Common use of Operating Expense Exclusions Clause in Contracts

Operating Expense Exclusions. Notwithstanding the foregoing, ----------------------------- Operating Expenses shall not include the following: a. Cost of repairs or other work occasioned by fire, windstorm or other casualty of an insurable nature or by the exercise of eminent domain if and to the extent Landlord receives compensation. b. Leasing commissions, attorneys' fees, costs and disbursements and other expenses incurred in connection with negotiations or disputes with tenants, other occupants, or prospective tenants or occupants. c. Renovating or otherwise improving, or decorating or redecorating space for tenants or other occupants of the Building. d. Landlord's costs of electricity and other services that are sold or provided to tenants and for which Landlord is entitled to be reimbursed by tenants as an additional charge or rental over and above the Base Rent and Additional Rent payable under this Lease with such tenant. e. Costs incurred by Landlord for alterations or improvements which are considered capital improvements or replacements under generally accepted accounting principles, except as expressly provided above in Section 3.2(a)(i)(F). f. Depreciation and amortization, except as provided above in Section 3.2(a)(i)(F). g. Expenses in connection with services or other benefits which are not made available to Tenant but which are provided to other tenants or occupants. h. Costs incurred due to violation by Landlord or any tenant of the terms and conditions of any lease. i. Interest on debt or amortization payments on any mortgage or mortgages, and rental under any ground leases. j. Any costs, fines or penalties incurred due to violations by Landlord or any governmental rule or authority, except if and to the extent such costs, fines or penalties are the subject of a good faith appeal by Landlord. k. Compensation paid to officers and executives of Landlord (but it is understood that the on-site building manager and other on-site employees below the grade of building manager may carry a title such as vice president and the salaries and related benefits of these officer/employees of Landlord would be allowable Operating Expenses) and any general corporate overhead of the Landlord. l. Cost incurred in the removal of asbestos or other substances considered to be detrimental to the health or the environment of occupants of the Building. m. Costs associated with bringing the Building in compliance of general building codes, which codes were enacted prior to Tenant's occupancy, whether such work is performed before or after the Commencement Date of this Lease.

Operating Expense Exclusions. Notwithstanding anything contained in the foregoing, ----------------------------- foregoing Section 3.1 the following expenses shall be excluded from Operating Expenses shall not include the followingExpenses: a. Cost 3.2.1 Depreciation or amortization on the initial construction of repairs the Project; 3.2.2 Debt service (including without limitation, interest, principal and any impound payments) required to be made on any mortgage or other work occasioned by fire, windstorm or other casualty deed of an insurable nature or by the exercise of eminent domain if and trust recorded with respect to the extent Landlord receives compensation.Project; b. 3.2.3 The cost of leasehold improvements made for any tenants of the Project; 3.2.4 Leasing commissions, attorneys' fees, costs and disbursements and other expenses (including advertising) incurred in connection with negotiations or disputes with tenantsleasing, other occupantsrenovating, or prospective tenants or occupants. c. Renovating or otherwise improving, or decorating or redecorating improving space for tenants or other occupants of the Project; 3.2.5 Repairs and replacements paid for by insurance proceeds; 3.2.6 Specific costs incurred for the account of, or separately billed to and paid by specific tenants of the Project; 3.2.7 Any cost or expense to the extent to which Landlord is paid or reimbursed (other than as a payment for Operating Expenses), including, but not necessarily limited to, (i) work or services performed for any tenant (including Tenant) at such tenant’s cost, (ii) the cost of any item for which Landlord is paid or reimbursed by insurance, warranties, service contracts, condemnation proceeds or otherwise, (iii) increased insurance or taxes assessed specifically to any Tenant of the Building. d. Landlord's costs , (iv) the portion of electricity charges (including applicable taxes) for electricity, water and other services that are sold or provided to tenants and utilities for which Landlord is entitled to be reimbursed by tenants as reimbursement from any tenant, and (v) the cost of any HVAC, janitorial or other services provided to Tenants on an additional charge or rental over extra-cost basis after regular business hours; 3.2.8 Salaries and bonuses of officers and executives of Landlord and administrative employees above the Base Rent grade of property manager or building supervisor and Additional Rent payable under this Lease with such tenant.Landlord’s general overhead; e. Costs incurred by Landlord 3.2.9 The cost of any work or service performed on an extra-cost basis for alterations or improvements which are considered capital improvements or replacements under generally accepted accounting principles, except as expressly provided above in Section 3.2(a)(i)(F). f. Depreciation and amortization, except as provided above in Section 3.2(a)(i)(F). g. Expenses in connection with services or other benefits which are not made available to Tenant but which are provided to other tenants or occupants. h. Costs incurred due to violation by Landlord or any tenant of the terms and conditions building (including Tenant); 3.2.10 The cost of any lease.work or services performed for any other property other than the Building; i. 3.2.11 Interest on debt or principal amortization payments or any other payments on any mortgage or mortgages, and rental any other payments under any ground leases.lease; j. 3.2.12 Any costsfees, fines costs and commissions incurred in procuring or penalties incurred due attempting to violations procure other tenants, including, but not necessarily limited to brokerage commissions, finder’s fees, attorney’s fees and expenses and entertainment cost and travel expenses and any costs of advertising or promotion of the Building; 3.2.13 Any cost included in Operating Expenses representing an amount paid to a person, firm, corporation or other entity related to Landlord which is in excess of the amount which would have been paid on an arms-length basis in the absence of such relationship; 3.2.14 Any costs of painting or decorating of any interior parts of the Building occupied or occupiable by Landlord tenants; 3.2.15 Any costs necessary to cure any violation of any law, ordinance or regulation applicable to the Building, existing as of the commencement date of this Lease or to remediate any environmental condition existing as of the commencement date of this Lease, including the removal of, or other steps taken with respect to, asbestos located in the Building, unless such condition was caused by Tenant; 3.2.16 Depreciation of the Building or any governmental rule part thereof; 3.2.17 Replacement or authoritycontingency reserves or any bad debt loss, except rent loss or reserves for bad debts or rent loss; 3.2.18 Expenses for renovating Tenant’s space; 3.2.19 Legal or other professional fees relating to leasing, financing, tenant disputes or other services not related to the normal maintenance, cleaning, repair or protection of the Building; 3.2.20 If any operating costs are incurred because of a change of policy or practice in operating the Building that causes an increase in operating expenses for the Building over the operating cost base expenses, such expenses shall be included as Operating Expenses, only if and the change in policy or practice would have been made by a reasonably prudent operator of a comparable building in the metropolitan area in which the Building is located. These changed expenses shall be included as Operating Expenses to the extent of the increase in cost over the projected cost that would have been included in the Operating Cost base had the policy or practice been in effect during the entire Operating Cost Base Year. 3.2.21 costs, expenses and fees relating to solicitation of, advertising for and entering into leases and other occupancy arrangements for space in the Building, including but not limited to legal fees, space planners’ fees, real estate brokers’ leasing commissions and advertising expenses; 3.2.22 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 Building, costs of any disputes between Landlord and its employees (if any) not engaged in Building operation, disputes of Landlord with Building management, or outside fees paid in connection with disputes with other tenants or adjacent property owners; 3.2.23 costs, expenses or judgments occasioned by casualty, injury or damage, to the extent that such costs, fines expenses or penalties judgments are or are required to be covered by insurance to be maintained by Landlord under this Lease; and 3.2.24 With exception of those items specifically referred to as an inclusion, the subject cost of a good faith appeal by Landlord. k. Compensation paid to officers and executives of Landlord (but it is understood that the on-site building manager and other on-site employees below the grade of building manager may carry a title such as vice president and the salaries and related benefits of these officer/employees of Landlord would be allowable Operating Expenses) and any general corporate overhead of the Landlord. l. Cost incurred in the removal of asbestos repairs, alterations, additions, improvements, changes, replacements or other substances considered to be detrimental to the health or the environment of occupants of the Buildingitems which under generally accepted accounting principles are properly classified as capital expenses. m. Costs associated with bringing the Building in compliance of general building codes, which codes were enacted prior to Tenant's occupancy, whether such work is performed before or after the Commencement Date of this Lease.

Operating Expense Exclusions. Notwithstanding the foregoingprovisions of Section 7.4 above, ----------------------------- the following costs and expenses shall be excluded from Landlord’s Operating Expenses shall not include the followingExpenses: a. Cost (1) Landlord’s Tax Expenses; (2) principal or interest on indebtedness, debt amortization or ground rent paid by Landlord in connection with any mortgages, deeds of trust or other financing encumbrances, or ground leases of the Building or the Property; (3) capital improvements to the Property other than those provided in subsection 7.4(i) above; (4) legal, auditing, consulting and professional fees and other costs paid or incurred in connection with financings, refinancings or sales of any interest in Landlord or of Landlord’s interest in the Building or the Property or in connection with any ground lease (including, without limitation, recording costs, mortgage recording taxes, title insurance premiums and other similar costs, but excluding those legal, auditing, consulting and professional fees and other costs incurred in connection with the normal and routine maintenance and operation of the Building and/or the Site); (5) legal fees, space planner’s fees, architect’s fees, leasing and brokerage commissions, advertising and promotional expenditures and any other marketing expense incurred in connection with the leasing of space in the Building (including new leases, lease amendments, lease terminations and lease renewals); (6) the cost of any items to the extent to which such cost is reimbursed to Landlord by tenants of the Property (other than pursuant to this Section 2.6), or other third parties, or is covered by a warranty to the extent of reimbursement for such coverage; (7) expenditures for any leasehold improvement which is made in connection with the preparation of any portion of the Building for occupancy by any tenant or which is not made generally to or for the benefit of the Building or the Property; (8) the cost of performing work or furnishing service to or for any tenant other than Tenant, at Landlord’s expense, to the extent such work or service is in excess of any work or service Landlord is obligated to provide to Tenant or generally to other tenants in the Building at Landlord’s expense; (9) the cost of repairs or other work occasioned replacements incurred by fire, windstorm reason of fire or other casualty casualty, or condemnation (other than costs not in excess of an insurable nature the deductible on any insurance maintained by Landlord which provides a recovery for such repair or by the exercise of eminent domain if and replacement), to the extent Landlord actually receives compensation.proceeds of property and casualty insurance policies or condemnation awards or would have received such proceeds had Landlord maintained the insurance required to be maintained by Landlord under this Lease; b. Leasing commissions(10) the cost of acquiring sculptures, attorneys' paintings or other objects of fine art in the Building in excess of amounts typically spent for such items in Class A office buildings of comparable quality in the competitive area of the Building; (11) bad debt loss, rent loss, or reserves for bad debt or rent loss; (12) reserves; (13) contributions to charitable or political organizations; (14) expenses related solely and exclusively to the operation of the retail space in the Building; (15) damage and repairs and other expenses necessitated by the negligence or willful misconduct of Landlord Parties; (16) fees, costs and disbursements and other expenses incurred by Landlord in connection with negotiations or relating to claims against or disputes with tenants, other occupants, or prospective tenants or occupants. c. Renovating or otherwise improving, or decorating or redecorating space for tenants or other occupants of the Building.; d. Landlord's costs of electricity and other services that are sold or provided to tenants and for which Landlord is entitled to be reimbursed by tenants as an additional charge or rental over and above the Base Rent and Additional Rent payable under this Lease with such tenant. e. Costs incurred by Landlord for alterations or improvements which are considered capital improvements or replacements under generally accepted accounting principles, except as expressly provided above in Section 3.2(a)(i)(F). f. Depreciation and amortization, except as provided above in Section 3.2(a)(i)(F). g. Expenses in connection with services or other benefits which are not made available to Tenant but which are provided to other tenants or occupants. h. Costs incurred due to violation by Landlord or any tenant of the terms and conditions of any lease. i. Interest on debt or amortization payments on any mortgage or mortgages, and rental under any ground leases. j. Any costs(17) interest, fines or penalties for late payment or violations of Legal Requirements by Landlord, if any; (18) the cost of remediation and removal of “Hazardous Materials” (as that term is defined in Section 11.2 below) in the Building or on the Property required by “Hazardous Materials Laws” (as that term is defined in Section 11.2 below), provided, however, that the provisions of this clause 18 shall not preclude the inclusion of costs with respect to materials (whether existing at the Property as of the date of this Lease or subsequently introduced to the Property) which are not as of the date of this Lease (or as of the date of introduction) deemed to be Hazardous Materials under applicable Hazardous Materials Laws but which are subsequently deemed to be Hazardous Materials under applicable Hazardous Materials Laws (it being understood and agreed that Tenant shall nonetheless be responsible under Section 11.2 of this Lease for all costs of remediation and removal of Hazardous Materials to the extent caused by Tenant Parties); (19) costs of replacements, alterations or improvements necessary to make the Building or the Property comply with Legal Requirements in effect and applicable to the Building and/or the Property prior to the date of this Lease (provided, however, that the provisions of this clause 19 shall not preclude the inclusion of costs of compliance with Legal Requirements enacted prior to the date of this Lease if such compliance is required for the first time by reason of any amendment, modification or reinterpretation of a Legal Requirement which is imposed after the date of this Lease); (20) costs and expenses incurred due for the administration of the entity which constitutes Landlord, as the same are distinguished from the costs of operation, management, maintenance and repair of the Property, including, without limitation, entity accounting and legal matters; (21) salaries and all other compensation (including fringe benefits) of partners, officers and executives above the grade of Regional Property Manager; (22) the wages and benefits of any employee who does not devote substantially all of his or her employed time to violations the Property unless such wages and benefits are prorated on a reasonable basis to reflect time spent on the operation and management of the Property vis-à-vis time spent on matters unrelated to the operation and management of the Property; (23) except as may be otherwise expressly provided in this Lease with respect to specific items, the cost of any services or materials provided by Landlord or any governmental rule or authorityparty related to Landlord, except if and to the extent such costscost exceeds, fines the reasonable cost for such services or penalties are materials absent such relationship in self-managed buildings similar to the subject Building in the vicinity of a good faith appeal by Landlord.the Building; k. Compensation paid (24) depreciation for the Building; (25) expenses incurred for the repair, maintenance or operation of the 100 Clarendon Garage, including but not limited to officers salaries and executives benefits of any attendants, electricity, insurance and taxes; and (26) expenses for any item or service for which Tenant separately reimburses Landlord (but it i.e., items or services in excess of what Landlord is understood that the on-site building manager and obligated to provide to Tenant or generally to other on-site employees below the grade of building manager may carry a title such as vice president and the salaries and related benefits of these officer/employees of Landlord would be allowable Operating Expenses) and any general corporate overhead of the Landlord. l. Cost incurred tenants in the removal of asbestos or other substances considered to be detrimental Building), and expenses incurred by Landlord to the health extent the same are separately reimbursable or the environment of reimbursed from any other tenants, occupants of the Buildingproperty or third parties. m. Costs associated with bringing the Building in compliance of general building codes, which codes were enacted prior to Tenant's occupancy, whether such work is performed before or after the Commencement Date of this Lease.

Operating Expense Exclusions. Notwithstanding Operating Expenses" shall exclude all Landlord profits and all costs in excess of costs reasonably incurred by prudent operators and managers of similar office building in the foregoingRockville, ----------------------------- Maryland area. Landlord shall use commercially reasonable efforts to minimize Operating Expenses. Operating Expenses shall be net of any reimbursement, refund or credit received by Landlord for the corresponding item of Operating Expense. In no event shall Landlord recover from County more than an amount equal to Tenant’s Pro Rata Share of One Hundred Percent (100%) of Operating Expenses. Landlord shall not include recover more than the following: a. Cost full actual cost of repairs any item through Additional Rent or charges to other work Building tenants. Landlord shall make no profit in connection with Operating Expenses nor shall Landlord recover any item of cost twice through Operating Expenses. The following items shall be specifically excluded from the Operating Expenses: (1) expenses for any capital improvements that were made to the Land or Building after the Lease Commencement Date that are not reasonably expected to reduce Operating Expenses; (2) expenses occasioned by fire, windstorm or other insured casualty of an insurable nature or by the exercise of eminent domain if and to the extent Landlord receives compensation. b. Leasing is reimbursed by insurance for such loss; (3) advertising, commissions, attorneys' fees, costs tenant improvements and disbursements and all other expenses incurred in connection with negotiations leasing or disputes with procuring new tenants; (4) expenses for repairs or improvements to other tenants’ leased space; (5) legal fees incurred in enforcing the terms of any lease or arising out of any mortgage or ground lease affecting the Building; (6) interest, other occupantsprincipal, or prospective tenants or occupants. c. Renovating or otherwise improvingrental, or decorating or redecorating space for tenants late fees or other occupants costs of any indebtedness or ground lease; (7) the cost of any work or service performed for any tenant at such tenant’s cost; (8) the cost of any work or materials performed or supplied to any facility other than the Building. d. Landlord's costs ; (9) the cost of electricity and other services that are sold or provided to tenants and any items for which Landlord is entitled to be reimbursed by tenants insurance, any tenant or otherwise; (10) salaries, wages and benefits of Landlord’s officers, directors, and employees above the level of Building manager; (13) the cost of installing, operating, maintaining or refurbishing any specialty service, such as an additional observatory, broadcasting facility, luncheon club, restaurant, retail store, sundry shop, athletic or recreational club or locker rooms, meeting rooms or lounges; (14) any charge for depreciation of the Building or rental over and above the Base Rent and Additional Rent payable under this Lease with such tenant. e. Costs incurred by Landlord for alterations or improvements which are considered capital improvements or replacements under generally accepted accounting principles, except as expressly provided above in Section 3.2(a)(i)(F). f. Depreciation and amortization, except as provided above in Section 3.2(a)(i)(F). g. Expenses in connection with services equipment; (15) any tenant improvement allowance or other benefits which are not made available payment from Landlord to Tenant; (16) taxes excluded from the definition of “Taxes”; (17) bad debt losses or reserves therefore; (18) costs of selling, syndicating, financing, mortgaging, or hypothecating any of the Building or Land or Landlord’s interest in the Building or Land; (19) expenses resulting from tortious conduct of Landlord, its employees, agents or contractors; and (20) any janitorial, HVAC and/or electrical expenses for the Leased Premises that Tenant but which are provided pays directly to other tenants or occupants. h. Costs incurred due to violation by the Landlord or any tenant of the terms and conditions of any leasethird (3rd) party. i. Interest on debt or amortization payments on any mortgage or mortgages, and rental under any ground leases. j. Any costs, fines or penalties incurred due to violations by Landlord or any governmental rule or authority, except if and to the extent such costs, fines or penalties are the subject of a good faith appeal by Landlord. k. Compensation paid to officers and executives of Landlord (but it is understood that the on-site building manager and other on-site employees below the grade of building manager may carry a title such as vice president and the salaries and related benefits of these officer/employees of Landlord would be allowable Operating Expenses) and any general corporate overhead of the Landlord. l. Cost incurred in the removal of asbestos or other substances considered to be detrimental to the health or the environment of occupants of the Building. m. Costs associated with bringing the Building in compliance of general building codes, which codes were enacted prior to Tenant's occupancy, whether such work is performed before or after the Commencement Date of this Lease.