Health Net 2009 Annual Report Download - page 369

age and appearance located within the portion of Marin County south of the most northerly point of the city limits of San Rafael,
during the twelve (12) month period immediately preceding the date upon which the determination of Fair Market Rental Value
is made, and having a commencement date within six (6) months of the date that the Fair Market Rental Value will commence
under this Lease, and taking into account (A) any tenant improvements and other concessions (including any free and abated
rent) granted to Tenant and tenants under leases of such comparable space or then existing in the Premises or the premises in the
transaction, and (B) whether the transaction is an initial lease or a renewal or extension of an existing lease. Costs which are
incurred by a landlord in connection with the negotiation and documentation of a lease transaction, and other costs incurred by a
landlord which are not paid to or for the direct benefit of the tenant, shall not be considered.
(i) Any disagreement regarding the Fair Market Rental Value for the purposes of this Section 3 shall be resolved as
follows:
(A) Within twenty (20) days after Tenant’s response to Landlord’s notice of Landlord’s initial determination of the
Fair Market Rental Value, Landlord and Tenant shall meet no less than two (2) times, at a mutually agreeable time and
place, to attempt to resolve any such disagreement.
(B) If, within the twenty (20) day consultation period described in subsection 3(d)(i)(A) above, Landlord and Tenant
cannot reach an agreement as to the Fair Market Rental Value, they shall each make a separate determination of the Fair
Market Rental Value within five (5) business days after the expiration of the said twenty (20) day period, and such
determinations shall be submitted to arbitration in accordance with subsection 3(d)(i)(C) below; provided that, if only one
(1) determination of Fair Market Rental Value is submitted to arbitration within the said five (5) business day period, then
such determination shall be the Basic Rent for the Extension Term and the parties shall not proceed with arbitration.
(C) If the Basic Rent has not been determined pursuant to the procedures outlined above, Landlord and Tenant shall
each appoint one arbitrator who shall be either a real estate broker or MAI appraiser and shall have been active over the
five (5) year period ending on the date of such appointment in the leasing of commercial mid-rise and/or high-rise
properties in the greater San Francisco metropolitan area. Each such arbitrator shall be appointed within five (5) business
days after the expiration of the twenty (20) day period described in subsection 3(d)(i)(B) above. The two (2) arbitrators so
appointed shall within ten (10) days of the date of appointment of the last appointed arbitrator agree upon and appoint a
third arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification of the first two
(2) arbitrators. The determination of the arbitrators shall be limited solely to the issue of whether the Landlord’s or the
Tenant’s submitted Fair Market Rental Value is the closest to the actual Fair Market Rental Value of the Premises, as
determined by the arbitrators. The three (3) arbitrators shall within thirty (30) days of the appointment of the third
arbitrator reach a decision as to whether the parties shall use the Landlord’s or the Tenant’s submitted Fair Market Rental
Value as the Basic Rent for the Extension Term, and shall notify Landlord and Tenant thereof. The decision of the majority
of the three (3) arbitrators shall be
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