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19.04 Example 3: Consumer Price IndexSection II: Consumer Price Index: The annual rental rate currently specified to be paid by Tenant at the time, from time to time, of each calculation hereunder (the "Base Rent"), shall be used as a basis to calculate additional rent as of the times and in the manner set forth in this Section II and as a result thereof, Tenant shall pay the additional rent as hereinafter provided: A. For the purposes of this Section II, the following definitions shall apply: (1) "Price Index" shall mean the "Consumer Price Index for all consumers, New York, New York - Northeastern New Jersey, All Items (1967=100)," issued and published by the Bureau of Labor Statistics of the United States Department of Labor. (2) "Base Price Index" shall mean the Price Index as it exists on the date hereof. B. Effective as of each January and July subsequent to the date hereof, the Base Rent shall be utilized as a basis for calculation of the additional rent under this Section, as follows: (1) The July calculation shall be based on eighty (80%) percent of the percentage difference between the Price Index for the preceding month of June and the Base Price Index. In the event that the Price Index for June in any calendar year during the Term reflects an increase over the Base Price Index, then the Base Rent hereunder as of July 1st following such month of June shall be multiplied by eighty (80%) percent of the percentage difference between the Price Index for June and the Base Price Index, and the resulting amount shall be additional rent effective as of such July 1st. Such additional rent shall thereafter be payable hereunder, in equal monthly installments, until it is readjusted pursuant to the terms of this Section II. (2) The January calculation shall be based on eighty (80%) percent of the percentage difference between the Price Index for the preceding month of December and the Base Price Index. In the event that the Price Index for December in any calendar year during the Term reflects an increase over the Base Price Index, then the Base Rent hereunder as of the January 1st following such month of December shall be multiplied by eighty (80%) percent of the percentage difference between the Price Index for December and the Base Price Index, and the resulting amount shall be additional rent effective as of such January 1st. Such additional rent shall thereafter be payable hereunder, in equal monthly installments, until it is readjusted pursuant to the terms of this Section II. The following illustrates the intention of the parties hereto as to the computation of the additional rent resulting from this Consumer Price Index adjustment as applied from time to time to the Base Rent: Assuming that (i) the Base Rent is $100,000, (ii) the Base Price Index is 255.4 and (iii) the Price Index for the particular June or December, is 280.9, then the percentage of increase is 10.0%. The sum of $100,000 would be multiplied by 80% of 10%, or 8%, resulting in an annual additional rental of $8,000 effective as be. Such $8,000 would be payable by Tenant in equal monthly installments in advance thereafter until the next such calculation and adjustment. C. In the event that the Price Index ceases to use the "1967 average of 100" as the basis of calculation, or if a substantial change is made in the terms or number of items or composition thereof contained in or utilized by the Price Index, then the Price Index shall be adjusted to the figure that would have been arrived at had the manner of computing the Price Index in effect on the date hereof not been altered. In the event such Price Index (or a successor or substitute index) is not available, a reliable governmental or other nonpartisan publication, selected by Landlord, evaluating the information used in determining the Price Index, shall be used. D. Landlord will cause statements of the additional rent provided for in this Section II to be prepared in reasonable detail and delivered to Tenant. In no event shall the additional rent payments being paid immediately prior to each such adjustment be reduced by virtue of any succeeding adjustment occurring under this Section II. Any delay or failure of Landlord, beyond July or January of any calendar year, in computing or billing for such additional rent hereinabove provided, shall not constitute a waiver of or in any way impair the continuing obligation of Tenant to pay such additional rent.