Common use of Common Area Maintenance Expenses Clause in Contracts

Common Area Maintenance Expenses. Tenant shall pay to Landlord, as Additional Rent, Tenant’s Pro Rata Share of the Common Area Maintenance Expenses. “Common Area Maintenance Expenses” shall mean all expenses of any kind or nature which are necessary, ordinary or customarily incurred with respect to the operation, repair and maintenance of the Building, and the lot on which the Building is situated, as determined in accordance with generally accepted accounting principles and shall include, but not be limited to, all sums expended in connection with Common Areas for all general operation and maintenance and repairs, resurfacing, or painting, restriping, cleaning and sweeping; maintenance and repair of sidewalks, curbs, sprinkler systems, planting and landscaping; water, lighting and other utilities; maintenance and repair of any fire protection systems, lighting systems, storm drainage systems, roof patching and any other utility systems; personnel to implement such services; personal property taxes and assessments on the improvements comprising said Common Areas; and governmental imposition or surcharge imposed against Landlord or assessed against the automobile parking area or any other portion of the Common Areas; depreciation on maintenance and operating machinery and equipment (if owned) and rental paid for such machinery and equipment (if rented). In addition, Tenant shall pay a sum to Landlord for the accounting, bookkeeping and collection of the expenses in connection with said Common Areas in an amount equal to ten percent (10%) of Tenant’s pro rata share of the total of the aforementioned expenses for each calendar year. The amount payable by Tenant for any repair that exceeds $10,000 shall be pro-rated over the useful life of the repair. Tenant shall only be required to pay its pro-rata share of the cost divided by the useful life, as determined in accordance with generally accepted accounting principles, multiplied by the remaining lease term, including the Renewal Period if Tenant has exercised its option to renew the lease. As an example, if a repair costs $20,000 and there are two years remaining on the lease term and the repair has a useful life of ten years, Tenants share would be calculated as follows: Repair cost $20,000 Useful life 10 years Remaining term 2 years $20,000/10 = $2,000 times 2 years = $4,000 Tenant’s share $4,000 times 34.3% = $1,372

Common Area Maintenance Expenses. Tenant shall pay to Landlord, Landlord as Additional Rent, Rent in the manner described below an amount equal to Tenant’s Pro Rata Share of the Common Area Maintenance ExpensesExpenses for the Project incurred or payable by Landlord for the Project in any partial or full calendar year. The terms “Common Area Maintenance Expenses” shall mean all expenses paid or incurred by Landlord for maintaining, operating and repairing the Common Areas, including, without limitation, the plaza, streets, parking areas, landscaping, including costs of any kind or nature which are necessaryobtaining services and products for maintaining, ordinary or customarily incurred with respect to the operation, repair operating and maintenance of the Building, repairing such Project common areas and the lot on which the Building is situatedpersonal property used in conjunction therewith, as determined in accordance with generally accepted accounting principles services of independent contractors compensation, including employment taxes and shall includefringe benefits, but not be limited to, of all sums expended persons who perform duties exclusively in connection with the maintenance of Common Areas for all general operation Areas, seasonal decorations, activities and maintenance and repairs, resurfacing, or painting, restriping, cleaning and sweeping; maintenance and repair events. Landlord acknowledges that Tenant’s acceptance of sidewalks, curbs, sprinkler systems, planting and landscaping; water, lighting and other utilities; maintenance and repair of any fire protection systems, lighting systems, storm drainage systems, roof patching and any other utility systems; personnel to implement such services; personal property taxes and assessments the Lease is based on the improvements comprising said Common Areas; condition and governmental imposition or surcharge imposed against Landlord or assessed against the automobile parking area or any other portion location of the Common Areas; depreciation on maintenance and operating machinery and equipment (if owned) and rental paid for such machinery and equipment (if rented). In addition, Tenant shall pay a sum to Landlord for the accounting, bookkeeping and collection Areas of the Project and Premises as of the Commencement Date herein. Landlord shall, at all times act in good faith and with due diligence to minimize interruption, reduction or discontinuation as to not unreasonably interfere with the ordinary conduct of Tenant’s business operations in the Premises. Landlord shall provide Tenant not less than 48 hours prior written notice specifying any alterations to be made and approximate time of completion. For the avoidance of doubt, Common Area Maintenance Expenses shall not include the costs or expenses in connection with said related to the repair or restoration of the Common Areas in an amount equal as a result of a Casualty. Landlord acknowledges and agrees that the Project’s Common Area Maintenance Expenses shall be limited to ten Common Area Maintenance Expenses of the Building until such time that a certificate of occupancy has been issued for Phase II and not less than thirty percent (1030%) of Tenant’s pro rata share the Rentable Square Feet of the total office space within Phase II has been leased and occupied by tenant of the aforementioned expenses for each calendar year. The amount payable by Tenant for any repair that exceeds $10,000 shall be pro-rated over the useful life of the repair. Tenant shall only be required to pay its pro-rata share of the cost divided by the useful life, as determined in accordance with generally accepted accounting principles, multiplied by the remaining lease term, including the Renewal Period if Tenant has exercised its option to renew the lease. As an example, if a repair costs $20,000 and there are two years remaining on the lease term and the repair has a useful life of ten years, Tenants share would be calculated as follows: Repair cost $20,000 Useful life 10 years Remaining term 2 years $20,000/10 = $2,000 times 2 years = $4,000 Tenant’s share $4,000 times 34.3% = $1,372Phase II.

Common Area Maintenance Expenses. Tenant shall pay to Landlord, Landlord as Additional Rent, in the manner described below, an amount equal to Tenant’s 's Pro Rata Share of the Common Area Maintenance Expenses, defined below, for the Property incurred or payable by Landlord for the development in any partial or full calendar year. “The terms "Common Area Maintenance Expenses” " shall mean all expenses of any kind paid or nature which are necessaryincurred by Landlord for maintaining, ordinary or customarily incurred with respect to operating and repairing the operation, repair and maintenance common areas of the BuildingProperty, including, without limitation, streets, parking areas, landscaping (“Common Areas”), including costs of obtaining services and products for maintaining, operating and repairing such Common Areas and the personal property used in conjunction therewith, services of independent contractors compensation, including employment taxes and fringe benefits, of all persons who perform duties in connection with the operating, insurance premiums, personal property taxes, licenses, seasonal decorations, activities and events, permits and inspection fees, legal and accounting expenses, administrative and office expenses, amortization of capital improvements that Landlord reasonably anticipates will improve the operating efficiency of the Property, but such amortization expenses shall not exceed reasonably expected savings in operating costs resulting from such capital improvements, and the lot on any other expense or charge described, which the Building is situated, as determined in accordance with generally accepted accounting principles and shall includemanagement practices would be considered an expense of maintaining, operating or repairing the Common Areas of the Property, but not be limited to, all sums expended in connection with Common Areas for all general operation and maintenance and repairs, resurfacing, or painting, restriping, cleaning and sweeping; maintenance and repair of sidewalks, curbs, sprinkler systems, planting and landscaping; water, lighting and other utilities; maintenance and repair excluding costs of any fire protection systemsspecial services rendered to individual tenants, lighting systemsincluding Tenant, storm drainage systems, roof patching for which a special charge is made and any other utility systems; personnel to implement such services; personal property taxes and assessments on the capitalizable leasehold improvements comprising said Common Areas; and governmental imposition or surcharge imposed against Landlord or assessed against the automobile parking area or any other portion of the Common Areas; depreciation on maintenance and operating machinery and equipment (if owned) and rental paid for such machinery and equipment (if rented). In addition, Tenant shall pay a sum to Landlord for the accounting, bookkeeping and collection of the expenses in connection with said Common Areas in an amount equal to ten percent (10%) of Tenant’s pro rata share of the total of the aforementioned expenses for each calendar year. The amount payable by Tenant for any repair that exceeds $10,000 shall be pro-rated over the useful life of the repair. Tenant shall only be required to pay its pro-rata share of the cost divided by the useful life, as determined in accordance with generally accepted accounting principles, multiplied by except to the remaining lease termextent expressly stated in this section 4.2(c). In no event shall any such charges, including modifications or alterations to the Renewal Period if Tenant has exercised its option to renew Common Areas increase Tenant’s Pro Rata Share as specified in Section 1.11. Landlord acknowledges that Tenant’s acceptance of the lease. As an example, if a repair costs $20,000 and there are two years remaining Lease is based on the lease term condition and location of the repair has a useful life parking, loading, private yard and Common Areas of ten yearsthe Property and Premises as of the Commencement Date herein. Landlord shall, Tenants share would be calculated at all times, act in good faith and with due diligence to minimize interruption, reduction or discontinuation as follows: Repair cost $20,000 Useful life 10 years Remaining term 2 years $20,000/10 = $2,000 times 2 years = $4,000 to not unreasonably interfere with the ordinary conduct of Tenant’s share $4,000 times 34.3% = $1,372business operations in the Premises. For clarification, Common Area Maintenance Expenses are separate from the Operating Expenses defined in Section 4.2(b) above.

Common Area Maintenance Expenses. (a) Tenant shall pay to Landlord, as Additional Rent, Rent Tenant’s Pro Rata Share 's proportionate share of all costs and expenses (the "Common Area Maintenance Expenses. “Common Area Maintenance Expenses” shall mean all expenses ") of any every kind and nature paid or nature incurred by Landlord, or for which are necessaryLandlord is obligated during the Term, ordinary or customarily incurred with respect to for operating, equipping, policing and protecting, lighting, insuring, repairing, replacing and maintaining (i) the operationcommon areas, repair (ii) the Building roofs and maintenance exteriors and other portions of the BuildingRetail Development not leased or available for lease, and (iii) all other areas, facilities and buildings used in the lot on which maintenance and operation of the Building is situatedRetail Development including any sprinkler or other safety systems, as determined in accordance with generally accepted accounting principles and any central mechanical plant. Such costs and expenses shall include, but not be limited to, the costs and expenses incurred in the following: providing all sums expended utilities to the Retail Development (except such costs which are paid by individual tenants), including all energy costs; illumination and maintenance of signs, whether located on or off the Retail Development; cleaning, lighting, snow removal and landscaping; security control and fire protection (including a per annum sprinkler charge of $0.10 per square foot of leasable area); management fees; premiums for Landlord's insurance described in Section 8.01 hereof; maintaining and replacing the equipment (if any) supplying music to such areas; the reasonable depreciation of equipment used in the operation and maintenance of such areas; compensation, employment taxes and expenses and benefits (including premiums for workers' compensation and other insurance) paid to or on behalf of persons directly involved in the performance, management or administration of the work specified in this Section 5.02; repair, maintenance and cleaning of such areas; operating costs; and maintenance, repair and replacement of mechanical equipment including any automatic door openers, elevators, escalators, lighting fixtures, fire sprinkler systems, security alarm systems, and all other items of equipment used in connection with Common Areas for all general operation and maintenance and repairsthe Retail Development or the central mechanical plant serving the Retail Development. In the event Landlord, resurfacingin its sole discretion, elects to furnish any utilities or painting, restriping, cleaning and sweeping; maintenance and repair of sidewalks, curbs, sprinkler systems, planting and landscaping; water, lighting services to Tenant and other utilities; maintenance and repair of any fire protection systems, lighting systems, storm drainage systems, roof patching and any other utility systems; personnel to implement such services; personal property taxes and assessments on tenants in the improvements comprising said Common Areas; and governmental imposition or surcharge imposed against Landlord or assessed against the automobile parking area or any other portion of the Common Areas; depreciation on maintenance and operating machinery and equipment (if owned) and rental paid for such machinery and equipment (if rented). In addition, Tenant shall pay a sum to Landlord for the accounting, bookkeeping and collection of the expenses in connection with said Common Areas in an amount equal to ten percent (10%) of Tenant’s pro rata share of the total of the aforementioned expenses for each calendar year. The amount payable by Tenant for any repair that exceeds $10,000 shall be pro-rated over the useful life of the repair. Tenant shall only be required to pay its pro-rata share of the cost divided by the useful life, as determined in accordance with generally accepted accounting principles, multiplied by the remaining lease termRetail Development, including the Renewal Period if Tenant has exercised its option to renew the lease. As an exampleheat, if a repair costs $20,000 ventilation and there are two years remaining on the lease term and the repair has a useful life of ten years, Tenants share would be calculated as follows: Repair cost $20,000 Useful life 10 years Remaining term 2 years $20,000/10 = $2,000 times 2 years = $4,000 Tenant’s share $4,000 times 34.3% = $1,372air-

Common Area Maintenance Expenses. (a) In addition to the Base Rent, Tenant shall also pay to Landlord as additional Rent hereunder Tenant's share of the amount of any increase in any calendar year in the total of all Common Area Maintenance Expenses incurred by Landlord in connection with the Building, over and above the Common Area Maintenance Expenses incurred by Landlord during the Base Year. Tenant's share of such increase shall be Tenant's Proportionate Share. Prior to the start of each calendar year or as soon thereafter as possible, Landlord shall furnish the Tenant with a statement showing an estimate of all of said Common Area Maintenance Expenses to be paid by Landlord for that year and the amount by which such estimate exceeds the Base Year expenses. Tenant shall pay to Landlord the said estimated excess amount according to the Tenant's Proportionate Share, in equal monthly installments, on the first day of each and every month throughout each such calendar year. Within a reasonable period of time following the end of each calendar year during the Lease Term, Landlord shall submit to Tenant a statement showing actual Common Area Maintenance Expenses incurred by Landlord during the preceding year. In the event that actual Common Area Maintenance Expenses exceed the estimated Common Area Maintenance Expenses for such year, Tenant shall pay to Landlord, as Additional Rentadditional Rent hereunder, Tenant’s Pro Rata Share 's share (as determined above) of such excess, such amount to be paid within twenty (20) days after the date of receipt of the statement of actual Common Area Maintenance Expenses. “If the actual Common Area Maintenance Expenses” shall mean all expenses of any kind or nature which Expenses are necessary, ordinary or customarily incurred with respect to less than the operation, repair and maintenance of the Building, and the lot on which the Building is situated, as determined in accordance with generally accepted accounting principles and shall include, but not be limited to, all sums expended in connection with estimated Common Areas for all general operation and maintenance and repairs, resurfacing, or painting, restriping, cleaning and sweeping; maintenance and repair of sidewalks, curbs, sprinkler systems, planting and landscaping; water, lighting and other utilities; maintenance and repair of any fire protection systems, lighting systems, storm drainage systems, roof patching and any other utility systems; personnel to implement such services; personal property taxes and assessments on the improvements comprising said Common Areas; and governmental imposition or surcharge imposed against Landlord or assessed against the automobile parking area or any other portion of the Common Areas; depreciation on maintenance and operating machinery and equipment (if owned) and rental paid Area Maintenance Expenses for such machinery year and equipment (if rented). In additionTenant is not in default under the terms of this Lease, Tenant shall pay a sum to Landlord for the accounting, bookkeeping and collection of the expenses in connection with said Common Areas in an amount equal to ten percent (10%) of Tenant’s pro rata 's share of the total of the aforementioned expenses for each calendar year. The amount payable by Tenant for any repair that exceeds $10,000 such difference shall be pro-rated over applied against the useful life installment of the repairBase Rent next falling due. Tenant shall only have ninety (90) days following receipt of said statement to contest the validity of, or verify the accuracy of said statements. Thereafter, the statements shall be required conclusively deemed correct. No rights to pay its pro-rata share of the cost divided by the useful life, as determined in accordance with generally accepted accounting principles, multiplied by the remaining lease term, including the Renewal Period contest or to verify shall be available to Tenant if Tenant is or has exercised been in default of any of its option to renew the lease. As an example, if a repair costs $20,000 and there are two years remaining on the lease term and the repair has a useful life of ten years, Tenants share would be calculated as follows: Repair cost $20,000 Useful life 10 years Remaining term 2 years $20,000/10 = $2,000 times 2 years = $4,000 Tenant’s share $4,000 times 34.3% = $1,372monetary obligations hereunder.

Common Area Maintenance Expenses. Tenant shall pay to LandlordThe total of all costs and expenses paid or incurred by Landlord in connection with the operation, as Additional Rentmaintenance, Tenant’s Pro Rata Share ownership, repair and replacement of the Common Area Maintenance Expenses. “Common Area Maintenance Expenses” shall mean all expenses of any kind or nature which are necessary, ordinary or customarily incurred with respect to the operation, repair and maintenance of the Building, and the lot on which the Building is situatedArea, as determined in accordance with generally accepted accounting principles and shall include, but not be limited to, all sums expended in connection with Common Areas for all general operation and maintenance and repairs, resurfacing, or painting, restriping, cleaning and sweeping; maintenance and repair of sidewalks, curbs, sprinkler systems, planting and landscaping; water, lighting and other utilities; maintenance and repair of any fire protection systems, lighting systems, storm drainage systems, roof patching and any other utility systems; personnel to implement such services; personal property taxes and assessments on the improvements comprising said Common Areas; and governmental imposition or surcharge imposed against Landlord or assessed against the automobile parking area or any other portion of the Common Areas; depreciation on maintenance and operating machinery and equipment (if owned) and rental paid for such machinery and equipment (if rented). In addition, Tenant shall pay a sum to Landlord for the accounting, bookkeeping and collection of the expenses in connection with said Common Areas in an amount equal to ten percent (10%) of Tenant’s pro rata share of the total of the aforementioned expenses for each calendar year. The amount payable by Tenant for any repair that exceeds $10,000 shall be pro-rated over the useful life of the repair. Tenant shall only be required to pay its pro-rata share of the cost divided by the useful life, as determined calculated in accordance with generally accepted accounting principles, multiplied consistently applied. Without limiting the generality of the foregoing and subject to the exclusions set forth below, Common Area Maintenance Expenses include all costs of and expense for: (i) resurfacing, resealing, remarking, painting, repainting, striping or restriping the Parking Area (but excluding certain parking lot repairs to the Parking Area, cross hatched on EXHIBIT A and identified as the Phase III Parking Lot Resurfacing area, to be performed pursuant to the Second Amendment); (ii) maintenance, repair and replacement of sidewalks, curbs, paving, walkways, Parking Area, Property signs, landscaping, planting and irrigation systems, trash facilities, loading and delivery areas, lighting, drainage and common utility facilities associated with Parking Area lighting, signage and irrigation of landscaping, directional or other signs, markers and bumpers; (iii) wages, salaries, benefits, payroll burden fees and charges of non-executive personnel (but including Landlord's property manager to extent the manager is utilized, in lieu of retaining independent contractors, for the supervision of the maintenance or repair of the Common Area) employed by Landlord and the remaining lease termcharges of all independent contractors retained by Landlord (to the extent on a percentage basis of time spent that such personnel and contractors are utilized by Landlord) for the maintenance or repair of the Common Area (but excluding the cost of any security services, except to the extent provided in paragraph 39); (iv) depreciation or amortization (or in lieu thereof, rental payments) on all tools, equipment and machinery used in the operation and maintenance of the Common Area; (v) premiums for Comprehensive General Liability Insurance or Commercial General Liability Insurance, casualty insurance, workers compensation insurance or other insurance on the Common Area, or any portion thereof or interest therein, and any deductibles (which deductible shall not exceed $15,000, increased annually by 3%) payable with respect to such insurance policies other than earthquake insurance for which the deductible shall not be included in Common Area Maintenance Expenses; (vi) cleaning, collection, storage and removal of trash, rubbish, dirt and debris, and sweeping and cleaning the Common Area; (vii) all personal property or real property taxes and assessments levied or assessed on the Property, or any portion thereof or interest therein, including without limitation the Renewal Period if Tenant has exercised its option to renew Real Property Taxes for the lease. As an examplePremises, if applicable under paragraph 15.A; (viii) reasonable legal, accounting and other professional services for the operation of the Common Area, including reasonable costs, fees and expenses of contesting the validity or applicability of any law, ordinance, rule, regulation or order relating to the Buildings, and of contesting, appealing or otherwise attempting to reduce any Real Property Taxes assessed against the Property; (ix) any alterations, additions or improvements required to be made to the Common Area in order to reduce Common Area Maintenance Expenses or to protect the safety of occupants of the Property (provided in the latter case that such alterations, additions or improvements are not necessitated solely as a repair costs $20,000 result of the use and there are two years remaining occupancy of the Common Area by a new tenant of the Property or as a result of new tenant improvements to any building on the lease term Property, other than in or on the Buildings, and further provided in any case that the repair has a cost of any such alterations, additions, improvements or capital improvements, together with interest at the rate of ten percent (10%) per annum, or, if applicable, the rate paid by Landlord on funds borrowed for the purpose of constructing or installing such alterations, additions or improvements, shall be amortized over the useful life of the alteration, addition, improvement or capital improvement in question and included in Common Area Maintenance Expenses for each year over which such costs are amortized and that the annual amount of such amortized costs passed through as an expense shall not exceed the cost savings realized in such year); (x) all costs and expenses incurred in performing any alterations, additions or improvements required to be made to the Common Area in order to comply with applicable laws, ordinances, rules, regulations and orders enacted after the date hereof, provided that the cost of any such alterations, additions, improvements or capital improvements, together with interest at the rate of ten yearspercent (10%) per annum, Tenants share would or, if applicable, the rate paid by Landlord on funds borrowed for the purpose of constructing or installing such alterations, additions or improvements, shall be calculated amortized over the useful life of the alteration, addition, improvement or capital improvement in question and included in Common Area Maintenance Expenses for each year over which such costs are amortized; (xi) any and all payments due and owing on behalf of the Property or any portion thereof with respect to any CC&R's to the extent such payments are in lieu of or substitution for other Common Area Maintenance Expenses; and (xii) all costs and expenses related to the adoption and maintenance of a portion of Highway 101 (Tenant's Percentage Share of which shall not exceed $720 per year, increased annually by 3%). However, notwithstanding the foregoing or anything to the contrary in this Lease, Common Area Maintenance Expenses shall not include the cost of or expenses for the following: (A) leasing commissions, attorneys' fees or other costs or expenses incurred in connection with negotiations or disputes with other tenants of the Property or attorneys' fees incurred which must be capitalized for income tax purposes; (B) depreciation of buildings in the Property; (C) payments of principal, interest, late fees, prepayment fees or other charges on any debt secured by a mortgage covering the Property, or rental payments under any ground lease or underlying lease; (D) any penalties incurred due to Landlord's violation of any governmental rule or authority (but not excluding the cost of compliance therewith, if such cost is chargeable to Tenant pursuant to this Lease); (E) items for which Landlord is reimbursed by insurance; (F) all costs associated with the operation of the business of the entity which constitutes "Landlord", as follows: Repair cost $20,000 Useful life 10 years Remaining term 2 years $20,000/10 = $2,000 times 2 years = $4,000 Tenant’s share $4,000 times 34.3% = $1,372distinguished from the costs of operations, including, but not limited to, costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be in issue), costs of selling, syndicating, financing, mortgaging, or hypothecating any of the Landlord's interest in the Property and/or Common Area, or any portion thereof, costs of any disputes between Landlord and its employees, costs of disputes of Landlord with Building management or costs paid in connection with disputes with Tenant or any other tenants; (G) all costs (including permit, license and inspection fees) incurred in renovating or otherwise improving or decorating, painting or redecorating space for other tenants in the Property; (H) the creation of any reserves for equipment or capital replacement; (I) all costs arising from monitoring, cleaning up and otherwise remediating any release of Hazardous Materials at the Premises; (J) any Real Property Taxes or costs for which Landlord is separately and directly reimbursed by Tenant or any other tenant of the Property which are assessed against the Premises or the premises leased by such other tenant(s); (K) any costs for security services; (L) any costs of repairs for damage or destruction occasioned by fires or other casualty (except the deductible amount permitted under item (v) above); (M) any costs due to replacement or failure of Landlord's computer hardware or software or other equipment used in connection with the operation of the Common Area due to so called "Year 2000" issues relating to the inability to distinguish between dates before and after January 1, 2000; and (N) all capital expenditures not described in items (ix) and (x) above.

Common Area Maintenance Expenses. Tenant shall pay to LandlordThe total of all costs and -------------------------------- expenses paid or incurred by Landlord in connection with the operation, as Additional Rentmaintenance, Tenant’s Pro Rata Share ownership, repair and replacement of the Common Area Maintenance Expenses. “Common Area Maintenance Expenses” shall mean all expenses of any kind or nature which are necessary, ordinary or customarily incurred with respect to the operation, repair and maintenance of the Building, and the lot on which the Building is situatedArea, as determined in accordance with generally accepted accounting principles and shall include, but not be limited to, all sums expended in connection with Common Areas for all general operation and maintenance and repairs, resurfacing, or painting, restriping, cleaning and sweeping; maintenance and repair of sidewalks, curbs, sprinkler systems, planting and landscaping; water, lighting and other utilities; maintenance and repair of any fire protection systems, lighting systems, storm drainage systems, roof patching and any other utility systems; personnel to implement such services; personal property taxes and assessments on the improvements comprising said Common Areas; and governmental imposition or surcharge imposed against Landlord or assessed against the automobile parking area or any other portion of the Common Areas; depreciation on maintenance and operating machinery and equipment (if owned) and rental paid for such machinery and equipment (if rented). In addition, Tenant shall pay a sum to Landlord for the accounting, bookkeeping and collection of the expenses in connection with said Common Areas in an amount equal to ten percent (10%) of Tenant’s pro rata share of the total of the aforementioned expenses for each calendar year. The amount payable by Tenant for any repair that exceeds $10,000 shall be pro-rated over the useful life of the repair. Tenant shall only be required to pay its pro-rata share of the cost divided by the useful life, as determined calculated in accordance with generally accepted accounting principles, multiplied consistently applied. Without limiting the generality of the foregoing and subject to the exclusions set forth below, Common Area Maintenance Expenses include all costs of and expense for: (i) resurfacing, resealing, remarking, painting, repainting, striping or restriping the Parking Area (but excluding certain parking lot repairs to the Parking Area designated as the Phase III Parking Lot Resurfacing area on EXHIBIT A-1 to be performed ----------- pursuant to that certain Amendment to Bay Road Lease and Xxxxxxx/Broadway Lease between Landlord and Tenant dated July 14, 1998); (ii) maintenance, repair and replacement of sidewalks, curbs, paving, walkways, Parking Area, Property signs, landscaping, planting and irrigation systems, trash facilities, loading and delivery areas, lighting, drainage and common utility facilities associated with Parking Area lighting, signage and irrigation of landscaping, directional or other signs, markers and bumpers; (iii) wages, salaries, benefits, payroll burden fees and charges of non-executive personnel (but including Landlord's property manager to extent the manager is utilized, in lieu of retaining independent contractors, for the supervision of the maintenance or repair of the Common Area) employed by Landlord and the remaining lease termcharges of all independent contractors retained by Landlord (to the extent on a percentage basis of time spent that such personnel and contractors are utilized by Landlord) for the maintenance or repair of the Property, but excluding the cost of any security services except to the extent provided in paragraph 41); (iv) depreciation or amortization (or in lieu thereof, rental payments) on all tools, equipment and machinery used in the operation and maintenance of the Common Area; (v) premiums for Comprehensive General Liability Insurance or Commercial General Liability Insurance, casualty insurance, workers compensation insurance or other insurance on the Common Area, or any portion thereof or interest therein, and any deductibles (which deductible shall not exceed $15,000, increased annually by 3%) payable with respect to such insurance policies other than earthquake insurance for which the deductible shall not be included in Common Area Maintenance Expenses; (vi) cleaning, collection, storage and removal of trash, rubbish, dirt and debris, and sweeping and cleaning the Common Area; (vii) all personal property or real property taxes and assessments levied or assessed on the Property, or any portion thereof or interest therein, including without limitation the Renewal Period if Tenant has exercised its option to renew Real Property Taxes for the lease. As an examplePremises, if applicable under paragraph 15.A; (viii) reasonable legal, accounting and other professional services for the operation of the Common Area, including reasonable costs, fees and expenses of contesting the validity or applicability of any law, ordinance, rule, regulation or order relating to the Building, and of contesting, appealing or otherwise attempting to reduce any Real Property Taxes assessed against the Property; (ix) any alterations, additions or improvements required to be made to the Common Area in order to reduce Common Area Maintenance Expenses or to protect the safety of occupants of the Property (provided in the latter case that such alterations, additions or improvements are not necessitated solely as a repair costs $20,000 result of the use and there are two years remaining occupancy of the Common Area by a new tenant of the Property or as a result of new tenant improvements to any building on the lease term Property, other than in or on the Building, and further provided in any case that the repair has a cost of any such alterations, additions, improvements or capital improvements, together with interest at the rate of ten percent (10%) per annum, if applicable, the rate paid by Landlord on funds borrowed for the purpose of constructing or installing such alterations, shall be amortized over the useful life of the alteration, addition, improvement or capital improvement in question and included in Common Area Maintenance Expenses for each year over which such costs are amortized and that the annual amount of such amortized costs passed through as an expense shall not exceed the cost savings realized in such year); (x) all costs and expenses incurred in performing any alterations, additions or improvements required to be made to the Common Area in order to comply with applicable laws, ordinances, rules, regulations and orders enacted after the date hereof, provided that the cost of any such alterations, additions, improvements or capital improvements, together with interest at the rate of ten yearspercent (10%) per annum, Tenants share would or, if applicable, the rate paid by Landlord on funds borrowed for the purpose of constructing or installing such alterations, shall be calculated amortized over the useful life of the alteration, addition, improvement or capital improvement in question and included in Common Area Maintenance Expenses for each year over which such costs are amortized; (xi) any and all payments due and owing on behalf of the Property or any portion thereof with respect to any CC&R's to the extent such payments are in lieu of or substitution for other Common Area Maintenance Expenses, and (xii) all costs and expenses related to the adoption and maintenance of a portion of Highway 101 (Tenant's Percentage Share of which shall not exceed $430 per year, increased annually by 3%). However, notwithstanding the foregoing or anything to the contrary in this Lease, Common Area Maintenance Expenses shall not include the cost of or expenses for the following: (A) leasing commissions, attorneys' fees or other costs or expenses incurred in connection with negotiations or disputes with other tenants of the Property or attorneys' fees incurred which must be capitalized for income tax purposes; (B) depreciation of buildings in the Property; (C) payments of principal, interest, late fees, prepayment fees or other charges on any debt secured by a mortgage covering the Property, or rental payments under any ground lease or underlying lease; (D) any penalties incurred due to Landlord's violation of any governmental rule or authority (but not excluding the cost of compliance therewith, if such cost is chargeable to Tenant pursuant to this Lease); (E) items for which Landlord is reimbursed by insurance; (F) all costs associated with the operation of the business of the entity which constitutes "Landlord", as follows: Repair cost $20,000 Useful life 10 years Remaining term 2 years $20,000/10 = $2,000 times 2 years = $4,000 Tenant’s share $4,000 times 34.3% = $1,372distinguished from the costs of operations, including, but not limited to, costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be in issue), costs of selling, syndicating, financing, mortgaging, or hypothecating any of the Landlord's interest in the Property and/or Common Area, or any portion thereof, costs of any disputes between Landlord and its employees, costs of disputes of Landlord with Building management or costs paid in connection with disputes with Tenant or any other tenants; (G) all costs (including permit, license and inspection fees) incurred in renovating or otherwise improving or decorating, painting or redecorating space for other tenants in the Property; (H) the creation of any reserves for equipment or capital replacement; (I) all costs arising from monitoring, cleaning up and otherwise remediating any release of Hazardous Materials at the Premises; (J) any Real Property Taxes or costs for which Landlord is separately and directly reimbursed by Tenant or any other tenant of the Property which are assessed against the Premises or the premises leased by such other tenant(s); (K) any costs for security services; (L) any costs of repairs for damage or destruction occasioned by fires or other casualty (except the deductible amount permitted under item (v) above); (M) any costs due to replacement or failure of Landlord's computer hardware or software or other equipment used in connection with the operation of the Common Area due to so called "Year 2000" issues relating to the inability to distinguish between dates before and after January 1, 2000; and (N) all capital expenditures not described in items (ix) and (x) above.

Common Area Maintenance Expenses. Tenant shall pay to Landlord, as Additional Rent, Tenant’s Pro Rata Share Common area maintenance expenses (“CAM Expenses”) are all costs and expenses associated with the operation and maintenance of the Common Area Maintenance Expenses. “Common Area Maintenance Expenses” shall mean all expenses Areas (as defined herein) of any kind or nature which are necessary, ordinary or customarily incurred with respect to the operation, Building and the repair and maintenance of the Buildingheating, ventilation, air conditioning, plumbing, electrical, utility and safety systems (to the lot on which the Building is situatedextent not performed by Tenant), as determined in accordance with generally accepted accounting principles and shall includeincluding, but not be limited to, all sums expended in connection with Common Areas for all general operation and maintenance and repairs, resurfacing, or painting, restriping, cleaning and sweeping; maintenance and repair of sidewalks, curbs, sprinkler systems, planting the following: gardening and landscaping; watersnow removal; utility, lighting water and other utilitiessewage services for the common areas; maintenance and repair of any fire protection systems, lighting systems, storm drainage systems, roof patching and any signs (other utility systemsthan tenants’ signs); personnel to implement such servicesworker’s compensation insurance; personal property taxes and assessments on taxes; reasonable rentals or lease payments paid by Landlord for rented or leased personal property used in the improvements comprising said Common Areas; and governmental imposition operation or surcharge imposed against Landlord or assessed against the automobile parking area or any other portion maintenance of the Common Areas; depreciation on fees for required licenses and permits routine maintenance and operating machinery repair of roof membrane, flashings, gutters, downspouts, roof drains, maintenance of paving for the lot utilized by Tenant, (including sweeping, striping, repairing, resurfacing and equipment repaving); general maintenance; painting; lighting; cleaning; refuse removal; security and similar items; reasonable reserves for roof replacement (if owned) not to exceed 2% of all other CAM Expenses), exterior painting; and rental paid for such machinery and equipment a property management fee (if rentednot to exceed 15% of CAM Expenses before the property management fee). In addition, Tenant shall pay a sum Landlord may cause any or all of such services to Landlord for be provided by third parties and the accounting, bookkeeping and collection cost of the expenses in connection with said Common Areas in an amount equal to ten percent (10%) of Tenant’s pro rata share of the total of the aforementioned expenses for each calendar year. The amount payable by Tenant for any repair that exceeds $10,000 such services shall be pro-rated over included in CAM Expenses. CAM Expenses shall not include: (a) the cost of capital repairs and replacements, provided, however, that the annual depreciation (based on the useful life of the repair. Tenant shall only be required to pay its pro-rata share of the cost divided by the useful life, as determined in accordance with item under generally accepted accounting principles) of any such capital repair or replacement to the Common Areas or the heating, multiplied by ventilating, air-conditioning, plumbing, electrical, utility and safety systems serving the remaining lease termProperty, including shall be included in the Renewal Period if Tenant has exercised its option to renew CAM Expenses each year during the lease. As an exampleTerm; and (b) the cost of capital improvements, if a repair costs $20,000 and there are two years remaining provided, however, that the annual depreciation (based on the lease term and the repair has a useful life of ten yearsthe item under generally accepted accounting principles) of any capital improvement undertaken to reduce CAM Expenses or made in order to comply with legal requirements shall be included in CAM Expenses each year during the Term. As used in this Lease, Tenants share would be calculated as follows: Repair cost $20,000 Useful life 10 years Remaining term 2 years $20,000/10 = $2,000 times 2 years = $4,000 Tenant’s share $4,000 times 34.3% = $1,372“Common Areas” shall mean all areas within the Building which are available for the common use of tenants of the Building and which are not leased or held for the exclusive use of Tenant or other tenants, including, but not limited to, parking areas, driveways, sidewalks, access roads, landscaping, and planted areas.