Basic Operating Cost. (a) Basic Operating Cost shall mean all commercially reasonable and necessary expenses and costs (but not specific costs which are separately billed to and paid by particular tenants of the Project ) as determined by Landlord in its reasonable opinion of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with the management, ownership, maintenance, repair, preservation and operation of the Project and its supporting facilities directly servicing the Project (determined in accordance with generally accepted accounting principles, consistently applied) including, but not limited to, the following: (1) Wages, salaries and related expenses and benefits of all on-site and off-site employees and personnel engaged in the operation, maintenance, repair and security of the Project, to the extent such charges are directly allocable to services rendered by the employees and personnel for the benefit of the Project. (2) Costs of Landlord's office (or of a property management office if Landlord is not the property manager) and office operation in the Project (provided, however, if such office is used for business activities other than Project management, only a reasonable allocation of such cost may be included in Basic Operating Cost), as well as the costs of operation of a room for delivery and distribution of mail to tenants of the Building. (3) All supplies, materials, equipment and equipment rental used in the operation, maintenance, repair and preservation of the Project. (4) Utilities, including water, sewer and power, telephone, communication and cable television facilities, lighting, heating, air conditioning and ventilating the entire Project; provided, however that the Leased Premises shall be (A) separately metered for lights and convenience power, and (B) separately metered using Landlord's energy management system for the Project for air conditioning and ventilation. (5) All maintenance, janitorial and service agreements for the Project and the equipment therein, including, without limitation, alarm and/or security service, window cleaning, elevator maintenance, sidewalks, landscaping, Building exterior and service areas; provided, however, that Tenant shall have the right to employ its own janitor to clean the Leased Premises, in which event Tenant shall not be charged by Landlord for janitorial services to the Leased Premises but Tenant shall be responsible for its prorata share of janitorial services to the Common Areas. (6) A management cost recovery in an amount not to exceed the lesser of four percent (4%) of all Rent (excluding such management cost recovery) derived from the Project or the actual costs charged by the property manager. (7) Day-to-day ordinary and reasonable legal and accounting services incurred to the extent attributable to the normal operation of the Project, excluding those expenses incurred in lease negotiations, termination of leases, extension of leases or legal costs incurred in proceedings by or against any specific tenant. (8) All insurance costs, including, but not limited to, the cost of all risk property and liability coverage and rental income and earthquake insurance applicable to the Project and Landlord's personal property used in connection therewith, as well as commercially reasonable deductible amounts applicable to such insurance; provided, however, that Landlord may, but shall not be obligated to, carry earthquake insurance. (9) Repairs, replacements and general maintenance (except for repairs paid by proceeds of insurance or by Tenant or other tenants of the Project or third parties, and alterations attributable solely to tenants of the Project other than Tenant). (10) All real estate or personal property taxes, possessory interest taxes, business or license taxes or fees, service payments in lieu of such taxes or fees, annual or periodic license or use fees, excises, transit charges, housing fund assessments, open space charges, assessments, bonds, levies, fees or charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind which are assessed, levied, charged, confirmed or imposed by any public authority upon the Project (or any portion or component thereof), its operations, this Lease, or the Rent due hereunder (or any portion or component thereof), except: (i) inheritance or estate taxes imposed upon or assessed against the Project, or any part thereof or interest therein, and (ii) Landlord's personal or corporate income, gift, franchise or transfer taxes. (11) Amortization in accordance with generally accepted accounting principles, consistently applied (together with reasonable financing charges) of capital improvements made to the Project subsequent to the Term Commencement Date which are designed to improve the operating efficiency of the Project (provided that the amortized amount shall not exceed the anticipated cost savings), or which may be required by governmental authorities pursuant to laws not in effect on the Term Commencement Date, including those improvements required for energy conservation and for the benefit of individuals with disabilities ("ADA Improvements") or for energy conservation. (b) With respect to subsection 3.05(a)(11) above, to the best of Landlord's knowledge, the Project is in compliance with the Americans with Disabilities Act and state law applicable to access by disabled persons (collectively, "ADA") . ADA Improvements, as defined in subsection 3.05(a)(11) above, includes ADA compliance work in any part of the Project required by governmental authorities due to changes in law, rules or regulations after the date of this Lease. ADA Improvements, for the purposes of Section 3.05(a)(11), shall not include any ADA compliance work in other tenant's spaces in the Project which is triggered by virtue of tenant improvement work in such space. Tenant shall not be responsible for the cost of improvements for ADA compliance work triggered by multi-tenanting of the Building. Tenant shall be responsible for one hundred percent (100%) of the cost of ADA compliance work triggered by the Tenant Improvements (or any subsequent alterations or additions made by Tenant). Tenant shall promptly reimburse Landlord for any costs incurred by Landlord with respect thereto. If not otherwise paid for by Tenant, Landlord shall be entitled to deduct from ▇▇▇▇▇▇▇▇'s Contribution any amount incurred by Landlord with respect to ADA compliance work triggered by the Tenant Improvements. Notwithstanding the foregoing, Landlord and not Tenant shall be responsible for ADA compliance work exterior to the Leased Premises triggered by the Tenant Improvements which Landlord was obligated to comply with on the Term Commencement Date. (c) In the event any of the Basic Operating Costs are not allocable solely to the Building or are not provided on a uniform basis, Landlord shall make an appropriate and equitable adjustment, in Landlord's commercially reasonable judgment, to the relevant cost allocations to the Building and Tenant shall pay its proportionate share of such Basic Operating Costs allocable solely to the Building and 100% of such Basic Operating Costs allocable solely to the Leased Premises. (d) Notwithstanding any other provision of this Lease to the contrary, in the event that the Project is not fully occupied during any year of the Term, an adjustment shall be made in computing Basic Operating Cost for such year so that Basic Operating Cost shall be computed as though the Project had been 95% occupied during such year. Exhibit F to this Lease sets forth --------- Landlord's good faith, itemized estimate of the Basic Operating Costs for the Building.
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Basic Operating Cost. (a) Basic Operating Cost shall mean all commercially reasonable and necessary expenses and costs (but not specific costs which are separately billed to and paid by particular tenants of the Project ) as determined by Landlord in its reasonable opinion of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with the management, ownership, maintenance, repair, preservation and operation of the Project and its supporting facilities directly servicing the Project (determined in accordance with generally accepted accounting principles, consistently applied) including, but not limited to, the following:
(1) Wages, salaries and related expenses and benefits of all on-site and off-site employees and personnel engaged in the operation, maintenance, repair and security of the Project, to the extent such charges are directly allocable to services rendered by the employees and personnel for the benefit of the Project.
(2) Costs of Landlord's office (or of a property management office if Landlord is not the property manager) and office operation in the Project (provided, however, if such office is used for business activities other than Project management, only a reasonable allocation of such cost may be included in Basic Operating Cost), as well as the costs of operation of a room for delivery and distribution of mail to tenants of the Building.
(3) All supplies, materials, equipment and equipment rental used in the operation, maintenance, repair and preservation of the Project.
(4) Utilities, including water, sewer and power, telephone, communication and cable television facilities, lighting, heating, air conditioning and ventilating the entire Project; provided, however that the Leased Premises shall be (A) separately metered for lights and convenience power, and (B) separately metered using Landlord's energy management system for the Project for air conditioning and ventilation.
(5) All maintenance, janitorial and service agreements for the Project and the equipment therein, including, without limitation, alarm and/or security service, window cleaning, elevator maintenance, sidewalks, landscaping, Building exterior and service areas; provided, however, that Tenant shall have the right to employ its own janitor to clean the Leased Premises, in which event Tenant shall not be charged by Landlord for janitorial services to the Leased Premises but Tenant shall be responsible for its prorata share of janitorial services to the Common Areas.
(6) A management cost recovery in an amount not to exceed the lesser of four percent (4%) of all Rent (excluding such management cost recovery) derived from the Project or the actual costs charged by the property manager.
(7) Day-to-day ordinary and reasonable legal and accounting services incurred to the extent attributable to the normal operation of the Project, excluding those expenses incurred in lease negotiations, termination of leases, extension of leases or legal costs incurred in proceedings by or against any specific tenant.
(8) All insurance costs, including, but not limited to, the cost of all risk property and liability coverage and rental income and earthquake insurance applicable to the Project and Landlord's personal property used in connection therewith, as well as commercially reasonable deductible amounts applicable to such insurance; provided, however, that Landlord may, but shall not be obligated to, carry earthquake insurance.
(9) Repairs, replacements and general maintenance (except for repairs paid by proceeds of insurance or by Tenant or other tenants of the Project or third parties, and alterations attributable solely to tenants of the Project other than Tenant).
(10) All real estate or personal property taxes, possessory interest taxes, business or license taxes or fees, service payments in lieu of such taxes or fees, annual or periodic license or use fees, excises, transit charges, housing fund assessments, open space charges, assessments, bonds, levies, fees or charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind which are assessed, levied, charged, confirmed or imposed by any public authority upon the Project (or any portion or component thereof), its operations, this Lease, or the Rent due hereunder (or any portion or component thereof), except:
(i) inheritance or estate taxes imposed upon or assessed against the Project, or any part thereof or interest therein, and (ii) Landlord's personal or corporate income, gift, franchise or transfer taxes.
(11) Amortization in accordance with generally accepted accounting principles, consistently applied (together with reasonable financing charges) of capital improvements made to the Project subsequent to the applicable Term Commencement Date which are designed to improve the operating efficiency of the Project (provided that the amortized amount shall not exceed the anticipated cost savings), or which may be required by governmental authorities pursuant to laws not in effect on the applicable Term Commencement Date, including those improvements required for energy conservation and for the benefit of individuals with disabilities ("ADA Improvements") or for energy conservation.
(b) With respect to subsection 3.05(a)(11) above, to the best of Landlord's knowledge, the Project is in compliance with the Americans with Disabilities Act and state law applicable to access by disabled persons (collectively, "ADA") ). ADA Improvements, as defined in subsection 3.05(a)(11) above, includes ADA compliance work in any part of the Project required by governmental authorities due to changes in law, rules or regulations after the date of this Lease. ADA Improvements, for the purposes of Section subsection 3.05(a)(11), shall not include any ADA compliance work in other tenant's spaces in the Project which is triggered by virtue of tenant improvement work in such space. Tenant shall not be responsible for the cost of improvements for ADA compliance work triggered by multi-tenanting of the Building. Tenant shall be responsible for one hundred percent (100%) of the cost of ADA compliance work triggered by the Tenant Improvements (or any subsequent alterations or additions made by Tenant). Tenant shall promptly reimburse Landlord for any costs incurred by Landlord with respect thereto. If not otherwise paid for by Tenant, Landlord shall be entitled to deduct from ▇▇▇▇▇▇▇▇Landlord's Contribution any amount incurred by Landlord with respect to ADA compliance work triggered by the Tenant Improvements. Notwithstanding the foregoing, Landlord and not Tenant shall be responsible for ADA compliance work exterior to the Leased Premises triggered by the Tenant Improvements which Landlord was obligated to comply with on the applicable Term Commencement Date.
(c) In the event any of the Basic Operating Costs are not allocable solely to the Building or are not provided on a uniform basis, Landlord shall make an appropriate and equitable adjustment, in Landlord's commercially reasonable judgment, to the relevant cost allocations to the Building and Tenant shall pay its proportionate share of such Basic Operating Costs allocable solely to the Building and 100% of such Basic Operating Costs allocable solely to the Leased Premises.
(d) Notwithstanding any other provision of this Lease to the contrary, in the event that the Project is not fully occupied during any year of the Term, an adjustment shall be made in computing Basic Operating Cost for such year so that Basic Operating Cost shall be computed as though the Project had been 95% occupied during such year. Exhibit EXHIBIT F to this Lease sets forth --------- Landlord's good --------- faith, itemized estimate of the Basic Operating Costs for the Building.
(e) The following items shall be excluded from Basic Operating Costs: (i) deprecia-tion on the Building and the Project; (ii) debt service; (iii) rental under any ground or underlying lease; (iv) attorneys' fees and expenses incurred in connection with lease negotiations with prospective Project tenants or alleged defaults with other Project tenants; (v) the cost of any
(a) Costs occasioned by the act, omission or violation of any law by Landlord, any other occupant of the Project, or their respective agents, employees or contractors; (
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Basic Operating Cost. (a) Basic Operating Cost shall mean all commercially reasonable and necessary expenses and costs (but not specific costs which are separately billed to and paid by particular tenants of the Project Building) as determined by Landlord in its reasonable opinion of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with the management, ownership, maintenance, repair, preservation and operation of the Project and its supporting facilities directly servicing the Project (determined in accordance with generally accepted accounting principles, consistently applied) including, but not limited to, the following:
(1) Wages, salaries and related expenses and benefits of all on-site and off-site employees and personnel engaged in the operation, maintenance, repair and security of the Project, to the extent such charges are directly allocable to services rendered by the employees and personnel for the benefit of the Project.
(2) Costs of Landlord's office (or of a including the property management office if Landlord is not the property manageroffice) and office operation in the Project (provided, however, if such office is used for business activities other than Project management, only a reasonable allocation of such cost may be included in Basic Operating Cost)Project, as well as the costs of operation of a room for delivery and distribution of mail to tenants of the Building.
(3) All supplies, materials, equipment and equipment rental used in the operation, maintenance, repair and preservation of the Project.
(4) Utilities, including water, sewer and power, telephone, communication and cable television facilities, lighting, heating, air conditioning heating and ventilating the entire Project; provided, however that the Leased Premises shall be (A) separately metered for lights and convenience power, and (B) separately metered using Landlord's energy management system for the Project for air conditioning and ventilation.
(5) All maintenance, janitorial and service agreements for the Project and the equipment therein, including, without limitation, alarm and/or security service, window cleaning, elevator maintenance, sidewalks, landscaping, Building exterior and service areas; provided, however, that Tenant shall have the right to employ its own janitor to clean the Leased Premises, in which event Tenant shall not be charged by Landlord for janitorial services to the Leased Premises but Tenant shall be responsible for its prorata share of janitorial services to the Common Areas.
(6) A management cost recovery in an amount not to exceed the lesser of four five percent (45%) of all Rent (excluding such management cost recovery) derived from the Project or the actual costs charged by the property managerBuilding.
(7) Day-to-day ordinary and reasonable legal Legal and accounting services incurred to the extent attributable to the normal operation of for the Project, excluding those including the costs of audits by certified public accountants (other than audits for which Landlord must bear the cost pursuant to SECTION 3.04; provided, however, that legal expenses incurred in shall not include the cost of lease negotiations, termination of leases, extension of leases or legal costs incurred in proceedings by or against any specific tenant.
(8) All insurance costs, including, but not limited to, the cost of all risk property and liability coverage and rental income and earthquake insurance applicable to the Project and Landlord's personal property used in connection therewith, as well as commercially reasonable deductible amounts applicable to such insurance; provided, however, that Landlord may, but shall not be obligated to, carry earthquake insurance, but if Landlord does not obtain earthquake insurance in the Base Year, but thereafter chooses to obtain such insurance, Landlord shall adjust the Basic Operating Costs for the Base Year to include an amount equal to the premium for such insurance that would have been paid if such insurance had been obtained in the Base Year.
(9) Repairs, replacements and general maintenance (except for repairs paid by proceeds of insurance or by Tenant or other tenants of the Project Building or third parties, and alterations attributable solely to specific tenants of the Project other than Tenant)Project.
(10) All real estate or personal property taxes, possessory interest taxes, business or license taxes or fees, service payments in lieu of such taxes or fees, annual or periodic license or use fees, excises, transit charges, housing fund assessments, open space charges, assessments, bonds, levies, fees or charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind which are assessed, levied, charged, confirmed or imposed by any public authority upon the Project (or any portion or component thereof), its operations, this Lease, or the Rent due hereunder (or any portion or component thereof), except:
(i) inheritance or estate taxes imposed upon or assessed against the Project, or any part thereof or interest therein, and (ii) Landlord's personal or corporate income, gift, franchise or transfer taxes.
(11) Amortization in accordance with generally accepted accounting principles, consistently applied (together with reasonable financing charges) of capital improvements made to the Project subsequent to the Term Commencement Date which are designed to and do improve the operating efficiency of the Project (provided that the amortized amount shall not exceed the anticipated cost savings)Project, in Landlord's reasonable opinion, or which may be required by governmental authorities pursuant to laws not in effect on the Term Commencement Dateauthorities, including those improvements required for energy conservation and for the benefit of individuals with disabilities ("ADA Improvements") ), in relation to new laws or for energy conservation.
(b) With respect to subsection 3.05(a)(11) abovechanges in existing laws, applicable to the best of Landlord's knowledgeBuilding, the Project is in compliance with the Americans with Disabilities Act and state law applicable to access by disabled persons (collectively, "ADA") . ADA Improvements, as defined in subsection 3.05(a)(11) above, includes ADA compliance work in any part of the Project required by governmental authorities due to changes in law, rules which arise or regulations take affect after the date of this Lease. ADA Improvements, for the purposes of Section 3.05(a)(11), shall not include any ADA compliance work in other tenant's spaces in the Project which is triggered by virtue of tenant improvement work in such space. Tenant shall not be responsible for the cost of improvements for ADA compliance work triggered by multi-tenanting of the Building. Tenant shall be responsible for one hundred percent (100%) of the cost of ADA compliance work triggered by the Tenant Improvements (or any subsequent alterations or additions made by Tenant). Tenant shall promptly reimburse Landlord for any costs incurred by Landlord with respect thereto. If not otherwise paid for by Tenant, Landlord shall be entitled to deduct from ▇▇▇▇▇▇▇▇'s Contribution any amount incurred by Landlord with respect to ADA compliance work triggered by the Tenant Improvements. Notwithstanding the foregoing, Landlord and not Tenant shall be responsible for ADA compliance work exterior to the Leased Premises triggered by the Tenant Improvements which Landlord was obligated to comply with on the Term Commencement Date.
(cb) In the event any of the Basic Operating Costs are not allocable solely to the Building or are not provided on a uniform basisbasis within the Building, Landlord shall make an appropriate and equitable adjustment, in Landlord's commercially reasonable judgmentdiscretion, to the relevant cost allocations to the Building and the Leased Premises and Tenant shall pay only its proportionate share of such Basic Operating Costs any increase in the amounts allocable solely to the Building and 100% of such Basic Operating Costs allocable solely to the Leased PremisesPremises over the amounts so allocated in the Base Year on a consistent basis.
(dc) Notwithstanding any other provision of this Lease to the contrary, in the event that the Project is not fully occupied during any year of the Term, an adjustment shall be made in computing Basic Operating Cost for such year (including the Base Year) so that Basic Operating Cost shall be computed as though the Project Building had been 95% occupied during such year. Exhibit F to this Lease sets forth --------- Landlord's good faith.
(d) The following items shall be excluded from Basic Operating Costs: (i) depreciation on the Building and the Project; (ii) debt service; (iii) rental under any ground or underlying lease; (iv) attorneys' fees and expenses incurred in connection with lease negotiations with prospective Project tenants or alleged defaults with Project tenants; (v) the cost of any improvements or equipment which would be properly classified as capital expenditures (except for any capital expenditures expressly included in SECTION 3.05(a), itemized estimate including, without limitation, SECTION 3.05(a)(10)); the cost of decorating, improving for tenant occupancy, painting or redecorating portions of the Basic Operating Costs for the BuildingBuilding to be demised to tenants; (vii) advertising expenses relating to vacant space; (viii) real estate brokers' or other leasing commissions; and (ix) Property Taxes.
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