Everett Public Facilities District 2/28/2002

or accrue or become due or payable out of or on account of or become a lien on the Premises, or the Regional Center or improvements now or hereafter comprising a part thereof, or the use or occupancy of the Premises, Regional Center or improvements. The term "Impositions" shall not include any income tax, gross receipts tax,business and occupation tax, withholding, profit or revenue tax or charge levied upon the Rent payable to Lessor under the terms of this Lease (except to the extent such tax is imposed on Lessor in lieu of real property ad valorem taxes on the Premises), any corporate franchise tax or corporate license fee that may be levied upon or against Lessor or any successor corporate Lessor or any similar obligations assessed against or imposed on Lessor by any governmental body. Section 5.2 Definition of Operating Expenses. The term"Operating Expenses" shall mean all expenses paid or caused to be paid by Lessee (excluding such items as Rent, depreciation, amortization, Permitted Debt Service, and financing fees) in connection with the use, operation,management, maintenance, repair and replacement of the Regional Center beginning in calendar year 2006 and continuing through the Lease Term, including without limitation: (a) Utilities, including any surcharges imposed thereon; (b) All reasonable and actual expenses paid or incurred by Lessee for maintaining, operating, and repairing the Regional Center and the personal property used in conjunction therewith, including insurance premiums, licenses,permits, and inspection fees (other than those obtained in connection with initial construction of the Regional Center and initial occupancy thereof), customary management fees, legal and accounting expenses, and other reasonable and actual costs that, in accordance with generally accepted accounting principles, consistently applied,would be treated as an expense of maintaining, operating, or repairing the Regional Center(and not a cost of constructing the Regional Center). Depreciation shall not be included in Operating Expenses. Any dispute as to the reasonableness of an expenditure shall be resolved by mandatory arbitration in accordance with Article 20; and (c) Taxes and assessments, excluding interest and penalties for late payment thereof, and excluding personal property taxes on furniture, equipment and other moveable personal property owned by Lessee. Except as set forth in this Section 5.2, no other items shall be considered Operating Expenses. Section 5.3 Lessee's Payment of Impositions and Operating Expenses. During the term of the Lease, Lessee shall pay when due, subject to the further provisions hereof, all Impositions assessed against the Premises, and all Operating Expenses, except that: 5.3.1 All Impositions or Operating Expenses that are payable by Lessee pursuant hereto for the Lease Year or tax year in which the Effective Date occurs, as well as during the year in which the Lease Term expires shall be prorated on an actual per diem basis so that Lessee and Lessor each shall pay their respective proportionate share of such Impositions or 7 GROUND LEASE COE--EPFD