Common use of Definition of Operating Expenses Clause in Contracts

Definition of Operating Expenses. (a) Subject to the exclusions and provisions hereinafter contained, the term "OPERATING EXPENSES" shall mean the total costs and expenses incurred by or allocable to Landlord for management, operation and maintenance of the Improvements, the Property and the Center, including, without limitation, costs and expenses of (i) insurance (including, but not limited to, earthquake insurance and environmental insurance), property management, landscaping, and the operation, repair and maintenance of buildings and Common Areas; (ii) all utilities and services; (iii) real and personal property taxes and assessments or substitutes therefor levied or assessed against the Center or any part thereof, including (but not limited to) any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect; (iv) supplies, equipment, utilities and tools used in management, operation and maintenance of the Center; (v) capital improvements to the Property, the Improvements or the Center, amortized over a reasonable period, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute or (bb) which are required by law, ordinance, regulation or order of any governmental authority or (cc) of which Tenant has use or which benefit Tenant; and (vi) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Lease) allocable to or paid by Landlord, as owner of the Center or Improvements, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of any declarations of covenants, conditions and restrictions now or hereafter affecting the Center or any other property over which Tenant has non-exclusive usage rights as contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any costs attributable to the work for which Landlord is required to pay under Article 5 or the Workletter, nor any costs attributable to the initial construction of buildings or Common Area improvements in the Center, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's Operating Cost Share under Section 7.1 for the applicable period. The distinction between items of ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principles, as determined in good faith by Landlord's accountants.

Definition of Operating Expenses. (a) Subject to the exclusions and provisions hereinafter contained, the term "OPERATING EXPENSES" “Operating Expenses” shall mean the total costs and expenses incurred by or allocable to Landlord for management, operation and maintenance of the Improvements, the Property Center, the buildings in the Center, and the Centerreal property on which the Center is located (or, in the case of items that are determined and allocated on a stand-alone basis as described in Section 7.1, that portion of the Center that consists of the separate legal parcel or parcels containing the buildings in which the Premises are located), including, without limitation, costs and expenses of (i) insurance (including, but not limited to, including earthquake insurance and environmental insurance), property management, landscaping, and the operation, repair and maintenance of buildings and Common Areas; (ii) all utilities and services; (iii) real and personal property taxes and assessments or substitutes therefor levied or assessed against the Center or any part thereof, including (but not limited to) any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect; (iv) supplies, equipment, utilities and tools used in management, operation and maintenance of the Center; (v) expenditures for capital improvements to the PropertyCenter, the Improvements or the buildings in the Center, amortized over a reasonable periodperiod determined in accordance with generally accepted accounting principles applied on a consistent basis, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute or (bb) which are required by law, ordinance, regulation or order of any governmental authority or (cc) of which Tenant has use or which benefit Tenant; and (vi) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Leasesurcharges) allocable to or paid by Landlord, as owner of the Center Center, the buildings therein or the Improvements, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of any declarations of covenants, conditions and restrictions now or hereafter affecting the Center or any other property over which Tenant has non-exclusive usage use rights as contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any costs attributable to the work for which Landlord is required to pay under Article 5 or the WorkletterLandlord’s Work, nor any costs attributable to the initial construction of the buildings in the Center or of Common Area improvements in the Center, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's Operating Cost Share under Section 7.1 for the applicable period. The distinction between items of ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principles, as determined in good faith by Landlord's ’s accountants.

Definition of Operating Expenses. (a) Subject to the exclusions and provisions hereinafter containedcontained and the allocation principles set forth in Section 5.1, the term "OPERATING EXPENSES" “Operating Expenses” shall mean the total costs and expenses incurred by or allocable to Landlord for management, operation and maintenance of the Improvements, the Property Building and the Center, including, without limitation, costs and expenses of (i) insurance (includingwhich may include, but not limited toat Landlord’s option, earthquake environmental and seismic insurance and environmental insuranceas part of or in addition to any casualty or property insurance policy), property management, landscaping, and the operation, repair and maintenance of buildings (including, but not limited to, Building Common Areas) and Center Common Areas; (ii) all utilities and services; (iii) real and personal property taxes and assessments or substitutes therefor levied or assessed against the Center or any part thereof, including (but not limited to) any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on gross rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect, and also including (but not limited to) all costs and expenses incurred in connection with any appeals or other proceedings challenging the amount of any real or personal property taxes or assessments against the Center or any part thereof; (iv) supplies, equipment, utilities and tools used in management, operation and maintenance of the Center; (v) capital improvements to the Property, the Improvements Center or the Centerimprovements therein, amortized over a reasonable period, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute contribute, or (bb) which are required by law, ordinance, regulation or order of any governmental authority (excluding, however, any such expenses incurred by Landlord in complying with Landlord’s obligations under Section 2.3), or (cc) of which Tenant has use or which benefit Tenant; and (vi) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Lease) allocable to or paid by Landlord, as owner of the Center or ImprovementsCenter, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of any declarations of covenants, conditions and restrictions now or hereafter affecting the Center or any other property over which Tenant has non-exclusive usage rights as contemplated in Section 1.1(b1.1 (d) hereof. Operating Expenses shall not include any costs attributable to the work for which Landlord is required to pay under Article 5 or the Workletter, nor any costs attributable to the initial construction of buildings or Common Area improvements in the Center, nor any costs attributable to Landlord’s Work under Section 2.3 above, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's ’s Operating Cost Share under Section 7.1 5.1 for the applicable period. The distinction between items of ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principlesbasis, as determined in good faith by Landlord's ’s accountants.

Definition of Operating Expenses. (a) Subject to the exclusions and provisions hereinafter contained, the term "OPERATING EXPENSESOperating Expenses" shall mean the total costs and expenses expenses, capital and ordinary, actually and reasonably incurred by or allocable to Landlord for management, operation and maintenance of the Improvements, the Property Improvements and the CenterProperty, including, including without limitation, costs and expenses of (i) operation, repair and maintenance of the roof, exterior walls and other structural portions and operating systems (including HVAC) of the Initial Building, provided that any portion of such that is of a "capital" nature pursuant to the terms hereof, shall be amortized as provided herein; (ii) liability, casualty, rent loss or other insurance (including, but not limited to, earthquake insurance and environmental insurance if Landlord elects to carry such insurance), property managementwhich it is Landlord's present intention to do) carried by Landlord with respect to the Property, landscaping, and the operation, repair and maintenance of buildings and Common Areas; (iiImprovements or any portion thereof subject to Paragraph 14.1(b) all utilities and servicesbelow; (iii) real and personal property taxes and assessments or substitutes therefor levied or assessed against the Center or any part thereof, including (but not limited to) any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect; (iv) supplies, equipment, utilities and tools used in managementoperation, operation repair and maintenance of the Centerroof (structural portions only), exterior walls and other structural portions of the Initial Building; (viv) capital improvements and repairs to the Property, the Improvements Property or the CenterImprovements, amortized over a reasonable periodtheir respective useful lives (including, but not limited to those, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute (but not in excess of the cost savings realized) or (bb) which are required by law, ordinance, regulation or order of any governmental authority or enacted after the date of this Lease); (ccv) the Management Fee; (vi) maintenance and repair of which Tenant has use or which benefit Tenantthe parking areas, driveways and paved areas outside the Initial Building; (vii) any obligations of Landlord pursuant to Paragraph 12.1 hereof; and (viviii) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Leasesurcharges) allocable to or paid by Landlord, as owner of the Center Property or Improvements, pursuant to the Existing CC&Rs or to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority authority, including without limitation any fees or pursuant to assessments imposed by the terms of any declarations of covenants, conditions and restrictions now or hereafter affecting the Torrey Pines Science Center or any other property over which Tenant has non-exclusive usage rights as contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any costs attributable to the work for which Landlord is required to pay under Article 5 or the Workletter, nor any costs attributable to the initial construction of buildings or Common Area improvements in the Center, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's Operating Cost Share under Section 7.1 for the applicable periodAssociation. The distinction between items of betwexx xxxxx xx ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principles, as determined in good faith by Landlord's accountants. Capital expenses authorized to be included as part of Operating Expenses shall be amortized over the actual useful life of such capital items. Landlord shall seek to have all contracts in connection with Operating Expenses be at reasonable prices, seeking competitive bids when Landlord deems same appropriate; all of the foregoing is subject, however, to Landlord's use of contractors, subcontractors and labor which meets the requirements of Paragraph 2 of Exhibit K annexed hereto.

Definition of Operating Expenses. (a) Subject to the exclusions and -------------------------------- provisions hereinafter contained, the term "OPERATING EXPENSESOperating Expenses" shall mean the total costs and expenses incurred by or allocable to Landlord for management, operation and maintenance of the Improvements, Building and the Property (and the Centerany applicable adjacent property owned by Landlord as described above), including, without limitation, costs and expenses of (i) insurance (including, but not limited to, earthquake insurance and environmental insurance), property management, landscapingbuilding maintenance, landscaping and the operation, repair and maintenance of buildings and Common Areascommon area maintenance; (ii) all utilities and services; (iii) real and personal property taxes and assessments or substitutes therefor levied or assessed against the Center or any part thereof, including (but not limited to) any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect, but excluding (aa) fees, exactions and taxes imposed as a condition to the issuance of any entitlements or building permits related to the Property, and (bb) gift taxes, inheritance taxes, transfer taxes and net income taxes of Landlord; (iv) supplies, equipment, utilities and tools used in management, operation and maintenance of the Center; maintenance: (v) capital improvements to the Property, the Improvements Property or the Centerbuildings and other improvements thereon, amortized over a the reasonable perioduseful life of the applicable improvement, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute (provided that the amortizable costs for this category of -------- improvement shall be limited to the amount of the reasonably estimated savings to be produced thereby), or (bb) which are required by any law, ordinance, regulation or order of any governmental authority that becomes applicable to the Property after the Commencement Date, or (cc) of which Tenant has use or which benefit TenantTenant (provided that amortizable improvements under this category shall be limited to those which are approved in writing by Tenant or which are merely a reasonably necessary repair or replacement of an existing improvement with one of like kind and quality, in which event no such approval by Tenant shall be required); and (vi) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Lease) allocable to or paid by Landlord, as owner of the Center or ImprovementsBuilding, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of any declarations of covenants, conditions and restrictions now or hereafter affecting the Center Property (or any other applicable adjacent property over which Tenant has non-exclusive usage rights owned by Landlord as contemplated in Section 1.1(b) hereofdescribed above). Operating Expenses Capital improvements shall not include any costs attributable to increasing the size of or otherwise expanding the Building or the cost of the work for which Landlord is required to pay under Article 5 or the Workletter, nor any costs attributable to the initial construction of buildings or Common Area improvements in the Center, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's Operating Cost Share under Section 7.1 for the applicable period2.4. The distinction between items of ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principlesbasis. Notwithstanding any other provisions of this Section 5.2, as determined in good faith by Landlord's accountants.Operating Expenses shall not include any of the following:

Definition of Operating Expenses. (a) Subject to the exclusions and provisions hereinafter containedcontained and the allocation principles set forth in Section 5.1, the term "OPERATING EXPENSES" “Operating Expenses” shall mean the total costs and expenses incurred by or allocable to Landlord for management, operation and maintenance of the Improvements, the Property Building and the Center (but with respect to the Center, only to the extent such costs and expenses are incurred in connection with the Common Areas thereof, and excluding any costs incurred specifically in connection with any other buildings in the Center), including, without limitation, costs and expenses of (i) insurance (includingwhich may include, but not limited toat Landlord’s option, earthquake environmental and seismic insurance and environmental insuranceas part of or in addition to any casualty or property insurance policy), property management, landscaping, and the operation, repair and maintenance of buildings the Building and Common Areas; (ii) all utilities and services; (iii) real and personal property taxes and assessments or substitutes therefor levied or assessed against the Center or any part thereof, including (but not limited to) any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on gross rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect; (iv) supplies, equipment, utilities and tools used in management, operation and maintenance of the Center; (v) capital improvements to the Property, the Improvements Center or the Centerimprovements therein, amortized over a reasonable periodthe useful life of such capital improvements as determined reasonably and in good faith by Landlord or its accountants on the basis of generally accepted accounting principles or tax accounting principles, consistently applied, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute or (bb) which are required by law, ordinance, regulation or order of any governmental authority (excluding, however, any such expenses incurred by Landlord in complying with Landlord’s obligations under Section 2.3) or (cc) of which Tenant has are for the use or benefit of Tenant or are generally for the use and benefit of tenants and occupants of the Building or Center and which benefit Tenantin either such event are reasonably consistent with the nature and quality of the Center as a first-class office and research and development campus; and (vi) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Lease) allocable to or paid by Landlord, as owner of the Center or ImprovementsCenter, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of the Declaration (as hereinafter defined) or of any other declarations of covenants, conditions and restrictions now or hereafter affecting the Center or any other property over which Tenant has non-exclusive usage rights as contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any costs attributable to the work for which Landlord is required to pay under Article 5 or the Workletter, nor any costs attributable to the initial construction of buildings or Common Area improvements in the Center, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's ’s Operating Cost Share under Section 7.1 5.1 for the applicable period. The distinction between items of ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principles, as determined reasonably and in good faith by Landlord's ’s accountants.

Definition of Operating Expenses. As used in this Lease, -------------------------------- "Operating Expenses" shall consist of all direct costs incurred by Landlord during the Term for the operation, management, maintenance and repair (a) Subject to the exclusions and provisions hereinafter containedextent that Landlord has the obligation under this Lease to maintain or repair such) of the Building, the term Parking Structure, the Outside Areas, and other portions of the Premises, including the following costs by way of illustration, but not limitation: the percentage of charges assessed against the Premises pursuant to any covenants, conditions and restrictions, reciprocal easement agreements or similar restrictions and agreement now or hereafter affecting the Premises; Real Property Taxes (as defined below) and any taxes and assessments hereafter imposed in lieu thereof; rent taxes, gross receipt taxes (whether assessed against Landlord or assessed against Tenant and paid by Landlord, or both) and water and sewer charges; accounting, legal and other consulting fees; any transportation or traffic fee, assessments, tax, tariff, charge, or other payment imposed on Landlord by any governmental authority having jurisdiction relating to the Premises, or imposed by Landlord in connection with any transportation or traffic plan or program relating to the Premises as mandated by any governmental authority having jurisdiction; premiums for commercial liability insurance covering the Premises; premiums for "OPERATING EXPENSESSpecial Form" or similar property insurance (and, at Landlord's option, flood and earthquake insurance) on the Building, the Parking Structure and other improvements within the Premises; premiums for insurance against loss of rents for a period of twelve (12) months from the date of the loss; premiums for any other insurance Landlord deems reasonably necessary; deductibles paid under any insurance policies maintained by Landlord; security costs; labor costs; costs of utilities and utilities surcharges; costs levied, assessed, or imposed by, or at the direction of, or resulting from statutes or regulations or interpretations thereof, promulgated by any federal, state, regional, municipal or local government authority in connection with the use or occupancy of the Premises; the cost (amortized over such reasonable period as Landlord shall mean determine together with interest at the total maximum rate allowed by law on the unamortized balance) of any capital improvements, repairs or replacements made to the Building, the Parking Structure, the Outside Areas or other improvements within the Premises by Landlord (to the extent that Landlord has the obligation under this Lease to make such improvements, repairs or replacements) or replacement of any equipment in the Building, Parking Structure or Outside Areas (to the extent that Landlord has the obligation under this Lease to replace such equipment) for any reason whatsoever, including, without limitation, capital improvements, repairs or replacements made to the Building, the Parking Structure the Outside Areas or other improvements within the Premises (A) needed to operate the same at the same quality levels as prior to replacement, (B) required by revisions to or governmental interpretations of any applicable building codes or other applicable laws, orders, regulations or ordinances, or (C) made by Landlord to reduce Operating Expenses; costs incurred in the management of the Premises [including supplies, wages and expenses incurred by or allocable to Landlord for salaries of employees used in the management, operation and maintenance of the ImprovementsPremises, payroll expenses and payroll taxes and similar governmental charges with respect thereto, and an annual property management fee in an amount equal to no more than three percent (3%) of the total Monthly Base Rent payable by Tenant under this Lease for the Expense Year (hereafter defined in Subparagraph 6(f)) in question]; waste disposal costs; costs of snow and ice removal; costs of supplies, materials, equipment and tools (including rental costs incurred in the repair and maintenance of the Building, the Property and Parking Structure, the Center, including, without limitation, Outside Areas or other improvements within the Premises); costs and expenses of gardening and landscaping; maintenance of signs (i) insurance (including, but not limited to, earthquake insurance and environmental insuranceother than signs of Tenant), property management, landscaping, and the operation; maintenance, repair and maintenance replacement of buildings asphalt paving, bumpers, striping, light bulbs, light standards, guard and Common Areasdirectional signs and lighting systems, perimeter walls, retaining walls, sidewalks, planters, landscaping and sprinkling in planting areas; (ii) all utilities and services; (iii) real and personal property taxes and assessments levied on or substitutes therefor levied or assessed against the Center or any part thereof, including (but not limited to) any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time attributable to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect; (iv) supplies, equipment, utilities and tools personal property used in management, operation and maintenance of connection with the Center; (v) capital improvements to the Property, the Improvements or the Center, amortized over a reasonable period, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute or (bb) which are required by law, ordinance, regulation or order of any governmental authority or (cc) of which Tenant has use or which benefit Tenant; and (vi) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Lease) allocable to or paid by Landlord, as owner of the Center or Improvements, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of any declarations of covenants, conditions and restrictions now or hereafter affecting the Center or any other property over which Tenant has non-exclusive usage rights as contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any costs attributable to the work for which Landlord is required to pay under Article 5 or the Workletter, nor any costs attributable to the initial construction of buildings or Common Area improvements in the Center, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's Operating Cost Share under Section 7.1 for the applicable period. The distinction between items of ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principles, as determined in good faith by Landlord's accountantsPremises.

Definition of Operating Expenses. (a) Subject to the exclusions and provisions hereinafter contained, the term "OPERATING EXPENSESOperating Expenses" shall mean the total costs and expenses incurred by or allocable to Landlord for management, operation and maintenance of the Improvements, the Property Building and the CenterProperty, including, without limitation, costs and expenses of (i) insurance (including, but not limited to, earthquake insurance and environmental insurancethe deductible portion of any insured loss), property management, landscaping, and the building operation, repair repairs and maintenance (including, but not limited to, Building office rent or rental value for a Building office of buildings no more than 600 square feet at market rental rates), landscaping and Common Areascommon area operation, repairs and maintenance; (ii) all utilities and services (including, but not limited to, security services, trash disposal, elevator maintenance and repair, janitorial services, sprinkler maintenance and repair, and establishment and maintenance of a Building directory), other than utilities and services that are directly metered or charged to the premises; (iii) real and personal property taxes and assessments or substitutes therefor levied or assessed against the Center or any part thereoftherefor, including (but not limited to) any possessory public interest, use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect; (iv) supplies, equipment, utilities and tools used in management, operation Operation and maintenance of the CenterProperty; (v) capital improvements to the Property, the Improvements Property or the CenterBuilding, amortized over a reasonable period, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute or (bbb) which are required by law, ordinance, regulation or order of any governmental authority or (cc) of which Tenant tenant has use or which benefit Tenant; and (vi) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Leasesurcharges) allocable to or paid by Landlord, as owner of the Center Property or ImprovementsBuilding, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of any declarations of covenants, conditions and restrictions now or hereafter affecting the Center Property; and (vii) any cost or any other property over which Tenant has non-exclusive usage rights as contemplated expenses listed in clauses (i) through (vi) of this Section 1.1(b) hereof. 5,3 that are allocable to the driveway opening onto Los Angeles Avenue to the east of the Building and the driveway opening onto Erringer Road to the south of the Building Operating Expenses shall not include any costs attributable to increasing the size of or otherwise expanding the Building or the cost of the work for which Landlord is required to pay under Article 5 Section 2.4 or the Workletter, nor any costs attributable to the initial construction of buildings or Common Area improvements in the Center, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's Operating Cost Share under Section 7.1 for the applicable period. Exhibit C. The distinction between items of ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principles, as determined in good faith by Landlord's accountantsbasis.

Definition of Operating Expenses. (a) Subject to the exclusions and provisions hereinafter contained, the term "OPERATING EXPENSESOperating Expenses" shall mean the total costs and expenses incurred by or allocable to Landlord for management, operation and maintenance of the Improvements, the Property and --------------------------- *CONFIDENTIAL TREATMENT REQUESTED 21 the Center, including, without limitation, costs and expenses of (i) insurance (includingwhich may include, but not limited toat Landlord's option, earthquake insurance and environmental insuranceas part of or in addition to any casualty or property insurance policy), property management, landscaping, and the operation, repair and maintenance of buildings and Common Areas; (ii) all utilities and services; (iii) real and personal property taxes and assessments or substitutes therefor levied or assessed against the Center or any part thereof, including (but not limited to) any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect; (iv) supplies, equipment, utilities and tools used in management, operation and maintenance of the Center; (v) capital improvements to the Property, the Improvements or the Center, amortized over a reasonable period, (aa) which reduce or will cause future reduction of other items of Operating Expenses for which Tenant is otherwise required to contribute or (bb) which are required by law, ordinance, regulation or order of any governmental authority or (cc) of which Tenant has use or which benefit Tenant; and (vi) any other costs (including, but not limited to, any parking or utilities fees or surcharges not otherwise specifically addressed elsewhere in this Leasesurcharges) allocable to or paid by Landlord, as owner of the Center or Improvements, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of any declarations of covenants, conditions and restrictions now or hereafter affecting the Center or any other property over which Tenant has non-exclusive usage rights as contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any costs attributable to the work for which Landlord is required to pay under Article 5 or the WorkletterExhibit C, nor any costs attributable to the initial construction of buildings or Common Area improvements in the Center, nor any costs attributable to buildings the square footage of which is not taken into account in determining Tenant's Operating Cost Share under Section 7.1 for the applicable period. The distinction between items of ordinary operating maintenance and repair and items of a capital nature shall be made in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with tax accounting principles, as determined in good faith by LandlordXxxxxxxx's accountants.