THIRD AMENDMENT TO LEASE
THIS THIRD AMENDMENT TO LEASE is made this 6th day of January, 1999,
between First Avenue West Building L.L.C., a Washington Limited Liability
Company ("Landlord" herein) and F5 Labs, Inc., a Washington corporation
("Tenant" herein) for the premises located in the city of Seattle, County of
King, State of Washington, commonly known as Xxxxx 000, Xxxxx Xxxx Xxxxxxxx, 000
Xxxxx Xxxxxx Xxxx.
RECITALS
A. Landlord and Tenant are parties to that certain lease dated October 9th,
1997, the First Amendment to Lease dated July 23rd, 1998, and the Second
Amendment to Lease dated September 30, 1998 (the "Lease" herein).
The Lease is made a part hereof as though set forth in full herein.
B. Landlord and Tenant hereby express their mutual desire and intend to amend by
this writing those terms, covenants and conditions contained in: "2. TERM", "3.
RENT", "38. REIMBURSEMENT OF DIRECT EXPENSES", "Premises Rentable Area, tenant
proportionate share and security deposit" as shown on Lease Reference Page,
"Exhibit E Additional Lease Terms (1. Renewal Options, 2. Parking, 3. First
Right of Refusal, 4. Signage, 5. Notice of Intent to Sell [Building])", and
"Exhibit D - Tenant Improvements."
NOW, THEREFORE, as parties hereto, Landlord and Tenant Agree as follows:
AMENDMENTS:
1. Paragraph "3. RENT" shall as of March 1, 1999 be amended to hereinafter
additionally provide as follows:
PERIOD RATE/RSF ANNUAL RENT MONTHLY RENT
------ -------- ----------- ------------
Year 1 (03/01/99 through 02/29/00) $17.76 $331,634 27,636.17
Year 2 (03/01/00 through 02/28/01) $18.99 $354,566 29,547.17
Year 3 (03/01/01 through 02/28/02) $22.23 $415,037 34,586.42
Year 4 (03/01/02 through 02/29/03) $23.23 $433,705 36,142.08
Year 5 (03/01/03 through 02/28/04) $24.23 $452,373 37,697.75
See Exhibit C for detailed rates by floor.
2. "Premises Rentable Area" as shown on Lease Reference Page shall be amended
to reflect the additional suites 105 and 110 on the first floor plus the
existing suites totaling the square footage of 18,668 effective March 1,
1999.
INITIAL PREMISES. Tenant shall initially lease approximately 18,668
rentable square feet (RSF) located on the fifth, second and first floors
(Suites 500, 205 [incorrectly noted as 210 on original Lease], 105, 106,
and 110) as described below. All space shall be measured according to the
Building Owners and Manager Association International (BOMA) standards
(ANSI Z65.1-1996) according to the final working drawings. Please see
attached floor plan, Exhibit A, for definition of Initial Premises, and
Option Space.
FLOOR SUITE RSF
----- ----- ---
5 500 6,769
2 205 2,702
1 110 416
1 106 2,430
1 105 6,351
STORAGE SPACE. The area designated as storage space shall be leased to
Tenant at a rate of $10.00 per square foot per year during the entire lease
term, and market rate during the option period. In the event Tenant uses
the space for general office purposes, Landlord shall charge Tenant the
established
1
market rate for floor one for the applicable lease year. Please see
Exhibit B for further definition of Storage Space (603 square feet).
3. "Tenant Proportionate Share" as shown on Lease Reference Page shall be
amended to reflect the expanded suite percentage of 29.63% effective
March 1, 1999.
4. "Security Deposit" as shown on the lease Reference Page shall be amended to
reflect the addition of $103,331.00 to the existing security deposit to
total $149,488.74 as tenant security deposit for the amended lease.
Tenant's security deposit shall increase from 3/1/99 by 2 1/2 % interest
per year on said deposit.
Additional security deposits shall be paid to Landlord on additional space
occupied in an amount equal to the initial four months of rent due for any
additional space leased.
5. "Exhibit E - Additional Lease Terms", No. 2. "Parking" shall be amended to
reflect Forty-four (44) reserved self-park stalls in the building parking
garage with access from First Avenue West. The rate will be fixed at $90.00
per stall per month for a period of twelve (12) months and adjusted to the
then market rate. Market rate will be determined by reviewing the monthly
parking rates at the following buildings:
- P.I. Building, 101 Elliot Avenue West,
- Cell Therapeutics Building, 201 Elliot Avenue West,
- Xxxxx Xxxx Plaza Building, 000 Xxxxx Xxx Xxxxx.
The rate will not exceed the highest rate as established in the above
referenced locations.
In the event Tenant expands its premises, Landlord shall provide additional
reserved parking stalls to Tenant within the building parking garages at a
ratio of two stalls per 1,000 rentable square feet leased after Tenant
expands beyond 22,000 RSF.
6. "TERM" as shown on the reference page shall as of March 1, 1999 be amended
to hereinafter additionally provide as follows: Five (5) years commencing
the sooner of the occupancy or March 1, 1999 (6,767 square feet subject to
prior vacancy by existing tenants).
7. "Exhibit E" - "Renewal Options" shall hereinafter be amended to reflect the
following: Landlord shall grant tenant one five (5) year renewal option
following the initial term of the lease. This renewal option will permit
Tenant to renew the lease on the same terms and conditions as those
previously in effect, except the rental rate shall be 100 percent of the
Fair Market Rental (FMR) at the time the renewal option is to commence. The
FMR is defined below. Tenant shall notify Landlord, in writing, nine (9)
months prior to the expiration of the initial term, of its desire to
exercise the renewal option.
The FMR for comparable office space in the Lower Xxxxx Xxxx market shall be
determined through a survey of the lease rates actually attained for
similar size space located upon floors approximately the same height and
view, with similar tenant improvements installed and with suitable
adjustments for (a) rental terms, (b) provisions for additional space, (c)
length of lease terms, (d) tenant improvements, (e) the current amount of
additional rent charged for such leases, (f) tenant improvements provided
by the landlord or tenant, (g) payment by the landlord or tenant of a
broker's commission, (h) other relevant factors affecting comparability of
various lease rates, and (i) the financial strength of Tenant in Landlord's
opinion. The Landlord shall have the right to require higher rent based on
Landlord's reasonable risk analysis of the Tenant's financial strength. The
buildings surveyed shall be of comparable quality as the First West
Building and shall be located within Xxxxx Xxxx district of Seattle. Recent
leases on equivalent type space in the building itself shall be included in
the survey. No lease executed more than nine months before the date as of
which the FMR is to be determined shall be included in such survey.
Such survey shall be conducted by an appraiser or appraisal company,
experienced in the market for office space in office buildings in the
central business district of the City of Seattle, selected jointly by
Landlord and Tenant, or if Landlord and Tenant are unable to agree upon the
selection of such person within 15 days after the request for selection by
either party, each party shall select its own appraiser
2
who shall have the qualifications described above. Each appraiser shall
conduct its survey and provide its estimate of the FMR within 30 days
after his appointment. If the appraisers are unable to agree on a FMR
value, a third appraiser shall be appointed by the first two appraisers
and the third appraiser shall also survey the lease rates for similar
space, and shall, after completion of his survey, within 30 days after
his appointment, select the FMR rate determined by one of the first two
appraisers which he determines to be closest to the FMR, and such
determination of FMR rates shall be binding upon Landlord and Tenant
until the lease requires a new FMR rate to be determined
8. Paragraph 38 - "Reimbursement of Direct Expenses" shall hereinafter
additionally provide as follows: Tenant agrees to pay its prorata share of
increases in direct operating expenses and real estate taxes attributable
to its lease of the rental premises over the term of the lease as long as
the annual increase is not more than five (5) percent of the prior year's
operating costs excluding real estate tax increases. Landlord agrees to
manage and maintain the building in a manner consistent with that of
comparable first class office buildings. The base year for determining
increases shall be 1998.
9. "Exhibit D - Tenant Improvements" shall hereinafter be amended to reflect
the following: Landlord shall provide a tenant improvement allowance
equal to $10.23 per rentable square foot for Suite 105, (First Image)
($10.23 x 6,351 RSF = $65,000). Tenant shall use such allowance to pay
for costs associated with demolition, constructing tenant improvements,
and architectural and engineering fees. Landlord shall be responsible
for removal of the raised floor, chemical duct work, and potentially
Hazardous Materials in Suite 105 at Landlord's cost. Per Landlord's
request, Tenant will work with Xxxxxxx Design in constructing
improvements at the Building standard. Tenant is required to improve
said space to a finished level reasonably equivalent to Tenant's existing
fifth floor space including similar qualities of carpet, paint and relite
construction in the First West Building or Landlord is not required to
provide any Tenant Improvement Allowance. Landlord will be required to
respond within ten (10) days of completion of the Tenant's Improvements
if said improvement is not at the Building standard. Tenant will then
have thirty (30) days to correct, or if unable to correct in thirty (30)
days, take reasonable steps towards correction. Landlord will then remit
the allowance to Tenant within thirty (30) days of the reimbursement
request. Tenant agrees to utilize Accent Construction for all tenant
improvement work within the building. If Accent is unavailable or unable
to meet a reasonable schedule for the work requested by Tenant, then
Tenant will select a contractor with approval by Landlord. Landlord
shall charge a construction management fee if Landlord is involved in
managing the construction.
10. "Exhibit E - 4. Signage" shall hereinafter be amended to reflect the
following: Landlord authorizes the construction of Tenant signage to be
placed on the south and west corners of the building. Signage will meet the
existing standards of Lower Xxxxx Xxxx office buildings. Landlord shall
have the right to approve any signage prior to installation.
11. "Exhibit E - 3. Right of First Refusal" shall hereinafter be amended to
reflect the following:
Subject to existing tenants' rights, Landlord shall grant Tenant an ongoing
Right of First Offer to lease any space that comes available within the
building.
Any such available space shall hereinafter be referred to as the "RFO
Space". If RFO Space becomes available, Landlord shall notify Tenant in
writing of all of the material terms upon which Landlord is willing to
lease the RFO Space. Tenant shall then have thirty (30) days in which to
notify Landlord in writing that Tenant irrevocably elects to lease all of
the RFO Space on the exact terms offered by Landlord. If Tenant fails to
deliver to Landlord such written notice within such deadline, Landlord
shall have the right to lease the RFO Space to another tenant at any time
within six months after expiration of Tenant's offer period so long as the
effective rental rate at which the RFO Space is leased is not less than 90
percent of the effective rental rate (including tenant improvements and
other concessions offered by Landlord) offered to Tenant. If within such
six month period, Landlord proposes to lease the RFO Space to a third party
at less than 90 percent of the effective rental rate offered to Tenant,
then Landlord shall be required to first re-offer the RFO Space to Tenant
at the reduced rental rate, and Tenant shall be required to respond within
two business days.
3
Rental rates for space occupied prior to February 29, 2000 shall be based
on established market rents for floors five, two and one.
ESTABLISHED MARKET RATES
ANNUAL RENTAL RATE (S) BY FLOOR
LEASE YEAR BEGINNING:
-----------------------------------------------------------
FLOOR 3/99 3/00 3/01 3/02 3/03 3/04
---------- -------- -------- --------- --------- ---------- ----------
Fifth $22 23 24 25 26 27
Fourth 22 23 24 25 26 27
Third 21 22 23 24 25 26
Second 20 21 22 23 24 25
First 19 20 21 22 23 24
Years starting 3/05 and beyond shall be one dollarper year per square foot higher.
Using the fifth floor rate as a base, the rental rate for floor three will
be $1.00 less per year per rentable square foot and rental rates for floor
four will be the same as floor five per year per rentable square foot.
Additional space occupied after February 29, 2000 will be for a term of
five years and will not be coterminous with existing terms. Additional
space occupied will be at the established market rates at time of occupancy
with an allowance of $5.00 for tenant improvements. Tenant is required to
improve said space to a finish level of F5 Labs' existing fifth floor space
in the First West Building or Landlord is not required to provide any T/I
Allowance. Annual rental rate increases beyond February 29, 2005 will be
$1.00 per square per year.
See Exhibit D for a list of lease terminations and options to renew.
Landlord acknowledges that time is of the essence and that Tenant's
business is relying on Landlord's ability to deliver the space as outlined
in the Expansion Options and Exhibit D. Should Landlord be unable to
deliver Expansion Option and Exhibit D on the Delivery Date, Landlord
agrees to pay Tenant daily rent, using the Established Market Rates -
Rental Rate by Floor as noted until such space is made available to Tenant,
except for space subject to existing options to renew.
4
Expansion Option: Landlord shall make available to Tenant the right to
expand into the following areas:
OPTION SPACE FLOOR SUITE RSF DELIVERY DATE
------------ ----- ----- --- -------------
A 5 505 2,385 11/1/99
B 5 506 3,313 06/01/00
C 1 108 2,226 11/01/99
Landlord shall provide Tenant thirty (30) day prior written notice as to
when such option space shall become available. Tenant shall respond in
writing within ten business days of its receipt of Landlord's notice of its
intent to exercise its Expansion Option. In the event Tenant does not
respond to Landlord's notice, Tenant shall have waived its rights to such
option space being offered, but not to future option space.
Option Space B is subject to existing Tenant's option to renew for 3 years
at market.
The rental rate for Option Space A and B shall be at the same rate as the
established market rate for space occupied on the fifth floor. Option Space
C will be at the then established market rate for space leased on the first
floor.
In addition, Landlord shall provide a tenant improvement allowance of $8.00
per square foot for suites 505 and 506 ($8.00 X 5,698 RSF = $45,584) and
$5.00 per square foot for suite 108 ($5.00 X 2,226 RSF = $11,130).
Landlord shall provide the Option Space to Tenant upon the specified
delivery date. Tenant shall have 30 days to complete its tenant
improvements prior to the rent commencement, or upon occupancy, whichever
first occurs. The term of the Option Space shall be coterminous with
Tenant's existing lease expiration.
12. "Exhibit E - 5. Notice of Intent to Sell (Building)" shall hereinafter be
amended to reflect the following:
Landlord shall inform Tenant it is putting the Building for sale with the
specific terms and conditions of sale. Tenant shall have a first right of
negotiation for a period of ten (10) business days after the date of
notification during which the Landlord and Tenant will, at Tenant's option,
negotiate in good faith a Letter of Intent to purchase the Building.
Landlord agrees not t to market the Building to any third party, disclose
to any possible buyers or their agents the Landlord's intention to sell the
Building or negotiate a purchase agreement or Letter of Intent with any
third party until the earlier of the expiration of the ten (10) day period
or Tenant's notice to Landlord that Tenant does not wish to purchase the
Building.
If Tenant fails to deliver to Landlord such written notice within such
deadline, then Landlord shall have the right to sell the Building to
another party at any time within a six month period after expiration of
Tenant's offer period so long as the Purchase Price is not less than 90
percent of the price at which the Building was offered to the Tenant. If
within such six month period, Landlord proposes to sell the Building to a
third party at less than 90 percent of the Purchase Price, then Landlord
shall be required to first re-offer the Building to Tenant at the reduced
Purchase Price and the Tenant shall be required to respond within ten (10)
business days.
5
INCORPORATION:
13. Except as herein modified, all other terms and conditions of the Lease
between the parties above described are ratified and affirmed and shall
continue in full force and effect.
The parties hereto have executed this Third Amendment to Lease on the
date specified below their respective signatures.
LANDLORD TENANT
XXXXX XXXXXX XXXX XXXXXXXX, X.X.X. X0 LABS, INC.
A WASHINGTON LIMITED LIABILITY CO. A WASHINGTON CORPORATION
BY: /s/ Xxxx X. Xxxxx, Xx. BY: /s/ Xxxxxxx X. Xxxxxx
------------------------------ ------------------------------
XXXX X. XXXXX, XX. XXXXXXX X. XXXXXX
ITS: MANAGING AGENT ITS: PRESIDENT AND CEO
DATE: 1/11/99 DATE:
---------------------------- ----------------------------
BY: /s/ Xxxxx X. Xxxxx
----------------------------
XXXXX X. XXXXX
ITS: VICE PRESIDENT OF FINANCE
DATE: 1/7/99
----------------------------
6
STATE OF WASHINGTON )
) SS
COUNTY OF SNOHOMISH )
I certify that I know or have satisfactory evidence that Xxxx. X.
Xxxxx, Xx. signed this instrument on oath, that he was authorized to execute
said instrument as the managing agent of First Avenue West Building L.L.C.
pursuant to the provisions of the Limited Liability Company and acknowledged
said instrument as the managing agent of the First Avenue West Building L.L.C.
to be the free and voluntary act of said Limited Liability Company for the uses
and purposes mentioned in said instrument
Date: January 11, 1999
-------------------------------------------
/s/ Xxxxxxx Xxxx
------------------------------------------------
Notary Public in and for the State of Washington
residing at Kirkland
------------------------------------
Print Name XXXXXXX XXXX
-------------------------------------
My appointment expires: 5/19/00
-------------------------
STATE OF WASHINGTON )
) SS
COUNTY OF KING )
On this 7th day of January, 1999, personally appeared before me
XXXXXXX X. XXXXXX, to me known to be the President and CEO of F5 Labs, Inc.,
the corporation that executed the within and foregoing instrument and
acknowledged said instrument to be the free and voluntary act and deed of said
corporation, for the uses and proposed therein mentioned, and on oath stated
that he was authorized to execute said instrument on behalf of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
Date: January 7, 1999
-------------------------------------------
/s/ Xxxx Xxxxxxx
------------------------------------------------
Notary Public in and for the State of Washington
residing at Mountlake Terrace/Snoh Cty
------------------------------------
Print Name XXXX XXXXXXX
-------------------------------------
My appointment expires: 8/19/2002
-------------------------
7
STATE OF WASHINGTON )
) SS
COUNTY OF KING )
On this 7th day of January, 1999, personally appeared before me XXXXX
X. XXXXX, to me known to be the Vice President of Finance of F5 Labs, Inc.,
the corporation that executed the within and foregoing instrument and
acknowledged said instrument to be the free and voluntary act and deed of said
corporation, for the uses and proposed therein mentioned, and on oath stated
that he was authorized to execute said instrument on behalf of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
Date: January 7, 1999
-------------------------------------------
/s/ Xxxx Xxxxxxx
------------------------------------------------
Notary Public in and for the State of Washington
residing at Mountlake Terrace/Snoh Cty
------------------------------------
Print Name XXXX XXXXXXX
-------------------------------------
My appointment expires: 8/19/2002
-------------------------
8
EXHIBIT A
FLOOR PLAN
EXHIBIT B
STORAGE SPACE
RENTAL RATE BY FLOOR
MONTHS PRESENTED BASED ON CURRENT LEASE
FIFTH FLOOR - 6,769 SQFT
YR 1 Months 4-12 $ 86,304.78 - agrees with original lease @ $17.00 per sqft
YR 1 Months 13-15 $ 29,191.32 - agrees with original lease @ $17.25 sqft
YR 2 Months 16-24 $ 87,573.96 - agrees with original lease @ $17.25 sqft
YR 2 Months 25-27 $ 38,921.75 - annual rate of $23.00 per sqft - beginning 12/01/00
YR 3 Months 28-39 $162,456.00 - annual rate of $24.00 per sqft - beginning 03/01/01
YR 4 Months 40-51 $169,225.00 - annual rate of $25.00 per sqft - beginning 03/01/02
YR 5 Months 52-63 $175,994.00 - annual rate of $26.00 per sqft - beginning 03/01/03
SECOND FLOOR - 2,702 SQFT
YR 1 Months 4-12 $ 34,450.51 - agrees with original lease @ $17.00 per sqft
YR 1 Months 13-15 $ 11,652.38 - agrees with original lease - $17.25 sqft
YR 2 Months 16-24 $ 34,957.13 - agrees with original lease - $17.25 sqft
YR 2 Months 25-27 $ 14,185.50 - annual rate of $21.00 per sqft - beginning 12/01/00
YR 3 Months 28-39 $ 59,444.00 - annual rate of $22.00 per sqft - beginning 03/01/01
YR 4 Months 40-51 $ 62,146.00 - annual rate of $23.00 per sqft - beginning 03/01/02
YR 5 Months 52-63 $ 64,848.00 - annual rate of $24.00 per sqft - beginning 03/01/03
FIRST FLOOR (BENCHMARK) - 2,430 SQFT
YR 1 Months 4-12 $ 30,982.50 - agrees with original lease @ $17.00 per sqft
YR 1 Months 13-15 $ 10,479.38 - agrees with original lease @ $17.25 per sqft
YR 2 Months 16-24 $ 31,438.13 - agrees with original lease @ $17.25 per sqft
YR 2 Months 25-27 $ 12,150.00 - annual rate of $20.00 per sqft - beginning 12/01/00
YR 3 Months 28-39 $ 51,030.00 - annual rate of $21.00 per sqft - beginning 03/01/01
YR 4 Months 40-51 $ 53,460.00 - annual rate of $22.00 per sqft - beginning 03/01/02
YR 5 Months 52-63 $ 55,890.00 - annual rate of $23.00 per sqft - beginning 03/01/03
FIRST FLOOR (FIRST IMAGE / ROCHEFORT) - 6,767 SQFT
YR 1 Months 4-12 $ 96,429.75 - proposal starting 03/01/99 @ $19.00 per sqft
YR 1 Months 13-15 $ 32,143.25 - proposal starting 03/01/99 @ $19.00 per sqft
YR 2 Months 16-24 $101,505.00 - proposal starting 03/01/00 @ $20.00 per sqft
YR 2 Months 25-27 $ 33,835.00 - proposal starting 03/01/00 @ $20.00 per sqft
YR 3 Months 28-39 $142,107.00 - annual rate of $21.00 per sqft - beginning 03/01/00
YR 4 Months 40-51 $148,874.00 - annual rate of $22.00 per sqft - beginning 03/01/01
YR 5 Months 52-63 $155,641.00 - annual rate of $23.00 per sqft - beginning 03/01/01
FIRST AVENUE WEST BUILDING LLC
LEASE TERMINATIONS
OPTION TO DAYS DELIVERY
NAME FLOOR SQ FT EXPIRES RENEW NOTICE DATE
----------------------------------------------------------------------------------------------------
FIRST WEST SUITES 4 4,586 3/31/03 7/1/03
FIRST WEST SUITES 4 3,504 3/31/03 7/1/03
AMERICAN PROPERTY FINANCING 2 2,838 2/28/03 5-YR 180 6/1/03
BUSINESS RESOURCE 3 3,735 7/31/00 2-YR 180 11/1/00
CGC JAPAN 3 1,345 8/31/00 12/1/00
CARING PRODUCTS INT. 2 4,664 7/31/00 5-YR 180 11/1/00
GRAPHIC ARTS CENTER 5 2,387 7/31/99 11/1/99
GUARDIANSHIP SVC OF SEA 3 2,354 9/30/00 1/1/01
XXXXXX 2 1,365 M TO M
LINTERS 5 3,313 2/28/00 3-YR 180 6/1/00
XXXXXXXXXX, A CONAM CO. 3 3,639 12/31/02 4/1/02
XXXXXX, XXXXXX & XXXXXXXX 4 1,657 8/31/01 2-YR 0 12/1/01
OCEAN KING SEAFOOD 3 1,183 7/31/99 11/1/99
SOURCE CAPITAL /PARALLEL 4 1,872 10/31/01 2/1/02
PROGRESSIVE SECURITIES 2 694 5/31/99 9/1/99
FIRST WEST SUITES 4 637 3/31/03 7/1/03
ABC RADIO NETWORK, INC. 1 2,503 3/31/03 7/1/03
VENTURE DEV. CORP 1 2,226 7/31/99 3-YR 180 11/1/99
TOTALS 44,502
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NOTE: Space will be available for lease within 90 days of expiration of Lease
or renewal option period.
