CURBS, WALKWAYS AND PARKING AREAS, AND REPAIRS TO ROOFS AND
REROOFING OF IMPROVEMENTS), (B) WHICH ARE INTENDED AS A LABOR-SAVING DEVICE OR
TO EFFECT OTHER ECONOMIES IN THE OPERATION OR MAINTENANCE OF THE REAL PROPERTY,
OR ANY PORTION THEREOF, OR (C) THAT ARE REQUIRED UNDER ANY GOVERNMENTAL LAW OR
REGULATION THAT IS THEN BEING ENFORCED BY A FEDERAL, STATE OR LOCAL GOVERNMENTAL
AGENCY; PROVIDED, HOWEVER, THAT EACH SUCH PERMITTED CAPITAL EXPENDITURE SHALL BE
AMORTIZED (INCLUDING INTEREST ON THE UNAMORTIZED COST AT THE INTEREST RATE IN
EFFECT AT THE TIME SUCH EXPENDITURE IS PLACED IN SERVICE) OVER ITS USEFUL LIFE
AS LANDLORD SHALL REASONABLY DETERMINE.
IF LANDLORD IS NOT FURNISHING ANY
PARTICULAR WORK OR SERVICE (THE COST OF WHICH, IF PERFORMED OR PROVIDED BY
LANDLORD, WOULD BE INCLUDED IN OPERATING EXPENSES) TO A TENANT WHO HAS
UNDERTAKEN TO PERFORM SUCH WORK OR SERVICE IN LIEU OF THE PERFORMANCE THEREOF BY
LANDLORD, OPERATING EXPENSES SHALL BE DEEMED TO BE INCREASED BY AN AMOUNT EQUAL
TO THE ADDITIONAL OPERATING EXPENSES WHICH WOULD REASONABLY HAVE BEEN INCURRED
DURING SUCH PERIOD BY LANDLORD IF IT HAD AT ITS OWN EXPENSE FURNISHED SUCH WORK
OR SERVICE TO SUCH TENANT.
IF THE BUILDING (AND ANY ADDITIONAL BUILDINGS
CONSTRUCTED IN THE BUILDING COMPLEX) ARE NOT ONE HUNDRED PERCENT (100%) OCCUPIED
DURING ALL OR A PORTION OF ANY EXPENSE YEAR (INCLUDING THE BASE YEAR), LANDLORD
SHALL MAKE AN APPROPRIATE ADJUSTMENT TO THE VARIABLE COMPONENTS OF OPERATING
EXPENSES FOR SUCH EXPENSE YEAR (INCLUDING THE BASE YEAR) AS REASONABLY
DETERMINED BY LANDLORD EMPLOYING SOUND ACCOUNTING AND MANAGEMENT PRINCIPLES, TO
DETERMINE THE AMOUNT OF OPERATING EXPENSES THAT WOULD HAVE BEEN PAID HAD SUCH
BUILDING(S) BEEN ONE HUNDRED PERCENT (100%) OCCUPIED, AND THE AMOUNT SO
DETERMINED SHALL BE DEEMED TO HAVE BEEN THE AMOUNT OF OPERATING EXPENSES FOR
SUCH EXPENSE YEAR.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
ARTICLE 4, WHEN CALCULATING DIRECT EXPENSES FOR THE BASE YEAR, OPERATING
EXPENSES SHALL EXCLUDE MARKET-WIDE LABOR-RATE INCREASES DUE TO EXTRAORDINARY
CIRCUMSTANCES, INCLUDING, BUT NOT LIMITED TO, BOYCOTTS AND STRIKES, UTILITY RATE
INCREASES DUE TO EXTRAORDINARY CIRCUMSTANCES, INCLUDING, WITHOUT LIMITATION,
CONSERVATION SURCHARGES, BOYCOTTS, EMBARGOES OR OTHER SHORTAGES, AND COSTS
RELATING TO CAPITAL IMPROVEMENTS OR EXPENDITURES.
Landlord shall have the right, from time to time, to equitably allocate and
prorate some or all of the Direct Expenses and/or Utilities Costs among
different tenants and/or different buildings of the Building Complex and/or on a
building-by-building basis (the "Cost Pools").
Such Cost Pools may include,
without limitation, the office space tenants and retail space tenants of the
buildings in the Building Complex and may be modified to take into account the
addition of any additional office buildings within the Building Complex.
Notwithstanding the foregoing, Operating Expenses shall not, however, include
(A) costs of repairs or other work occasioned by fire, windstorm or other
casualty to the extent Landlord is reimbursed by insurance proceeds (other than
those amounts within the deductible limits of insurance policies actually
carried by Landlord, which amounts shall be includable as Operating Expenses so