Common use of Pass-Through Expenses Clause in Contracts

Pass-Through Expenses. In addition to the Base Rental, Tenant, as Additional Rental, shall pay, for each calendar year during the Lease Term, the sum of (i) Tenant’s Percentage Share of the Operating Expenses for the calendar year in question plus (ii) Tenant’s Percentage Share of the Property Taxes for the calendar year in question (together, the “Pass-Through Expenses”), which amounts shall be determined and adjusted in accordance with the following procedures: (a) During each December of the Lease Term, or as soon thereafter as practicable, Landlord shall give Tenant written notice of its reasonable estimate of Pass-Through Expenses for the ensuing calendar year. On or before the first day of each month during the ensuing calendar year, Tenant shall pay to Landlord 1/12 of such estimated amounts together with the Base Rental, provided that if such notice is not given in December Tenant shall continue to pay during the ensuing calendar year on the basis of the amounts payable during the calendar year just ended, until the month after such notice is given to Tenant. If at any time or times it appears to Landlord that the actual amount payable under this Section 3.3 for the current calendar year will vary from Landlord’s estimate, Landlord shall have the option one (1) time each Lease Year to revise, by notice to Tenant, its estimate for such year, and subsequent payments by Tenant for such year shall be based upon such revised estimate. Failure to make a revision contemplated by the immediately preceding sentence shall not prejudice Landlord’s right to collect the full amounts of the Pass-Through Expenses payable under this Section 3.3. (b) Within one-hundred and twenty (120) days after the close of each calendar year during the Lease Term, or as soon after such 120-day period as practicable, Landlord shall deliver to Tenant a written statement (an “Expense Statement”) identifying in reasonable detail the adjustments to be made pursuant to this Section 3.3 for the calendar year just ended. If, on the basis of such Expense Statement and subject to Tenant’s audit rights set forth in Section 3.3(d) below, Tenant owes an amount that is less than the estimated payments for the calendar year just ended previously made by Tenant, Landlord shall credit such excess to the next payments of Pass-Through Expenses coming due pursuant to this Section 3.3 or, if the Lease Term is about to expire, refund such excess to Tenant if Tenant is not then in Default under this Lease (in the instance of a Default such excess shall be held as additional security for Tenant’s performance, may be applied by Landlord to cure any such Default, and shall not be refunded until any such Default is cured). If, on the basis of such Expense Statement and subject to Tenant’s audit rights set forth in Section 3.3(d) below, Tenant owes an amount that is more than the estimated payments for the calendar year just ended previously made by Tenant, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the Expense Statement. (c) If the Lease Term shall commence or expire on a day other than the last day of a calendar year, the amount of Pass-Through Expenses payable pursuant to this Section 3.3 shall be the product of multiplying the Pass-Through Expenses which otherwise would have been payable hereunder for the full calendar year by a fraction, the numerator of which is the actual number of days of the calendar year in question included within the Lease Term, and the denominator of which is 365. The expiration or termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to subsection (b) of this Section 3.3 to be performed subsequent to such expiration. (d) Landlord shall maintain books and records showing Operating Expenses and Property Taxes as well as the determination of Pass-Through Expenses in accordance with sound accounting and management practices. If Tenant reasonably believes that any Expense Statement includes charges that are not permitted pursuant to this Lease or contains an error in calculation or otherwise, then Tenant shall be entitled to the following audit right. Such audit right shall be exercisable by Tenant providing Landlord, within ninety (90) days of Landlord’s delivery of such Expense Statement, a written notice of its exercise of such audit right and a statement enumerating reasonably detailed reasons for Tenant’s objections to such Expense Statement. Unless Tenant shall provide the requisite notice within ninety (90) days of Landlord’s delivery of such Expense Statement, then such Expense Statement shall be considered final and accepted by Tenant. If within thirty (30) days after Landlord’s receipt of Tenant’s written notice and statement, Landlord and Tenant are unable to resolve Tenant’s objections, then not later than fifteen (15) days after the expiration of such thirty (30)-day period, Tenant shall notify Landlord that it wishes to employ a national or regional recognized independent certified public accounting firm reasonably acceptable to Landlord to inspect and audit Landlord’s books and records relating to the objections raised in Tenant’s statement. If Tenant elects to employ such accountant as set forth above, Tenant and such accountant shall execute and deliver to Landlord a confidentiality and nondisclosure agreement on Landlord’s standard form, and Tenant shall provide Landlord not less than thirty (30) days notice of the date on which the accountant desires to examine Landlord’s books and records during regular business hours; provided, however, that such date shall be between thirty (30) and ninety (90) days after Tenant delivers to Landlord such notice. The accountant engaged by Tenant to conduct such audit cannot be compensated on a “contingency” or “success fee” basis. Such audit shall be limited to a determination of whether Landlord calculated the Expense Statement in accordance with the terms and conditions of this Lease. All costs and expenses of any such audit shall be paid by Tenant, unless as a result of the audit it is determined that Landlord overcharged Tenant by more than five (5%) of the amount of Tenant’s Pass-Through Costs shown on the Expense Statement, in which case Landlord shall pay for the costs of the audit not to exceed $2,500. Notwithstanding any audit made by Tenant, Tenant shall pay Landlord the full amount of any additional Pass-Through Expenses shown on the Expense Statement, subject to adjustment at such time as any such audit is completed pursuant to the terms hereof. If as a result of the audit it is determined that there was an underpayment of Additional Rent, Tenant shall, within thirty (30) days after the audit is completed, pay to Landlord an amount equal to such underpayment. In case of an overpayment, Landlord shall credit the next monthly rental payment by Tenant with an amount equal to such overpayment. Additionally, if this Lease shall have expired, Landlord shall apply such excess against any sums due from Tenant to Landlord and shall refund any remainder to Tenant within thirty (30) days after the audit is completed. Notwithstanding anything contained herein to the contrary, Tenant shall be entitled to exercise its right to audit pursuant to this Section 3.3(d) only in strict accordance with the foregoing procedures and not more often than once with respect to each Expense Statement and each such audit shall relate only to the most recent calendar year covered by the Expense Statement. Tenant shall not be entitled to exercise its audit rights on behalf of any subtenant or any other person or entity nor shall Tenant be entitled to exercise its audit rights with respect to any Expense Statement if a Default exists.

Pass-Through Expenses. In addition Unless otherwise agreed by the Parties, Idearc shall pay all Pass-Through Expenses directly to the Base Rentalapplicable vendors following review, Tenant, as Additional Rental, validation and approval of such Pass-Through Expenses by Provider and proper authorization by Idearc. Provider shall pay, for each calendar year during the Lease Term, the sum not charge any margin or handling or administrative charge or any other markup of (i) Tenant’s Percentage Share any kind in connection with its processing or review of the Operating Expenses for the calendar year in question plus (ii) Tenant’s Percentage Share of the Property Taxes for the calendar year in question (together, the “such Pass-Through Expenses”), which amounts shall be determined and adjusted in accordance with the following procedures: (a) During each December of the Lease Term, or as soon thereafter as practicable, Landlord shall give Tenant written notice of its reasonable estimate of . All pre-approved Pass-Through Expenses for the ensuing calendar year. On or before the first day of each month during the ensuing calendar year, Tenant shall pay to Landlord 1/12 of such estimated amounts together with the Base Rental, provided that if such notice is not given in December Tenant shall continue to pay during the ensuing calendar year on the basis as of the amounts payable during applicable Tower Commencement Date, if any, will be detailed in the calendar year just ended, until the month after such notice is given to Tenantcorresponding Transaction Document. If at any time or times it appears to Landlord that the actual amount payable under this Section 3.3 for the current calendar year will vary from Landlord’s estimate, Landlord shall have the option one (1) time each Lease Year to revise, by notice to Tenant, its estimate for such year, and subsequent payments by Tenant for such year shall be based upon such revised estimate. Failure to make a revision contemplated by the immediately preceding sentence shall not prejudice Landlord’s right to collect the full amounts of the No Pass-Through Expenses payable under this Section 3.3. (b) Within onemay be added without Idearc’s prior consent. Before submitting an invoice to Idearc for any Pass-hundred Through Expense, Provider shall review and twenty (120) days after validate the close of each calendar year during invoiced charges, identify any errors or omissions and communicate with the Lease Term, applicable vendor to correct any errors or as soon after such 120-day period as practicable, Landlord omissions and resolve any questions or issues and obtain any applicable credits for Idearc. Provider shall deliver to Tenant a written statement (an “Expense Statement”) identifying in reasonable detail Idearc the adjustments to be made pursuant to this Section 3.3 for the calendar year just ended. Iforiginal vendor invoice, on the basis of together with any documentation supporting such Expense Statement and subject to Tenant’s audit rights set forth in Section 3.3(d) below, Tenant owes an amount that is less than the estimated payments for the calendar year just ended previously made by Tenant, Landlord shall credit such excess to the next payments of Pass-Through Expenses coming due pursuant to this Section 3.3 or, if the Lease Term is about to expire, refund such excess to Tenant if Tenant is not then in Default under this Lease (in the instance of a Default such excess shall be held as additional security for Tenant’s performance, may be applied by Landlord to cure any such Default, and shall not be refunded until any such Default is cured). If, on the basis of such Expense Statement and subject to Tenant’s audit rights set forth in Section 3.3(d) below, Tenant owes an amount that is more than the estimated payments for the calendar year just ended previously made by Tenant, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the Expense Statement. (c) If the Lease Term shall commence or expire on a day other than the last day of a calendar year, the amount of Pass-Through Expenses payable pursuant to this Section 3.3 shall be the product of multiplying the Pass-Through Expenses which otherwise would have been payable hereunder for the full calendar year by a fraction, the numerator of which is the actual number of days of the calendar year in question included within the Lease Term, and the denominator of which is 365. The expiration or termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to subsection (b) of this Section 3.3 to be performed subsequent to such expiration. (d) Landlord shall maintain books and records showing Operating Expenses and Property Taxes as well as the determination of Pass-Through Expenses in accordance with sound accounting and management practices. If Tenant reasonably believes that any Expense Statement includes charges that are not permitted pursuant to this Lease or contains an error in calculation or otherwise, then Tenant shall be entitled to the following audit right. Such audit right shall be exercisable by Tenant providing Landlord, within ninety (90) days of Landlord’s delivery of such Expense Statement, a written notice of its exercise of such audit right invoice and a statement enumerating reasonably detailed reasons for Tenant’s objections that Provider has reviewed and validated the invoiced charges, at least 30 days prior to such Expense Statement. Unless Tenant shall provide the requisite notice within ninety (90) days of Landlord’s delivery of such Expense Statement, then such Expense Statement shall be considered final and accepted by Tenant. If within thirty (30) days after Landlord’s receipt of Tenant’s written notice and statement, Landlord and Tenant are unable to resolve Tenant’s objections, then not later than fifteen (15) days after the expiration of such thirty (30)-day period, Tenant shall notify Landlord that it wishes to employ a national or regional recognized independent certified public accounting firm reasonably acceptable to Landlord to inspect and audit Landlord’s books and records relating to the objections raised in Tenant’s statement. If Tenant elects to employ such accountant as set forth above, Tenant and such accountant shall execute and deliver to Landlord a confidentiality and nondisclosure agreement on Landlord’s standard form, and Tenant shall provide Landlord not less than thirty (30) days notice of the date on which payment is due. In addition, if the accountant desires vendor offers a discount for payment prior to examine Landlord’s books a specified date, Provider shall deliver such invoice and records during regular business hours; providedassociated documentation to Idearc at least three days prior to such date. To the extent Provider fails to comply with its obligations hereunder, however, that such date Provider shall be between thirty (30) and ninety (90) days after Tenant delivers to Landlord such noticefinancially responsible for any discounts lost or any late fees or interest charges incurred by Idearc. The accountant engaged by Tenant to conduct such audit cannot be compensated on a “contingency” or “success fee” basis. Such audit In addition, Provider shall be limited to a determination of whether Landlord calculated the Expense Statement in accordance with the terms and conditions of this Lease. All costs and expenses of financially responsible for any such audit shall be paid by Tenant, unless as a result of the audit it is determined that Landlord overcharged Tenant by more than five (5%) of the amount of Tenant’s Pass-Through Costs shown on Expense that is not processed and forwarded to Idearc for payment by the Expense Statement, end of the third month after the month in which case Landlord shall pay Provider received a correct and accurate third party invoice for the costs of the audit not to exceed $2,500. Notwithstanding any audit made by Tenant, Tenant shall pay Landlord the full amount of any additional such Pass-Through Expenses shown on the Expense Statement, subject to adjustment at such time as any such audit is completed pursuant to the terms hereof. If as a result of the audit it is determined that there was an underpayment of Additional Rent, Tenant shall, within thirty (30) days after the audit is completed, pay to Landlord an amount equal to such underpayment. In case of an overpayment, Landlord shall credit the next monthly rental payment by Tenant with an amount equal to such overpayment. Additionally, if this Lease shall have expired, Landlord shall apply such excess against any sums due from Tenant to Landlord and shall refund any remainder to Tenant within thirty (30) days after the audit is completed. Notwithstanding anything contained herein to the contrary, Tenant shall be entitled to exercise its right to audit pursuant to this Section 3.3(d) only in strict accordance with the foregoing procedures and not more often than once with respect to each Expense Statement and each such audit shall relate only to the most recent calendar year covered by the Expense Statement. Tenant shall not be entitled to exercise its audit rights on behalf of any subtenant or any other person or entity nor shall Tenant be entitled to exercise its audit rights with respect to any Expense Statement if a Default existsExpense.

Pass-Through Expenses. In addition Certain of the Leases contain tenant obligations to pay for taxes, common area expenses, operating expenses and/or additional charges for any other nature relating to the Base Rental, Tenant, as Additional Rental, shall pay, for each calendar year during the Lease Term, the sum of Property and/or certain portions thereof (i) Tenant’s Percentage Share of the Operating Expenses for the calendar year in question plus (ii) Tenant’s Percentage Share of the Property Taxes for the calendar year in question (togethercollectively, the “Pass-Through ExpensesCharges”). Purchaser and Seller acknowledge and agree that Charges which Seller has heretofore collected from tenants at the Property for calendar year 2022 from January 1, 2022, through and including the Closing Date (“Seller’s Reconciliation Period”), which amounts shall be determined and adjusted in accordance have not yet been reconciled with the following procedures: tenants to the extent Seller’s recovery of such expenses from the tenants for such period exceeds or was less than the actual amount of such expenses for such period (the “Tenant Reconciliation”). In connection with the Tenant Reconciliation, the parties agree that (a) During each December within a reasonable time after Closing, Seller shall deliver to Purchaser the data reasonably supporting the Charges that Seller collected from the tenants during Seller’s Reconciliation Period and the amount of the Lease Term, or as soon thereafter as practicable, Landlord shall give Tenant written notice of its reasonable estimate of Pass-Through Expenses for the ensuing calendar year. On or before the first day of each month Charges actually paid by Seller during the ensuing calendar year, Tenant shall pay to Landlord 1/12 of such estimated amounts together with the Base Rental, provided that if such notice is not given in December Tenant shall continue to pay during the ensuing calendar year on the basis of the amounts payable during the calendar year just ended, until the month after such notice is given to Tenant. If at any time or times it appears to Landlord that the actual amount payable under this Section 3.3 for the current calendar year will vary from LandlordSeller’s estimate, Landlord shall have the option one (1) time each Lease Year to revise, by notice to Tenant, its estimate for such yearReconciliation Period, and subsequent payments by Tenant for such year shall be based upon such revised estimate. Failure to make a revision contemplated by the immediately preceding sentence shall not prejudice Landlord’s right to collect the full amounts of the Pass-Through Expenses payable under this Section 3.3. (b) Within one-hundred and twenty on or before March 31, 2023, Purchaser shall be responsible for preparing the final Tenant Reconciliation (120) days after the close of each calendar year during the Lease Term, or as soon after such 120-day period as practicable, Landlord shall deliver to Tenant a written statement (an “Expense Statement”) identifying in reasonable detail the adjustments to be made pursuant to this Section 3.3 for the calendar year just ended. If, on the basis of such Expense Statement and subject to TenantSeller’s audit rights set forth in Section 3.3(dapproval with respect to Seller’s Reconciliation Period) below, Tenant owes an amount that is less than the estimated payments for the calendar year just ended previously made by Tenant, Landlord shall credit such excess to the next payments of Pass-Through Expenses coming due pursuant to this Section 3.3 or, if the Lease Term is about to expire, refund such excess to Tenant if Tenant is not then in Default under this Lease (in the instance of a Default such excess shall be held as additional security for Tenant’s performance, may be applied by Landlord to cure any such Default, and shall not be refunded until any such Default is cured). If, on the basis of such Expense Statement and subject to Tenant’s audit rights set forth in Section 3.3(d) below, Tenant owes an amount that is more than the estimated payments for the calendar year just ended previously made by Tenant, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the Expense Statement. (c) If the Lease Term shall commence or expire on a day other than the last day of a calendar year, the amount of Pass-Through Expenses payable pursuant to this Section 3.3 shall be the product of multiplying the Pass-Through Expenses which otherwise would have been payable hereunder for the full calendar year by a fraction, the numerator of which is the actual number of days of the calendar year in question included within the Lease Term, and the denominator of which is 365. The expiration or termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to subsection (b) of this Section 3.3 to be performed subsequent to such expiration. (d) Landlord shall maintain books and records showing Operating Expenses and Property Taxes as well as the determination of Pass-Through Expenses in accordance with sound accounting and management practices. If Tenant reasonably believes that any Expense Statement includes charges that are not permitted pursuant to this Lease or contains an error in calculation or otherwise, then Tenant shall be entitled to the following audit right. Such audit right shall be exercisable by Tenant providing Landlord, within ninety (90) days of Landlord’s delivery of such Expense Statement, a written notice of its exercise of such audit right and a statement enumerating reasonably detailed reasons for Tenant’s objections to such Expense Statement. Unless Tenant shall provide the requisite notice within ninety (90) days of Landlord’s delivery of such Expense Statement, then such Expense Statement shall be considered final and accepted by Tenant. If within thirty (30) days after Landlord’s receipt of Tenant’s written notice and statement, Landlord and Tenant are unable to resolve Tenant’s objections, then not later than fifteen (15) days after the expiration of such thirty (30)-day period, Tenant shall notify Landlord that it wishes to employ a national or regional recognized independent certified public accounting firm reasonably acceptable to Landlord to inspect and audit Landlord’s books and records relating to the objections raised in Tenant’s statement. If Tenant elects to employ such accountant as set forth above, Tenant and such accountant shall execute and deliver to Landlord a confidentiality and nondisclosure agreement on Landlord’s standard form, and Tenant shall provide Landlord not less than thirty (30) days notice of the date on which the accountant desires to examine Landlord’s books and records during regular business hours; provided, however, that such date shall be between thirty (30) and ninety (90) days after Tenant delivers to Landlord such notice. The accountant engaged by Tenant to conduct such audit cannot be compensated on a “contingency” or “success fee” basis. Such audit shall be limited to a determination of whether Landlord calculated the Expense Statement strictly in accordance with the terms and conditions of this Leasethe applicable Leases and, to the extent applicable, either reimbursing or billing tenants accordingly. All costs and expenses If the Tenant Reconciliation for Seller’s Reconciliation Period shows that amounts collected during Seller’s Reconciliation Period were more than the amount of charges actually paid by Seller during Seller’s Reconciliation Period, then Seller shall reimburse Purchaser to the extent of any over-payment of such audit shall be paid Charges actually received by Tenant, unless as a result of the audit Seller for Seller’s Reconciliation Period. If it is determined that Landlord overcharged Tenant by more than five (5%) tenant has underpaid to Seller any portion of the Charges for Seller’s Reconciliation Period, Purchaser shall make good faith attempts to collect the amount of Tenant’s Passany under-Through Costs shown on the Expense Statementpayment of such Charges from such tenant, in which case Landlord shall pay for the costs of the audit not to exceed $2,500. Notwithstanding any audit made by Tenant, Tenant shall pay Landlord the full amount of any additional Pass-Through Expenses shown on the Expense Statement, subject to adjustment at such time as any such audit is completed pursuant to the terms hereof. If as a result of the audit it is determined that there was an underpayment of Additional Rent, Tenant and shall, within thirty (30) days after the audit is completedupon receipt, pay promptly immediately deliver such amount to Landlord an amount equal to such underpayment. In case of an overpayment, Landlord shall credit the next monthly rental payment by Tenant with an amount equal to such overpayment. Additionally, if this Lease shall have expired, Landlord shall apply such excess against any sums due from Tenant to Landlord and shall refund any remainder to Tenant within thirty (30) days after the audit is completed. Notwithstanding anything contained herein to the contrary, Tenant shall be entitled to exercise its right to audit pursuant to this Section 3.3(d) only in strict accordance with the foregoing procedures and not more often than once with respect to each Expense Statement and each such audit shall relate only to the most recent calendar year covered by the Expense Statement. Tenant shall not be entitled to exercise its audit rights on behalf of any subtenant or any other person or entity nor shall Tenant be entitled to exercise its audit rights with respect to any Expense Statement if a Default existsSeller.

Pass-Through Expenses. In addition to the Base Rental, Tenant, as Additional Rental, TXUED shall pay, for each calendar year during the Lease Term, the sum of (i) Tenant’s Percentage Share of the Operating Expenses for the calendar year in question plus (ii) Tenant’s Percentage Share of the Property Taxes for the calendar year in question (together, the “Pass-Through Expenses”), which amounts shall be determined and adjusted in accordance with the following procedures: (a) During each December of the Lease Term, or as soon thereafter as practicable, Landlord shall give Tenant written notice of its reasonable estimate of pay all Pass-Through Expenses for directly to the ensuing calendar year. On or before the first day of each month during the ensuing calendar yearapplicable suppliers following review, Tenant shall pay to Landlord 1/12 validation and approval of such estimated amounts together with the Base Rental, provided that if such notice is not given in December Tenant shall continue to pay during the ensuing calendar year on the basis of the amounts payable during the calendar year just ended, until the month after such notice is given to Tenant. If at any time or times it appears to Landlord that the actual amount payable under this Section 3.3 for the current calendar year will vary from Landlord’s estimate, Landlord shall have the option one (1) time each Lease Year to revise, by notice to Tenant, its estimate for such year, and subsequent payments by Tenant for such year shall be based upon such revised estimate. Failure to make a revision contemplated by the immediately preceding sentence shall not prejudice Landlord’s right to collect the full amounts of the Pass-Through Expenses payable under this Section 3.3. by Vendor. Before submitting an invoice to TXUED for any Pass-Through Expense, Vendor shall (bi) Within one-hundred review and twenty validate the invoiced charges, (120ii) days after identify any errors or omissions and (iii) communicate with the close of each calendar year during the Lease Termapplicable supplier to correct any errors or omissions, resolve any questions or as soon after such 120-day period as practicable, Landlord issues and obtain any applicable credits for TXUED. Vendor shall deliver to Tenant a written statement (an “Expense Statement”) identifying in reasonable detail TXUED the adjustments to be made pursuant to this Section 3.3 for the calendar year just ended. Iforiginal supplier invoice, on the basis of together with any documentation supporting such Expense Statement and subject to Tenant’s audit rights set forth in Section 3.3(d) below, Tenant owes an amount that is less than the estimated payments for the calendar year just ended previously made by Tenant, Landlord shall credit such excess to the next payments of Pass-Through Expenses coming due pursuant to this Section 3.3 or, if the Lease Term is about to expire, refund such excess to Tenant if Tenant is not then in Default under this Lease (in the instance of a Default such excess shall be held as additional security for Tenant’s performance, may be applied by Landlord to cure any such Default, and shall not be refunded until any such Default is cured). If, on the basis of such Expense Statement and subject to Tenant’s audit rights set forth in Section 3.3(d) below, Tenant owes an amount that is more than the estimated payments for the calendar year just ended previously made by Tenant, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the Expense Statement. (c) If the Lease Term shall commence or expire on a day other than the last day of a calendar year, the amount of Pass-Through Expenses payable pursuant to this Section 3.3 shall be the product of multiplying the Pass-Through Expenses which otherwise would have been payable hereunder for the full calendar year by a fraction, the numerator of which is the actual number of days of the calendar year in question included within the Lease Term, and the denominator of which is 365. The expiration or termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to subsection (b) of this Section 3.3 to be performed subsequent to such expiration. (d) Landlord shall maintain books and records showing Operating Expenses and Property Taxes as well as the determination of Pass-Through Expenses in accordance with sound accounting and management practices. If Tenant reasonably believes that any Expense Statement includes charges that are not permitted pursuant to this Lease or contains an error in calculation or otherwise, then Tenant shall be entitled to the following audit right. Such audit right shall be exercisable by Tenant providing Landlord, within ninety (90) days of Landlord’s delivery of such Expense Statement, a written notice of its exercise of such audit right invoice and a statement enumerating reasonably detailed reasons for Tenantthat Vendor has reviewed and validated the invoiced charges, within ten (10) calendar days after Vendor’s objections to such Expense Statement. Unless Tenant shall provide the requisite notice within ninety receipt thereof, or if earlier, at least three (903) days of Landlord’s delivery of such Expense Statement, then such Expense Statement shall be considered final and accepted by Tenant. If within thirty (30) days after Landlord’s receipt of Tenant’s written notice and statement, Landlord and Tenant are unable prior to resolve Tenant’s objections, then not later than fifteen (15) days after the expiration of such thirty (30)-day period, Tenant shall notify Landlord that it wishes to employ a national or regional recognized independent certified public accounting firm reasonably acceptable to Landlord to inspect and audit Landlord’s books and records relating to the objections raised in Tenant’s statement. If Tenant elects to employ such accountant as set forth above, Tenant and such accountant shall execute and deliver to Landlord a confidentiality and nondisclosure agreement on Landlord’s standard form, and Tenant shall provide Landlord not less than thirty (30) days notice of the date on which payment is due if such invoice was received by Vendor at least ten (10) days prior to such due date. In addition, if the accountant desires supplier offers a discount for payment prior to examine Landlord’s books a specified date, Vendor shall deliver such invoice and records during regular business hours; providedassociated documentation to TXUED at least ten (10) days prior to such date, however, that such date shall be between thirty but no earlier than three (30) and ninety (903) days after Tenant delivers Vendor’s receipt of such invoice. To the extent Vendor fails to Landlord such notice. The accountant engaged by Tenant to conduct such audit cannot be compensated on a “contingency” or “success fee” basis. Such audit comply with its obligations hereunder, it shall be limited financially responsible for any discounts actually lost or any late fees or interest charges actually paid by TXUED and in addition, to a determination of whether Landlord calculated the Expense Statement extent Vendor fails to process any invoice in accordance with the terms and conditions of this Lease. All costs and expenses of any such audit provision, it shall be financially responsible for any penalties associated with late payment with respect to such invoiced amounts actually paid by TenantTXUED, unless as a result provided that in each such case TXUED notified Vendor of the audit it is determined that Landlord overcharged Tenant by more than five (5%) importance of processing the amount of Tenant’s applicable Pass-Through Costs shown on the Expense Statement, in which case Landlord shall pay for the costs of the audit not to exceed $2,500. Notwithstanding any audit made by Tenant, Tenant shall pay Landlord the full amount of any additional Pass-Through Expenses shown on the Expense Statement, subject to adjustment at such time as any such audit is completed pursuant to the terms hereof. If as a result of the audit it is determined that there was an underpayment of Additional Rent, Tenant shall, within thirty (30) days after the audit is completed, pay to Landlord an amount equal to such underpayment. In case of an overpayment, Landlord shall credit the next monthly rental payment by Tenant with an amount equal to such overpayment. Additionally, if this Lease shall have expired, Landlord shall apply such excess against any sums due from Tenant to Landlord timely manner and shall refund any remainder to Tenant within thirty (30) days after the audit is completed. Notwithstanding anything contained herein to the contrary, Tenant shall be entitled to exercise its right to audit pursuant to this Section 3.3(d) only in strict accordance with the foregoing procedures and not more often than once with respect to each Expense Statement and each such audit shall relate only to the most recent calendar year covered by the Expense Statement. Tenant shall not be entitled to exercise its audit rights on behalf of any subtenant or any other person or entity nor shall Tenant be entitled to exercise its audit rights with respect to any Expense Statement if a Default existsunderlying invoice terms.

Pass-Through Expenses. In addition Certain of the Leases contain tenant obligations to pay for taxes, common area expenses, operating expenses and/or additional charges for any other nature relating to the Base Rental, Tenant, as Additional Rental, shall pay, for each calendar year during the Lease Term, the sum of Property and/or certain portions thereof (i) Tenant’s Percentage Share of the Operating Expenses for the calendar year in question plus (ii) Tenant’s Percentage Share of the Property Taxes for the calendar year in question (togethercollectively, the “Pass-Through ExpensesCharges”). Purchaser and Seller acknowledge and agree that Charges which Seller has heretofore collected from tenants at the Property for calendar year 2014 from January 1, 2014, through and including the Final Closing Date (“Seller’s Reconciliation Period”), which amounts shall be determined and adjusted in accordance have not yet been reconciled with the following procedures: tenants to the extent Seller’s recovery of such expenses from the tenants for such period exceed or was less than the actual amount of such expenses for such period (the “Tenant Reconciliation”). In connection with the Tenant Reconciliation, the parties agree that (a) During each December within a reasonable time after Closing, Seller shall deliver to Purchaser the data reasonably supporting the Charges that Seller collected from the tenants during Seller’s Reconciliation Period and the amount of the Lease Term, or as soon thereafter as practicable, Landlord shall give Tenant written notice of its reasonable estimate of Pass-Through Expenses for the ensuing calendar year. On or before the first day of each month Charges actually paid by Seller during the ensuing calendar year, Tenant shall pay to Landlord 1/12 of such estimated amounts together with the Base Rental, provided that if such notice is not given in December Tenant shall continue to pay during the ensuing calendar year on the basis of the amounts payable during the calendar year just ended, until the month after such notice is given to Tenant. If at any time or times it appears to Landlord that the actual amount payable under this Section 3.3 for the current calendar year will vary from LandlordSeller’s estimate, Landlord shall have the option one (1) time each Lease Year to revise, by notice to Tenant, its estimate for such yearReconciliation Period, and subsequent payments by Tenant for such year shall be based upon such revised estimate. Failure to make a revision contemplated by the immediately preceding sentence shall not prejudice Landlord’s right to collect the full amounts of the Pass-Through Expenses payable under this Section 3.3. (b) Within one-hundred and twenty on or before March 31, 2015, Purchaser shall be responsible for preparing the final Tenant Reconciliation (120) days after the close of each calendar year during the Lease Term, or as soon after such 120-day period as practicable, Landlord shall deliver to Tenant a written statement (an “Expense Statement”) identifying in reasonable detail the adjustments to be made pursuant to this Section 3.3 for the calendar year just ended. If, on the basis of such Expense Statement and subject to TenantSeller’s audit rights set forth in Section 3.3(dreasonable approval with respect to Seller’s Reconciliation Period) below, Tenant owes an amount that is less than the estimated payments for the calendar year just ended previously made by Tenant, Landlord shall credit such excess to the next payments of Pass-Through Expenses coming due pursuant to this Section 3.3 or, if the Lease Term is about to expire, refund such excess to Tenant if Tenant is not then in Default under this Lease (in the instance of a Default such excess shall be held as additional security for Tenant’s performance, may be applied by Landlord to cure any such Default, and shall not be refunded until any such Default is cured). If, on the basis of such Expense Statement and subject to Tenant’s audit rights set forth in Section 3.3(d) below, Tenant owes an amount that is more than the estimated payments for the calendar year just ended previously made by Tenant, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the Expense Statement. (c) If the Lease Term shall commence or expire on a day other than the last day of a calendar year, the amount of Pass-Through Expenses payable pursuant to this Section 3.3 shall be the product of multiplying the Pass-Through Expenses which otherwise would have been payable hereunder for the full calendar year by a fraction, the numerator of which is the actual number of days of the calendar year in question included within the Lease Term, and the denominator of which is 365. The expiration or termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to subsection (b) of this Section 3.3 to be performed subsequent to such expiration. (d) Landlord shall maintain books and records showing Operating Expenses and Property Taxes as well as the determination of Pass-Through Expenses in accordance with sound accounting and management practices. If Tenant reasonably believes that any Expense Statement includes charges that are not permitted pursuant to this Lease or contains an error in calculation or otherwise, then Tenant shall be entitled to the following audit right. Such audit right shall be exercisable by Tenant providing Landlord, within ninety (90) days of Landlord’s delivery of such Expense Statement, a written notice of its exercise of such audit right and a statement enumerating reasonably detailed reasons for Tenant’s objections to such Expense Statement. Unless Tenant shall provide the requisite notice within ninety (90) days of Landlord’s delivery of such Expense Statement, then such Expense Statement shall be considered final and accepted by Tenant. If within thirty (30) days after Landlord’s receipt of Tenant’s written notice and statement, Landlord and Tenant are unable to resolve Tenant’s objections, then not later than fifteen (15) days after the expiration of such thirty (30)-day period, Tenant shall notify Landlord that it wishes to employ a national or regional recognized independent certified public accounting firm reasonably acceptable to Landlord to inspect and audit Landlord’s books and records relating to the objections raised in Tenant’s statement. If Tenant elects to employ such accountant as set forth above, Tenant and such accountant shall execute and deliver to Landlord a confidentiality and nondisclosure agreement on Landlord’s standard form, and Tenant shall provide Landlord not less than thirty (30) days notice of the date on which the accountant desires to examine Landlord’s books and records during regular business hours; provided, however, that such date shall be between thirty (30) and ninety (90) days after Tenant delivers to Landlord such notice. The accountant engaged by Tenant to conduct such audit cannot be compensated on a “contingency” or “success fee” basis. Such audit shall be limited to a determination of whether Landlord calculated the Expense Statement strictly in accordance with the terms and conditions of this Leasethe applicable Leases and, to the extent applicable, either reimbursing or billing tenants accordingly. All costs and expenses If the Tenant Reconciliation for Seller’s Reconciliation Period shows that amounts collected during Seller’s Reconciliation Period were more than the amount of charges actually paid by Seller during Seller’s Reconciliation Period, then Seller shall reimburse such tenant to the extent of any over-payment of such audit shall be paid Charges actually received by Tenant, unless as a result of the audit Seller for Seller’s Reconciliation Period. If it is determined that Landlord overcharged Tenant by more than five (5%) tenant has underpaid to Seller any portion of the Charges for Seller’s Reconciliation Period, Purchaser shall make good faith attempts to collect the amount of Tenant’s Passany under-Through Costs shown on the Expense Statementpayment of such Charges from such tenant, in which case Landlord shall pay for the costs of the audit not to exceed $2,500. Notwithstanding any audit made by Tenant, Tenant shall pay Landlord the full amount of any additional Pass-Through Expenses shown on the Expense Statement, subject to adjustment at such time as any such audit is completed pursuant to the terms hereof. If as a result of the audit it is determined that there was an underpayment of Additional Rent, Tenant and shall, within thirty (30) days after the audit is completedupon receipt, pay immediately deliver such amount to Landlord an amount equal to such underpayment. In case of an overpayment, Landlord shall credit the next monthly rental payment by Tenant with an amount equal to such overpayment. Additionally, if this Lease shall have expired, Landlord shall apply such excess against any sums due from Tenant to Landlord and shall refund any remainder to Tenant within thirty (30) days after the audit is completed. Notwithstanding anything contained herein to the contrary, Tenant shall be entitled to exercise its right to audit pursuant to this Section 3.3(d) only in strict accordance with the foregoing procedures and not more often than once with respect to each Expense Statement and each such audit shall relate only to the most recent calendar year covered by the Expense Statement. Tenant shall not be entitled to exercise its audit rights on behalf of any subtenant or any other person or entity nor shall Tenant be entitled to exercise its audit rights with respect to any Expense Statement if a Default existsSeller.