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EXHIBIT 10.3
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE is made this 15th day of September, 1997 by
and between Washington Capital Management, Inc., as Investment Manager for
Locals 302 and 612, International Union of Operating Engineers-Employers
Construction Industry Retirement Fund, (the "Landlord") and SeaMED Corporation,
a Delaware corporation, (the "Tenant").
WHEREAS, Landlord and Tenant entered into a Lease Agreement dated
September 10, 1996 (the "Lease"), for approximately 30,000 square feet located
in Building "B", Tract 41, Highlands Campus, (the "Premises"), as more fully
described in the Lease; and
WHEREAS, the Tenant and Landlord desire to modify the Base Rent, Premises,
Tenant Improvement Allowance, and Core and Shell definition and, modify the
Lease accordingly;
NOW, THEREFORE, consideration of the covenants and agreements contained
herein, the parties hereby mutually agree as follows:
1. Premises. Pursuant to Section 1.03 (Premises) of the Lease, the
"Premises" shall be expanded to 40,500 square feet in Building B as outlined on
Exhibit A-2, attached hereto and by reference made a part hereof, which shall
replace and supersede Exhibit A-1 of the Lease. The Premises shall expand in
accordance with the schedule provided in paragraph 2 below unless otherwise
accelerated by Tenant as allowed under paragraph 4 below.
2. Premises Expansion/Rent Schedule. Effective upon the Commencement Date,
the Base Rent as set forth for in Section 1.10 of the Lease shall be modified as
set forth below:
MONTH PREMISES SF BASE RENT
------- ----------- -----------
1-6 40,500 $ 43,335.00
7-12 60,750 $ 65,002.00
13-36 81,000 $ 86,670.00
37-72 81,000 $ 94,080.00
73-108 81,000 $102,156.00
109-120 81,000 $110,960.00
3. Common Expenses. Tenant's share of Common Expenses, as described in
Section 4.02 of the Lease, shall be based upon the Premises square footage as
described in the schedule outlined in Paragraph 2 above, or as accelerated by
Tenant under paragraph 4 below. Notwithstanding the foregoing Tenant shall pay
100% utility charges (including, without limitation, electricity, gas, water,
sewer and garbage) for the entire building from the initial date of occupancy.
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4. Early Expansion. At Tenant's sole option, Tenant may expand the
Premises prior to the dates described in Paragraph 2 above. If Tenant wishes to
expand ahead of the above schedule, Tenant shall give 10 days written notice to
Landlord of the area that Tenant wishes to be added to the Premises and the date
of the addition; provided that in no event shall the added space be less than
5,000 square feet. On the date of the expansion, the area included in the
Premises, the Base Rent and Tenant's share of Common Expenses shall each be
adjusted accordingly. In addition, Landlord's property manager, with prior
notice, shall review the Premises on a regular basis and, if in the Landlord's
property manager's sole discretion, it is determined that Tenant is using any
area outside the then Premises for any purpose other than Temporary Dead Storage
(as defined below), then Landlord's property manager shall notify Tenant and
adjust the Premises, Base Rent and Tenant's share of Common Expenses
accordingly, as of the first day of the current month. For example, if Tenant
expands the Premises by using additional areas without notifying the Landlord,
and if the property manager first notices it on May 15, the Premises shall be
expanded in relation to that space (but not less than 5,000 square feet) as of
May 1. The retroactive increase in Base Rent and other charges shall be paid by
Tenant within 10 days after Tenant receives the invoices. Notwithstanding, the
foregoing from time to time and on a temporary basis only, Tenant may use
portions of the Building outside the Premises for the sole purposes of dead
storage of boxes, unused equipment and unused furniture ("Temporary Dead
Storage"). Any other use of space beyond the scheduled Premises which involves
more than Temporary Dead Storage shall be construed as use which causes the
Premises to be automatically expanded. The Premises shall be expanded in
increments of not less than 5,000 square feet regardless of whether Tenant is
using all of that area. Tenant reserves the right to vacate the early expanded
premises in the event that Landlord and Tenant are in disagreement with respect
to the size of the early expanded premises.
5. Deleted Provisions. The following paragraphs of the Lease are hereby
terminated and of no further force and effect:
1) Section 1.06
2) Article Seventeen: Right to Lease Entire Building
3) Article Eighteen: Right of First Opportunity
6. Security Deposit. On or before the date that the Premises are expanded
to 60,750 square feet, Tenant shall increase the Security Deposit to $65,000. On
or before the date that the Premises are expanded to 81,000 square feet, Tenant
shall increase the Security Deposit to $86,000.
7. Modified Provisions. Paragraph F (Tenant Improvement Allowance),
Paragraph G (Reduction in Base Rent for Tenant Improvement Savings), Paragraph H
(Increase in Base Rent for Additional Allowance), Paragraph I (Funding for
Tenant Improvements in Excess of $840,000) of Exhibit B (Landlord's Work) of the
Lease shall be replaced with the following:
F. Tenant Improvement Allowance. Landlord shall provide a tenant
improvement allowance of $2,340,000 (inclusive of construction costs, sales tax,
permit fees and architectural fees) for improvements to the Premises above the
Core and Shell (the "Tenant
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Improvements"). At Tenant's option, Landlord shall provide an additional
allowance of up to $160,000 (the "Additional Allowance"). The Additional
Allowance shall be amortized over the Lease Term as set forth in Paragraph H
below. Unless otherwise agreed by Landlord and Tenant, all tenant improvements
shall be competitively bid by at least two (2) union subcontractors mutually
agreed upon by Landlord and Tenant.
G. Reduction in Base Rent for Tenant Improvement Savings. If the
cost of the Tenant Improvements is less than $2,340,000, then the Base Rent
shall be reduced using the formula set forth below:
ABR = BR- [CS X 10%)/12]
ABR = Adjusted Base Rent
BR = Base Rent set forth in Paragraph 2 of this Amendment
CS = Cost Savings ($2,340,000 minus actual cost of the Tenant
Improvements)
H. Increase in Base Rent for Additional Allowance. If Tenant
utilizes part or all of the Additional Allowance, the monthly Base Rent shall be
increased by an amount equal to what the monthly payment would be on a 10 year
loan at 11 percent with a principal balance of the cost of additional Tenant
Improvements funded by Landlord.
I. Funding of Tenant Improvements in Excess of $2,500,000. If Tenant
requests Tenant Improvements in excess of $2,500,000, Landlord agrees to
construct the additional Tenant Improvements provided that Tenant shall be
solely responsible for the cost of such work and Tenant will fund those costs
prorata as the payments are due to the contractor. Landlord's share of each
payment to the contractor for Tenant Improvements shall be the fraction of the
numerator which is $2,500,000, and the denominator is the estimate by the
contractor of the actual cost of the Tenant Improvements and Tenant shall pay
the remainder. For example, if the contractor estimates that a particular
additional improvement shall cost $300,000, Landlord shall pay 89.3% of each
invoice, and Tenant shall pay the remainder. When the Tenant Improvements have
been completed and final numbers are available, appropriate adjustments shall be
made to the amounts previously paid by Landlord and Tenant so that Landlord has
paid $2,500,000 and Tenant has paid the balance.
8. Core and Shell. Schedule 2, attached hereto and by reference made a
part hereof, shall replace and supersede Schedule 1 of the Lease.
Notwithstanding anything to the contrary in the Lease or Amendment, Schedule 2
shall define the Core and Shell ("Core and Shell") and the limits of Landlord's
Work.
9. Authorization. Tenant warrants that all necessary corporate actions
have been duly taken to permit Tenant to enter into this First Amendment to
Lease and that each undersigned officer has been duly authorized and instructed
to execute this First Amendment To Lease.
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10. No Other Modifications. Except as expressly modified above, all terms
and conditions of the Lease remain in full force and effect and are hereby
ratified and confirmed.
LANDLORD TENANT
Washington Capital Management, SeaMED Corporation, a Delaware
Inc., as Investment Manager of corporation
Locals 302 and 612, International
Union of Operating Engineers
Employers construction Industry By: /s/ XXX XXXX
Retirement Fund. --------------------------------
Its: Sr. VP, Operations
--------------------------------
By: [signature] Date: 9-19-97
-------------------------------- --------------------------------
Its:
--------------------------------
Date: 9-23-97
--------------------------------
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STATE OF WASHINGTON )
) ss.
County of KING )
On this 19 day of September, 1997, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Xxx Xxxx, to me known to be the person who signed as VP of
SeaMed, voluntary act and deed of such party for the uses and purposes therein
mentioned; and on oath stated that he was authorized to execute the said
instrument on behalf of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
[SIGNATURE]
--------------------------------------
NOTARY PUBLIC,
residing at Bellevue
My appointment Expires 1/18/2001
STATE OF WASHINGTON )
) ss.
County of KING )
On this 23d day of September, 1997, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Xxxxxxx X. Xxxxxx, to me known to be the person who signed
as VP of Washington Capital Management, voluntary act and deed of such party for
the uses and purposes therein mentioned; and on oath stated that he was
authorized to execute the said instrument on behalf of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
[SIGNATURE]
--------------------------------------
NOTARY PUBLIC,
residing at Seattle
My appointment Expires 4/23/00
