Common use of Operating Expenses Defined Clause in Contracts

Operating Expenses Defined. Operating Expenses", as used in this Lease, means all amounts paid or accrued by Landlord per calendar year for the operation and maintenance of the Project or the land on which it is situated, and the equipment, fixtures and facilities used in connection therewith, including the parking area. Operating Expenses includes, but is not limited to the cost of utilities, building supplies, janitorial and window cleaning services, normal maintenance and repair of the Project and the common areas (including elevators, if any, and the periodic refurbishing of the common areas), heating and air-conditioning, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape maintenance, taxes (defined below), insurance premiums (including boiler and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurance), and all labor, supplies, materials, tools, professional fees, management fees, wages, salaries and payroll burden of the Project manager, clerical maintenance and other employees directly associated with the operation of the Project, (including Project office rent or rental value, office supplies and materials, and all other items constituting operating and maintenance costs in connection with the Project and land according to generally accepted accounting principles). Operating Expenses shall not include the following: (a) depreciation of the Project, (b) leasing commissions, (c) repairs and restorations paid for by the proceeds of any insurance policy or (d) construction of improvements of a capital nature, except for the cost, or a portion thereof properly allocable to the Project, of any capital improvements made to the Project specifically to reduce Operating Expenses, or required to be made to the Project specifically to reduce Operating Expenses, or required to be made to the Project under any governmental law or regulation not applicable to the Project at the time it was constructed. Such cost shall be amortized over such reasonable period of time as Landlord shall determine, (e) ground rent, (f) debt service, (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of or as a substitute in whole or in part for Taxes.

Operating Expenses Defined. The term “Operating Expenses", as used in this Lease, means ” shall mean all amounts paid or accrued reasonable expenses actually incurred by Landlord per calendar year for the operation and maintenance of the Project or the land on which it is situated, and the equipment, fixtures and facilities used in connection therewithwith the operation, including the parking area. Operating Expenses includesmanagement, but is not limited to the cost of utilities, building supplies, janitorial and window cleaning services, normal maintenance and repair of the Project (which shall in all cases be net of any discounts, credits, reimbursements and the common areas (including elevators, if any, and the periodic refurbishing of the common areasrebates received by Landlord or which Landlord is entitled to receive), heating and air-conditioning, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape maintenance, taxes (defined below), insurance premiums (including boiler and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurance), and all labor, supplies, materials, tools, professional fees, management fees, wages, salaries and payroll burden of the Project manager, clerical maintenance and other employees directly associated with the operation of the Project, (including Project office rent or rental value, office supplies and materials, and all other items constituting operating and maintenance costs in connection with the Project and land . All Operating Expenses shall be determined according to generally accepted accounting principles), which shall be consistently applied. Operating Expenses shall include, but are not include limited to, the followingfollowing items: (a) depreciation the cost of the personal property used in conjunction with the operation, management, maintenance and repair of the Project; (b) costs to repair and maintain the Project; (c) all expenses paid or incurred by Landlord for water, gas, electric, sewer and oil services for the Project; (d) the costs and expenses incurred in connection with the provision of the services set forth in Article 7, above and any other services provided by Landlord to the Project from time to time; (e) building supplies and materials used in connection with repairs to the Project; (f) cleaning and janitorial services in or about the Premises and the Project; (g) window glass replacement, repair and cleaning; (h) repair, replacement and maintenance of the grounds, including costs of landscaping, lighting, Project and Building signage, gardening and planting, including service or management contracts with independent contractors, including but not limited to security and energy management services and costs; (i) operational costs to achieve compliance with applicable laws, statutes, codes, ordinances, orders, rules, regulations, conditions of approval and requirements of all federal, state, county, municipal and governmental authorities and all administrative or judicial orders or decrees and all permits, licenses, approvals and other entitlements issued by governmental entities, and rules of common law, relating to or affecting the Project or the Premises or the use or operation thereof, including, without limitation, ADA Requirements and Environmental Laws and any covenants, conditions and restrictions, or any corporation, committee or association formed in connection therewith (“Applicable Laws”) but only if and to the extent such Applicable Laws are first applicable to the Project after the initial Lease Commencement Date, excluding capital expenses associated therewith except to the extent specifically set forth below; (j) utility taxes; (k) compensation (including employment taxes, fringe benefits, salaries, wages, medical, surgical, and general welfare benefits (including health, accident and group life insurance)), pension payments, payroll taxes for all personnel employed by Landlord or its management company (up to level of senior property manager) who perform duties in connection with the operation, management, maintenance and repair of the Project (it being expressly understood that to the extent such personnel are not assigned exclusively to the Project, then Operating Expenses shall include only the portion of the foregoing costs that Landlord reasonably allocates to the Project based upon the total square footage of the properties to which any such person is assigned) plus the salary and benefits of the property manager specifically assigned to the Project; (I) any (i) capital expenditures incurred to reduce Operating Expenses (to the extent of the anticipated savings each calendar year during the Term as estimated by a third-party engineering or professional consulting firm engaged by Landlord), (ii) capital expenditures incurred to comply with Applicable Laws to the extent (I) not in effect as of the Commencement Date or (II) in effect as of the Commencement Date as may be amended, changed, added to, interpreted or re-interpreted by applicable governmental authority or court decision, or administrative ruling subsequent to Commencement Date (such (I) and (II) being herein called “Newly Enacted Laws”), such capital expenditures shall be recoverable only over the useful life of the item in question by amortizing such expenditure over such useful life (in accordance with applicable federal income tax guidelines) at an annual interest rate equal to eight percent (8%) at the time of such expenditure, and only the sum of all amortization payments payable during the year in question shall be includable in Operating Expenses in each year during such recovery period, (the foregoing collectively referred to as “Permitted Capital Expenditures”); (m) cost of premiums for casualty and liability insurance policies required to be maintained by Landlord hereunder and any other insurance carried by Landlord with respect to the Project; (n) license, permit and inspection fees; (o) management fees not to exceed two and one half percent (2.5%) of the Building gross revenues per annum; (p) consulting fees in connection with the provision of common area maintenance services to the extent not duplicative of costs incurred via the management fee; (q) personal property and BPOL taxes; (r) trash removal, including all costs incurred in connection with waste product recycling; (s) snow and ice removal or prevention to the extent permitted ; (t) maintenance, repair and striping of all parking areas used by tenants of the Building, and any other cost or assessment payable in connection with the maintaining of such parking areas; (u) uniforms and dry cleaning; (v) telephone, cellular phone, paging, telegraph, postage, stationery supplies and other materials and expenses required for the routine operation of the Building; (w) association and other assessments for maintenance of on-site or offsite improvements prorated to reflect the extent to which such improvements serve or benefit the Project in comparison to other properties also served or benefitted thereby or are allocated to the Project in accordance with any applicable reciprocal easement, maintenance agreement or similar encumbrance; (x) costs and expenses relating to compliance with any ongoing existing proffer obligations applicable to the Project; (y) the cost of acquisition, repair, maintenance and replacement of seasonal Building decoration; (z) the cost of operating, maintaining, repairing and replacing conduits and other electrical fixtures, fire protection, alarm and sprinkler systems, Building and Project plumbing and storm and sanitary sewer systems, (aa) costs and fees charged and/or assessed in connection with any business improvement district that is applicable to the Project; (bb) costs and fees charged and/or assessed in connection with any transportation district fee or assessment that is applicable to the Project, (bcc) leasing commissionsall costs of operating, (c) repairs maintaining, repairing and restorations paid for by the proceeds replacing equipment in any portion of any insurance policy or (d) construction of improvements of a capital nature, except for the cost, or a portion thereof properly allocable to fitness facility in the Project, of any capital improvements made and (dd) the Amenities OpEx. Notwithstanding anything in this Lease to the Project specifically contrary, the preceding list is for definitional purposes only and shall not impose any obligation upon Landlord to reduce Operating Expenses, incur such expenses or required to be made to the Project specifically to reduce Operating Expenses, or required to be made to the Project under any governmental law or regulation not applicable to the Project at the time it was constructed. Such cost shall be amortized over provide such reasonable period of time as Landlord shall determine, (e) ground rent, (f) debt service, (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of or as a substitute in whole or in part for Taxesservices.

Operating Expenses Defined. As used herein, the term "Operating -------------------------- Expenses"" shall mean all expenses, costs and disbursements of every kind and nature, except as used specifically excluded otherwise herein, which Landlord incurs because of or in this Leaseconnection with the ownership, means maintenance, management and operation of the Project, including, if the Project is less than ninety-five percent (95%) occupied, all amounts additional costs and expenses of operation, management and maintenance of the Project which Landlord determines that it would have paid or accrued incurred during any Calendar Year if the Project had been ninety-five percent (95%) occupied. Operating Expenses may include, without limitation, all costs, expenses and disbursements incurred or made in connection with the following: (a) Wages and salaries of all employees, whether employed by Landlord per calendar year for or the Project's management company, engaged in the operation and maintenance of the Project Project, and all costs related to or associated with such employees or the land carrying out of their duties, including uniforms and their cleaning, taxes, auto allowances and insurance and benefits (including, without limitation, contributions to pension and/or profit sharing plans and vacation or other paid absences); (b) All supplies, tools, equipment and materials, including janitorial and lighting supplies, used directly in the operation and maintenance of the Project, including any lease payments therefor; provided, however, any such equipment which under generally accepted accounting principles should be classified as capital items shall be amortized on which it is situateda straight-line basis over their useful lives, not to exceed the Project's useful life, together with interest on the unamortized balance of such cost at the Interest Rate, or such higher rate as may have been paid by Landlord on funds borrowed for the purposes of purchasing such equipment; (c) All utilities, including, without limitation, electricity, telephone, water, sewer, power, gas, heating, lighting and air conditioning for the Project, except to the extent such utilities are charged directly to, or paid directly by, a tenant of the Project other than as a part of the Operating Expenses; (d) All maintenance, operation and service agreements for the Project, and any equipment related thereto, including, without limitation, service and/or maintenance agreements for the equipmentParking Facilities, fixtures energy management, HVAC, plumbing and facilities electrical systems, and for window cleaning, elevator maintenance, janitorial service, groundskeeping, interior and exterior landscaping and plant maintenance; (e) All insurance purchased by Landlord or the Project's management company relating to the Project and any equipment or other property contained therein or located thereon including, without limitation, casualty, liability, earthquake, rental loss, sprinkler and water damage insurance; (f) All repairs to the Project (excluding to the extent repairs are paid for by the proceeds of insurance or by Tenant or other third parties other than as a part of the Operating Expenses), including interior, exterior, structural or nonstructural repairs, and regardless of whether foreseen or unforeseen; provided, however, any such repairs which under generally accepted accounting principles should be classified as capital improvements shall be amortized on a straight-line basis over their useful lives, not to exceed the Project's useful life, together with interest on the unamortized balance of such cost at the Interest Rate, or such higher rate as may have been paid by Landlord on funds borrowed for the purposes of constructing such capital improvements; (g) All maintenance of the Project, including, without limitation, repainting, replacement of wall coverings and window coverings, replacement of carpeting, ice and snow removal, window washing, landscaping, groundskeeping, trash removal and the patching, painting, resealing and complete resurfacing of roads, driveways and parking lots; provided, however, any such maintenance, repairs or replacements which under generally accepted accounting principles should be classified as capital improvements shall be amortized on a straight-line basis over their useful lives, not to exceed the Projects useful life, together with interest on the unamortized balance of such cost at the Interest Rate, or such higher rate as may have been paid by Landlord on funds borrowed for the purposes of constructing such capital improvements; (h) A market rate management fee for management of buildings of comparable size, age, location and quality in the El Segundo/Manhattan Beach Area, payable to Landlord or the company or companies managing the Project, if any; (i) That part of office rent or rental value of space in the Project used or furnished by Landlord to enhance, manage, operate and maintain the Project; provided, however, such space shall not exceed 4,000 square feet; (j) Accounting and legal fees incurred in connection therewithwith the operation and maintenance of the Project, including or related thereto; (k) Any additional services not provided to the parking area. Project at the Commencement Date but thereafter provided by Landlord which Landlord reasonably deems necessary or desirable in connection with the management or operation of the Project; (l) Any capital improvements made to the Project for the purpose of reducing Operating Expenses includesor which are required under any governmental law or regulation that was not applicable to the Project as of the Date of Lease (which are not a result of the nature of Tenant's specific use of the Premises, but is not limited to which capital improvements shall be the responsibility of Tenant), the cost of utilitieswhich shall be amortized on a straight-line basis over the improvement's useful life, building suppliesnot to exceed the Project's useful life, janitorial together with interest on the unamortized balance of such cost at the Interest Rate, or such higher rate as may have been paid by Landlord on funds borrowed for the purposes of constructing such capital improvements; and (m) Other expenses and window cleaning servicescosts reasonably necessary for operating and maintaining the Project. Notwithstanding the foregoing, normal maintenance Operating Expenses shall not include: (i) ground rents, if any; (ii) interest, principal, points and fees or amortization on any mortgage or any other debt instrument encumbering the Project; (iii) capital items other than those referred to in subsections (b), (f), (g) and (l) above; (iv) expenditures incurred by Landlord for the repair of damage to the Project resulting from fire or other casualty to the extent Landlord is reimbursed by insurance proceeds; (v) depreciation or amortization of the Project or any other improvements, fixtures or equipment within the Project, except as otherwise provided in subsections (b), (f), (g), and (l) above; (vi) Landlord's advertising and promotional expenses; (vii) leasing commissions and finders' fees; (viii) attorneys' fees incurred by Landlord in connection with negotiations for leases with tenants or prospective tenants of the Project and the common areas (including elevators, if any, and the periodic refurbishing in connection with disputes with and/or enforcement of any leases with tenants or prospective tenants of the common areas)Project; provided, heating however, Operating Expenses shall include those reasonable attorneys' fees and air-conditioningother costs and expenses incurred in connection with Landlord's successful negotiations of disputes or claims related to items of Operating Expenses, waste disposal, lighting, enforcement of Rules and Regulations for the Project and such other matters relating to the maintenance of fire protection standards required by Landlord under the Lease. (ix) costs of tenant improvements, including architectural and security systemsengineering costs, planting "tenant allowances" and landscaping"tenant concessions", landscape maintenancepermit, taxes (defined below), insurance premiums (including boiler license-and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurance), and all labor, supplies, materials, tools, professional inspection fees, management fees, clean-up costs and other costs and expenses incurred in renovating leased space for the exclusive use of a particular tenant of the Project; (x) items and services for which a tenant specifically reimburses Landlord or for which a tenant pays third persons; (xi) wages, salaries salaries, fees and payroll burden benefits paid to administrative or executive personnel of Landlord above the level of the Project managerManager and below such level for any personnel to the extent not involved in the direct management of the Project; (xii) any cost representing an amount paid for services or materials to a person, clerical maintenance and other employees directly firm or entity related to Landlord or any general partner of Landlord, to the extent such amount exceeds the amount that would be paid for such services or materials of comparable quality at the then existing market rates to an unrelated person, firm or corporation; (xiii) costs associated with the operation of the Projectbusiness of the partnership which constitutes the Landlord, (including Project office rent or rental value, office supplies and materials, and all other items constituting operating and maintenance costs in connection with as the Project and land according to generally accepted accounting principles). Operating Expenses shall not include same are distinguished from the following: (a) depreciation cost of operation of the Project; (xiv) costs incurred due to Landlord's violation of laws in effect as of the Date of Lease; (xv) all interest, late charges, penalties and attorneys' fees incurred as a result of Landlord's violation of laws (bincluding environmental laws) leasing commissionspromulgated after the Date of Lease, except to the extent resulting from the failure of Tenant to pay Rent in a timely manner; (cxvi) repairs and restorations paid for by Landlord's charitable or political contributions; (xvii) costs associated with the proceeds repair or correction of any insurance policy latent defects in the initial design or (d) construction of improvements the Project; (xviii) costs of a capital nature, except for compliance with the cost, or a portion thereof properly allocable ADA to the Project, of any capital improvements made extent Landlord is responsible for such costs pursuant to the Project specifically to reduce Operating Expenses, or required to be made to the Project specifically to reduce Operating Expenses, or required to be made to the Project under any governmental law or regulation not applicable to the Project at the time it was constructed. Such cost shall be amortized over such reasonable period of time SECTION 9.4(a) -------------- herein; and (xix) Impositions (as Landlord shall determine, (e) ground rent, (f) debt service, (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid defined in lieu of or as a substitute in whole or in part for Taxes.ARTICLE VII hereof); -----------

Operating Expenses Defined. As used herein, the term "Operating Expenses", as used in this Lease, means all amounts " shall mean and include those costs and expenses paid or accrued incurred by or on behalf of Landlord per calendar year for managing, operating, maintaining and repairing the operation and maintenance of the Project or the land on which it is situatedProject, and the equipmentincluding, fixtures and facilities used in connection therewithwithout limitation, including the parking area. Operating Expenses includes, but is not limited to the cost of utilitiessecurity and security devices and systems; snow, building suppliesice and trash removal; cleaning and sweeping; planting and replacing decorations, janitorial flowers and window cleaning serviceslandscaping; maintenance, normal repair and replacement of utility systems, elevators and escalators [but including replacement only to the extent of replacement of parts and components incidental to the maintenance and repair thereof and not to the extent replacement of any item would constitute a capital improvement or a capital expenditure which is excluded from Operating Expenses as hereinafter provided]; electricity, steam, water, the Project condenser water riser system, sewer, fuel, heating, lighting and the common areas (including elevatorsair conditioning; window cleaning; janitorial service; insurance, if anyincluding, and the periodic refurbishing of the common areas)but not limited to, heating and air-conditioningfire, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape maintenance, taxes (defined below), insurance premiums (including boiler and machinery, fire and extended coverage, earthquakeall risk, floodliability, rental workmen's compensation, elevator and public liability insurance), any other insurance carried by Landlord and all labor, supplies, materials, tools, professional fees, applicable to the Project; painting; uniforms; management fees; supplies; sundries; sales or use taxes on supplies and services; wages and salaries of all persons employed by Landlord or Landlord's management agent and engaged in the operation, wagesmanagement, salaries and payroll burden of the Project manager, clerical maintenance and other employees directly associated with the operation or repair of the Project, (and so-called fringe benefits, including Project office rent social security taxes, unemployment insurance taxes, cost for providing coverage for disability benefits, cost of any pensions, hospitalization, welfare or rental value, office supplies and materialsretirement plans, and all any other items constituting operating and similar expenses incurred under the provisions of any collective bargaining agreement, or any other cost or expense which Landlord pays or incurs to provide benefits for employees so engaged in the operation, management, maintenance costs in connection or repair of the Project; the charges of any contractor who, under contract with Landlord or its representatives, does any of the work of operating, managing, maintaining or repairing the Project (provided such charge is not an Excluded Operating Expense); legal and land according to accounting expenses, seeking or obtaining reductions in and refunds of real estate taxes; and any other expense or charge, whether or not hereinbefore mentioned, which, in accordance with generally accepted accounting and management principles), would be considered an expense of managing, operating, maintaining or repairing the Project, except as hereinafter provided. Operating Expenses shall not include the following: (a) depreciation any of the Projectfollowing (collectively, the “Excluded Operating Expenses”): costs or other items included within the meaning of the term Taxes (b) as hereinafter defined); costs of alterations of the premises of tenants of the Building; costs of capital improvements to the Project (except as herein provided); depreciation charges; interest and principal payments on mortgages; ground rental payments; real estate brokerage and leasing commissions, ; other expenses incurred in leasing or in procuring tenants; any expenditures for services which are provided to one or more tenants but are not available generally to all office tenants; any expenditures for which Landlord has been reimbursed (cother than pursuant to this Article or provisions in other leases requiring the tenants thereunder to pay a share of expenses associated with the Building); and any of the expenses identified on Exhibit C attached hereto. If the Building is not at least ninety-five percent (95%) repairs and restorations paid for occupied by the proceeds of any insurance policy or (d) construction of improvements of a capital nature, except for the cost, tenants during all or a portion thereof properly allocable to the Project, of any capital improvements made Calendar Year, or if during all or any portion of any Calendar Year Landlord is not furnishing to any tenant or tenants any particular service, the Project specifically to reduce cost of which, if furnished by Landlord, would be included in Operating Expenses, then Landlord may elect to make an adjustment for such year of Operating Expenses and the amounts thereof which may vary depending upon the occupancy level of the Building or required the number of tenants using the service. Any such adjustments shall be deemed costs and expenses paid or incurred by Landlord and included in Operating Expenses for such year, as if the Building had been ninety-five percent (95%) occupied during the entire Calendar Year, Landlord had furnished such service at its expense to be made all tenants for the entire Calendar Year and Landlord had paid or incurred such costs and expenses for such year. Notwithstanding anything to the Project specifically contrary contained herein, Landlord shall not be entitled to reduce adjust, in accordance with this Section 6.1, any legal or accounting expense or costs related thereto or insurance premiums which are included in Operating Expenses, or required to be made to the Project under any governmental law or regulation not applicable to the Project at the time it was constructed. Such cost shall be amortized over such reasonable period of time as Landlord shall determine, (e) ground rent, (f) debt service, (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of or as a substitute in whole or in part for Taxes.

Operating Expenses Defined. Operating Expenses", as used in this Lease, means all amounts paid or accrued by Landlord per calendar year for the operation and maintenance of the Project or the land on which it is situated, and the equipment, fixtures and facilities used in connection therewith, including the parking area. Operating Expenses includes, but is it not limited to the cost of utilities, building supplies, janitorial and window cleaning services, normal maintenance and repair of the Project and the common areas (including elevators, if any, and the periodic refurbishing of the common areas), heating and air-conditioning, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape maintenance, taxes (defined below), insurance premiums (including boiler and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurance), and all labor, supplies, materials, tools, professional fees, management fees, wages, salaries and payroll burden of the Project managerManager, clerical maintenance and other employees directly associated with the operation of the Project, (including Project office rent or rental value, office supplies and materials, and all other items constituting operating and maintenance costs in connection with the Project and land according to generally accepted accounting principles). Operating Expenses shall not include the following: (a) depreciation of the Project, (b) leasing commissions, (c) repairs and restorations paid for by the proceeds of any insurance policy or (d) construction of improvements of a capital nature, except for the cost, or a portion thereof properly allocable to the Project, of any capital improvements made to the Project specifically to reduce Operating Expenses, or required to be made to the Project specifically to reduce Operating Expenses, or required to be made to the Project under any governmental law or regulation not applicable to the Project at the time it was constructed. Such cost shall be amortized over such reasonable period of time as Landlord shall determine, (e) ground rent, (f) debt service, (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of or as a substitute in whole or in part for Taxes.

Operating Expenses Defined. Operating Expenses", ," as used in this Lease, means all amounts paid or accrued by Landlord per calendar year for the operation and maintenance of the Project Building or the land on which it is situated, and the equipment, fixtures and facilities used in connection therewith, including the parking area. Operating Expenses includesinclude, but is are not limited to the cost of utilities, window cleaning, services, building supplies, janitorial and window cleaning services, normal maintenance and repair of the Project Building and the common areas (including elevators, if any, and the periodic refurbishing of the common areas), heating and air-air conditioning, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape maintenance, taxes "Taxes" (as defined below), insurance premiums (including without limitation boiler and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurance), and all labor, supplies, materials, tools, professional fees, management fees, wages, salaries and payroll burden of the Project managerBuilding's manager and clerical, clerical maintenance and other employees directly associated with the operation of the ProjectBuilding, (including Project Building office rent or rental value, office supplies and materials, and all other items constituting operating and maintenance costs in connection with the Project Building and land according to generally accepted accounting principles). Operating Expenses shall not include the following: (a) depreciation of the Project, depreciation; (b) leasing commissions, ; (c) repairs and restorations paid for by the proceeds of any insurance policy or policy; (d) construction of improvements of a capital nature, ; except for the cost, or a portion thereof thereof, properly allocable to the ProjectBuilding, of any capital improvements made to the Project Building specifically to reduce Operating Expenses, which cost shall be amortized over the useful life of the improvement (together with interest on the unamortized balance at Landlord's cost of funds), or required to be made to the Project specifically to reduce Operating Expenses, or required to be made to the Project Building under any governmental law or regulation not applicable to the Project Building at the time it was constructed. Such , which cost shall also be amortized over such reasonable period the useful life of time as Landlord shall determine, the improvement (together with interest on the unamortized balance at Landlord's cost of funds); (e) ground rent, ; (f) debt service, ; and (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of or as a substitute in whole or in part for Taxes. If less than ninety-five percent (95%) of the rentable area of the Building is actually occupied during any calendar year, Operating Expenses for such calendar year shall be the amount that the Operating Expenses would have been for such calendar year had ninety-five percent (95%) of the rentable area of the Building been occupied during all of such calendar year as determined by Landlord.

Operating Expenses Defined. As used herein, the term “Operating Expenses"” shall mean all expenses and costs which Landlord incurs to maintain, as used manage and operate the Building, subject to Section 7.3. To the extent the Building is part of, or continues to be maintained in this Leaseconjunction with the Project, means Landlord shall have the right (but not the obligation) to provide certain services contemplated herein to the Building in conjunction with one or more buildings in the Project, in which event an appropriate portion of the expenses associated therewith (based on the relative net rentable square footage of all amounts paid buildings with respect to which such items or accrued services are provided on a common basis) shall be allocated by Landlord per calendar year to the Building as Operating Expenses hereunder. By way of example, and not of limitation, snow removal costs for the operation Project shall be allocated on an appropriate basis between all tenantable buildings in the Project which receive the benefit of such snow removal services under a single snow removal contract. In no event will the foregoing gross-up and maintenance allocation provisions be construed or implemented in order to allow Landlord to recover from the tenants of the Building or Project (as the case may be) more than the amounts expended by Landlord for the items in question, and such provisions shall be interpreted equitably to ensure that the costs and services which make up the Operating Expenses of the Project or are properly allocated among the land on which it is situated, and the equipment, fixtures and facilities used in connection therewith, including the parking areaparties benefiting therefrom. Operating Expenses includesshall include, but is not limited to without limitation, all expenses, charges and fees incurred by or on behalf of Landlord in connection with the cost of utilitiesmanagement, building suppliesoperation, janitorial and window cleaning servicesownership, normal maintenance maintenance, servicing, insuring and repair of the Project Building, including, without limitation, the following: (1) electricity, gas, water, HVAC, sewer and other utility costs, charges and fees (including, without limitation, any tap fees and connection and switching fees) of every type and nature; (2) premiums, deductibles (to the common areas extent reasonable and customary) and other charges for insurance; (3) management fees based on arms-length transactions for similar class buildings in the Herndon, Virginia area (which shall be deemed to be a fee equal to not more than three percent (3%) of the gross revenues of the Building less amounts that would have been received had there been no rental abatements or other concessions) and personnel costs of the Building (including elevatorsall fringe benefits, if anyworkers’ compensation insurance premiums and payroll taxes), but expressly limited to that portion of the Building occupied and used by, and expressly limited to those personnel of, the periodic refurbishing Landlord engaged in the management and operation of the common areas)Building; (4) costs of service, heating access control and air-conditioning, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape contracts relating to the Building as a whole; (5) maintenance, taxes repair and replacement expenses and supplies; (defined below)6) depreciation/amortization for capital expenditures made by Landlord to reduce operating expenses if Landlord reasonably estimates that the annual reduction in operating expenses shall exceed such depreciation or to comply with legal or insurance requirements (including, without limitation, the Americans with Disabilities Act and environmental laws) that are created or imposed after the date hereof, and which shall be charged to Operating Expenses in annual installments over the useful life of the items for which such costs are incurred (in the case of items required to comply with legal or insurance premiums requirements) or over the period Landlord reasonably estimates that it will take for the savings in operating expenses achieved by such items to equal their costs (including boiler and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurancein the case of items intended to reduce operating expenses or their rate of increase), and all laborin either case, suppliestogether with interest, materialseach Calendar Year such costs are charged to Operating Expenses, toolson the unamortized balance at an interest rate of one percent (1%) in excess of the Prime Rate in effect on January 1 of each calendar year; (7) charges for janitorial and cleaning services and supplies furnished to the Building; (8) any business, professional or occupational license tax payable by Landlord with respect to the Building and any association fees; (9) reasonable reserves for replacements, management feesrepairs and contingencies; (10) sales, wages, salaries use and payroll burden of the Project manager, clerical maintenance personal property taxes payable in connection with tangible personal property and other employees directly associated with the operation of the Project, (including Project office rent or rental value, office supplies services purchased for and materials, and all other items constituting operating and maintenance costs used in connection with the Project Building; (11) reasonable third party accounting and land according audit fees relating to generally accepted accounting principles). the determination of Operating Expenses shall (and tenants’ proportionate shares thereof) and the preparation of statements required by tenant leases; (12) expenses incurred in connection with concierge services provided to the Building (if any); (13) the fair market rental value of any management office (of reasonable and customary size) and health/fitness facilities in the Building (to the extent not include the following: offset by separate membership or usage fees imposed by Landlord); (a14) depreciation special assessments, fees, penalties and other charges and costs for transit, transit encouragement traffic reduction programs, or any similar purpose; (15) all costs of operating, maintaining, repairing and replacing equipment in any portion of the ProjectFitness Facility (as defined in Section 18.6), roof deck, function room or other amenity of the Building; and (b16) leasing commissionsany other expense reasonably incurred in good faith by Landlord in arm’s-length transactions in maintaining, (c) repairs and restorations paid for by repairing or operating the proceeds of any insurance policy or (d) construction of improvements of a capital nature, except for the cost, or a portion thereof properly allocable to the Project, of any capital improvements made to the Project specifically to reduce Operating Expenses, or required to be made to the Project specifically to reduce Operating Expenses, or required to be made to the Project under any governmental law or regulation not applicable to the Project at the time it was constructed. Such cost shall be amortized over such reasonable period of time as Landlord shall determine, (e) ground rent, (f) debt service, (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of or as a substitute in whole or in part for TaxesBuilding.

Operating Expenses Defined. The term "Operating Expenses"" shall mean all costs and expenses (and taxes thereon, as used in this Lease, means all amounts if any) paid or accrued incurred by Landlord per calendar year for with respect to the operation ownership, operation, cleaning, repair, safety, management, security, and maintenance of the Project or Building (and the land on upon which it is situated), including, but not limited to: (a) real estate taxes; (b) gas, electricity, telephone, water, sewer, and the equipmentother fuel and utility charges (including surcharges) of whatever nature; (c) casualty, fixtures rent, liability, fidelity, and facilities used in connection therewithany other insurance; (d) building personnel costs, including the parking area. Operating Expenses includesincluding, but is not limited to to, salaries, wages, fringes benefits, and other direct and indirect costs of building managers, engineers, superintendents, watchmen, porters, char workers, and any other building personnel; (e) social security, unemployment, and other payroll taxes and the cost of utilitiesproviding disability and workers' compensation coverage required by law or otherwise with respect to such employees; (f) costs of service and maintenance contracts, building suppliesincluding, janitorial but not limited to, chillers, boilers, controls, elevators, windows, security, trash removal, and window cleaning servicesany other Building service or system; (g) charges of independent contractors performing work with respect to the operation, normal cleaning, repair, safety, security, and maintenance of the Building; (h) maintenance and repair expenses and supplies; (i) the cost or rental of the Project all Building and the common areas (including elevators, if any, and the periodic refurbishing of the common areas), heating and air-conditioning, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape maintenance, taxes (defined below), insurance premiums (including boiler and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurance), and all labor, management office cleaning supplies, materials, tools, professional fees, and equipment; (j) management fees; (k) legal, wagesaccounting, salaries and payroll burden of the Project manager, clerical maintenance and other employees directly associated with the operation of the Project, (including Project office rent or rental value, office supplies professional fees and materials, and all other items constituting operating and maintenance costs disbursements incurred in connection with the Project operation and land according to generally accepted accounting principles)management of the Building; (l) costs of uniforms, work clothes, and dry cleaning; (m) depreciation of hand tools and other movable equipment used for the management of the Building; and (n) business taxes and licenses. The term "Operating Expenses Expenses" shall not include the following: include, also, (a) depreciation expenditures for capital improvements and capital equipment purchased or installed for the purpose of decreasing Operating Expenses, but only to the Projectextent that relevant decreases are applied in any given year. Such expenditures for capital improvements and capital equipment shall be amortized in subsequent Lease Years on a straight-line amortized basis over an appropriate period, not to exceed ten years, together with interest on the unamortized cost fluctuating at the "prime rate" charged by Crestar Bank (as changed from time to time). The term "Operating Expenses" shall exclude; (a) executives' salaries above the grade of building manager; (b) leasing commissions, expenditures for capital improvements and capital equipment other than those specified above; (c) repairs principal and restorations paid for by the proceeds interest payments on any mortgages, deeds of any insurance policy trust or other financing encumbrances; (d) construction of improvements of a capital nature, except for the cost, or a portion thereof properly allocable to the Project, of any capital improvements made to the Project specifically to reduce Operating Expenses, or required to be made to the Project specifically to reduce Operating Expenses, or required to be made to the Project under any governmental law or regulation not applicable to the Project at the time it was constructed. Such cost shall be amortized over such reasonable period of time as Landlord shall determine, leasing commissions payable by Landlord; (e) ground rent, deductions for depreciation; (f) debt service, costs of repairs or replacements incurred by reason of fire or other casualty or condemnation to the extent Landlord is compensated for same; and (g) income and franchise taxes other than that portionthe costs of preparing, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of improving or as a substitute in whole altering space for any new or in part for Taxesrenewal tenant.

Operating Expenses Defined. The term “Operating Expenses"” means and includes the total reasonable operating expenses related to the Building and the Building Site (the Building and the Building Site collectively, as used in this Lease, means all amounts paid or accrued the “Real Estate”) which are incurred by Landlord per calendar year for the operation and maintenance of the Project or the land on which it is situatedLandlord, and shall include, without limitation, taxes and assessments levied, assessed or imposed at any time by any municipal, county, state or federal government or any governmental authority, upon or against the equipmentReal Estate (“Real Estate Taxes”), fixtures and facilities used in connection therewith, including the parking area. Operating Expenses includes, but is not limited to the cost of utilities, building supplies, janitorial and window cleaning services, normal maintenance and repair of the Project and the common areas (including elevators, if anyfees contingent on tax savings realized from an appeal, and the periodic refurbishing of the common areas)also any tax or assessment levied, heating and air-conditioning, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape maintenance, taxes (defined below), insurance premiums (including boiler and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurance), and all labor, supplies, materials, tools, professional fees, management fees, wages, salaries and payroll burden of the Project manager, clerical maintenance and other employees directly associated with the operation of the Project, (including Project office rent assessed or rental value, office supplies and materials, and all other items constituting operating and maintenance costs imposed at any time by any governmental authority in connection with the Project receipt of any income or rents from the Building and/or Building Site to the extent that any such tax or assessment is in lieu of all or a portion of any of the Real Estate Taxes, personal property and land ad valorem taxes, costs of water and sewage, reasonable management expenses (management expense not to exceed four percent (4%) of the annual rent for the Premises), labor, including all wages, salaries, Social Security taxes which may be levied upon such wages and salaries according to generally accepted accounting principles)practices, supplies, repairs, maintenance, painting, general exterior cleaning, insurance, landscaping, snow removal, and other items properly constituting direct operating costs according to standard accounting practices. The term “Operating Expenses shall Expenses” does not mean or include the following: (a) depreciation of the ProjectBuilding or equipment, (b) leasing commissions, (c) repairs and restorations paid for by the proceeds interest expense on borrowed money of any insurance policy form or (d) construction of improvements of a capital nature, except for costs of maintaining the costLandlord’s corporate or business existence, franchise taxes, federal or a portion thereof properly allocable to the Projectstate income taxes, of any capital improvements made to the Project specifically to reduce Operating Expenses, or expenditures required to be made to capitalized for federal income tax purposes, office expenses or salaries of the Project specifically to reduce Operating ExpensesLandlord’s executive officers, commissions and fees paid for the rental of the Building, or required to be made to the Project under any governmental law parts thereof, or regulation not applicable to the Project at the time it was constructedtenant improvements, wage taxes or Social Security payments of Landlord or its property manager, or Landlord’s transfer, recording, inheritance, estate, succession, franchise, excise, business privilege, personal property, income, gross receipts or profit tax. Such cost Costs incurred for capital improvements shall be included within Operating Expenses for the calendar year in which the costs are incurred and for subsequent calendar years amortized on a straight line basis over such reasonable period the ordinary, useful life of time the improvement (as Landlord shall determinedetermined by the Internal Revenue Code of 1986, (e) ground rentas amended, (f) debt service, (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of or as a substitute in whole or in part for Taxesthe regulations thereto).

Operating Expenses Defined. Operating ExpensesThe phrase ", Total Cost of Operation," as used herein, shall mean all expenses, costs, and disbursements of every kind and nature which Landlord, or its agents, shall pay or become obligated to pay in this Leaseconnection with the operation, means service, maintenance, ownership and/or repair of the Building, to include garage, exterior parking area and landscaping, determined in accordance with generally accepted accounting principles, including by way of example, but not by way of limitation, the following: (a) wages and salaries of all amounts paid or accrued by Landlord per calendar year for employees engaged in the operation and maintenance of the Project Building; employer's Social Security taxes, unemployment taxes or insurance, and other taxes which may be levied on such wages and salaries; the cost of disability and hospital insurance and pension or retirement benefits for such employees and other benefits relating to the cost of all labor; (b) cost of all supplies, materials and tools used in the operation, maintenance and security of the Building; (c) cost of all utilities for the Building, garage, exterior parking area, and landscaping including water, power, heat, light, air conditioning and ventilation; (d) cost of all management fees, and maintenance and service agreements, including but not limited to, equipment, security, window cleaning and elevator maintenance; (e) cost of insurance applicable to Building, the tract of land on which it the Building is situated, and the equipment, fixtures and facilities Landlord's personal property used in connection therewith; (f) cost of repairs, replacements and general maintenance, exclusive of expenses for alterations attributable solely to specific tenants of the Building, but including a reasonable amortization charge on account of any capital expenditure incurred to effect a reduction in the parking area. other Operating Expenses includesof the Building; (g) all taxes and assessments and governmental charges, but is not limited whether federal, state, parish or municipal, and any other taxes and assessments attributable to the cost Building, the tract of utilitiesland on which the Building is situated, building supplies, janitorial and window cleaning services, normal maintenance and repair of the Project and the common areas (including elevators, if any, and the periodic refurbishing of the common areas), heating and air-conditioning, waste disposal, lighting, maintenance of fire protection and security systems, planting and landscaping, landscape maintenance, taxes (defined below), insurance premiums (including boiler and machinery, fire and extended coverage, earthquake, flood, rental and public liability insurance), and all labor, supplies, materials, tools, professional fees, management fees, wages, salaries and payroll burden of the Project manager, clerical maintenance and other employees directly associated with or the operation of the ProjectBuilding, excluding, however, federal, state and parish taxes on income; (including Project office rent or rental value, office supplies h) cost of all janitorial and materials, other services; (i) costs of any and all other items constituting operating licenses, permits and maintenance costs inspection fees or assessments; (j) in connection with the Project and land according to generally accepted accounting principles). Operating Expenses event that during the Term hereof a tax is placed on or assessed against rents or receipts per se from the Premises, the Base Rent shall not include the following: (a) depreciation of the Project, (b) leasing commissions, (c) repairs and restorations paid for be increased immediately by the proceeds amount of any insurance policy or (d) construction of improvements of a capital nature, except for the cost, or a portion thereof properly allocable to the Project, of any capital improvements made to the Project specifically to reduce Operating Expenses, or required to be made to the Project specifically to reduce Operating Expenses, or required to be made to the Project under any governmental law or regulation not applicable to the Project at the time it was constructed. Such cost shall be amortized over such reasonable period of time as Landlord shall determine, (e) ground rent, (f) debt service, (g) income and franchise taxes other than that portion, if any, of income and franchise taxes which may hereinafter be assessed and paid in lieu of or as a substitute in whole or in part for Taxestax.