\n During Year 2 of the Term: $630,000.00
\n During Year 3 of the Term: $560,000.00
\n During Year 4 of the Term: $490,000.00
\n During Year 5 of the Term: $420,000.00
\n During Year 6 of the Term: $350,000.00
\n During Year 7 of the Term: $280,000.00
\n During Years 8, 9 and 10 of the Term: $160,000.00
\n During the Extension Period: $160,000.00
\n<\/c><\/s><\/table>\n Notwithstanding the foregoing, from and after the third anniversary of the
\nCommencement Date, the Deposit shall be in the amount of $80,000.00 in the sole
\nevent that Tenant provides evidence reasonably satisfactory to Landlord at least
\nthirty (30) and no more than sixty (60) days prior to each anniversary of the
\nCommencement Date that Tenant has a tangible net worth of at least
\n$75,000,000.00. For any year that Tenant does not provide satisfactory evidence
\nof such tangible net worth, the Deposit shall be in the amount set forth above
\nfor such year.<\/p>\n
Section 36. Waiver. The waiver by either party hereto of any agreement,
\ncondition, or provision contained in this Lease shall not be deemed to be a
\nwaiver of any subsequent breach of the agreement, condition, or provision or any
\nother agreement, condition, or provision contained in the Lease, nor shall any
\ncustom or practice that may arise between the parties in the administration of
\nthe terms of this Lease be construed to waive or to lessen the right of any
\nparty to the performance by the other party in strict accordance with these
\nterms. The subsequent acceptance of rental under this Lease by Landlord shall
\nnot be deemed to be a waiver of any preceding breach by Tenant of any agreement,
\ncondition, or provision of this Lease, other than the failure of Tenant to pay
\nthe particular accepted rental, regardless of knowledge of the preceding breach
\nat the time of the rental acceptance.<\/p>\n
Section 37. Notices and Consents. All notices, consents, demands, and
\nother communications from one party to the other that are given pursuant to the
\nterms of this Lease shall be in writing and shall be deemed to have been fully
\ngiven when delivered, including delivery by commercial delivery <\/p>\n
60<\/p>\n
services or facsimile transmission, or if deposited in the United States mail,
\ncertified or registered, postage prepaid, when received or refused. All notices,
\nconsents, demands, and other communications shall be addressed as follows: to
\nTenant at the address specified in the Basic Lease Information, or to another
\nplace or person as Tenant may designate in a notice to Landlord, or delivered to
\nTenant at the Premises; to Landlord at the address specified in the Basic Lease
\nInformation, or to another place as Landlord may designate in a notice to
\nTenant.<\/p>\n
Section 38. Entire Agreement. There are no oral agreements between
\nLandlord and Tenant affecting this Lease, and this Lease supersedes and cancels
\nall previous negotiations, arrangements, brochures, agreements, and
\nunderstandings between Landlord and Tenant or displayed by Landlord to Tenant
\nwith respect to the subject matter of this Lease. There are no representations
\nbetween Landlord and Tenant other than those contained in this Lease. All
\nimplied warranties, including implied warranties of merchantability and fitness,
\nare excluded.<\/p>\n
Section 39. Authority. If either of the parties signs this Lease as a
\ncorporation, such party warrants that the party is a duly formed and validly
\nexisting corporation, that the party is qualified to do business in California,
\nand any other jurisdiction in which it conducts business, that the party has the
\nright and authority to enter into this Lease, and that each person signing on
\nbehalf of the corporation is authorized to do so. If either of the parties
\nsigns this Lease as a partnership, each person executing this Lease on behalf of
\nthe party warrants that the party is a partnership, that the partnership has the
\nright and authority to enter into this Lease, and that each person signing on
\nbehalf of the partnership is authorized to sign.<\/p>\n
Section 40. Plural and Singular. The words Landlord and Tenant as used
\nin this Lease shall include the plural as well as the singular.<\/p>\n
Section 41. Joint and Several Obligations. If there is more than one
\nTenant, the obligations imposed on Tenant shall be joint and several.<\/p>\n
Section 42. Time of the Essence. Time is of the essence in this Lease
\nand all of its provisions.<\/p>\n
Section 43. Examination of Lease. Submission of this instrument for
\nexamination or signature by Tenant does not constitute a reservation of or
\noption for lease, and it is not effective as a lease or otherwise until
\nexecution and delivery by both Landlord and Tenant.<\/p>\n
Section 44. Heirs, Successors, and Assigns. The agreements, conditions,
\nand provisions contained in this Lease shall, subject to the provisions for
\nassignment, apply to and bind the heirs, executors, administrators, successors,
\nand assigns of the parties to it. Unless expressly provided herein to the
\ncontrary, the terms, conditions and covenants of this Lease are intended solely
\nfor the benefit of Landlord and Tenant.<\/p>\n
Section 45. Name of Building. Tenant shall not, without the consent of
\nLandlord, use the name of the Building or the Complex for any purpose other than
\nas the address of the business to be conducted by Tenant in the Premises.<\/p>\n
61<\/p>\n
Section 46. Illegality or Unenforceability of Portion of Lease. If any
\nprovision of this Lease is determined to be illegal or unenforceable, this
\ndetermination shall not affect any other provision of this Lease, and all other
\nprovisions shall remain in full force and effect.<\/p>\n
Section 47. Governing Law. This Lease shall be governed by and construed
\npursuant to law of the State of California. The headings and titles to the
\nparagraphs of this Lease are for convenience only and are not to be used to
\ninterpret or construe this Lease. Wherever the term “including” or “includes”
\nis used in this Lease it shall be construed as if followed by the phrase
\n“without limitation.”<\/p>\n
Section 48. Obligations Independent. The obligations of each party
\nhereunder are independent and do not constitute conditions to the effectiveness
\nof the other party’s obligations. The nonperformance by either party of any of
\nits obligations shall not excuse any nonperformance by the other party except to
\nthe extent that it makes such other party’s performance impossible or
\nimpracticable.<\/p>\n
Section 49. Exhibits. The exhibits and addenda, if any, specified in the
\nOffice Lease Index set forth at the beginning of this Lease are attached to this
\nLease and by this reference made a part of it. To the extent that the terms and
\nconditions of such exhibits and addenda are inconsistent with the terms and
\nconditions contained in the body of this Lease, the terms and conditions
\ncontained in such exhibits and addendum shall control.<\/p>\n
Section 50. Landlord’s Liability. The term “Landlord,” as used in this
\nLease, shall mean only the owner or owners of the Property at the time in
\nquestion. Notwithstanding any other term or provision of this Lease, (a) the
\nliability of Landlord for its obligations under this Lease is limited solely to
\nLandlord’s interest in the Property as the same may from time to time be
\nencumbered (or the amount of any proceeds from the sale of the Property), and no
\npersonal liability shall at any time be asserted or enforceable against any
\nother assets of Landlord or against Landlord’s stockholders, directors, officers
\nor partners on account of any of Landlord’s obligations or actions under this
\nLease, and (b) in no event shall Landlord be liable to Tenant for any punitive
\nor consequential damages or damages for loss of business by Tenant. In
\naddition, from and after the date of Landlord’s conveyance of title to the
\nProperty, Landlord shall be relieved of all liability with respect to Landlord’s
\nobligations to be performed under this Lease after the date of such conveyance.
\nIf Tenant provides Landlord with any security for Tenant’s performance of its
\nobligations hereunder, and Landlord transfers such security to the grantee or
\ntransferee of Landlord’s interest in the Property, Landlord shall be released
\nfrom any further responsibility or liability for such security. Upon any
\nconveyance of title to the Property, the grantee or transferee, by accepting
\nsuch conveyance, shall be deemed to have assumed Landlord’s obligations to be
\nperformed under this Lease from and after the date of transfer, subject to the
\nlimitations on liabilities set forth in this Section 50.<\/p>\n
51. Financing Condition. If at any time or times Landlord desires to
\nobtain financing for the Property, or any portion hereof containing the
\nPremises, or if any lender which intends to take, or is holding, a mortgage or
\ndeed of trust encumbering the Property should require, as a condition to such
\nfinancing, either execution by Tenant of an agreement requiring Tenant <\/p>\n
62<\/p>\n
to send such lender written notice of any default by Landlord under this Lease,
\ngiving such lender the right to cure such default until such lender has
\ncompleted foreclosure, and preventing Tenant from terminating this Lease unless
\nsuch default remains uncured after foreclosure has been completed, except with
\nrespect to maintenance and repair or provision of services to the extent the
\ndefault substantially interferes with Tenant’s intended use of the Premises, or
\nany modification of the agreements, covenants, conditions or provisions of this
\nLease, or both of them, then Tenant agrees to execute and deliver such agreement
\nand to modify this Lease as required by such lender; provided, however, that no
\nsuch modification shall unfairly increase the obligations or adversely affect
\nthe rights of Tenant hereunder nor affect the length of the term hereof or
\nincrease the rent payable by Tenant under Sectionsy4 and 5, it being
\nacknowledged that the purpose of such modifications would be only to preserve
\nthis Lease as security for payment of Landlord’s obligations to such lender.
\nTenant acknowledges and agrees that its failure to execute any such agreement or
\nmodification required by such lender may cause Landlord serious financial damage
\nby causing the failure of a financing transaction and giving Landlord all of its
\nrights and remedies under Sections 20, 21 and 22 hereof, including its right to
\ndamages caused by the loss of said financing. In addition to such rights and
\nremedies, if Tenant shall fail or refuse to execute any such agreement or
\nmodification within ten (10) days after receipt thereof, Landlord, at its
\noption, may, upon written notice to Tenant, terminate this Lease and, upon
\ngiving such termination notice, Landlord shall refund to Tenant any unearned
\nrent and\/or security deposit held by Landlord in excess of amounts which Tenant
\nthen owes to Landlord, and this Lease shall terminate.<\/p>\n
52. Hazardous Substance Disclosure. California law requires landlords to
\ndisclose to tenants the existence of certain hazardous substances. Accordingly,
\nthe existence of tobacco smoke, lead paint and asbestos containing materials
\n(“ACM”) must be disclosed. Although smoking is prohibited in the public areas
\nof the Building and the Complex, these areas may, from time to time, be exposed
\nto tobacco smoke. Additionally, certain areas of the Building and Complex may
\ncontain ACM, but these areas are generally inaccessible to tenants, such as
\nmachinery rooms, the inside of sealed walls and above suspended ceilings.
\nFurther, certain potions of the Complex may contain lead paint. Landlord
\ncovenants to comply during the Lease term with all local, state and federal laws
\nand regulations requiring disclosure to tenants regarding the existence of
\nhazardous substances within the Building and the Complex. Tenant agrees not to
\nexpose or disturb any ACM or lead paint unless Landlord has given Tenant prior
\nwritten consent thereto and Tenant complies with all applicable legal
\nrequirements and Landlord’s written procedures for handling ACM and lead paint.
\nTenant’s failure to comply with the immediately preceding sentence shall
\nconstitute an Event of Default under Section 19 of the Lease. Tenant may obtain
\na copy of Landlord’s written procedures for handling asbestos and lead paint
\nfrom the Building office. Landlord shall have available at the Building office
\nfor inspection by Tenant, during Normal Business Hours, all reports in
\nLandlord’s possession relating to hazardous substances existing at the Property.<\/p>\n
The parties have executed this Lease as of the date first set forth above.<\/p>\n
63<\/p>\n
Landlord: Tenant:<\/p>\n
PACIFIC RESOURCES PCX DEVELOPMENT SALON.COM, a Delaware corporation
\nINC., a California corporation<\/p>\n
By: \/s\/ Kevin Wu By: \/s\/ Todd Hagen<\/p>\n
Name: Kevin Wu Name: Todd Hagen<\/p>\n
Its: Its: Chief Financial Officer
\n Vice President and Asst Secretary<\/p>\n
By: By:<\/p>\n
Name: Name:<\/p>\n
Its: Its:<\/p>\n
64<\/p>\n
6124629.6<\/p>\n
Exhibit A. Description of Premises<\/p>\n
65<\/p>\n
6124629.6<\/p>\n
Exhibit A-1. Description of Real Property<\/p>\n
The Real Property is situated in the County of San Francisco, State of
\nCalifornia, and is described as follows:<\/p>\n
Lot 48, as shown on “Parcel Map Merging of Lots 1, 46 and 47, a Portion of
\nAssessor’s Block 3705, also Being a Portion of 100 Vara Block 371”, San
\nFrancisco, California filed June 18, 1992, in Book 41 of Parcel Maps, at Pages
\n44 and 45, in the Office of the Recorder of the City and County of San
\nFrancisco, State of California.<\/p>\n
Assessor’s Lot 48, Block 3705.<\/p>\n
66<\/p>\n
6124629.6<\/p>\n
Exhibit B. Rules<\/p>\n
1. The sidewalks, halls, passages, exits, entrances, shopping malls,
\nelevators, escalators, and stairways of the Building and the Complex shall not
\nbe obstructed by any of the tenants or used for any purpose other than for
\ningress to and egress from their respective Premises. The halls, passages,
\nexits, entrances, shopping malls, elevators, escalators, and stairways are not
\nfor the general public, and Landlord shall in all cases retain the right to
\ncontrol and prevent access to them by all persons whose presence in the judgment
\nof Landlord would be prejudicial to the safety, character, reputation, and
\ninterests of the Building, the Complex and its tenants. However, nothing here
\nshall be construed to prevent access to persons with whom any tenant normally
\ndeals in the ordinary course of business, unless these persons are engaged in
\nillegal activities. No tenant and no employee or invitee of any tenant shall go
\non the roof of the Building or the Complex.<\/p>\n
2. A sign, placard, picture, name, advertisement, or notice visible from
\nthe exterior of any tenant’s Premises shall not be inscribed, painted, affixed,
\nor otherwise displayed by any tenant on any part of the Building or the Complex
\nwithout the prior written consent of Landlord. Landlord will adopt and furnish
\nto tenants general guidelines relating to signs inside the Building on the
\noffice floors. Each tenant shall conform to these guidelines, but may request
\napproval of Landlord for modifications, which will not be unreasonably withheld.
\nAll approved signs or lettering on doors shall be printed, painted, affixed, or
\ninscribed at the expense of the tenant by a person approved by Landlord, which
\nwill not be unreasonably withheld. Material visible from outside the Building
\nor the Complex will not be permitted.<\/p>\n
3. The Premises of each tenant shall not be used for the storage of
\nmerchandise held for sale to the general public or for lodging. No cooking
\nshall be done or permitted by any tenant on the Premises, except that (a) each
\ntenant may establish and operate a lunchroom facility for use by tenant’s
\nemployees, and (b) each tenant may use and install food and beverage vending
\nmachines and Underwriters’ Laboratory approved microwave ovens and equipment for
\nbrewing coffee, tea, hot chocolate, and similar beverages, provided that
\nadequate provisions are made for venting and control of odors and all facilities
\nand equipment are in accordance with all applicable federal, state, and city
\nlaws, codes, ordinances, rules, and regulations.<\/p>\n
4. No tenant shall employ any person other than Landlord’s janitorial
\nservice for cleaning the Premises, unless otherwise approved by Landlord. No
\nperson other than those approved by Landlord shall be permitted to enter the
\nBuilding to clean it. No tenant shall cause any unnecessary labor because of
\ncarelessness or indifference in the preservation of good order and cleanliness.
\nJanitor service will not be furnished on nights when rooms are occupied after
\n9:30 p.m. unless, by prior arrangement with Landlord, service is extended to a
\nlater hour for specifically designated rooms.<\/p>\n
5. Landlord will furnish each tenant, free of charge, one key to each
\ndoor lock in the Premises. Landlord may make a reasonable charge for any<\/p>\n
67<\/p>\n
additional keys. No tenant shall have any keys made. No tenant shall alter any
\nlock or install a new or additional lock or any bolt on any door of the premises
\nwithout the prior consent of Landlord. The tenant shall in each case furnish
\nLandlord with a key for any lock. Each tenant, upon the termination of the
\ntenancy, shall deliver to Landlord all keys to doors in the Building that have
\nbeen furnished to the tenant.<\/p>\n
6. The freight elevator shall be available for use by all tenants in the
\nBuilding, subject to reasonable scheduling as Landlord deems appropriate. The
\npersons employed to move equipment in or out of the Building must be acceptable
\nto Landlord. Landlord shall have the right to prescribe the weight, size, and
\nposition of all equipment, materials, furniture, or other property brought into
\nthe Building and the Complex. Heavy objects shall, if considered necessary by
\nLandlord, stand on wood strips of a thickness necessary to properly distribute
\nthe weight. Landlord will not be responsible for loss of or damage to any
\nproperty from any cause, and all damage done to the Building or the Complex by
\nmoving or maintaining property shall be repaired at the expense of the tenant.<\/p>\n
7. No tenant shall use or keep in the Premises, the Building or the
\nComplex any kerosene, gasoline, or inflammable or combustible fluid or material
\nother than limited quantities reasonably necessary for the operation or
\nmaintenance of office equipment, and may not, without Landlord’s prior approval,
\nuse any method of heating or air conditioning other than that supplied by
\nLandlord. No tenant shall use or keep any foul, noxious, or hazardous gas or
\nsubstance in the Premises, or permit or suffer the Premises to be occupied or
\nused in a manner offensive or objectionable to Landlord or other occupants of
\nthe Building and the Complex because of noise, odors, or vibrations, or
\ninterfere in any way with other tenants or those having business in the Building
\nand the Complex. No pets shall be kept in the Premises.<\/p>\n
8. Landlord shall have the right, exercisable without notice and without
\nliability to any Tenant, to change the name and street address of the Building
\nor the Complex.<\/p>\n
9. Landlord reserves the right to exclude from the Building between the
\nhours of 6:00 p.m. and 7:00 a.m. and at all hours on Saturdays, Sundays, and
\nlegal holidays any person who does not present a proper access card or other
\nidentification as a tenant or an employee of a tenant, or who does not otherwise
\npresent proper authorization by a tenant for access to its premises. Each
\ntenant shall be responsible for all persons for whom it authorizes access and
\nshall be liable to Landlord for all acts of these persons. Landlord shall in no
\ncase be liable for damages for any error with regard to the admission to or
\nexclusion from the Building or the Complex of any person. In the case of
\ninvasion, mob, riot, public excitement, or other circumstances rendering an
\naction advisable in Landlord’s opinion, Landlord reserves the right to prevent
\naccess to the Building and the Complex during the continuance of the
\ncircumstance by any action Landlord deems appropriate.<\/p>\n
10. A directory of the Building will be provided to display the name and
\nlocation of tenants. Landlord reserves the right to exclude any other names.
\nAny additional name that a tenant desires to have added to the directory shall
\nbe subject to Landlord’s approval and may be subject to a charge.<\/p>\n
68<\/p>\n
11. No curtains, draperies, blinds, shutters, shades, screens, or other
\ncoverings, hangings, or decorations shall be attached to, hung, or placed in, or
\nused in connection with any exterior window in the Building without the prior
\nconsent of Landlord. If consented to by Landlord, these items shall be
\ninstalled on the office side of the standard window covering and shall in no way
\nbe visible from the exterior of the Building or the Complex.<\/p>\n
12. Messenger services and suppliers of bottled water, food, beverages,
\nand other products or services shall be subject to reasonable regulations as may
\nbe adopted by Landlord. Landlord may establish a central receiving station in
\nthe Building for delivery and pick up by all messenger services, and may limit
\ndelivery and pick up at tenant Premises to Building personnel.<\/p>\n
13. Each tenant shall see that the doors of the premises are closed and
\nlocked and that all water faucets or apparatus, cooking facilities, and office
\nequipment, excluding office equipment required to be operative at all times, are
\nshut off before the tenant or employees leave the Premises at night, so as to
\nprevent waste or damage. For any default or carelessness in this regard the
\ntenant shall be responsible for any damage sustained by other tenants or
\noccupants of the Building or the Complex or Landlord. On multiple-tenancy
\nfloors, tenants shall keep the doors to the Building corridors closed at all
\ntimes except for ingress and egress.<\/p>\n
14. The toilets, urinals, wash bowls, and other rest room facilities
\nshall not be used for any purpose other than that for which they were
\nconstructed. No foreign substance of any kind shall be thrown in them, and the
\nexpense of any breakage, stoppage, or damage resulting from the violation of
\nthis rule shall be borne by the tenant who, or whose employees or invitees, have
\ncaused it.<\/p>\n
15. Except with the prior consent of Landlord, no tenant of the office
\nportions of the Building shall sell, or permit the sale at retail, of
\nnewspapers, magazines, periodicals, theater tickets, or any other goods or
\nmerchandise to the general public in the Premises, nor shall any tenant carry
\non, permit, or allow any employee or other person to carry on the business of
\nstenography, typewriting, or any similar business in or from the Premises for
\nthe service or accommodation of occupants of any other portion of the Building,
\nnor shall the Premises of any tenant of the office portions of the Building be
\nused for manufacturing of any kind, as a labor union office, barber or manicure
\nshop, employment bureau, doctor’s or dentist’s office, dance or music studio or
\nfor any business or activity other than that specifically provided for in the
\ntenant’s lease.<\/p>\n
16. No tenant shall install any antenna, loudspeaker, or other device on
\nthe roof or exterior walls of the Building or the Complex.<\/p>\n
17. No motorcycles, motor scooters or bicycles shall be parked or stored
\nanywhere in the Building or the Complex without the consent of Landlord.<\/p>\n
18. Hand trucks or other material handling equipment, except those
\nequipped with rubber tires and side guards, may not be used in any portion of
\nthe Building or the Complex unless approved by Landlord.<\/p>\n
69<\/p>\n
19. Each tenant shall store refuse within that tenant’s premises. No
\nmaterial of a nature that it may not be disposed of in the ordinary and
\ncustomary manner of removing and disposing of refuse in the City and County of
\nSan Francisco, California, without being in violation of any law or ordinance
\ngoverning this disposal shall be placed in the refuse boxes or receptacles. All
\nrefuse disposal shall be made only through entryways and elevators provided for
\nthese purposes and at the times Landlord shall designate.<\/p>\n
20. Canvassing, peddling, soliciting, and distributing handbills or any
\nother written materials in the Building and the Complex is prohibited, and each
\ntenant shall cooperate to prevent this type of occurrence.<\/p>\n
21. The requirements of the tenants will be attended to only on
\napplication by telephone or in person at the office of the Building. Employees
\nof Landlord shall not perform any work or do anything outside of their regular
\nduties unless under special instructions from Landlord.<\/p>\n
22. Landlord may waive any one or more of these Rules and Regulations for
\nthe benefit of any particular tenant of the office portions of the Building, so
\nlong as Tenant’s use of the Premises is not adversely affected by the waiver,
\nand no waiver by Landlord shall be construed as a waiver of the Rules in favor
\nof any other tenant, nor prevent Landlord from later enforcing any of the Rules
\nagainst any of the tenants of the office portions of the Building.<\/p>\n
23. These Rules are in addition to, and shall not be construed to modify
\nor amend, in whole or in part, the terms, covenants, agreements, and conditions
\nof any lease of Premises in the office portions of the Building.<\/p>\n
24. Landlord reserves the right to make other reasonable rules as
\nLandlord judges may be needed for the safety, care, and cleanliness of the
\nBuilding and the Complex, and for the preservation of good order, provided that
\nTenant’s use and occupancy of the Premises shall not be adversely affected by
\nother rules.<\/p>\n
25. Landlord shall have the right to require that any person entering the
\nBuilding shall be subject to identification by the employees and agents of
\nLandlord. Subject to the provisions of this Lease, Landlord will provide all
\nsecurity services for the Building, provided that, if Tenant desires any
\nadditional security service for the Premises, Tenant shall have the right (with
\nadvance written consent of Landlord, which consent will not be unreasonably
\nwithheld) to obtain such additional service at Tenant’s sole cost and expense.<\/p>\n
26. Only workmen employed, designated or approved by Landlord (such
\napproval not to be unreasonably withheld) may be employed for repairs,
\ninstallations, alterations, painting, material moving and other similar work
\nthat may be done on the Premises.<\/p>\n
27. No boring or cutting through floors of the Building or the Complex
\nshall be permitted without prior written consent of Landlord (which consent
\nshall not be unreasonably withheld) and as Landlord may reasonably direct.<\/p>\n
28. Tenant shall give immediate notice to Landlord in case of accidents
\nin the Premises, the Building or in the Complex or of defects <\/p>\n
70<\/p>\n
therein or in any fixtures or equipment or of any known emergency in the
\nBuilding or the Complex.<\/p>\n
29. Tenant shall not place a load upon any floor of the Premises which
\nexceeds the load per square foot which such floor was designed to carry and
\nwhich is allowed by law. Business machines and mechanical equipment belonging
\nto Tenant which cause noise, vibration or any other nuisance that may be
\ntransmitted to the structure or other portions of the Building and the Complex
\noutside the Premises to such a degree as to be objectionable to Landlord or
\nwhich interfere with the use or enjoyment by other tenants of their premises or
\nthe public portions of the Building and the Complex shall be placed and
\nmaintained by Tenant, at Tenant’s expense, in settings of cork, rubber or
\nspring-type vibration eliminators sufficient to eliminate noise or vibration.<\/p>\n
30. No portion of the Premises or any part of the Building shall at any
\ntime be occupied as sleeping or lodging quarters.<\/p>\n
31. Tenant shall not bring or keep or permit to be brought or kept in or
\non the Premises cut natural trees, including but not limited to, Christmas
\ntrees.<\/p>\n
32. Tenant shall inform all persons making deliveries to the Building at
\nTenant’s request that delivery vehicles which require more than seven point
\nturns should not be used because of the possibility for traffic congestion on
\nJessie Street.<\/p>\n
71<\/p>\n
6124629.6<\/p>\n
EXHIBIT C<\/p>\n
Work Letter Agreement<\/p>\n
THIS WORK LETTER AGREEMENT, dated July 9, 1999, is entered into by and
\nbetween PACIFIC RESOURCES PCX DEVELOPMENT INC., a California corporation
\n(“Landlord”), and SALON.COM, a Delaware corporation (“Tenant”).<\/p>\n
Recitals<\/p>\n
. Landlord and Tenant have entered into a lease dated as of July
\n9, 1999 (the “Lease”), for certain premises on the 15th and 16th Floors (the
\n“Premises”) located in the building known as 22 Fourth Street, San Francisco,
\nCalifornia (the “Building”).<\/p>\n
. The parties have agreed pursuant to the Lease that the Premises
\nwill be improved for Tenant’s occupancy in the manner and on the terms and
\nconditions specified herein.<\/p>\n
Agreement<\/p>\n
Now, therefore, in consideration of the mutual terms and conditions
\ncontained in the Lease and herein, and in consideration of other good and
\nvaluable consideration, the receipt and sufficiency of which is hereby
\nacknowledged, the parties agree as follows:<\/p>\n
. Definitions. The terms defined in the Lease shall have the same
\nmeaning when used in this Agreement. The following terms shall bear the
\ndefinitions assigned them below for all purposes under this Agreement:<\/p>\n
( ) Construction Documents. Construction Documents herein means
\nfully dimensioned architectural construction drawings and specifications, and
\nany required engineering drawings (including mechanical, electrical, plumbing,
\nair-conditioning (if any), ventilation, and heating), and shall include any
\napplicable items described above for the Space Plan, and if applicable:
\n( ) electrical outlet locations, circuits, and anticipated usage therefor;
\n( ) reflected ceiling plan, including lighting, switching, and any special
\nceiling specifications; ( ) duct locations for heating, ventilating, and air-
\nconditioning equipment, if any; ( ) details of all millwork; ( ) dimensions of
\nall equipment and cabinets to be built in; ( ) furniture plan showing details of
\nspace occupancy; ( ) keying schedule; ( ) lighting arrangement; ( ) location of
\nprint machines, equipment in lunch rooms, concentrated file and library
\nloadings, and any other equipment or systems (with brand names wherever
\npossible) which require special consideration relative to any air-conditioning,
\nventilation, electrical, plumbing, structural, fire protection, life-fire-safety
\nsystem, or mechanical systems; ( ) special heating, ventilating, and
\nairAconditioning (if any) equipment and requirements; ( ) weight and location of
\nheavy equipment, and anticipated loads for special usage rooms; ( ) demolition
\nplan; ( ) partition construction plan; and ( ) any other details or features
\nreasonably required in order to obtain a more firm cost estimate or otherwise
\nreasonably requested by Landlord or the Space Planner.<\/p>\n
72<\/p>\n
( ) Landlord Provided Improvements. Landlord Provided Improvements
\nherein means all those improvements to the Premises to be constructed by
\nLandlord in accordance with the Plans approved by Landlord in accordance with
\nthe terms of the Lease subsequent to the execution hereof.<\/p>\n
( ) Planning Completion Date. Planning Completion Date herein means
\nAugust 30, 1999<\/p>\n
( ) Plans. Plans herein means, collectively, any Space Plan,
\nConstruction Documents, or other plans, drawings, or specifications. The Plans
\nshall be signed or initialed by Tenant, if requested by Landlord, and any
\nConstruction Documents shall include at least three (3) mylar sepias (or such
\nother quantity as Landlord may reasonably require). In the event of any
\ninconsistency between any of the same, or revisions thereto, the latest dated
\nitem approved by Landlord shall control.<\/p>\n
( ) Space Plan. Space Plan herein means a preliminary floor plan,
\ngenerally showing demising walls, corridor doors, interior partition walls, and
\ninterior doors. The term Space Plan for purposes of this Agreement shall also
\nrefer to any so-called “pricing plan”; i.e., a more detailed Space Plan, drawn
\nto scale, showing: (1) any special walls, glass partitions, or corridor doors;
\n(2) any rest rooms, kitchens, computer rooms, file rooms, and other special
\npurpose rooms, and any sinks or other plumbing facilities, or other special
\nfacilities or equipment; (3) communications system, indicating telephone and
\ncomputer outlet locations; and (4) any other details or features reasonably
\nrequired in order to obtain a preliminary cost estimate or otherwise reasonably
\nrequested by Landlord or the Space Planner.<\/p>\n
(F) Space Plan Completion Date. Space Plan Completion Date herein means
\nJuly 19, 1999.<\/p>\n
(G) Space Planner. Space Planner herein means Mostert Architecture with
\nwhom Tenant has a written contractual arrangement for space planning and
\narchitectural services for the Premises.<\/p>\n
(H) Tenant’s Cost. Tenant’s Cost herein means any amounts that Tenant is
\nrequired to pay for under this Agreement.<\/p>\n
(I) Tenant’s Extra Improvements. Tenant’s Extra Improvements herein means
\nany and all improvements made to the Premises other than Landlord Provided
\nImprovements.<\/p>\n
(J) Work. Work herein means the construction of the improvements shown on
\nthe final approved Plans, and any demolition, preparation, or other work
\nrequired in connection therewith, including, without limitation, any work
\nrequired to be performed outside the Premises in order to obtain building
\npermits for the work to be performed within the Premises (if Landlord elects to
\nperform such work outside the Premises).<\/p>\n
. Basic Agreement. The following terms constitute the parties’ basic
\nagreement with respect to the parties’ responsibility for (a) the construction
\nof the Work and (b) payment of the cost of the Work:<\/p>\n
. Completion of Plans. Tenant has provided the Space Planner with
\nall information concerning Tenant’s requirements necessary for the Space <\/p>\n
73<\/p>\n
Planner to prepare the Space Plan. On or before the Space Plan Completion Date,
\n(a) Tenant shall arrange for the Space Planner to prepare the Space Plan, (b)
\nTenant shall approve in writing the Space Plan, and (c) Tenant shall provide to
\nLandlord the Space Plan for approval by Landlord within ten (10) days after
\nreceipt by Landlord and shall thereafter receive Landlord’s approval of the
\nSpace Plan not to be unreasonably withheld. Then, on or before the Planning
\nCompletion Date, (a) Tenant shall arrange for the Space Planner to prepare the
\nPlans, (b) Tenant shall approve in writing the final Plans, (c) Tenant shall
\nprovide to Landlord the final Plans for approval by Landlord within ten (10)
\ndays after receipt by Landlord and shall thereafter receive Landlord’s approval
\nof the final Plans which shall be approved if a logical evolution from the
\napproved Space Plan, and (d) Tenant shall cause the Space Planner to submit the
\nLandlord-approved Plans to the City and County of San Francisco, California in
\norder to obtain a building permit for the Work. Landlord shall engage the firm
\nof Plant Construction as general contractor for construction of the Work
\npursuant, at Tenant’s option, to a form of construction contract providing for a
\nlump sum payment or a cost plus a fee with a guaranteed maximum price. Landlord
\nshall require that the general contractor solicit bids for all Work to be
\nsubcontracted that is not design-build and shall insure that the costs of all of
\nthe Work are competitive with those that would be incurred if Landlord were to
\ncompetitively bid all of the Work.<\/p>\n
. Completion of Work. Landlord shall use its best efforts to
\nsubstantially complete the Work shown on the final approved Plans on or before
\nthe Anticipated Target Commencement Date under the Lease, as applicable to each
\nof the 15th and 16th floors. All Work, including any work performed by Tenant,
\nas may be permitted by Landlord, shall be completed in a good and workmanlike
\nmanner pursuant to valid and current permits as required by and in compliance
\nwith applicable laws, including without limitation, the Americans with
\nDisabilities Act of 1990, as amended and all Work done by Landlord shall be
\nwarranted to be in compliance with Plans, all applicable laws and free of
\ndefects in workmanship and installation for a period of one (1) year after
\nsubstantial completion. However, Landlord shall not be responsible for delays
\ncaused by Tenant or Tenant’s contractors, agents, or employees, as further
\ndescribed in \/y4 below.\/<\/p>\n
. Cost of Landlord Provided Improvements. Landlord shall bear the
\ncost of constructing the Landlord Provided Improvements, up to a maximum of
\nSeven Hundred Thirty Thousand Nine Hundred Five and No\/100 dollars ($730,905.00)
\n(“Landlord’s Costs”). Landlord shall charge a construction administration fee
\nequal to three percent (3%) of Landlord’s Costs and Tenant’s Costs incurred in
\nconnection with the Work. Costs for architectural and engineering fees and
\nservices and the foregoing construction administration fee shall be Tenant’s
\nCosts, but may be paid for by Landlord and credited against Landlord’s Costs if
\nso paid.<\/p>\n
. Cost of All Work Other Than Landlord Provided Improvements. Tenant
\nshall reimburse Landlord for all costs and expenses incurred by Landlord in
\nconnection with the Work done hereunder (which costs shall include the costs of
\nconstruction, construction management, costs of permits and permit expediting,
\nand all architectural and engineering services obtained by Landlord in
\nconnection with the Work) other than Landlord’s Costs within ten (10) days after
\nwritten request therefor accompanied by the appropriate invoices. All items of
\nthe Landlord Provided Improvements and the Tenant Extra Improvements, whether or
\nnot the cost thereof is part of <\/p>\n
74<\/p>\n
Landlord’s Costs, shall immediately become the property of Landlord and shall
\nremain on the Premises at all times during the term of the Lease.<\/p>\n
. Tenant Extra Improvements. If Tenant shall desire any changes,
\nalterations, or additions to the Landlord Provided Improvements or Tenant’s
\nExtra Improvements shown on the Plans, Tenant shall submit a detailed written
\nrequest or revised drawings showing the requested changes (the “Change Order”)
\nto the Landlord for approval. All costs in connection with any changes,
\nalterations, or additions to the Landlord Provided Improvements or Tenant’s
\nExtra Improvements shown on the Plans, including construction costs, permit
\nfees, and any additional plans, drawings, engineering reports, or other studies
\nor tests, or revisions of such existing items, shall be paid for by Tenant.
\nLandlord shall provide Tenant with cost estimates of Tenant’s Cost for the
\nChange Orders pursuant to \/y6 or notify Tenant of Landlord’s disapproval of the
\nChange Order pursuant to \/y5. In the event that Landlord does not expend all of
\nLandlord’s Costs in completion of the Landlord Provided Improvements, any excess
\nmay be applied against Tenant’s Costs for Tenant Extra Improvements only and for
\nno other purpose.\/<\/p>\n
. Delays in Construction. If Substantial Completion of the Work is delayed
\ndue to one or more of the following delays (collectively called “Tenant
\nDelays”), the Commencement Date under the Lease shall be the earlier of the date
\nof Substantial Completion or the date when Substantial Completion would have
\noccurred had the applicable Tenant Delay(s) not occurred.<\/p>\n
. Tenant Delays in Planning. Delays in planning, including delays
\nfrom failure by Tenant to approve the Plans and to cause their submittal for a
\nbuilding permit prior to the Planning Completion Date, in any delays resulting
\nfrom differences in the Landlord Provided Improvements depicted in the Space
\nPlan and those depicted in the Plans which require Landlord’s approval, any
\ndelays by Tenant in submitting to Landlord revisions to the Plans to reduce
\nTenant’s Cost pursuant to 6 and Tenant’s revisions reasonably required by
\nLandlord pursuant to 5;<\/p>\n
. Tenant Change Orders. All changes to the Work or Change Orders
\nunder 3 or otherwise;<\/p>\n
. Specialty Items. Any upgrades, special work, or items not
\ncustomarily provided by Landlord to office tenants, to the extent that the same
\ninvolve longer lead times, installation times, delays, or difficulties in
\nobtaining building permits, requirements for any governmental approval, permit,
\nor action beyond the issuance of normal building permits, or other delays not
\ntypically encountered in connection with Landlord’s standard office
\nimprovements;<\/p>\n
. Tenant’s Performance of Work. The performance by Tenant or
\nTenant’s contractors, agents, or employees of any work at or about the Premises
\nor Building; or<\/p>\n
. Tenant’s Fault or Negligence. Any act or omission of Tenant or
\nTenant’s contractors, agents, or employees, or any breach by the Tenant of any
\nprovisions contained in the Agreement, including without limitation, Tenant’s
\nobligation to timely pay Tenant’s Costs as provided herein, or in the Lease, or
\nany failure of Tenant to cooperate with Landlord or otherwise act in good faith
\nin order to cause the Work to be designed and performed in a timely manner.<\/p>\n
75<\/p>\n
. Landlord’s Approval of Change Orders. Landlord shall not unreasonably
\nwithhold approval, if the Change Orders are consistent with a customary office
\nlayout, with finishes and materials generally conforming to materials currently
\nbeing used by Landlord at the Building, are compatible with the Building’s shell
\nand core construction, and if no modifications will be required for the Building
\nelectrical, heating, airAconditioning (if any), ventilation, plumbing, fire
\nprotection, life safety, or other systems or equipment, and will not require any
\nstructural modifications to the Building, whether required by heavy loads or
\notherwise. Landlord may request that Tenant approve Landlord’s suggested
\nchanges in writing (such approval shall not be unreasonably withheld), or
\nLandlord may arrange directly with the Space Planner for revised Plans to be
\nprepared incorporating such suggestions; and in any such case, Tenant shall sign
\nor initial the revised Plans and\/or Landlord’s notice concerning the suggested
\nchanges, if requested by Landlord. Landlord’s approval of the Plans or any
\nChange Orders shall not be deemed a warranty as to the adequacy or legality of
\nthe design, and Landlord hereby disclaims any responsibility or liability for
\nthe same.<\/p>\n
. Change Order Cost Estimate. As soon as practicable after receipt of a
\nChange Order, Landlord shall notify Tenant of the estimated cost of completing
\nsuch Change Order as well as the estimated increase in construction time caused
\nby the construction changes pursuant to the Change Order, if any. Tenant shall
\napprove or disapprove such estimates within two (2) business days after receipt
\nof Landlord’s notice. If Tenant reasonably disapproves any such estimate,
\nTenant shall meet with Landlord or the Space Planner and eliminate or substitute
\nitems in order to reduce Tenant’s Cost. Upon approval by Tenant of Tenant’s
\nCost for the Change Order, Landlord shall be authorized to proceed with the
\nimplementation of the Change Order. If Tenant disapproves or fails to approve
\nTenant’s Cost estimates, and any additional time estimates, Landlord shall not
\nbe required to proceed with the Change Order, and all costs incurred by Landlord
\nin preparing such estimates shall be borne and promptly paid by Tenant as
\nTenant’s Cost. In the event Landlord is instructed by Tenant to proceed with a
\nChange Order without a prior determination of the increased cost or the
\nincreased construction time resulting from such Change Order and without
\napproval of such increases by Tenant, the amounts thereof shall be as determined
\nby Landlord upon completion of the improvements pursuant to the Change Order,
\nsubject only to Landlord’s furnishing to Tenant appropriate back-up information
\nconcerning the increased costs and increased construction time.<\/p>\n
. Substantial Completion. The term substantial completion and its various
\ninflections as used herein shall mean that Landlord has caused all of the Work
\nto be completed substantially, except for soAcalled “punchlist items”; e.g.,
\nminor details of construction or decoration or mechanical adjustments which do
\nnot substantially interfere with Tenant’s occupancy or beneficial enjoyment of
\nthe Premises for their intended purposes or Tenant’s ability to complete any
\nimprovements to the Premises to be made by Tenant. If there is any dispute as
\nto whether Landlord has substantially completed the Work, the issuance of a
\ntemporary certificate of occupancy for the Premises by the City and County of
\nSan Francisco, California, relating thereto, shall be conclusive that the Work
\nhas been substantially completed.<\/p>\n
. Notice of Substantial Completion. If Landlord notifies Tenant in
\nwriting that the Work is substantially completed (which notice shall constitute
\nLandlord’s good faith certification that the Work is substantially <\/p>\n
76<\/p>\n
complete), and Tenant fails to object thereto in writing within three (3)
\nbusinessydays thereafter specifying in reasonable detail the items of work
\nneeded to be performed in order to achieve substantial completion, Tenant shall
\nbe deemed conclusively to have agreed that the Work is substantially completed,
\nfor purposes of commencing the Commencement Date and Rent under the Lease.<\/p>\n
. Final Completion. Substantial Completion shall not prejudice
\nTenant’s rights to require full completion of any remaining items of Work.
\nHowever, if Landlord notifies Tenant in writing that the Work is fully
\ncompleted, and Tenant fails to object thereto in writing within fifteen (15)
\ndays thereafter specifying in reasonable detail the items of work needed to be
\ncompleted and the nature of work needed to complete said items, Tenant shall be
\ndeemed conclusively to have accepted the Work as fully completed (or such
\nportions thereof as to which Tenant has not so objected).<\/p>\n
. Substitution of Materials. Landlord reserves the right to
\nsubstitute comparable or better materials and items for those shown in the
\nPlans, so long as they do not materially and adversely affect the appearance and
\nfunctionality of the Premises.<\/p>\n
. Work Performed by Tenant. Landlord, at Landlord’s discretion, may permit
\nTenant and Tenant’s agents and contractors to enter the Premises prior to
\ncompletion of the Work in order to make the Premises ready for Tenant’s use and
\noccupancy. If Landlord permits such entry prior to completion of the Work, then
\nsuch permission is conditioned upon Tenant and Tenant’s agents, contractors,
\nworkmen, mechanics, suppliers, and invitees working in harmony and not
\ninterfering with Landlord and Landlord’s contractors in doing the Work or with
\nother tenants and occupants of the Building. If at any time such entry shall
\ncause or threaten to cause such disharmony or interference, Landlord shall have
\nthe right to withdraw such permission upon twenty-four (24) hours’ oral or
\nwritten notice to Tenant. Tenant agrees that any such entry into the Premises
\nshall be deemed to be under all of the terms, covenants, conditions, and
\nprovisions of the Lease (including, without limitation, all insurance
\nrequirements), except as to the covenant to pay Rent thereunder, and further
\nagrees that Landlord shall not be liable in any way for any injury, loss, or
\ndamage which may occur to any items of work constructed by Tenant or to other
\nproperty of Tenant that may be placed in the Premises prior to completion of the
\nWork, the same being at Tenant’s sole risk.<\/p>\n
. Liability. The parties acknowledge that Landlord is not an architect or
\nengineer and that the Work will be designed and performed by independent
\narchitects, engineers, and contractors. Accordingly, except as expressly stated
\nin Section 2.2 of this Agreement, Landlord does not guarantee or warrant that
\nthe Plans will be free from errors or omissions, nor that the Work will be free
\nfrom defects; and Landlord shall have no liability therefor, provided that such
\narchitects, engineers, and contractors are licensed and reputable.<\/p>\n
. Union Contractors. Tenant or its contractors shall employ union labor for
\nany work to the Premises to be performed by Tenant in order to ensure, to the
\nextent possible, the progress of the Work and other work by Landlord in the
\nBuilding without interruption on account of strikes or work stoppages.<\/p>\n
77<\/p>\n
. Incorporation Into Lease; Default. The parties agree that the provisions
\nof this Work Letter Agreement are hereby incorporated by this reference into the
\nLease fully as though set forth therein. In the event of any express
\ninconsistencies between the Lease and this Work Letter Agreement, the latter
\nshall govern and control. Any default by a party hereunder shall constitute a
\ndefault by that party under the Lease, and said party shall be subject to the
\nremedies and other provisions applicable thereto under the Lease.<\/p>\n
IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter as
\nof the date first set forth above.<\/p>\n
TENANT LANDLORD<\/p>\n
SALON.COM, a Delaware corporation PACIFIC RESOURCES PCX DEVELOPMENT
\n INC., a California corporation<\/p>\n
By: By:<\/p>\n
Name: Name: Kevin Wu<\/p>\n
Its: Its: Vice President and
\nAssistant Secretary<\/p>\n
By:<\/p>\n
Name:<\/p>\n
Its:<\/p>\n
78<\/p>\n
6124629.6<\/p>\n
Exhibit D<\/p>\n
Commencement Date Memorandum<\/p>\n
LANDLORD: PACIFIC RESOURCES PCX DEVELOPMENT INC., a California corporation<\/p>\n
TENANT: SALON.COM, a Delaware corporation<\/p>\n
LEASE DATE: July 9, 1999<\/p>\n
PREMISES: Suites 1500 and 1600, 22 Fourth Street, San Francisco, California<\/p>\n
The Commencement Date of the Lease between Landlord and Tenant for the Premises
\nis hereby established as , 19 .<\/p>\n
The Termination Date of the Lease between Landlord and Tenant is hereby
\nestablished as , 20__.<\/p>\n
DATED: TENANT:<\/p>\n
SALON.COM, a Delaware corporation<\/p>\n
By:
\n Name:
\n Its:<\/p>\n
DATED: LANDLORD:<\/p>\n
PACIFIC RESOURCES PCX DEVELOPMENT INC., a California corporation<\/p>\n
By:
\n Name:
\n Its:<\/p>\n
79<\/p>\n
6124629.6
\nExhibit E
\n[Form of Subordination, Nondisturbance and Attornment Agreement]<\/p>\n
80<\/p>\n
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT<\/p>\n
TO<\/p>\n
Section:
\nBlock:
\nLot:
\nCountry:
\nCity:
\nState:<\/p>\n
Premises:<\/p>\n
Dated: as of <\/p>\n
Record and return by mail to:<\/p>\n
81<\/p>\n
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT<\/p>\n
AGREEMENT made as of this ___ day of . , between
\n___________________________, a ______________, having an office at
\n________________________________(hereinafter called
\n“Beneficiary”),_______________________and a _________________________, having an
\noffice at ___________________________________ (hereinafter called “Tenant”).<\/p>\n
WITNESSETH:<\/p>\n
WHEREAS, by a lease (the “Original Lease”) dated _____________ between
\n________________________ (hereinafter called “Landlord”), as landlord, and
\nTenant, as tenant, as amended by lease amendment[s] dated _____________,
\n, [_________ , ____] and [_________ , ____] (the Original Lease, as so
\namended, is hereinafter the “Lease”), a memoranda of which Lease was dated and
\nwas recorded in ________ Reel ________ Page __, [add recording data for
\nmemoranda of amendments, if applicable], Landlord leased to Tenant certain
\npremises known as _________________ (the “Premises”) on the property described
\nin Schedule “A” annexed hereto and made a part hereof (the “Property”); and<\/p>\n
WHEREAS, Landlord has heretofore made, executed and delivered to Beneficiary its
\nnote in the original principal amount of ____________________ Dollars
\n($______________), which note is secured by, among other things, a mortgage or
\ndeed of trust (which mortgage or deed of trust, and all amendments, renewals,
\nincreases, modifications, replacements, substitutions, extensions, spreaders and
\nconsolidations thereof and all re-advances thereunder and additions thereto, is
\nreferred to as the “Deed of Trust”) encumbering the Property; and<\/p>\n
WHEREAS, Beneficiary and Tenant desire to confirm their understanding and
\nagreement with respect to the Lease and the Deed of Trust.<\/p>\n
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
\ncontained, Beneficiary and Tenant hereby agree and covenant as follows:<\/p>\n
1. The Lease, and all of the terms, covenants, provisions and conditions
\nthereof (including, without limitation, any right of first refusal, right of
\nfirst offer, option or any similar right with respect to the sale or purchase of
\nthe Property, or any portion thereof), is, shall be and shall at all times
\nremain and continue to be subject and subordinate in all respects to the lien,
\nterms, covenants, provisions and conditions of the Deed of Trust and to all
\nadvances and re-advances made thereunder and all sums secured thereby. This
\nprovision shall be self-operative but Tenant shall execute and deliver any
\nadditional instruments which Beneficiary may reasonably require to effect such
\nsubordination.<\/p>\n
2. So long as (i) Tenant is not in default (beyond any period given Tenant to
\ncure such default) in the payment of rent or additional rent or in the
\nperformance or observance of any of the other terms, covenants, provisions or
\nconditions of the Lease on Tenant’s part to be performed or observed, (ii)
\nTenant is not in default under this Agreement and (iii) the Lease is in full<\/p>\n
82<\/p>\n
force and effect: (a) Tenant’s possession of the Premises and Tenant’s rights
\nand privileges under the Lease, or any extensions or renewals thereof which may
\nbe effected in accordance with any option therefor which is contained in the
\nLease, shall not be diminished or interfered with by Beneficiary, and Tenant’s
\noccupancy of the Premises shall not be disturbed by Beneficiary for any reason
\nwhatsoever during the term of the Lease or any such extensions or renewals
\nthereof and (b) Beneficiary will not join Tenant as a party defendant in any
\naction or proceeding to foreclose the Deed of Trust or to enforce any rights or
\nremedies of Beneficiary under the Deed of Trust which would cut-off, destroy,
\nterminate or extinguish the Lease or Tenant’s interest and estate under the
\nLease (except to the extent that Tenant’s right to receive or set-off any monies
\nor obligations owed or to be performed by any of Beneficiary’s predecessors-in-
\ninterest shall not be enforceable thereafter against Beneficiary or any of
\nBeneficiary’s successors-in-interest). Notwithstanding the foregoing provisions
\nof this paragraph, if it would be procedurally disadvantageous for Beneficiary
\nnot to name or join Tenant as a party in a foreclosure proceeding with respect
\nto the Deed of Trust, Beneficiary may so name or join Tenant without in any way
\ndiminishing or otherwise affecting the rights and privileges granted to, or
\ninuring to the benefit of, Tenant under this Agreement.<\/p>\n
3. (A) After notice is given by Beneficiary that the Deed of Trust is in
\ndefault and that the rentals under the Lease should be paid to Beneficiary,
\nTenant will attorn to Beneficiary and pay to Beneficiary, or pay in accordance
\nwith the directions of Beneficiary, all rentals and other monies due and to
\nbecome due to Landlord under the Lease or otherwise in respect of the Premises;
\nand such payments shall be made regardless of any right of set-off, counterclaim
\nor other defense which Tenant may have against Landlord, whether as the tenant
\nunder the Lease or otherwise.<\/p>\n
(B) In addition, if Beneficiary (or its nominee or designee) shall succeed to
\nthe rights of Landlord under the Lease through possession or foreclosure action,
\ndelivery of a deed or otherwise, or another person purchases the Property or the
\nportion thereof containing the Premises upon or following foreclosure of the
\nDeed of Trust or in connection with any bankruptcy case commenced by or against
\nLandlord, then at the request of Beneficiary (or its nominee or designee) or
\nsuch purchaser (Beneficiary, its nominees and designees, and such purchaser, and
\ntheir respective successors and assigns, each being a “Successor-Landlord”),
\nTenant shall attorn to and recognize Successor-Landlord as Tenant’s landlord
\nunder the Lease. Such attornment shall be effective and self-operative without
\nthe execution of any further instrument; however, at the request of Successor-
\nLandlord, Tenant shall promptly execute and deliver any instrument that
\nSuccessor-Landlord may reasonably request to further evidence such attornment.
\nUpon such attornment, the Lease shall continue in full force and effect as, or
\nas if it were, a direct lease between Successor-Landlord and Tenant upon all
\nterms, conditions and covenants as are set forth in the Lease. If the Lease
\nshall have terminated by operation of law or otherwise as a result of or in
\nconnection with a bankruptcy case commenced by or against Landlord or a
\nforeclosure action or proceeding or delivery of a deed in lieu, upon request of
\nSuccessor-Landlord, Tenant shall promptly execute and deliver a direct lease
\nwith Successor-Landlord which direct lease shall be on substantially the same
\nterms and conditions as the Lease (subject, however, to the provisions of
\nclauses (i)-(v) of this paragraph 3(B)) and shall be effective as of the day the
\nLease shall have terminated as aforesaid. Notwithstanding the continuation of
\nthe Lease, the attornment of Tenant thereunder or the <\/p>\n
83<\/p>\n
execution of a direct lease between Successor-Landlord and Tenant as aforesaid,
\nSuccessor-Landlord shall not:<\/p>\n
(i) be liable for any previous act or omission of Landlord under the Lease;<\/p>\n
(ii) be subject to any off-set, defense or counterclaim which shall have
\ntheretofore accrued to Tenant against Landlord;<\/p>\n
(iii) be bound by any modification of the Lease or by any previous prepayment of
\nrent or additional rent for more than one (l) month which Tenant might have paid
\nto Landlord, unless such modification or prepayment shall have been expressly
\napproved in writing by Beneficiary;<\/p>\n
(iv) be liable for any security deposited under the Lease unless such security
\nhas been physically delivered to Beneficiary; and<\/p>\n
(v) be liable or obligated to comply with or fulfill any of the obligations of
\nthe Landlord under the Lease or any agreement relating thereto with respect to
\nthe construction of, or payment for, improvements on or about the Premises (or
\nany portion thereof), leasehold improvements, tenant work letters and\/or similar
\nitems.<\/p>\n
4. Tenant agrees that without the prior written consent of Beneficiary, it
\nshall not (i) amend, modify, terminate or cancel the Lease or any extensions or
\nrenewals thereof, (ii) tender a surrender of the Lease or make a prepayment of
\nany rent or additional rent in excess of one (l) month or (iii) subordinate or
\npermit the subordination of the Lease to any lien subordinate to the Deed of
\nTrust. Any such purported action without such consent shall be void as against
\nthe holder of the Deed of Trust.<\/p>\n
5. Tenant shall promptly notify Beneficiary of any default by Landlord under
\nthe Lease and of any act or omission of Landlord which would give Tenant the
\nright to cancel or terminate the Lease or to claim a partial or total eviction.
\nIn the event of a default by Landlord under the Lease which would give Tenant
\nthe right, immediately or after the lapse of a period of time, to cancel or
\nterminate the Lease or to claim a partial or total eviction, or in the event of
\nany other act or omission of Landlord which would give Tenant the right to
\ncancel or terminate the Lease, Tenant shall not exercise such right (i) until
\nTenant has given written notice of such default, act or omission to Beneficiary
\nand (ii) unless Beneficiary has failed, within sixty (60) days after Beneficiary
\nreceives such notice, to cure or remedy the default, act or omission or, if such
\ndefault, act or omission shall be one which is not reasonably capable of being
\nremedied by Beneficiary within such sixty (60) day period, until a reasonable
\nperiod for remedying such default, act or omission shall have elapsed following
\nthe giving of such notice and following the time when Beneficiary shall have
\nbecome entitled under the Deed of Trust to remedy the same (which reasonable
\nperiod shall in no event be less than the period to which Landlord would be
\nentitled under the Lease or otherwise, after similar notice, to effect such
\nremedy), provided that Beneficiary shall with due diligence give Tenant written
\nnotice of its intention to and shall commence and continue to, remedy such
\ndefault, act or omission. If Beneficiary cannot reasonably remedy a default, act
\nor omission of Landlord until after Beneficiary obtains possession of the
\nPremises, Tenant may not terminate or cancel the Lease or claim a partial or
\ntotal eviction by reason of such default, act or omission until the expiration
\nof a reasonable period necessary for the remedy after Beneficiary secures<\/p>\n
84<\/p>\n
possession of the Premises. To the extent Beneficiary incurs any expenses or
\nother costs in curing or remedying such default, act or omission, including,
\nwithout limitation, attorneys’ fees and disbursements, Beneficiary shall be
\nsubrogated to Tenant’s rights against Landlord. Notwithstanding the foregoing,
\nBeneficiary shall have no obligation hereunder to remedy such default, act or
\nomission.<\/p>\n
6. To the extent that the Lease shall entitle Tenant to notice of the existence
\nof any deed of trust and the identity of any beneficiary or any ground lessor,
\nthis Agreement shall constitute such notice to Tenant with respect to the Deed
\nof Trust and Beneficiary.<\/p>\n
7. Upon and after the occurrence of a default under the Deed of Trust,
\nBeneficiary shall be entitled, but not obligated, to exercise the claims,
\nrights, powers, privileges and remedies of Landlord under the Lease and shall be
\nfurther entitled to the benefits of, and to receive and enforce performance of,
\nall of the covenants to be performed by Tenant under the Lease as though
\nBeneficiary were named therein as Landlord.<\/p>\n
8. Anything herein or in the Lease to the contrary notwithstanding, in the
\nevent that a Successor-Landlord shall acquire title to the Property or the
\nportion thereof containing the Premises, Successor-Landlord shall have no
\nobligation, nor incur any liability, beyond Successor-Landlord’s then interest,
\nif any, in the Property and Tenant shall look exclusively to such interest, if
\nany, of Successor-Landlord in the Property for the payment and discharge of any
\nobligations imposed upon Successor-Landlord hereunder or under the Lease, and
\nSuccessor-Landlord is hereby released or relieved of any other liability
\nhereunder and under the Lease. Tenant agrees that, with respect to any money
\njudgment which may be obtained or secured by Tenant against Successor-Landlord,
\nTenant shall look solely to the estate or interest owned by Successor-Landlord
\nin the Property, and Tenant will not collect or attempt to collect any such
\njudgment out of any other assets of Successor-Landlord.<\/p>\n
9. Except as specifically provided in this Agreement, Beneficiary shall not, by
\nvirtue of this Agreement, the Deed of Trust or any other instrument to which
\nBeneficiary may be a party, be or become subject to any liability or obligation
\nto Tenant under the Lease or otherwise.<\/p>\n
10. (a) Tenant acknowledges and agrees that this Agreement satisfies and
\ncomplies in all respects with the provisions of Section 27 of the Lease and that
\nthis Agreement supersedes (but only to the extent inconsistent with) the
\nprovisions of such Article and any other provision of the Lease relating to the
\npriority or subordination of the Lease and the interests or estates created
\nthereby to the Deed of Trust.<\/p>\n
(b) Tenant agrees to enter into a subordination, non-disturbance and attornment
\nagreement with any lender which shall succeed Beneficiary as lender with respect
\nto the Property, or any portion thereof, provided such agreement is
\nsubstantially similar to this Agreement. Tenant does herewith irrevocably
\nappoint and constitute Beneficiary as its true and lawful attorney-in-fact in
\nits name, place and stead to execute such subordination, non-disturbance and
\nattornment agreement, without any obligation on the part of Beneficiary to do
\nso. This power, being coupled with an interest, shall be irrevocable as long as
\nthe indebtedness secured by the Deed of Trust remains unpaid. Beneficiary agrees
\nnot to exercise its rights under the <\/p>\n
85<\/p>\n
preceding two (2) sentences if Tenant promptly enters into the subordination,
\nnon-disturbance and attornment agreement as required pursuant to the first
\nsentence of this subparagraph (b).<\/p>\n
11. (a) Any notice required or permitted to be given by Tenant to Landlord
\nshall be simultaneously given also to Beneficiary, and any right of Tenant
\ndependent upon notice shall take effect only after notice is so given.
\nPerformance by Beneficiary shall satisfy any conditions of the Lease requiring
\nperformance by Landlord, and Beneficiary shall have a reasonable time to
\ncomplete such performance as provided in Paragraph 5 hereof.<\/p>\n
(b) All notices or other communications required or permitted to be given to
\nTenant or to Beneficiary pursuant to the provisions of this Agreement shall be
\nin writing and shall be deemed given only if mailed by United States registered
\nmail, postage prepaid, or if sent by facsimile transmission (with machine
\nanswerback) addressed as follows: to Tenant, at the address first set forth
\nabove, Attention: __________, facsimile number: ______________; to Beneficiary,
\nat the address first set forth above, Attention: , facsimile number: with a copy
\nto______________________, __________________, ________, ________________
\nAttention:________________, facsimile number: (____) _____________; or to such
\nother address or number as such party may hereafter designate by notice
\ndelivered in accordance herewith. Except as otherwise provided in this
\nAgreement, all such notices shall be deemed given three (3) business days after
\ndelivery to the United States Post office registry clerk if given by registered
\nmail, or on the next business day after facsimile transmission<\/p>\n
12. Tenant will not pay an installment of rent or additional rent or any part
\nthereof more than one (1) month prior to the due date of such installment.<\/p>\n
13. This Agreement may be modified only by an agreement in writing signed by
\nthe parties hereto, or their respective successors-in-interest. This Agreement
\nshall inure to the benefit of and be binding upon the parties hereto, and their
\nrespective successors and assigns. The term “Beneficiary” shall mean the then
\nholder of the Deed of Trust. The term “Landlord” shall mean the then holder of
\nthe landlord’s interest in the Lease. The term “person” shall mean an
\nindividual, joint venture, corporation, partnership, trust, limited liability
\ncompany, unincorporated association or other entity. All references herein to
\nthe Lease shall mean the Lease as modified by this Agreement and to any
\namendments or modifications to the Lease which are consented to in writing by
\nBeneficiary. Any inconsistency between the Lease and the provisions of this
\nAgreement shall be resolved, to the extent of such inconsistency, in favor of
\nthis Agreement.<\/p>\n
14. BOTH TENANT AND BENEFICIARY HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY
\nJURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
\nTHIS AGREEMENT.<\/p>\n
15. This Agreement shall be governed by and construed in accordance with the
\nlaws of the State of California<\/p>\n
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
\nas of the day and year first above written.<\/p>\n
86<\/p>\n
[LENDER]<\/p>\n
By:
\n Name:
\n Title:<\/p>\n
[TENANT]<\/p>\n
By:
\n Name:
\n Title:<\/p>\n
AGREED AND CONSENTED TO:<\/p>\n
[BORROWER]<\/p>\n
By:
\n Name:
\n Title:<\/p>\n
87<\/p>\n
[Add Acknowledgments]<\/p>\n
88<\/p>\n
[Add Schedule A]<\/p>\n
89<\/p>\n
6124629.6<\/p>\n
Addendum to
\n Standard Office Lease<\/p>\n
This Addendum to the Standard Office Lease between Pacific Resources PCX
\nDevelopment Inc., a California corporation (“Landlord”), and Salon.Com,
\na Delaware corporation (“Tenant”), is entered into as of July 9, 1999.<\/p>\n
A1. Extension Option.<\/p>\n
(a) Landlord grants to Tenant one (1) option to renew the Lease for a
\nperiod of five (5) years after the Termination Date (the “Extension Period”).
\nTenant’s privilege to exercise this option is expressly conditioned upon Tenant
\nnot having previously defaulted on the terms of the Lease, not being in default
\nat the time the option is exercised and not being in default between the time
\nthe option is exercised and the start of the new lease term.<\/p>\n
(b) Provided Tenant is not in default, Tenant shall have the right to
\nextend the Term upon tendering written notice (the “Extension Notice”) to
\nLandlord no later than nine (9) months and no earlier than twelve (12) months
\nprior to the expiration of the Term. All terms and conditions of this Lease
\nshall continue during the Extension Period, provided that during the Extension
\nPeriod, the Base Rent shall be the greater of the Fair Market Rent as of the
\ndate six (6) months preceding the Termination Date (the “Rent Determination
\nDate”) or the Base Rent payable by Tenant under the Lease for the month
\nimmediately prior to the Rent Determination Date.<\/p>\n
(c) As used in this Lease, Fair Market Rent shall be deemed to mean
\nthe base amount of rental that would typically be paid by a tenant under a
\nbaseAyear lease for premises of a similar type, design, and quality in the same
\nor similar quality geographic area in which the Premises are situated under
\nmarket leasing conditions existing at that time and taking into account the
\npresence, if any, of other escalation provisions provided in this Lease.<\/p>\n
(d) If Landlord and Tenant cannot agree on the Fair Market Rent within
\nfifteen (15) days after the Rent Determination Date, the Base Rent payable
\nduring the Extension Period shall be conclusively determined as follows:<\/p>\n
(i) Within ten (10) days after the expiration of the fifteen (15) day
\nperiod, each party, at its cost and by giving notice to the other party, shall
\nappoint an unaffiliated real estate appraiser with at least five (5) years’
\nfull-time commercial appraisal experience in the downtown San Francisco area, to
\nappraise and determine the then Fair Market Rent as described in this Section.<\/p>\n
(ii) If one party does not appoint an appraiser within the time period
\nin Section A1(d)(i) above, the appraiser appointed by the other party shall be
\nthe sole appraiser and shall determine the Fair Market Rent.<\/p>\n
90<\/p>\n
(iii) If neither party appoints an appraiser within the
\ntime period set forth in Section A1(d)(i), the Base Rent during the Extension
\nPeriod shall be the Base Rent payable in the last full month immediately
\npreceding the Termination Date.<\/p>\n
(iv) If the two (2) appraisers are so appointed by the parties, they
\nshall meet promptly and attempt to appraise and determine the Fair Market Rent.
\nIf they are unable to agree within ten (10) days after the second appraiser has
\nbeen appointed, they shall attempt to select a third appraiser who meets the
\nqualifications stated in Section A1(d)(i) within ten (10) days after the last
\nday the two appraisers are given to determine the Fair Market Rent. If they are
\nunable to agree on a third appraiser, either of the parties to this Lease, by
\ngiving ten (10) days’ notice to the other party, can apply to the presiding
\njudge of the Superior Court for the county in which the Premises are located for
\nthe selection of a third appraiser who meets the qualifications stated in
\nSectionyA1(d)(i). Each of the parties shall bear one-half (1\/2) of the cost of
\nappointing the third appraiser and of the third appraiser’s fees. The third
\nappraiser, however selected, shall be a person who has not previously acted in
\nany capacity for either party.<\/p>\n
(v) Within ten (10) days after the selection of the third appraiser, a
\nmajority of the appraisers shall appraise and determine the Fair Market Rent.
\nIf a majority of the appraisers are unable to so set the Fair Market Rent within
\nthe required period of time, the appraisals of the three appraisers shall be
\nadded together and their total divided by three. The resulting quotient shall
\nbe the Fair Market Rent.<\/p>\n
(vi) If, however, the low appraisal or the high appraisal are more than ten
\npercent (10%) lower or higher than the middle appraisal, the low appraisal or
\nthe high appraisal shall be disregarded. If only one appraisal is disregarded,
\nthe remaining two appraisals shall be added together and their total divided by
\ntwo. The resulting quotient shall be the Fair Market Rent. If two appraisals are
\ndisregarded, the remaining appraisal shall be the Fair Market Rent.<\/p>\n
A2. Property Taxes. Landlord and Tenant acknowledge that, as of the
\ndate hereof, neither the Building nor the office portions of the Building are
\nseparately assessed for purposes of determining Property Taxes. Landlord
\nintends, however, to seek separate assessments. Prior to the time that the
\noffice portions of the Building constitute a separate tax parcel, Landlord shall
\nequitably determine that portion of the Property Taxes allocable to the office
\nportions of the Building from the Property Taxes on the Building, the Complex or
\nthe Property as applicable. Upon request, Landlord shall provide Tenant with
\ncopies of all tax bills and records, including assessor’s records, if applicable
\nand in Landlord’s possession, that Landlord used in apportioning Property Taxes.
\nIn the event that the office portions of the Building are separately assessed
\nfor Property Tax purposes, Property Taxes shall be adjusted, as of the date that
\nthe separate Property Tax parcel becomes effective, to reflect the Property
\nTaxes payable in the separate Property Tax parcel containing the Premises.<\/p>\n
A3. Shell Improvements. Except as expressly provided in the Work
\nLetter Agreement or below, Landlord shall not be responsible for making any
\nimprovements to the Premises and Tenant agrees to accept the Premises in their
\nexisting condition, “as is,” on the Commencement Date. In addition to its
\nobligations under the Work Letter Agreement, Landlord shall, at its sole <\/p>\n
91<\/p>\n
cost and expense, using contractors and subcontractors of its choice, make the
\nfollowing improvements to the Premises and no others (the “Shell Improvements”)
\nand use its best efforts to Substantially Complete the same prior to or on each
\nAnticipated Target Commencement Date for each floor of the Building within the
\nPremises: provision of a structural shell for the Premises, with the existing
\nHVAC system stubbed to the Premises, the existing fire sprinkler grid systems,
\nand the existing main electrical\/telephone closet, the existing telephone punch
\nboard, and removing existing floor outlets, saving the existing drain and water
\nlines to existing sinks or plumbing on the floor, and by removing and abating
\nall asbestos. No structural work shall be required. All Shell Improvements shall
\nbe constructed to the standards and condition required by all applicable Legal
\nRequirements, including without limitation, handicapped accessibility codes for
\nelevator accessories, restrooms, drinking fountains, stairways, etc. and other
\ncodes as they pertain to the common areas and shell of the Building, including
\nfire safety rules and regulations. Landlord shall warrant that the Shell
\nImprovements shall be free of defects in workmanship and installation for a
\nperiod of one (1) year after the date of Substantial Completion of the Shell
\nImprovements.<\/p>\n
The base building systems and services to be provided by Landlord when
\nTenant takes possession of the Premises are as follows:<\/p>\n
Electrical Distributions System. The existing system is 277\/480 volt, 3 phase,
\n4 wire, 3000 amp with a bus duct from the main switchboard “MSB” rising through
\nthe core of the Building. From this bus one switch per floor is provided to
\nfeed one multi-pole 277\/480 volt panel (panel HA). A second switch is provided
\napproximately every third floor, Floors 2, 5, 8, 11 and 15, to feed a 480V-
\n120\/280V step-down transformer. This will provide approximately 37.5 kva for
\neach of the fifteenth and the sixteenth floors. This equates to approximately
\n3.0 watts per square foot, at 120\/208 volt, three phase, multi-pole panelboard.
\nA second bus direct, 277\/480 volt 2000 amp from distribution switchboard “DSA”
\nalso rises through the Building. From this bus, one switch per floor is
\nprovided to feed one multi-pole 277\/480 volt panel (HB). This panel was
\nintended to feed perimeter HV AC units which are now removed. An existing
\n277\/480 volt emergency generator is available to feed emergency lighting at 0.1
\nwatts per square foot per floor.<\/p>\n
Fire Alarm System. The existing fire alarm system has been upgraded to an
\naddressable Simplex 4100 system. This handles the core area and restrooms. Any
\nexpansion shall be at Tenant’s sole cost.<\/p>\n
Amplifier System (Life Safety). The existing system is adequate and will not
\nrequire changes or additions. Any expansion shall be at Tenant’s sole cost.<\/p>\n
Fire Sprinkler. A complete fire sprinkler system has been installed for the
\n“shell” spaces.<\/p>\n
Air Conditioning. A central air handling system has been installed to provide a
\nvariable air volume system for the interior areas. Ducts are partially extended
\non each floor for future connections.<\/p>\n
A four pipe (hot and chilled water) system has been installed on each floor.
\nTenant will connect to the system stub-outs and extend piping to tenant provided
\nfan coils serving the perimeter.<\/p>\n
92<\/p>\n
A 2″ stub-out on each floor from a central condenser water system has been
\nprovided to serve high cooling load areas and areas with 24 hour capacity
\nrequirements. Water source heat pumps (provided by tenant) can be used for
\nthese areas. The 2″ stub-out will accommodate approximately 10 tons of cooling.<\/p>\n
Controls. The addition of tenant ductwork may require that existing life safety
\nequipment be modified and that controls and related interfaces be modified. All
\nfire\/smoke controls and controls for the central systems are in place. Tenant
\nis responsible for variable air volume, fan coil and water source heat pump
\ncontrols, all at Tenant’s sole cost.<\/p>\n
Exhaust. No provisions have been made for tenant usage. Any related
\nimprovements shall be at Tenant’s sole cost.<\/p>\n
Domestic Hot and Cold Water. No provisions have been made for tenant usage.
\nAny improvements shall be at Tenant’s sole cost.<\/p>\n
Waste and Vent Piping. Landlord will allow Tenant to access the Building’s
\nwaste and vent piping in accordance with applicable legal requirements, at
\nTenant’s sole cost.<\/p>\n
Elevators. Elevators, both passenger and freight are provided. The cabs and
\ncontrols for the passenger elevators will meet current codes and have been
\nrefurbished in the cab interior.<\/p>\n
Toilet Rooms. New Men’s and Women’s toilet rooms are installed on each floor
\nand meet current code requirements. In addition, drinking fountains are
\ninstalled adjacent to the toilet room complex on each floor and these conform to
\ncurrent code.<\/p>\n
Off Hour Usage. At this time provisions are not in place for electronic KW or
\nDemand metering, neither local nor remote, nor are there any provisions for
\nmonitoring lighting or power circuits for after hour usage.<\/p>\n
A4. Signage. Landlord hereby agrees to install and maintain during the
\nTerm, Tenant’s name and suite number in the Building Directory in the lobby of
\nthe Building. Any other signage in the Building desired by Tenant shall be
\nsubject to Landlord’s prior approval, which shall not be unreasonably withheld,
\nand shall be made and installed at Tenant’s sole cost; provided, however, that
\nLandlord hereby consents to Tenant’s installation to any elevator lobby signage
\nwithin the Premises (which is not visible from the exterior of the Building).<\/p>\n
A5. Operating Expense Exclusions.<\/p>\n
Notwithstanding anything in the Lease to the contrary, the term “Operating
\nExpenses” shall exclude the following:<\/p>\n
(i) costs of repairs, replacements or other work occasioned by fire, windstorm
\n or other casualty to the extent of reimbursement by insurance proceeds
\n therefor, or the exercise by governmental authorities of the right of
\n eminent domain to the extent of reimbursement by condemnation proceeds
\n therefor;<\/p>\n
(ii) leasing commissions, attorneys’ fees, costs, disbursements and other
\n expenses incurred by Landlord or its agents in connection with negotiations
\n for leases with tenants, other occupants or prospective tenants or other<\/p>\n
93<\/p>\n
occupants of the Building, and similar costs incurred in connection with
\n disputes with and\/or enforcement of any leases with tenants, other
\n occupants, or prospective tenants or other occupants of the Building;<\/p>\n
(iii) “tenant allowances,” “tenant concessions,” work letters, and other costs
\n or expenses (including permit, license and inspection fees) incurred in
\n completing, fixturing, furnishing, renovating or otherwise improving,
\n decorating or redecorating space for tenants or other occupants of the
\n Building, or vacant, leasable space in the Building, including space
\n planning\/interior design\/architectural fees for same;<\/p>\n
(iv) costs of correcting defects in the construction of the Building
\n (including latent defects) or equipment used therein (or the replacement
\n of defective equipment), any associated parking garages or area, or other
\n improvements, or in the equipment used therein;<\/p>\n
(v) services, items and benefits for which Tenant or any other tenant or
\n occupant of the Building specifically reimburses Landlord (not including
\n reimbursement pursuant to Operating Expense pass-through provisions
\n similar to those included in the Lease) or for which Tenant or any other
\n tenant or occupant of the Building pays third persons;<\/p>\n
(vi) costs or other expenses (including fines, penalties and legal fees)
\n incurred due to the non-compliance by Landlord, its employees, agents
\n and\/or contractors, of any terms and conditions of the Lease or of the
\n leases with other tenants in the Building, and\/or of any valid,
\n applicable laws, rules, regulations and codes of any federal, state,
\n county, municipal or other governmental authority having jurisdiction
\n over the Building that would not have been incurred but for such non-
\n compliance by Landlord, its employees, agents and\/or contractors;<\/p>\n
(vii) penalties for late payment, including, without limitation, taxes,
\n equipment leases, etc.;<\/p>\n
(viii) costs directly resulting from the gross negligence or willful
\n misconduct of Landlord, its employees, agents and\/or contractors;<\/p>\n
(ix) payments in respect of overhead and\/or profit to any affiliate of
\n Landlord, as a result of a non-competitive selection process for services
\n (other than the management fee) on or to the Building, or for goods,<\/p>\n
(x) supplies or other materials, to the extent that the costs of such
\n services, goods, supplies and\/or materials exceed the costs that would
\n have been paid had the services, goods, supplies or materials been
\n provided by parties unaffiliated with Landlord, or by third parties, of
\n similar skill, competence and experience, on a competitive basis;<\/p>\n
(xi) payments of principal, finance charges or interest on debt or
\n amortization on any mortgage, deed of trust of other debt, and rental
\n payments (or increases in same) under any ground or underlying lease or
\n leases (except to the extent the same may be made to pay or reimburse, or
\n may be measured by, property taxes);<\/p>\n
(xii) taxes payable by Landlord unrelated to the operation, maintenance and
\n management of the Property or based or measured on the net income of
\n Landlord;<\/p>\n
(xiii) Property Taxes attributable to any leasehold improvements of other
\n tenants in the Building chargeable to such other tenants or to Landlord
\n pursuant to leases with such tenants;<\/p>\n
(xiv) except for the management fee, costs of Landlord’s general overhead and
\n general administrative expenses (individual, partnership or corporate, as
\n the case may be), which costs would not be chargeable to Operating
\n Expenses of the Building in accordance with generally accepted accounting
\n principles, consistently applied;<\/p>\n
94<\/p>\n
(xv) compensation paid to clerks, attendants or other persons in commercial
\n concessions (such as a snack bar, restaurant or newsstand), if any,
\n operated by Landlord or any affiliate of Landlord;<\/p>\n
(xvi) rentals and other related expenses, if any, incurred in leasing air
\n conditioning systems, elevators or other equipment considered to be of a
\n capital nature according to generally accepted accounting principles,
\n except equipment which is used in providing janitorial services or which
\n is not affixed to the Building or as otherwise permitted in the
\n definition of Operating Expenses set forth in Section 1 of the Lease;<\/p>\n
(xvii) advertising and promotional expenses incurred in connection with the
\n leasing, sale or other marketing of Landlord’s interest in the Property;<\/p>\n
(xviii) expenses of extraordinary services provided to any tenant of the
\n Building, including Tenant, which are made available to tenants at a
\n cost for which such tenants are separately billed;<\/p>\n
(xix) costs arising from the remediation and removal of any hazardous or toxic
\n materials or substances in or about the Building, including without
\n limitation, the removal of asbestos within the Building; or<\/p>\n
(xx) costs of property management fees which exceed such fees then generally
\n prevailing in the marketplace.<\/p>\n
Landlord further acknowledges that Landlord shall not be entitled to collect
\nEscalation Rent from Tenant in excess of 100% of Tenant’s Percentage Share of
\nthe actual increases in Operating Expenses and Property Taxes over the Base
\nOperating Expenses and Base Property Taxes. Any excess so collected by Landlord
\nshall be returned to Tenant immediately upon discovery of such excess
\ncollection.<\/p>\n
Landlord’s Initials Tenant’s Initials <\/p>\n
———————<\/p>\n
End of Addendum<\/p>\n
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