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NEGOTIATING KEY LEASE PROVISIONS A Landlord's Point of View - page 36 / 60

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FORM 12

CPI WITH FLOOR AND CAP - COMPOUNDING (LANDLORD ORIENTED)

(a)

Adjustments in the Minimum Rent shall be calculated at the end of each "Calculation

Period" (as defined below) and Minimum Rent shall be adjusted (and such adjustments in

Minimum Rent shall become effective) on each "Adjustment Date" (as defined below). The first thirty (30) months of the Lease Term shall constitute an "Adjustment Period." In the event Tenant exercises its option to extend the Lease Term (as provided in Paragraph , above) the first thirty (30) months of such Extended Term shall also constitute an "Adjustment Period." The first

day of the month first following the expiration of each Adjustment Period shall be referred to herein as the "Adjustment Date."

(b)

The index to be used in calculating adjustments in Minimum Rent shall be the "All

Items" Consumer Price Index for Urban Wage Earners and Clerical Workers (1982-84=100) for Seattle-Tacoma, published by the United States Department of Labor's Bureau of Labor Statistics

(the "CPI").

(c)

At the end of (i) the first twelve (12) months (ii) the second twelve (12) months: and (iii)

the last six (6) months of each Adjustment Period (each such period being referred to herein as a

"Calculation Period"), the increase in the CPI shall be calculated. Said increase shall be computed by comparing the "Beginning CPI" to the "Ending CPI" (as those terms are defined herein), and calculating, on a percentage basis, changes between the Beginning CPI and the Ending CPI.

(d)

The term "Beginning CPI" shall mean and refer to the CPI as of the date which is two (2)

months prior to the commencement of each Calculation Period, and the "Ending CPI" shall mean the CPI as of the date which is two (2) months prior to the last month of each Calculation Period. In the event the CPI increases more than six percent (6%) during any Calculation Period, the CPI shall be deemed to have increased six percent (6%) during such Calculation Period. In the event the CPI increases less than three percent (3%) during any Calculation Period, the CPI shall be deemed to have increased three percent (3%) during such Calculation Period. For any Calculation Period that is less than one full year, the CPI minimum and maximum increase limitations described above shall be prorated, based upon a comparison of the amount of time in

such Calculation Period to a full year. The sum of the percentage CPI increases during each Calculation Period which falls within the Adjustment Period in question shall be used to determine the increase in Minimum Rent as of each Adjustment Date.

(e)

Minimum Rent to become effective on the Adjustment Date in question shall be equal to

the Minimum Rent of the immediately preceding Adjustment Period, plus an amount equal to the

increase in the CPI during such Adjustment Period (expressed as a fraction) ties the Minimum Rent in effect during such Adjustment Period.

99999\11111\215691.V01 JDC

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