Exclusions to Operating Expenses. Notwithstanding the provisions of Section 4.2.7.1 above, for purposes of this Lease, Operating Expenses shall not, however, include: (i) costs, including marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any Common Areas or parking facilities); (ii) except as set forth in Sections 4.2.7.1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment; (iii) costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant's carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company; (iv) any bad debt loss, rent loss, or reserves for bad debts or rent loss; (v) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's general corporate overhead and general and administrative expenses; (vi) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager; (vii) amounts paid as ground rental for the Project by the Landlord; (viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis; (ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense; (x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project; (xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement; (xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art; (xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof; (xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease; (xv) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project; (xvi) costs arising from the negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services; (xvii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; (xviii) costs arising from Landlord's charitable or political contributions; (xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents; (xx) the cost of any magazine, newspaper, trade or other subscriptions; (xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis; (xxii) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date; (xxiii) costs relating to categories of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categories; and (xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvements.
Appears in 1 contract
Samples: Office Lease (Quality Systems Inc)
Exclusions to Operating Expenses. Notwithstanding the provisions of In addition to any exclusions to Operating Expenses set forth in Section 4.2.7.1 4.2.4 above, for purposes of this Lease, the following shall also not be included in Operating Expenses shall not, however, include:
Expenses: (i) costs, including marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the ProjectBuilding, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or Building; (ii) rental concessions granted to specific tenants and expenses incurred in renovating or otherwise improving, improving or decorating, painting painting, or redecorating vacant space for tenants or specific tenants, other occupants than ordinary repairs and maintenance provided to all tenants; (iii) depreciation and other "non-cash" items; (iv) costs, fines, interest and penalties incurred due to the late payment of the Project Taxes; (excluding, however, such costs relating to any Common Areas or parking facilities);
(iiv) except as set forth in Sections 4.2.7.1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
; (iiivi) costs for which the Landlord is actually reimbursed (x) by any tenant or occupant of the Project Building, or (y) by insurance by its carrier or any tenant's carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
; (ivvii) any bad debt loss, rent loss, or other reserves for bad debts of any kind or rent loss;
nature; (vviii) management fees in excess of three percent (3%) of the annual gross revenues of the leases in the Building, (ix) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership partnership, accounting and legal mattersmatters (excluding accounting and legal matters related to the Building), costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue)mortgagee, costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the ProjectBuilding, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project Building management, or between Landlord and other tenants or occupants, and Landlord's general corporate overhead and general and administrative expenses;
; (vix) [intentionally deleted] (xi) the wages and benefits cost of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project Building provided by Landlord or any Landlord Affiliate (as defined below) to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
basis in the San Francisco area (ixas used herein, a "Landlord Affiliate" shall mean an entity that (i) controls, is controlled by or is under common control with, Landlord, or (ii) acquires all or substantially all of the business and assets of Landlord or a division thereof or results from a merger with Landlord or such a division; and a party shall be deemed to "control" another party for purposes of the aforesaid definition only if the first party owns more than fifty percent (50%) of the stock or other beneficial interests of the second party); (xii) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
; (x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xiixiii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains paintings or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
; (xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
; (xv) rent for any office space occupied by Project Building management personnel to the extent (x) the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the BuildingBuildings, with adjustment where appropriate for the size of the applicable project;
Building, (y) the size of such office exceeds 1,500 useable square feet, or (z) the base rent for such office exceeds the then base rental rate for the Premises; (xvi) costs arising from the uninsured gross negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;
Landlord's Agents; (xvii) costs (A) incurred to comply with laws relating to arising from the removal presence of Hazardous Material (as defined at Section 23.6 below) which was Materials in existence in or about the Building or on that were present at the Project Building prior to the Lease Commencement DateDate or costs arising from the use, and was disposal or release of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, Materials by other tenants in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect theretoBuilding; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
; (xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
; (xx) the cost of any magazine, newspaper, trade or other subscriptions;
; (xxi) any amount paid to Landlord or to subsidiaries or affiliates of the costs incurred by Landlord for services in the Project repair of damage to the Building, to the extent that Landlord is (x) reimbursed in insurance proceeds or would have been reimbursed had Landlord obtained the same exceeds insurance policies that Landlord is required to carry pursuant to this Lease, or (y) reimbursed by warranties that Landlord has obtained in connection with the cost construction of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
the Building; (xxii) costs arising from Landlord's failure to comply incurred in connection with any applicable governmental laws the sale, financing or regulations in existence at the time refinancing of the Lease Commencement Date;
Building; (xxiii) costs relating any penalties or damages that Landlord pays to categories of expenses for Tenant under this Lease or to other tenants in the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categoriesBuilding under their respective leases; and
(xxiv) any entertainment expenses Landlord's costs of electricity and travel expenses of Landlord, its employees, agents, partners other services sold or provided to tenants in the Building and affiliates. If for which Landlord is not furnishing entitled to be reimbursed by such tenants as a separate additional charge or rental over and above the base rental or additional base rental payable under the lease with such tenant; (xxv) all items (including repairs) and services for which Tenant or other tenants pay directly to third parties or for which Tenant or other tenants reimburse Landlord (other than through Operating Expenses); (xxvi) advertising and promotional expenditures; (xxvii) attorneys' fees, costs and disbursements and other expenses incurred in connection with negotiations or disputes with tenants or other occupants of the Building or with prospective tenants (other than attorneys' fees, costs and disbursements and other expenses incurred by Landlord in seeking to enforce Building rules and regulations); (xxviii) reserves, including reserves for capital items, bad debts, or rental losses; and (xxix) any particular work other expense or service (the cost of charge which, if performed by Landlordin accordance with general industry practice with respect to the operation of a first-class office building, would not be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by construed as an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvementsoperating expense.
Appears in 1 contract
Samples: Lease Agreement (Redenvelope Inc)
Exclusions to Operating Expenses. Notwithstanding the provisions of Section 4.2.7.1 above, for purposes of this Lease, Operating Expenses shall not, however, include:: 00 XXXXXXXXX XXXXXX XXXXXXXX III [Quality Systems, Inc.]
(i) costs, including marketing costs, legal fees, space planners' ’ fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any Common Areas or parking facilities);
(ii) except as set forth in Sections 4.2.7.1 4.2.7. 1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(iii) costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant's ’s carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
(iv) any bad debt loss, rent loss, or reserves for bad debts or rent loss;
(v) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc are distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's ’s interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's ’s general corporate overhead and general and administrative expenses;
(vi) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or 12 LAKESHORE TOWERS BUILDING III [Quality Systems, Inc.] similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. “Management Fee Cap"”) of Landlord's ’s gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(xv) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;
(xvi) costs arising from the negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;
(xvii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) except for immaterial amounts completed in connection with routine maintenance and repairs; which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect theretothereto except for immaterial amounts completed in connection with routine maintenance and repairs;
(xviii) costs arising from Landlord's ’s charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost of any magazine, newspaper, trade or other subscriptions;
(xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;; 00 XXXXXXXXX XXXXXX XXXXXXXX III [Quality Systems, Inc.]
(xxii) costs arising from Landlord's ’s failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categories; and
(xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvements.
Appears in 1 contract
Samples: Office Lease (Quality Systems Inc)
Exclusions to Operating Expenses. Notwithstanding anything to the provisions of Section 4.2.7.1 above, for purposes of contrary contained in this Lease, in no event shall Taxes and Operating Expenses shall not, however, include:
(i) costs, including marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction under no circumstances shall Lessee otherwise be required to pay directly or development, indirectly or original indemnify Lessor or future leasing any other person for any of the Projectfollowing (the “Exclusions”): (1) any costs relating to the replacement of the roof or relating to structural repairs or replacements to maintain the structural integrity of the Building (including, without limitation, the structural repairs to the structural elements of the exterior, walls, columns, roof, footings and floor slab of the Building), (2) costs, including permit, license and inspection costs, incurred with respect to the installation construction of tenant leasehold improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant leasable space for within the Building, (3) costs in order to market space to potential tenants, leasing commissions, and attorneys’ fees, accounting fees or other professionals’ fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases and/or assignments or other costs in connection with lease, sublease and/or assignment negotiations with present or prospective tenants or other occupants of the Project Building, (excluding4) costs incurred for restoration following condemnation to the extent reimbursed by condemnation award or for repair of damage to the Building to the extent reimbursed by insurance proceeds (provided that insurance deductibles and uninsured casualty damage shall be included in Operating Expenses but only to the extent that, however, such costs relating with respect to any Common Areas or parking facilities);
(ii) except as set forth in Sections 4.2.7.1 (xispecific casualty, Lessee’s Percentage Share of any insurance deductible does not exceed $25,000), (xii)5) ground lease rental on any underlying ground lease or interest, and (xiii) aboveprincipal, depreciation, interest and principal payments points and/or fees on debts or amortization or depreciation charges on any mortgage or mortgages and or any other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(iii) costs for which instrument encumbering the Landlord is reimbursed by any tenant Building or occupant of the Project or by insurance by its carrier or any tenant's carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
(iv) any bad debt loss, rent loss, or reserves for bad debts or rent loss;
(v) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's general corporate overhead and general and administrative expenses;
(vi6) to the wages and benefits of extent any employee who does not devote substantially all of Lessor spends only a portion of his or her employed time working with respect to the Project unless (as opposed to full time work with respect to the Project), a prorated amount of such wages employee’s wages, salaries and benefits are prorated to reflect compensation based upon the portion of time spent on operating and managing by such employee with respect to the Project vis-a-vis time spent on matters unrelated to operating and managing projects other than the Project; provided, that in no event shall Operating Expenses for purposes (7) costs resulting from the breach of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii)Lessor, below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(xv) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;
(xvi) costs arising from the negligence or willful misconduct of Landlord Lessor or Lessor’s agents, employees or contractors, (8) costs incurred due to violation by Lessor or any other tenant in the Building of the terms and conditions of any lease for space within the Building, (9) the cost of any service provided to Lessee or other occupants of the Building or other cost includable in Operating Expenses pursuant hereto for which Lessor is actually reimbursed by insurance, third parties or otherwise (other than reimbursement by lessees as a part of their respective payments of Operating Expenses), (10) charitable or political contributions, (11) interest, penalties or other costs arising out of Lessor’s failure to make timely payment of its obligations, (12) costs to remediate Hazardous Materials (defused in Article 8 below) located upon, within or beneath the Project prior to the Commencement Date or which were brought onto the Project thereafter by Lessor, its agents, employees, vendors, or contractors, or providers of materials or services;
(xvii13) costs (Aother than ordinary maintenance) incurred to comply with laws relating to the removal for sculpture, paintings and other objects of Hazardous Material art, (as defined at Section 23.6 below14) which was advertising or promotional expenses and costs of signs in existence in the Building or on the Project prior to identifying the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge owner of the presence Project or the other lessees’ signs; (15) costs of such Hazardous Materialservices for which Lessee is obligated to separately reimburse Lessor pursuant to this Lease, (16) expense reserves and bad debt loss or reserves therefor; (17) costs incurred in connection with the state, and under the conditions that it then existed in original construction or subsequent reconfiguration of the Building or on the Project, would have then required the removal ; (18) costs of such Hazardous Material curing violations of applicable building codes or other remedial laws or containment action with respect thereto; and regulations (Bincluding without limitation ADA as defined below) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into other legal requirements where such violations exist as of the Commencement Date or of correcting defects in the original design or original construction of the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature(including latent defects); (19) legal, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material accounting or other remedial or containment action professional fees incurred in connection with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost audit of any magazine, newspaper, trade or other subscriptions;
Lessor financial materials; (xxi20) any amount overhead and profit paid to Landlord or to subsidiaries or affiliates of the Landlord Lessor for management or other services in the Project for supplies or other materials to the extent the same exceeds the cost amounts incurred are in excess of those which would have been incurred if such supplies or services rendered by qualified, first-class unaffiliated were obtained from unrelated third parties on (but this provisions does not prevent the payment of a competitive basis;
management fee to Lessor as provided above), (xxii21) depreciation costs except as explicitly provided elsewhere in this Article 7, or (22) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were replacement or repair of capital items, where such cost exceeds $200,000 (as determined with respect to each such capital item and not included in Operating Expenses during the Base Yearon an aggregate basis for all such capital items), except to the extent amortized over the Base Year is retroactively adjusted to include such categories; and
(xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu useful life of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to capital item in question (along with interest on the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvementsunamortized amount).
Appears in 1 contract
Samples: Net Office Lease (Splunk Inc)
Exclusions to Operating Expenses. Notwithstanding The following items will be excluded from the provisions definition of Operating Expenses as set forth in Section 4.2.7.1 above13 of the Lease:
(a) Capital expenditures except those capital expenditures (a) made primarily to reduce Operating Expenses, or to comply with any laws or other governmental requirements, or (b) for replacements (as opposed to additions or new improvements) of non-structural items located in the common areas of the property required to keep such areas in good condition; provided, all such permitted capital expenditures (together with reasonable financing charges) shall be amortized for purposes of this Lease, Operating Expenses shall not, however, include:Lease over the useful life of the item in accordance with generally accepted accounting principles.
(ib) costsLeasing commissions, including marketing costs, legal attorney fees, space planners' feescosts and disbursements and other expenses incurred in connection with negotiations or disputes with tenants or other occupants or prospective tenants or other occupants, advertising and promotional expensesor associated with the enforcement of any leases or the defense of Landlord’s title to or interest in the Building or any part thereof, and brokerage or legal fees incurred in connection with any Real Estate Tax proceedings (unless made primarily to reduce the original construction or development, or original or future leasing Real Estate Tax component of the Project, and costs, Operating Expenses);
(c) Costs (including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or fees) incurred in renovating or otherwise improving, improving or decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any Common Areas or parking facilities)in renovating or redecorating vacant space;
(iid) except as set forth in Sections 4.2.7.1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, Landlord’s costs of capital repairs any services sold or provided tenants or other occupants for which Landlord is entitled to be reimbursed by such tenants or other occupants as an additional charge or rental over and alterations, above the basic rent (and costs of capital improvements and equipmentescalations thereof) payable under the lease with such tenant or other occupant;
(iiie) costs for which the Costs incurred due to violation by Landlord is reimbursed by or any tenant or occupant of the Project or by insurance by its carrier or terms and conditions of any tenant's carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service companylease;
(ivf) any bad debt loss, rent loss, Payments in respect of overhead or reserves for bad debts or rent loss;
(v) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's general corporate overhead and general and administrative expenses;
(vi) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of Landlord, or to any party as a result of a non-competitive selection process, for management or other services on or to the Landlord Building, or for services in the Project supplies or other materials to the extent the same exceeds that the costs of such services rendered services, supplies, or materials exceed the costs that would have been paid had the services, supplies, or materials exceed the costs had the services, supplies, or materials been provided by qualified, first-class parties unaffiliated third parties with the Landlord on a competitive basis;
(ixg) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense’s general corporate overhead and general administrative expenses;
(xh) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all All items and services for which Tenant or any other tenant in the Project reimburses Landlord or pays to third parties or which Landlord provides selectively to one or more tenants or occupants of the Building (other than Tenant) without reimbursement;
(xiii) costs, other than those incurred in ordinary maintenance Advertising and repair, for sculpture, paintings, fountains or other objects of artpromotional expenditures;
(xiiij) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up Costs incurred to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours provide services or utilities) from the Project for any calendar year other benefits to other tenants or portion thereofoccupants of a type that are not provided or available to Tenant hereunder;
(xivk) any Repairs or other work occasioned by fire, windstorm or other casualty, or by condemnation, the costs expressly excluded from Operating Expenses elsewhere of which are reimbursed to Landlord by insurers, other parties or by governmental authorities in this Lease;eminent domain.
(xvl) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the BuildingDebt service, with adjustment where appropriate for the size of the applicable project;
(xvi) costs arising from the negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;
(xvii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material interest or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost of any magazine, newspaper, trade or other subscriptions;
(xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(xxii) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were not finance charges unless specifically included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categoriesabove; and
(xxivm) Rental payments to any entertainment ground lessor or landlord.
(n) Franchise taxes, income taxes, gross receipts taxes, and transfer and gains taxes of Landlord.
(o) The cost of electric current furnished to any other tenant.
(p) The cost of installing, operating, and maintaining any specialty facility such as an observatory, broadcasting facility, restaurant or luncheon club, athletic or recreational club, theatre or cafeteria.
(q) The cost of correcting defects in construction of the building, parking garage, or other part of the premises, or in the building equipment.
(r) The cost of any additions to the building that result in a larger building.
(s) Any expenses and travel expenses incurred in connection with any hazardous materials’ abatement, encapsulation, or removal, including, without limitation, asbestos.
(t) The cost of providing “overtime” HVAC to any Tenant.
(u) Costs incurred as a result of the negligent or otherwise tortious acts or omissions of Landlord, its employees, agents, partners employees and affiliates. If Landlord is not furnishing contractors.
(v) Costs or payments associated with Landlord’s obtaining air rights or development rights.
(w) In the event the occupancy in the Building during any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu calendar year of the performance thereof by Landlordterm is less than 95%, then variable cost component of Operating Expenses shall be deemed “grossed up” to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that that, using reasonable projections, would have been normally be expected to be incurred had during such year if the Project been ninety-five percent (Building were 95%) % occupied; and the amount so determined such projections shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvementsconsistently applied.
Appears in 1 contract
Exclusions to Operating Expenses. Notwithstanding the provisions of Section 4.2.7.1 above, for purposes of this Lease, Operating Expenses shall not, however, include:
(i) costs, including marketing costs, legal fees, space planners' ’ fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any Common Areas or parking facilities);
(ii) except as set forth in Sections 4.2.7.1 4.2.7. 1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(iii) costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant's ’s carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
(iv) any bad debt loss, rent loss, or reserves for bad debts or rent loss;
(v) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc are distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's ’s interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's ’s general corporate overhead and general and administrative expenses;
(vi) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. “Management Fee Cap"”) of Landlord's ’s gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(xv) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;
(xvi) costs arising from the negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;
; (xvii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost of any magazine, newspaper, trade or other subscriptions;
(xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(xxii) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categories; and
(xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvements.
Appears in 1 contract
Exclusions to Operating Expenses. Notwithstanding anything in the provisions of Section 4.2.7.1 aboveLease to the contrary, for purposes of this Lease, the parties agree that “Operating Expenses Expenses” shall not, however, includeexpressly exclude the following:
(i) costs, including marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing costs of the Project, and costs, including permit, license and inspection costs, incurred with respect repairs to the installation Building, if the costs of such repairs are reimbursed by the insurance carried by Landlord or subject to award under any eminent domain proceeding;
(ii) the cost of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants tenant(s) of the Project (excluding, however, such costs relating to any Common Areas Building or parking facilities);
(ii) except as set forth in Sections 4.2.7.1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipmentProject;
(iii) costs for which the Landlord is reimbursed by of interest on debt or amortization on any tenant or occupant mortgages, and rent payable under any ground lease of the Project or by insurance by its carrier or any tenant's carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service companyProject;
(iv) any bad debt losssalaries and fringe benefits for officers, rent loss, or reserves for bad debts or rent lossemployees and executives except as covered by the management fee;
(v) costs for which Landlord has been compensated by a management fee, and any management fees in excess of those management fees which are normally and customarily charged by landlords of other comparable Buildings in the vicinity of the Project; [FINAL EXECUTION COPY] -7- 0000 XXXXXXX XXXXXX SMRH:4888-9988-7969.11 Xxxx’s Fashion Lounge, LLC 062923 54RL-374105 DocuSign Envelope ID: 8AD56723-1CA7-49A1-A144-808922A962D5
(vi) any ground lease rental or charges;
(vii) the costs and expenses incurred in leasing equipment or systems, the cost of such equipment or systems which would ordinarily constitute a capital expenditure if the equipment or systems were purchased (but such costs may constitute Operating Expenses as set forth above with respect to certain capital expenditures);
(viii) costs incurred by Landlord that Landlord is reimbursed for by insurance proceeds, other occupants of the Building or Project, or other third parties;
(ix) depreciation, amortization or interest payments;
(x) marketing costs, including without limitation, leasing commissions, attorneys’ fees and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with Tenant or present or prospective Tenants or other occupants of the Building or Project;
(xi) overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in or to the Building or Project to the extent the same exceeds the costs of such goods and/or services rendered by unaffiliated third parties on a competitive basis;
(xii) costs incurred due to Landlord’s or any tenant of the Project’s violation, other than Tenant, of the terms and conditions of any lease or rental agreement in the Project or costs incurred by Landlord due to a violation of laws or recorded covenants by Landlord or its employees, agents or contractors, or by any other Tenant, occupant or user of the Building or Project.
(xiii) costs (including in connection therewith all attorneys’ fees and costs of settlement judgments and payments in lieu thereof) arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation, or arbitrations pertaining to Landlord and/or the Building or Project;
(xiv) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc distinguished from the costs of operation of the Project (which shall specifically includeincluding general corporate overhead, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's ’s interest in the Building or Project, and any “in-house” legal and/or accounting fees, costs incurred in connection with of any disputes between Landlord and its employees, between Landlord and Project managementagents, contractors or other third parties, or between Landlord and fees paid in connection with disputes with other tenants or occupants, and Landlord's general corporate overhead and general and administrative expenses;
(vi) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this LeaseTenants;
(xv) rent for any office space occupied by Project management personnel costs or expenses of utilities directly metered to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel Tenants of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable projectProject or Building and paid separately by such Tenants;
(xvi) All costs arising from which are capital in nature excepting capital costs which are: (i) reasonably expected to reduce the negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;
normal Common Area Operating Expenses (xviiincluding all utility costs) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such as amortized using a naturecommercially reasonable interest rate over the time period reasonably estimated by Landlord to recover the costs thereof taking into consideration the anticipated cost savings, at that timeas determined by Landlord using its good faith, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, commercially reasonable judgment; (ii) improvements made in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost of any magazine, newspaper, trade or other subscriptions;
(xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(xxii) costs arising from Landlord's failure order to comply with any applicable Applicable Requirement promulgated by any governmental laws authority after the Commencement Date or regulations in existence at any interpretation hereafter rendered with respect to any existing Applicable Requirement after the time of the Lease Commencement Date;
(xxiii) costs relating to categories , as amortized using a commercially reasonable interest rate over the useful economic life of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categories; and
(xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period improvements as determined by Landlord if it had at in its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupiedreasonable discretion; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market[FINAL EXECUTION COPY] -8- 0000 XXXXXXX XXXXXX SMRH:4888-wide labor9988-rate increases due to extraordinary circumstances7969.11 Xxxx’s Fashion Lounge, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvements.LLC 062923 54RL-374105 DocuSign Envelope ID: 8AD56723-1CA7-49A1-A144-808922A962D5
Appears in 1 contract
Samples: Commercial Lease Agreement (Lulu's Fashion Lounge Holdings, Inc.)
Exclusions to Operating Expenses. Notwithstanding anything contained in the provisions definition of Section 4.2.7.1 above, for purposes Operating Expenses as set forth in Subsection 4.1. b) of this the Lease, Operating Expenses shall not, however, includenot include the following:
(i) costsAny ground lease rental;
(ii) The cost of repairs to the Building, including marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with if the original construction cost of such repairs is reimbursed by the insurance carried by Landlord or development, or original or future leasing of the Project, and costssubject to award under any eminent domain proceeding;
(iii) Costs, including permit, license and inspection costs, incurred with respect to the installation of tenant Tenant’s or other occupants improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for Tenant or other occupants of the Building;
(iv) Depreciation, amortization and interest payments, except as specifically permitted herein, except that Landlord shall be permitted to deduct the cost of depreciation, amortization and interest payments made for materials, tools, supplies and vendor-type equipment purchased by Landlord to enable Landlord to supply services Landlord might otherwise contract for with a third party, so long as the cost of such purchases or service provided by Landlord is no more than the charge for such third party’s services. In such a circumstance, the inclusion of all depreciation, amortization and interest payments shall be determined pursuant to generally accepted accounting principles, consistently applied, amortized over the reasonably anticipated useful life of the capital item for which such amortization, depreciation or interest allocation was calculated.
(v) Marketing costs including leasing commissions, attorneys’ fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases and/or assignments, space planning costs, and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with present or prospective tenants or other occupants of the Project (excludingBuilding, howeverand any advertising or promotional expenses, such costs relating to any Common Areas including tenant newsletters, promotional gifts, decorations, events or parking facilities)parties for existing or future occupants of the Building or for the celebration or acknowledgment of holidays;
(iivi) except as set forth in Sections 4.2.7.1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(iii) costs Expenses for services not offered to Tenant or for which the Landlord Tenant is reimbursed by any charged and pays directly, whether or not such services or other benefits are provided to another tenant or occupant of the Project Building, including the costs of furnishing or installing non-Building standard replacement bulbs and ballasts in premises occupied by insurance by its carrier Tenant or any tenant's carrier or by anyone else, and electric power costs for which any tenant directly contracts with other tenants of the local public service companyBuilding;
(ivvii) Costs incurred due to Landlord’s or any bad debt losstenant of the Building’s violation, rent lossother than Tenant, of the terms and conditions of any lease or reserves for bad debts or rent lossrental agreement in the Building;
(vviii) That portion of any billing by Landlord, its subsidiaries or affiliates, for goods and/or services in the Building, to the extent that such billing exceeds the costs of such goods and/or services if rendered by an unaffiliated third parties on a competitive basis;
(ix) Costs incurred by Landlord for structural earthquake repairs necessitated by the January 17, 1994 earthquake that occurred in the vicinity of the Building;
(x) Interest, principal, points and fees on debts or amortization on any mortgage or mortgages or any other debt instrument encumbering the Building or the land thereunder;
(xi) Costs associated with operating the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc are distinguished from the costs of operation of the Project (which shall specifically includeBuilding, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of including partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's ’s interest in the ProjectBuilding, cost (including attorneys’ fees and costs incurred of settlement judgments and payments in lieu thereof) arising from claims, disputes or potential disputes in connection with any disputes between Landlord and its employeespotential or actual claims, between Landlord and Project management, litigation or between Landlord and other tenants or occupants, and arbitrations pertaining to Landlord's general corporate overhead and general and administrative expenses’s ownership of the Building;
(vixii) Promotional expenditures and signs identifying the wages and benefits owner of any employee who does not devote substantially all of his the Building, or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project managerother tenants’ signs;
(viixiii) amounts paid as ground rental Electric, gas or other power costs for with Landlord has been directly reimbursed by another tenant or occupant of the Project by Building, or for which any tenant directly contracts with the Landlordlocal public service company;
(viiixiv) except for Penalties, fines, fees, expenses and interest incurred as a Project management fee result of Landlord’s negligence or willful failure to the extent allowed pursuant make any payment and/or to item (xiii)file any income tax or informational return(s) when due, below, overhead and profit increment paid unless such non-payment is due to the Landlord or to subsidiaries or affiliates Tenant’s nonpayment of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basisRent;
(ixxv) Costs incurred by Landlord to comply with notices of violation of the Americans With Disabilities Act, as amended, or violations of Codes (as defined in Section 10.1 below) when such notices are for conditions existing prior to the Commencement Date;
(xvi) Any charitable or political contributions;
(xvii) The purchase or rental price of any sculpture, paintings or other object of art (except for Project fountains), whether or not installed in, on or upon the Building (provided that costs related to any Common Area fountains shall be included);
(xviii) Any compensation paid or expenses reimbursed to clerks, attendants or other persons working in any commercial concessions operated by concession(s), or any other expense arising out of Landlord’s operation thereof, including the Landlord, parking facilities (provided that any compensation paid to any concierge at all repair, replacements, and maintenance costs of the Project parking facilities shall be includable as an included in Operating ExpenseExpenses, subject to the other exclusions set forth in this Lease including the exclusions listed in item (xxii) below), and any services provided, taxes attributable to and costs incurred in connection with the operation of any retail or restaurant operations in the Building, or for the installation or operation of any specialty service, observatory, broadcasting facilities, luncheon club, museum, athletic, sports or recreational facility or club, or for a child care facility;
(xxix) rentals and other related expenses incurred in leasing air conditioning systemsAny accelerated payment(s) (except for property tax payments) made at Landlord’s election on obligations undertaken by Landlord, elevators or other equipment which if purchased the cost of which would not otherwise become due, to the extent that such accelerated payment(s) exceed the amount otherwise payable had Landlord not elected to accelerate payment thereof. Notwithstanding such exclusion, the balance of such accelerated payment shall be included by Landlord in operating expense calculations for succeeding years, as if the payment had been made when originally due prior to such acceleration;
(xx) Costs, including attorneys’ fees and settlement judgments and/or payments in lieu thereof, arising from actual or potential claims, disputes, litigation or arbitration pertaining to Landlord and/or the Building;
(xxi) Costs of any items to the extent Landlord receives reimbursement from insurance proceeds (such proceeds to be excluded from Operating Expenses as a capital costin the year in which received, except equipment not affixed to the Project which is used in providing janitorial that any deductible amount under any insurance policy shall be included within Operating Expenses) or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Projecta third party;
(xixxii) all items and services Reserves of any kind, including but not limited to replacement reserves, and/or reserves for which Tenant bad debt or lost rent or any other tenant in similar charge not involving the Project reimburses Landlord or which Landlord provides selectively payment of money to one or more tenants (other than Tenant) without reimbursementthird parties;
(xiixxiii) costs, other than those incurred in ordinary maintenance and repair, Costs of repairs which would have been covered by casualty insurance but for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of Landlord’s failure to maintain casualty insurance to cover the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy replacement value of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in as required by this Lease;
(xvxxiv) rent Capital expenditures not otherwise permitted hereunder;
(xxv) Costs of any “tap fees” or any sewer or water connection fees for the benefit of any office space occupied particular tenant in the Building that are payable by Project management personnel to the extent the size or rental rate such tenant;
(xxvi) Any expenses incurred by Landlord for use of such office space exceeds the size or fair market rental value of office space occupied by management personnel any portions of the Comparable Buildings Building to accommodate events including, but not limited to, shows, promotions, kiosks, displays, filming, photography, private events, parties or ceremonies, and advertising for such events, beyond the normal expenses otherwise attributable to providing Building services, such as lighting and HVAC to such public portions of the Building in normal Building operations during standard Building hours of operation, but Operating Expenses shall include the vicinity costs incurred by Landlord for events primarily intended to benefit Tenant and other tenants of the Building, with adjustment where appropriate for the size of the applicable project;
(xvixxvii) costs arising from the negligence Any entertainment, dining or willful misconduct travel expenses of Landlord or its agentsproperty manager for any purpose, employees, vendors, contractors, or providers other than costs directly related to carrying out the management services for the Building and providing the services to Tenant and to other tenants of materials or servicesthe Building (but excluding those costs relating to providing services to any individual tenant which are not provided to tenants of the Building generally);
(xviixxviii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoeverAny “above-standard” cleaning, including, but not limited to, Tenantconstruction cleanup or special cleaning associated with parties/events and specific tenant requirements in excess of service provided to Tenant under this Lease (or available to Tenant even though Tenant may elect not to receive all such services from Landlord), other tenantsincluding related trash collection, employeesremoval, vendors, contractors, prospective tenants hauling and agentsdumping;
(xxxxix) Costs incurred in removing and storing the cost property of any magazine, newspaper, trade former tenants or other subscriptionsoccupants of the Project;
(xxixxx) Insurance deductible amounts which are in excess of $300,000 in any amount paid to Landlord or to subsidiaries or affiliates single Subsequent Year provided that the portion of the Landlord subject deductibles in excess of $300,000 (if any) for services such single Subsequent Year shall be amortized over the useful life of the improvements repaired or replaced as reasonably determined by Landlord, together with a commercially reasonable interest factor consistent with that used by other similarly situated owners in making such calculation;
(xxxi) The cost of furnishing and installing non-Building standard replacement bulbs and ballasts in tenant spaces;
(xxxii) The costs arising out of Landlord’s abatement, mitigation, remediation and/or encapsulation of any Hazardous Materials when the Project same are located in, on or about the Building and/or the real property underlying the Building, to the extent such Hazardous Materials came in, on or about the same exceeds the cost Building in violation of such services rendered by qualifiedany then-effective federal, first-class unaffiliated third parties on a competitive basis;
state, county or local law (xxii) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except and to the extent such Hazardous Materials were brought into the Base Year is retroactively adjusted to include such categoriesBuilding and/or the real property underlying the Building by Tenant or any of its contractors, invitees or employees); and
(xxivxxxiii) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work The assessment or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount billing of Operating Expenses that would have been incurred had the Project been ninety-five results in Landlord being reimbursed more than one hundred percent (95100%) occupied; and of the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses total expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvementscalendar year in question.
Appears in 1 contract
Samples: Office Lease (ReachLocal Inc)
Exclusions to Operating Expenses. Notwithstanding the provisions Tenant's Proportionate Share of Section 4.2.7.1 above, for purposes of this Lease, Operating Expenses shall not, however, not include:
: (i) coststhe original cost of construction of the common areas including any repair and/or replacement thereof due to defect in the original construction, the cost of construction of new buildings in the Shopping Center or the cost of acquisition of additional land or additional buildings for the Shopping Center; (ii) amounts paid by Landlord as a result of personal injury or property damage to the extent not covered by insurance proceeds; (iii) except as specifically set forth in Section 5.A, general administrative overhead of Landlord that is not directly related to management of the Shopping Center; (iv) compensation for services rendered in connection with any other property of Landlord; (v) costs of capital improvements, except Landlord may include the cost of capital improvements amortized on a straight-line basis over the useful life of such item; (vi) costs related to procuring tenants and negotiating leases or legal expenses incurred in connection with disputes with tenants; (vii) licensing fees and taxes; audit, professional and consulting fees and expenses for Landlord; (viii) any fees or costs for offering attendant or valet parking; (ix) any late fees and/or interest charged for Landlord's failure to timely pay any Operating Expenses when due; (x) costs for maintaining any vacant space within the Shopping Center with respect to costs customarily incurred as maintenance obligations of a tenant occupant for which such tenant occupant is solely and directly responsible and that are not customarily charged by Landlord as an Operating Expense of the Shopping Center; (xi) [intentionally omitted]; (xii) any interest or principal payments or other charges on any financing for the Shopping Center; (xiii) the cost of any repair to remedy damage caused by or resulting from the negligence of any other tenants in the Shopping Center, including marketing coststheir agents, servants or employees but only if and to the extent Landlord shall recover the cost thereof from said parties; (xiv) legal and other fees, space planners' feescommissions, advertising expenses and promotional expenses, and brokerage fees other costs incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project Shopping Center; (excluding, however, such costs relating to any Common Areas or parking facilities);
(ii) except as set forth in Sections 4.2.7.1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(iii) costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant's carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
(ivxv) any bad debt loss, rent loss, loss or reserves for bad debts or rent loss;
; (vxvi) costs associated with the operation of Landlord related to formation of the business of the partnership or entity which constitutes the Landlordownership entity, as the same arc distinguished from the costs of operation of the Project (which shall specifically includeinternal matters including, but not be limited to, accounting costs associated with the operation preparation of the Project). Costs associated with the operation tax returns and financial statements and gathering of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal mattersdata, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue)lawsuits, costs of selling, syndicatingsyndication, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, Shopping Center; (xvii) legal and costs incurred accounting fees; and/or (xviii) any management fee/administrative fee in connection with any disputes between Landlord excess of the fifteen percent (15%) administrative fee and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's general corporate overhead and general and administrative expenses;
four percent (vi4%) the wages and benefits of any employee who does not devote substantially all of his or her employed time management fee set forth hereinabove. Notwithstanding anything in this Lease to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; providedcontrary, that in no event shall Operating Expenses for purposes include any amount that is duplicative in nature of this Lease include wages and/or benefits attributable any other expense to personnel above the level of Project manager;
(vii) amounts be paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii)Tenant hereunder, below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses whether as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects part of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(xv) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;
(xvi) costs arising from the negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;
(xvii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost of any magazine, newspaper, trade or other subscriptions;
(xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(xxii) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categories; and
(xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work , as additional rent or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvementsotherwise.
Appears in 1 contract
Samples: Lease Agreement
Exclusions to Operating Expenses. Notwithstanding the provisions of Section 4.2.7.1 above, for purposes of this Lease, Operating Expenses shall not, however, include:
(i) costs, including marketing costs, legal fees, space planners' ’ fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any Common Areas or parking facilities);
(ii) except as set forth in Sections 4.2.7.1 4.2.7. 1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(iii) costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant's ’s carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
(iv) any bad debt loss, rent loss, or reserves for bad debts or rent loss;
(v) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc are distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's ’s interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's ’s general corporate overhead and general and administrative expenses;
(vi) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. “Management Fee Cap"”) of Landlord's ’s gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(xv) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;
(xvi) costs arising from the negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;
(xvii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) except for immaterial amounts completed in connection with routine maintenance and repairs; which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect theretothereto except for immaterial amounts completed in connection with routine maintenance and repairs;
(xviii) costs arising from Landlord's ’s charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost of any magazine, newspaper, trade or other subscriptions;
(xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(xxii) costs arising from Landlord's ’s failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categories; and
(xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvements.
Appears in 1 contract
Samples: Office Lease (Quality Systems Inc)
Exclusions to Operating Expenses. Notwithstanding anything contained in the provisions definition of Section 4.2.7.1 above, for purposes Operating Expenses as set forth in Subsection 4.1(b) of this Lease, Operating Expenses shall not, however, includenot include the following:
(i) principal payments, bad-debt expenses, depreciation, interest and amortization on mortgages, or ground lease payments, if any;
(ii) real estate brokers' leasing commissions;
(iii) the cost of providing any service directly to and paid directly by any tenant;
(iv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(v) costs of any items to the extent Landlord receives reimbursement from insurance proceeds (such proceeds to be excluded from Operating Expenses in the year in which received, except that any deductible amount under any insurance policy shall be included within Operating Expenses) or from a third party ;
(vi) costs of capital improvements, except those set forth in Section 4.1(b);
(vii) marketing costs, including marketing costs, legal fees, space planners' feesleasing commissions, advertising and promotional expenses, space planning costs and brokerage attorneys' fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, and subleases and/or assignments incurred in connection with the original construction present or development, prospective tenants or original or future leasing other occupants of the ProjectBuilding, including attorneys' fees and other costs and expenditures incurred in connection with disputes with present or prospective tenants or other occupants of the Building;
(viii) costs, including permit, license and inspection costscosts and any allowances or other tenant improvement concessions, incurred or provided with respect to the design, construction and/or installation of tenant other tenants' or occupants' improvements made for new tenants initially occupying space or other occupants in the Project after the Lease Commencement Date Building or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of in the Project Building (excluding, however, such costs relating to any Common Areas or Building parking facilities);
(iiix) except as set forth in Sections 4.2.7.1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages rentals and other debt costsrelated expenses incurred in leasing a heating, ventilation and air conditioning system, elevators, or other items (except equipment not affixed to the Building which is used in providing janitorial or similar services to the Building and, further excepting from this exclusion such equipment rented or leased on a temporary basis to remedy or ameliorate an emergency condition in the Building) which if anypurchased, penalties and interestrather than rented, costs of would constitute a capital repairs and alterations, and costs of capital improvements and equipmentimprovement not included in Operating Expenses pursuant to this Lease;
(iiix) depreciation, amortization and interest payments, except as specifically included in Operating Expenses pursuant to the terms of this Lease and, except on materials, tools, supplies and vendor-type equipment purchased by Landlord to enable Landlord to supply services Landlord might otherwise contract for with a third party, where such depreciation, amortization and interest payments would otherwise have been included in the charge for such third party's services, all as determined in accordance with sound real estate management principles, and when depreciation or amortization is permitted or required, the item shall be amortized over its reasonably anticipated useful life;
(xi) costs incurred by Landlord for alterations (including structural additions), repairs, equipment and tools which are of a capital nature and/or which are considered capital improvements or replacements under sound real estate management principles, except as specifically included in Operating Expenses pursuant to the terms of this Lease;
(xii) expenses in connection with services or other benefits which are not offered to Tenant or for which the Landlord Tenant is reimbursed by any charged for directly but which are provided to another tenant or occupant of the Project Building, without charge;
(xiii) overhead and profit increment paid to Landlord or to the parent organization or to subsidiaries or affiliates of Landlord for goods and/or services in the Building to the extent the same exceeds the costs of such by insurance by its carrier or any tenant's carrier or by anyone elseunaffiliated third parties on a competitive basis;
(xiv) advertising and promotional expenditures, and costs of signs in or on the Building identifying the owner of the Building or other tenants' signs;
(xv) to the extent applicable, electric power costs or other utility costs for which any tenant directly contracts with the local public service companycompany (but Landlord shall have the right to "gross up" as if the floor was vacant);
(ivxvi) any bad debt losstax penalties incurred as a result of Landlord's negligence, rent loss, inability or reserves for bad debts unwillingness to make payments or rent lossfile returns when due;
(vxvii) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, fees and costs incurred in connection with concerning the negotiation and preparation of this Lease or any disputes litigation between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's general corporate overhead and general and administrative expensesTenant;
(vixviii) any reserves retained by Landlord;
(xix) costs arising from Landlord's charitable or political contributions;
(xx) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project Building unless such wages and benefits are prorated to reflect time spent on operating and managing the Project Building vis-a-vis time spent on matters unrelated to operating and managing the ProjectBuilding; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project Building manager, Building engineer and/or chief operating engineer;
(viixxi) amounts except as expressly set forth otherwise in this Section 4.1(c), late charges, penalties, liquidated damages, and interest;
(xxii) amount paid as ground rental or as rental for the Project Building by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ixxxiii) any compensation paid to clerks, attendants or other persons in commercial concessions operated by or on behalf of the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xixxiv) all items and services for which Tenant or any other tenant in the Project reimburses Building is obligated to reimburse Landlord, provided that Landlord shall use commercially reasonable efforts to collect such reimbursable amounts, or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xiixxv) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(xvxxvi) rent for any office space occupied by Project Building management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable projectbuilding;
(xvixxvii) 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 (except to the extent inconsistent with the general practice of landlords of other first-class office buildings) and shall be included as Operating Expenses in the year in which the assessment or premium installment is actually paid;
(xxviii) in the event any facilities, services or utilities used in connection with the Building are provided from another building owned or operated by Landlord or vice versa, the costs incurred by Landlord in connection therewith shall be allocated to Operating Expenses by Landlord on a reasonably equitable basis;
(xxix) legal fees and costs, settlements, judgments or awards paid or incurred because of disputes between Landlord and Tenant, Landlord and other tenants or prospective occupants or prospective tenants/occupants or providers of goods and services to the Building;
(xxx) the costs of any flowers, gifts, balloons, etc. provided to any prospective tenants, Tenant, other tenants, and occupants of the Building, except to the extent such costs are customarily included in operating expenses by landlords of comparable first-class office buildings in the Xxxxxxx Oaks area;
(xxxi) costs for which the Landlord is reimbursed, or would have been reimbursed if Landlord had carried the insurance Landlord is required to carry pursuant to this Lease or would have been reimbursed if Landlord had used commercially reasonable efforts to collect such amounts, by any tenant or occupant of the Building or by insurance from its carrier or any tenant's carrier;
(xxxii) tax penalties;
(xxxiii) costs reimbursed to Landlord under any warranty carried by Landlord for the Building, which warranties Landlord shall use commercially reasonable efforts to enforce;
(xxxiv) costs of third party non-tenant parties;
(xxxv) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same are distinguished from the costs of operation of the Building, including partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Building, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Building management, or between Landlord and other tenants or occupants;
(xxxvi) costs arising from the negligence or willful misconduct of Landlord or its agentsthe "Indemnitees", employees, vendors, contractors, or providers as that term is defined in Section 9.1 of materials or servicesthis Lease;
(xviixxxvii) costs of specialty clubs and services not provided or offered to Tenant without charge;
(Axxxviii) costs, including permit, license and inspection costs, incurred to comply with laws relating respect to the removal installation of Hazardous Material (as defined at Section 23.6 below) which was in existence other tenants' or occupants' improvements made for tenants or other occupants in the Building or on the Project prior to the Lease Commencement Dateincurred in renovating or otherwise improving, and was of such a nature that a federaldecorating, State painting or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, redecorating vacant space for tenants or other occupants in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost of any magazine, newspaper, trade or other subscriptions;
(xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(xxii) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categoriesBuilding; and
(xxivxxxix) any entertainment expenses and travel expenses bad debt loss, rent loss or reserves for any bad debts, rent loss, replacements or refurbishment;
(xl) rent for any management office in excess of 1,000 rentable square feet;
(xli) the costs of earthquake insurance (subject to the provisions of Section 4.1(b)); and
(xlii) the costs arising out of Landlord's abatement, its employeesmitigation, agentsremediation and/or encapsulation of any hazardous materials and/or toxic substances as defined in any federal, partners and affiliates. If Landlord is not furnishing any particular work state, county or service (local law, when the cost of whichsame are located in, if performed by Landlordon or about the Building and/or the real property underlying the Building, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during extent such period by Landlord if it had at its own expense furnished such work hazardous materials or service to such tenant. If toxic substances came in, on or about the Project is not at least ninetyBuilding in violation of any then-five percent (95%) occupied during all effective federal, state, county or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvementslocal law.
Appears in 1 contract
Exclusions to Operating Expenses. Notwithstanding the provisions of Section 4.2.7.1 above, for purposes of this Lease, Operating Expenses shall not, however, include:
(i) costs, including marketing costs, legal fees, space planners' ’ fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any Common Areas or parking facilities);
(ii) except as set forth in Sections 4.2.7.1 4.2.7. 1 (xi), (xii), and (xiii) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(iii) costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant's ’s carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
(iv) any bad debt loss, rent loss, or reserves for bad debts or rent loss;
(v) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc are distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's ’s interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's ’s general corporate overhead and general and administrative expenses;
; (vi) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii), below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(xv) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;
(xvi) costs arising from the negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;
(xvii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto; and (B) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost of any magazine, newspaper, trade or other subscriptions;
(xxi) any amount paid to Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the cost of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(xxii) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categories; and
(xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized costs relating to capital improvements.
Appears in 1 contract
Samples: Office Lease (Epicor Software Corp)
Exclusions to Operating Expenses. Notwithstanding anything to the provisions of Section 4.2.7.1 above, for purposes of contrary contained in this Lease, in no event shall Taxes and Operating Expenses shall not, however, include:
(i) costs, including marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction under no circumstances shall Lessee otherwise be required to pay directly or development, indirectly or original indemnify Lessor or future leasing any other person for any of the Projectfollowing (the “Exclusions”): (1) any costs relating to the replacement of the roof or relating to structural repairs or replacements to maintain the structural integrity of the Building (including, without limitation, the structural repairs to the structural elements of the exterior, walls, columns, roof, footings and floor slab of the Building), (2) costs, including permit, license and inspection costs, incurred with respect , to the installation construction of tenant leasehold improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant leasable space for within the Building, (3) costs in order to market space to potential tenants, leasing commissions, and attorneys’ fees, accounting fees or other professionals’ fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases and/or assignments or other costs in connection with lease, sublease and/or assignment negotiations with present or prospective tenants or other occupants of the Project Building, (excluding4) costs incurred for restoration following condemnation to the extent reimbursed by condemnation award or for repair of damage to the Building to the extent reimbursed by insurance proceeds (provided that insurance deductibles and uninsured casualty damage shall be included in Operating Expenses, however, such costs relating to any Common Areas or parking facilities);
except that earthquake insurance deductibles in excess of Two Dollars (ii$2.00) except as set forth in Sections 4.2.7.1 (xiper square foot of Rentable Area leased by Lessee under this Lease shall be excluded), (xii)5) ground lease rental on any underlying ground lease or interest, and (xiii) aboveprincipal, depreciation, interest and principal payments points and/or fees on debts or amortization or depreciation charges on any mortgage or mortgages and or any other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(iii) costs for which instrument encumbering the Landlord is reimbursed by any tenant Building or occupant of the Project or by insurance by its carrier or any tenant's carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
(iv) any bad debt loss, rent loss, or reserves for bad debts or rent loss;
(v) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same arc distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's general corporate overhead and general and administrative expenses;
(vi6) to the wages and benefits of extent any employee who does not devote substantially all of Lessor spends only a portion of his or her employed time working with respect to the Project unless (as opposed to full time work with respect to the Project), a prorated amount of such wages employee’s wages, salaries and benefits are prorated to reflect compensation based upon the portion of time spent on operating and managing by such employee with respect to the Project vis-a-vis time spent on matters unrelated to operating and managing projects other than the Project; provided, that in no event shall Operating Expenses for purposes (7) costs resulting from the breach of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(vii) amounts paid as ground rental for the Project by the Landlord;
(viii) except for a Project management fee to the extent allowed pursuant to item (xiii)Lessor, below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(ix) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(x) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;
(xi) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(xii) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;
(xiii) fees payable by Landlord for management of the Project in excess of five percent (5%) (the "Management. Fee Cap") of Landlord's gross -5- LAKRSHORE TOWERS BUILDING II [Quality Systems, Inc.] rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Building with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after hours services or utilities) from the Project for any calendar year or portion thereof;
(xiv) any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(xv) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;
(xvi) costs arising from the negligence or willful misconduct of Landlord Lessor or its Lessor’s agents, employees, vendors, employees or contractors, (8) costs incurred due to violation by Lessor or providers of materials or services;
(xvii) costs (A) incurred to comply with laws relating to the removal of Hazardous Material (as defined at Section 23.6 below) which was in existence any other tenant in the Building of the terms and conditions of any lease for space within the Building, (9) the cost of any service provided to Lessee or on other occupants of the Building or other cost includable in Operating Expenses pursuant hereto for which Lessor is actually reimbursed by insurance, third parties or otherwise (other than reimbursement by lessees as a part of their respective payments of Operating Expenses), (10) charitable or political contributions, (11) interest, penalties or other costs arising out of Lessor’s failure to make timely payment of its obligations, (12) costs to remediate Hazardous Materials (defined in Article 8 below) located upon, within or beneath the Project prior to the Lease Commencement DateDate or which were brought onto the Project thereafter by Lessor, its agents, employees or contractors, (13) costs (other than ordinary maintenance) for sculpture, paintings and was other objects of such a nature that a federalart, State (14) advertising or municipal governmental authority, if it then had knowledge promotional expenses and costs of signs in or on the Project identifying the owner of the presence Project or the other lessees’ signs; (15) costs of such Hazardous Materialservices for which Lessee is obligated to separately reimburse Lessor pursuant to this Lease, (16) bad debt loss or reserves therefor; (17) costs incurred in connection with the state, and under the conditions that it then existed in original construction or subsequent reconfiguration of the Building or on the Project, would have then required the removal ; (18) costs of such Hazardous Material curing violations of applicable building codes or other remedial laws or containment action with respect thereto; and regulations (Bincluding without limitation ADA as defined below) costs incurred to remove, remedy, contain, or treat Hazardous Material, which hazardous material is brought into other legal requirements where such violations exist as of the Commencement Date or of correcting defects in the original design or original construction of the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature(including latent defects); (19) legal, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material accounting or other remedial or containment action professional fees incurred in connection with respect thereto;
(xviii) costs arising from Landlord's charitable or political contributions;
(xix) any gifts provided to any entity whatsoever, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents;
(xx) the cost audit of any magazine, newspaper, trade or other subscriptions;
Lessor financial materials; (xxi20) any amount overhead and profit paid to Landlord or to subsidiaries or affiliates of the Landlord Lessor for management or other services in the Project for supplies or other materials to the extent the same exceeds the cost amounts incurred are in excess of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(xxii) costs arising from Landlord's failure to comply with any applicable governmental laws or regulations in existence at the time of the Lease Commencement Date;
(xxiii) costs relating to categories of expenses for the Project parking areas those which were not included in Operating Expenses during the Base Year, except to the extent the Base Year is retroactively adjusted to include such categories; and
(xxiv) any entertainment expenses and travel expenses of Landlord, its employees, agents, partners and affiliates. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had if such supplies or services were obtained from unrelated third parties (but this provisions does not prevent the Project been ninety-five percent payment of a management fee to Lessor as provided above); or (95%21) occupied; and any capital improvement costs or expenditures incurred by Lessor (i) in order to expand the amount so determined shall be deemed to have been Building’s Rentable Area by adding one or more additional floors or expanding the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortagesBuilding envelope, or amortized costs relating to capital improvements(ii) for artwork, such as paintings and sculptures.
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