Prevailing market rate clause samples

parties shall instruct the Agents to select a third Agent meeting the above criteria (and if the Agents fail to agree upon such third Agent within 10 days after being so instructed, either party may cause a court of competent jurisdiction to select such third Agent). Promptly upon selection of such third Agent, the parties shall instruct such Agent (or, if only one of the parties has selected an Agent within the 7-day period described above, then promptly after the expiration of such 7-day period the parties shall instruct such Agent) to determine, as soon as practicable but in any case within 14 days after his selection, which of the two Estimates most closely reflects the Prevailing Market rate. Such determination by such Agent (the “Final Agent”) shall be final and binding on both parties as the Prevailing Market rate for the Extension Term and may be entered in a court of competent jurisdiction. If the Final Agent believes that expert advice would materially assist him, he may retain one or more qualified persons to provide such expert advice. The parties shall share equally in the costs of the Final Agent and of any expe1ts retained by the Final Agent. Any fees of any other broker, agent, counsel or expert engaged by Landlord or Tenant shall be borne by the party retaining such broker, agent, counsel or expert.

B.Terms Applicable to the First Floor Premises during the First Floor Premises Option Term.The initial Base Rent rate per rentable square foot for the First Floor Premises during the First Floor Premises Option Term shall equal the Prevailing Market rate (hereinafter defined) per rentable square foot for the First Floor Premises.Base Rent during the First Floor Premises Option Term shall increase, if at all, in accordance with the increases assumed in the determination of Prevailing Market rate.Base Rent attributable to the First Floor Premises shall be payable in monthly installments in accordance with the terms and conditions of Article 4 of the Lease.

i. If (A)Tenant shall exercise a Renewal Option and (B)Landlord shall deliver a Renewal Acceptance Notice, the Base Rent per rentable square foot for the Premises for such Renewal Term shall be equal to the Prevailing Market (hereinafter defined) rate per rentable square foot for the Premises. Base Rent during such Renewal Term shall increase, if at all, in accordance with the increases assumed in the determination of the Prevailing Market rate. Notwithstanding the foregoing or anything else to the contrary, the annual Base Rent due and payable at the commencement of each Renewal Term shall not be less than the annual Base Rent in effect immediately prior to such Renewal Term. Base Rent during any Renewal Term shall continue to be payable in monthly installments in accordance with the terms and conditions of this Lease. Notwithstanding the foregoing or anything else in this Lease to the contrary, in the event this Lease is subject to an Over-Lease, the Base Rent rate per leasable square foot of the Premises during each Renewal Term will under no circumstance be any less than the Base Rent rate per leasable square foot payable by Landlord under the Over-Lease during the same period.

(i)The Lease of the Premises for the Extension shall be upon all of the same terms and conditions as set forth in the Lease for the initial Term, except that (a) Tenant shall have no further option to extend the Term, and (b) the initial Base Rent rate per rentable square foot for the Premises during the Extension Term shall equal the Prevailing Market rate (hereinafter defined) per rentable square foot for the Premises. Base Rent during the Extension Term may increase in accordance with the increases assumed in the determination of Prevailing Market rate. Base Rent attributable to the Premises shall be payable in monthly installments in accordance with the terms and conditions of Article 4 of the Lease. The Base Year for Expenses and the Base Year for Taxes during the Extension Term shall be the calendar year and fiscal year, respectively, in which the Extension Term commences.

2.2.5 Definition of Prevailing Market Rate. For purposes of the First Renewal Option, “Prevailing Market” shall mean the arms length fair market annual rental rate per rentable square foot under new leases or renewal leases and amendments, whichever is appropriate, entered into on or about the date on which the Prevailing Market is being determined for space comparable to the Premises in the Building and other similar office buildings located in Northwest suburban Chicago, Illinois. The determination of Prevailing Market shall take into account any material economic differences between the terms of this Lease and any comparison lease or amendment, such as rent abatements, construction costs and other concessions and the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes, including but not limited to any base year. The determination of Prevailing Market shall also take into consideration any reasonably anticipated changes in the Prevailing Market from the time such Prevailing Market is being determined and the time such Prevailing Market will become effective under this Lease.

(ii) If Tenant timely rejects Landlord’s proposal, Landlord and Tenant shall first negotiate in good faith in an attempt to agree upon the Prevailing Market Rate for the Extension Term. If Landlord and Tenant are able to agree within thirty (30)days following Landlord’s receipt of Tenant’s notice rejecting Landlord’s proposal (the “Negotiation Period”), such agreement shall constitute a determination of Prevailing Market Rate for purposes of this Paragraph. If Landlord and Tenant are unable to agree upon the Prevailing Market Rate during the Negotiation Period, then within thirty (30)days after expiration of the Negotiation Period, the parties shall meet and concurrently deliver to each other their respective written estimates of the Prevailing Market Rate for the Extension Term, supported by the reasons therefor (respectively, “Landlord’s Determination” and “Tenant’s Determination”). Landlord’s Determination may be more or less than its initial proposal of Prevailing Market Rate. If either party fails to deliver its Determination in a timely manner, then the Prevailing Market Rate shall be the amount specified by the other party. If the higher of such Determinations is not more than one hundred five percent (105%) of the lower of such Determinations, then the Prevailing Market Rate shall be the average of the two Determinations. If the Prevailing Market Rate is not resolved by exchange of the Determinations, the Prevailing Market Rate shall be determined as follows, each party being bound to its Determination and such Determinations constituting the only two choices available to the Appraisal Panel (as hereinafter defined).

(c) Prevailing Market Rate. As used in this Lease, the phrase “Prevailing Market Rate” means the amount that a landlord under no compulsion to lease the Premises, and a tenant under no compulsion to lease the Premises, would agree upon at arm’s length as Base Rent for the Premises for the Extension Term, as of the commencement of the Extension Term. The Prevailing Market Rate shall be based upon non-sublease, non-encumbered, non-equity lease transactions recently entered into for space in the Building and in Comparable Buildings (“Comparison Leases”) and may include periodic increases. Rental rates payable under Comparison Leases shall be adjusted to account for variations between this Lease and the Comparison Leases with respect to: (i)the length of the Extension Term compared to the lease term of the Comparison Leases; (ii)rental structure, including additional rent, and taking into consideration any “base year”; (iii) the size of the Premises compared to the size of the premises under the Comparison Leases; (iv)utility, location, floor levels, views and efficiencies of the floor(s) of the Premises compared to the premises under the Comparison Leases; (v)the age and quality of construction of the Building; (vi)the value of existing leasehold improvements to Tenant; and (vii)the financial condition and credit history of Tenant compared to the tenants under the Comparison Leases. In determining the Prevailing Market Rate, no consideration shall be given to (i)any rental abatement period granted to tenants in Comparison Leases in connection with the design and construction of tenant improvements, (ii)whether Landlord or the landlords under Comparison Leases are paying real estate brokerage commissions in connection with Tenant’s exercise of the Extension Option or in connection with the Comparison Leases, and (iii)moving allowances paid. For purposes of this Paragraph, “Comparable Buildings” mean those buildings located in the vicinity of the Building.

subparagraph shall have at least ten (10) years prior experience in the commercial leasing market of the Market Area and shall be members of the American Institute of Real Estate Appraisers or similar professional organization.If either Landlord or Tenant fails or refuses to select an appraiser, the other appraiser shall alone determine the Prevailing Market Rate.Landlord and Tenant agree that they shall be bound by the determination of Prevailing Market Rate pursuant to this paragraph.Landlord shall bear the fee and expenses of its appraiser; Tenant shall bear the fee and expenses of its appraiser; and Landlord and Tenant shall share equally the fee and expenses of the third appraiser, if any.

The initial Base Rent rate per rentable square foot for the Premises during the Extension Term shall equal the Prevailing Market (hereinafter defined) rate per rentable square foot for the Premises.Base Rent during the Extension Term shall increase, if at all, in accordance with the increases assumed in the determination of Prevailing Market rate. Base Rent attributable to the Premises shall be payable in monthly installments in accordance with the terms and conditions of the Lease.

High Bluff Drive and El Camino Real leasing market with working knowledge of current rental rates and leasing practices related to buildings similar to the Building, within 10days after the appointment of the second arbitrator. Each of Landlord and Tenant shall furnish each of the three arbitrators with a copy of their respective final determination of the Prevailing Market rate. The third arbitrator shall proceed with all reasonable dispatch to determine whether Landlord’s final determination of the Prevailing Market rate or Tenant’s final determination of the Prevailing Market rate, most closely reflects the Prevailing Market rate and in no event shall the arbitrator have the right (i) to average the final determination of the Prevailing Market rate of Landlord and Tenant or (ii) to choose another rate. The decision of such third arbitrator shall in any event be rendered within 30 days after his/her appointment, or within such other period as the parties shall agree, and such decision shall be in writing and in duplicate, one counterpart thereof to be delivered to each of the parties. The arbitration shall be conducted in accordance with the rules of the American Arbitration Association (or its successor) and applicable Law and this Section, which shall govern to the extent of any conflict between this Section and the rules of the American Arbitration Association, and the decision of the third arbitrator shall be reviewable only to the extent provided by the rules of the American Arbitration Association and shall otherwise be binding, final and conclusive on the parties. Each party shall pay the fees of the arbitrator it chose and the fees of its counsel and the losing party shall pay for the fees of the third arbitrator and the reasonable and necessary expenses incident to the proceedings; provided however, if a party fails to appoint an arbitrator, the fees of the sole arbitrator shall be split between the two parties equally.

36.3 Prevailing Market Rate. As used in this Lease, the phrase “Prevailing Market Rate” means the amount that a landlord under no compulsion to lease the Premises, and a tenant under no compulsion to lease the Premises, would agree upon at arm’s length as Base Rent for the Premises for the Second Extension Term, as of the commencement of the Second Extension Term. The Prevailing Market Rate shall be based upon non-sublease, non-encumbered, non-equity lease transactions recently entered into for space in the Building and in Comparable Buildings (“Comparison Leases”) and may include periodic increases. Rental rates payable under Comparison Leases shall be adjusted to account for variations between this Lease and the Comparison Leases with respect to: (i)the length of the Second Extension Term compared to the lease term of the Comparison Leases; (ii)rental structure, including additional rent, and taking into consideration any “base year” or “expense stops”; (iii) the size of the Premises compared to the size of the premises under the Comparison Leases; (iv)utility, location, floor levels, views and efficiencies of the floor(s) of the Premises compared to the premises under the Comparison Leases; (v)the age and quality of construction of the Building; (vi)the value of existing leasehold improvements to Tenant; and (vii)the financial condition and credit history of Tenant compared to the tenants under the Comparison Leases. The Prevailing Market Rate shall take into consideration tenant improvement or refurbishment allowances granted in Comparison Leases. In determining the Prevailing Market Rate, no consideration shall be given to (a)any rental abatement period granted to tenants in Comparison Leases in connection with the design and construction of tenant improvements and (b)whether Landlord or the landlords under Comparison Leases are paying real estate brokerage commissions in connection with Tenant’s exercise of the Extension Option or in connection with the Comparison Leases. For purposes of this Article, Comparable Buildings shall mean other tier one class A building in the Downtown San Francisco Central Business District.

(b) Prevailing Market Rate. As used in this Lease, the phrase “Prevailing Market Rate” means the amount that a landlord under no compulsion to lease the Premises, and a tenant under no compulsion to lease the Premises, would agree upon at arm’s length as Base Rent for the Premises for the Extension Term, as of the commencement of the Extension Term. The Prevailing Market Rate shall be based upon non-sublease, non-encumbered, non-equity lease transactions in the Building and in Comparable Buildings (“Comparison Leases”), and may include annual or other periodic increases. Rental rates payable under Comparison Leases shall be adjusted to account for variations between this Lease and the Comparison Leases with respect to: (i)the length of the Extension Term compared to the lease term of the Comparison Leases; (ii)rental structure, including additional rent, and taking into consideration any “base year” or “expense stops”; (iii) the size of the Premises compared to the size of the premises under the Comparison Leases; (iv)utility, location, floor levels, views and efficiencies of the floor(s) of the Premises compared to the premises under the Comparison Leases; (v)the age and quality of construction of the Building; (vi)the value of existing leasehold improvements to Tenant; and (vii)the financial condition and credit history of Tenant compared to the tenants under the Comparison Leases. In determining the Prevailing Market Rate, no consideration shall be given to (A)whether Landlord or the landlords under Comparison Leases are paying real estate brokerage commissions in connection with Tenant’s exercise of the Extension Option or in connection with the Comparison Leases, (B)moving allowances paid, and (C)the value of any improvements or alterations paid for by Tenant. For purposes of this Article, “Comparable Buildings” means ClassA office buildings in the Pleasanton Area with similar amenities.

(i) Within thirty (30)days following the Outside Agreement Date, Landlord and Tenant shall each appoint an arbitrator who shall be a licensed California real estate broker having significant experience in leasing suburban office space in the Pleasanton area for at least the immediately preceding ten (10)years prior to such appointment. The two arbitrators so appointed shall jointly attempt to agree upon the Prevailing Market Rate. If the arbitrators are unable to agree within forty-five (45)days after appointment of the last appointed arbitrator, then within ten (10)days after expiration of such forty-five (45)period, the arbitrators shall meet and concurrently deliver to each other their respective written determinations of the Prevailing Market Rate for the Extension Term supported by the reasons therefor, and promptly deliver copies of their determinations to Landlord and Tenant. If the higher of such determinations is not more than one hundred five percent (105%) of the lower, then the Prevailing Market Rate shall be the average of the two determinations. Otherwise, the Prevailing Market Rate shall be determined by a third arbitrator as set forth below.

3.3.5 Landlord’s Proposal. Not later than one hundred twenty (120)days after Tenant has given valid notice of exercise of the applicable Extension Option, Landlord shall deliver to Tenant a good faith written proposal of the Prevailing Market Rate for the Premises for such Extension Term. At Tenant’s request, Landlord and Tenant shall meet to discuss the basis of Landlord’s proposed Prevailing Market Rate. Within forty five (45)days after receipt of Landlord’s proposal, Tenant shall notify Landlord in writing (a)that Tenant accepts Landlord’s proposal or (b)that Tenant elects to submit the determination of Prevailing Market Rate to arbitration in accordance with Paragraph 3.3.6. If Tenant does not give Landlord a timely notice in response to Landlord’s proposal, Landlord’s proposal of Prevailing Market Rate for the applicable Extension Term shall be binding upon Tenant.

1.3 AUTOMATIC RENEWAL: THIS AGREEMENT LASTS FOR THE PERIOD STATED IN IT AND THEN WILL BE EXTENDED AUTOMATICALLY FOR SUCCESSIVE PERIODS EQUAL TO THE CURRENT TERM BUT NO LESS THAN 3 MONTHS (UNLESS LEGAL RENEWAL TERM LIMITS APPLY) UNTIL TERMINATED BY THE CLIENT OR BY THE PROVIDER PERSUANT TO SECTION 1.4. UNTIL BROUGHT TO AN END BY THE CLIENT OR BY THE PROVIDER. ALL PERIODS SHALL RUN TO THE LAST DAY OF THE MONTH IN WHICH THEY WOULD OTHERWISE EXPIRE. THE FEES ON ANY RENEWAL WILL BE AT THE THEN PREVAILING MARKET RATE. THIS CLAUSE DOES NOT APPLY TO MONTH TO MONTH AGREEMENTS.