and Tenant shall negotiate in good faith to resolve any differences concerning any proposed Budget. Landlord shall deliver to Tenant the proposed final Budget for the next succeeding calendar year and the calculation of Tenant’s Occupancy Percentage thereof on or before July 15 of each calendar year; provided that if Tenant fails to approve a proposed Budget on or before July 1 of a preceding calendar year, and if the parties have been unsuccessful in their efforts to resolve any disagreements, either Landlord or Tenant may at any time thereafter submit the Budget for the next calendar year (or any portion thereof) to dispute resolution in accordance with the provisions of Article XII of this Lease, and, in such event, Landlord shall deliver the final Budget to Tenant within thirty (30) days following the completion of the dispute resolution process. Notwithstanding the foregoing, (i) if the dispute resolution process regarding the Budget is not completed by January 1 of the calendar year to which such proposed Budget relates, then (A) the costs set forth on the proposed Budget shall be used for all items not the subject of a dispute, and (B) to the extent applicable, the prior year’s budgeted costs shall be used for all items of a proposed Budget that are the subject of a dispute and (ii) in the event that the actual Operating Expenses or Real Estate Taxes incurred by Landlord during a calendar year exceed Landlord’s estimated Operating Expenses and Real Estate Taxes (including contingencies) for such year as set forth on an approved Budget, Landlord may prepare and submit a revised Budget to Tenant for Tenant’s review and approval (but not more frequently than once during any calendar year). Upon completion of the dispute resolution process, the new year’s Budget shall be correspondingly adjusted and Tenant’s monthly payment of Tenant’s Operating Expense Share shall likewise be adjusted. If Landlord determines during the course of a calendar year that a Building is in need of capital repairs, replacements or improvements that are not included in the approved Budget for such Building for such calendar year, Landlord shall so advise Tenant, and Tenant shall review and approve or disapprove the proposed capital repair, replacement or improvement in conformity with the procedures outlined in this Section 2.4(a) as if such repair, replacement or improvement were originally included by Landlord as part of the budget process described above.. BBD-1 Separate Lease Form (b) Tenant, at Tenant’s sole cost and expense, shall have the right, to be exercised by notice given to Landlord within three (3) years after receipt of an Operating Expense Statement, Tax Statement or other invoice, to audit and/or inspect that portion of Landlord’s books and records pertaining to such Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, for such calendar year; provided such audit and/or inspection commences within ninety (90) days after Tenant’s notice to Landlord and thereafter proceeds reasonably to conclusion, and further provided that Tenant may audit any single year only once unless Landlord has subsequently made revisions to any Operating Expense Statement, Tax Statement or other components of Additional Rent that impact Tenant’s Operating Expense Share, Tenant’s Tax Share or other Additional Rent payment. Tenant may conduct such audit and/or inspection of Landlord’s books with Tenant’s own employees, or through an accountant or other agent selected by Tenant, or both in combination. Tenant shall require any accountant or agent selected by Tenant to conduct or assist in such audit and/or inspection to execute and deliver to Landlord a confidentiality agreement substantially in the form attached hereto as Exhibit C. B. Landlord agrees to cooperate in good faith with Tenant in the conduct of any such audit and/or inspection, and to make Landlord’s books and records of and relating to Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, available to Tenant or Tenant’s agents at one (1) single location. If Tenant’s audit and/or inspection shows that Landlord’s calculation of Tenant’s Operating Expense Share, Tenant’s Tax Share or other components of Additional Rent for the audited/inspected calendar year or years (which shall in no event be prior to the two (2) calendar years immediately preceding the most recently completed calendar year) was overstated by more than four percent (4%) with respect to any Property), then Landlord shall pay, within thirty (30) days after Tenant’s request, Tenant’s actual reasonable audit/inspection out-of-pocket fees applicable to the audit/inspection of said calendar year statements for such Propertystatements. Upon completion of the audit and/or inspection, if the calculation of Tenant’s Operating Expense Share, Tenant’s Tax Share or other components of Additional Rent indicates that Tenant overpaid Rent for any audited calendar year, Landlord shall pay Tenant (in the form of a credit against Rent next due or, upon expiration of this Lease, in the form of Landlord’s check within thirty (30) days after the completion of such audit and/or inspection) an amount equal to such overpayment. In the event of any such audit or inspection, Landlord shall cause the books and records to be made available during such normal business hours as are prescribed by Landlord at Landlord’s headquarters or main office, which shall be located in the continental United States. In any case, should Landlord disagree with the results of Tenant’s audit, Landlord and Tenant shall refer the matter to a mutually acceptable independent certified public accountant, who shall work in good faith with Landlord and Tenant to resolve the discrepancy. The fees and costs of such independent accountant to which such dispute is referred shall be borne by the unsuccessful party and shall be shared pro rata to the extent each party is unsuccessful as determined by such independent certified public accountant, whose decision shall be final and binding.. BBD-1 Separate Lease Form

Budget; Audit Rights. (a) On or before June 1 of each calendar year during the Term of this Lease, Landlord shall deliver to Tenant for Tenant’s 's review and comment, a written estimate in reasonable detail of the projected budget for Operating Expenses and Real Estate Taxes for each Property the Project for the next succeeding calendar year (the “"Budget”"). The Budget shall show (i) the estimated amount of Operating Expenses, Tenant’s 's Operating Expense Share, Real Estate Taxes and Tenant’s 's Tax Share for each Propertythe Project, for the next succeeding calendar year, (ii) the estimated amount for each major category of expense that is expected to be included in Operating Expenses for each Property during the next succeeding calendar year, including on a Property by Property basisincluding, without limitation, any items that constitute capital expenditures in accordance with this Lease and the amount thereof to be amortized during such calendar year, (iii) the estimated rates to be charged by Landlord for Above Standard Services for each Property for which Tenant has requested the same Project during the next succeeding calendar year and (iv) the actual amounts for all such items for the prior calendar year. It is understood and agreed by Landlord and Tenant that the Operating Expenses and Real Estate Taxes in the Budget shall be estimated on a reasonable good faith basis taking into consideration, among other things, the actual Operating Expenses and Real Estate Taxes for the then current calendar year, a good faith estimate of the rate of cost increases during the then current calendar year, the actual known prospective increases to each item in the Budget and a good faith estimate for contingencies for the next succeeding calendar year. Tenant may disapprove a portion of a proposed Budget only if such portion of the Budget fails to reflect the reasonable and necessary Operating Expenses and Real Estate Taxes to operate, repair and maintain the Properties Project in conformity with the requirements of this Lease and in accordance with the accepted principles of sound management practices as applied to the operation, repair and maintenance of Comparable Buildings; provided that for any Property when provided, however, if Tenant’s 's Occupancy Percentage of the Project is greater than thirty-five percent (35%), (i) Tenant may disapprove Landlord’s 's decision to replace (and not repair or maintain) any major equipment or system unless Landlord establishes, by certification of a qualified engineer for as to whom Tenant has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable and (ii) Tenant may require Landlord to replace (and not repair or maintain) any major equipment or system if Tenant establishes, by certification of a qualified engineer for as to whom Landlord has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable. If Tenant disapproves a portion of a proposed Budget, Tenant shall so notify Landlord in writing, which notification shall state, in reasonable detail, the item or items of the proposed Budget disapproved by Tenant and the basis for such disapproval. Landlord and Tenant shall negotiate in good faith to resolve any differences concerning any proposed Budget. Landlord shall deliver to Tenant the proposed final Budget for the next succeeding calendar year and the calculation of Tenant’s 's Occupancy Percentage thereof on or before July 15 of each calendar year; provided that if Tenant fails to approve a proposed Budget on or before July 1 of a preceding calendar year, and if the parties have been unsuccessful in their efforts to resolve any disagreements, either Landlord or Tenant may at any time thereafter submit the Budget for the next calendar year (or any portion thereof) to dispute resolution in accordance with the provisions of Article XII of this Lease, and, in such event, Landlord shall deliver the final Budget to Tenant within thirty (30) days following the completion of the dispute resolution process. Notwithstanding the foregoing, (i) if the dispute resolution process regarding the Budget is not completed by January 1 of the calendar year to which such proposed Budget relates, then (A) the costs set forth on the proposed Budget shall be used for all items not the subject of a dispute, and (B) to the extent applicable, the prior year’s 's budgeted costs shall be used for all items of a proposed Budget that are the subject of a dispute and (ii) in the event that the actual Operating Expenses or Real Estate Taxes incurred by Landlord during a calendar year exceed Landlord’s 's estimated Operating Expenses and Real Estate Taxes (including contingencies) for such year as set forth on an approved Budget, Landlord may prepare and submit a revised Budget to Tenant for Tenant’s 's review and approval (but not more frequently than once during any calendar year). Upon completion of the dispute resolution process, the new year’s 's Budget shall be correspondingly adjusted and Tenant’s 's monthly payment of Tenant’s 's Operating Expense Share shall likewise be adjusted. If Landlord determines during the course of a calendar year that a Building is in need of capital repairs, replacements or improvements that are not included in the approved Budget for such Building for such calendar year, Landlord shall so advise Tenant, and Tenant shall review and approve or disapprove the proposed capital repair, replacement or improvement in conformity with the procedures outlined in this Section 2.4(a) as if such repair, replacement or improvement were originally included by Landlord as part of the budget process described above. (b) Tenant, at Tenant’s 's sole cost and expense, shall have the right, to be exercised by notice given to Landlord within three (3) years after receipt of an Operating Expense Statement, Tax Statement or other invoice, to audit and/or inspect that portion of Landlord’s 's books and records pertaining to such Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, for such calendar year; provided such audit and/or inspection commences within ninety (90) days after Tenant’s 's notice to Landlord and thereafter proceeds reasonably to conclusion, and further provided that Tenant may audit any single year only once unless Landlord has subsequently made revisions to any Operating Expense Statement, Tax Statement or other components of Additional Rent that impact Tenant’s 's Operating Expense Share, Tenant’s 's Tax Share or other Additional Rent payment. Tenant may conduct such audit and/or inspection of Landlord’s 's books with Tenant’s 's own employees, or through an accountant or other agent selected by Tenant, or both in combination. Tenant shall require any accountant or agent selected by Tenant to conduct or assist in such audit and/or inspection to execute and deliver to Landlord a confidentiality agreement substantially in the form attached hereto as Exhibit C. Landlord agrees to cooperate in good faith with Tenant in the conduct of any such audit and/or inspection, and to make Landlord’s 's books and records of and relating to Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, available to Tenant or Tenant’s 's agents at one (1) single location. If Tenant’s 's audit and/or inspection shows that Landlord’s 's calculation of Tenant’s 's Operating Expense Share, Tenant’s 's Tax Share or other components of Additional Rent for the audited/inspected calendar year or years (which shall in no event be prior to the two (2) calendar years immediately preceding the most recently completed calendar year) was overstated by more than four percent (4%) with respect to any Property), then Landlord shall pay, within thirty (30) days after Tenant’s 's request, Tenant’s 's actual reasonable audit/inspection out-of-pocket fees applicable to the audit/inspection of said calendar year statements for such Propertystatements. Upon completion of the audit and/or inspection, if the calculation of Tenant’s 's Operating Expense Share, Tenant’s 's Tax Share or other components of Additional Rent indicates that Tenant overpaid Rent for any audited calendar year, Landlord shall pay Tenant (in the form of a credit against Rent next due or, upon expiration of this Lease, in the form of Landlord’s 's check within thirty (30) days after the completion of such audit and/or inspection) an amount equal to such overpayment. In the event of any such audit or inspection, Landlord shall cause the books and records to be made available during such normal business hours as are prescribed by Landlord at Landlord’s 's headquarters or main office, which shall be located in the continental United States. In any case, should Landlord disagree with the results of Tenant’s 's audit, Landlord and Tenant shall refer the matter to a mutually acceptable independent certified public accountant, who shall work in good faith with Landlord and Tenant to resolve the discrepancy. The fees and costs of such independent accountant to which such dispute is referred shall be borne by the unsuccessful party and shall be shared pro rata to the extent each party is unsuccessful as determined by such independent certified public accountant, whose decision shall be final and binding.

Budget; Audit Rights. (a) On or before June 1 of each calendar year during the Term of this Lease, Landlord shall deliver to Tenant for Tenant’s review and comment, a written estimate in reasonable detail of the projected budget for Operating Expenses and Real Estate Taxes for each the Property for the next succeeding calendar year (the “Budget”). The Budget shall show (i) the estimated amount of Operating Expenses, Tenant’s Operating Expense Share, Real Estate Taxes and Tenant’s Tax Share for each the Property, for the next succeeding calendar year, (ii) the estimated amount for each major category of expense that is expected to be included in Operating Expenses for each Property during the next succeeding calendar year, including on a Property by Property basis, any items that constitute capital expenditures in accordance with this Lease and the amount thereof to be amortized during such calendar year, (iii) the estimated rates to be charged by Landlord for Above Standard Services for each the Property for which Tenant has requested the same during the next succeeding calendar year and (iv) the actual amounts for all such items for the prior calendar year. It is understood and agreed by Landlord and Tenant that the Operating Expenses and Real Estate Taxes in the Budget shall be estimated on a reasonable good faith basis taking into consideration, among other things, the actual Operating Expenses and Real Estate Taxes for the then current calendar year, a good faith estimate of the rate of cost increases during the then current calendar year, the actual known prospective increases to each item in the Budget and a good faith estimate for contingencies for the next succeeding calendar year. Tenant may disapprove a portion of a proposed Budget only if such portion of the Budget fails to reflect the reasonable and necessary Operating Expenses and Real Estate Taxes to operate, repair and maintain the Properties Property in conformity with the requirements of this Lease and in accordance with the accepted principles of sound management practices as applied to the operation, repair and maintenance of Comparable Buildings; provided that for any Property when provided, however, if Tenant’s Occupancy Percentage of the Property is greater than thirty-five percent (35%), (i) Tenant may disapprove Landlord’s decision to replace (and not repair or maintain) any major equipment or system unless Landlord establishes, by certification of a qualified engineer for as to whom Tenant has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable and (ii) Tenant may require Landlord to replace (and not repair or maintain) any major equipment or system if Tenant establishes, by certification of a qualified engineer for as to whom Landlord has no reasonable objection, that the equipment or system in question is beyond its useful life and that continued repair or maintenance (and not replacement) is not commercially practicable. If Tenant disapproves a portion of a proposed Budget, Tenant shall so notify Landlord in writing, which notification shall state, in reasonable detail, the item or items of the proposed Budget disapproved by Tenant and the basis for such disapproval. Landlord and Tenant shall negotiate in good faith to resolve any differences concerning any proposed Budget. Landlord shall deliver to Tenant the proposed final Budget for the next succeeding calendar year and the calculation of Tenant’s Occupancy Percentage thereof on or before July 15 of each calendar year; provided that if Tenant fails to approve a proposed Budget on or before July 1 of a preceding calendar year, and if the parties have been unsuccessful in their efforts to resolve any disagreements, either Landlord or Tenant may at any time thereafter submit the Budget for the next calendar year (or any portion thereof) to dispute resolution in accordance with the provisions of Article XII of this Lease, and, in such event, Landlord shall deliver the final Budget to Tenant within thirty (30) days following the completion of the dispute resolution process. Notwithstanding the foregoing, (i) if the dispute resolution process regarding the Budget is not completed by January 1 of the calendar year to which such proposed Budget relates, then (A) the costs set forth on the proposed Budget shall be used for all items not the subject of a dispute, and (B) to the extent applicable, the prior year’s budgeted costs shall be used for all items of a proposed Budget that are the subject of a dispute and (ii) in the event that the actual Operating Expenses or Real Estate Taxes incurred by Landlord during a calendar year exceed Landlord’s estimated Operating Expenses and Real Estate Taxes (including contingencies) for such year as set forth on an approved Budget, Landlord may prepare and submit a revised Budget to Tenant for Tenant’s review and approval (but not more frequently than once during any calendar year). Upon completion of the dispute resolution process, the new year’s Budget shall be correspondingly adjusted and Tenant’s monthly payment of Tenant’s Operating Expense Share shall likewise be adjusted. If Landlord determines during the course of a calendar year that a Building is in need of capital repairs, replacements or improvements that are not included in the approved Budget for such Building for such calendar year, Landlord shall so advise Tenant, and Tenant shall review and approve or disapprove the proposed capital repair, replacement or improvement in conformity with the procedures outlined in this Section 2.4(a) as if such repair, replacement or improvement were originally included by Landlord as part of the budget process described above. (b) Tenant, at Tenant’s sole cost and expense, shall have the right, to be exercised by notice given to Landlord within three (3) years after receipt of an Operating Expense Statement, Tax Statement or other invoice, to audit and/or inspect that portion of Landlord’s books and records pertaining to such Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, for such calendar year; provided such audit and/or inspection commences within ninety (90) days after Tenant’s notice to Landlord and thereafter proceeds reasonably to conclusion, and further provided that Tenant may audit any single year only once unless Landlord has subsequently made revisions to any Operating Expense Statement, Tax Statement or other components of Additional Rent that impact Tenant’s Operating Expense Share, Tenant’s Tax Share or other Additional Rent payment. Tenant may conduct such audit and/or inspection of Landlord’s books with Tenant’s own employees, or through an accountant or other agent selected by Tenant, or both in combination. Tenant shall require any accountant or agent selected by Tenant to conduct or assist in such audit and/or inspection to execute and deliver to Landlord a confidentiality agreement substantially in the form attached hereto as Exhibit C. B. Landlord agrees to cooperate in good faith with Tenant in the conduct of any such audit and/or inspection, and to make Landlord’s books and records of and relating to Operating Expenses, Real Estate Taxes or other components of Additional Rent, as applicable, available to Tenant or Tenant’s agents at one (1) single location. If Tenant’s audit and/or inspection shows that Landlord’s calculation of Tenant’s Operating Expense Share, Tenant’s Tax Share or other components of Additional Rent for the audited/inspected calendar year or years (which shall in no event be prior to the two (2) calendar years immediately preceding the most recently completed calendar year) was overstated by more than four percent (4%) with respect to any Property), then Landlord shall pay, within thirty (30) days after Tenant’s request, Tenant’s actual reasonable audit/inspection out-of-pocket fees applicable to the audit/inspection of said calendar year statements for such Propertystatements. Upon completion of the audit and/or inspection, if the calculation of Tenant’s Operating Expense Share, Tenant’s Tax Share or other components of Additional Rent indicates that Tenant overpaid Rent for any audited calendar year, Landlord shall pay Tenant (in the form of a credit against Rent next due or, upon expiration of this Lease, in the form of Landlord’s check within thirty (30) days after the completion of such audit and/or inspection) an amount equal to such overpayment. In the event of any such audit or inspection, Landlord shall cause the books and records to be made available during such normal business hours as are prescribed by Landlord at Landlord’s headquarters or main office, which shall be located in the continental United States. In any case, should Landlord disagree with the results of Tenant’s audit, Landlord and Tenant shall refer the matter to a mutually acceptable independent certified public accountant, who shall work in good faith with Landlord and Tenant to resolve the discrepancy. The fees and costs of such independent accountant to which such dispute is referred shall be borne by the unsuccessful party and shall be shared pro rata to the extent each party is unsuccessful as determined by such independent certified public accountant, whose decision shall be final and binding.