Condition, the Co-Tenancy Condition remains unsatisfied for one hundred eighty (180) consecutive days or more, then until the date that the Co-Tenancy Condition is next satisfied, provided Tenant is open and operating in the Premises, all Base Rent and Additional Rent (other than Tenant’s Tax Contribution) otherwise due hereunder shall be abated, and in lieu thereof Tenant shall pay Alternate Rent to Landlord. The Alternate Rent shall be paid monthly in arrears on or before the fifteenth (15th) day after the end of each calendar month. Together with each payment, Tenant shall submit a statement, showing the total Gross Sales for the applicable period, which shall be subject to the reporting, audit and confidentiality provisions of this Article 4.
From time to time at Tenant’s request (but not more frequently than two (2) times in any Lease Year, except when the Co-Tenancy Condition is not satisfied), Landlord shall specify in writing the current Co-Tenancy Levels of the Center, which shall be subject to verification by Tenant. Tenant’s payment of Base Rent or any other amounts with respect to any period when the Co-Tenancy Condition is not satisfied shall not constitute a waiver of Tenant’s rights under Section 3.5 or this Section 4.7, whether or not Tenant knew or should have known that the Co-Tenancy Condition was not satisfied.
Section 5.1.Tenant’s CAM Contributions. Beginning on the Commencement Date Tenant shall reimburse Landlord in the manner provided below for Tenant’s Pro-Rata Share of Common Area Expenses reasonably incurred by Landlord from and after the Commencement Date (the amount payable by Tenant pursuant to this Article 5 is referred to herein as “Tenant’s CAM Contribution”); provided, however, Tenant’s liability for Tenant’s CAM Contribution in any calendar year shall not exceed the Common Area Expenses Cap applicable to such calendar year. Notwithstanding the immediately preceding sentence, to the extent Common Area utility and insurance cost increases cause the Common Area Expenses to exceed the Common Area Expenses Cap, Tenant shall pay Tenant’s Pro-Rata Share of those excess charges. To avoid overpayment by Tenant, Landlord shall provide Tenant with an annual statement showing the amounts of Tenant’s CAM Contribution paid by Tenant for such calendar year. Tenant’s CAM Contribution shall be subject to verification and reconciliation in accordance with Sections 5.5, 5.6 and 5.7 below. Notwithstanding anything to the contrary contained in this Lease, as consideration for Tenant’s agreement to carry the insurance covering the Building set forth in Section 7.1(a)(ii) below, and as long as Tenant is opening and operating, Tenant’s CAM Contribution shall be reduced each calendar year by an amount equal to $35,419 (“Tenant’s CAM Contribution Reduction”). Tenant’s CAM Contribution Reduction shall be credited against Tenant’s CAM Contribution yearly during the course of the Term of this Lease. In addition, Tenant’s CAM Contribution Reduction shall be increased each year by the lesser of (i) the increase, if any, in insurance premiums for the insurance carried by Tenant, as described in Section 7.1(a)(ii) or (ii) three percent (3%) of Tenant’s CAM Contribution Reduction for the prior calendar year on an annualized basis. Tenant shall continue to receive Tenant’s CAM Contribution Reduction each year of the Term, but only if Tenant is carrying flood insurance in the normal course of business on a majority of its theatres located in California. In the event Tenant does not carry the required insurance in a majority of its theatres located in California, Landlord shall not be required to provide Tenant the Tenant’s CAM Contribution Reduction. Tenant’s CAM Contribution Reduction will no longer apply if Tenant assigns this Lease to an unaffiliated third party.
Tenant shall make estimated payments on account of Tenant’s CAM Contribution to Landlord, in equal monthly installments, on the first day of each calendar month from and after the Commencement Date. For the partial calendar year in which the Commencement Date occurs, such monthly payments shall be based on Landlord’s reasonable estimate of the Common Area Expenses to be incurred in such year, as shown on Landlord’s budget therefor prepared reasonably and in good faith and provided to Tenant at least sixty (60) days prior to the Commencement Date (subject to the limitation set forth above with respect to the Common Area Expenses Cap). Annually during the Term, Landlord shall provide to Tenant Landlord’s proposed budget of Common Area Expenses for the next following calendar or fiscal year giving due consideration to the Common Area Expenses for the preceding calendar or fiscal year (if and to the extent known).