Common use of Operating Costs—Base Year Clause in Contracts

Operating Costs—Base Year. Beginning on the first day of the second (2nd) calendar year (i.e. January 1, 2007), Tenant shall pay as Additional Rent Tenant’s estimated Proportionate Share (as defined below) of the amount by which Operating Costs (as defined below) for each calendar year falling entirely or partly within the Term exceed a base amount (the “Operating Costs Base Amount”) equal to the “Operating Costs” incurred during the Base Year for Operating Costs. In the event the Operating Costs Base Amount as otherwise determined in this Section is abnormally high in comparison to the historical average of Operating Costs for the prior five (5) calendar years, taking into account year-by-year increases, the Operating Costs Base Amount shall be determined by taking the Building’s average Operating Costs for the prior five (5) calendar years and increasing such average Operating Costs by the average annual increase in the Building’s Operating Costs. For purposes of this Lease, “Tenant’s Proportionate Share” for Operating Costs has been calculated to be that percentage that is equal to a fraction, the numerator of which is the number of square feet of Gross Rentable Area in the Premises, and the denominator of which is the number of square feet of the Gross Rentable Area set forth in the Basic Lease Information. To the extent Landlord, at the Effective Date, carries earthquake, terrorism and/or mold insurance coverage, such coverage shall be included in the Operating Costs Base Amount, and Tenant shall be responsible for increases above the Operating Costs Base Amount consistent with this Section 4.1. To the extent Landlord elects, in its sole discretion to carry earthquake, terrorism and/or mold insurance coverage (and Landlord did not maintain such coverage at the Effective Date of this Lease), then Landlord shall increase the Operating Costs Base Amount by the per square foot costs attributable to the premiums payable for the first full calendar year that such coverage is purchased, and thereafter, increases in premiums shall be includable in Operating Costs.