Landlord shall maintain books and records showing Operating Expenses and Taxes in accordance with sound accounting and management practices, consistently applied. Tenant or its representative (which representative shall be a certified public accountant licensed to do business in the state in which the Property is located and whose primary business is certified public accounting and who shall not be paid on a contingency basis) shall have the right, for a period of ninety (90) days following the date upon which Landlord’s Statement is delivered to Tenant, to examine the Landlord’s books and records with respect to the items in the foregoing statement of Operating Expenses and Taxes during normal business hours, upon written notice, delivered at least three (3) business days in advance. Tenant shall pay for all costs of such examination, provided, however, if such examination results in a discrepancy of more than five percent (5%) in the actual Operating Expenses and Taxes from those shown on the Landlord’s Statement, such costs shall be reimbursed by Landlord. If Tenant does not object in writing to Landlord’s Statement within ninety (90) days of Tenant’s receipt thereof, specifying the nature of the item in dispute and the reasons therefor, then Landlord’s Statement shall be considered final and accepted by Tenant and Tenant shall be deemed to have waived its right to dispute Landlord’s Statement. If Tenant does dispute any item in the Landlord’s Statement, Tenant shall give notice of such dispute to Landlord and deliver a copy of any such audit to Landlord at the time of notification of the dispute. If Tenant does not provide such notice of dispute and a copy of such audit to Landlord within such ninety (90) day period, it shall be deemed to have waived such right to dispute Landlord’s Statement. Any amount due to Landlord as shown on Landlord’s Statement, whether or not disputed by Tenant as provided herein shall be paid by Tenant when due as provided above, without prejudice to any such written exception. In no event shall Tenant be permitted to examine Landlord’s records or to dispute any statement of Operating Expenses and Taxes while Tenant is in Default under this Lease. Upon resolution of any dispute with respect to Operating Expenses and/or Taxes, Tenant shall either pay Landlord any shortfall or Landlord shall credit Tenant with respect to any overages paid by Tenant (or promptly pay such amount directly to Tenant, if there are not sufficient months left in the Term to credit such amount to). The records obtained by Tenant shall be treated as confidential and neither Tenant nor any of its representatives or agents (including without limitation any financial or legal consultants) shall disclose or discuss the information set forth in the audit to or with any other person or entity except # to Tenant’s lawyers and accountants, or # as required by applicable law (“Confidentiality Requirement”). Tenant shall indemnify and hold Landlord harmless for any losses or damages arising out of the breach of the Confidentiality Requirement.
Landlord shall maintain books and records reflecting the Operating Costs in accordance with commercially reasonable accounting and management practices. Tenant and any independent, third-party certified public accountant engaged and paid by Tenant (who shall not be paid on a contingency, percentage, bonus, "success fee", or similar basis) shall have the right to examine such records not more than once a year upon reasonable prior written notice to Landlord given no later than one hundred twenty (120) days following the furnishing of the Operating Costs and Tax Statement or modification thereof, specifying the records Tenant desires to examine and the basis for Tenant's dispute. Such examination shall take place during normal business hours at the location where such records are normally kept, and shall be limited to the records pertaining to the calendar year addressed by the most recent Operating Costs and Tax Statement. It is a condition to Tenant's exercise of this audit right that Tenant shall have paid to Landlord all amounts billed by Landlord to Tenant. No later than sixty (60) days after the date on which Tenant has completed examination of such records, Tenant may take exception to matters included in Operating Costs and Tax Statement or Landlord's computation of Tenant's Proportionate Share thereof (a "Report Exception") by sending written notice to Landlord specifying the Report Exception and the reasons therefor. The Report Exception shall not be determinative and Landlord shall have the right to dispute the Report Exception. If Tenant timely raises a Report Exception and Landlord and Tenant, after working together in good faith for a period of thirty (30) days thereafter, are unable to mutually agree on the resolution thereof, such exception shall be referred to one of Deloitte & Touche, KPMG, PWC, and Ernst & Young ("CPA") as selected by Landlord to determine the resolution of the Report Exception, which determination shall be final and conclusive between Landlord and Tenant. Landlord shall allow Tenant a credit against rent next due for the amount of any overpayment, and Tenant shall pay Landlord the amount of any underpayment. If the CPA determines that Operating Costs were overstated by more than five percent (5%), Landlord shall pay the cost of such CPA's certification, and Tenant's cost of such audit. Except as may be required to comply with an order from a court or other governmental body of competent jurisdiction, the results of any examination shall be kept strictly confidential by Tenant and its certified public accountants, and Tenant and its certified public accountants must agree in their contract for such services to such confidentiality restrictions and that the results shall not be revealed to any other person. As a condition to exercise of any right to examine under this Section, Tenant must deliver to Landlord, if requested by Landlord, a signed confidentiality agreement from Tenant and its certified public accountants reasonably acceptable to Landlord confirming the confidentiality provisions.
The annual determination and statement of Operating Expenses and Taxes (the "Statement") shall be made by or verified by an accounting or auditing officer of the Landlord or an auditing company designated by the Landlord. Within three (3) months after receipt of the Statement the Tenant shall be entitled, upon five (5) days' prior written notice and during normal business hours at the Landlord's office or such other place as the Landlord shall designate, to inspect and examine the books and records of the Landlord relating to the determination of Operating Expenses and Taxes for the immediately preceding year. If, after inspection and examination of such books and records, the Tenant disputes the amounts of Operating Expenses or Taxes charged by the Landlord, the Tenant may, by written notice to the Landlord, request an independent audit of such books and records. The independent audit of the books and records shall be conducted by a Chartered Accountant or firm of Chartered Accountants (the "CA") appointed by the Landlord. The audit shall be limited to the determination as to whether the amount of Operating Expenses or Taxes billed to the Tenant was incorrect, and, if such amount is determined to be incorrect, the appropriate party shall pay to the other party the deficiency or overpayment resulting from such determination, as applicable. The result of the audit shall be binding upon the parties hereto. The fees and expenses paid by the Landlord to the CA shall be repaid to the Landlord by the Tenant unless the audit shows that the Landlord overstated Operating Expenses for the subject year by more than three percent (3%). The Tenant shall keep any information gained from such audit confidential and shall not disclose it to any other party. The exercise by the Tenant of its audit rights hereunder shall not relieve the Tenant of its obligation to pay when otherwise due hereunder all sums due hereunder, including, without limitation, the disputed Operating Expenses.
Each Statement sent to Tenant shall constitute an account stated between Landlord and Tenant and shall be conclusively binding upon Tenant unless Tenant # pays to Landlord when due the amount set forth in such Statement, without prejudice to Tenant’s right to audit such Statement, and # within one hundred eighty (180) days after such Statement is delivered, sends a written notice to Landlord objecting to such Statement and stating that Tenant will audit the records concerning said Statement. Tenant and all auditors, representatives, contractors, agents, and other third parties involved on behalf of Tenant in any review, audit or dispute concerning Operating Expenses, Insurance Expenses or Taxes shall execute and deliver to Landlord a confidentiality agreement, in form and substance reasonably satisfactory to Landlord and Tenant, whereby such parties agree not to disclose to any third party any of the information obtained in connection with such review. Tenant agrees that Tenant will not employ, in connection with any review, audit or dispute under this Lease, any person or entity who is to be compensated in whole or in part, on a contingency fee basis. If Tenant satisfies the foregoing conditions precedent, then Tenant may review or audit the Operating Expenses, Insurance Expenses, or Taxes (as applicable) for the subject calendar year or Tax Year (as applicable). If the parties are unable to resolve any dispute as to the correctness of such Statement within thirty (30) days following the review or audit performed by Tenant, then either party may refer the issues raised by such review or audit to a nationally recognized public accounting firm selected by Landlord and reasonably acceptable to Tenant, and the decision of such accountants shall be conclusively binding upon Landlord and Tenant. If said accountants shall determine that Tenant shall have made any payment in excess of the amount properly due hereunder, such excess amount shall be refunded to Tenant by Landlord promptly after said accountants shall have rendered their decision and if such accountants shall determine that Tenant shall have underpaid the amount properly due hereunder such under-payment shall be paid by Tenant to Landlord promptly after said accountants shall have rendered their decision. Tenant shall pay the fees and expenses relating to the audit and dispute procedure, unless such accountants determine that Landlord overstated Operating Expenses, Insurance Expenses or Taxes (as applicable) by more than three percent (3%) for such calendar year or Tax Year (as applicable), in which case Landlord shall pay the reasonable out-of-pocket fees and expenses incurred by Tenant for the audit conducted by Tenant and said third-party accountant. Except as provided in this Section 7.5, Tenant shall have no right whatsoever to dispute by judicial proceeding or otherwise the accuracy of any Statement.
Audit Rights. Tenant shall have the right, at Tenant's cost, after reasonable notice to Landlord, to have Tenant's authorized employees or agents inspect, at Landlord's main corporate office during normal business hours, Landlord's books, records and supporting documents concerning the Operating Expenses, Tax Expenses and Utilities Costs set forth in any Statement delivered by Landlord to Tenant for a particular Expense Year pursuant to [Section 4.3.2] above; provided, however, Tenant shall have no right to conduct such inspection or object to or otherwise dispute the amount of the Operating Expenses, Tax Expenses and Utilities Costs set forth in any such Statement, unless Tenant notifies Landlord of such inspection objection and dispute, completes such inspection within three (3) months immediately following Landlord's delivery of a Statement (the "Review Period"); provided, further, that notwithstanding any such timely inspection, objection, dispute, and/or audit, and as a condition precedent to Tenant's exercise of its right of inspection, objection, dispute, and/or audit as set forth in this [Section 4.6], Tenant shall not be permitted to withhold payment of, and Tenant shall timely pay to Landlord, the full amounts as required by the provisions of this Article 4 in accordance with such Statement. However, such payment may be made under protest pending the outcome of any audit. In connection with any such inspection by Tenant, Landlord and Tenant shall reasonably cooperate with each other so that such inspection can be performed pursuant to a mutually acceptable schedule, in an expeditious manner and without undue interference with Landlord's operation and management of the Project. If after such inspection and/or request for documentation, Tenant disputes the amount of the Operating Expenses, Tax Expenses and Utilities Costs set forth in the Statement, Tenant shall have the right, but not the obligation, within the Review Period, to cause an independent certified public accountant which is not paid on a contingency basis and which is mutually approved by Landlord and Tenant (the "Accountant") to complete an audit of Landlord's books and records to determine the proper amount of the Operating Expenses, Tax Expenses and Utilities Costs incurred and amounts payable by Tenant for the Expense Year which is the subject of such Statement. Such audit by the Accountant shall be final and binding upon Landlord and Tenant. If Landlord and Tenant cannot mutually agree as to the identity of the Accountant within thirty (30) days after Tenant notifies Landlord that Tenant desires an audit to be performed, then the Accountant shall be one of the "Big 4" accounting firms selected by Landlord, which is not paid on a contingency basis and is not, and has not been, otherwise employed or retained by Landlord. If such audit reveals that Landlord has over-charged Tenant, then within thirty (30) days after the results of such audit are made available to Landlord, Landlord shall reimburse to Tenant the amount of such over-charge. If the audit reveals that the Tenant was under-charged, then within thirty (30) days after the results of such audit are made available to Tenant, Tenant shall reimburse to Landlord the amount of such under-charge. Tenant agrees to pay the cost of such audit unless it is subsequently determined that Landlord's original Statement which was the subject of such audit was in error to Tenant's disadvantage by five percent (5%) or more of the total Operating Expenses, Tax Expenses and Utilities Costs which was the subject of the audit (in which case Landlord shall pay the cost of such audit). The payment by Tenant of any amounts pursuant to this Article 4 shall not preclude Tenant from questioning the correctness of any Statement provided by Landlord at any time during the Review Period, but the failure of Tenant to object thereto, conduct and complete its inspection and have the Accountant conduct and complete the audit as described above prior to the expiration of the Review Period shall be conclusively deemed Tenant's approval of the Statement in question and the amount of Operating Expenses, Tax Expenses and Utilities Costs shown thereon. In connection with any inspection and/or audit conducted by Tenant pursuant to this [Section 4.6], Tenant agrees to keep, and to cause all of Tenant's employees and consultants and the Accountant to keep, all of Landlord's books and records and the audit, and all information pertaining thereto and the results thereof, strictly confidential, and in connection therewith, Tenant shall cause such employees, consultants and the Accountant to execute such reasonable confidentiality agreements as Landlord may require prior to conducting any such inspections and/or audits.
office of Landlord or Landlord’s property manager. If Tenant retains an agent to review Landlord’s records, the agent must be with a licensed CPA firm. Tenant shall be solely responsible for all costs, expenses and fees incurred for the audit provided, however that if such audit should result in a reduction of three percent (3%) or greater in Tenant’s liability for Operating Expenses, then Landlord shall reimburse Tenant for its reasonable out of pocket costs for such audit. Within sixty (60) days after the records are made available to Tenant, Tenant shall have the right to give Landlord written notice (an “Objection Notice”) stating in reasonable detail any objection to Landlord’s statement of Operating Expenses for the applicable year of the Term. Tenant may give an Objection Notice based on its own review or that of an agent. Tenant may object to an individual component of Operating Expenses or Landlord’s calculation on the whole. If Tenant fails to give Landlord an Objection Notice within the sixty (60) day period or fails to provide Landlord with a Review Notice within the one hundred and twenty (120) day period described above, Tenant shall be deemed to have approved Landlord’s statement of Operating Expenses and shall be barred from raising any claims regarding the Operating Expenses for the applicable year of the Term. If Tenant provides Landlord with a timely Objection Notice, Landlord and Tenant shall work together in good faith to resolve any issues raised in Tenant’s Objection Notice. If Landlord and Tenant determine that Operating Expenses for the applicable year of the Term are less than reported, Landlord shall provide Tenant at Landlord’s option either a refund of the amount of overpayment or with a credit against the next installment of Additional Rent (and, if such credit is in excess of three months’ Additional Rent for Operating Expenses and Real Estate Taxes, Fixed Rent) in the amount of any overpayment by Tenant. Likewise, if Landlord and Tenant determine that Operating Expenses for the applicable year of the Term are greater than reported, Tenant shall pay Landlord the amount of any underpayment within thirty (30) days. The records obtained by Tenant shall be treated as confidential. In no event shall Tenant be permitted to examine Landlord’s records or to dispute any statement of Operating Expenses unless Tenant has paid and continues to pay all Fixed Rent, Supplemental Rent (if any) and Additional Rent when due.
6.5Audits. If Tenant disputes the amount set forth in the Statement, Tenant shall have the right, at Tenant's sole expense, not later than ninety (90) days following receipt of such Statement, to review Landlord's books and records using a member of Tenant’s finance department with respect to the calendar year which is the subject of the Statement. In addition, if Tenant disputes the amount set forth in the Statement, Tenant shall have the right, at Tenant's sole expense, not later than ninety (90) days following receipt of such Statement, to cause Landlord's books and records with respect to the calendar year which is the subject of the Statement to be audited by a certified public accountant mutually acceptable to Landlord and Tenant (an “Accountant”). The audit shall take place at the offices of Landlord where its books and records are located at a mutually convenient time during Landlord's regular business hours. If the audit is performed by a mutually acceptable Accountant, Tenant's Percentage Share of Operating Expenses shall be appropriately adjusted based upon the results of such audit, and the results of such audit shall be final and binding upon Landlord and Tenant. Tenant shall have no right to conduct an audit or to give Landlord notice that it desires to conduct an audit at any time Tenant is in material default under the Lease continuing beyond any notice and cure period. The accountant conducting the audit shall be compensated on an hourly basis and shall not be compensated based upon a percentage of overcharges it discovers. No subtenant shall have any right to conduct an audit, and no assignee shall conduct an audit for any period during which such assignee was not in possession of the Premises. Tenant's right to undertake an audit with respect to any calendar year shall expire ninety (90) days after Tenant's receipt of the Statement for such calendar year, and such Statement shall be final and binding upon Tenant and shall, as between the parties, be conclusively deemed correct, at the end of such ninety (90) day period, unless prior thereto Tenant shall have given Landlord written notice of its intention to audit Operating Expenses using an Accountant for the calendar year which is the subject of the Statement. If Tenant gives Landlord notice of its intention to audit Operating Expenses using an Accountant, it must commence such audit within sixty (60) days after such notice is delivered to Landlord, and the audit must be completed within one hundred twenty (120) days after such notice is delivered to Landlord. If Tenant does not commence and complete the audit within such periods, the Statement which Tenant elected to audit shall be deemed final and binding upon Tenant and shall, as between the parties, be conclusively deemed correct. Tenant agrees that the results of any Operating Expense audit shall be kept strictly confidential by Tenant and shall not be disclosed to any other person or entity. If as a result of an audit, it is determined that Landlord has overstated the Operating Expenses owed by Tenant on a Statement by more than of the actual Operating Expenses owed by Tenant, Landlord shall reimburse Tenant for the reasonable out of pocket costs Tenant paid to unrelated third parties for the performance of the audit.
Tenant, within sixty (60) days after receiving Landlord's determination of Operating Expenses, may give Landlord written notice ("Review Notice") that Tenant intends to review Landlord's records of the Operating Expenses (excluding Real Property Taxes) for the calendar year to which the statement applies. Within a reasonable time after receipt of the Review Notice, Landlord shall make all pertinent records available for inspection that are reasonably necessary for Tenant to conduct its review. If any records are maintained at a location other than the management office for the Building, Tenant may either inspect the records at such other location or pay for the reasonable cost of copying and shipping the records. If, after Tenant has performed its review described above in this Section 3, Tenant retains an agent to review Landlord's records (an “Audit”), the agent must be with a CPA firm licensed to do business in the state where the Property is located. Tenant shall be solely responsible for all costs, expenses and fees incurred for Tenant’s own review and for any Audit. Within ninety (90) days after the records are made available to Tenant, Tenant shall have the right to give Landlord written notice (an "Objection Notice") stating in reasonable detail any objection to Landlord's statement of Operating Expenses for that year. If Tenant fails to give Landlord an Objection Notice within the ninety (90)-day period or fails to provide Landlord with a Review Notice within the sixty (60)- day period described above, Tenant shall be deemed to have approved Landlord's determination of Operating Expenses and shall be barred from raising any claims regarding Operating Expenses for that year. If Tenant provides Landlord with a timely Objection Notice, Landlord and Tenant shall work together in good faith to resolve any issues raised in Tenant's Objection Notice. If Landlord and Tenant determine that Operating Expenses for the calendar year are less than reported, Landlord shall provide Tenant with a credit against the next installment of Tenant's Proportionate Share of Operating Expenses in the amount of the overpayment by Tenant. Likewise, if Landlord and Tenant determine that Operating Expenses for the calendar year are greater than reported, Tenant shall pay Landlord the amount of any underpayment within thirty (30) days. The records obtained by Tenant shall be treated as confidential. In no event shall Tenant be permitted to examine Landlord's records or to dispute any statement of Operating Expenses unless Tenant has paid and continues to pay all Rent when due. Notwithstanding anything to the contrary specified herein: # if an Audit is performed and proves that total Operating Expenses for the applicable calendar year were overstated by more than five percent (5%), then Landlord shall reimburse Tenant for Tenant’s third-party costs and expenses incurred in connection with such Audit in an amount not to exceed $5,000; and # if an Audit is performed and fails to prove that total Operating Expenses for the applicable calendar year were overstated by more than five percent (5%), then Tenant shall reimburse Landlord for Landlord’s third-party costs and expenses incurred in connection with such Audit in an amount not to exceed $5,000.
Inspection. Tenant shall have the right at its own expense to inspect the books and records of Landlord pertaining to Operating Costs and Taxes allocated to the Building once in any calendar year by any employee of Tenant or by a certified public accountant mutually acceptable to Landlord and Tenant (provided such certified public accountant charges for its service on an hourly basis and not based on a percentage of any recovery or similar incentive method) at reasonable times, and upon reasonable written notice to Landlord as hereinafter provided. Tenant’s right to inspect such books and records is conditioned upon Tenant first paying Landlord the full amount billed by Landlord. Within one hundred eighty (180) days after receipt of Landlord’s annual reconciliation of such Operating Costs and Taxes, Tenant shall have the right, after at least thirty (30) days prior written notice to Landlord, to inspect at the offices of Landlord or its property manager, the books and records of Landlord pertaining solely to the Operating Costs and Taxes allocated to the Building for the immediately preceding calendar year covered in such annual reconciliation statement. All expenses of the inspection shall be borne by Tenant and must be completed within fifteen (15) days after commencement of such inspection. If Tenant’s inspection reveals a discrepancy in the comparative annual reconciliation statement, Tenant shall deliver a copy of the inspection report and supporting calculations to Landlord within thirty (30) days after completion of the inspection. If Tenant and Landlord are unable to resolve the discrepancy within thirty (30) days after Landlord’s receipt of the inspection report, either party may upon written notice to the other have the matter decided by an inspection by an independent certified public accounting firm approved by Tenant and Landlord (the “CPA Firm”), which approval shall not be unreasonably withheld or delayed. If the inspection by the CPA Firm shows that the actual aggregate amount of Operating Costs and Taxes payable by Tenant is greater than the amount previously paid by Tenant for such accounting period, Tenant shall pay Landlord the difference within thirty (30) days. If the inspection by the CPA Firm shows that the actual applicable amount is less than the amount paid by Tenant, then the difference shall be applied in payment of the next estimated monthly installments of Tenant’s Proportionate Share of Operating Costs and Taxes owing by Tenant, or in the event such accounting occurs following the expiration of the Term hereof, such difference shall be refunded to Tenant. Tenant shall pay for the cost of the inspection by the CPA Firm, unless such inspection shows that Landlord overstated the aggregate amount Operating Costs and Taxes by more than five percent (5%), in which case Landlord shall pay for the cost of the inspection by the CPA Firm, not to exceed $2,500.00.
Audit Rights. Tenant shall have the right, at Tenant’s cost, after reasonable notice to Landlord, to have Tenant’s authorized employees, consultants, agents, or third-party accountant (meeting the qualifications of an Accountant (as defined below)) inspect, , Landlord’s books, records and supporting documents concerning the Operating Expenses, Tax Expenses and Utilities Costs set forth in any Statement delivered by Landlord to Tenant for a particular Expense Year pursuant to [Section 4.3.2] above (and Landlord agrees to make such books, records and supporting documentation available to Tenant and Tenant’s authorized employees, consultants, agents, or third-party accountants in electronic format); provided, however, Tenant shall have no right to conduct such inspection or object to or otherwise dispute the amount of the Operating Expenses, Tax Expenses and Utilities Costs set forth in any such Statement, unless Tenant notifies Landlord of such inspection request within six (6) months following Landlord’s delivery of a Statement, and completes the audit and makes any objection or dispute within six (6) months thereafter (the “Review Period”) (subject to reasonable extension in the event that Landlord fails to promptly upon request make available to Tenant and its authorized employees, agents, or accountants any information or materials relevant to the inspection); provided, further, that notwithstanding any such timely inspection, objection, dispute, and/or audit, and as a condition precedent to Tenant’s exercise of its right of inspection, objection, dispute, and/or audit as set forth in this [Section 4.6], Tenant shall not be permitted to withhold payment of, and Tenant shall timely pay to Landlord, the full amounts as required by the provisions of this Article 4 in accordance with such Statement. However, such payment may be made under protest pending the outcome of any audit. In connection with any such inspection by Tenant, Landlord and Tenant shall reasonably cooperate with each other so that such inspection can be performed pursuant to a mutually acceptable schedule, in an expeditious manner and without undue interference with Landlord’s operation and management of the Project. If after such inspection and/or request for documentation, Tenant disputes the amount of the Operating Expenses, Tax Expenses and Utilities Costs set forth in the Statement, Tenant shall have the right, but not the obligation, within the Review Period, to cause an independent certified public accountant which is not paid on a contingency basis and which is
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