Operating Expenses Exclusions. Operating Expenses shall not include # depreciation on the Building; # debt service, rental under any ground or underlying lease, or interest, principal, points and fees on any mortgage or other debt instrument encumbering the Building (except that, as provided in Paragraph 7.1 above, Landlord may include interest in the amortization of certain capital expenditures); # [[Organization B:Organization]] expenses incurred in negotiating leases, collecting rents, evicting tenants or costs incurred in [[Organization B:Organization]] proceedings with or against any tenant or to enforce the provisions of any lease, # the cost of decorating, improving for tenant occupancy, painting or redecorating portions of the Building to be demised to tenants; # advertising expenses relating to vacant space; # real estate brokers’ or other leasing commissions; # costs for which Landlord is reimbursed by insurance or condemnation proceeds, other tenants or any other source, and Landlord shall use commercially reasonable efforts to pursue claims under existing warranties and/or guaranties or against other responsible third parties to pay such costs; provided, that, the cost of pursuing such claims shall be included in Operating Expenses; # any bad debt loss, rent loss, or reserves for bad debt loss or rent loss; # costs incurred in connection with the operation of the business of the entity constituting Landlord, as distinguished from the costs of operating the Building, including accounting and [[Organization B:Organization]] matters, costs of defending any lawsuits with any mortgagee, costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord’s interest in the Building; # Landlord’s political or charitable contributions; # the cost of any “tenant relations” parties, events or promotions; # insurance which is not customarily carried by institutional owners of Comparable Buildings; # costs to repair or replace the Project resulting from any insured casualty (except commercially reasonable deductibles under Landlord’s insurance policies may be included in Operating Expenses to the extent permitted pursuant to Paragraph 7.1(b)); # repairs, alterations, additions, improvements or replacements made to rectify or correct any defect in the design, materials or workmanship of the Project (as opposed to the cost of normal repair, maintenance and replacement expected in light of the specifications of the applicable construction materials and equipment) or to comply with any Applicable Laws in effect as of the Substantial Completion Date (based on the current interpretation thereof by applicable governmental entity(ies) as of the Substantial Completion Date); # repairs, alterations, additions, improvements or replacements made to rectify or correct damage caused by the gross negligence or willful misconduct of Landlord or any of Landlord’s employees, agents, or contractors; # salaries, wages, bonuses and other compensation (including hospitalization, medical, surgical, retirement plan, pension plan, union dues, parking privileges, life insurance, including group life insurance, welfare and other fringe benefits, and vacation, holidays and other paid absence benefits) relating to managers, officers, directors, or executives of Landlord that are above the rank of general manager (or similar title); # fines, penalties or interest incurred due to violation by Landlord of the terms and conditions of any lease or any Applicable Laws or due to violation by any other tenant in the Project of the terms and conditions of any lease or any Applicable Laws; # interest, penalties or other costs arising out of Landlord’s failure to make timely payment of its obligations; # costs incurred to test, survey, cleanup, contain, abate, remove, or otherwise remedy Hazardous Materials or mold from the Project (except that Operating Expenses shall include costs incurred in connection with the prudent operation and maintenance of the Building, such as monitoring air quality); # costs incurred to correct defective equipment installed in the Project (as opposed to the cost of normal repair, maintenance and replacement expected in light of the specifications of the applicable equipment); # acquisition costs of any artwork; # Community Facilities District No. 2008-1 (Bay Meadows) assessment; # inheritance or estate taxes imposed upon or assessed against the interest of any person in the Project, or taxes computed upon the basis of the net income of any owners of any interest in the Project; # costs relating to the capital repair or capital replacement of the structural portions of the roof, foundations and exterior walls (except for any capital expenditures expressly included in Operating Expenses); and # any construction costs of the Project, Building, and Parking Facilities (including the Parking Garage). Tenant’s Proportionate Share of the management fees for the Project shall not exceed two percent (2%) of the Base Rent. If it shall not be lawful for Tenant to reimburse Landlord for all or any part of such taxes, the monthly rental payable to Landlord under this Lease shall be revised to net Landlord the same net rental after imposition of any such taxes by Landlord as would have been payable to Landlord prior to the payment of any such taxes.

Notwithstanding the foregoing, Operating Expenses shall not include any net income, franchise, capital stock, estate or inheritance taxes, or taxes that are the personal obligation of Tenant or of another tenant of the Project; leasing commissions; advertising and marketing expenses; expenses that relate to preparation of rental space for a tenant at the Project, including costs incurred to improve, renovate, redecorate or otherwise prepare any rental space for a tenant; [[Organization C:Organization]] expenses incurred by Landlord in connection with the negotiation of leases with prospective tenants and occupants of the Project (other than Tenant) and [[Organization C:Organization]] expenses (including attorneys’ fees) incurred in connection with disputes and enforcement of any leases with tenants of the Project (other than Tenant); costs of repairs to the extent reimbursed by payment received from other tenants of the Project or a third party not affiliated with Landlord; [[Organization C:Organization]] expenses (including attorneys’ fees) incurred in connection with negotiations or disputes between Landlord and employees, management agents, leasing agents, purchasers or mortgagees of the Building; expenses of initial development and construction, including grading, paving, landscaping and decorating (as distinguished from maintenance, repair and replacement of the foregoing); costs or expenses to the extent reimbursed by payment of insurance proceeds received by Landlord; interest, principal or any other payments under any loans to Landlord or loans secured by a loan agreement, mortgage, deed of trust, security instrument or other loan document covering the Project or a portion thereof (collectively, “Loan Documents”) (provided that interest upon a government assessment or improvement bond payable in installments shall constitute an Operating Expense under [Subsection 9.1(a)]); all payments of rent (but not taxes or operating expenses) under any ground lease or other underlying lease of all or any portion of the Project; salaries of executive officers of Landlord; depreciation claimed by Landlord for tax purposes (provided that this exclusion of depreciation is not intended to delete from Operating Expenses actual costs of repairs and replacements that are provided for in [Subsection 9.1(b)]); taxes that are excluded from Operating Expenses by the last sentence of [Subsection 9.1(a)]; costs or expenses incurred in connection with the financing or sale of the Project or any portion thereof; costs to maintain reserves of any kind; costs incurred to remedy any non-compliance as of the Execution Date with Applicable Laws that was not caused by Tenant or any Tenant Party; costs incurred to remove, study, test or remediate Hazardous Materials (as defined below) to the extent such Hazardous Materials existed on or about the Project as of the Execution Date and did not arise from and were not caused or exacerbated by Tenant or any Tenant Party (except with respect to those costs for which Tenant is otherwise responsible pursuant to the express terms of this Lease, which costs shall remain Tenant’s direct obligation); costs arising from a breach of this Lease by Landlord or the gross negligence or willful misconduct of Landlord or its employees; costs expressly excluded from Operating Expenses elsewhere in this Lease or that are charged to or paid by Tenant under other provisions of this Lease; professional fees and disbursements and other costs and expenses related to the ownership (as opposed to the use, occupancy, operation, maintenance or repair) of the Project; capital expenditures, except Permitted Capital Expenditures; costs to subsidiaries or affiliates of Landlord for goods and/or services in or to the Project to the extent the same materially exceeds arm’s-length competitive costs charged by firms that are not related to Landlord for the same goods and/or services; costs of Landlord’s charitable or political contributions; costs for the initial purchase of any fine art maintained at the Project; a property management fee other than the Property Management Fee (as defined below); penalties, fines, interest or other similar charges incurred by Landlord due to Landlord’s inability or unwillingness to make payment of taxes and/or to file any tax or informational returns when due (unless due to a default by Tenant); and any item that, if included in Operating Expenses, would involve a double collection for such item by Landlord. To the extent that Tenant uses more than Tenant’s Pro Rata Share of any item of Operating Expenses, Tenant shall pay Landlord for such excess in addition to Tenant’s obligation to pay Tenant’s Pro Rata Share of Operating Expenses (such excess, together with Tenant’s Pro Rata Share, “Tenant’s Adjusted Share”).

"Operating Expenses" shall mean all expenses, costs and amounts of every kind and nature which Landlord pays or accrues during any Expense Year because of or in connection with the ownership, management, maintenance, security, repair, replacement, restoration or operation of the Project, or any portion thereof. Without limiting the generality of the foregoing, Operating Expenses shall specifically include any and all of the following: # the cost of supplying all utilities, the cost of operating, repairing and maintaining the utility, telephone, mechanical, sanitary, storm drainage, and elevator systems, and the cost of maintenance and service contracts in connection therewith; # the cost of licenses, certificates, permits and inspections and the cost of contesting any governmental enactments which are reasonably likely to increase Operating Expenses during the Lease Term, and the costs incurred in connection with a governmentally mandated transportation system management program or similar program; # the cost of all insurance carried by Landlord in connection with the Project and Premises as reasonably determined by Landlord; # the cost of landscaping, relamping, and all supplies, tools, equipment and materials used in the operation, repair and maintenance of the Project, or any portion thereof; # the cost of parking area operation, repair, restoration, and maintenance; # management and/or incentive fees, consulting fees, [[Organization A:Organization]] fees and accounting fees, of all contractors and consultants in connection with the management, operation, maintenance and repair of the Project; # payments under any equipment rental agreements; # subject to item (f), below, wages, salaries and other compensation and benefits, including taxes levied thereon, of all persons engaged in the operation, maintenance and security of the Project; # costs under any easement pertaining to the sharing of costs by the Project; # operation, repair, maintenance and replacement of all systems and equipment and components thereof of the Project; # the cost of janitorial, alarm, security and other services, replacement of wall and floor coverings, ceiling tiles and fixtures in Common Areas, maintenance and replacement of curbs and walkways, repair to roofs and re-roofing; # amortization (including interest on the unamortized cost) over such period of time as Landlord shall reasonably determine, of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or any portion thereof; # the cost of capital improvements or other costs incurred in connection with the Project # which are intended to effect economies in the operation or maintenance of the Project, or any portion thereof, or to reduce current or future Operating Expenses or to enhance the safety or security of the Project or its occupants, # which are required to comply with present or anticipated conservation programs, # which are replacements or modifications of nonstructural items located in the Common Areas required to keep the Common Areas in good order or condition, or # which are required under any governmental law or regulation; provided, however, that any capital expenditure shall be amortized (including reasonable interest on the amortized cost) over the reasonable useful life of such capital item; and # costs, fees, charges or assessments imposed by, or resulting from any mandate imposed on Landlord by, any federal, state or local government for fire and police protection, trash removal, community services, or other services which do not constitute "Tax Expenses" as that term is defined in Section 4.2.5, below, and # payments under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Building, including, without limitation, any covenants, conditions and restrictions affecting the property, and reciprocal easement agreements affecting the property, any parking licenses, and any agreements with transit agencies affecting the Property (collectively, "Underlying Documents"). Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses shall not, however, include:

(a) “Operating Expenses” shall mean any or all expenses incurred by Landlord in connection with the operation of the Building, including: # salaries, wages, medical, surgical and general welfare benefits, (including group life insurance) pension payments and other fringe benefits of employees of Landlord engaged in the operation and maintenance of the Building; # payroll taxes, worker’s compensation, uniforms and dry cleaning for the employees referred to in subdivision (i); # the cost of all charges for steam, heat, ventilation, air conditioning and water (including sewer rental and taxes) furnished to the Building and/or used in the operation of all of the service facilities of the Building and the cost of all charges for electricity furnished to the public and service facilities of the Building including any taxes on any of such utilities, less actual costs for utilities whether or not directly metered to but payable, other than as a part of Operating Expenses, by any tenant; # the cost of all charges for rent, hazard, casualty, war risk insurance (if obtainable from the United States government) and liability insurance for the Building carried by Landlord; # the cost of all building and cleaning supplies for the common areas of the building and charges for telephone for the Building; # the cost of all charges for the management of the Building (if there is no managing agent for the Building, a sum in lieu thereof which is not in excess of the then prevailing rates for managing agents of other first class office buildings in Manhattan); # the cost of all charges for window cleaning and service contracts with independent contractors for the common areas of the Building; # the cost of compliance by Landlord with any federal, state, municipal or local ordinances hereafter enacted which affect the Land and/or the Building; # the cost relating to the maintenance and operation of the elevators in the Building; # the cost relating to protection and security; # the cost relating to lobby decorations and interior and exterior landscape maintenance; # repairs, replacements and improvements which are appropriate for the continued operation of the Building; # painting of non-tenanted areas; # professional and consulting fees; and # association fees or dues. Notwithstanding the foregoing. Operating Expenses shall not include # the cost of painting and decoration for any tenant’s space or any leaseable space; # administrative wages and salaries, including executive compensation; # renting commissions; # franchise taxes or income taxes of Landlord; # Taxes; # the cost of providing overtime heat and air-conditioning to tenants of the Building to the extent that the same are not provided to all tenants or are payable by the tenants for whom such services are provided; # the cost of any work or service provided to any tenant of the Building that is not provided to Tenant; # debt service and amortization on mortgages; # rent paid under superior leases; # any expense to the extent Landlord is compensated or reimbursed through the proceeds of insurance or is otherwise compensated or reimbursed by any tenant (including Tenant) of the Building; # depreciation; # transfer, gains, inheritance, estate, gift, franchise or income taxes imposed upon Landlord; # financing and refinancing costs, including legal fees; # costs and expenses incurred by Landlord in connection with the sale or the rental of the Land or the Building, or in connection with the purchase or sale of any “air” or “development” rights; # the cost of investment grade art; # the cost of electrical energy furnished directly to Tenant and other tenants of the Building and to any other leasable space in the Building; # the cost of installations and decorations and all other costs and expenses incurred in connection with preparing or renovating space for a tenant and all contributions foe tenant improvement work; # costs incurred to remove, encapsulate or otherwise abate asbestos, asbestos-containing materials or other hazardous materials in the Building; # capital expenses; # legal fees incurred in connection with any negotiations of, or disputes arising out of, any space lease in the Building, or for obtaining approvals from or otherwise dealing or negotiating with mortgagees or lessors or providing reports and information thereto or therefor; # lease takeover costs incurred by Landlord in connection with entering into leases in the Building and costs incurred by Landlord to relocate tenants in the Building in order to consummate a specific lease or accomodate a specific tenant’s request; # costs relating to withdrawal liability or unfunded pension liability under the Multi-Employer Pension Act or similar law; # the cost of any work or services performed or other expenses incurred in connection with the installation, operation and maintenance of a specialty facility at the Building such as an observatory, athletic or recreational club, broadcasting facility, child care or similar facility or luncheon club, cafeteria or dining facility; (xxxviii) any compensation paid to clerks, attendants or other persons in commercial concessions owned or operated by Landlord or its affiliates in the Building; # costs, if any, incurred by Landlord for the benefit of retail tenants or any other similar group of tenants or any single tenant in the Building; (xl) governmental fines and penalties; (xli) the cost of maintaining, organizing or reorganizing the entity that is Landlord; (xlii) the cost of complying with any violation of any legal or insurance requirement existing on the date hereof. (xliii) the cost of rentals of capital equipment; (xliv) the cost of improvements made or equipment acquired by Landlord with respect to the maintenance and/or operation of the Land and/or Building, which, under generally accepted accounting principles would be amortized; (xlv) any utility services rendered to retail tenants in excess of those rendered to non-retail tenants of the Building.