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12 <br />conditioning system is in good operating condition; the exterior walls and roof, the <br />lighting system (excluding such additions as may be required for Tenant's particular <br />business operation) and the parking area and sidewalks are in good repair on the date of <br />commencement of the lease term. County represents and wan-ants to Tenant that it holds <br />unencumbered fee title to the Leased Premises. The County shall not be responsible for <br />any latent defect or change of condition in such building, improvements, FFE and <br />IR personalty, and the rent hereunder shall in no case be withheld or diminished on account <br />of any defect in such property, any change in the condition thereof, any damage occurring <br />thereto or the existence with respect thereof of any violations of the laws or regulations of <br />any governmental authority, except as hereinafter provided. In addition, Tenant <br />acknowledges that the Leased Premises is a smoke free building and does not permit <br />tobacco use inside of the building. <br />3. Term and Rental. <br />(a) This lease shall commence on January 2, 2013, and shall end on January <br />I , 2018, unless sooner terminated as herein provided. <br />(b) County and Tenant acknowledge the fair rental value of the Leased <br />Premises notwithstanding the rent listed in Section 3(c)(O is estimated at $2,166.67 per <br />month ($26,000 per annum). The fair rental value shall be subject to a two percent (2"/o) <br />annual percentage increase. It is acknowledged by Tenant this annual increase for the <br />initial term of this lease is below the average market rate annual increase of five percent <br />(5 %) and any renewal or extension of this lease will reflect the fair rental value at the <br />time of the renewal or extension. In any such renewal or extension the fair rental value, <br />as it is determined at the time of the renewal or extension, shall be subject to a five <br />percent (5 %) annual percentage increase. <br />(c) The Tenant agrees to pay the County without demand at its office, or at <br />such other place or places as County may from time to time designate in writing, the <br />following amounts as rent for the Leased Premises: <br />i} sum of one dollar ($1) per month for the first two (2) years of the <br />term; <br />ii) a sum equal to thirty -three percent (33 %) of the fair rental value for <br />the third year of the term commencing on January 2, 2015; <br />iii) a sum equal to sixty -six percent (6b %) of the fair rental value <br />including the annual percentage increase for the fourth year of the <br />term commencing on January 2, 2016; <br />iv) the fair rental value including the annual percentage increase for the <br />fifth year of the term commencing on January 2, 201710 <br />(d) Rent shall be due and payable on or before the fifth day of each month. <br />Tenant acknowledges this rental rate is discounted for a portion of the term in an effort to <br />assist Tenant in providing a public benefit that being regional food and agricultural <br />2 <br />