Operating Charges. 3.1.1 From and after the Extension Term Commencement Date, Tenant shall pay as Additional Rent Tenant's Proportionate Share of the amount of Operating Charges for each calendar year to the extent falling within the Extension Term. Tenant's Proportionate Share with respect to Operating Charges shall be 56.60%, which has been calculated to be that percentage which is equal to a fraction, the numerator of which is the number of square feet of rentable area in the Premises and the denominator of which is the number of square feet of rentable area in the Building. 3.1.2 If the average occupancy rate for the Building during any calendar year is less than one hundred percent (100%), or if any tenant is separately paying for (or does not require) certain utilities or services which are furnished to its premises, then Landlord shall include in Operating Charges for such year all additional expenses, as reasonably estimated by Landlord, which would have been incurred during such year if such average occupancy rate had been one hundred percent (100%) and if Landlord paid for such utilities or services furnished to such premises. 3.1.3 Tenant shall make estimated monthly payments to Landlord on account of the amount of Operating Charges that are expected to be incurred during each calendar year (or portion thereof). On or before the Extension Term Commencement Date, Landlord shall submit a reasonably detailed written statement setting forth Landlord's reasonable estimate of Tenant's Proportionate Share thereof. Tenant shall pay to Landlord on the first day of each month following receipt of such statement, until Tenant's receipt of the succeeding annual statement, an amount equal to one‑twelfth (1/12) of each such share (estimated on an annual basis without proration). Not more than once during any calendar year, Landlord may revise Landlord's estimate and adjust Tenant's monthly payments to reflect Landlord's revised estimate. Within one hundred eighty (180) days after the end of each calendar year, Landlord shall submit a reasonably detailed written statement showing (1) Tenant's Proportionate Share of the amount of Operating Charges incurred during the preceding calendar year, and (2) the aggregate amount of Tenant's estimated payments made on account of Operating Charges during such year (“Reconciliation Statement”) for Operating Charges. If such Reconciliation Statement indicates that the aggregate amount of such estimated payments exceeds Tenant's actual liability, then Landlord shall credit the net overpayment toward Tenant's next installment(s) of rent due under the Lease, or, if the Lease Term has expired or will expire before such credit can be fully applied, or if Tenant is not otherwise liable to Landlord for further payment, Landlord shall reimburse Tenant for the amount of such overpayment within thirty (30) days. If such statement indicates that Tenant's actual liability exceeds the aggregate amount of such estimated payments, then Tenant shall pay the amount of such excess as Additional Rent. Landlord will furnish Tenant with any backup material supporting Landlord's calculations within thirty (30) days after receipt of Tenant's reasonable written request therefor.
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Operating Charges. 3.1.1 From all expenses, charges and fees incurred by or on behalf of Landlord in connection with the management, operation, ownership, maintenance, servicing, insuring and repair of the Building (which is deemed to include the site upon which the Building is constructed (which site is sometimes referred to herein as the “Land”), the roof of the Building and any physical extensions therefrom, any driveways, sidewalks, landscaping and parking facilities in the Building or on the Land, and all other areas, facilities, improvements and appurtenances relating to any of the foregoing) including the following: (1) electricity with respect to the Common Areas and the Building systems (as reasonably determined by Landlord), gas, water, HVAC (including chilled condenser water), sewer and other utility and service costs, charges and fees (including any tap fees and connection and switching fees) of every type and nature; (2) premiums, deductibles and other charges for insurance; (3) management fees of not more than three percent (3%) of the adjusted gross revenues of the Building (plus amounts that would have been received had there been no rental abatements or other concessions); (4) costs of service, equipment rental, access control, landscaping and maintenance contracts; (5) maintenance, repair and (subject to the limitations on capital expenditures set forth below) replacement expenses and supplies; (6) depreciation/amortization for capital expenditures made by Landlord to reduce operating expenses or to comply with Laws imposed after the Extension Term Commencement Datedate hereof, Tenant which shall pay as Additional Rent Tenant's Proportionate Share be charged in annual installments over the useful life of the amount items for which such costs are incurred (provided that in the case of Operating Charges for capital expenditures reasonably estimated to reduce operating expenses, Landlord shall have the right to amortize such expenses in annual installments equal to the projected annual savings) together with interest, each calendar year to the extent falling within the Extension Term. Tenant's Proportionate Share with respect such costs are charged to Operating Charges shall be 56.60%Charges, which has been calculated to be that percentage which is equal to a fraction, on the numerator unamortized balance at an interest rate of which is the number of square feet of rentable area in the Premises and the denominator of which is the number of square feet of rentable area in the Building.
3.1.2 If the average occupancy rate for the Building during any calendar year is less than one hundred two percent (100%), or if any tenant is separately paying for (or does not require) certain utilities or services which are furnished to its premises, then Landlord shall include in Operating Charges for such year all additional expenses, as reasonably estimated by Landlord, which would have been incurred during such year if such average occupancy rate had been one hundred percent (1002%) and if Landlord paid for such utilities or services furnished to such premises.
3.1.3 Tenant shall make estimated monthly payments to Landlord on account in excess of the amount of Operating Charges that are expected to be incurred during each calendar year (or portion thereof). On or before the Extension Term Commencement Date, Landlord shall submit a reasonably detailed written statement setting forth Landlord's reasonable estimate of Tenant's Proportionate Share thereof. Tenant shall pay to Landlord Prime Rate in effect on the first day of each month following receipt of such statement, until Tenant's receipt of the succeeding annual statement, an amount equal to one‑twelfth (1/12) of each such share (estimated on an annual basis without proration). Not more than once during any calendar year, Landlord may revise Landlord's estimate and adjust Tenant's monthly payments to reflect Landlord's revised estimate. Within one hundred eighty (180) days after the end January 1 of each calendar year; (7) charges for janitorial and cleaning services and supplies; (8) any business, professional or occupational license tax payable by Landlord shall submit a reasonably detailed written statement showing with respect to the Building and any association fees; (19) Tenant's Proportionate Share of [reserved]; (10) sales, use and personal property taxes payable in connection with tangible personal property and services purchased for and used in connection with the amount Building; (11) reasonable third party accounting and audit fees relating to the determination of Operating Charges (and tenants’ proportionate shares thereof) and the preparation of statements required by tenant leases; (12) expenses incurred during in connection with concierge services provided to the preceding calendar yearBuilding (if any); (13) the fair market rental value of any management office (of reasonable and customary size) and fitness facilities in the Building; (14) special assessments, fees, penalties and other charges and costs for transit, transit encouragement traffic reduction programs, or any similar purpose; (15) all costs of operating, maintaining, repairing and replacing equipment in any portion of any fitness facility, roof deck, function room, conference facility or other amenity of the Building (to the extent not offset by separate membership or usage fees imposed by Landlord); (16) payments or assessments required in connection with a reciprocal easement or similar agreement to which the Landlord or the Building is bound; (17) any other expense incurred by Landlord in arm’s-length transactions in connection with maintaining, repairing or operating the Building; (18) costs and expenses for the maintenance and operation of parking areas and facilities and other parking arrangements for the Building for any transportation demand management program therefor, and for the maintenance and operation of shuttle bus and other transportation programs or facilities therefor; (219) all costs (including all fringe benefits, workers’ compensation insurance premiums and payroll taxes) of employees at or below the level of property manager that are exclusively employed at the Building; and (20) all common area expenses and any and all other operating, management and other amounts imposed under private assessments and allocable to the Building. Notwithstanding any provision contained in this Lease to the contrary, Operating Charges shall not include: (i) Real Estate Taxes; (ii) principal or interest payments on any Mortgage; (iii) the aggregate amount costs of Tenant's estimated special services and utilities separately charged to particular tenants of the Building; (iv) base rent or percentage rent payments made on account under any ground lease; (v) advertising and promotional expenses directly relating to leasing; (vi) costs for which Landlord is reimbursed by insurance proceeds or from tenants of Operating Charges during the Building (other than such year (“Reconciliation Statement”) for tenants’ regular contributions to Operating Charges. If ); (vii) costs directly and solely related to the maintenance and operation of the entity that constitutes the Landlord, such Reconciliation Statement indicates as accounting fees incurred solely for the purpose of reporting Landlord’s financial condition; (viii) costs of repairs, replacements or other work occasioned by fire, windstorm or other casualty, or the exercise by governmental authorities of the right of eminent domain (except for the deductible under any insurance carried by Landlord); (ix) leasing commissions, attorney’s fees, costs, disbursements and other expenses incurred by Landlord or its agents in connection with negotiations for leases with tenants, other occupants or prospective tenants or other occupants of the Building, and similar costs incurred in connection with disputes with and/or enforcement of any leases with tenants, other occupants, or prospective tenants or other occupants of the Building; (x) tenant allowances, tenant concessions, and other costs and expenses (including permit, license and inspection fees) incurred in connection with completing, fixturing, furnishing, renovating or otherwise improving, decorating or redecorating leased premises for tenants or other occupants, or vacant, leasable space in the Building, including space planning/interior architecture fees and/or engineering for same; (xi) costs or expenses (including fines, penalties and legal fees) incurred due to the violation (as compared to compliance costs) by Landlord, its agents or employees, any tenant (other than Tenant) or other occupant of the Building of any terms and conditions of this Lease or of the leases of other tenants in the Building, and/or of any valid applicable Laws that would not have been incurred but for such violation by Landlord, its agent or employee, tenant, or other occupant, it being intended that each party shall be responsible for the aggregate amount costs resulting from its violation of such estimated payments exceeds Tenant's actual liabilityleases and Law (provided that reasonable attorneys’ fees to enforce rules and regulations for the Building shall be included in Operating Charges); (xii) penalties for any late payment by Landlord, then Landlord shall credit including taxes and equipment leases; (xiii) compensation paid to clerks, attendants or other persons in commercial concessions (such as a snack bar, restaurant or newsstand, but not including Building amenities such as the net overpayment toward Tenant's next installment(s) of rent due under fitness facility and the Lease, or, if the Lease Term has expired or will expire before such credit can be fully appliedParking Facilities, or if any roof deck, function room, or conference facility); (xiv) Landlord’s contributions to charitable organizations; (xv) costs of correcting defects, including any allowances for same, in the original construction of the Building; (xvi) costs in connection with services (including electricity), items or other benefits of a material type which are not available to Tenant without specific charge therefor, but which are provided to another tenant or occupant of the Building, whether or not such other tenant or occupant is not otherwise liable to Landlord for further payment, Landlord shall reimburse Tenant specifically charged therefor by Landlord; (xvii) costs or expenses for the amount purchase or leasing of such overpayment within thirty sculpture, paintings or other works of art, other than normal building decorations customary in projects comparable to the Building; and (30xviii) days. If such statement indicates that reserves of any kind; and (xix) costs arising from the presence of Hazardous Materials in, about or below the Land or the Building (including any Hazardous Materials brought to, deposited on or disposed of at the Building by Landlord or its employees, agents, or contractors, but excluding those Hazardous Materials utilized in connection with the operation, maintenance and repair of the Building in the ordinary course and those brought, deposited or disposed of by Tenant or Tenant's actual liability exceeds ’s Agents with respect to its use or occupancy of space in the aggregate amount of such estimated payments, then Tenant shall pay the amount of such excess as Additional Rent. Landlord will furnish Tenant with any backup material supporting Landlord's calculations within thirty (30) days after receipt of Tenant's reasonable written request thereforBuilding).
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