(a) supplies, materials and equipment purchased or rented, total wage and salary costs paid to, and all contract payments made on account of, all persons to the extent engaged in the operation, maintenance, security, cleaning and repair of the Property at or below the level of property manager (including the amount of any taxes, social security taxes, unemployment insurance contributions, union benefits) and any on-site employees of Landlords property management agent;
(b) subject to the limitations set forth below regarding Essential Capital Expenditures (as hereinafter defined), the maintenance, repair and replacement of all building systems, including, but not limited to, heating, ventilating and air conditioning equipment such as chillers, cooling towers, pumps, loops, plumbing, electrical, mechanical, sewer, fire detection, sprinkler, life safety and security systems, telecommunications facilities, elevators and escalators, exterior windows and doors, tenant directories, emergency generator, and other equipment used in common by, or for the benefit of, occupants of the Building including such repairs and replacements as may be necessary to maintain the same in proper working order and in compliance with all applicable laws and industry performance standards (except to the extent such repairs or replacements are made necessary by the negligent act or omission or willful act of Tenant, its agents, servants or contractors, invitees or licensees which expense shall be billed directly to Tenant as Additional Rent);
(c) charges of contractors for services and facilities otherwise includable in Operating Expenses, including security, trash removal, cleaning, janitorial, window washing, snow and ice removal, exterior and interior landscaping, maintenance and repair of the parking areas (if any), roadways and light poles;
(d) the cost of utility services for the Property, including, without limitation, water, sanitary sewer, common area electricity, gas, fuel oil, steam, chilled water; but excluding electricity supplied to the Premises and billed to Tenant pursuant to this Section and electricity used by other tenants of the Building within their leased space and billed directly to such tenants;
(e) the premiums for fire, extended coverage, loss of rents, boiler, machinery, sprinkler, commercial general liability, property damage, earthquake, flood, and other insurance relative to the Property and the operation and maintenance thereof, and unreimbursed costs incurred by Landlord that are subject to an insurance deductible;
(f) the operation and maintenance of any Building amenities to which Tenant has access (including, but not limited to, shared gym/fitness facilities, lounge areas, conference rooms and the like), including, without limitation, the cost of utilities, repairs and insurance associated with such Building amenities;
(g) office costs of administration; legal and accounting fees and other expenses of maintaining and auditing Property accounting records and preparing Landlords Statements;
(h) fees for management services whether rendered by Landlord (or affiliate) or a third-party property manager in an amount not to exceed the rate of five percent (5%) of total rents charged to Building tenants; and
(i) the annual amortization of Essential Capital Expenditures in accordance with the paragraph below.
As used herein, Essential Capital Expenditures shall mean capital expenditures that are (a) required to comply with any legal requirements coming into applicability after the Effective Date, or (b) anticipated to result in a reduction in (or minimize increases in) Operating Expenses (regardless of whether such result is achieved), or (c) necessary in order to prevent injury to persons or damage to property or to otherwise improve safety and security measures at the Property. Essential Capital Expenditures shall be amortized over the useful life of the applicable item based on industry standards and generally accepted accounting principles until such cost or expense has been fully recovered. Operating Expenses shall include an interest charge on the unamortized balance of such Essential Capital Expenditures at the then-prevailing prime rate; provided, however, that if Landlord has actually borrowed money to finance such Essential Capital Expenditures, then Operating Expenses with respect to such Essential Capital Expenditures shall include an interest charge at the interest rate actually paid by Landlord.
- 9 -