Options to Extend. 2.4.1 Tenant shall have the right to extend the Lease Term (each an “Option to Extend”) for two (2) five-year periods (each an “Extended Term”), provided Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided Landlord with written notice of its intention to extend the Lease not later than twelve (12) months nor earlier than fifteen (15) months prior to the expiration of the Lease Term. The right to extend for the second Extended Term shall be of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premises. Within thirty (30) days of Tenant’s exercise of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum. 2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4. 2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent. 2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
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Options to Extend. 2.4.1 Tenant shall have the right to Lessee may extend the Lease Term for one (each an “Option to Extend”1) for two additional period of five (25) five-year periods years (each an “the "Extended Term”), provided Tenant is not in Default at ") upon all the time of exercise and at the time the Extended Term commences of any of the terms, covenants terms and conditions of this Lease, subject to the Lease following terms, conditions and has provided Landlord with exceptions. Lessee must exercise the Option, if at all, by giving written notice of its intention to extend the Lease not do so no earlier than nine (9) and no later than twelve six (12) months nor earlier than fifteen (156) months prior to the expiration end of the Original Term:
(a) Lessee's option shall automatically terminate upon any transfer, assignment, sublease, conveyance, hypothecation or encumbrance of the Lease Term. The right (except to extend a Permitted Transferee) for the second Extended Term shall be of no force which Lessor's consent is required, or effect if the Option to Extend use of he Premises specified in Paragraphs 1.8 and 6 is changed without the consent of Lessor.
(b) Base Rent for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be equal to the fair market Fair Market Rental Rate (the "FMRR") of the Premises as of the commencement of such Extended Term. As used herein, FMRR shall mean the rent (defined below) that a willing lessee would pay to a willing lessor, with neither party under any financial duress, in an arm's length transaction, for property similar to the Premises, as the Premises are then improved (and taking into account that there shall be no free rent period and no payment of broker's commissions), in the market area in which the Premises are located. Not more than nine (9), nor less than six (6) months before the end of the Original Term, Lessee shall provide Lessor with its written notice that it wishes to exercise its option as provided for herein. Within thirty (30) days of Tenant’s exercise Lessor's receipt of such notice, Lessor shall provide Lessee, in writing, its good faith opinion of the Option FMRR of the Premises as of the end of such term ("Lessor's FMRR Notice"). If Lessee objects to ExtendLessor's determination of the FMRR of the Premises for the Extended Term, Landlord Lessee shall notify Tenant Lessor in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year)writing, and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing receipt of Lessors notice of the FMRR, that Tenant Lessee disagrees with such Lessor's determination, . The parties shall then attempt to agree upon the FMRR. In the event that Lessor and Lessee are unable to agree upon the FMRR of the Premises within five thirty (530) days after of Lessor's receipt of Lessee's notice that it disagrees with the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the sameLessor's FMRR Notice, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, FMRR shall be determined by arbitration as appraisal in the manner provided below in Section 2.4.2below. Should Until the determination of fair market rent not be completed or agreed upon prior appraisal procedures are finalized; Lessee shall continue to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than Lessor the amount of Base Rent previously paid due immediately preceding the expiration of the Lease Term. After the determination of the appraisers is final, Lessee shall promptly make payment to Lessor for any underpayment of Base Rent owing for prior months. The FMRR of the Premises shall be determined as follows: The Premises shall be appraised by Tenant an MAI appraiser chosen by Lessor ("First Appraisal") and the appraisal report forwarded to Lessee. If the First Appraisal is deemed unacceptable by Lessee, then Lessee shall so advise Lessor in writing within ten (10) working days after receipt of the First Appraisal and Lessee shall have the right to engage an MAI appraiser to appraise the Premises ("Second Appraisal") and the appraisal report forwarded to Lessor. In the event Lessor shall deem the Second Appraisal unacceptable, then Lessor shall advise Lessee within ten (10) working days after receipt of the Second Appraisal, and the first appraiser and second appraiser shall together choose a third MAI appraiser who shall appraise the Premises ("Third Appraisal") and forward the appraisal report to Lessor and Lessee. The cost of the second appraisal shall be borne by Lessee, and the cost of the third Appraiser, if any, shall be shared equally by the parties. All Appraisers shall have no less than five (5 ) years experience (up to and including the date of instituting the appraisal process, of appraising property like the Premises, in the market area where the Premises are located, If the Third Appraiser is greater than the highest or lower than the lowest of the First and Second Appraisals, then the FMRR for the Premises shall be the average of the First and Second Appraisals. If the Third Appraisal is not greater than the highest nor lower than the lowest of the First and Second Appraisals, then the FMRR for the applicable Premises shall be the sum of the three appraisals, divided by three (3). The appraisal process shall commence no later than forty-five (45) days prior to the effect date of the Extended Term, Landlord Term and shall pay the difference to Tenant be concluded within thirty (30) days after the date start of such determinationthe appraisal process. Notwithstanding anything else herein to the contrary, with interest thereon calculated from in no event shall the date of each payment of such Base Rent by Tenant for any Extended Term be less than that in effect at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official end of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the prior Term.
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Samples: Lease Agreement (Converse Inc)
Options to Extend. 2.4.1 (a) Subject to the terms of this Paragraph 1 and Paragraph 4, entitled “Options,” Landlord hereby grants to Tenant shall have the right option (each, an “Extension Option” and collectively, the “Extension Options”) to extend the Term of the Lease Term with respect to the entire Premises for up to five (each 5) additional periods of five (5) years (each, an “Option to Extend”) for two (2) five-year periods (each an Term” and collectively, the “Extended TermOption Terms”), provided Tenant is not in Default at on the time of exercise and at the time the Extended Term commences of any of the same terms, covenants and conditions as provided for in the Lease during the immediately preceding Term, except that (i) Tenant shall have no further extension rights (other than as expressly set forth herein), and (ii) Basic Rent shall be established based on ninety-five percent (95%) of the Lease “fair market rental rate” for the Premises for the applicable Option Term as defined and has provided Landlord determined in accordance with the provisions of this Paragraph 1 below.
(b) Each Extension Option must be exercised, if at all, by written notice of its intention (“Extension Notice”) delivered by Tenant to extend Landlord no earlier than the Lease not date which is three hundred sixty (360) days, and no later than twelve the date which is two hundred seventy (12270) months nor earlier than fifteen (15) months days, prior to the expiration of the Lease Term. immediately preceding Term of the Lease.
(c) The right to extend term “fair market rental rate” as used in this Rider 1 shall mean the annual amount per square foot, projected during the relevant period, that a willing, comparable, non-equity, renewal tenant (excluding sublease and assignment transactions) would pay, and a willing, comparable, institutional landlord of a comparable Class “A” quality industrial building located in the greater South Bay area (“Comparison Area”) would accept, at arm’s length (what Landlord is accepting in current transactions for the second Extended Building or other buildings in the Project may be considered), for space comparable in size (including the existing mezzanine square footage of approximately 13,135 square feet of space, whether or not Tenant removes the same during the Term of the Lease) and quality as the leased area at issue taking into account the age, quality and layout of the existing improvements in the leased area at issue and taking into account items that professional real estate brokers customarily consider, including, but not limited to, rental rates, industrial space availability, tenant size, tenant improvement allowances, operating expenses and allowance, parking charges, and any other economic matters then being charged by Landlord or lessors of such similar industrial buildings, however, not taking into account any improvements exclusively paid for by Tenant (i.e., any improvements paid for with the Allowance shall be deemed paid for by Landlord and not Tenant). Notwithstanding anything herein to the contrary, in no event will Basic Rent decrease from that payable in the last year of no force or effect if the Option to Extend for the first Extended immediately previous Lease Term has not been validly exercised. The Base Rent during each Extended Term shall be as a result of the fair market rent rental rate determination provided for in this Paragraph 1.
(defined belowd) for the Premises. Within thirty (30) days of Tenant’s exercise of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term rental rate shall be changed delivered to the calendar year during which the applicable Extended Term commences Tenant in writing not later than sixty (or the 60) days following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, receipt of Tenant’s Extension Notice. Tenant shall so notify Landlord in writing within will have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the proposal from Landlordfair market rental rate within which to accept such fair market rental rate or to object thereto in writing. In Tenant’s failure to object to the event that fair market rental rate submitted by Landlord in writing within Tenant’s Review Period will conclusively be deemed Tenant’s approval and acceptance thereof. If Tenant objects to the fair market rental rate submitted by Landlord within Tenant’s Review Period, then Landlord and Tenant are unable will attempt in good faith to agree in writing upon such fair market rent rental rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement on such fair market rental rate within fifteen (15) days after following the expiration of Tenant’s Review Period (the “Outside Agreement Date”), then each party’s determination will be submitted to appraisal in accordance with the provisions below.
(i) Landlord and Tenant shall have notified Landlord in writing that Tenant disagrees with such determinationeach appoint one independent, then within unaffiliated real estate broker (referred to herein as an “appraiser” even though only a broker) who has been active over the five (5) days after year period ending on the expiration date of such 15-day period, appointment in the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates leasing of fair market rent (including applicable annual increases)comparable industrial properties in the Comparison Area. If each party’s estimate of fair market rent is the same, then the fair market rent shall equal Each such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall appraiser will be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant appointed within thirty (30) days after the date Outside Agreement Date.
(ii) The two (2) appraisers so appointed will within fifteen (15) days of such determination, with interest thereon calculated from the date of each payment the appointment of such Base Rent by Tenant at the rate last appointed appraiser agree upon and appoint a third appraiser who shall be qualified under the same criteria set forth herein above for qualification of six percent the initial two (6%2) per annum; and, if after appraisers.
(iii) The determination of fair market rent, the fair market rent is more than appraisers shall be limited solely to the amount issue of Base whether Landlord’s or Tenant’s last proposed (as of the Outside Agreement Date) new Basic Rent previously paid Tenant for the Premises is the closest to the actual new Basic Rent for the applicable Extended TermPremises as determined by the appraisers, Tenant taking into account the requirements of Subparagraph 1(c) and this Subparagraph 1(e) regarding same.
(iv) The three (3) appraisers shall pay the difference to Landlord within thirty (30) days after of the date appointment of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is third appraiser reach a decision as to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, whether the parties shall attempt use Landlord’s or Tenant’s submitted new Basic Rent, and shall notify Landlord and Tenant thereof.
(v) The decision of the majority of the three (3) appraisers shall be binding upon Landlord and Tenant and neither party will have the right to reject the determination or undo the exercise of the Extension Option. The cost of each party’s appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser (or arbitration, if necessary) shall be shared equally by Landlord and Tenant.
(vi) If either Landlord or Tenant fails to appoint an appraiser within the time period in Subparagraph 1(e)(i) herein above, the appraiser appointed by one of them shall reach a decision, notify Landlord and Tenant thereof and such appraiser’s decision shall be binding upon Landlord and Tenant and neither party will have the right to reject the determination or undo the exercise of the Extension Option.
(vii) If the two (2) appraisers fail to agree upon and appoint a mutually-acceptable arbitrator meeting third appraiser, both appraisers shall be dismissed and the criteria set forth below matter to determine fair market rent hereunder. If be decided shall be forthwith submitted to binding arbitration under the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office provisions of the American Arbitration Association, and neither party shall raise any objections as .
(viii) In the event that the new Basic Rent is not established prior to the appointment made by such official or as to such official’s full power and jurisdiction to entertain end of the application for and make immediately previous Term of the appointment. The arbitrator Lease, the Basic Rent immediately payable at the commencement of the applicable Option Term shall be a member the Basic Rent paid by Tenant at the expiration of the Appraisal Institute (or its successor organization) immediately preceding Term. Notwithstanding the above, once the fair market rental is determined in accordance with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education programthis section, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to shall settle any overpayment or underpayment on the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is next Basic Rent payment date falling not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within less than thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4such determination.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
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Options to Extend. 2.4.1 Tenant (a) Borrower shall have the right option to extend (the Lease Term (each an “First Option to Extend”) the term of the Loan from the Original Maturity Date (for two (2) five-year periods (each an purposes of this Section, “Extended TermOriginal Maturity Date”), provided Tenant is not in Default at to the time First Extended Maturity Date, upon satisfaction of exercise each and at the time the Extended Term commences of any every one of the terms, covenants and following conditions of the Lease and has provided Landlord precedent in Lender’s discretion:
(i) Borrower shall provide Lender with written notice of its intention Borrower’s request to extend exercise the Lease not later than twelve (12) months nor earlier than fifteen (15) months prior to the expiration of the Lease Term. The right to extend for the second Extended Term shall be of no force or effect if the First Option to Extend for in the first Extended Term has form attached hereto as Exhibit C not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premises. Within less than thirty (30) days of Tenant’s exercise and not more than one hundred twenty (120) days prior to the Original Maturity Date (which notice may be revoked by Borrower on or before the Original Maturity Date; provided Borrower shall pay all costs and expenses incurred by Lender in connection with such notice to extend).
(ii) As of the Original Maturity Date, no Default shall exist, and to Borrower’s knowledge no event or condition which, with the giving of notice or the passage of time or both, would constitute a Default shall exist, and Borrower shall so certify in writing.
(iii) Borrower shall execute or cause the execution of all documents reasonably required by Lender to exercise the First Option to Extend.
(iv) [intentionally omitted].
(v) If required by Lender, at Borrower’s sole cost and expense, the issuance by the Title Company, and Lender’s receipt, of any endorsements deemed necessary by Lender for attachment to the Title Policy, insuring the priority and validity of the Security Instrument.
(vi) Borrower shall have delivered evidence reasonably satisfactory to Lender that as of the Original Maturity Date the Property has achieved a Debt Yield of at least 8.0%; provided, however, in the event such required minimum Debt Yield is not achieved, then Borrower shall either (i) pay down the outstanding principal balance of the Loan by an amount (the “First Extension Debt Yield Shortfall Amount”) such that said minimum Debt Yield is met, or (ii) deliver to Lender an Acceptable Letter of Credit in a stated amount equal to the First Extension Debt Yield Shortfall Amount. Any principal balance reduction shall reduce Lender’s commitment by a like amount and may not be re-borrowed.
(vii) Lender shall have received, at Borrower’s sole expense, a written appraisal prepared in conformance with the requirements of FIRREA, as well as any other applicable rules and/or regulations from any and all applicable governmental authorities (subject to review and adjustment by Lender consistent with Lender’s standard practices), confirming to the satisfaction of Lender that the Loan-to-Value Percentage, as of the Original Maturity Date, does not exceed fifty-nine percent (59.0%); provided, however, in the event such fair market value is not adequate to meet the required Loan-to-Value Percentage, then Borrower shall either (i) pay down the outstanding principal balance of the Loan by an amount (the “First Extension Loan-to-Value Rebalance Amount”) such that said Loan-to-Value Percentage is met or (ii) deliver to Lender an Acceptable Letter of Credit in a stated amount equal to the First Extension Loan-to-Value Rebalance Amount. The valuation date of such appraisal shall be within ninety (90) days of the Original Maturity Date. Any principal balance reduction shall reduce Lender’s commitment by a like amount and may not be re-borrowed.
(viii) On or before the Original Maturity Date, Borrower shall pay to Lender an extension fee in the amount of 0.25% of the total commitment amount of the Loan, in immediately available funds.
(ix) Borrower shall have delivered to Lender an updated Property Condition Report for the Property in form reasonably acceptable to Lender.
(x) Guarantor shall be in compliance with the Guarantor Financial Covenants. Except as modified by this First Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this LeaseAgreement and the other Loan Documents as modified and approved by Lender shall remain unmodified and in full force and effect.
(b) Borrower shall have a second option to extend (the “Second Option to Extend”) the term of the Loan from the First Extended Maturity Date, to the Second Extended Maturity Date, upon satisfaction of each and every one of the following conditions precedent in Lender’s discretion:
(i) Borrower shall provide Lender with written notice of Borrower’s request to exercise the Second Option to Extend in the form attached hereto as Exhibit C not less than thirty (30) days and not more than one hundred twenty (120) days prior to the First Extended Maturity Date (which notice may be revoked, by Borrower on or before the First Extended Maturity Date; provided Borrower shall pay all costs and expenses incurred by Lender in connection with such notice to extend).
(ii) As of the date the First Extended Maturity Date, no Default shall exist, and to Borrower’s knowledge, no event or condition which, with the giving of notice or the passage of time or both, would constitute a Default shall exist, and Borrower shall so certify in writing.
(iii) Borrower shall execute or cause the Base Year for execution of all documents reasonably required by Lender to exercise the space Second Option to which Extend.
(iv) Lender shall have received, at Borrower’s sole expense, a written appraisal prepared in conformance with the requirements of FIRREA, as well as any other applicable rules and/or regulations from any and all applicable governmental authorities (subject to review and adjustment by Lender consistent with Lender’s standard practices), confirming to the satisfaction of Lender that the Loan-to-Value Percentage, as of the First Extended Maturity Date, does not exceed fifty-nine percent (59.0%); provided, however, in the event such fair market rent value is not adequate to apply. In additionmeet the required Loan-to-Value Percentage, (A) the determination of fair market rent then Borrower shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease either (i) assigns this Lease pay down the outstanding principal balance of the Loan (the “Second Extension Loan-to-Value Rebalance Amount”) such that said Loan-to-Value Percentage is met or (ii) subleases more than fifty percent deliver to Lender an Acceptable Letter of Credit in a stated amount equal to the Second Extension Loan-to-Value Rebalance Amount The valuation date of such appraisal shall be within ninety (50%90) days of the rentable square feet First Extended Maturity Date. Any principal balance reduction shall reduce Lender’s commitment by a like amount and may not be re-borrowed.
(v) If required by Lender, at Borrower’s sole cost and expense, the issuance by the Title Company, and Lender’s receipt, of any endorsements deemed necessary by Lender for attachment to the Title Policy, insuring the priority and validity of the Premises for substantially the remainder Security Instrument.
(vi) Borrower shall have delivered evidence reasonably satisfactory to Lender that as of the TermFirst Extended Maturity Date the Property has achieved a Debt Yield of at least 8.25%; provided, however, in the event such required minimum Debt Yield is not achieved, then Borrower shall (i) pay down the outstanding principal balance of the Loan by an amount (the “Second Extension Debt Yield Shortfall Amount”) such that said minimum Debt Yield is met, or (ii) deliver to Lender an Acceptable Letter of Credit in a stated amount equal to the Second Extension Debt Yield Shortfall Amount Any principal balance reduction shall reduce Lender’s commitment by a like amount and may not be re-borrowed.
(vii) On or before the First Extended Maturity Date, Borrower shall pay to Lender an extension fee in the amount of 0.25% of total commitment amount of the Loan, in immediately available funds.
(viii) Guarantor shall be in compliance with the Guarantor Financial Covenants. Except as modified by this Second Option to Extend, the terms and conditions of this Agreement and the other Loan Documents as modified and approved by Lender shall remain unmodified and in full force and effect.
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Samples: Term Loan Agreement (Invesco Real Estate Income Trust Inc.)
Options to Extend. 2.4.1 Subject to satisfaction of the conditions precedent set forth below, Tenant shall have the right two (2) options to extend the Lease Term (each an “Option to ExtendExtension Option”) for two a period of sixty (260) five-year periods months each (each each, an “Extended Extension Term”), provided on the following terms and conditions:
23.1 Each Extension Option shall be subject to satisfaction of each of the following conditions precedent, which are solely for the benefit of, and may be waived unilaterally by, Landlord:
(a) The applicable Extension Option shall be exercised by written notice (the “Option Notice”) delivered by Tenant to Landlord not earlier than fifteen (15) months and not later than twelve (12) months prior to the end of the initial Term or first (1st) Extension Term, as applicable;
(b) Tenant shall be in occupancy of at least eighty percent (80%) of the area of the Premises directly or through a wholly owned subsidiary (at any tier), and not through an unaffiliated assignee or sublessee; and
(c) The Lease shall be in effect and Tenant shall not be in default of any material provision thereof both on the day such written notice is delivered to Landlord and on the last day of the Term; provided, however, if Tenant is in default but the cure period has not in Default at run, this condition shall be deemed satisfied if Tenant cures the time default within the applicable cure period.
23.2 In the event the Term shall be extended following exercise by Tenant of exercise and at the time the Extended Term commences of any an Extension Option, then all of the terms, covenants and conditions of this Lease shall remain in full force and effect during the Lease and has provided Landlord with written notice of its intention to extend applicable Extension Term, except that the Lease not later than twelve initial monthly Base Rent (12including subsequent annual increases in Base Rent) months nor earlier than fifteen (15) months prior to during the expiration of the Lease Term. The right to extend for the second Extended applicable Extension Term shall be of adjusted to the then effective market rate as reasonably determined by Landlord for new leases for comparable space in the Carlsbad area (and taking into account (1) rental abatement concessions reflecting free rent and/or no force or effect rent, (2) tenant improvement allowances, if any, and (3) all other monetary and non- monetary concessions, if any, being granted to similar renewal tenants in connection with comparable space) provided, however, that in no event shall the Option to Extend Base Rent payable for any Lease Year be less than the Base Rent payable for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premisesimmediately preceding Lease Year. Within thirty ten (3010) days of Tenantafter Xxxxxxxx’s exercise receipt of the applicable Option to ExtendNotice, Landlord shall notify Tenant in writing of Landlord’s determination of fair the market rent and rate for the Base Rent proposed during the applicable Extended Term. The Base Year Premises for the applicable Extended Term shall be changed to Extension Term. In the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), event Xxxxxx rejects Xxxxxxxx’s determination and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify notifies Landlord in writing within thirty ten (3010) days after receipt of the proposal from Landlord. In the event that determination, then Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree in good faith upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunderrate for the Premises. If the parties are unable Landlord and Tenant fail to agree on an arbitrator reach agreement within twenty (20) days following Xxxxxxxx’s receipt of such fifteen (15) day periodrejection notice, then either party, on behalf of both, may request appointment of such arbitrator by the then head official Tenant’s exercise of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator Extension Option in question shall be a member of rescinded, the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and Term shall not then be engaged or have been engaged by either Landlord or Tenant within extended for the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator applicable Option Term and any remaining Extension Options shall be final null and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor void.
23.3 The increase in Base Rent provided by this Section shall be appointed in the same manner addition to any increase in Operating Expenses as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision described in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions Section 4.2 of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
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Options to Extend. 2.4.1 Tenant shall have the right and option, which said option and right shall not be severed from this Lease or separately assigned, mortgaged or transferred, to extend the Lease Term (each an “Option to Extend”) Initial Terra for two (2) five-year additional consecutive periods of five (5) years each an (hereinafter collectively referred to as the “Extended TermExtension Period” and singularly as the “First Extension Period” and the “Second Extension Period”, respectively), provided that (a) Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided shall give Landlord with written notice of its intention to extend the Lease not later than twelve Tenant’s exercise of each such option at least eighteen (1218) months nor earlier than fifteen (15) full months prior to the expiration of the (i) Initial Term with respect to the first such option, and (ii) First Extension Period with respect to the second such option and (b) Tenant shall not be in default (beyond expiration of applicable notice and cure periods, if any) in the performance or observance of any of the terms and provisions of the Lease Termon the part of Tenant to be performed or observed at the time of giving applicable notice and the commencement of each such Extension Period. The right to extend Except for the second Extended amount of Basic Rent (which is to be determined as hereinafter provided), all the terms, covenants, conditions, provisions and agreements in the Lease contained shall be applicable to the additional period through which the Initial Term shall be extended as aforesaid, except that there shall be no further option to extend the Term nor shall there be any Allowance nor shalL Landlord be obligated to make or pay for any improvements to the Premises nor pay any architectural or engineering fees, legal fees, brokerage fees or inducement payments of no force any kind or effect if nature. If Tenant shall give notice of its exercise of each such option to extend in the Option to Extend for manner and within the first Extended Term has not been validly exercised. The Base Rent during each Extended time period provided aforesaid, the Term shall be extended upon the fair market rent giving of such notice without the requirement of any further attention on the part of either Landlord or Tenant. Landlord hereby reserves the right, exercisable by Landlord in its sole discretion, to waive (defined belowin writing) for the Premises. Within thirty (30) days of any or all conditions precedent to Tenant’s exercise of the Option to Extendany such option, Landlord shall notify Tenant which conditions are set forth in writing of Landlord’s determination of fair market rent clauses (a) and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into accountb) above. If Tenant does not agree with Landlord’s proposalshall fail to give timely notice of the exercise of any such option as aforesaid, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power right to select an alternative position or a decision different from that proposed by either party. The decision of extend the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes Term of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent time being charged by Landlord and other landlords at the time of exercise of the Option essence of the foregoing provisions. Failure to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in timely exercise the Building and Comparable Buildings. Fair market rent first such option shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 terminate Tenant’s right to extend exercise the Lease Term for an Extended Term is personal to the named second such option. Any assignment by Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee its interest under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) any subleasing of the rentable square feet all or any part of the Premises for substantially the remainder (other than a subletting of a portion of the TermPremises consented to by Landlord pursuant to Article VI) or any termination of this Lease Agreement shall terminate the rights hereby granted Tenant. Any subletting of the Premises will not transfer to the sublessee any of the rights granted hereby.
Appears in 1 contract
Samples: Lease (Aspen Technology Inc /De/)
Options to Extend. 2.4.1 15.1 So long as Digital Island, Inc. (or a Permitted Assignee) is the Tenant hereunder and occupies the entirety of the Leased Premises, and subject to the condition set forth in clause (b) below, Tenant shall have the right three (3) options to extend the Lease Term (each an “Option "Extension Option") the term of this Lease with respect to Extend”the entirety of the Leased Premises, for a period of five (5) for two (2) five-year periods years each (each an “Extended Term”"Extension Period"), provided Tenant is not in Default subject to the following conditions:
(a) Each option to extend shall be exercised, if at the time all, by notice of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided given to Landlord with written notice of its intention to extend the Lease by Tenant not later more than fifteen months nor less than twelve (12) months nor earlier than fifteen (15) months prior to the expiration of the Lease Term. The right to extend for the second Extended Term shall be of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent eleventh (defined below11th) for the Premises. Within thirty (30) days of Tenant’s exercise year of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Lease Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day the Extension Period then in effect, as applicable;
(b) Anything herein to the contrary notwithstanding, if Tenant is in default (beyond any applicable cure period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range under any of the higher final estimateterms, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed covenants or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes conditions of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords either at the time of exercise Tenant exercises an Extension Option or On the commencement date of the Option applicable Extension Period, Landlord shall have, in addition to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space all of Landlord's other rights and remedies provided in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors right to terminate such option(s) to extend upon notice to Tenant.
15.2 1n the event the applicable Extension Option is exercised in a timely fashion, the Lease shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition extended for the use as permitted by term of the applicable Extension Period upon all of the terms and conditions of this Lease, and (iii) provided that the Base Year Monthly Rent for each extension period shall be the "Fair Market Rent" for the space Leased Premises, increased as set forth below. For purposes hereof, "Fair Market Rent" shall mean the Base Monthly Rent, that a third party tenant executing a five (5) year lease for leased premises of similar size and with similar quality improvements and tenant improvement allowance in Silicon Valley, taking into account any and all tenant inducements offered in connection with such leasing and the annual increases to which Base Monthly Rent Set forth herein; provided however, that the fair market rent is to apply. In addition, (A) the determination of fair market rent "Fair Market Rent" shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall not take into account the then unamortized value of Building standard any alterations or improvements made to the Leased Premises paid for by Tenant but at Tenant's sole cost and expense, which "Fair Market Rent" shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything pursuant to the contrary contained in process described below. At the preceding sentence, end of the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount first twelve (12) month period of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Leaseany Extension Period, and shall not inure to at the benefit end of each twelve (12) month period thereafter during any other assignee or subtenant. The Option to Extend Extension Period, Base Monthly Rent shall be void and increased at a rate of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term3.0% per annum compounded.
Appears in 1 contract
Samples: Lease (Digital Island Inc)
Options to Extend. 2.4.1 Tenant Subject to the provisions of Section 24(a)(ix) above and provided that no Default shall have occurred and be continuing at the right time this Option is exercised, Landlord hereby grants to Tenant three (3) successive options (collectively, the "OPTIONS", and each an "OPTION") to extend the Lease Term of this Lease for three (3) successive periods of five (5) consecutive Lease Years each. Tenant may exercise each an “Option to Extend”) for two (2) five-year periods (each an “Extended Term”), provided Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided only by giving Landlord with written notice of its intention to extend the Lease thereof not later less than twelve (12) months nor earlier months, no more than fifteen eighteen (1518) months prior to the expiration of the then running initial or extended Lease Term, as the case may be. The covenants, terms and conditions between Landlord and Tenant during each such extended term shall be the same as contained in this Lease for the initial Lease Term, except that Tenant shall have no further right to extend for the second Extended Term shall be of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premises. Within thirty (30) days of Tenant’s exercise of the Option to ExtendLease Term, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed payable during each such extended term for which Tenant exercises this Option shall be adjusted for the first Lease Year of the applicable Extended Term. The Option to equal the greater of:
a. one hundred and two percent (102%) of the Base Year Rent due for the applicable Extended Term shall be changed preceding Lease Year; and
b. Fair Market Rental of the Leased Premises as of the beginning of the extended term ("OPTION DATE") as hereinafter set forth: '
i. Between the three hundred sixty-fifth (365th) and one hundred eightieth (180th) day prior to the calendar year Option Date, Landlord and Tenant shall attempt to agree by a written and signed addendum to this Lease on the Fair Market Rental to be payable during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into accountsuch extended term. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent on such Fair Market Rental or fail to execute the addendum by the one hundred eightieth (180th) day preceding the Option Date, then, within fifteen thirty (1530) days after thereafter Landlord and Tenant shall have notified each select a Qualified Appraiser and use the appraisal mechanism set forth in Section 28 to determine the Fair Market Rental.
ii. If for any reason the Fair Market Rental has not been determined as of the Option Date, Tenant shall continue to pay Base Rent to Landlord in writing that Tenant disagrees with such determination, then within five (5) days after an amount of Landlord's lowest proposal during the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below negotiations set forth in Section 2.4.2. Should 27(b)(i) above, and, when the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant Fair Market Rental for the Premises for the applicable Extended Termextended term is determined, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determinationfollowing Landlord's notice thereof, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than shall pay to Landlord the amount of any increase for each month during which Tenant paid a lower monthly installment of Base Rent previously Rent, or, if Tenant has over paid Tenant for the Premises for the applicable Extended TermBase Rent, Tenant shall pay receive a credit for such amounts against Base Rent next coming due.
c. Further, the difference to Landlord within thirty (30) days Base Rent for each Lease Year during an Option after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent first Lease Year during said Option shall be increased by Tenant at the rate of six two percent (62%) per annumover the preceding Lease Year.
2.4.2 Whenever under this Section 2.4 the determination d. The exercise of fair market rent all preceding Option(s) is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as condition precedent to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member exercise of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience any subsequent Option(s).
e. Any references in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended shall mean the initial Lease Term is personal as extended pursuant to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the TermSection.
Appears in 1 contract
Options to Extend. 2.4.1 (a) Subject to the terms of this Paragraph 1 and Paragraph 3 below, entitled “Options,” Landlord hereby grants to Tenant shall have the right option (each, an “Extension Option” and collectively, the “Extension Options”) to extend the Term of the Lease Term with respect to the entire Premises for up to [***] additional periods of [***] years each (each each, an “Option to Extend”) for two (2) five-year periods (each an Term” and collectively, the “Extended TermOption Terms”), provided Tenant is not in Default at on the time of exercise and at the time the Extended Term commences of any of the same terms, covenants and conditions as provided for in the Lease during the immediately preceding Term, except that (i) Tenant shall have no further extension rights (other than as expressly set forth herein), (ii) Basic Rent shall be established based on [***] of the Lease “fair market rental rate” for the Premises for the applicable Option Term as defined and has provided Landlord determined in accordance with the provisions of this Paragraph 1, and (iii) all other economic terms such as, without limitation, parking charges, if any, etc., shall be established based on the “fair market rental rate” for the Premises for the Option Term as defined and determined in accordance with the provisions of this Paragraph 1.
(b) Each Extension Option must be exercised, if at all, by written notice of its intention (“Extension Notice”) delivered by Tenant to extend Landlord no earlier than the Lease not date which is four hundred twenty (420) days, and no later than twelve the date which is three hundred sixty (12360) months nor earlier than fifteen (15) months days, prior to the expiration of the Lease Term. immediately preceding Term of the Lease.
(c) The right term “fair market rental rate” as used in this Rider 1 shall mean the annual amount per square foot, projected during the relevant period, that a willing, comparable, non-equity, renewal tenant (excluding sublease and assignment transactions) would pay, and a willing, comparable, institutional landlord of a comparable Class “A” quality industrial building containing similar parking ratios (e.g., up to extend 2.5 spaces per 1,000 square feet) and located in the greater Alameda County, San Xxxx and Milpitas areas (collectively, the “Comparison Area”) would accept, at arm’s length (what Landlord is accepting in current transactions for the second Extended Building may be considered), for space comparable in size and quality as the leased area at issue taking into account the age, quality and layout of the existing improvements in the leased area at issue and taking into account items that professional real estate brokers customarily consider, including, but not limited to, rental rates, industrial space availability, tenant size, tenant improvement allowances, operating expenses and allowance, parking charges, and any other economic matters then being charged by Landlord or lessors of such similar industrial buildings but shall not take into account any improvements or alterations paid for at the sole cost and expense of Tenant. Notwithstanding anything herein to the contrary, in no event will Basic Rent decrease from that payable in the last year of the immediately previous Lease Term shall be as a result of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent rental rate determination provided for in this Paragraph 1. *** Information has been omitted pursuant to a request for confidential treatment which has been filed separately with the Securities and Exchange Commission.
(defined belowd) for the Premises. Within thirty (30) days of Tenant’s exercise of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term rental rate shall be changed delivered to the calendar year during which the applicable Extended Term commences Tenant in writing not later than sixty (or the 60) days following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, receipt of Tenant’s Extension Notice. Tenant shall so notify Landlord in writing within will have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the proposal from Landlordfair market rental rate within which to accept such fair market rental rate or to object thereto in writing. In Tenant’s failure to object to the event that fair market rental rate submitted by Landlord in writing within Tenant’s Review Period will conclusively be deemed Tenant’s approval and acceptance thereof. If Tenant objects to the fair market rental rate submitted by Landlord within Tenant’s Review Period, then Landlord and Tenant are unable will attempt in good faith to agree in writing upon such fair market rent rental rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement on such fair market rental rate within fifteen (15) days after following the expiration of Tenant’s Review Period (the “Outside Agreement Date”), then each party’s determination will be submitted to appraisal in accordance with the provisions below.
(i) Landlord and Tenant shall have notified Landlord in writing that Tenant disagrees with such determinationeach appoint one independent, then within unaffiliated real estate broker (referred to herein as an “appraiser” even though only a broker) who has been active over the five (5) days after year period ending on the expiration date of such 15-day period, appointment in the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates leasing of fair market rent (including applicable annual increases)comparable industrial properties in the Comparison Area. If each party’s estimate of fair market rent is the same, then the fair market rent shall equal Each such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall appraiser will be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant appointed within thirty (30) days after the date Outside Agreement Date.
(ii) The two (2) appraisers so appointed will within fifteen (15) days of such determination, with interest thereon calculated from the date of each payment the appointment of such Base Rent by Tenant at the rate last appointed appraiser agree upon and appoint a third appraiser who shall be qualified under the same criteria set forth herein above for qualification of six percent the initial two (6%2) per annum; and, if after appraisers.
(iii) The determination of fair market rent, the fair market rent is more than appraisers shall be limited solely to the amount issue of Base whether Landlord’s or Tenant’s last proposed (as of the Outside Agreement Date) new Basic Rent previously paid Tenant for the Premises is the closest to the actual new Basic Rent for the applicable Extended TermPremises as determined by the appraisers, Tenant taking into account the requirements of Subparagraph 1(c) and this Subparagraph 1(e) regarding same.
(iv) The three (3) appraisers shall pay the difference to Landlord within thirty (30) days after of the date appointment of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is third appraiser reach a decision as to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, whether the parties shall attempt use Landlord’s or Tenant’s submitted new Basic Rent, and shall notify Landlord and Tenant thereof.
(v) The decision of the majority of the three (3) appraisers shall be binding upon Landlord and Tenant and neither party will have the right to reject the determination or undo the exercise of the Extension Option. The cost of each party’s appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser (or arbitration, if necessary) shall be shared equally by Landlord and Tenant.
(vi) If either Landlord or Tenant fails to appoint an appraiser within the time period in Subparagraph 1(e)(i) herein above, the appraiser appointed by one of them shall reach a decision, notify Landlord and Tenant thereof and such appraiser’s decision shall be binding upon Landlord and Tenant and neither party will have the right to reject the determination or undo the exercise of the Extension Option.
(vii) If the two (2) appraisers fail to agree upon and appoint a mutually-acceptable arbitrator meeting third appraiser, both appraisers shall be dismissed and the criteria set forth below matter to determine fair market rent hereunder. If be decided shall be forthwith submitted to binding arbitration under the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office provisions of the American Arbitration Association.
(viii) In the event that the new Basic Rent is not established prior to end of the immediately previous Term of the Lease, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain Basic Rent immediately payable at the application for and make commencement of the appointment. The arbitrator applicable Option Term shall be a member of the Appraisal Institute (or its successor organization) Basic Rent determined by Landlord. Notwithstanding the above, once the fair market rental is determined in accordance with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education programthis section, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to shall settle any overpayment on the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is next Basic Rent payment date falling not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within less than thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4such determination.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
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Options to Extend. 2.4.1 (a) Tenant shall have the right two successive options to extend the Lease Term for the Extension Terms set forth in Section 1.1, on the terms set forth below (each an the “Option First Extension Option” and the “Second Extension Option,” which shall collectively be referred to Extend”) for two (2) five-year periods (each an as the “Extended TermExtension Option”), provided Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided Landlord with written notice of its intention to extend the Lease not later than twelve (12) months nor earlier than fifteen (15) months prior to the expiration of the Lease Term. The right rental terms applicable with respect to extend for the second Extended each Extension Term shall be equal to ninety-five percent (95%) of no force or effect if the Option to Extend for Fair Market Rental Value of the first Extended Term has not been validly exercisedPremises (as determined below). The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premises. Within thirty (30) days of Tenant’s exercise lease of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed Premises during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year)Extension Terms shall, and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt exclusive of the proposal from Landlord. In the event economic terms hereof that Landlord and Tenant are unable to agree superseded by such terms as established in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees connection with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day Fair Market Rental Value of the applicable Extended TermPremises, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing be on the first (1st) day all of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this LeaseLease in effect on the last day of the expiring Term, provided that in any event, Tenant shall have no option to extend the Term beyond the end of the second Extension Term.
(b) If Tenant wishes to exercise the First Extension Option, Tenant shall give Landlord notice of its election to so extend the Term (“Extension Exercise Notice’) not later than May 31, 2016. So long as Tenant has extended the Term to include the first Extension Term, then if Tenant wishes to exercise the Second Extension Option, Tenant shall give Landlord an Extension Exercise Notice not later than November 30, 2021. Failure by Tenant timely to send an Extension Exercise Notice under this paragraph (b) shall constitute an irrevocable waiver of Tenant’s right to extend the Term.
(c) If Tenant shall request in writing, no sooner than February 29, 2016 and no later than March 31, 2016 with respect to the first Extension Term, and no sooner than August 31, 2021 and no later than September 30, 2021 with respect to the second Extension Term, that Landlord deliver its estimate of ninety-five percent (iii95%) of the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination Fair Market Rental Value of fair market rent shall exclude “down time” for releasing the Premises and during for what would be the period upcoming Extension Term (assuming Tenant elects to exercise the Extension Option), then Landlord and shall furnish Tenant are negotiating with Landlord’s estimate as aforesaid, within thirty days after such request from Tenant.
(d) If Tenant timely exercises the fair market rent only First Extension Option under paragraph (b) above, but the amount of an “in-house” brokerage commission parties do not agree on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations rental terms pertaining to the Premises paid for by the first Extension Term on or before June 30, 2016, or if Tenant timely exercises the Second Extension Option under paragraph (b) above, but shall exclude any value attributable the parties do not agree on the rental terms pertaining to above Building standard alterations in the Premises paid for the second Extension Term on or before December 31, 2021, then either party may initiate the arbitration procedure set forth in Section 2.8 by Tenant; and giving notice to the other. The failure by the parties to complete the process contemplated under Section 2.8, prior to commencement of the applicable Extension Term, shall not affect the continuation of the Term or the parties’ obligation to make any adjustments for any overpayments or underpayments for the Annual Base Rent due for the Extension Term promptly after the determination thereof is made.
(Ce) If Tenant shall exercise the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration Extension Option in accordance with this Section 2.4, notwithstanding anything to the contrary contained in provisions of this Section shall be self-operative, but upon request by either party after determination of the preceding sentenceAnnual Base Rent and Inducements (if any) for the applicable Extension Term, the arbitrator parties shall take into account all factors which execute an experienced arbitrator familiar with agreement specifying the Comparable Buildings would customarily take into account Annual Base Rent and Inducements, as defined in determining Section 2.8 (if any), for the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Leaseapplicable Extension Term, and shall not inure to acknowledge the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder extension of the Term.
(f) Notwithstanding any provision of this Section to the contrary, Tenant’s option to extend the Term shall be void, at Landlord’s election, if Tenant is in default hereunder, after any applicable notice and cure periods have expired, at the time Tenant elects to extend the Term or at the time the Term would expire but for such extension.
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Samples: Lease Agreement (Digitas Inc)
Options to Extend. 2.4.1 Provided no Event of Default under this Lease has ----------------- occurred and is continuing, Tenant shall have the right to extend the Lease Term (each an “Option to Extend”) for two (2) five-year periods (each an “Extended Term”)and option, provided Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided exercisable by giving Landlord with written notice of its intention to extend the Lease not later than twelve at least nine (12) months nor earlier than fifteen (159) months prior to the expiration of the then current Lease Term. The right , to extend the Lease Term for two (2) additional periods of five (5) years each (each, an "Extended Term") and, upon the second giving of such notice, this Lease shall automatically be extended for such five (5) year periods and no further agreement of extension need be executed. In the event that Tenant fails to give such notice to Landlord as herein provided, this Lease shall automatically terminate at the end of the then current Lease Term and Tenant shall have no further right or option to extend this Lease. Each Extended Term shall be of no force or effect if upon the Option to Extend for same covenants, agreements, provisions, terms and conditions as during the first Extended original Lease Term has not been validly exercised. The Base except that the Annual Fixed Rent during each Extended Term shall be equal the fair market rent (defined below) Fair Market Rent for the Leased Premises. Within The "Fair Market Rent" for the Leased Premises shall mean the rent for comparable space in a Class A mid-rise building in upper Bucks County for a new tenant entering into a new five (5) year lease and with the Operating Expense Allowance being adjusted to reflect the expense allowance used in calculating the Fair Market Rent. At least twelve (12) months prior to the expiration of the then current Lease Term, Tenant may request Landlord to quote the Fair Market Rent effective for the first day of the Extended Term. If Tenant objects thereto, Landlord and Tenant shall negotiate for a period of thirty (30) days of Tenant’s exercise of to determine whether the Option to Extend, Fair Market Rent can be agreed upon. In the event Landlord shall notify and Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does cannot agree with Landlord’s proposal, Tenant shall so notify Landlord in writing on the Fair Market Rent within such thirty (30) days after receipt of the proposal from Landlord. In the event that day period, Landlord and Tenant are unable to agree shall mutually select a real estate appraiser (MAI or equal) knowledgeable of rents obtained in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord Class A mid-rise office buildings in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Termupper Bucks County, Landlord shall pay submit to such appraiser the difference lowest Annual Fixed Rent which Landlord is willing to Tenant within thirty (30) days after the date of such determinationaccept, together with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, any information with respect thereto that Landlord deems relevant and Tenant shall pay submit to such appraiser the difference highest Annual Fixed Rent which Tenant is willing to Landlord within thirty (30) days after the date of such determinationpay, together with interest thereon calculated from the date of each payment of such Base Rent by any information with respect thereto that Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Associationdeems relevant, and neither party shall raise any objections as to the appointment made by such official appraiser will then select which of Landlord's or as to such official’s full power and jurisdiction to entertain Tenant's submissions most clearly reflect the application Fair Market Rent for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial mid-rise office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the upper Bucks County for new leases for a five (5) year period preceding their appointment hereunderterm as aforesaid. The arbitrator appraiser's decision shall be rendered within forty-five (45) days following his selection and to determine which the Fair Market Rent of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinionLeased Premises as aforesaid. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator Such determination shall be final final, binding and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. conclusive on Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4Tenant.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
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Options to Extend. 2.4.1 Tenant (a) Borrower shall have the right option to extend (the Lease Term (each an “First Option to Extend”) for two (2) five-year periods (the Original Construction Loan Maturity Date to the First Extended Construction Loan Maturity Date, upon satisfaction of each an “Extended Term”), provided Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and following conditions of the Lease and has provided Landlord precedent:
(i) Borrower shall provide Bondowner Representative with written notice of its intention Borrower’s request to extend exercise the Lease not later than twelve (12) months nor earlier than fifteen (15) months prior to the expiration of the Lease Term. The right to extend for the second Extended Term shall be of no force or effect if the First Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent more than ninety (defined below90) for the Premises. Within days but not less than thirty (30) days of Tenant’s exercise prior to the Original Construction Loan Maturity Date;
(ii) As of the date of Borrower’s delivery of notice of request to exercise the First Option to Extend, Landlord and as of the Original Construction Loan Maturity Date, no Default shall notify Tenant in writing have occurred and be continuing, and no event or condition which, with the giving of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (notice or the following calendar year if the Extended Term commences in the last quarter passage of time or both, would constitute a calendar year)Default shall have occurred and be continuing, and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant Borrower shall so notify Landlord certify in writing within thirty writing;
(30iii) days after receipt Borrower shall execute or cause the execution of all documents reasonably required by Bondowner Representative to exercise the proposal from Landlord. In the event that Landlord First Option to Extend and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently Bondowner Representative, at a mutually agreeable place Borrower’s sole cost and time their respective final written estimates expense, such title insurance endorsements reasonably required by Bondowner Representative;
(iv) There shall have occurred no material adverse change, as determined by Bondowner Representative in its sole discretion, in the financial condition of fair market rent Borrower, General Partner or any Guarantor from that which existed as of the later of: (including applicable annual increases). If each partyi) the Effective Date; or (ii) the date upon which the financial condition of such party was first represented to Bondowner Representative;
(v) Borrower shall represent and warrant that the Partnership Documents and the Tax Credit Investor’s estimate obligations to make the Capital Contributions thereunder, as approved by Bondowner Representative, are unamended and in full force and effect;
(vi) The construction of fair market rent is the same, then the fair market rent Project shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten be one hundred percent (10100%) range complete and free of all liens (other than liens that Borrower is diligently contesting in good faith and as to which Borrower has obtained bonds to the reasonable satisfaction of Bondowner Representative) as evidenced by Bondowner Representative’s receipt of mechanic’s lien free endorsements to the Title Policy, a Notice of Completion shall have been recorded, if applicable, and Borrower shall obtain and deliver to Bondowner Representative a copy of a temporary certificate of occupancy or certificate of occupancy issued by the appropriate Governmental Authority for the Project or equivalent evidence of Completion of the higher final estimateconstruction from the local jurisdiction, then fair market rent shall equal the average if any, and a certificate of completion from Architect in form and substance reasonably satisfactory to Bondowner Representative with a copy of the two recorded notice of completion, if any;
(2vii) final estimates. In every other caseThe Subordinate Loan Documents, fair market rentSubsidy Contracts, based HCD MHP Standard Agreement and HCD VHHP Standard Agreement shall be in full force and effect and Borrower shall be in compliance with all provisions thereof;
(viii) The balance in the interest reserve as of the Original Construction Loan Maturity Date shall be sufficient to pay interest on the two Loan until the First Extended Construction Loan Maturity Date;
(2ix) final estimates, Not less than percent ( %) of the residential units in the Project shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent leased and not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1stless than percent ( %) day of the applicable Extended Term, residential units in the Project shall be occupied by tenants pursuant to leases which comply with the Regulatory Agreement and continuing until all other Restrictions recorded against the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on Property;
(x) Borrower shall have provided evidence satisfactory to Bondowner Representative of Borrower’s continued compliance with all TCAC achievement dates;
(xi) Borrower shall have delivered to Bondowner Representative evidence satisfactory to Bondowner Representative that the first (1st) day date of expiration of HCD’s commitments to fund the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is HCD MHP Loan and HCD VHHP Loan shall be not less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date First Extended Construction Loan Maturity Date, together with financial projections or other evidence satisfactory to Bondowner Representative demonstrating that the satisfaction of such determinationall conditions to the funding of the HCD MHP Loan, with interest thereon calculated from HCD VHHP Loan and any other financing sources necessary for the date payoff of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annumLoan shall be achieved prior to the First Extended Construction Loan Maturity Date; and, if after determination of fair market rent,
(xii) [Borrower shall pay to the fair market rent is more than Bondowner Representative on or before the Original Construction Loan Maturity Date an Extension Fee in the amount equal to % of Base Rent previously paid Tenant for the Premises for original principal amount of the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annumLoan.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator ] Except as modified by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the First Option to Extend for non-renewalExtend, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, Agreement and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent other Loan Documents as modified and approved by Bondowner Representative shall exclude “down time” for releasing the Premises remain unmodified and during the period Landlord in full force and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market renteffect.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
Appears in 1 contract
Samples: Loan Agreement
Options to Extend. 2.4.1 Tenant shall have As consideration for the right to extend the consent of Landlord herein set forth, Lease Term Paragraph 43 (each an “Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. 3 dated April 16, 1997 (“Third Five Year Option to Extend”) are hereby deleted in their entirety and shall be replaced with the following:
A. SECOND FIVE YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to extend this Lease Agreement (“Option to Extend” or the “Option”) for two an additional five years (2) five-year periods (each an “Second Extended Term”), provided ) upon the following terms and conditions:
1) Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided shall give Landlord with written notice of its intention Tenant’s exercise of this Option to extend the Lease not later than twelve Extend at least one hundred eighty (12180) months nor earlier than fifteen (15) months days prior to the expiration of the Lease Term. The right Term pursuant to extend for Paragraph A hereof (not later than April 3, 2011), in which event the second Extended Term of the Lease shall be considered extended for an additional five (5) years, subject to the Basic Rent set forth below and with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) management fee and the terms and conditions subject to amendment by Landlord (Landlord, in its sole and absolute discretion, may, but is not required to, incorporate its then current Lease provisions that are standard in Landlord’s leases for comparable buildings as of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premises. Within thirty (30) days date of Tenant’s exercise of the its Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent ); and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30iii) days after receipt of the proposal from Landlordthis Paragraph 2.A thereafter deleted. In the event that Tenant fails to timely exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further Option to Extend this Lease, and the Lease shall continue in full force and effect for the full remaining term hereof, absent this Paragraph 2.
2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein, Landlord and Tenant are unable to agree in writing upon fair market rent shall, within fifteen (15) days after receipt of Tenant’s exercise of the Option, advise Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph 2.A.l(ii) above) and the Basic Rent (which shall not be less than the Basic Rent for the fifth year of the current Term) required for the Extended Term of the Lease to make the Basic Rent for the Premises comparable to the then current market triple net basic rent for comparable properties either (i) then owned in whole or in part by the above mentioned Landlord or by members of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its family as stated herein, other third party properties in the vicinity of the Premises. Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after receipt from the expiration Landlord of such 15-said new terms and conditions and Basic Rent in which to accept said new terms and conditions and Basic Rent and enter into written documentation confirming same. In the event Tenant fails to execute said written documentation confirming said new teens and conditions and Basic Rent for the Second Extended Term of Lease within said five (5) day period, Tenant shall have no further Option to Extend this Lease, and this Lease shall continue in full force and effect for the parties full remaining term hereof absent of this Paragraph 2, with Landlord having no further responsibility or obligation to Tenant with respect to Tenant’s Option to Extend.
3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in default of this Lease and has failed to cure the default in the time period allowed, this Paragraph 2 shall deliver be null and void and Tenant will have no further rights under this Paragraph. It is further agreed that if Tenant has exercised its Option to each other concurrently Extend and is subsequently in default, and has failed to cure the default in the time period allowed by the Lease at a mutually agreeable place and any time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is prior to, or at the same, then time the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based lease commences on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Second Extended Term, Landlord may at its sole and absolute discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force and effect for the full remaining Term hereof, absent of this Paragraph 2.
4) The Option rights of Tenant under this Paragraph 2.A, and the Second Extended Term thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by Tenant, except as provided for in Lease Paragraph 57 (“Permitted Assignments and Subleases”), either voluntarily or by operation of law, in any manner whatsoever.
5) Notwithstanding anything to the contrary in this Paragraph, this Option to Extend is automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure said default within five days for a monetary default and thirty days for a non-monetary default (or such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend is forfeited as stated herein, Tenant shall pay have no further Option to Extend this Lease.
B. THIRD FIVE (5)-YEAR OPTION PERIOD: Provided Tenant has extended the difference Lease for an additional five year period as set forth in Paragraph A above, Landlord hereby grants to Tenant within thirty another Option to Extend the Lease Agreement upon the following terms and conditions;
1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at least one hundred eighty (30180) days after prior to the expiration of the Basic Term hereof (not later than April 3, 2016), in which event the Term of the Lease shall be considered extended for an additional five (5) years (“Third Extended Term”) subject to the Basic Rent set forth below and with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) the management fee and the terms and conditions subject to amendment by Landlord (Landlord, in its sole and absolute discretion, may, but is not required to, incorporate its then current Lease provisions that are standard in Landlord’s leases for comparable buildings as of the date of such determination, with interest thereon calculated from Tenant’s exercise of its Option to Extend); and (iii) this Paragraph 2.B thereafter deleted. In the date of each payment of such Base Rent by event that Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Termfails to timely exercise Tenant’s Option as set forth herein in writing, Tenant shall pay have no further Option to Extend this Lease, and the difference Lease shall continue in full force and effect for the full remaining term hereof, absent this Paragraph 2.B.
2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein, Landlord shall, within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after receipt of Tenant’s exercise of option, advise Tenant of any changes in the parties management fee and the terms and conditions as referenced in Paragraph 2.B.1(ii) above and Basic Rent (which shall not be less than the Basic Rent for the fifth year of the Second Extended Term) required for the Third Extended Term of the Lease to make the Basic Rent for the Premises comparable to the then current market triple net basic rent for comparable properties either (i) then owned in whole or in part by the above mentioned Landlord or by members of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its family as stated herein, other third party properties in the vicinity of the Premises. Tenant shall have exchanged their estimates five (5) days after receipt from the Landlord of fair market rent under Section 2.4.1, said new terms and conditions and Basic Rent in which to accept said new terms and conditions and Basic Rent and enter into written documentation confirming same. In the parties shall attempt event Tenant fails to agree upon a mutually-acceptable arbitrator meeting execute said written documentation confirming said new terms and conditions and Basic Rent for the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator Third Extended Term of Lease within such fifteen said five (155) day period, then either partyTenant shall have no further Option to Extend this Lease, on behalf and this Lease shall continue in full force and effect for the full remaining term hereof absent of boththis Paragraph 2.B, may request appointment with Landlord having no further responsibility or obligation to Tenant with respect to Tenant’s Option to Extend.
3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in default of such arbitrator this Lease and has failed to cure the default in the time period allowed, this Paragraph 2.B will be null and void and Tenant will have no further rights under this Paragraph. It is further agreed that if Tenant has exercised its Option to Extend and is subsequently in default, and has failed to cure the default in the time period allowed by the then head official Lease at any time prior to, or at the scheduled Commencement Date of the San Francisco office of the American Arbitration AssociationThird Extended Term, Landlord may at its sole and absolute discretion, cancel Tenant’s Option to Extend, and neither party shall raise any objections this Lease will continue in full force and effect for the full remaining Term hereof, absent of this Paragraph Z.B.
4) The Option rights of Tenant under this Paragraph 2.B and the Third Extended Term thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by Tenant, except as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application provided for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California Lease Paragraph 57 (“Comparable BuildingsPermitted Assignments and Subleases”), and shall not then be engaged either voluntarily or have been engaged by either Landlord or Tenant within the five (operation of law, in any manner whatsoever, 5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest Notwithstanding anything to the correct result contrary in this Paragraph 2.B, this Option to Extend is automatically forfeited by Tenant (without notice from Landlord) in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of event Tenant is, at any time during the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes Term of this Lease, “fair market rent” means the rent at which in default of said Lease and if Tenant does not completely cure said default within five days for a landlord, under no compulsion to lease, would rent the Premises monetary default and thirty days for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: monetary default (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use longer time as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations cure in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increasesLease Agreement). In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The said Option to Extend is forfeited as stated herein, Tenant shall be void and of have no further effect if at any time the named Tenant or an Affiliate Assignee under Option to Extend this Lease. EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989 Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the TermAgreement, as heretofore amended, shall remain in full force and effect.
Appears in 1 contract
Samples: Lease Agreement (Maxtor Corp)
Options to Extend. 2.4.1 Tenant shall have the right two (2) options to extend renew the Lease Term for all or a portion of the Premises (each an “Option Options to Extend”) for two five (25) five-year periods lease terms (each each, an “Extended Extension Term”), provided Tenant is not in Default ) at the prevailing market rental rate at the time of exercise and at the time the Extended Term commences of any commencement of the terms, covenants and conditions of Extension Term for similar type properties in the Lease and has provided Landlord with general market area (“Fair Market Value”). Tenant shall provide written notice to Landlord of its intention to extend exercise its options to renew the Lease not later less than twelve six (12) months nor earlier than fifteen (156) months prior to the expiration of the Lease Term or an Extension Term. The right In order to extend for exercise Tenant’s options to extend, Tenant shall not have defaulted at any time during the second Extended Term initial lease term, or option period, beyond the stated cure date. For each Extension Term, the Base Year shall be adjusted to reflect the then current base year that is being offered to prospective tenants of the building, but in no force or effect if event earlier that the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premisesyear in which Tenant’s lease would expire. Within thirty sixty (3060) days of Tenant’s exercise the beginning of any Extension Term, the Landlord shall provide an allowance of $7.00 per rentable square foot of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year Premises for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year)refurbishment thereof. Landlord shall, and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of Tenant’s renewal notice, send to Tenant, Landlord’s proposed fair market rental value for the proposal from Leased Premises based on comparable buildings, for comparable tenants ("Landlord’s Rent") for the upcoming Renewal Term. In Within ten (10) days thereafter, Tenant shall send to Landlord a notice stating either (i) Tenant’s agreement with Landlord’s Rent, in which event Base Rent shall be said amount payable by Tenant throughout the event that upcoming Renewal Term with any subsequent fair market annual increases, or (ii) Tenant’s evaluation of said prevailing fair market rental value ("Tenant’s Rent") with any subsequent fair market annual increases. If Landlord and Tenant are unable to agree in writing good faith upon said prevailing fair market rent rental value within fifteen twenty (1520) business days after (the “Good Faith Negotiation Period”) from the date of sending the notice described in (ii) above, then Tenant may elect to either (i) rescind its renewal notice or (ii) consent to the matter being determined by baseball arbitration pursuant to the paragraph below. Disputes between Landlord and Tenant with respect to the prevailing fair market rental value of the Leased Premises only shall be determined by baseball arbitration as provided in this paragraph. No other provision or issue arising under this Lease or any addendum hereto shall be subject to or determined by the provisions hereof. Landlord and Tenant shall have notified each appoint a person as arbitrator who is a recognized authority on commercial office leasing in the City of Memphis, Tennessee and is not affiliated with either Landlord or Tenant in writing that Tenant disagrees with such determinationany way, then within five ten (510) business days after the expiration of the Good Faith Negotiation Period. Such appointment shall be signified in writing by each party to the other within such 15-ten (10) business day period, and the parties arbitrators so appointed shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are appoint within a ten percent (10%) range days after the appointment of the higher final estimateTenant’s arbitrator and Landlord’s arbitrator a third arbitrator, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, who shall be determined by arbitration as provided below a person who is a recognized authority on commercial office leasing in Section 2.4.2the City of Memphis, Tennessee and is not affiliated with Landlord or Tenant in any way. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant Said third arbitrator shall, commencing on after due consideration of all the first (1st) day of relevant factors to be taken into account and any other information the applicable Extended Termarbitrator deems necessary, and continuing until the fair market rent is determined under Section 2.4.2in good faith, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final make its own determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount rental value of Base Rent previously paid by Tenant for the Premises for within ten (10) days of his or her appointment (the applicable Extended Term“Arbitrator’s Rent”) and thereafter select either the Landlord’s Rent or the Tenant’s Rent, Landlord shall pay but no other, whichever is closest to the difference Arbitrator’s Rent (the “Final Rent Determination”), such determination to Tenant be made within thirty twenty (3020) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such officialthird arbitrator’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator Final Rent Determination decision shall be a member in writing and in duplicate, one counterpart thereof to be delivered to each of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education programparties hereto. The Final Rent Determination shall be binding, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”)final, and conclusive on the parties. The fees of the arbitrators and the expenses incident to the proceedings shall not then be engaged or have been borne equally between Landlord and Tenant. The fees of respective counsel engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability and the fees of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen expert witnesses and other witnesses called by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties parties, shall be paid by the respective party engaging such counsel or consultantcalling or engaging such witnesses. The If Tenant fails to appoint an arbitrator shall render his or her decision in writingthe manner and within the time specified above, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify then the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “prevailing fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent rental value of the Premises for the applicable Extended upcoming Renewal Term shall be the Landlord’s Rent. If Landlord fails to appoint an arbitrator in the manner and a tenantwithin the time specified above, under no compulsion to lease, would rent then the Premises prevailing fair market rental value for the applicable Extended Termupcoming Renewal Term shall be the Tenant’s Rent. Fair market rent shall mean and refer If the parties’ arbitrators fail to appoint the rent being charged by Landlord and other landlords at third arbitrator within the time of exercise of and in the Option to Extend for non-renewal, non-expansionmanner prescribed herein, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating shall jointly and promptly apply to the fair market rent only local office of the amount American Arbitration Association for the appointment of an “in-house” brokerage commission on renewal shall be taken into account; (B) the third arbitrator. As soon as reasonably practicable after the agreement to or determination of fair market rent the Base Rent rate that will apply during any applicable Renewal Term, Tenant shall take into account deliver to Landlord a written notice (“Renewal Base Rent Notice”) that memorializes the then unamortized value of Building standard alterations Base Rent rate that is expected to the Premises paid for by Tenant but shall exclude apply during any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be such Renewal Term, as determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rentterms hereof.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
Appears in 1 contract
Samples: Lease (Bioventus Inc.)
Options to Extend. 2.4.1 2.3.1 Tenant shall have the right to extend the Term of this Lease Term for up to three (3) additional terms of five (5) years each (each, an “Option to Extend”"Extension Term") for two (2) five-year periods (each an “Extended Term”), provided Tenant is not in Default at the time by delivery of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided Landlord with written notice of its intention to extend the Lease not Landlord no later than twelve ninety (1290) months nor earlier than fifteen (15) months days prior to the expiration of the Lease Term. The right to extend for penultimate year of the second Extended then-existing Term shall be of no force or effect if (the Option to Extend for the first Extended Term has not been validly exercised"Extension Notice"). The Base Rent during each Extended Term the Extension Term, subject to periodic adjustment as provided in Section 3.1.3, below, shall be the fair market rent (defined below) for the Premises as of the date of the Extension Notice (the "Extended Base Rent"). The determination of fair market rent for the Premises shall consider the rents and other terms and conditions at which comparable transactions are being consummated in projects comparable to the Premises in the El Segundo, California area, which determination of comparable projects shall duly take into account such projects' age, design and construction relative to the Premises, and the presence or absence of any remaining Proposition XIII protection in accordance with Section 5.2.2, below, as such Proposition XIII protection may be affected by Tenant exercising its right to extend the Term pursuant to this Section 2.3. Other than the determination of Base Rent for the Extension Term, the terms and conditions of this Lease shall remain the same for the Extension Term and Landlord shall have no obligation to grant Tenant any improvement allowances or concessions in connection with the Extension Term. Tenant's Extension Notice shall set forth Tenant's opinion of the Extended Base Rent. Within thirty (30) days of Tenant’s exercise after Landlord's receipt of the Option to ExtendExtension Notice, Landlord shall notify either deliver a notice to Tenant in writing either accepting Tenant's opinion of Landlord’s the Extended Base Rent or objecting (an "Objection Notice") to Tenant's determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into accountBase Rent. If Tenant does not agree with Landlord’s proposalLandlord delivers an Objection Notice, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that then Landlord and Tenant are unable to agree shall negotiate in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than good faith the amount of the Extended Base Rent previously paid by Tenant for Rent. The right to exercise the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties Extension Terms are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as personal to the appointment made originally named Tenant herein (the "Original Tenant") and may only be exercised by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Original Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties"Survivor" or an "Affiliate," as those terms are defined in Article 15 below, absent fraud which Survivor or gross error. Upon failure, refusal or inability of Affiliate is an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions assignee of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In additionmay not be exercised by any other assignee, (A) the determination sublessee or transferee of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
Appears in 1 contract
Samples: Lease (Infonet Services Corp)
Options to Extend. 2.4.1 (a) Subject to the terms of this Paragraph 1 and Paragraph 3 below, entitled “Options,” Landlord hereby grants to Tenant shall have the right option (each, an “Extension Option” and collectively, the “Extension Options”) to extend the Term of the Lease Term with respect to the entire Premises for up to [***] additional periods of [***] years each (each each, an “Option to Extend”) for two (2) five-year periods (each an Term” and collectively, the “Extended TermOption Terms”), provided Tenant is not in Default at on the time of exercise and at the time the Extended Term commences of any of the same terms, covenants and conditions as provided for in the Lease during the immediately preceding Term, except that (i) Tenant shall have no further extension rights (other than as expressly set forth herein), (ii) Basic Rent shall be established based on [***] of the Lease “fair market rental rate” for the Premises for the applicable Option Term as defined and has provided Landlord determined in accordance with the provisions of this Paragraph 1, and (iii) all other economic terms such as, without limitation, parking charges, if any, etc., shall be established based on the “fair market rental rate” for the Premises for the Option Term as defined and determined in accordance with the provisions of this Paragraph 1.
(b) Each Extension Option must be exercised, if at all, by written notice of its intention (“Extension Notice”) delivered by Tenant to extend Landlord no earlier than the Lease not date which is four hundred twenty (420) days, and no later than twelve the date which is three hundred sixty (12360) months nor earlier than fifteen (15) months days, prior to the expiration of the Lease Term. immediately preceding Term of the Lease.
(c) The right term “fair market rental rate” as used in this Rider 1 shall mean the annual amount per square foot, projected during the relevant period, that a willing, comparable, non-equity, renewal tenant (excluding sublease and assignment transactions) would pay, and a willing, comparable, institutional landlord of a comparable Class “A” quality industrial building containing similar parking ratios (e.g., up to extend 2.5 spaces per 1,000 square feet) and located in the greater Alameda County, San Xxxx and Milpitas areas (collectively, the “Comparison Area”) would accept, at arm’s length (what Landlord is accepting in current transactions for the second Extended Building may be considered), for space comparable in size and quality as the leased area at issue taking into account the age, quality and layout of the existing improvements in the leased area at issue and taking into account items that professional real estate brokers customarily consider, including, but not limited to, rental rates, industrial space availability, tenant size, tenant improvement allowances, operating expenses and allowance, parking charges, and any other economic matters then being charged by Landlord or lessors of such similar industrial buildings but shall not take into account any improvements or alterations paid for at the sole cost and expense of Tenant. Notwithstanding anything herein to the contrary, in no event will Basic Rent decrease from that payable in the last year of the immediately previous Lease Term shall be as a result of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent rental rate determination provided for in this Paragraph 1. *** Information has been omitted pursuant to a request for confidential treatment which has been filed separately with the Securities and Exchange Commission. EXHIBIT L
(defined belowd) for the Premises. Within thirty (30) days of Tenant’s exercise of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term rental rate shall be changed delivered to the calendar year during which the applicable Extended Term commences Tenant in writing not later than sixty (or the 60) days following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, receipt of Tenant’s Extension Notice. Tenant shall so notify Landlord in writing within will have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the proposal from Landlordfair market rental rate within which to accept such fair market rental rate or to object thereto in writing. In Tenant’s failure to object to the event that fair market rental rate submitted by Landlord in writing within Tenant’s Review Period will conclusively be deemed Tenant’s approval and acceptance thereof. If Tenant objects to the fair market rental rate submitted by Landlord within Tenant’s Review Period, then Landlord and Tenant are unable will attempt in good faith to agree in writing upon such fair market rent rental rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement on such fair market rental rate within fifteen (15) days after following the expiration of Tenant’s Review Period (the “Outside Agreement Date”), then each party’s determination will be submitted to appraisal in accordance with the provisions below.
(i) Landlord and Tenant shall have notified Landlord in writing that Tenant disagrees with such determinationeach appoint one independent, then within unaffiliated real estate broker (referred to herein as an “appraiser” even though only a broker) who has been active over the five (5) days after year period ending on the expiration date of such 15-day period, appointment in the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates leasing of fair market rent (including applicable annual increases)comparable industrial properties in the Comparison Area. If each party’s estimate of fair market rent is the same, then the fair market rent shall equal Each such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall appraiser will be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant appointed within thirty (30) days after the date Outside Agreement Date.
(ii) The two (2) appraisers so appointed will within fifteen (15) days of such determination, with interest thereon calculated from the date of each payment the appointment of such Base Rent by Tenant at the rate last appointed appraiser agree upon and appoint a third appraiser who shall be qualified under the same criteria set forth herein above for qualification of six percent the initial two (6%2) per annum; and, if after appraisers.
(iii) The determination of fair market rent, the fair market rent is more than appraisers shall be limited solely to the amount issue of Base whether Landlord’s or Tenant’s last proposed (as of the Outside Agreement Date) new Basic Rent previously paid Tenant for the Premises is the closest to the actual new Basic Rent for the applicable Extended TermPremises as determined by the appraisers, Tenant taking into account the requirements of Subparagraph 1(c) and this Subparagraph 1(e) regarding same.
(iv) The three (3) appraisers shall pay the difference to Landlord within thirty (30) days after of the date appointment of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is third appraiser reach a decision as to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, whether the parties shall attempt use Landlord’s or Tenant’s submitted new Basic Rent, and shall notify Landlord and Tenant thereof.
(v) The decision of the majority of the three (3) appraisers shall be binding upon Landlord and Tenant and neither party will have the right to reject the determination or undo the exercise of the Extension Option. The cost of each party’s appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser (or arbitration, if necessary) shall be shared equally by Landlord and Tenant.
(vi) If either Landlord or Tenant fails to appoint an appraiser within the time period in Subparagraph 1(e)(i) herein above, the appraiser appointed by one of them shall reach a decision, notify Landlord and Tenant thereof and such appraiser’s decision shall be binding upon Landlord and Tenant and neither party will have the right to reject the determination or undo the exercise of the Extension Option.
(vii) If the two (2) appraisers fail to agree upon and appoint a mutually-acceptable arbitrator meeting third appraiser, both appraisers shall be dismissed and the criteria set forth below matter to determine fair market rent hereunder. If be decided shall be forthwith submitted to binding arbitration under the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office provisions of the American Arbitration Association.
(viii) In the event that the new Basic Rent is not established prior to end of the immediately previous Term of the Lease, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain Basic Rent immediately payable at the application for and make commencement of the appointment. The arbitrator applicable Option Term shall be a member of the Appraisal Institute (or its successor organization) Basic Rent determined by Landlord. Notwithstanding the above, once the fair market rental is determined in accordance with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education programthis section, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to shall settle any overpayment on the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is next Basic Rent payment date falling not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within less than thirty (30) days after his or her appointmentsuch determination. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.EXHIBIT L
Appears in 1 contract
Samples: Standard Industrial Lease
Options to Extend. 2.4.1 (a) Subject to the terms of this Paragraph 40 and Paragraph 42, entitled "Options," Landlord hereby grants to Tenant shall have the right option (each, an "Extension Option") to extend the Term of this Lease Term (each an “Option with respect to Extend”) the entire Premises for up to two (2) five-year additional periods of five (5) years each (each, an “Extended "Option Term”"), provided Tenant is not in Default at on the time of exercise and at the time the Extended Term commences of any of the same terms, covenants and conditions as provided for in this Lease during the initial Lease Term, except that all economic terms such as, without limitation, Monthly Base Rent, an Operating Expense Allowance, if any, parking charges, etc., shall be established based the "fair market rental rate" for the Premises for the applicable Option Term as defined and determined in accordance with the provisions of this Paragraph 40 below. Notwithstanding the foregoing, Monthly Base Rent during each Option Term shall be ninety-five percent (95%) of the Lease fair market Monthly Base Rent, and has provided Landlord with in no event will Market Base Rent during any Option Term be less that the Market Base Rent at the end of the immediately preceding term.
(b) The Extension Option must be exercised, if at all, by written notice of its intention ("Extension Notice") delivered by Tenant to extend Landlord no earlier than the Lease not date which is one (1) year, and no later than twelve the date which is nine (12) months nor earlier than fifteen (159) months prior to the expiration of the Lease Termthen current Term of this Lease.
(c) The term "fair market rental rate" as used in this Addendum shall mean the annual amount per rentable square foot, projected during the relevant period, that a willing, comparable, non-equity renewal tenant (excluding sublease and assignment transactions) would pay, and a willing, institutional landlord of a comparable Class "A" quality office building located in the Xxxx Xxxxx Airport area ("Comparison Area") would accept, at arm's length (what Landlord is accepting in current transactions for the Building or other buildings in the Development may be considered), for space comparable in size, quality and floor height as the leased area at issue taking into account the age, quality and layout of the existing improvements in the leased area at issue and taking into account items that professional real estate brokers customarily consider, including, but not limited to, rental rates, office space availability, tenant size, tenant improvement allowances, operating expenses and allowance, parking charges, free rent, free parking and any other lease concessions, if any, then being charged or granted by Landlord or the lessors of such similar office buildings. The right to extend for fair market rental rate will be an effective rate, not specifically including, but accounting for, the second Extended Term appropriate lease concessions described above.
(d) Landlord's determination of fair market rental rate shall be of no force or effect if the Option delivered to Extend for the first Extended Term has Tenant in writing not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premises. Within later than thirty (30) days following Landlord's receipt of Tenant’s exercise of the Option to Extend, Landlord shall notify 's Extension Notice. Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within will have thirty (30) days ("Tenant's Review Period") after receipt of Landlord's notice of the proposal from Landlordfair market rental rate within which to accept such fair market rental rate or to object thereto in writing. In Tenant's failure to object to the event that fair market rental rate submitted by Landlord in writing within Tenant's Review Period will conclusively be deemed Tenant's approval and acceptance thereof. If Tenant objects to the fair market rental rate submitted by Landlord within Tenant's Review Period, then Landlord and Tenant are unable will attempt in good faith to agree in writing upon such fair market rent rental rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement on such fair market rental rate within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after following the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the sameTenant's Review Period, then the fair market rent neither Tenant nor Landlord shall equal have any obligation to proceed with such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for rental rate or the applicable Extended Term, Landlord Extension Option and this Lease shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree terminate upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4scheduled expiration date.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
Appears in 1 contract
Samples: Office Building Lease (California First National Bancorp)
Options to Extend. 2.4.1 (a) Provided that no Event of Default shall have occurred and be continuing, Tenant shall have the right option to extend the Lease initial Term (each an “Option to Extend”) for two (2) five-year successive periods of five (5) years each an “Extended (the "First Extension Term”)" or the "Second Extension Term," as the case may be, provided Tenant is not in Default at and collectively, the time of exercise and at "Extension Terms") upon the time the Extended Term commences of any of the terms, covenants same terms and conditions of this Lease in effect at the Lease and has provided Landlord with expiration of the initial Term or the First Extension Term, as the case may be, except that the Minimum Annual Rent (not including Additional Rent) for the Extension Terms shall be adjusted as set forth below (in each case, the "Rent Adjustment"). Tenant, if it elects to exercise either option to extend, shall do so by delivering written notice of its intention such election to extend the Lease not Landlord no later than twelve one (121) months nor earlier than fifteen (15) months year prior to the expiration of the initial Lease Term or the First Extension Term, as the case may be. Unless Landlord otherwise agrees in writing, Tenant's rights under this Section shall terminate if Tenant fails to timely and properly exercise either option to extend.
(b) The right to extend Rent Adjustment for the second Extended First Extension Term shall be of no force or effect if an amount equal to the Option to Extend product obtained by multiplying the Minimum Annual Rent for the first Extended Term has tenth (10th) lease year (not been validly exercisedincluding Additional Rent) by one hundred and fifteen percent (115%). The Base Rent during each Extended Adjustment for the Second Extension Term shall be the fair market rent determined as follows: Within twenty (defined below) for the Premises. Within thirty (30) days of Tenant’s exercise of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (3020) days after receipt of Tenant's notice to extend, Landlord shall send written notice to Tenant of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing "prevailing rental rate" (based upon fair market rent for premises of comparable size, age, quality and tenant finish improvements as are found in the Earth City/Riverport area to a tenant of similar credit standing as Tenant, excluding free rent and other concessions) (the "Rental Criteria") and shall advise Tenant of Landlord's proposed Rent Adjustment, if any. If Tenant disagrees with Landlord's determination of prevailing rental rates (based on the Rental Criteria) and such proposed Rent Adjustment, Tenant may, but only within fifteen forty- five (1545) days after Tenant shall have notified receipt of Landlord's notice, require by written notice to Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range determination of the higher final estimate, then fair market rent shall equal the average of the two prevailing rental rate (2) final estimates. In every other case, fair market rent, based on the two (2Rental Criteria) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to Adjustment be made by arbitrationappraisers. In such event, such arbitration within ten (10) days thereafter, each party shall be conducted select an MAI appraiser (i) with at least ten (10) years experience in appraising commercial property and determined buildings in the City of San Francisco, solely in accordance with Earth City/Riverport area comparable to the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration AssociationLeased Premises, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designationii) currently certified under the continuing education programprogram of The Appraisal Institute, or its successor (any such appraiser meeting the foregoing requirements to be hereinafter called an "Appraiser"). The two Appraisers shall give their opinion of the prevailing rental rates (based on the Rental Criteria) within twenty (20) days after their retention. In no event, however, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings the Minimum Annual Rent in the area from Second Extension Term be less than the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged Minimum Annual Rent payable by either Landlord or Tenant within during the five (5) year period preceding their appointment hereunderFirst Extension Term. The arbitrator shall determine which In the event that the opinions of the two estimates submitted Appraisers differ and, after good faith efforts over the succeeding twenty (20) day period, the Appraisers cannot mutually agree, the Appraisers shall immediately and jointly appoint a third Appraiser with the qualifications specified above. The Minimum Annual Rent during the Second Extension Term shall be established by the parties pursuant to Section 2.4.1 is closest to third Appraiser based on the correct result in Rental Criteria; provided, however, that said Rent Adjustment shall not be greater than the arbitrator’s opinioninitial high appraisal or be less than the initial low appraisal. Each party shall pay its own costs for its Appraiser and shall equally share the costs of any third Appraiser. The arbitrator parties shall have no power to select an alternative position or a decision different from that proposed by either partyimmediately confirm the Rental Adjustment for the Second Extension Term in writing. The decision Minimum Monthly Rent during each Extension Term shall be an amount equal to one- twelfth (1/12) of the arbitrator Minimum Annual Rent for each such Extension Term and shall be final paid at the same time and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.43.01.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.
Appears in 1 contract
Options to Extend. 2.4.1 19.1 So long as Redback Networks, Inc. is the Tenant hereunder and occupies the entirety of the Leased Premises, and subject to the condition set forth in clause (b) below, Tenant shall have the right two options to extend the term of this Lease with respect to the entirety of the Leased Premises, the first for a period of five (5) years from the expiration of the ninth year of the Lease Term (each an “Option to Extend”the "First Extension Period"), and the second (the "Second Extension Period") for two a period of five (25) five-year periods years from the expiration of the First Extension Period, subject to the following conditions:
(each an “Extended Term”)a) Each option to extend shall be exercised, provided Tenant is not in Default if at the time all, by notice of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided given to Landlord with written notice of its intention to extend the Lease by Tenant not later more than twelve (12) months nor earlier less than fifteen nine (159) months prior to the expiration of the Lease Term. The right to extend for the second Extended Term shall be of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premises. Within thirty (30) days of Tenant’s exercise ninth year of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Lease Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day periodthe First Extension Period, as applicable;
(b) Anything herein to the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent contrary notwithstanding, if Tenant is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range in default under any of the higher final estimateterms, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed covenants or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes conditions of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords either at the time of exercise Tenant exercises either extension option or on the commencement date of the Option First Extension Period or the Second Extension Period, as applicable, Landlord shall have, in addition to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space all of Landlord's other rights and remedies provided in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors right to terminate such option(s) to extend upon notice to Tenant.
19.2 In the event the applicable option is exercised in a timely fashion, the Lease shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition extended for the use as permitted by term of the applicable extension period upon all of the terms and conditions of this Lease, and (iii) provided that the Base Year Monthly Rent for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the each extension period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty ninety-five percent (5095%) of the rentable square feet "Fair Market Rent" for the Leased Premises, increased as set forth below. For purposes hereof, "Fair Market Rent" shall mean the Base Monthly Rent determined pursuant to the process described below. In no event, however, shall any adjustment of the Premises for substantially the remainder of the Term.Base Monthly
Appears in 1 contract
Samples: Lease (Redback Networks Inc)
Options to Extend. 2.4.1 (a) Landlord hereby grants to Tenant the exclusive and irrevocable option to extend the Term for three (3) additional periods (each such additional period being an "Extended Term") of five (5) year(s) each by giving Landlord written notice at least twelve (12) months prior to the Expiration Date of the Primary Term or the then applicable Extended Term. Tenant shall have the right to exercise these options to extend provided that on the date of such exercise no Event of Default by Tenant then exists under this Lease Term and there then exists no uncured default by Tenant with respect to which Landlord has given written notice to Tenant pursuant to the provisions of Paragraph 30 hereof.
(each an “Option to Extend”b) for two (2) five-year periods (each an “Extended Term”), provided Tenant is not in Default at the time of exercise and at the time the Each Extended Term commences of any of shall be on the terms, covenants and conditions of this Lease then applicable, except that the Lease and has provided Landlord with written notice of its intention to extend the Lease not later than twelve (12) months nor earlier than fifteen (15) months prior to the expiration of the Lease Term. The right to extend Fixed Rent for the second Extended Term shall be of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent "Fair Market Rent" (defined belowas hereinafter defined) for and except that after the Premises. Within thirty (30) days of Tenant’s exercise of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year option for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference have only two (2) options to Landlord within thirty (30) days extend and after the date exercise of such determinationthe option for the second Extended Term, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent shall have only one (6%1) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is option to be made by arbitrationextend, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official exercise of the San Francisco office of option for the American Arbitration Associationthird Extended Term, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power further options to select an alternative position or a decision different from that proposed by either party. The decision of extend the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. "Fair market rent Market Rent" shall mean and refer to (i) the rent annual effective rental rate per square foot of rentable floor area then being charged by Landlord and other landlords at the time under new leases of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity office space in the Building metropolitan Cary, North Carolina, market for space similar to the Premises in a building of comparable quality and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during with comparable parking and other amenities, taking into account concessions offered to new tenants such as free rent, tenant improvement allowances, moving allowances and other such concessions, and taking into account Tenant's repair and maintenance obligations under this Lease and the applicable Extended Term, but may be subject Taxes and expenses Tenant is obligated to periodic adjustment. For purposes of determining fair market rent pay under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, ; (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted amount of space and length of term taken by the terms and conditions of this Lease, tenant; and (iii) the Base Year for credit worthiness and quality of the space to which the tenant. The fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.'s modular office furniture shall
Appears in 1 contract
Samples: Lease Agreement (Wells Real Estate Investment Trust Inc)
Options to Extend. 2.4.1 (a) Tenant shall have the right to extend the Lease Term (each an “Option to Extend”) for two (2) five-year periods (each an “Extended Term”), provided Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided Landlord with written notice of its intention options to extend the Term of this Lease (the "Options to Extend") for successive periods of ten (10) years each (the "Extension Periods"), subject to and on the terms set forth herein. Tenant may only exercise the Options to Extend with respect to the entire Premises (including the Expansion Spaces). If Tenant shall desire to exercise either Option to Extend, it shall give Landlord a notice (the "Inquiry Notice") of such desire not later than twelve twenty-one (12) months nor earlier than fifteen (1521) months prior to the expiration of the Initial Term of this Lease Termor the preceding Extension Period, as the case may be. The right to extend for Thereafter, the second Extended Term shall be of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Fair Market Rent during each Extended Term shall be the fair market rent (as defined in Subsection (b) below) for the Premisesapplicable Extension Period shall be determined in accordance with Subsection (e) below. Within thirty After the applicable Fair Market Rent has been so determined, Tenant may exercise each Option to Extend by giving Landlord written notice (30the "Exercise Notice") days of Tenant’s exercise its election to do so not later than (x) the date by which Fair Market Rent has been determined pursuant to this Section 10.12 or (y) eighteen (18) months prior to the expiration of the Initial Term of this Lease, or the preceding Extension Period, as the case may be, whichever is earlier. If Tenant fails to timely give either the Inquiry Notice or the Exercise Notice to Landlord with respect to any Option to Extend, Landlord shall notify Tenant in writing at the sole election of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty be conclusively deemed to have waived such Option to Extend hereunder.
(30b) days after receipt For purposes of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant this Section 10.12, "Fair Market Rent" shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal mean the average of the two (21) final estimates. In every other case, fair market rent, based on the two ninety-five percent (295%) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after rental value for unfinished, shell office space in a comparable office building in the Kendall Square, Cambridge, Massachusetts office market area (the "Relxxxxx Xarket") and (2) ninety-five percent (95%) of the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant rental value for the Premises for Premises, including the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration AssociationExpansion Spaces, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity space in the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Term, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Lease, the following factors shall be taken into account: (i) that the Premises are then in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all other relevant factors which an experienced arbitrator familiar with in the Comparable Buildings would customarily take into account in determining Relevant Market, including the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease ten (i10) assigns this Lease or (ii) subleases more than fifty percent (50%) year term of the rentable square feet of applicable Extension Period. In no event shall the Premises Fair Market Rent for substantially the remainder of first Extension Period be less than the TermAnnual Fixed Rent for the Premises, including the Expansion Spaces, for the fifteenth Lease Year and in no event shall the Fair Market Rent for the second Extension Period be less than the Annual Fixed Rent for the Premises, including the Expansion Spaces, for the twenty-fifth Lease Year.
Appears in 1 contract
Samples: Lease (BioMed Realty Trust Inc)
Options to Extend. 2.4.1 (a) Landlord hereby grants to Tenant the exclusive and irrevocable option to extend the Term for two (2) additional periods (each such additional period being an "Extended Term") of five (5) year(s) each by giving Landlord written notice at least twelve (12) months prior to the Expiration Date of the Primary Term or the then applicable Extended Term. Tenant shall have the right to exercise these options to extend provided that on the date of such exercise no Event of Default by Tenant then exists under this Lease Term and there then exists no uncured default by Tenant with respect to which Landlord has given written notice to Tenant pursuant to the provisions of Paragraph 30 hereof.
(each an “Option to Extend”b) for two (2) five-year periods (each an “Extended Term”), provided Tenant is not in Default at the time of exercise and at the time the Each Extended Term commences of any of shall be on the terms, covenants and conditions of this Lease then applicable, except that the Lease and has provided Landlord with written notice of its intention to extend the Lease not later than twelve (12) months nor earlier than fifteen (15) months prior to the expiration of the Lease Term. The right to extend Fixed Rent for the second Extended Term shall be of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent "Fair Market Rent" (defined belowas hereinafter defined) for and except that after the Premises. Within thirty (30) days of Tenant’s exercise of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year option for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference have only one (1) option to Landlord within thirty (30) days extend, and after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official exercise of the San Francisco office of option for the American Arbitration Associationsecond Extended Term, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designation) currently certified under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power further options to select an alternative position or a decision different from that proposed by either party. The decision of extend the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. "Fair market rent Market Rent" shall mean and refer to (i) the rent annual effective rental rate per square foot of rentable floor area then being charged by Landlord and other landlords at the time under new leases of exercise of the Option to Extend for non-renewal, non-expansion, then current, comparable non-sublease, non-encumbered, non-equity office space in the Building metropolitan Oklahoma City, Oklahoma, market for space similar to the Premises in a building of comparable quality and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during the applicable Extended Termwith comparable parking and other amenities, but may be subject taking into account concessions offered to periodic adjustment. For purposes of determining fair market rent new tenants such as free rent, tenant improvement allowances, moving allowances and other such concessions, and taking into account Tenant's repair and maintenance obligations under this LeaseLease and the Taxes and expenses Tenant is obligated to pay under this Lease (or, the following factors shall be taken into account: (i) if applicable, that the Premises are then Tenant is obligated to pay Tenant's Proportionate Share of Operating Expenses and Taxes pursuant to Paragraph 52 and Exhibit "M" in their “as is, where is” condition as improved with any alterations thereto made by or on behalf of Tenant in their then condition, lieu thereof); (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted amount of space and length of term taken by the terms and conditions of this Lease, tenant; and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises credit worthiness and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) quality of the rentable square feet of the Premises for substantially the remainder of the Termtenant.
Appears in 1 contract
Samples: Net Lease Agreement (Wells Real Estate Fund Xi L P)
Options to Extend. 2.4.1 a. Tenant shall have the right to extend the Lease Term (each an “Option to Extend”) for two (2) five-year periods (each an “Extended Term”), provided Tenant is not in Default at the time of exercise and at the time the Extended Term commences of any of the terms, covenants and conditions of the Lease and has provided Landlord with written notice of its intention successive options to extend the Term of this Lease for an additional period of five (5) years each (the "Renewal Options"), which Renewal Options shall each be exercised by serving written notice (the "Renewal Notice") upon Landlord at least six (6) months, but not later more than twelve (12) months nor earlier than fifteen (15) months months, prior to the expiration of the Lease Term. The right to extend for the second Extended Initial Term shall be of no force or effect if the Option to Extend for the first Extended Term has not been validly exercised. The Base Rent during each Extended Term shall be the fair market rent (defined below) for the Premises. Within thirty (30) days of Tenant’s exercise of the Option to Extend, Landlord shall notify Tenant in writing of Landlord’s determination of fair market rent and the Base Rent proposed during the applicable Extended Term. The Base Year for the applicable Extended Term shall be changed to the calendar year during which the applicable Extended Term commences (or the following calendar year if the Extended Term commences in the last quarter of a calendar year), and fair market rent shall take that change into account. If Tenant does not agree with Landlord’s proposal, Tenant shall so notify Landlord in writing within thirty (30) days after receipt of the proposal from Landlord. In the event that Landlord and Tenant are unable to agree in writing upon fair market rent within fifteen (15) days after Tenant shall have notified Landlord in writing that Tenant disagrees with such determination, then within five (5) days after the expiration of such 15-day period, the parties shall deliver to each other concurrently at a mutually agreeable place and time their respective final written estimates of fair market rent (including applicable annual increases). If each party’s estimate of fair market rent is the same, then the fair market rent shall equal such estimate. If both parties’ final estimates of fair market rent are within a ten percent (10%) range of the higher final estimate, then fair market rent shall equal the average of the two (2) final estimates. In every other case, fair market rent, based on the two (2) final estimates, shall be determined by arbitration as provided below in Section 2.4.2. Should the determination of fair market rent not be completed or agreed upon prior to the commencement of an Extended Term, Tenant shall, commencing on the first (1st) day of the applicable Extended Term, and continuing until the fair market rent is determined under Section 2.4.2, pay as Base Rent commencing on the first (1st) day of the applicable Extended Term, an amount equal to Landlord’s final determination of the fair market rent. If after the fair market rent is determined under Section 2.4.2, the fair market rent is less than the amount of Base Rent previously paid by Tenant for the Premises for the applicable Extended Term, Landlord shall pay the difference to Tenant within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum; and, if after determination of fair market rent, the fair market rent is more than the amount of Base Rent previously paid Tenant for the Premises for the applicable Extended Term, Tenant shall pay the difference to Landlord within thirty (30) days after the date of such determination, with interest thereon calculated from the date of each payment of such Base Rent by Tenant at the rate of six percent (6%) per annum.
2.4.2 Whenever under this Section 2.4 the determination of fair market rent is to be made by arbitration, such arbitration shall be conducted and determined in the City of San Francisco, solely in accordance with the provisions of this Section 2.4.2. Within fifteen (15) days after the parties have exchanged their estimates of fair market rent under Section 2.4.1, the parties shall attempt to agree upon a mutually-acceptable arbitrator meeting the criteria set forth below to determine fair market rent hereunder. If the parties are unable to agree on an arbitrator within such fifteen (15) day period, then either party, on behalf of both, may request appointment of such arbitrator by the then head official of the San Francisco office of the American Arbitration Association, and neither party shall raise any objections as to the appointment made by such official or as to such official’s full power and jurisdiction to entertain the application for and make the appointment. The arbitrator shall be a member of the Appraisal Institute (or its successor organization) with a then current senior designation of MAI (or then comparable designationextended Option Term, if applicable) currently certified of the Lease (collectively the "Option Term(s)"); provided that such option is conditioned upon the Lease being in full force and effect, and there being no Event of Default existing under the continuing education program, shall have at least ten (10) years’ experience in appraising major Class A commercial office buildings in the area from the Central San Xxxxxx exit off Highway 101 and south or southern Marin County, California (“Comparable Buildings”), and shall not then be engaged or have been engaged by either Landlord or Tenant within the five (5) year period preceding their appointment hereunder. The arbitrator shall determine which of the two estimates submitted by the parties pursuant to Section 2.4.1 is closest to the correct result in the arbitrator’s opinion. The arbitrator shall have no power to select an alternative position or a decision different from that proposed by either party. The decision of the arbitrator shall be final and binding upon the parties, absent fraud or gross error. Upon failure, refusal or inability of an arbitrator to act, his or her successor shall be appointed in the same manner as provided for the original appointment. The party whose position is not chosen by the arbitrator shall bear the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel and consultants to the respective parties shall be paid by the respective party engaging such counsel or consultant. The arbitrator shall render his or her decision in writing, with counterpart copies to each party, within thirty (30) days after his or her appointment. The arbitrator shall have no power to modify the provisions of this Lease. Landlord and Tenant agree to execute and deliver to each other a supplement to this Lease confirming the new Base Rent as determined by the method described in this Section 2.4.
2.4.3 For purposes of this Lease, “fair market rent” means the rent at which a landlord, under no compulsion to lease, would rent the Premises for the applicable Extended Term and a tenant, under no compulsion to lease, would rent the Premises for the applicable Extended Term. Fair market rent shall mean and refer to the rent being charged by Landlord and other landlords at the time of exercise delivery of the Renewal Notice. Any termination of the Lease during the Initial Term (or then extended Option Term, if applicable) shall terminate all rights of extension hereunder.
b. Upon the service of the Renewal Notice, and subject to Extend the conditions set forth herein, the Lease shall be extended without the necessity of the execution of any further instrument or document. Such extended Term shall commence upon the expiration date of the initial Term (or then extended Option Term, if applicable) of the Lease, expire upon the expiration of sixty (60) months thereafter, and be upon the same terms, covenants and conditions as provided in the Lease for the initial Term, except that the Base Rent during the extended Term of the Renewal Options shall be the then Fair Market Rate (as defined below).
c. The term "Fair Market Rate" shall mean the annual amount per rentable square foot that a willing, comparable, non-equity, non-renewal, non-expansion, then currentnew tenant would pay and a willing, comparable non-subleaselandlord for comparable space of a warehouse/office building in San Antonio, non-encumberedTexas (the "Comparison Area") would accept at arm's length, non-equity space in giving appropriate consideration to, without limiting the Building and Comparable Buildings. Fair market rent shall not necessarily be a monthly rent fixed during scope thereof, annual rental rates per rentable square foot, the applicable Extended Termtype of lease escalation clauses (including, but may be subject to periodic adjustment. For purposes of determining fair market rent under this Leasewithout limitation, operating expense, real estate taxes, CPI), the following factors shall be taken into account: extent of liability under the escalation clauses (i) that the Premises are then in their “as ise.g., where is” condition as improved with any alterations thereto made by whether determined on a "net lease" basis or on behalf of Tenant in their then condition, (ii) that Tenant could immediately occupy the Premises in such condition for the use as permitted by the terms and conditions of this Lease, and (iii) the Base Year for the space to which the fair market rent is to apply. In addition, (A) the determination of fair market rent shall exclude “down time” for releasing the Premises and during the period Landlord and Tenant are negotiating the fair market rent only the amount of an “in-house” brokerage commission on renewal shall be taken into account; (B) the determination of fair market rent shall take into account the then unamortized value of Building standard alterations to the Premises paid for by Tenant but shall exclude any value attributable to above Building standard alterations in the Premises paid for by Tenant; and (C) the fair market rent shall include appropriate annual increases. In the event that the fair market rent is to be determined by arbitration in accordance with this Section 2.4, notwithstanding anything to the contrary contained in the preceding sentence, the arbitrator shall take into account all factors which an experienced arbitrator familiar with the Comparable Buildings would customarily take into account in determining the amount of fair market rent.
2.4.4 Tenant’s right to extend the Lease Term for an Extended Term is personal to the named Tenant and/or Affiliate Assignee under this Lease, and shall not inure to the benefit of any other assignee or subtenant. The Option to Extend shall be void and of no further effect if at any time the named Tenant or an Affiliate Assignee under this Lease (i) assigns this Lease or (ii) subleases more than fifty percent (50%) of the rentable square feet of the Premises for substantially the remainder of the Term.by
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Samples: Lease Agreement (Solo Serve Corp)
