Methods to Determine Fair Market Value in Current Market

Home , Market value, Rental value

METHODS TO DETERMINE FAIR MARKET VALUE IN CURRENT MARKET

PHILIP D. WELLER

ACREL 1994 FALL MEETING --- SEATTLE OCTOBER 21, 1994

Vinson & Elkins L.L.P. 3700 Trammell Crow Center 2001 Ross Avenue Dallas, Texas 7520175201----29752975

TABLE OF CONTENTS

Page No.

TEXT

INTRODUCTION...... 1

BASIC APPROACHES...... 1

POINTS TO CONSIDER IN ADOPTING VALUATION AND DETERMINATION PROVISIONS ...... 3

CONCLUSION ...... 5

APPENDICES

APPENDIX 1 Customized AAA Format - Office Lease ...... 1

APPENDIX 2 General Arbitration - Purchase Option - Ground Lease...... 4

APPENDIX 3 Private Arbitration - Baseball - Ground Lease ...... 6

APPENDIX 4 Private Arbitration - Average or Consensus - Office Lease Fair Market Rental Rate...... 8

APPENDIX 5 Private Arbitration - Baseball - Office Lease Prevailing Market Conditions...... 10

APPENDIX 6 Private Arbitration - Baseball - Office Prevailing Market Conditions...... 13

APPENDIX 7 Extension Options ...... 15

APPENDIX 8 Private Arbitration - Consensus/Average - Accountants Select - Partnership Agreement Valuation and Appraisal Procedures...... 18

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APPENDIX 9 English Lease Practice - Rent Adjustment Provision - Chartered Surveyor...... 20

APPENDIX 10 Arbitration Rules for the Real Estate Industry (Including a Mediation Alternative ...... 23

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METHODS TO DETERMINE FAIR MARKET VALUE IN CURRENT MARKET

I. INTRODUCTION

Leases, office, retail, and ground, frequently provide that certain rights, such as renewal or expansion options, be exercised in the future based upon the then "fair market value" of the right. This paper discusses various ways to ascertain that fair market value in a binding fashion. The touchstone of any such agreement is that it be a definitive mechanism for ascertaining the value in question, as the courts will not enforce agreements to agree. See, e.g., Stekool Petroleum Co v. Hamilton, 255 S.W.2d 187, 192 (Tex. 1953). Accordingly the lease will need to provide something more than a rental rate to be determined by the parties in the future in order to assure that each party receives the benefit of its bargain concerning renewal. In addition to providing a variety of examples of provisions from existing leases relating to determination of fair market value, this paper also discusses some concepts and points to consider in drafting such provisions.

II. BASIC APPROACHES

A. Leave It To The Law. Interestingly enough, one very simple (too simple?) approach is to simply provide that the rental (or purchase price or whatever is being determined) shall be the then prevailing rental rate (or fair market value) for similar properties taking into account all the relevant factors. For example, in Texas, a court enforced a provision reading as follows:

"The rental for the renewed term shall be based on the then prevailing rental rates for properties of equivalent quality, size, utility and location, with the length of the Lease term and credit standing of the Lessee to be taken into account . . .".

Aycock v. Vantage Management Co., 554 S.W.2d 235, 236-237 (Tex. Civ. App.--Dallas 1977, writ ref'd. n.r.e.).

The lease went on to specify that the tenant would give notice of its intention to renew and the landlord would respond within 15 days with the proposed renewal rate and then the parties would meet to try to resolve any differences. The court had little trouble distinguishing this clause from a provision to renew at a rental to be agreed upon by the parties (which would not be enforceable) and found that the contract was binding. The court stated that a contract is sufficiently definite for enforcement although the performance of one of the parties is to be measured by a standard of reasonableness if the contract specifically so provides a standard. This concept is also supported by decisions from other jurisdictions. E.g. see, Bechmann v. Taylor, 249 P. 262 (Colo. 1926); George Y. Worthington & Son Management Corp. v. Levy, 204 A.2d 334 (D.C. 1964) (an option to renew at a rental rate to be agreed upon by both parties, where such agreement must be based upon the prevailing fair rents for similar property at that time, found enforceable); P.J.'s Pantry v. Puschak, 458 A.2d 123 (N.J. Super. Ct. App. Div. 1983) (option to renew at rental reasonably to be agreed

C:\SPEECHES\ACREL-94\METH-FMV.SPC 12/27/00:9:38AM PDW - Page 2 upon enforceable); Northrup v. Hushard, 514 N.Y.S.2d 304 (N.Y. Sup. Ct. 1987) (renewal clause fixing future rents at reasonable market value price enforceable); and Stone v. Martin, 206 S.W.2d 388 (Tenn. 1947). Also, in general, see the annotations at 87 A.L.R.3d 986 and 58 A.L.R.3d 500. Accordingly, it is clear that the parties can draft a relatively short provision agreeing to exercise a right at "fair market value," but the ramifications of such approach must be taken into consideration. First, the delay in ascertaining the value could have a serious impact on occupancy or operations, and the procedure is likely to be more costly than a privately structured arbitration procedure, given the costs of litigation. Finally, the parties would probably be more comfortable with more specific definitions concerning the precise parameters to be applied in determining fair market value.

B. Arbitration Through Organizations. Another possibility is to call for a submission of the determination of fair market value to binding arbitration through the American Arbitration Association ("AAA") or one of the other available commercial mediation/arbitration services now providing dispute resolution services across the country. In general, see Dispute Resolution in Real Estate Transactions - Acrel Fall Meeting, October 15-16, 1993. One good example is the American Arbitration Association's "Arbitration Rules for the Real Estate Industry", a copy of which attached as Appendix 10. (For those who were familiar with the AAA's "Real Estate Valuation Rules", they have been superseded by the general real estate industry rules.) The arbitration clause for this procedure is very short (see page 6 of Appendix 10). Clients may find this preferable because it lowers transactional costs at the beginning. Also the AAA offers a fairly streamlined procedure for handling matters and the AAA rules can also be "custom tailored" by contract provision to further speed the process or limit the scope of inquiry (see Appendix 1). The attached rules also include a mediation alternative, but if the parties turn to mediation without a binding arbitration "fallback" (and without any reasonableness standard or fair market standard as discussed in 2.A above), then the provision may be not sufficiently definite to be enforceable under the general "agreement to agree" rule of contracts.

C. Privately Crafted Arbitration Provisions. Most lawyers in the real estate industry are familiar with customized provisions for appointing arbitrators, determining fair market value, defining what fair market value is and the like. Examples from leases are attached as Appendices 1 through 7 (Appendix 8 comes from a partnership agreement and Appendix 9 comes from an English lease and reflects their practice using chartered surveyors). There are wide range of formats for a lawyer to consider. One concept to consider in the current market is the "baseball arbitration" approach noted in Appendices 3, 5, 6 & 7. Under this approach each party submits its estimate of the value to be determined and an arbitrator (one or more depending on your taste) will select that number which is the closest to its determination.

III. POINTS TO CONSIDER IN ADOPTING VALUATION AND DETERMINATION PROVISIONS

A. Do we really intend to ever use this? This question is not as frivolous as it might first appear. The author's experience is that arbitration provisions are primarily a backstop, serving as a

C:\SPEECHES\ACREL-94\METH-FMV.SPC 12/27/00:9:38AM PDW - Page 3 background against which the parties negotiate in good faith to determine the value in question (i.e., neither party really wants to go through the time and expense of arbitration or litigation to determine the matter). A material consideration, of course, is the length and complexity of the process. The longer, the more difficult, or the more expensive it is likely to be, the less likely it is to be utilized, which may provide one party or the other to an advantage in determining value. For example, if the process is rather lengthy, but the documentation provides that the tenant keeps paying rent at the old rate while a new rental is being determined, then the tenant may be inclined to sit on its hands unless there are provisions for interest on underpaid amounts, etc. to make the landlord whole during the process. Conversely, in the case of a purchase option under a lease, the time for action may become a problem if the arbitration determination periods have not been harmonized with the exercise rights.

B. What If the Result is Unacceptable - Escape Clauses. A lease may provide that upon the Tenant's exercise of a right requiring an evaluation or a determination of value (as, for example, a renewal) the landlord will provide an estimate and the parties will negotiate, failing which the arbitration provision will be followed. What if, however, as a result of the arbitration it turns out that the landlord was exactly right, the tenant was wrong (whether in good faith or not), and the rental rate that is determined is well beyond what the tenant intended to pay? Does the tenant have a right to opt out of his exercise once the value is determined. (For example, see Appendix 3 which provides that if the appraiser's determination is greater than 120% of the lessee's final offer, then lessee may terminate the lease). From the landlord's perspective this, in effect, gives the tenant two bites at the apple. Renewal options always afford to the tenant a chance to shop the market. For example, if a renewal option is at a fixed rate the tenant can simply look at the market and determine whether it is above or below the fixed price. If the market has moved north, the tenant will exercise; if the market has moved south, the tenant will not renew the lease unless the landlord lowers the rate to at or about market, and thus fixed price renewal options are sort of a no-win proposition for the landlord. A similar situation arises where a tenant has a right to withdraw its election to renew, acquire, etc. once the fair market value has been determined.

C. Be Careful About the Time Frames for Determination. As a review of the appendices will indicate, a customary procedure for value determination involves one party initiating the procedure by appointing an arbitrator, the other party then appointing another arbitrator, the arbitrators appointing another arbitrator, the arbitrators meeting and determining value by averaging or by reaching consensus, etc. If each of these component steps has a 30-day time frame, the parties will spend a considerable amount of time in getting through the process. In this regard compare the arbitration rules of the AAA with the appendices. In drafting these provisions, several elements need to be taken into account: the length of the overall process, how rent or other consideration is paid while the process goes on, how any makeup payments (or refunds) are handled following completion of the process, whether interest is payable on any underpaid/overpaid amounts, etc.

D. Defining the Elements of Fair Market Value. One point sometimes overlooked in drafting is dealing with specificity as to exactly what the parties mean by fair market value. The appendices contain differing formulations of what constitutes fair market value in both the office

C:\SPEECHES\ACREL-94\METH-FMV.SPC 12/27/00:9:38AM PDW - Page 4 lease and in the ground lease context - the important point to remember is to list the elements to be taken into (or excluded from) consideration such as, in the case of an office lease, the creditworthiness of tenant, concessions in the market, length and term of the lease, etc. (for example, see Appendix 5 for a "linear" listing). In the context of a purchase right, Appendices 1 and 2 both have provisions delineating elements of fair market value. In a build-to-suit situation where the tenant's lease is the credit driving the transaction, the tenant might properly argue that the only thing it should be required to purchase is the value of the landlord's reversion, giving effect to the existing lease but not to the improvements constructed upon the property. Unless the lease is specific in this regard, however, the appraisers or arbitrators might well consider the value of improvements in determining fair market value. The parties' intentions concerning the use to be valued (as opposed to highest and best use) should also be taken into account. A tenant with a purchase option presumably will wish to purchase to continue its existing use of the property. The landlord, on the other hand, may wish as part of its bargain to be able to argue that its reversionary interest would have a much higher value if an alternate use were taken into account - ascertaining the parties true intentions and making sure it is properly documented is the counsel's role here.

E. Qualifications of the Parties Determining Value. Another point to consider in drafting fair market value determination provisions is the qualifications one wishes to impose upon the parties making the determination. When using the AAA rules, little needs to be done as a selection procedure is provided for those who do not wish to specify a procedure. On the other hand, when drafting specific provisions, at a minimum there should be some requirement that the parties pick someone familiar with the matter to be determined. It is also worthwhile to require that the appraisers or arbitrators be members of some professional organization (as, for example, the American Institute of Real Estate Appraisers) so there is at least some professionalism. Without some standards or qualifications it is possible for parties to pick a friend, a brother-in-law, or whoever might make a favorable determination unrelated to actual market conditions. Frequently provision is also made that the arbitrators have no interest in the outcome of the transaction other than a normal fee. Further, if there is anything peculiar to the particular situation (as, for example, special environmental conditions or use restrictions) specifying parties familiar with those conditions can greatly enhance the overall fairness of the market value determination process. Another consideration is the "fallback" mechanism for appointing an arbitrator where a party fails to do so. Frequently, for example, provisions are drafted where each party appoints an arbitrator and if the two so appointed are unable to agree, they appoint a third party; if a person entitled to do so fails to timely appoint an arbitrator, provision is made for having the appointment to be made by a judge or someone else. Before using such a provision it would be worthwhile to be sure that the party picked to designate an arbitrator is willing to do so; otherwise there will be a "gap" in the procedure which cannot be fulfilled. In this regard, for example, note the provisions of Appendix 3 (circuit judge appoints) and Appendix 8 (third appraiser to be appointed by the New York office of one of a list of certified public accountant firms).

F. Making the Final Determination. There are also several alternatives to consider when specifying how the final fair market value will be derived. The procedure might require the determination of a single arbitrator; a consensus of or among multiple arbitrators; the selection of another arbitrator to pick a value determined by the prior arbitrators; a baseball type selection

C:\SPEECHES\ACREL-94\METH-FMV.SPC 12/27/00:9:38AM PDW - Page 5 approach (pick one of the competing estimates); an averaging approach; or the establishment of floors and ceilings. If an averaging approach is followed, it is prudent to provide a mechanism to avoid the inclusion of an aberrant value (for example, see Appendices 2 and 9 - "two closest appraisals").

IV. CONCLUSION

Leases frequently require market value determinations at future dates, either for purchase options or other purposes. Agreements to submit such a matter to binding arbitration or determination by appraisers or arbitrators will be given effect as will a simple agreement that the particular value in question must be a reasonable market value at the time. On the other hand, an agreement to agree in the future will not be given effect. There are a variety of mechanisms available, ranging from custom crafted appraisal provisions to provisions provided by organizations like the American Arbitration Association to enable the practitioner to satisfy the client's desires for protecting their future expectancies in an enforceable manner.

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APPENDIX 1

Customized AAA Format - Office Lease

__ Arbitration. Either Landlord or Tenant may require that any dispute under this Lease be submitted to arbitration pursuant to this Article __ (even if not specifically provided for in the provisions of this Lease). To the extent the provisions of this Article __ vary from or are inconsistent with the Commercial Arbitration Rules of the American Arbitration Association or any other arbitration tribunal, the provisions of this Article __ shall govern. All arbitrations shall occur at a location in ______, ______chosen by the arbitrators and shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association (or any successor organization, or if no such successor organization exists, then from an organization composed of persons of similar professional qualifications). The party desiring arbitration shall given notice to that effect to the other party and simultaneously therewith also shall give notice to the director of the ______, ______regional office of the American Arbitration Association (or any successor organization, or if no such successor organization exists, then to an organization, or if no such successor organization exists, then to an organization composed of persons of similar professional qualifications), requesting such organization to select, as soon as possible but in any event within the next thirty (30) days, three (3) arbitrators with, if reasonably possible, recognized expertise in the subject matter of the arbitration. At the request of either party, the arbitrators shall authorize the service of subpoenas for the production of documents or attendance of witnesses. Within thirty (30) days after their appointment, the arbitrators so chosen shall hold a hearing at which each party may submit evidence, be heard and cross-examine witnesses, with each party having at least ten (10) days advance notice of the hearing. The hearing shall be conducted such that each of Landlord and Tenant shall have reasonably adequate time to present oral evidence or argument, but either party may present whatever written evidence it deems appropriate prior to the hearing (with copies of any such written evidence being sent to the other party). In the event of the failure, refusal or inability of any arbitrator to act, a new arbitrator shall be appointed in his stead, which appointment shall be made in the same manner as hereinbefore provided. The decision of the arbitrators so chosen shall be given within a period of thirty (30) days after the conclusion of such hearing, and shall be accompanied by conclusions of law and findings of fact. The decision in which any two arbitrators so appointed and acting hereunder concur shall in all cases be binding and conclusive upon the parties and shall be the basis for a judgment entered in any court of competent jurisdiction. The fees and expenses of arbitration under this Article __ shall be apportioned to Landlord and Tenant in such a manner as decided by the arbitrators. Landlord and Tenant may at any time by mutual written agreement discontinue arbitration proceedings and themselves agree upon any such matter submitted to arbitration.

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___ Fair Market Rental. Notwithstanding the provisions of Section ______, if the purpose of the arbitration is to determine the Market Base Rental Rate, then the following provisions shall apply:

___ Each arbitrator shall be a member of the American Institute of Real Estate Appraisers (or any successor organization, or if no such successor organization exists, then from organizations composed of persons of similar professional qualifications), with the designation M.A.I. and with not less than ten (10) years' experience appraising commercial properties in ______, ______.

___ Within 30 days after the conclusion of the hearing, the arbitrators shall again meet and simultaneously disclose in writing their respective determinations for the rate or value they have been instructed to determine (the "Applicable Arbitrated Amount"). If the determinations of at least two (2) of the arbitrators shall be identical in amount, said amount shall be the Applicable Arbitrated Amount. If the determinations of at least two (2) of the arbitrators shall not be identical in amount, then the Applicable Arbitrated Amount shall be the average of all three (3) determinations of the Applicable Arbitrated Amount. Any such determination of the Applicable Arbitrated Amount shall be binding and conclusive upon Landlord and Tenant.

___ The Market Base Rental for the Office Space and the Storage Space shall be separately stated by the arbitrators.

___ Whenever used in this Lease, the term "Market Base Rental Rate" shall mean the annual net rental rate per square foot (exclusive of expense pass-through additions, whether characterized as such or not, and exclusive of any portion of "base rental" attributable to expenses or to an "expense stop") of Net Rentable Area then being charged in Comparable Buildings, for leases then being charged in Comparable Buildings, for leases then being entered into for space comparable to the space for which the Market Base Rental Rate is being determined, taking into consideration the following factors (collectively, the "Market Factors"): location, quality, amenities, age and reputation of the buildings in which the space being compared is located; use and size of the space being compared is located; use and size of the space under comparison; location and/or floor level of the subject space and any comparison space within their respective buildings, including view, elevator lobby exposure, etc.; definition of "Net Rentable Area" applicable to the spaces; distribution (if any) between "gross" and "net" rental rates; type, base year or dollar real estate taxes) if the comparison space is being leased on a "gross" lease basis; any other adjustments (including adjustments by any of indexes) to base rental; extent of services provided or to be provided; extent and condition of leasehold improvements in the subject space and in any comparison space; abatements pertaining to the subject space and to any comparison space (including with respect to base rental, operating expenses and/or real estate taxes, and parking charges); number of parking spaces and inclusion or exclusion of parking charges in rental; lease takeovers/assumptions by the landlord of the comparison space, if applicable; relocation allowances

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granted, if any; refurbishment and repainting allowances granted, if any; club memberships granted, if any; any other concessions or inducements and the timing of payment of such concessions or inducements, overall creditworthiness of Tenant and of tenants in any comparison space; term or length of lease of subject space and of any comparison space; the time the particular rental rate under consideration was agreed upon and became or is to become effective; the reputation of the tenant; and payment of a leasing commission, fees, bonuses or other compensation, whether to Tenant's representative or to Landlord, to any person or entity affiliated with Tenant or Landlord, or otherwise). Landlord and Tenant agree that bona fide written offers and recent leases (not from Affiliates of Landlord) to lease comparable space located in the Building from third parties (at arm's length) may be used as an indication of the Market Base Rate but shall not be conclusive or controlling as to any such rental rates.

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APPENDIX 2

General Arbitration - Purchase Option - Ground Lease

___ Arbitration. This section shall only apply where express provision is made in this Lease for settlement of a dispute or determination of a matter by arbitration. If a party desires to submit a dispute or matter to arbitration, such party shall so notify the other party and in such notice shall designate the first arbitrator. Within ten (10) days after the giving of such notice, the other party shall designate, in a written notice, the second arbitrator. If the party entitled to do so fails to timely designate the second arbitrator, then the first arbitrator shall proceed to determine the matter or dispute. If a second arbitrator is designated the arbitrators shall meet within five (5) days after the designation of the second arbitrator, and if within ten (10) days thereafter they have not agreed upon the matter in issue, they shall appoint a third arbitrator; if the two arbitrators are unable to agree upon a third within five (5) days after the expiration of the aforesaid ten (10) day time period, a third arbitrator shall be selected by Landlord and Tenant if they can agree thereon within a further period of five (5) days. If the parties do not so agree, then either party on behalf of both may request such appointment by the United States District Judge for the District of , who is then senior in service. A decision of the arbitrators so chosen shall be given within a period of ten (10) days after the appointment of the third arbitrator. A decision in which any two arbitrators shall have concurred shall be binding and conclusive on the parties hereto, or if no two arbitrators concur, then the average of the two closest mathematical determinations shall constitute the decision of all three arbitrators and shall be similarly binding and conclusive, as to matters which are subject to mathematical resolution. If any arbitrator shall fail, refuse, or become unable to act, a new arbitrator shall be appointed in his place following the same method as was originally followed with respect to the arbitrator to be replaced. Landlord and Tenant shall pay the fees and expenses of the arbitrator appointed by them, and the fees and expenses of the third arbitrator and all other expenses of arbitration shall be borne equally by the parties, except that in those cases where arbitration is used pursuant to Section ______to determine the Fair Market Value (hereinafter defined) of the Land, then the cost of the arbitration shall be borne by Tenant. All hearings and proceedings held and all investigations and actions taken by the arbitrators shall take place in . Any arbitrator designated to serve in accordance with the provision of this Section ______shall be qualified to appraise real estate in , of the type demised by this Lease, shall not have any financial interest (other than payment of a reasonable fee for serving as an arbitrator) in the outcome of the dispute or matter in question, shall be a member of the American Institute of Real Estate Appraisers or any successor association or body of comparable standing if such Institute is not then in existence, and shall have been actively engaged in the appraisal of real estate in for a period of not less than five (5) years immediately preceding such arbitrator's appointment.

___ Tenant's Option to Acquire from Landlord. Tenant shall have the right and option to purchase the Landlord's Interest as provided in this Section ______.

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___ If Landlord has not theretofore put the Landlord's Interest to the Tenant as provided in Section ______, then Tenant, subject to the provisions of Section ______, shall have the option to acquire the Landlord's Interest by giving written notice thereof to Landlord at any time within sixty (60) days after the expiration of the twentieth (20th) Lease Year and at the end of every five (5) Lease Years thereafter, such option being exercisable by giving written notice thereof to Landlord at any time within sixty (60) days after expiration of the relevant Lease Year, in each case at a purchase price equal to the then Fair Market Value of the Land.

___ If Tenant affirmatively exercises its rights under Section ______, then within ten (10) days thereafter Landlord and Tenant shall meet to try to agree upon the Fair Market Value for the Land. If they are unable to do so within such ten (10) day period, then such value shall be determined as follows: the parties determining such value (i.e., either Landlord or Tenant, or arbitrators pursuant to Section ______) shall determine the value of the Land, considering all such land as unmortgaged, disregarding any improvements wholly or partially located thereon, and disregarding the existence of this Lease, such value being that cash price which an informed purchaser under no obligation to purchase would pay to an informed seller under no obligation to sell such land; such value shall constitute the "Fair Market Value" of the Land hereunder. Any closing pursuant to this Section ______shall occur within thirty (30) days after the purchase price for the Landlord's Interest is finally determined.

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APPENDIX 3

Private Arbitration - Baseball - Ground Lease

___ Rent for Renewal Terms

Within thirty (30) days after the Exercise Date, the Landlord shall give notice to the Tenant of the Landlord's determination of the Rent established for the ensuing ten Lease Years. Such adjustment shall be based on the fair market rental value of the Land for the Renewal Term. Rent shall be stated as Rent for the entire Renewal Term in question and in terms of a monthly figure. In no event shall Rent for the second Renewal Term be less than the Rent for the previous Renewal Term. Within ten (10) business days after the effective date of the Landlord's notice setting forth its determination of Rent, the Tenant shall in writing either (i) notify the Landlord of the Tenant's acceptance of the Landlord's determination of the fair market rental value for the Renewal Term, in which event the Rent for the Renewal Term in question shall be as so determined by the Landlord; or (ii) notify the Landlord of the Tenant's rejection of the Landlord's determination of the fair market rental value, in which event the fair market rental value shall be determined in accordance with Section ___. The failure of the Tenant to give any notice hereunder shall be deemed a rejection by the Tenant of the Landlord's determination of the fair market rental value.

___ Arbitration Procedure

___ Within ten (10) business days after the Tenant's rejection of the Landlord's determination of fair market rental value, each party shall submit to the other party a written statement of its final position on the fair market rental value of the Land for the Renewal Term (the "Final Offers"). Within ten (10) business days after the submission of the Final offers, the parties shall jointly select a real estate appraiser (the "Appraiser") who shall be an MAI with at least ten (10) years continuous appraisal experience in the ______area including extensive experience in appraising land which has been developed for commercial and industrial uses. If the parties cannot agree on the Appraiser, the presiding judge of the Circuit court of ______County, ______shall, upon application by either party, select an Appraiser having the above qualifications. Both parties shall have the right to submit proposed names and criteria for the Appraiser to the presiding judge.

___ Each party shall be entitled to submit written information to the Appraiser for the Appraiser's use in determining the fair market rental value of the Land for the Renewal Term. "Fair market rental value" shall mean the rent in terms of money which the Land will bring during the Renewal Term in an open rental market under all conditions requisite to a fair rental transaction, the Landlord and Tenant each acting prudently and knowledgeably; assuming: (1) the price is not affected by undue stimulus; (2) the value is based on the then current use of the Land; and (3) the Land is unimproved. The Appraiser shall consider rental rates then being charged for comparable

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properties in the ______metropolitan area. In considering comparable parcels, the Appraiser shall consider parcels in which leasehold estates have been conveyed to the Tenant if such parcels are otherwise comparable, but only where such leasehold estates are in their renewal term and not initial term.

___ The Appraiser selected shall determine the fair market rental value of the Land pursuant to such appraisal criteria and shall then select the Final Offer which is closest thereto, without considering whether the Final Offer is higher or lower than the fair market rental value of the Land as determined by the Appraiser. The decision of the Appraiser shall be final and binding on the parties, effective and retroactive to the first day of the Renewal Term under arbitration. The party whose Final offer was not selected by the Appraiser shall pay the cost of the appraisal, including the Appraiser's fees. If the fair market rental value is not determined by the first day of the Renewal Term, then promptly after the date on which the fair market rental rate for the Renewal Term is determined, Tenant shall vary the Port rent for the Land at the rental rate so determined for the period from the first day of the Renewal Term to the date of determination together with interest thereon at the rate declared by ______, as its prime rate on the first day of the Renewal Term until the date of payment. If ______ceases to publish such a rate, then the prime rate of the largest bank (in terms of customer deposits) headquartered in ______shall be used. Thereafter Lessee shall pay rent for the Renewal Term in accordance with Section ______.

___ If the fair market rent determined by the Appraiser is greater than one hundred twenty percent (120%) of the Lessee's Final offer, then Lessee may terminate the Lease by written notice given within twenty (20) days after the date of the Appraiser's decision. The effective date of such termination shall he one hundred eighty (180) days after the date of such termination notice. Lessee shall pay Rent at the rate determined in accordance with this Section ______until the effective date of such termination.

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APPENDIX 4

Private Arbitration - Average or Consensus - Office Lease

Fair Market Rental Rate

___ Definition. The term "Fair Market Rental Rate" shall mean the market rental rate for the time period such determination is being made for office space in class A office buildings in the Central Business District "CBD" of comparable condition for space of equivalent quality, size, utility, and location. Such determination shall take into account all relevant factors, including, without limitation, the following matters: the credit standing of Tenant; the length of the term; expense stops; with regard to extension options only, the fact that Landlord will experience no vacancy period and that Tenant will not suffer the costs and business interruption associated with moving its offices and negotiating a new lease; construction allowances and other tenant concessions that would be available to tenants comparable to Tenant in the CBD (such as moving expense allowance, free rent periods, and lease assumptions and take-over provisions, if any, but specifically excluding the value of improvements installed in the Premises at Tenant's cost), and whether adjustments are then being made in determining the rental rates for expansions and renewals in the CBD because of concessions being offered by Landlord to Tenant (or the lack thereof) for the Space (defined below) or extended Term in question. For purposes of such calculation, it will be assumed that Landlord is paying a representative of Tenant a brokerage commission in connection with leasing the Space in question or extension Term in question, based on the then current market rates.

___ Determination. Landlord shall deliver to Tenant notice of the Fair Market Rental Rate (the "FMR Notice") for the space in question (the "Space") or the extended Term in question within 30 days after Tenant exercises the option giving rise for the need to determine the Fair Market Rental Rate. If Tenant disagrees with Landlord's assessment of the Fair Market Rental Rate specified in a FMR Notice, then it shall so notify Landlord in writing within ten business days after delivery of such FMR Notice; otherwise, the rate set forth in such notice shall be the Fair Market Rental Rate. If Tenant timely delivers to Landlord written notice that it disagrees with Landlord's assessment of the Fair Market Rental Rate, then Landlord and Tenant shall meet to attempt to determine the Fair Market Rental Rate. If Tenant and Landlord are unable to agree on such Fair Market Rental Rate within ten business days after Tenant notifies Landlord of its disagreement with Landlord's assessment thereof, then Landlord and Tenant shall each appoint an independent real estate appraiser with at least five-years' commercial real estate appraisal experience in the CBD market. The two appraisers shall then, within ten days after their designation, select an independent third appraiser with like qualifications. If the two appraisers are unable to agree on the third appraiser within such ten-day period, either Landlord or Tenant, by giving five-days' prior written notice thereof to the other, may apply to the then presiding judge of any ______County court for selection of a third appraiser who meets the qualifications stated above. Within 20 business days

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after the selection of the third appraiser, a majority of the appraisers shall determine the Fair Market Rental Rate. If a majority of the appraisers is unable to agree upon the Fair Market Rental Rate by such time, the two closest appraisals shall be averaged and the average will be the Fair Market Rental Rate. Tenant and Landlord shall each bear the entire cost of the appraiser selected by it and shall share equally the cost of the third appraiser.

___ Administration. If Tenant has exercised an option or right to lease Space or to extend the Term and the Fair Market Rental Rate for the Space or extended Term has not been determined in accordance with this Exhibit K by the time that Basic Rental for such Space or extended Term is to commence in accordance with the terms hereof, then Tenant shall pay Basic Rental for such Space based on the Fair Market Rental Rate proposed by Landlord pursuant to this Exhibit K until such time as the Fair Market Rental Rate has been so determined, at which time appropriate cash adjustments shall be made between Landlord and Tenant such that Tenant is charged Basic Rental based on the Fair Market Rental Rate (as finally determined pursuant to this Exhibit K) for the Space or extended Term during the interval in question.

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APPENDIX 5

Private Arbitration - Baseball - Office Lease

Prevailing Market Conditions

___ Definitions. The "Prevailing Market Conditions" shall mean, for the date such determination is being made, the base rental rate, expense stop, operating expense pass through, management fee, and tenant inducements in comparable buildings of similar quality, age, and condition in the ______, ______area consisting of the ______areas ("Comparable Buildings"), for the time period such determination is being made, for office space of equivalent quality, size, utility, and location as the space in question (taking into account all relevant factors, including, without limitation, the Market Conditions). "Market Conditions" shall mean:

___ the location, quality and age of the Complex and the Comparable Buildings;

___ the use, location, size and/or floor level(s) of the space in question;

___ the definition of "rentable square feet" or rentable area;

___ the extent of the fair market value of leasehold improvements (other than those in Tenant's then-existing Premises) or to be provided;

___ allowances, rent or lease assumptions, rent abatement or operating expense abatement, and other tenant concessions and inducements then being offered in other Comparable Buildings;

___ prevailing parking charges in Comparable Buildings;

___ credit standing and financial status of Tenant or tenants in transactions in Comparable Buildings;

___ term or length of lease as to the space in question;

___ the time the particular rental rate under consideration was agreed upon and became effective; and

___ extent of services provided or to be provided;

___ distinction between "gross" and "net" lease;

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___ expense stop amounts for escalation purposes considering all operating expenses and inclusion or exclusion of electricity charges; and

___ any other relevant term or condition in making such Prevailing Market Conditions determination.

___ Method for Determination. "Exercise Notice" shall mean a Preferential Space Exercise Notice, exercising Tenant's preferential rights under Exhibit __, an Extension Exercise Notice exercising Tenant's rights to extend the Term under Exhibit __, an Available Space Exercise Notice or a Refusal Space Exercise Notice exercising Tenant's rights under Exhibit __, or an Expansion Notice exercising Tenants rights under Exhibit __. Within 30 days after Landlord has received an Exercise Notice, Landlord shall deliver to Tenant Landlord's assessment of the Prevailing Market Conditions for the Extension Period or space in question (the "Landlord's Assessment"). Tenant shall notify Landlord whether it agrees with the Landlord's Assessment within 30 days after it is delivered to Tenant. If Tenant fails timely to notify Landlord whether it agrees or disagrees with the Landlord's Assessment, then the Exercise Notice shall be automatically rescinded, except in the case of a Preferential Space Exercise Notice, in which case, Landlord's Assessment shall be the Prevailing Market Conditions for the Preferential Space in question. If Tenant timely delivers to Landlord written notice that it disagrees with the Landlord's Assessment (an "Objection Notice"), then the Objection Notice shall specify Tenant's assessment of the Prevailing Market Conditions for the space or Extension Period in question ("Tenant's Assessment"). Landlord and Tenant shall meet to attempt to determine the Prevailing Market Conditions for such Extension Period or space; if they are unable to agree on such Prevailing Market Conditions within 15 days after Tenant delivers to Landlord an Objection Notice, then Tenant may elect to rescind the exercise of its option by delivering written notice thereof within five days after such 15-day period (time is of the essence with respect to the delivery thereof); however, Tenant may not elect to rescind its election as to Preferential Space under Exhibit __. If Tenant does not timely make or is not entitled to make such rescission, then Landlord and Tenant shall, within ten days after such 15-day period expires, jointly appoint an independent real estate broker or consultant (an "Arbitrator") who (a) has at least ten-years' commercial real estate experience in the vicinity of the Complex and has been involved in office leasing of at least 2,000,000 rentable square feet and (b) is not affiliated with either Landlord or Tenant, and submit to the Arbitrator their respective assessments of the Prevailing Market Conditions for such Extension Period or space, together with the supporting data that was used to calculate such assessments. Within 20 days after the selection of the Arbitrator, the Arbitrator shall select the assessment which is closest to his determination of such Prevailing Market Conditions, which assessment shall be the Prevailing Market Conditions for such Extension Period or space. The Arbitrator's determination shall be binding on Landlord and Tenant and may be enforced by a court of competent jurisdiction. The cost of such Arbitrator shall be paid by the party whose assessment was not selected.

___ Tenants Right to Adjust Terms. Landlord's Assessment and Tenant's Assessment shall set forth the amount of base rental rate, expense stop, and tenant inducements for the space or

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Extension Period in question. Tenant may, within 15 days after the Prevailing Market Conditions are finally determined for such space or Extension Period, elect to waive the expense stop and any tenant inducements and have the base rental rate adjusted based on the economic value of the waived items in question, provided such election is made as to the entire Extension Period or all of the space for which the determination of Prevailing Market Conditions was made.

___ Payments During Determination Period. If Tenant has exercised the right to lease additional space or extend the Term and the Prevailing Market Conditions therefor have not been determined by the time Basic Rental for such space or Extension Period is scheduled to begin, then Tenant shall pay Rent for such space or the Extension Period on the terms in effect under this Lease immediately before such space is leased or the Extension Period begins (as the case may be) until such time as the Prevailing Market Conditions have been determined, at which time appropriate cash payments shall be made by Landlord or Tenant such that Tenant is charged Rent based at the Prevailing Market Conditions for the space or Extension Period during the interval in question.

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APPENDIX 6

Private Arbitration - Baseball - Office

Prevailing Market Conditions

The "Prevailing Market Conditions" shall mean the base rental rate, expense stop, operating expense pass-through, and Tenant inducements in Comparable Buildings for the time period such determination is being made for office space of equivalent quality, size, utility, and location as the space in question (taking into account all relevant factors, including, without limitation, the creditworthiness of Tenant, the length of the extended Term in question, the term for such additional space, the age of the Building, and the fair market value of the improvements in such space that Tenant elects to use, and sums Landlord is required to pay Tenant in respect thereof under this Lease, as determined using leases entered into for comparable space in Comparable Buildings under similar circumstances during the period six months before the determination date in question, recent letters of intent and term sheets for comparable space in Comparable Buildings under similar circumstances and other relevant information. "Exercise Notice" shall mean an Extension Exercise Notice, an Available Space Exercise Notice, or an Expansion Notice. Within 30 days after Landlord has received an Exercise Notice, Landlord shall deliver to Tenant Landlord's assessment of the Prevailing Market Conditions for the extended Term or space in question (the "Landlord's Assessment"). Tenant shall notify Landlord whether it agrees with the Landlord's Assessment within 30 days after it is delivered to Tenant. If Tenant fails timely to notify Landlord that it disagrees with the Landlord's Assessment, then the Landlord's Assessment shall be the Prevailing Market Conditions for the extended Term or space in question. If Tenant timely delivers to Landlord written notice that it disagrees with the Landlord's Assessment for the extended Term (an "Objection Notice"), then the Objection Notice shall specify Tenant's assessment of the Prevailing Market Conditions for the space or extended Term in question ("Tenant's Assessment"). If the difference between Landlord's Assessment and Tenant's Assessment is 10% or less, then the Prevailing Market Conditions shall be the average of Landlord's Assessment and Tenant's Assessment. If the difference between Tenant's Assessment and Landlord's Assessment is more than 10%, then Landlord and Tenant shall meet to attempt to determine the Prevailing Market Conditions for such extended Term or space; if they are unable to agree on such Prevailing Market Conditions within 15 days after Tenant delivers to Landlord an Objection Notice, then Tenant may elect to rescind the exercise of its option by delivering written notice thereof within five days after such 15-day period (time is of the essence with respect to the delivery thereof). If Tenant does not timely make such rescission, then Landlord and Tenant shall, within ten days after such 15-day period expires, jointly appoint an independent real estate broker or consultant (an "Arbitrator") with at least ten-years' commercial real estate experience in the vicinity of the Building and submit to the Arbitrator their respective assessments of the Prevailing Market Conditions for such extended Term or space, together with the supporting data that was used to calculate such assessments. Within 20 days after the selection of an Arbitrator, the Arbitrator shall select the assessment which

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is closest to his determination of the Prevailing Market Conditions for the extended Term or space, which assessment shall be the Prevailing Market Conditions for such extended Term or space. The Arbitrator's determination shall be binding on Landlord and Tenant. The cost of such Arbitrator shall be paid by the party whose assessment was not selected.

If Tenant has exercised the right to lease additional space or extend the Term and the Prevailing Market Conditions therefor have not been determined by the time Basic Rental for such space or extended Term is scheduled to begin, then Tenant shall pay Rent for such space or the extended Term on the terms in effect under this Lease immediately before such space is leased or the extended Term (as the case may be) until such time as the Prevailing Market Conditions have been determined, at which time appropriate cash payments shall be made by Landlord or Tenant such that Tenant is charged rent based on the Prevailing Market Condition for the space or extended Term during the interval in question.

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APPENDIX 7

Extension Options

___ Option. Provided no Event of Default exists when Tenant delivers such notice, Tenant may renew this Lease for ___ additional periods of ____ years each on the same terms provided in this Lease (except as set forth below). On or before the commencement date of the extended Term in question, Landlord and Tenant shall execute an amendment to this Lease extending the Term on the same terms provided in this Lease, except as follows:

___ The Basic Rental payable for each month during each such extended Term shall be the Fair Market Rental Rate determined in accordance with paragraph __. below;

___ Tenant shall have no further renewal options unless expressly granted by Landlord in writing;

___ Landlord shall lease to Tenant the Premises in their then-current condition, and Landlord shall not provide to Tenant any allowances (e.g., moving allowance, construction allowance, and the like) or other tenant inducements; and

___ Tenant shall pay rent for the parking spaces which it is entitled to use at the rates from time to time charged to patrons of the Parking Garage during the extended Term in question.

Tenant's rights under this Exhibit shall terminate if (a) this Lease expires or is cancelled or, because of an Event of Default, this Lease or Tenant's right to possession of the Premises is terminated, or (b) Tenant fails to timely exercise its option under this Exhibit, time being of the essence with respect to Tenant's exercise thereof. If any assignment of Tenant's interest in all or a portion of this Lease or any sublease of all or a portion of the Premises is in effect at the commencement of an extended Term or within six months thereafter, then all amounts payable to Landlord and Tenant under Section ______during the extended Term in respect of such assignment and subletting shall be payable to Landlord.

___ Exercise of Option. The term "Fair Market Rental Rate" shall mean the market rental rate for the time period such determination is being made for office space in class A office buildings in the CBD of comparable condition for space of equivalent quality, size, utility, and location. Such determination shall take into account all relevant factors, including, without limitation, the factors listed in Schedule __ to this Exhibit and shall be made based on the weighted average of such rent over the applicable term.

Tenant may request that Landlord designate the Fair Market Rental Rate for the extended Term in

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question at least 14 months (but not sooner than 16 months) before the expiration of the Term in question, in which case Landlord shall deliver to Tenant Landlord's assessment of the Fair Market Rental Rate for the extended term in question (the "Landlord's Assessment") at least 13 months before the expiration of the Term; thereafter Tenant shall elect whether to extend the term by delivering to Landlord written notice thereof (the "Election Notice") by the later of (a) one year before the expiration of the Term or (b) one month after Landlord delivers to Tenant Landlord's Assessment. If Tenant fails to deliver a written request for Landlord's Assessment at least 14 months before the end of the Term, then Tenant shall be required to deliver to Landlord the Election Notice at least 12 months before the end of the Term to exercise this option and Landlord shall deliver to Tenant the Landlord's Assessment within 30 days after the earlier of (c) Landlord's receipt of Tenant's written request therefor or (d) Landlord's receipt of Tenant's Election Notice. If Tenant fails timely to deliver the Election Notice, Tenant's rights under this Exhibit shall terminate; time being of the essence with respect to such delivery.

The Election Notice shall state whether Tenant disagrees with the Landlord's Assessment; otherwise, the Landlord's Assessment shall be the Basic Rental for the extended Term in question. If Tenant specifies in the Election Notice that it disagrees with Landlord's Assessment for the extended Term in question, Landlord and Tenant shall meet to attempt to determine the prevailing rental rate for such extended Term. If Tenant and Landlord are unable to agree on such prevailing rental rate within 15 days after Tenant delivers to Landlord the Election Notice, Landlord and Tenant shall jointly appoint an independent real estate appraiser with at least five-years' commercial real estate experience in the CBD and submit to the appraiser its assessment of the prevailing rental rate for such extended Term, together with such supporting data used to support such assessment. Within 20 days after its selection, the appraiser shall select the assessment closest to his determination of the Fair Market Rental Rate for the extended Term in question, which assessment shall be the Basic Rental for such extended Term. Landlord and Tenant shall share equally the cost of the appraiser.

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SCHEDULE 1

___ The type of escalation clauses, including, but not limited to, those escalation clauses dealing with operating expenses, real estate taxes or adjustments tied to the Consumer Price Index.

___ The methods of calculation of adjustments under escalation clauses (e.g. whether such adjustments are determined on a "net lease" basis or increases over particular base year or base dollar amount).

___ The timing for commencement of accrual of rent and other provisions concerning free rent or abated rent during the period of construction or any other period during the lease term.

___ Brokerage commission, if any.

___ Length of lease term.

___ Building standard work letter and/or tenant improvements allowances, moving allowances and lease assumption allowances, if any.

___ Any other generally accepted terms or conditions of tenancy for leased space comparable to such actual leased space.

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APPENDIX 8

Private Arbitration - Consensus/Average - Accountants Select - Partnership Agreement

Valuation and Appraisal Procedures

___ Voluntary Appraisal. If an Appraisal Buyout is commenced pursuant to Section ______, the General Partner and the affected Limited Partner shall promptly attempt, in good faith, to agree upon the fair market value of all of the assets of the Partnership for a period of fifteen (15) days from written notice of the General Partner.

___ Appraisal Panel.

___ If the General Partner and the affected Limited Partner, within the fifteen (15) day period specified in Section ______do not agree upon the fair market value of the assets of the Partnership or otherwise agree upon the applicable Appraisal Buyout Price, either Partner shall have the right to call for an appraisal by written notice to the other Partner designating a qualified appraiser (the "First Appraiser") to serve on the Appraisal Panel provided for below.

___ The other Partner shall have seven (7) days from receipt of notice invoking Section ______appointing the First Appraiser in which to designate another qualified appraiser (the "Second Appraiser") to serve on the Appraisal Panel by serving notice of such designation on the electing Partner. If the Second Appraiser is not so appointed and designated within such seven (7) day period, then the First Appraiser shall be the sole appraiser to determine the value of the assets of the Partnership.

___ Within seven (7) days after the designation, if any, of the Second Appraiser, the First Appraiser and the Second Appraiser shall themselves appoint a third qualified appraiser (the "Third Appraiser"). If the First Appraiser and the Second Appraiser are unable to agree upon such appointment within such seven (7) day period, then the General Partner shall request that such appointment of the Third Appraiser be made by the New York office of one of the following Certified Public Accounting firms: Coopers & Lybrand, Deloitte & Touche, Ernst & Young, KMPG Peat Marwick, Arthur Andersen & Co., and Price Waterhouse (or their successors) or a firm of equivalent status.

___ In the event of failure, refusal or inability of any appraiser to act, a new appraiser shall be appointed in the stead thereof, which appointment shall be made in the same manner as provided in this Section ______for the appointment of such appraiser so failing, refusing or being unable to act.

___ The one or three appraisers appointed as the appraisal panel pursuant to this

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Section ______(the "Appraisal Panel") shall each appraise the assets of the Partnership taking into account appropriate indicators of the fair market value of such assets in a cash sale between a willing buyer and seller (neither under undue duress nor time pressure) and shall report their findings in writing to the General Partner and the affected Limited Partner. In the case of an Appraisal Panel with three appraisers, if one or more appraiser fails to deliver their reports within sixty (60) days after the appointment of the Third Appraiser, the Partner which appointed the delinquent appraiser may dismiss the delinquent appraiser and a new appraiser may be appointed in accordance with Section ______.

___ Appraised Value. The "Appraised Value" of the Partnership's assets shall be equal to the mean of the two (2) closest appraised values reported by the Appraisal Panel; provided that if such values are equally distributed, the "Appraised Value" of the assets to be appraised shall be equal to the mean of the three appraised values reported by the Appraisal Panel.

___ Expenses. Except as otherwise provided herein, each Partner shall pay the fees and expenses of the appraiser appointed by such Partner, or in whose stead (as above provided) such appraiser was appointed, and the fees and expenses of the Third Appraiser, and all other expenses, if any, shall be borne equally by such Partner(s).

___ Qualification. To be qualified to be selected or designated as an appraiser for purposes of this Article __, each appraiser must (a) not be an Affiliate of any Partner, (b) be in good standing as a licensed appraiser, and (c) demonstrate past appraising experience of at least five years (which experience shall include the appraisal of ______).

___ Continued Use of Appraisal. If an Appraised Value shall have been established pursuant to the procedures of this Article __, such Appraised Value shall be used for purposes of any subsequent election under this Agreement for a period of three months after the date such Appraised Value was established.

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APPENDIX 9

English Lease Practice - Rent Adjustment Provision - Chartered Surveyor

Provided always and it is hereby further agreed that:

___ At the expiration of the fifth year and each period of five years thereafter of the term (the time in each case being computed from the date of the commencement of the term and the date of expiration of each such period being hereinafter referred to as the "date of review") the yearly rent first hereinabove reserved shall be increased to an amount (hereinafter called the "revised rent") which shall represent the rack rental market value of the demised premises at each date of review;

___ The rack rental market value of the demised premises at each date of review shall be such an amount as may be agreed between the Landlord and the Tenant or determined in accordance with sub-clause (c) of this Clause as representing the rental value of the demised premises for a term of twenty years as between a willing lessor and willing lessee with vacant possession but upon the supposition (if not a fact) that the Tenant has complied with all the obligations on the part of the Tenant imposed by these presents (but without prejudice to any rights of the Landlord in regard thereto) and taking no account of:

___ any goodwill attributable to the demised premises by reason of any trade or business carried on therein by the Tenant or any undertenant; and

___ any effect of any improvements to the demised premises (to which the Landlord shall have given written consent) carried out by the Tenant or any undertenant otherwise than in pursuance of an obligation to the Landlord; and

___ any effect on rent of the fact that the Tenant or any undertenant may have been in occupation of the demised premises; and in all other respects on the terms and conditions of these presents including this Clause ______;

___ If the Landlord and the Tenant shall be unable to agree on the amount of the rack rental market value as aforesaid then the same shall be decided by a Surveyor (who shall act and be deemed to act as an arbitrator and not as an expert) to be agreed upon the parties hereto or in the event of failure so to agree then the same shall be decided by a Surveyor specializing or experienced in dealing with office rents in Mayfair to be nominated at the request of the Landlord or the Tenant by the President for the time being of The Royal Institution of Chartered Surveyors and the decision of such Surveyor (who shall act and be deemed to act as an arbitrator and not as an expert) shall be binding on both the Landlord and the Tenant and the fees payable to the President

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and any such Surveyor shall be borne and paid by the parties hereto in such shares and in such manner as such Surveyor shall determine and failing any such decision and subject thereto in equal share;

___ Notwithstanding the decision of the arbitrator hereinbefore referred to in no event shall the rent payable by the Tenant after each date of review be less than the rent payable by the Tenant immediately before such date of review;

___ In the event that by the relevant date of review the amount of the revised rent has not been agreed between the parties hereto or determined as aforesaid then in respect of the period of time (hereinafter called the "said interval") beginning with the relevant date of review and ending on the Quarter Day immediately following the date upon which the amount of the revised rent is agreed or determined as aforesaid the Tenant shall pay to the Landlord in manner hereinbefore provided rent at the yearly rate payable immediately before the relevant date of review and at the expiration of the said interval there shall be due as a debt payable by the Tenant to the Landlord on demand as arrears of rent an amount equal to the difference between the revised rent and the rent actually paid during the said interval and apportioned on a daily basis in respect of the said interval;

___ If at any date of review the Landlord shall be obliged legally or otherwise to comply with any Act of Parliament dealing with the control of rent and which shall restrict or modify the Landlord's right to revise the rent in accordance with the terms of these presents or which shall restrict the right of the Landlord to demand or accept payment of the full amount of the rent for the time being payable under these presents then the Landlord shall on each occasion that any such enactment is removed relaxed or modified be entitled on giving not less than three months' notice in writing to the Tenant expiring after the date of each such removal relaxation or modification to introduce an intermediate review date (hereinafter called the "intermediate review date") which shall be the date of expiration of such notice and the rent payable hereunder from an intermediate review date to the next succeeding date of review or intermediate review date (whichever shall first occur) shall be determined in like manner as the rent payable from each date of review as hereinbefore provided;

___ As soon as the amount of rent payable after a date of review has been agreed or ascertained in accordance with the terms hereof (and if required by the Landlord so to do) the parties hereto will at the expense of the Tenant forthwith endorse a memorandum thereof on the Lease and the Counterpart thereof specifying the amount of the revised rent and all stamp duties (if any) payable in respect thereof shall be borne and paid by the Tenant.

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APPENDIX 10

Arbitration Rules for the Real Estate Industry (Including a Mediation Alternative

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