Common use of Operating Cost Escalation Clause in Contracts

Operating Cost Escalation. With respect to the First Fiscal Year for Tenant's Paying Operating Cost Escalation, or fraction thereof, and any Fiscal Year or fraction thereafter, Tenant shall pay to Landlord, as additional rent, Operating Cost Escalation (as defined below), if any, on or before the thirtieth day following receipt by Tenant of Landlord's Statement (as defined below). As soon as practicable after the end of each Fiscal Year ending during the Term and after Lease termination, and in either case, no later than 180 days thereafter, Landlord shall render a statement ("Landlord's Statement") in reasonable detail and according to usual accounting practices certified by Landlord and showing for the preceding Fiscal Year or fraction thereof, as the case may be, Landlord's Operating Costs. Upon request, Landlord will provide access to Tenant, at reasonable times, to Landlord's books and records relating to the preparation of Landlord's statement, and Tenant may inspect and copy such records as are necessary to verify the accuracy of the Landlord's annual statement. In the event of a dispute, Tenant shall have the right to conduct or have conducted an audit according to generally accepted accounting principles consistently applied, with which Landlord shall cooperate in good faith. In the event of an error of five percent or more, Landlord shall bear all costs of such inspection and audit. For the purpose of this Paragraph 4.2, Landlord's Operating Costs shall exclude the interest and amortization on mortgages for the Building and Lot or leasehold For this purpose of this Paragraph 4.2, Landlord's Operating Costs shall include, without limitation: real estate taxes on the Building and Lot; installments and interest on assessments for public betterments or public improvements (other than those if any, relating to a traffic signal and related accessory improvements and turnaround on Route 9 adjacent to the Lot); expenses of any proceedings for abatement of taxes and If the management fee is reduced by reason of a tenant's default in the payment of fixed or additional rent, Landlord shall reduce the Annual Estimated Operating Costs by the amount of such reduction in the management fee. In case of services which are not rendered to all areas on a comparable basis, the proportion allocable to the Premises shall be the same proportion which the Rentable Floor Area of Tenant's Space bears to the total rentable floor area to which such service is so rendered (such latter area to be determined in the same manner as the Total Rentable Floor Area of the Building).

Appears in 2 contracts

Samples: Lease Agreement (Aspect Medical Systems Inc), Lease Agreement (Aspect Medical Systems Inc)

AutoNDA by SimpleDocs

Operating Cost Escalation. With respect to the First Fiscal Year for Tenant's ’s Paying Operating Cost Escalation, or fraction thereof, and any Fiscal Year or fraction thereafter, Tenant shall pay to Landlord, as additional rent, Tenant’s share of the Operating Cost Escalation (as defined below), if any, on or before before, the thirtieth (30th) day following receipt by Tenant of Landlord's ’s Statement (as defined below). As soon as practicable after the end of each Fiscal Year ending during the Term and after Lease termination, and in either case, no later than 180 days thereafter, Landlord shall render a statement ("Landlord's ’s Statement") in reasonable detail and according to usual accounting practices certified by Landlord and showing for the preceding Fiscal Year or fraction thereof, as the case may be, Landlord's ’s Operating Costs. Upon request, Landlord will provide access to TenantEXCLUDING the principal, at reasonable times, to Landlord's books and records relating to the preparation of Landlord's statement, and Tenant may inspect and copy such records as are necessary to verify the accuracy of the Landlord's annual statement. In the event of a dispute, Tenant shall have the right to conduct or have conducted an audit according to generally accepted accounting principles consistently applied, with which Landlord shall cooperate in good faith. In the event of an error of five percent or more, Landlord shall bear all costs of such inspection and audit. For the purpose of this Paragraph 4.2, Landlord's Operating Costs shall exclude the interest and amortization on mortgages for the Building Building, and Lot or leasehold For this purpose interests therein, depreciation, improvements made to the Building, the Lot or the Park that do not lower operating costs, and the cost of this Paragraph 4.2special services rendered to tenants (including Tenant) for which a special charge is made, Landlord's Operating Costs shall includeBUT INCLUDING, without limitation: real estate taxes on the Building and Lot; installments and reasonable interest on assessments for public betterments or public improvements (other than those if any, relating to a traffic signal and related accessory improvements and turnaround on Route 9 adjacent to the Lot)improvements; expenses of any proceedings for abatement of taxes and If the management fee is reduced by reason assessments with respect to any Fiscal Year or fraction of a tenant's default Fiscal Year; reasonable premiums for insurance; reasonable compensation and all fringe benefits for fully time employees at the Building, workmen’s compensation, insurance premiums and payroll taxes paid by Landlord to, for or with respect to all persons engaged in the operating, maintaining, or cleaning of the Building and Lot; water, sewer, gas, telephone and the electricity to operate the base building heating, ventilating, air conditioning systems, elevators and parking lot lighting, and other utility charges not billed directly to tenants by Landlord or the utility companies (the cost for the electricity consumed by the tenant for interior lighting, plugs, equipment, supplemental air conditioning and fixtures in shall be billed monthly to Tenant by Landlord as set forth in Paragraph IX of Exhibit “D”); measurable and market costs of building and cleaning supplies and equipment (including rental); reasonable cost of maintenance, cleaning and repairs, including without limitation the services provided in Exhibit “D” hereof; cost of snow plowing or removal, or both, and care of landscaping; payments to independent contractors under service contracts for cleaning, operating, managing, maintaining and repairing the Building and Lot (which payments may be to affiliates of Landlord provided the same are at reasonable rates consistent with the type of occupancy and the services rendered); the Building’s pro rata share (i.e. approximately 39.45% as hereinafter provided) of the cost of operating, maintaining and repairing the common areas and facilities within the Park (such as, but not limited to, snow plowing, sanding, sand removal, lot sweeping, landscaping, common area and street lighting, and management); and all other reasonable and necessary expenses paid in connection with the operation, cleaning, maintenance, and repair of the Building and Lot, or either, and properly chargeable against income. If Landlord (i) installs a new or replacement capital item for the purposes of (i) reducing Landlord’s Operating Costs, or (ii) is required to perform capital repairs or replacements or to install capital items in order to comply with changes in applicable law from and after the Commencement Date, or (iii) or is required pursuant to Section 5.1.3 to perform capital repairs or replacements which are chargeable to Tenant to the extent provided by the provisions of this Section, the costs thereof as reasonably amortized by Landlord over their useful life in accordance with generally accepted accounting principles, with legal interest (not to exceed the then “Prime Rate” published in the Wall Street Journal plus two percent (2%) per annum) (“Agreed Interest Rate”) on the unamortized amount, shall be included in “Landlord’s Operating Costs”. In such event, Tenant shall pay Tenant’s share of such amortization payment for each month after such improvement is completed until the first to occur of the expiration of the Term or the end of the term over which such costs are required to be amortized. Landlord agrees that all of such services to be included in Landlord’s Operating Costs shall be obtained by Landlord at commercially reasonable, competitive market rates consistent with the operation and management of comparable Class A office buildings in the suburban Boston area. Notwithstanding anything to the contrary contained herein, in no event shall Landlord’s Operating Costs include (nor shall Tenant have any obligation to pay any Operating Cost Escalation on account of) the following: (a) Costs, expenses and fees relating to solicitation of, advertising for and entering into leases and other occupancy arrangements for space in the Park, including but not limited to legal fees, space planners’ fees, real estate brokers’ leasing commissions and advertising and marketing expenses. (b) Costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord’s interest in the Park (or any part thereof), costs of any disputes between Landlord and its employees, disputes of Landlord with building management, or outside fees paid in connection with disputes with other tenants, invitees or adjacent property owners. (c) Costs of correcting defects in the Building or the Building equipment or replacing defective equipment solely to the extent such costs relate to items covered by warranties of manufacturers, suppliers or contractors or are otherwise borne by parties other than Landlord and for which Landlord receives reimbursement. (d) Costs of installations paid by or constructed for specific tenants or other occupants. (e) Interest, points, other finance charges and principal payments on mortgages, and other costs of indebtedness, if any. (f) All amounts which are specifically charged to or otherwise paid by any other tenant or other occupant of the Building or the Park, or for items or services which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement. (g) Any bad debt loss, rent loss or reserves for bad debts or rent loss. (h) The salary and indirect compensation (including, without limitation, all fringe benefits, workmen’s compensation, insurance premiums and payroll taxes) of any employee above the trade of property manager, and the wages and indirect compensation of any employee to the extent such employee devotes his or her time to property other than the Building. (i) Amounts, if any, paid as ground rental by Landlord. (j) Expenses related to third-party landlord-tenant disputes. (k) Any cost of any service or items sold or provided to tenants of the Building or Park or other occupants for such service or has been or is entitled to be reimbursed by insurance or otherwise compensated by parties (e.g. easement holders) other than tenants of the Building and for which Landlord receives reimbursement. (l) The costs of repair, replacement, or restoration work occasioned by any casualty or condemnation above the deductible amount on the insurance policy. (m) Any depreciation allowance or expense, expense reserve and other non-cash items. (n) The costs of repairs, alterations and general maintenance necessitated by the negligence or willful misconduct of Landlord or its agents, employees, or contractors or repairs, alterations, and general maintenance necessitated by the negligence or willful misconduct of any other tenant (including Tenant) or occupant of the Building or any of their respective agents, employees, contractors, invitees, or licensees. (o) Interest or penalties due to the late payment of fixed taxes, utility bills or additional rentother such costs, unless caused by Tenant, in which event Tenant shall be responsible for same. (p) Any amount payable by Landlord by way of indemnity or for damages or which constitute a fine or penalty, including interest or penalties for late payment, unless caused by Tenant, in which event Tenant shall reduce be responsible for same. (q) Any other cost or expense which, under generally accepted accounting principles, consistently applied, would not be a normal maintenance or operating expense of the Annual Estimated Operating Building, including bad debt expenses and charitable contributions and donations. (r) Costs incurred to maintain the structural integrity of the Building, except in the event caused by the amount of such reduction Tenant as set forth in the management feeSection 5.1.3 hereof. In case of services which are not rendered to all areas of the Building on a comparable basis, the proportion allocable to the Premises shall be the same proportion which the Rentable Floor Area of Tenant's ’s Space bears to the total rentable floor area to which such service is so rendered (such latter area to be determined in the same manner as the Total Rentable Floor Area of the Building)., or shall be re-allocated by Landlord on a reasonable basis taking into consideration such factors as usage of a particular tenant in the Park and/or such other pertinent factors as reasonably determined by Landlord. Tenant shall be responsible to pay its share of Landlord’s Operating Costs for the Building based upon the proportion that the Rentable Floor Area of Tenant’s Space bears to the Total Rentable Floor Area of the Building (i.e. 41.55%). Tenant shall also be responsible to pay its pro rata share of Park-related costs, which shall be allocated by Landlord in a commercially reasonable mariner based upon the following: upon the ratio of the square footage of the Premises to the aggregate square footage of all completed buildings in the Park (e.g. 460,588 RSF), as such buildings are completed from time to time (i.e. the Building’s current share of Park-related costs is approximately 39.45%). As of this date, the Park consists of approximately 460,588 RSF, specifically consisting of the following: One Wall Street: 192,000 RSF Two and Ten Wall Street (Retail): 34,908 RSF Twenty Wall Street: 52,000 RSF Five Wall Street: 181,680 RSF Total: 460,588 RSF

Appears in 1 contract

Samples: Sublease (Demandware Inc)

Operating Cost Escalation. With respect to the First Fiscal Year for Tenant's Paying Operating Cost Escalation, or fraction thereof, and any Fiscal Year or fraction thereafter, Tenant shall pay to Landlord, as additional rentAdditional Rent, Operating Cost Escalation (as defined below), if any, ) on or before the thirtieth 10th day following receipt by Tenant of Landlord's Operating Cost Statement (as defined below). As soon as practicable after After the end of each Fiscal Year ending calendar year during the Term term and after Lease termination, and in either case, no later than 180 days thereafter, Landlord shall render a statement ("Landlord's Operating Cost Statement") in reasonable detail and according to usual accounting practices practices, certified by Landlord Landlord, and showing for the preceding Fiscal Year calendar year or fraction thereof, as the case may be, Landlord's Operating CostsCosts (as defined below). Upon request, Landlord will provide access to Tenant, at reasonable times, to Landlord's books and records relating to the preparation of Landlord's statement, and Tenant may inspect and copy such records as are necessary to verify the accuracy of the Landlord's annual statement. In the event of a dispute, Tenant shall have the right to conduct or have conducted an audit according to generally accepted accounting principles consistently applied, with which Landlord shall cooperate in good faith. In the event of an error of five percent or more, Landlord shall bear all costs of such inspection and audit. For the purpose of this Paragraph 4.2, Landlord's Operating Costs shall exclude the interest and amortization on mortgages for the Building and Lot or leasehold For this purpose of this Paragraph 4.2, Landlord's Operating Costs shall include, without limitation: real estate , premiums for insurance covered by Landlord with respect to the Property; compensation and all fringe benefits, worker's compensation, insurance premiums and payroll taxes on paid by Landlord to, for or with respect to all persons engaged in the managing, operating, maintaining or cleaning of the Property below the grade of property manager; water and sewer use charges for the Property; all utility charges attributable to the interior and exterior common areas and facilities of the Property; payments to contractors and management companies under service or management contracts (or other costs incurred directly by Landlord or its agents) for operating, managing, cleaning, maintaining and repairing the Property, including, without limitation, management fees, Building cleaning, window cleaning, pest extermination, trash removal, landscaping, snow removal and repair and maintenance to elevators, the HVAC, electric and plumbing systems and parking areas (which payments may be to affiliates of Landlord, provided the same are at reasonable rates), and all other reasonable and necessary costs and expenses paid in connection with the cleaning, operating, managing, maintaining, replacing and repairing of the Building or any other portion of the Property (except for capital repairs to or capital replacements of the roof or the foundation or structure of the Building which shall be made by Landlord at its sole cost and Lot; installments expense and interest not passed through as Operating Costs). The following capital repairs and capital replacements are the only categories of capital expenditure that may be included in Operating Costs and the same may be included on assessments for public betterments an amortized basis only, as set forth below: (a) capital expenditures required to comply with laws enacted or public improvements requirements of laws applicable after the date of this Lease or (other than those if any, relating b) capital expenditures to a traffic signal and related accessory improvements and turnaround on Route 9 adjacent repair or replace building systems or components thereof. Capital expenditures made pursuant to the Lot); preceding sentence shall be amortized over the useful life of the item in question with interest thereon at an annual rate equal to two (2%) percent above the base rate (prime rate) of Fleet Bank of Boston (or any other Bank having offices in Boston, Massachusetts chosen by Landlord) from time to time, shall be included in Landlord's Operating Costs. Without limiting the generality of the foregoing, it is also expressly understood and agreed that (a) all costs, expenses and charges (collectively, the "Park Common Expenses") of any proceedings for abatement kind or nature charged or assessed to the Property (or any part thereof) under the Park Covenants and/or Cross Easement, as either the same may be amended, restated, modified, changed, supplemented or substituted from time to time and (b) the cost of taxes all insurance required to be carried by Landlord under the Ground Lease or which Landlord carries under the Ground Lease shall be included in Operating Costs. Tenant also agrees that, at the option of Landlord, the entire cost of all replacements of component parts of machinery and If the management fee is reduced by reason equipment which require periodic replacement or regularly wear out may be treated as an expense and shall be fully included as part of a tenantLandlord's default in the payment of fixed or additional rent, Landlord shall reduce the Annual Estimated Operating Costs without the need to amortize or depreciate the same In determining Landlord's Operating Costs, if less than 95% of the Building shall have been occupied by tenants and fully used by them, at any time during the year, Landlord's Operating Costs which vary directly with the level of Building occupancy (such as cleaning and trash removal) shall be extrapolated to an amount of such reduction in the management fee. In case of services which are not rendered to all areas on a comparable basis, the proportion allocable equal to the Premises shall like operating expenses that would normally be expected to be incurred had such occupancy been 95% and had such full utilization been made during the same proportion entire period, but those Operating Costs which do not vary directly with the Rentable Floor Area level of Tenant's Space bears to the total rentable floor area to which such service is so rendered Building occupancy (such latter area as security costs, snow plowing, utilities to common areas and the like) shall not be determined in the same manner as the Total Rentable Floor Area of the Building)so extrapolated.

Appears in 1 contract

Samples: Lease (Netezza Corp)

Operating Cost Escalation. With respect to the First Fiscal Year for Tenant's ’s Paying Operating Cost Escalation or Real Estate Tax Escalation, or fraction thereof, and any Fiscal Year or fraction thereafterthereafter during the Term, Tenant shall pay to Landlord, as additional rent, Operating Cost Escalation (as defined below), if any, on or before the thirtieth (30th) day following receipt by Tenant of Landlord's ’s Statement (as defined below). As soon as practicable after the end of each Fiscal Year ending during the Term and after Lease termination, and in either case, no later than 180 days thereafter, Landlord shall render a statement ("Landlord's ’s Statement") in reasonable detail and according to usual accounting practices Generally Accepted Accounting Principles (“GAAP”), consistently applied, certified by Landlord Landlord, and showing for the preceding Fiscal Year or fraction thereof, as the case may be, Landlord's ’s Operating Costs. Upon request, Landlord will provide access to Tenant, at reasonable times, to Landlord's books and records relating to the preparation of Landlord's statement, and Tenant may inspect and copy such records as are necessary to verify the accuracy of the Landlord's annual statement. In the event of a dispute, Tenant shall have the right to conduct or have conducted an audit according to generally accepted accounting principles consistently applied, with which Landlord shall cooperate in good faith. In the event of an error of five percent or more, Landlord shall bear all costs of such inspection and audit. For the purpose of this Paragraph 4.2, Landlord's Operating Costs shall exclude ,” EXCLUDING the interest and amortization on mortgages for the Building and Lot or leasehold For this purpose interests therein and the cost of this Paragraph 4.2special services rendered to tenants (including Tenant) versus tenants in general, Landlord's Operating Costs shall includeBUT INCLUDING, without limitation: real estate taxes on the Building Building, the Lot and Lot; the Common Areas of the Park, installments and interest on assessments for public betterments or public improvements improvements, with respect to any Fiscal Year or fraction of a Fiscal Year; premiums for insurance required to be maintained by Landlord pursuant to this Lease; compensation and all fringe benefits, workmen’s compensation, insurance premiums and payroll taxes paid by Landlord to, for or with respect to all persons engaged in the operating, maintaining, or cleaning of the Building and Lot; water, sewer, gas, telephone and the electricity to operate the base building heating, ventilating, air conditioning systems, elevators and parking lot lighting, and other utility charges not billed directly to tenants by Landlord or the utility companies (the cost for the electricity consumed by the tenant for interior lighting, plugs, equipment, supplemental air conditioning and fixtures shall be billed monthly to Tenant by Landlord as set forth in Paragraph IX of Exhibit D); costs of building and cleaning supplies and equipment (including rental); cost of maintenance, cleaning and repairs; cost of snow plowing or removal, or both, and care of landscaping; payments to independent contractors under service contracts for cleaning, operating, managing, maintaining and repairing the Building and Lot (which payments may be to affiliates of Landlord provided the same are at reasonable rates consistent with similar contracts with unaffiliated third parties); the Building’s pro rata share of the cost of operating, managing, maintaining and repairing the Common Areas of the Park (such as, but not limited to, snow plowing, sanding, sand removal, lot sweeping, landscaping, common area and street lighting, and management); and all other reasonable and necessary expenses paid in connection with the operation, cleaning, maintenance, management and repair of the Building and Lot, or either, and properly chargeable against income, it being agreed that if Landlord installs a new or replacement capital item for the purpose of reducing Landlord’s Operating Costs (including without limitation the replacement of an unrepairable items) or as required by governmental regulation or laws, the costs thereof as reasonably amortized over the useful life in years of the capital item so installed in accordance with GAAP, consistently applied, with legal interest (not to exceed the Prime Rate published in the Wall Street Journal plus two percent (2%) on the unamortized amounts, shall be included in Landlord’s Operating Costs. Landlord agrees that all of such services to be included in Landlord’s Operating Costs shall be obtained by Landlord at commercially reasonable, competitive market rates consistent with the operation and management of comparable “Class A” office buildings in the suburban Boston area. Notwithstanding anything to the contrary contained herein, in no event shall Landlord’s Operating Costs include (nor shall Tenant have any obligation to pay any Operating Cost Escalation on account of) the following: (a) Costs, expenses and fees relating to solicitation of, advertising and promotion for and entering into leases and other occupancy arrangements for space in the Park, including but not limited to legal fees, space planners’ fees, real estate brokers’ leasing commissions and advertising expenses, entertaining expenses, dining expenses, any costs relating to tenant or vendor relation programs, including flowers, gifts, luncheons, parties and other social events, but excluding any life safety information programs. (b) Costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord’s interest in the Park (or any part thereof), costs of any disputes between Landlord and its employees, disputes of Landlord with building management, or outside fees paid in connection with disputes with other tenants or adjacent property owners. (c) Costs of correcting defects in the Building or the Building equipment or replacing defective equipment solely to the extent such costs relate to items covered by warranties of manufacturers, suppliers or contractors or are otherwise borne by parties other than Landlord and for which Landlord receives reimbursement after having used good faith and diligent efforts to collect. (d) Costs of installations paid by or constructed for specific tenants or other occupants. (e) Interest, points, other finance charges and principal payments on mortgages, and other costs of indebtedness, if any. (f) All amounts which are specifically charged to or otherwise paid by any other tenant or other occupant of the Building or the Park, or for items, benefits or services which Landlord provides selectively to one or more tenants (other than those Tenant) without reimbursement. (g) Any bad debt loss, rent loss or reserves for bad debts or rent loss, or any reserves of any kind. (h) Amounts, if any, paid as ground rental by Landlord, (i) Expenses related to third-party landlord-tenant disputes. (j) All costs of a capital nature, except as those relating to a traffic signal and related accessory improvements and turnaround on Route 9 adjacent to the Lot); expenses of any proceedings for abatement of taxes and If the management fee is reduced by reason of a tenant's default in the payment of fixed or additional rent, Landlord shall reduce the Annual Estimated reducing Landlord’s Operating Costs as aforesaid and capital expenditures required by government regulation or laws, enacted after the Term Commencement Date , the amount of such reduction costs relating to any such legal requirement(s) to be amortized on a straight-line basis, with interest at the aforesaid rate (i.e. Prime Rate plus two percent per annum), over the asset’s useful life in accordance with GAAP. (k) All repairs or replacements resulting from a breach of Landlord’s Work Guaranty (as defined in Section 3.7 hereof). (l) Expenses in connection with non-Building standard services or benefits of a type which are not provided to Tenant but which are provided to other Building occupants, or for which Tenant is charged directly but which are provided to other Building occupants without direct charge. (m) Expenses associated with the management fee. provision of HVAC services to other Building occupants during non Business Hours as set forth in Exhibit D. In case of services which are not rendered to all areas of the Building on a comparable basis, the proportion allocable to the Premises shall be the same proportion which the Rentable Floor Area of Tenant's ’s Space bears to the total rentable floor area to which such service is so rendered (such latter area to be determined in the same manner as the Total Rentable Floor Area of the Building), or shall be reallocated by Landlord on a reasonable basis taking into consideration such factors as usage of a particular tenant in the Park and/or such other pertinent factors as reasonably determined by Landlord. Landlord covenants to enforce the preceding provision on all tenants in the Park. Tenant shall be responsible to pay its share of Landlord’s Operating Costs of the Operating Cost Escalation for the Building based upon the proportion that the Rentable Floor Area of Tenant’s Space (based on Phases leased) bears to the Total Rentable Floor Area of the Building. Tenant shall also be responsible to pay its pro rata share of Park-related costs, which shall be allocated by Landlord in a commercially reasonable manner based upon the following: upon the ratio of the rentable square footage of the Premises (based on Phases leased) to the aggregate square footage of all completed buildings in the Park (currently 250,428 rentable square feet), as such buildings are completed from time to time, and provided that evidence of completion (i.e. a temporary certificate of occupancy for at least a phase) is provided to Tenant, upon Tenant’s request.

Appears in 1 contract

Samples: Lease Agreement (Aspen Technology Inc /De/)

AutoNDA by SimpleDocs

Operating Cost Escalation. With respect to the First Fiscal Year for Tenant's ’s Paying Operating Cost Escalation, or fraction thereof, and any Fiscal Year or fraction thereafter, Tenant shall pay to Landlord, as additional rent, Tenant’s share of the Operating Cost Escalation (as defined below), if any, on or before the thirtieth (30th) day following receipt by Tenant of Landlord's ’s Statement (as defined below). As soon as practicable Within ninety (90) days after the end of each Fiscal Year ending during the Term and after Lease termination, and in either case, no later than 180 days thereafter, Landlord shall render a statement ("Landlord's ’s Statement") in reasonable detail and according to usual accounting practices certified by Landlord and showing for the preceding Fiscal Year or fraction thereof, as the case may be, Landlord's ’s Operating CostsCosts (as defined herein). Upon request, Landlord will provide access to Tenant, at reasonable times, to Landlord's books and records relating to the preparation of Landlord's statement, and Tenant may inspect and copy such records as are necessary to verify the accuracy of the Landlord's annual statement. In the event of a dispute, Tenant shall have the right to conduct or have conducted an audit according to generally accepted accounting principles consistently applied, with which Landlord shall cooperate in good faith. In the event of an error of five percent or more, Landlord shall bear all costs of such inspection and audit. For the purpose of this Paragraph 4.2, Landlord's Operating Costs shall exclude mean the commercially reasonable costs incurred by Landlord in operating, cleaning, maintaining, managing, and repairing the Building and the Lot, EXCLUDING the principal, interest and amortization on mortgages for the Building Building, and Lot or leasehold For this purpose interests therein, depreciation; improvements made to the Building, the Lot or the Park that do not lower operating costs; and the cost of this Paragraph 4.2, Landlord's Operating Costs shall includespecial services rendered to tenants (including Tenant) for which a special charge is made; BUT INCLUDING, without limitation: real estate taxes on the Building and Lot; installments and interest on assessments for public betterments or public improvements (other than those if any, relating to a traffic signal and related accessory improvements and turnaround on Route 9 adjacent but only to the Lot); extent of the installment required to be paid in such Fiscal Year, Landlord hereby agreeing to pay such amounts over the longest period available under applicable law, reasonable expenses of any proceedings for abatement of taxes and If the management fee is reduced by reason assessments with respect to any Fiscal Year or fraction of a tenant's default Fiscal Year; reasonable premiums for insurance; reasonable compensation and all reasonable fringe benefits for full- time employees at the Building, workmen’s compensation, insurance premiums and payroll taxes paid by Landlord to/for or with respect to all persons engaged in the operating, maintaining, managing or cleaning of the Building and Lot, water, sewer, gas, telephone and the electricity to operate the base building heating, ventilating, air conditioning systems, elevators and parking lot lighting, and other utility charges not billed directly to tenants by Landlord or the utility companies (the cost for the electricity consumed by the tenant for interior lighting, plugs, equipment, supplemental air conditioning and fixtures in shall be billed monthly to Tenant by Landlord as set forth in Paragraph IX of Exhibit “D”); measurable and market costs of building and cleaning supplies and equipment (including rental); reasonable cost of maintenance, cleaning and repairs, including without limitation the services provided in Exhibit “D” hereof; cost of snow plowing or removal, or both, and care of landscaping; payments to independent contractors under service contracts for cleaning, operating, managing, maintaining and repairing the Building and Lot (which payments may be to affiliates of Landlord provided the same are at reasonable rates consistent with the type of occupancy and the services rendered); the Building’s pro rata share (i.e. approximately 39.45% as hereinafter provided) of the Park-related costs (as defined below, including, but not limited to, snow plowing, sanding, sand removal, lot sweeping, landscaping, and common area and street lighting); and all other reasonable and necessary expenses paid in connection with the operation, cleaning, maintenance, management, and repair of the Building (including the cafeteria and fitness center located therein) and Lot, or either, and properly chargeable against income. If Landlord (i) installs a new or replacement capital item for the purposes of (i) reducing Landlord’s Operating Costs, or (ii) is required to perform capital repairs or replacements or to install capital items in order to comply with changes in applicable law from and after the Commencement Date, the costs thereof as reasonably amortized by Landlord over their useful life in accordance with generally accepted accounting principles, with legal interest (not to exceed the then “Prime Rate” published in the Wall Street Journal plus two percent (2%) per annum) on the unamortized amount, shall be included in “Landlord’s Operating Costs”, but with respect to subsection (i) in no event may the amount included herein with respect to a Fiscal Year exceed the reasonably projected annual reduction in Operating Costs. In such event, Tenant shall pay Tenant’s share of such amortization payment for each month after such improvement is completed until the first to occur of the expiration of the Term or the end of the term over which such costs are required to be amortized. Landlord agrees that all of such services to be included in Landlord’s Operating Costs shall be obtained by Landlord at commercially reasonable, competitive market rates consistent with the operation and management of comparable Class A office buildings in the suburban Boston area. Notwithstanding the foregoing, in no event shall “controllable operating expenses” included within Landlord’s Operating Costs increase by more than five percent (5%) per Lease Year, on a cumulative basis. For purposes hereof, the term “controllable operating expenses” shall mean those Operating Costs within Landlord’s control, exercising prudent business practices, but shall exclude the following: (i) insurance premiums; (ii) costs incurred because of changes in applicable laws, rules, regulations, ordinances, requirements, and codes (“Applicable Laws”) after the Commencement Date; (iii) wages and benefits mandated by Applicable Laws or by union contracts; (iv) snow-plowing and expenses incurred as a result of acts of God; (v) the cost of utilities and real estate taxes; and (vi) pest control. Notwithstanding anything to the contrary contained herein, in no event shall Landlord’s Operating Costs include (nor shall Tenant have any obligation to pay any Operating Cost Escalation on account of) the following: (a) Costs, expenses and fees relating to solicitation of, advertising for and entering into leases and other occupancy arrangements for space in the Park, including but not limited to legal fees, space planners’ fees, real estate brokers’ leasing commissions and advertising and marketing expenses. (b) Costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord’s interest in the Park (or any part thereof), costs of any disputes between Landlord and its employees, disputes of Landlord with building management, or outside fees paid in connection with disputes with other tenants, invitees or adjacent property owners. (c) Costs of correcting defects in the Building or the Building equipment or replacing defective equipment solely to the extent such costs relate to items covered by warranties of manufacturers, suppliers or contractors or are otherwise borne by parties other than Landlord and for which Landlord receives reimbursement, (d) Costs of installations paid by or constructed for specific tenants or other occupants. (e) Interest, points, other finance charges and principal payments on mortgages, and other costs of indebtedness, if any. (f) All amounts which are specifically charged to or otherwise paid by any other tenant or other occupant of the Building or the Park, or for items or services which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement. (g) Any bad debt loss, rent loss or reserves for bad debts or rent loss or other future expenses. (h) The salary and indirect compensation (including, without limitation, all fringe benefits, workmen’s compensation, insurance premiums and payroll taxes) of any employee above the trade of property manager, and the wages and indirect compensation of any employee to the extent such employee devotes his or her time to property other than the Building. (i) Amounts, if any, paid as ground rental by Landlord. (j) Expenses related to third-party landlord-tenant disputes. (k) Any cost of any service or items sold or provided to tenants of the Building or Park or other occupants for such service or has been or is entitled to be reimbursed by insurance or otherwise compensated by parties (e.g. easement holders) other than tenants of the Building and for which Landlord receives reimbursement. (l) The costs of repair, replacement, or restoration work occasioned by any casualty or condemnation above the deductible amount on the insurance policy. (m) Any depreciation allowance or expense, expense reserve and other non-cash items. (n) Interest or penalties due to the late payment of fixed taxes, utility bills or additional rentother such costs, unless caused by Tenant, in which event Tenant shall be responsible for same. (o) Any amount payable by Landlord by way of indemnity or for damages or which constitute a fine or penalty, including interest or penalties for late payment, unless caused by Tenant, in which event Tenant shall reduce be responsible for same. (p) Costs incurred to maintain the Annual Estimated structural integrity of the Building, except if caused by the Tenant as set forth in Section 5.1.3 hereof. (q) Costs incurred in connection with the making of repairs or replacements which are the obligation of another tenant or occupant of the Building; (r) Federal and state income taxes, excess profits taxes, franchise taxes, gift taxes, capital stock tax, inheritance and succession taxes, profit, use, occupancy, gross receipts, rental, capital gains, capital stocks income and transfer taxes imposed upon Landlord or the Park, estate taxes and any other taxes to the extent applicable to Landlord’s general or net income; (s) costs of any utility or other service used or consumed in the premises leased or leasable to any tenant or occupant, if Tenant’s use or consumption of such utility or other services is separately metered or sub-metered at the Premises; (t) costs of any additions to or expansions of the Park or the Building; (u) expenditures for capital improvements or replacement except as expressly permitted above; (v) special assessments levied against the Park for any public improvements required to be undertaken by a governmental authority which would normally have been constructed by Landlord as part of the initial construction of the Park; (w) the cost to make improvements, alterations and additions to the Building or the Lot which are required in order to render the same in compliance with laws, rules, orders regulations and/or directives existing as of the date of this Lease; (x) the cost of environmental monitoring, compliance, testing and remediation performed in, on, about and around the Building or the Lot to the extent that such costs are caused by the negligent actions of Landlord or its employees or contractors; (y) any costs or expense related to vacant space; (z) amounts paid to subsidiaries or affiliates of Landlord for services rendered to the Property to the extent such amounts exceed the competitive costs for delivery of such services were they not provided by such related parties; (aa) management fees in excess of five percent (5%) of gross rents; (bb) any cost arising from Landlord’s charitable or political contributions; and (cc) any other expenses which, in accordance with generally accepted accounting principles, consistently applied, would not customarily be treated as Operating Costs by lessors of comparable buildings. In the amount event that the average occupancy rate for the Building is less than ninety-five (95%) percent for any Fiscal Year (including Fiscal Year 2011), then for purposes of calculating Operating Costs, the Operating Costs for such reduction Fiscal Year shall be increased by the additional costs and expenses that Landlord reasonably and in good faith estimates would have been incurred if the average occupancy rate had been ninety-five (95%) percent for such Fiscal Year. It is not the intent of this provision to permit Landlord to charge Tenant for any Operating Costs attributable to unoccupied space, or to seek reimbursement from Tenant for costs Landlord never incurred. Rather, the intent of this provision is to allow Landlord to recover only those increases in Operating Costs properly attributable to occupied space in the management feeBuilding and this provision is designed to calculate the actual cost of providing a variable operating expense service to the portions of the Building receiving such service. This “gross-up” treatment shall be applied only with respect to Operating Costs which vary based on level of occupancy. In case of services which are not rendered to all areas of the Building on a comparable basis, the proportion allocable to the Premises shall be the same proportion which the Rentable Floor Area of Tenant's ’s Space bears to the total rentable floor area to which such service is so rendered (such latter area to be determined in the same manner as the Total Rentable Floor Area of the Building), or shall be re-allocated by Landlord on a reasonable basis taking into consideration such factors as usage of a particular tenant in the Park and/or such other pertinent factors as reasonably determined by Landlord. Tenant shall be responsible to pay its share of the Operating Cost Escalation based upon the proportion that the Rentable Floor Area of Tenant’s Space bears to the Total Rentable Floor Area of the Building (i.e. 26.85%), but any elements of Operating Costs which relate to elements of the Park other than the Building and the Lot (“Park-related costs”), shall be allocated by Landlord in a commercially reasonable manner based upon the following: upon the ratio of the square footage of the Premises to the aggregate square footage of all completed buildings in the Park (e.g. 460,588 RSF), as such buildings are completed from time to time (i.e. the Building’s current share of Park-related costs is approximately 39.45%). In no event shall Park-related costs include costs which do not relate to a service or amenity which has a benefit to the Building or which relate exclusively to another Building or Lot in the Park. As of this date, the Park consists of approximately 460,588 RSF, specifically consisting of the following: One Wall Street: 192,000 RSF Two and Ten Wall Street (Retail): 34,908 RSF Twenty Wall Street: 52,000 RSF Five Wall Street: 181,680 RSF Total: 460,588 RSF “Operating Cost Escalation” shall be equal to the difference for each Fiscal Year, if any, between: (a) the product of Landlord’s Operating Costs per rentable square foot as indicated in Landlord’s Statement times the Rentable Floor Area of Tenant’s Space; and (b) the product of the Base Operating Costs per rentable square foot times the Rentable Floor Area of Tenant’s Space. If, with respect to any Fiscal Year or fraction thereof during the Term, Tenant is obligated to pay Operating Cost Escalation, then Tenant shall pay, as additional rent, on the first day of each month of each ensuing Fiscal Year thereafter, until Landlord’s Statement for an ensuing Fiscal Year reflects that Tenant is not obligated to pay Operating Cost Escalation, “Estimated Monthly Escalation Payments” equal to 1/12th of the annualized Operating Cost Escalation for the immediately preceding Fiscal Year. Estimated Monthly Escalation Payments for each ensuing Fiscal Year shall be made retroactively from the first day of such Fiscal Year and on account of the payment to be made pursuant to the first sentence of this Section 4.2 for such Fiscal Year, with an appropriate additional payment or refund to be made at the time such payment is due for the previous year.

Appears in 1 contract

Samples: Sublease Agreement (Demandware Inc)

Draft better contracts in just 5 minutes Get the weekly Law Insider newsletter packed with expert videos, webinars, ebooks, and more!