Common use of Taxes and Operating Expenses Clause in Contracts

Taxes and Operating Expenses. Tenant shall pay to Landlord as Additional Rent “Tenant’s Proportionate Share of Taxes and Operating Expenses” of all costs and expenses in excess of the Tax and Operating Expense Base incurred by Landlord in the management, operation and maintenance of the Property or any portion thereof, including, without limiting the generality of the foregoing, all such costs and expenses in connection with (1) insurance, license fees, janitorial service, landscaping and snow removal, (2) wages, salaries, management fees, employee benefits, payroll taxes, office expenses, administrative and auditing expenses, and equipment and materials for the operation, management and maintenance of the Property, (3) capital expenditures (amortized, with interest, on such reasonable basis as Landlord shall determine) made by Landlord for the purpose of reducing other operating expenses or complying with any governmental requirement either first enacted or first effective as to the Property after the Term Commencement Date, (4) water and sewer charges, (5) the furnishing of heat, air conditioning, electricity, utilities, and any other services, (6) the operation and servicing of any computer system installed to regulate Building equipment or other equipment serving the Property, (7) the furnishing of repairs and services referred to in the Article contained herein entitled “UTILITIES AND LANDLORD’S SERVICES” and (8) Real Estate Taxes (the foregoing being collectively referred to as “Operating Expenses”). Tenant’s Proportionate Share of Taxes and Operating Expenses in excess of the Tax and Operating Expense Base may be referred to in this Lease as the “Tax and Operating Expense Escalation”. Any Operating Expense incurred with respect to more than one of the buildings on the Property shall be allocated to each of such buildings on the basis of the rentable square feet of such buildings. Any Operating Expense that is incurred with respect to the entire Property, Land or Parking Areas shall be allocated to each building on the Property on the basis of the rentable square feet in the buildings on the Property. If, during a portion of a fiscal year for which Operating Expenses are being computed pursuant to this Section, less than the entire rentable area of the Building is occupied or Landlord is not supplying all occupants with the same services being supplied hereunder, such costs and expenses shall be reasonably extrapolated in order to take into account the costs and expenses which would have been incurred had the entire rentable area of the Building been occupied and had such services been supplied to all occupants. As soon as Tenant’s Proportionate Share of Taxes and Operating Expenses with respect to a fiscal year can be determined, Landlord shall notify Tenant of the same and the same will become payable to Landlord within ten (10) days following such notification, subject to proration with respect to any portion of a fiscal year in which the Term of this Lease begins or ends.

Taxes and Operating Expenses. 5. Commencing with the calendar year 2001, Tenant -- shall pay, as additional rent, a pro-rata portion of any increases in taxes and operating costs of the building over and above taxes and operating costs in existence in the year 2000 (the "Base Year"). Tenant's pro-rata portion shall -- be 5.50 % resulting from dividing the number of square feet of Rentable Area --------- of the Premises [which is Six Thousand Three Hundred Nineteen(6,319 ) square ----------------------------------- ------- feet], by the number of square feet of Rentable Area of the total office area for The Park (which is 114,841 square feet). "Comparison Year" shall mean any calendar year during the term of the Lease following the Base Year. If the Lease terminates on a date other than the end of a calendar year, then such year shall also be treated as a Comparison Year except that any amount required to be paid pursuant to this paragraph 5 for such Comparison Year shall be prorated based on the number of days during such calendar year that Tenant occupies the Premises. Building taxes shall include, but are not limited to, any city, county and special district real estate taxes. Building and operating costs shall include but are not limited to, the costs Landlord incurred for all utilities, fuel, building supplies, janitorial service, security services, normal maintenance and repairs of buildings, parking areas, lake areas and landscaped areas, wages of employees who work customarily in and about the buildings and whose duties are connected with its operation, maintenance or repairs (including social security taxes, unemployment insurance costs, disability benefits, the cost of pension, hospitalization and retirement plans), costs of hazard insurance maintained by the Landlord and assessments payable by the Landlord and allocable to the buildings. Operating costs shall be adjusted to reflect a 90% occupancy of the buildings during any period in which the buildings are not at least 90% occupied. Commencing with the initial Comparison Year and each Comparison Year thereafter, Tenant shall pay as additional rent, a prorata share of any increases in taxes and expenses of the building over and above taxes and expenses in existence the previous year. Within ninety (90) days after each annual period, or within a reasonable time thereafter, Landlord shall furnish to Tenant written notice, together with reasonable evidence indicating the increase or decrease of taxes and/or operating costs, and Tenant's pro-rata proportion. In the case of a decrease no adjustment will be made. In the event any such written notice is furnished to Tenant showing an increase in the rent payable hereunder for any annual period, Tenant shall pay to Landlord, within thirty (30) days after such notice is furnished to Tenant, an amount equal to Tenant's share of such increase for the annual period for which the increase is effective, plus an amount equal to one twelfth (1/12th) of such increase multiplied by the number of rent payment dates then elapsed during the then current annual period. Thereafter, until a new statement is furnished, the monthly rent payable by Tenant hereunder shall be increased by an amount equal to one-twelfth (1/12th) of such annual rent increase. If the term of this Lease expires and the Tenant vacates the Premises, Tenant shall pay to Landlord as Additional Rent “Tenant’s Proportionate Share of Taxes and Operating Expenses” of all costs and expenses in excess the appropriate apportionment of the Tax pro rata increases of any taxes and Operating Expense Base incurred by Landlord operating costs in the management, operation and maintenance of the Property or any portion thereof, including, without limiting the generality of the foregoing, all such costs and expenses in connection with (1) insurance, license fees, janitorial service, landscaping and snow removal, (2) wages, salaries, management fees, employee benefits, payroll taxes, office expenses, administrative and auditing expenses, and equipment and materials for the operation, management and maintenance of the Property, (3) capital expenditures (amortized, with interest, on such reasonable basis as Landlord shall determine) made by Landlord for the purpose of reducing other operating expenses or complying with any governmental requirement either first enacted or first effective as to the Property after the Term Commencement Date, (4) water and sewer charges, (5) the furnishing of heat, air conditioning, electricity, utilities, and any other services, (6) the operation and servicing of any computer system installed to regulate Building equipment or other equipment serving the Property, (7) the furnishing of repairs and services referred to in the Article contained herein entitled “UTILITIES AND LANDLORD’S SERVICES” and (8) Real Estate Taxes (the foregoing being collectively referred to as “Operating Expenses”). Tenant’s Proportionate Share of Taxes and Operating Expenses in excess of the Tax and Operating Expense Base may be referred to in this Lease as the “Tax and Operating Expense Escalation”. Any Operating Expense incurred with respect to more than one of the buildings on the Property shall be allocated to each of such buildings on the basis of the rentable square feet of such buildings. Any Operating Expense that is incurred with respect to the entire Property, Land or Parking Areas shall be allocated to each building on the Property on the basis of the rentable square feet in the buildings on the Property. If, during a portion of a fiscal year for which Operating Expenses are being computed pursuant to this Section, less than the entire rentable area of the Building is occupied or Landlord is not supplying all occupants with the same services being supplied hereunder, such costs and expenses shall be reasonably extrapolated in order to take into account the costs and expenses which would have been incurred had the entire rentable area of the Building been occupied and had such services been supplied to all occupants. As soon as Tenant’s Proportionate Share of Taxes and Operating Expenses with respect to a fiscal year can be determined, Landlord shall notify Tenant of the same and the same will become payable to Landlord within ten (10) days following such notification, subject to proration with respect to any portion of a fiscal year in which the Term of this Lease begins expires. Tenant shall pay, during the term hereof, prior to delinquency, all taxes assessed on trade fixtures, personal property or endsleasehold improvements installed by Tenant or in possession of Tenant in, upon or about the Premises, and assessed against the real property of which the Premises are a part. In the event any such taxes should be assessed against said real property, the amount of such taxes shall become a part of the rent due hereunder and shall be payable upon the first rent due date after demand for payment has been made.

Taxes and Operating Expenses. (a) In addition to the Base Rent, Tenant shall pay (i) Tenant's Percentage Share of Property Taxes (according to the percentage set forth in the Basic Lease Information) relating to those Property Taxes (as the term is defined under Paragraph 4(a)(1) below) which are assessed during the Term, and (ii) Tenant's Percentage Share of Operating Expenses (according to the percentage set forth in the Basic Lease Information) relating to those Operating Expenses (as the term is defined under Paragraph 4(a)(2) below) which are paid or incurred by Landlord during the Term. (1) "Property Taxes" shall mean all real property taxes, bonds and assessments and governmentally imposed fees or charges (and any tax levied wholly or partly in lieu thereof) levied, assessed, confirmed, imposed or which have become a lien against the Building (which for the purposes of defining "Property Taxes" shall include the tax parcel of which the Building is a part) and Common Areas. (2) "Operating Expenses" shall mean the following: (A) all costs of management, operation, maintenance and repair of the Building and Common Areas, including, without limitation, property management expenses, maintenance and repair materials, supplies and equipment; (B) all costs of water, power, electricity, refuse collection, parking lot sweeping, landscaping, and other services relating to the Common Areas; (C) all costs of alterations or improvements to the Building or Common Areas made to achieve compliance with federal, state and local law including, without limitation, the Americans with Disabilities Act (42 U.S.C. Section 12101 et seq.), which costs will be amortized over the useful life of each alteration or improvement; (D) all costs of public liability and casualty insurance maintained by Landlord with respect to the Building and Common Areas; (E) all costs incurred by Landlord for making any capital improvements, structural repairs or modifications to the Building or Common Areas or making any improvements or modifications to reduce the operating expenses, which costs will be amortized over the useful life of each capital improvement, structural repair or modification; (F) all costs of maintaining machinery, equipment and directional signage or other markers; and G) the share allocable to the Building of dues and assessments payable under any reciprocal easement or common area maintenance agreements or declarations or by any owners' associations affecting the Building. That portion of the Operating Expenses relating to the property management expenses for the Building and Common Areas which shall be charged to Tenant shall be four percent (4%) of both Tenant's annual Base Rent and the subtotal of Tenant's share of Operating Expenses of the Building. In the event that Landlord calculates the Operating Expenses based upon the Project instead of the Building, as indicated on the Basic Lease Information, then the term "Project" shall be substituted in the place of all references to the term "Building" in this paragraph. -2- 3 (b) The Property Taxes to be paid by Tenant shall be determined by multiplying the total amount of the Property Taxes by Tenant's Percentage Share of Property Taxes (which percentage is determined by multiplying 100% by a fraction, the numerator of which is the rentable area of the Premises and the denominator of which is the total rentable area of all improvements located within the tax parcel of which the Premises are a part). Landlord may cause the Common Areas of the Project to be separately assessed from other areas and buildings of the Project. In such case, Tenant's Percentage Share of Property Taxes attributable to the Common Areas shall be determined by the ratio that the total rentable square feet in the Premises bears to the total number of square feet of rentable area which is included in the property subject to the assessment. (c) Operating Expenses for each calendar year shall be adjusted to equal Landlord's reasonable estimate of Operating Expenses as though ninety-five percent (95%) of the total rentable area of the Building had been occupied. When the Building is one hundred percent (100%) occupied, the Operating Expenses shall be adjusted to reflect a 100% occupied building. The Operating Expenses to be paid by Tenant shall be determined by multiplying the total amount of the Operating Expenses as adjusted above by Tenant's Percentage Share of Operating Expenses (which percentage is determined by multiplying 100% by a fraction, the numerator of which is the rentable area of the Premises and the denominator of which is the total rentable area located within the Building, if the Operating Expenses are calculated for the Building, or within the Project, if the Operating Expenses are calculated for the Project). (d) Tenant shall pay to Landlord each month at the same time and in the same manner as Additional monthly Base Rent “Tenant’s Proportionate Share one-twelfth (l/12th) of Landlord's estimate of the amount of Property Taxes and one- twelfth (1/12th) of Landlord's estimate of Operating Expenses” Expenses payable by Tenant for the then-current calendar year. The initial monthly amount shall be as set forth in the Basic Lease Information. Within (120) one hundred eighty (180) days after the close of all costs and expenses each calendar year, Landlord shall deliver to Tenant a statement in excess reasonable detail of the Tax and Operating Expense Base incurred by Landlord in the management, operation and maintenance actual amount of the Property or any portion thereof, including, without limiting the generality of the foregoing, all such costs and expenses in connection with (1) insurance, license fees, janitorial service, landscaping and snow removal, (2) wages, salaries, management fees, employee benefits, payroll taxes, office expenses, administrative and auditing expenses, and equipment and materials for the operation, management and maintenance of the Property, (3) capital expenditures (amortized, with interest, on such reasonable basis as Landlord shall determine) made by Landlord for the purpose of reducing other operating expenses or complying with any governmental requirement either first enacted or first effective as to the Property after the Term Commencement Date, (4) water and sewer charges, (5) the furnishing of heat, air conditioning, electricity, utilities, and any other services, (6) the operation and servicing of any computer system installed to regulate Building equipment or other equipment serving the Property, (7) the furnishing of repairs and services referred to in the Article contained herein entitled “UTILITIES AND LANDLORD’S SERVICES” and (8) Real Estate Taxes (the foregoing being collectively referred to as “Operating Expenses”). Tenant’s Proportionate Share of Taxes and Operating Expenses payable by Tenant in excess of accordance with this Paragraph 4 for such calendar year; Landlord 's failure to provide such statement to Tenant within the Tax 180-day period shall act as a waiver against Landlord later delivering a statement to Tenant for such calendar year and Operating Expense Base recovering additional amounts from Tenant based Upon the actual expenses for such calendar year. Tenant may be referred request further information if desired. Landlord's failure to in this Lease provide such statement to Tenant within the 180-day period shall not act as a waiver and shall not excuse Tenant or Landlord from making the “Tax and Operating Expense Escalation”adjustments to reflect actual costs as provided herein. Any Operating Expense incurred with respect to more than one of the buildings on the Property shall be allocated to each of such buildings If on the basis of such statement Tenant owes an amount that is less than the rentable square feet estimated payments for such calendar year previously made by Tenant, Landlord shall credit such excess to Tenant against future additional rent due under this Paragraph 4. If on the basis of such buildings. Any Operating Expense statement Tenant owes an amount that is incurred more than the estimated payments for such calendar year previously made by Tenant, Tenant shall pay the deficiency to Landlord within fifteen (15) days after delivery of the statement. The obligations of Landlord and Tenant under this Paragraph 4(d) with respect to the entire Property, Land or Parking Areas shall be allocated to each building on reconciliation between the estimated and actual amounts of Property on the basis of the rentable square feet in the buildings on the Property. If, during a portion of a fiscal year for which Operating Expenses are being computed pursuant to this Section, less than the entire rentable area of the Building is occupied or Landlord is not supplying all occupants with the same services being supplied hereunder, such costs and expenses shall be reasonably extrapolated in order to take into account the costs and expenses which would have been incurred had the entire rentable area of the Building been occupied and had such services been supplied to all occupants. As soon as Tenant’s Proportionate Share of Taxes and Operating Expenses with respect to a fiscal payable by Tenant for the last year can be determined, Landlord shall notify Tenant of the same Term shall survive the termination of the Lease. When the final determination is made of the actual amounts of Property Taxes and Operating Expenses payable by Tenant for the same will become payable to Landlord within ten (10) days following such notification, subject to proration with respect to any portion of a fiscal year in which the Term of this Lease begins or endsterminates, Tenant shall immediately pay any increase due over the estimated payments and, conversely, any overpayment made by Tenant shall be immediately reimbursed to Tenant by Landlord. 5.