Common use of Operating Expense Payments Clause in Contracts

Operating Expense Payments. (a) It is the intention of Landlord and Tenant that Landlord receive the Base Rent “net” of all other charges except as expressly provided herein. Accordingly, beginning on the Commencement Date, Tenant shall pay as additional rent Tenant's Share (defined below) of the Operating Expenses and relating to the Premises, the Building, and the Project. As used in this Lease, the term “Rent” shall mean, collectively, Base Rent and additional rent. The term “Operating Expenses” shall mean all costs and expenses incurred by Landlord with respect to the ownership, maintenance, repair and operation of the Common Area and Project, including but not limited to: Taxes (as provided in this Lease); Insurance (as provided in this Lease); utilities; maintenance, repair and replacement of all portions of the Project (including the buildings and Common Areas), including without limitation, signs, sprinklers and fire suppression systems (if any), mechanical systems, including any HVAC or EVAP systems and their components, plumbing systems, exterior surfaces (including but not limited to painting, cleaning and graffiti removal), paving and parking areas (including striping, line painting and snow removal), dock systems, dock doors, roads, roofs, and roof systems, alleys, landscaping (including sprinkler systems), utility lines, lighting, electrical systems, Building Systems (defined below); trash collection, sweeping; compliance with laws, rules, regulations and orders of governmental authorities, including any Legal Requirements; fees and assessments; amounts paid to contractors and subcontractors for work or services performed in connection with the foregoing; property management fees (which, at Landlord’s option, may be payable to itself, an affiliate or third party manager); and administrative fees equal to fifteen percent (15%) of the Operating Expenses (excluding Taxes and Insurance) (which, at Landlord’s option, may be payable to itself, an affiliate or third party manager); deductibles on insurance loss; security services (if any). Notwithstanding the foregoing, Landlord agrees that all Operating Expenses must be reasonable and customary for the operation and maintenance of the Property and Project.

Operating Expense Payments. (a) It is During each month of the intention of Landlord and Tenant Lease Term, on the same date that Landlord receive the Base Rent “net” of all other charges except as expressly provided herein. Accordingly, beginning on the Commencement Dateis due, Tenant shall pay Landlord an amount equal to 1/12 of the annual cost, as additional rent reasonably estimated by Landlord from time to time, of Tenant's Proportionate Share (defined belowhereinafter defined) of the Operating Expenses (hereinafter defined) for the Exterior Premises and relating to the Premises, for the Building, and the Project. As used in this Lease, the term “Rent” Payments thereof for any fractional calendar month shall mean, collectively, Base Rent and additional rentbe prorated. The term “"Operating Expenses” shall mean " means all costs and expenses incurred by Landlord with respect to the ownership, maintenance, repair and operation of the Common Area and ProjectPremises, including but not limited toto costs of: (i) Taxes (as provided in this Lease)hereinafter defined) and fees payable to tax consultants and attorneys for consultation and contesting taxes; Insurance (as provided in this Lease)ii) insurance; (iii) utilities; (iv) maintenance, repair and replacement of all portions of the Project (including the buildings and Common Areas)Premises, including without limitation, signs, sprinklers and fire suppression systems (if any), mechanical systems, including any HVAC or EVAP systems and their components, plumbing systems, exterior surfaces (including but not limited to painting, cleaning and graffiti removal), paving and parking areas (including striping, line painting and snow removal), dock systems, dock doorsareas, roads, roofs, and roofs (including without limitation the roof systemsmembrane), alleys, landscaping (including sprinkler systems)and driveways, mowing, landscaping, snow removal, exterior painting, utility lines, heating, ventilation and air conditioning systems, lighting, electrical systems, systems and other mechanical and Building Systems Systems; (defined below); trash collection, sweeping; compliance with laws, rules, regulations and orders of governmental authorities, including any Legal Requirements; fees and assessments; v) amounts paid to contractors and subcontractors for work or services performed in connection with any of the foregoing; (vi) charges or assessments of any association or document of record to which the Premises is subject; (vii) property management fees payable to a property manager, including but not limited to any affiliate of Landlord at an amount equal to three percent (3%) of monthly Base Rent; (viii) security services, if any; (ix) trash collection, sweeping and removal; and (x) the cost of additions or alterations made by Landlord to the Premises in order to comply with Legal Requirements (other than those expressly required herein to be made by Tenant), and the cost of capital additions or alterations required by Legal Requirements and capital repairs to or replacements of the Building Systems, provided that such capital costs shall be amortized on a straight line basis over a period equal to the useful life thereof in accordance with generally accepted real estate accounting principles, consistently applied, together with interest thereon if Landlord borrowed such funds (not to exceed eight percent (8%), and Tenant shall pay such amortized cost on a monthly basis until the earlier of the expiration or earlier termination of this Lease or the useful life thereof. Operating Expenses do not include, and Tenant shall have no obligation to pay for, any of the following: (i) costs, expenses, depreciation or amortization for capital repairs and capital replacements of the Building Structure which are the sole obligation of Landlord under Paragraph 10 of this Lease; (ii) the costs of repair, replacement, or restoration work occasioned by any casualty pursuant to Paragraph 15 below or condemnation pursuant to Paragrap▇ ▇▇ ▇▇▇▇▇; (▇▇▇) ▇▇▇▇▇▇▇ and debt service fees, principal and/or interest on debt or amortization payments on any mortgages executed by Landlord covering Landlord’s property, any other indebtedness of Landlord, and rental under any ground lease or leases for the Building and/or the Property; (iv) any depreciation allowance or expense, amortization (except as expressly permitted in the preceding paragraph), expense reserve and other non-cash items; (v) except for management fees, Landlord’s general overhead and any overhead or profit increment to any subsidiary or affiliate of Landlord for services on or to the Building and/or the Property to the extent that the cost of such service exceeds competitive costs for such services rendered by persons or entities of similar skill, competence and experience other than a subsidiary or affiliate of Landlord; (vi) any costs or expenses representing any amount paid for services and materials to a (personal or business) related person, firm, or entity to the extent such amount exceeds the amount that would have been paid for such service or materials at the then existing market rates in the absence of such relationship; (vii) compensation paid to any employee of Landlord above the grade of Property Manager/Building Superintendent, including officers and executives of Landlord; (viii) the costs and expenses incurred in resolving disputes with other occupants, or prospective occupants of the Building; (ix) insurance costs for coverage not customarily paid by tenants of similar projects in the vicinity of the Building, increases in insurance costs caused by the activities of another occupant of the Building, and co-insurance payments; (x) insurance deductibles (including, without limitation, deductibles for earthquake and flood insurance carried by Landlord) in excess of $25,000.00 per casualty unless such excess is amortized over the useful life of the improvements to be repaired or replaced (as determined in accordance with generally accepted real estate accounting principles, consistently applied), together with interest thereon at the rate charged to Landlord if Landlord borrowed such funds (not to exceed eight percent (8%) per annum, payable by Tenant on a monthly basis as an Operating Expense until the earlier of the expiration or earlier termination of this Lease or the expiration of the useful life of the improvements); (xi) costs incurred in connection with the presence of any Hazardous Materials, except to the extent stored, used, released or disposed of by Tenant, its agents, employees, contractors, invitees, sublessees and assignees; (xii) the costs and expenses attributable to the construction of the Building, including correcting defects in the construction of the Building or in the Building equipment; (xiii) intentionally deleted; (xiv) the costs of repairs or maintenance which are or would have been covered by warranties or service contracts in existence on the Commencement Date and to the extent such maintenance and repairs are made at no cost to Landlord; (xv) the costs of repairs, alterations, and general maintenance necessitated by the negligence or willful misconduct of Landlord or its agents, employees or contractors; (xvi) interest or penalties due to the late payment of taxes, utility bills (to the extent made the obligation of Landlord hereunder) or other such costs payable by Landlord; (xvii) any amount payable by Landlord by way of indemnity or for damages or which constitute a fine or penalty; (xviii) any cost for overtime or other expenses to Landlord in curing defaults; (xix) the costs, including fines, penalties, and legal fees incurred, due to violations by Landlord, its employees, agents, contractors or assigns of building codes or any governmental rule or requirement; (xx) any of the following Taxes or assessment expenses: (a) estate, inheritance, transfer, gift or franchise taxes of Landlord or any federal, state or local income, sales or transfer tax, (b) penalties and interest, other than those attributable to Tenant’s failure to timely comply with its obligations pursuant to this Lease, (c) any Taxes in excess of the amount which would be payable if such tax or assessment expense were paid in installments over the longest possible term; and (xxi) any other cost or expense which, at Landlord’s optionunder generally accepted accounting principles, may consistently applied, would not be payable a normal maintenance or operating expense of the Building, including bad debt expenses and charitable contributions and donations. Landlord agrees that (y) Landlord will not collect or be entitled to itself, an affiliate or third party manager); and administrative fees equal to fifteen collect more than one hundred percent (15100%) of the Operating Expenses actually paid by Landlord in connection with the operation of the Building in any calendar year; and (excluding Taxes and Insurancez) (which, at Landlord shall make no profit from Landlord’s optioncollection of Operating Expenses. Within one hundred twenty (120) days after the end of each calendar year, may be payable Landlord shall furnish to itselfTenant a statement showing in reasonable detail the amount of Operating Expenses for the preceding calendar year. If Tenant's total payments of Operating Expenses for any year are less than Tenant's Proportionate Share of actual Operating Expenses for such year, an affiliate then Tenant shall pay the difference to Landlord within thirty (30) days after receipt of such annual statement, and if more, then Landlord shall pay the difference to Tenant together with delivery of such annual statement. For purposes of calculating Tenant's Proportionate Share of Operating Expenses, a year shall mean a calendar year except the first year, which shall begin on the Commencement Date, and the last year, which shall end on the expiration or third party manager); deductibles on insurance loss; security services (if any)earlier termination of this Lease. Notwithstanding the foregoingforegoing to the contrary, if Landlord agrees that all fails to provide a statement to Tenant within twelve (12) months after the end of the calendar year at issue, Tenant shall not be obligated to pay Tenant’s Proportionate Share of Operating Expenses must be reasonable and customary for the operation and maintenance in excess of the Property and Projectestimated amounts actually paid by Tenant for such calendar year.

Operating Expense Payments. (a) It is During each month of the intention of Landlord and Tenant Lease Term, on the same date that Landlord receive the Base Rent “net” of all other charges except as expressly provided herein. Accordingly, beginning on the Commencement Dateis due, Tenant shall pay Landlord an amount equal to 1/12th of the annual cost, as additional rent estimated by Landlord from time to time, of Tenant's ’s Proportionate Share (defined belowhereinafter defined) of the Operating Expenses and relating to the Premises, the Building, and for the Project. As used Payments thereof for any fractional calendar month shall be prorated on the basis of the actual number of days in this Lease, the term “Rent” shall mean, collectively, Base Rent and additional rentsuch calendar month. The term “Operating Expenses” shall mean means all costs and expenses incurred by Landlord during the Term with respect to the ownership, maintenance, repair repair, replacement and operation of the Common Area Premises and Projectthe Project including, including but not limited toto costs of: (i) Taxes (as provided in this Lease)hereinafter defined) and reasonable fees payable to tax consultants and attorneys for consultation and contesting taxes; Insurance (as provided in this Lease)ii) insurance; (iii) utilities; (iv) maintenance, repair and and/or replacement of all portions of the Project (including the buildings and Common Areas)Project, including without limitation, signspaving and parking areas, sprinklers and fire suppression systems roads, non-structural components of the roofs (if anyincluding the roof membrane), mechanical systemsalleys, including any HVAC or EVAP systems and their componentsdriveways, plumbing systemsmowing, landscaping, snow removal, exterior surfaces painting, utility lines and exterior lighting (including but excluding any maintenance, repairs or replacements under this Lease which Landlord is obligated to perform at its sole cost and expense); (v) maintenance, repair and/or replacement of mechanical and building systems serving the Premises including, but not limited to paintingto, cleaning and graffiti removal), paving and parking areas (including striping, line painting and snow removal), dock systems, dock doors, roads, roofs, and roof systems, alleys, landscaping (including sprinkler systems), utility lineselectrical, lighting, electrical systemsplumbing, Building Systems heating, ventilating and air conditioning systems (defined belowincluding, without limitation, amounts paid under any service contracts for maintaining the same); trash collection, sweeping; compliance with laws, rules, regulations and orders of governmental authorities, including any Legal Requirements; fees and assessments; (vi) amounts paid to contractors and subcontractors for work or services performed in connection with any of the foregoing; (vii) charges or assessments of any association to which the Project is subject; (viii) property management fees payable to a property manager (whichwith Tenant’s Proportionate Share not to exceed 3 percent of the total amount of Base Rent and Operating Expenses payable by Tenant hereunder), including any affiliate of Landlord; security services, if any; (ix) trash collection, sweeping and removal; and (x) additions or alterations made by Landlord to the Project or the Building in order to comply with Legal Requirements (other than those expressly required herein to be made by Tenant) or that are appropriate to the continued operation of the Project or the Building as a commercial/industrial building in the market area; provided, however, that the cost of capital repairs, replacements, additions or alterations that are required to be or otherwise customarily capitalized for federal income tax purposes shall be amortized on a straight-line basis for a period equal to the useful life thereof for federal income tax purposes and Tenant shall be only obligated to pay in equal monthly installments that portion attributable the remaining term of this Lease (including any renewals or extensions thereof). Operating Expenses do not include (a) debt service under mortgages or ground rent under ground leases; (b) leasing commissions, attorneys’ fees, or the costs of marketing, leasing and renovating space for tenants; (c) repairs, alterations, additions, improvements or replacements made to rectify or correct any defect in the design, materials or workmanship of the Premises, the Building or the Project; (d) costs of repairs, restoration, replacements or other work occasioned by (i) fire, windstorm or other casualty (including the costs of any deductibles paid by Landlord) and either (aa) payable (whether paid or not) by insurance required to be carried by Landlord under this Lease, or (bb) otherwise paid by insurance then in effect obtained by Landlord, or (ii) the adjudicated negligence or adjudicated intentional tort of Landlord, or any representative, employee or agent of Landlord; (e) costs incurred (less costs of recovery) for any items to the extent such amounts are, in Landlord’s reasonable judgment, recoverable by Landlord under a manufacturer’s, materialman’s, vendor’s or contractor’s warranty; (f) non-cash items, such as deductions for depreciation and amortization of the Premises, the Building or the Project and the Premises, the Building or the Project equipment, or interest on capital invested; (g) legal fees, accountants’ fees and other expenses incurred in connection with disputes with other tenants or occupants of the Premises, the Building or the Project or associated with the enforcement of any lease or defense of Landlord’s title to or interest in the Premises, the Building or the Project or any part thereof; (h) costs incurred due to violation by Landlord of the terms and conditions of this Lease; (i) the cost of any service provided to Tenant for which Landlord is entitled to be reimbursed; (j) charitable or political contributions; (k) interest, penalties or other costs arising out of Landlord’s failure to make timely payments of its obligations; (l) costs, expenses, depreciation or amortization for repairs and replacements required to be made by Landlord under Paragraph 10 of this Lease; (m) any reserves for bad debts or for future improvements, repairs or additions; (n) the expense of removing, abating or remediating Hazardous Materials not caused by Tenant or any party under Tenant’s direction or control; (o) Landlord’s general corporate overhead and all general administrative overhead expenses for services not specifically performed for the Building; (p) overhead profit increments paid to Landlord’s subsidiaries or affiliates for management or other services on or to the Premises, Building or Project or for supplies or other materials, in each case to the extent that the cost of such services, supplies or materials materially exceeds the cost that would have been paid had such services, supplies or materials been provided by unaffiliated parties on a competitive basis; and (q) salaries of executives of Landlord above the level of senior property manager. Landlord shall not collect in excess of one hundred percent (100%) of all of Operating Expenses, and none of the costs and expense of the Initial Improvements pursuant to Addendum 3 shall be included in Operating Expenses. Landlord shall not recover, through Operating Expenses, any item of cost or expense more than once. If Tenant’s total payments of Operating Expenses for any year are less than Tenant’s Proportionate Share of Operating Expenses for such year, then Tenant shall pay the difference to Landlord within 30 days after demand, and if more, then Landlord shall retain such excess and credit it against Tenant’s next payments (or if the Lease Term has ended, then paid to Tenant within thirty (30) days after reconciliation). For purposes of calculating Tenant’s Proportionate Share of Operating Expenses, a year shall mean a calendar year except the last year, which shall end on the expiration of this Lease. For purposes of calculating Operating Expenses for the last year of the Lease Term, Operating Expenses for the Base Year shall be reduced proportionately based upon the number of days that this Lease is in effect during such last year. With respect to Operating Expenses which Landlord allocates to the entire Project, Tenant’s “Proportionate Share” shall be the percentage set forth on the first page of this Lease as Tenant’s Proportionate Share of the Project; and, with respect to Operating Expenses which Landlord allocates only to the Building, Tenant’s “Proportionate Share” shall be the percentage set forth on the first page of this Lease as Tenant’s Proportionate Share of the Building. No later than 90 days following the first day of each calendar year during the Lease Term, Landlord shall deliver to Tenant an Operating Expense Reconciliation Invoice (“Invoice”) and an Operating Expense Summary Report listing the Operating Expenses for the prior year of the Lease Term (“Report”). Provided (x) no Event of Default exists under this Lease, and (y) no payments of Base Rent, Operating Expenses, or other amounts due under the Lease are outstanding, , Tenant, at its sole cost and expense, shall have the right to examine property invoices evidencing such costs and expenses as provided in the Invoice and Report. Such review of Landlord’s property invoices may occur not more than once per year at Landlord’s optionlocal market office during reasonable business hours. Landlord agrees to make the property invoices pertaining to the applicable Invoice and Report, may a copier and conference room available to Tenant for a period not to exceed one week to examine such property invoices. In the event Tenant desires to exercise the foregoing right, Tenant shall deliver written notice of Tenant’s intent to review the property invoices, no later than thirty (30) days following Tenant’s receipt of the Invoice and Report. Time is of the essence with regards to the delivery of such notice. Upon Landlord’s receipt of Tenant’s notice, Landlord and Tenant shall work in good faith to schedule a time and date for such property invoice examination which shall be payable acceptable to itselfboth parties. In the event that Tenant accurately determines that the Invoice and Report contain an error to the detriment of Tenant, an affiliate or third party manager)Landlord shall immediately provide a revised Invoice and Report to Tenant. If Tenant has already paid the Invoice, Landlord will provide a credit against Tenant’s obligations to pay Base Rent the amount overpaid by Tenant; and administrative fees if it is determined that Landlord overcharged Tenant by more than five percent (5%), then Landlord shall reimburse Tenant the Tenant’s actual, out-of-pocket cost of such review, not to exceed $2,500.00. Tenant shall keep any information gained from such examination confidential and shall not disclose it to any other party, except as required by law. If requested by Landlord, Tenant shall be required to sign a confidentiality agreement as a condition of Landlord making Landlord’s invoices available for inspection. Notwithstanding anything contained herein to the contrary, in no event shall Tenant retain any person paid on a contingency fee basis to act on behalf of Tenant with regards to the forgoing rights to review the property invoices and Landlord shall have no obligation to allow any such representative paid on a contingency fee basis access to Landlord’s records. Notwithstanding anything contained in this Lease to the contrary, Tenant hereby agrees that Tenant’s sole remedy pertaining to an error in the Invoice or Report shall be for the recovery from Landlord an amount equal to fifteen percent (15%) the amount overpaid by Tenant, and Tenant hereby waives any right to terminate this Lease as a result of any such error in the Operating Expenses (excluding Taxes and Insurance) (which, at Landlord’s option, Invoice or Report which Tenant may be payable to itself, an affiliate have under law or third party manager); deductibles on insurance loss; security services (if any). Notwithstanding the foregoing, Landlord agrees that all Operating Expenses must be reasonable and customary for the operation and maintenance of the Property and Projectequity.

Operating Expense Payments. 5.01. For the purposes of this Article 5 and other provisions of this Lease: (a) It is the intention of Landlord and Tenant that Landlord receive the Base Rent “net” of all other charges except as expressly provided herein. Accordingly, beginning on the Commencement Date, Tenant shall pay as additional rent Tenant's Share (defined below) of the Operating Expenses and relating to the Premises, the Building, and the Project. As used in this Lease, the term “Rent” shall mean, collectively, Base Rent and additional rent. The term “"Operating Expenses” " shall mean all costs and expenses paid or incurred by Landlord with or on Landlord's behalf in respect to of the ownershiprepair, maintenance, repair maintenance and operation of the Common Area and Project, including but not limited to: Taxes (including, without limitation, all expenses paid or incurred as provided in a result of Landlord complying with its obligations under this Lease. Operating Expenses shall include, without limitation, (i) salaries, wages, medical, surgical, union and general welfare benefits (including, without limitation, group life insurance and pension and welfare payments and contributions and all other fringe benefits paid to, for or with respect to all persons (whether employees of Landlord or its managing agent) engaged in the repair, operation and maintenance of the Project; (ii) payroll taxes, workers' compensation, uniforms, dry cleaning, and related expenses for such persons; (iii) the cost of all charges for gas, steam, electricity, heat, ventilation, air-conditioning, water and other utilities furnished to the buildings within the Project (including, without limitation, the common areas thereof) together with any taxes on such utilities (excluding however, the cost of electricity, heat, ventilating and air-conditioning described in clauses (9) and (10) of this definition); Insurance (as provided in this Lease); utilities; maintenance, repair and replacement iv) the cost of all portions painting any portion of the Project other than rentable areas; (including v) the buildings cost of building and Common Areas)cleaning supplies and equipment, including without limitationcost of replacements for tools and equipment used in the operation, signs, sprinklers and fire suppression systems (if any), mechanical systems, including any HVAC or EVAP systems and their components, plumbing systems, exterior surfaces (including but not limited to painting, cleaning and graffiti removal), paving and parking areas (including striping, line painting and snow removal), dock systems, dock doors, roads, roofsmaintenance, and roof systems, alleys, landscaping repair of the Project and charges for public telephone service for the Project; (including sprinkler systems), utility lines, lighting, electrical systems, Building Systems (defined below); trash collection, sweeping; compliance with laws, rules, regulations and orders of governmental authorities, including any Legal Requirements; fees and assessments; amounts paid to contractors and subcontractors for work or services performed vi) financial expenses incurred in connection with the foregoingoperation of the Project, such as insurance premiums (including, without limitation, liability insurance, fire and casualty insurance, rent insurance and any other insurance), reasonable attorneys' fees and disbursements (exclusive of any such fees and disbursements incurred in applying for any reduction of Taxes or in connection with the leasing of space in the Project or the enforcement of leases), auditing and other professional fees and expenses, association dues and any other ordinary and customary financial expenses incurred in connection with the operation of the Project; property (vii) the cost or rentals of all supplies (including, without limitation, cleaning supplies), tools, materials and equipment, and sales and other taxes thereon; (viii) cost of hand tools and other movable equipment used in the repair, maintenance or operation of the Project; (ix) the cost of all charges for window and other cleaning and janitorial and security services; (x) charges of independent contractors for the provision of goods and/or services otherwise includible as Operating Expenses under this Section 5.01; (xi) the cost of repairs and replacements made by Landlord; (xii) the cost of alterations and improvements to the Project made by reason of Legal Requirements or Insurance Requirements (subject to the amortization requirements set forth in clause (12) below); (xiii) payments under service contracts; (xiv) management fees or, if no managing agent is employed by Landlord, a sum in lieu thereof which is not in excess of the then prevailing rates for management fees of similar properties in Westchester County (which, at Landlord’s option, may be payable to itself, an affiliate or third party managerbut not less than 3-1/2% of the rents and additional charges); and administrative fees equal (xv) all other charges properly allocable to fifteen percent (15%) the repair, operation and maintenance of the Project in accordance with generally accepted accounting principles ("GAAP") (and, except as provided in clause (11) below, not required under GAAP to be capitalized); excluding, however, (1) depreciation, (2) interest on and amortization of debts, (3) ground rent, (4) leasehold improvements made for existing or future tenants of the Project, (5) brokerage commissions, (6) refinancing costs, (7) costs and expenses in connection with the construction of new buildings, (8) Taxes, (9) the cost of Basic Electric and HVAC Electric (as such terms are defined in Section 15.01) furnished to the Premises or to other tenants of the Project, (10) the cost of producing and furnishing steam and chilled water to provide heat, ventilating and air-conditioning furnished to the Premises or to other tenants of the Project, (11) salaries of officers of Keren Developments Inc. at or above the level of vice president, and (12) the cost of any improvement, machinery or equipment that is required to be capitalized for federal income tax purposes, except (x) expenditures designed to result in savings or a reduction of Operating Expenses (excluding Taxes e.g., energy saving devices), and Insurance(y) (whichexpenditures required by law, in either of which case such expenditure shall, subject to the immediately following sentence, be included in Operating Expenses for the Operating Year in which such expenditure is incurred and subsequent Operating Years, on a straight line basis, to the extent that such items are depreciated over an appropriate period considering the useful life thereof with an interest factor equal to the rate announced by Citibank, N.A. or its successor as its prime or base rate at Landlord’s option, may be payable to itself, an affiliate or third party manager); deductibles on insurance loss; security services (if any)the time Landlord incurs such expenditure. Notwithstanding the foregoing, Landlord agrees that all in no event shall any expenditure of the type described in the foregoing clause (12)(x) be included in Operating Expenses must during any one Operating Year in an amount in excess of the amount of Operating Expenses saved during such year (as reasonably estimated by Landlord) as the result of the expenditure in question, and in the event that such an excess exists for any Operating Year, the period for depreciating such item(s) shall be reasonable extended until Landlord has fully included such excess in Operating Expenses. If Landlord leases any equipment designed to result in savings or reductions in Operating Expenses, then the rentals and customary other costs paid pursuant to such leasing shall be included in Operating Expenses for the operation and maintenance Operating Year in which they are incurred. Any cost or expense shall be included in Operating Expenses for any Operating Year no more than once, notwithstanding that such cost or expense may fall under more than one of the Property and Projectcategories listed above. Landlord may use related or affiliated entities to provide services or furnish materials for the Project provided that the rates or fees charged by such entities are competitive with those charged by unrelated or unaffiliated entities for the same services or materials. Operating Expenses shall be calculated on the accrual basis of accounting.