This excerpt taken from the NPSP 10-K filed Mar 3, 2006.
ARTICLE 34. Option to Extend
34.1 Options To Extend. Tenant shall have the option to extend the term of this Lease for two, five year periods, subject to the following provisions:
34.1.1 Tenant shall have no right to exercise an option: (i) during the period commencing with the giving of any notice of default and continuing until said default is cured, (ii) during the period of time any Rent is due and unpaid, or (iii) in the event that Landlord has given three or more notices of separate monetary or material non-monetary defaults, whether or not the defaults are cured, during the 12 months immediately preceding the exercise of the option.
34.1.2 The period of time within which an option may be exercised shall not be extended or enlarged by reason of Tenants inability to exercise an option because of paragraph 34.1.1.
34.1.3 An option shall terminate and be of no further force or effect, notwithstanding Tenants due and timely exercise of the option, if, after such exercise and prior to the commencement of the extended term, (i) Tenant fails to pay Rent for a period of 30 days after such Rent becomes due, or (ii) if Tenant commits a default under this Lease and such default is continuing after the expiration of the applicable cure periods set forth in Section 17.1.
34.1.4 Tenant shall exercise the option by delivery of written notice to Landlord not less than 12 months prior to the expiration of the initial term and, if exercised, the first option period, of this Lease. If said notice is not delivered within said time period(s), this option shall terminate.
34.2 Rent Option.
36.2.1 RentFirst Option. The Base Monthly Rental payable by Tenant during the first option period shall be 100% of the fair market rent for the Premises at the commencement date of such option period. The Base Monthly Rental payable by Tenant would continue to be increased as of the expiration of every year of the option period commencing on the anniversary of the commencement of such option period by an amount equal to 2.75% of the Base Monthly Rental for the preceding year.
36.2.2 RentSecond Option. The Base Monthly Rental payable by Tenant during the first year of the second option period shall be 100% of the fair market rent for the Premises at the commencement date of such option period. The Base Monthly Rental payable by Tenant would continue to be increased as of the expiration of every year of the option period commencing on the anniversary of the commencement of such option period by an amount equal to 2.75% of the Base Monthly Rental for the preceding year.
34.2.3 Fair Market Rent. If Landlord and Tenant cannot agree on the fair market rent of the Premises for the extension period within 30 days after the Tenant has notified Landlord of Tenants exercise of the option, Landlord and Tenant shall each select, within 15 days of such notification, an appraiser who must be a qualified MAI appraiser with at least 5 years experience appraising commercial properties to determine said fair market rental value. If one party fails to so designate an appraiser within the time required, the determination of fair market rental value of the one appraiser who has been designated by the other party within the time required shall be binding on both parties. The appraisers shall submit their determinations of fair market rental value to both parties within 30 days after their selection. If the difference between the two determinations is 10% or less of the higher appraisal, then the average between the determinations shall be the fair market rental value of the Premises. If said difference
is greater than 10%, then the two appraisers shall within 15 days of the date the second determination is submitted to the parties designate a third appraiser who must also be a qualified MAI appraiser. The sole responsibility of the third appraiser will be to determine which of the determinations made by the first two appraisers is most accurate. The third appraiser shall have no right to propose a middle ground or any modification of either of the determinations made by the first two appraisers. The third appraisers choice shall be submitted to the parties within 20 days after his or her selection. Such determination shall bind both of the parties and shall establish the fair market rental value of the Premises. Each party shall pay the fees and expenses of its appraiser and shall pay equal shares of the fees and expenses of the third appraiser. Fair market rent for the purposes of this Lease shall mean the then prevailing rent for premises comparable in size, quality and location to the demised Premises, leased on terms comparable to the terms contained in this Lease.