ANY
OVERPAYMENT TO TENANT AFTER FIRST DEDUCTING THE AMOUNT OF RENT DUE.
IF THE
ESTIMATED EXPENSE EXCESS OR ESTIMATED TAX EXCESS FOR THE PRIOR CALENDAR YEAR OR
FISCAL YEAR, AS THE CASE MAY BE, IS LESS THAN THE ACTUAL EXPENSE EXCESS OR
ACTUAL TAX EXCESS, FOR SUCH PRIOR CALENDAR YEAR OR FISCAL YEAR, AS THE CASE MAY
BE, FOR SUCH PRIOR YEAR, TENANT SHALL PAY LANDLORD, WITHIN THIRTY (30) DAYS
AFTER ITS RECEIPT OF THE STATEMENT OF EXPENSES OR TAXES, ANY UNDERPAYMENT FOR
THE PRIOR CALENDAR YEAR.
THIS PROVISION SHALL SURVIVE THE TERMINATION OR
EARLIER EXPIRATION OF THE LEASE.
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2.
EXPENSES.
2.1
"EXPENSES" MEANS ALL COSTS AND EXPENSES INCURRED IN EACH CALENDAR
YEAR IN CONNECTION WITH OPERATING, MAINTAINING, REPAIRING, AND MANAGING THE
BUILDING AND/OR COMPLEX.
EXPENSES INCLUDE, WITHOUT LIMITATION: (A) ALL LABOR
AND LABOR RELATED COSTS; (B) MANAGEMENT FEES; (C) THE COST OF EQUIPPING,
STAFFING AND OPERATING AN ON-SITE AND/OR OFF-SITE MANAGEMENT OFFICE;
(D) ACCOUNTING COSTS; (E) THE COST OF SERVICES; (F) RENTAL AND PURCHASE COST OF
PARTS, SUPPLIES, TOOLS AND EQUIPMENT; (G) INSURANCE PREMIUMS AND DEDUCTIBLES;
(H) ELECTRICITY, GAS AND OTHER UTILITY COSTS; AND (I) THE AMORTIZED COST OF
CAPITAL IMPROVEMENTS (AS DISTINGUISHED FROM REPLACEMENT PARTS OR COMPONENTS
INSTALLED IN THE ORDINARY COURSE OF BUSINESS) MADE SUBSEQUENT TO THE BASE YEAR
WHICH ARE:
(1) PERFORMED PRIMARILY TO REDUCE CURRENT OR FUTURE OPERATING
EXPENSE COSTS, UPGRADE SECURITY OR OTHERWISE IMPROVE THE OPERATING EFFICIENCY OF
THE BUILDING AND/OR COMPLEX; OR (2) REQUIRED TO COMPLY WITH ANY LAWS THAT ARE
ENACTED, OR FIRST INTERPRETED TO APPLY TO THE BUILDING AND/OR COMPLEX, AFTER THE
DATE OF THIS LEASE.
THE COST OF CAPITAL IMPROVEMENTS SHALL BE AMORTIZED BY
LANDLORD OVER THE LESSER OF THE PAYBACK PERIOD (DEFINED BELOW) OR THE USEFUL
LIFE OF THE CAPITAL IMPROVEMENT AS REASONABLY DETERMINED BY LANDLORD. "PAYBACK
PERIOD" MEANS THE REASONABLY ESTIMATED PERIOD OF TIME THAT IT TAKES FOR THE COST
SAVINGS RESULTING FROM A CAPITAL IMPROVEMENT TO EQUAL THE TOTAL COST OF THE
CAPITAL IMPROVEMENT. LANDLORD, BY ITSELF OR THROUGH AN AFFILIATE, SHALL HAVE THE
RIGHT TO DIRECTLY PERFORM, PROVIDE AND BE COMPENSATED FOR ANY SERVICES UNDER
THIS LEASE.
ANY EXPENSES GENERALLY APPLICABLE TO THE COMPLEX AS A WHOLE OR ANY
PORTION THEREOF SHALL BE EQUITABLY PRORATED AND TENANT'S INITIAL PRO-RATA SHARE
OF SUCH EXPENSES SHALL BE AS SET FORTH IN SECTION 1.4 OF THE LEASE.
IF LANDLORD
INCURS EXPENSES FOR THE BUILDING AND/OR COMPLEX TOGETHER WITH ONE OR MORE OTHER
BUILDINGS OR PROPERTIES, WHETHER PURSUANT TO A RECIPROCAL EASEMENT AGREEMENT,
COMMON AREA AGREEMENT OR OTHERWISE, THE SHARED COSTS AND EXPENSES SHALL BE
EQUITABLY PRORATED AND APPORTIONED BETWEEN THE BUILDING, COMPLEX AND THE OTHER
BUILDINGS OR PROPERTIES.
2.2
EXPENSES SHALL NOT INCLUDE: THE COST OF CAPITAL IMPROVEMENTS
(EXCEPT AS SET FORTH ABOVE); DEPRECIATION; PRINCIPAL PAYMENTS OF MORTGAGE AND
OTHER NON-OPERATING DEBTS OF LANDLORD; THE COST OF REPAIRS OR OTHER WORK TO THE
EXTENT LANDLORD IS REIMBURSED BY INSURANCE, CONDEMNATION PROCEEDS OR OTHER THIRD
PARTIES; COSTS IN CONNECTION WITH LEASING SPACE IN THE BUILDING AND/OR COMPLEX,
INCLUDING