Common use of Pass-Through Expenses Clause in Contracts

Pass-Through Expenses. 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 Property and/or certain portions thereof (collectively, the “Charges”). 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”), have not yet been reconciled with the 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) 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 Charges actually paid by Seller during Seller’s Reconciliation Period, and (b) on or before March 31, 2015, Purchaser shall be responsible for preparing the final Tenant Reconciliation (subject to Seller’s reasonable approval with respect to Seller’s Reconciliation Period) strictly in accordance with the terms and conditions of the applicable Leases and, to the extent applicable, either reimbursing or billing tenants accordingly. 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 Charges actually received by Seller for Seller’s Reconciliation Period. If it is determined that 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 any under-payment of such Charges from such tenant, and shall, upon receipt, immediately deliver such amount to Seller.

Pass-Through Expenses. Certain TXUED shall pay all Pass-Through Expenses directly to the applicable suppliers following review, validation and approval of the Leases contain tenant obligations such Pass-Through Expenses by Vendor. Before submitting an invoice to pay for taxes, common area expenses, operating expenses and/or additional charges TXUED for any other nature relating to Pass-Through Expense, Vendor shall (i) review and validate the Property and/or certain portions thereof invoiced charges, (collectively, the “Charges”). Purchaser ii) identify any errors or omissions 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”), have not yet been reconciled iii) communicate with the tenants applicable supplier to the extent Seller’s recovery of such expenses from the tenants correct any errors or omissions, resolve any questions or issues and obtain any applicable credits for such period exceed or was less than the actual amount of such expenses for such period (the “Tenant Reconciliation”)TXUED. In connection with the Tenant Reconciliation, the parties agree that (a) within a reasonable time after Closing, Seller Vendor shall deliver to Purchaser TXUED the data reasonably original supplier invoice, together with any documentation supporting such invoice and a statement that Vendor has reviewed and validated the Charges that Seller collected from invoiced charges, within ten (10) calendar days after Vendor’s receipt thereof, or if earlier, at least three (3) days prior to the tenants during Sellerdate 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 supplier offers a discount for payment prior to a specified date, Vendor shall deliver such invoice and associated documentation to TXUED at least ten (10) days prior to such date, but no earlier than three (3) days after Vendor’s Reconciliation Period and receipt of such invoice. To the amount of Charges extent Vendor fails to comply with its obligations hereunder, it shall be financially responsible for any discounts actually lost or any late fees or interest charges actually paid by Seller during Seller’s Reconciliation Period, TXUED and (b) on or before March 31, 2015, Purchaser shall be responsible for preparing the final Tenant Reconciliation (subject to Seller’s reasonable approval with respect to Seller’s Reconciliation Period) strictly in accordance with the terms and conditions of the applicable Leases andaddition, to the extent applicableVendor fails to process any invoice in accordance with this provision, either reimbursing or billing tenants accordingly. If the Tenant Reconciliation it shall be financially responsible for Seller’s Reconciliation Period shows that any penalties associated with late payment with respect to such invoiced amounts collected during Seller’s Reconciliation Period were more than the amount of charges actually paid by Seller during Seller’s Reconciliation PeriodTXUED, then Seller shall reimburse provided that in each such tenant to the extent of any over-payment of such Charges actually received by Seller for Seller’s Reconciliation Period. If it is determined that tenant has underpaid to Seller any portion case TXUED notified Vendor of the Charges for Seller’s Reconciliation Period, Purchaser shall make good faith attempts to collect importance of processing the amount of any underapplicable Pass-payment of such Charges from such tenant, Through Expense in a timely manner and shall, upon receipt, immediately deliver such amount to Selleraccordance with the underlying invoice terms.

Pass-Through Expenses. 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 Property and/or certain portions thereof (collectively, the “Charges”). Purchaser and Seller acknowledge and agree that Charges which Seller has heretofore collected from tenants at the Property for calendar year 2014 2022 from January 1, 20142022, through and including the Final Closing Date (“Seller’s Reconciliation Period”), have not yet been reconciled with the tenants to the extent Seller’s recovery of such expenses from the tenants for such period exceed 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) 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 Charges actually paid by Seller during Seller’s Reconciliation Period, and (b) on or before March 31, 20152023, Purchaser shall be responsible for preparing the final Tenant Reconciliation (subject to Seller’s reasonable approval with respect to Seller’s Reconciliation Period) strictly in accordance with the terms and conditions of the applicable Leases and, to the extent applicable, either reimbursing or billing tenants accordingly. 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 Purchaser to the extent of any over-payment of such Charges actually received by Seller for Seller’s Reconciliation Period. If it is determined that 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 any under-payment of such Charges from such tenant, and shall, upon receipt, promptly immediately deliver such amount to Seller.

Pass-Through Expenses. Certain 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 Leases contain tenant obligations 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 taxesthe current calendar year will vary from Landlord’s estimate, common area expensesLandlord shall have the option one (1) time each Lease Year to revise, operating expenses and/or 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 any other nature 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 Property and/or certain portions thereof (collectivelyobjections raised in Tenant’s statement. If Tenant elects to employ such accountant as set forth above, the “Charges”). Purchaser Tenant and Seller acknowledge such accountant shall execute and agree that Charges which Seller has heretofore collected from tenants at the Property for calendar year 2014 from January 1deliver to Landlord a confidentiality and nondisclosure agreement on Landlord’s standard form, 2014, through and including the Final Closing Date (“Seller’s Reconciliation Period”), have Tenant shall provide Landlord not yet been reconciled with the tenants to the extent Seller’s recovery of such expenses from the tenants for such period exceed or was less than thirty (30) days notice of the actual amount of date on which the accountant desires to examine Landlord’s books and records during regular business hours; provided, however, that such expenses for such period (the “Tenant Reconciliation”). In connection with the Tenant Reconciliation, the parties agree that (a) 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 Charges actually paid by Seller during Seller’s Reconciliation Period, and (b) on or before March 31, 2015, Purchaser date shall be responsible for preparing 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 final Tenant Reconciliation (subject to Seller’s reasonable approval with respect to Seller’s Reconciliation Period) strictly Expense Statement in accordance with the terms and conditions of the applicable Leases and, to the extent applicable, either reimbursing or billing tenants accordinglythis Lease. If the Tenant Reconciliation for Seller’s Reconciliation Period shows that amounts collected during Seller’s Reconciliation Period were more than the amount All costs and expenses of charges actually any such audit shall be paid by Seller during Seller’s Reconciliation PeriodTenant, then Seller shall reimburse such tenant to unless as a result of the extent of any over-payment of such Charges actually received by Seller for Seller’s Reconciliation Period. If audit it is determined that tenant has underpaid to Seller any portion Landlord overcharged Tenant by more than five (5%) of the Charges for Seller’s Reconciliation Period, Purchaser shall make good faith attempts to collect 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 underaudit made by Tenant, Tenant shall pay Landlord the full amount of any additional Pass-payment 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 such Charges from such tenantthe audit it is determined that there was an underpayment of Additional Rent, and Tenant shall, upon receiptwithin thirty (30) days after the audit is completed, immediately deliver 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 Sellersuch 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.