Calculation Requirements. Operating Expenses and Real Estate Tax Expenses shall be calculated based on an accrual method of accounting. When depreciation or amortization is permitted to be included in Operating Expenses, the subject item shall be amortized on a straight line basis over its reasonably anticipated useful life in accordance with generally accepted accounting principles, to the extent applicable. Operating Expenses for the Operating Expenses Base Year and each calendar year and Real Estate Tax Expenses for the Real Estate Taxes Base Year and each calendar year shall be appropriately grossed-up employing sound accounting and management principles to reflect the amount of Operating Expenses and Real Estate Tax Expenses that would have been incurred for the Operating Expenses Base Year, the Real Estate Tax Expenses Base Year, and the subject calendar year, respectively, had: (a) the Building been one hundred percent (100%) leased and occupied during the entire subject year, in the case of Operating Expenses; and (b) the Building having been one hundred percent (100%) leased and one hundred percent (100%) of the Building and all tenant improvements in all rentable space in the Building been completed and fully assessed during the entire subject year, in the case of Real Estate Tax Expenses; provided, however, that following the gross-up of Operating Expenses for the Operating Expenses Base Year, such Operating Expenses will be adjusted and again grossed up after all Operating Expenses for such Operating Expenses Base Year are known to Landlord. Landlord agrees that since one of the purposes of Operating Expenses, Real Estate Tax Expenses and the gross up provisions set forth herein is to allow Landlord to require Tenant to pay for increases in costs and taxes attributable to the Premises, Landlord agrees that: (i) Landlord shall not collect any Operating Expenses or Real Estate Tax Expenses in excess of the amounts actually incurred for each of same; and (ii) Landlord shall promptly pay to Tenant, Tenant’s Share of any refund Landlord receives in connection with any amounts previously included in Operating Expenses or Real Estate Tax Expenses. In the event Landlord incurs costs or expenses associated with or relating to separate items or categories or subcategories of Operating Expenses which were not part of Operating Expenses during the entire Operating Expense Base Year, Operating Expenses for the Operating Expenses Base Year shall be deemed increased by the amounts Lan...
Calculation Requirements. Landlord agrees that since one of the purposes of Operating Expenses and the gross up provision set forth in Section 3(c)(ii) is to allow Landlord to require Tenant to pay for the costs attributable to its Premises, (i) Landlord will not collect or be entitled to collect from Tenant with respect to Operating Expenses, an amount greater than Tenant's Pro Rata Share of the Operating Expenses actually paid by Landlord in connection with the operation of the Building, grossed up to 95% occupancy in accordance with Section 3(c)(ii), (ii) Landlord shall make no profit from Landlord's collections of Operating Expenses (exclusive of the management fee), (iii) all assessments and premiums which are not specifically charged to Tenant because of what Tenant has done, which can be paid by Landlord in installments, shall be paid by Landlord in the maximum number of installments permitted by law and not included as Operating Expenses except in the Reference Year in which the assessment or premium installment is actually paid and (iv) Landlord shall reduce the amount of Operating Expenses by any refund or discount Landlord receives in connection with any costs or expenditures previously included in Operating Expenses. 4.
Calculation Requirements. Landlord agrees that (i) except for the permitted management fee, Landlord will not collect or be entitled to collect from Tenant with respect to Operating Costs, an amount greater than Tenant’s Proportionate Share of the Operating Costs actually paid by Landlord in connection with the operation of the Building and Project, (ii) except for the permitted management fee, Landlord shall make no profit from Landlord’s collections of Operating Costs, (iii) all assessments which are not specifically charged to Tenant because of what Tenant has done, which can be paid by Landlord in installments, shall be paid by Landlord in the maximum number of installments permitted by law and not included as Operating Costs except in the year in which the assessment is actually paid; and (iv) Landlord shall reduce the amount of Operating Costs by any refund or discount Landlord receives in connection with any costs or expenditures previously included in Operating Costs. Further, if Landlord, in any year after the Base Year, adds any new services or substantially increases the level of existing service or adds new categories of Operating Costs which were not part of Operating Costs during the entire Base Year, then for such period of time in which such new services or increased levels of existing service or such new categories apply, Operating Costs for the Base Year shall be increased by the amount that Landlord reasonably determines it would have incurred had Landlord provided such service or substantially increased the level of such existing service or had such new category applied throughout the Base Year. If Landlord, in any year after the Base Year, discontinues any service or substantially decreases the level of any existing service, or a category of Operating Costs no longer exists, then for such period of time in which such services are discontinued or decreased, or such category no longer applies, Operating Costs for the Base Year shall be decreased by the amount that Landlord reasonably determines it incurred for such service or category throughout the Base Year. By way of example only, and not as a limitation upon the foregoing, if earthquake insurance is not carried during the Base Year but is added in a subsequent year, then for such period of time in which such earthquake insurance is maintained, Operating Costs for the Base Year shall be increased by the amount that Landlord reasonably determines it would have incurred had Landlord maintained earthquake insuran...
