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333 ELLIOTT WEST
OFFICE LEASE AGREEMENT
BETWEEN
SELIG REAL ESTATE HOLDINGS XXV, L.L.C.
AND
F5 NETWORKS, INC.
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1. BASIC LEASE
TERMS.
Section 1 represents a summary of the basic terms of this Office
Space
Lease for 333 Elliott West.
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A. EFFECTIVE DATE:
October 31, 2006
B. TENANT:
F5 Networks, Inc.
ADDRESS OF LEASED PREMISES:
333 Elliott Avenue West
Seattle, WA 98119
ADDRESS FOR BILLING AND NOTICES: 401 Elliott Avenue West
Seattle, WA 98119
Phone: (206) 272-5555
Fax: (206) 272-5556
Attn: John Rodriguez, Chief Accounting Officer
or such other place as
Tenant may from time to time
designate by notice to Landlord.
C. LANDLORD:
Selig Real Estate Holdings XXV, L.L.C.
ADDRESS FOR NOTICES:
1000 Second Avenue
Suite 1800
Seattle, WA 98104-1046
Phone: (206) 467-7600
Fax: (206) 386-5296
Attn: Martin Selig
or such other place as
Landlord may from time to time designate by
notice to Tenant
D. PREMISES
AREA:
137,201 rentable square feet (RSF) consisting
of the
following:
26,712 RSF on floor 1
28,141 RSF on floor 2
29,190 RSF on floor 3
26,965 RSF on floor 4
26,193 RSF on floor 5
E. BUILDING
AREA:
137,201 RSF
F. TENANT'S
PERCENTAGE OF BUILDING: 100%
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G. TERM OF
LEASE:
This Lease shall commence on the "Lease
Commencement Date," which date shall be the
last to occur of (i) ninety (90) days after
the Delivery Date or (ii) the date of
Substantial Completion (as both terms are
hereinafter defined), and shall expire on the
last day of the one hundredth and twentieth
(120th) full calendar month after the Lease
Commencement Date (the "Expiration Date").
H. BASE MONTHLY
RENT:
$285,835.42 (based on $25.00/RSF/yr.)
I. PARKING:
Initial Monthly Charge of $125.00 per month
for each parking permit for a parking stall in
the garage located beneath the Building (the
"Building Garage") and $100.00 per month for
each parking permit for a parking stall
located outside of the Building Garage.
Number of parking permits allocated to Tenant:
Approximately 160 permits, but not less than
123 for the stalls located in the Building
Garage, approximately 30 permits but not less
than 23 for the stalls located in the surface
parking lots on the Property and 100 for the
stalls located outside of the Property but
within two and one-half blocks of the
Building.
Tenant shall be entitled to "stack" cars in
the building garage by purchasing additional
parking permits. In the event Landlord sells
the building Landlord will have no obligation
to provide off-site parking to Tenant.
J. RENT
ADJUSTMENTS:
Base Monthly Rent is the product of the annual
rate of $25.00 per RSF times the RSF Tenant
leases from Landlord divided by twelve. The
annual rental rate shall increase $1.00 per
RSF at each anniversary of Lease Commencement
Date.
Months
Annual Rental Rent
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------------------------
1-12
$25.00 per RSF per annum
13-24 $26.00 per
RSF per annum
25-36
$27.00 per
RSF per annum
37-48 $28.00 per
RSF per annum
49-60 $29.00 per
RSF per annum
61-72 $30.00 per
RSF per annum
73-84 $31.00 per
RSF per annum
85-96 $32.00 per
RSF per annum
97 -108
$33.00 per RSF per annum
109 -120 $34.00
per RSF per annum
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K. ADDITIONAL
RENT - ESTIMATED
N/A
INITIAL TENANT'S SHARE OF
EXPENSES:
L. DEPOSIT:
N/A
M.
NON-REFUNDABLE CLEANING FEE:
N/A
N. PREPAID RENT:
12th, 24th, 48th and 72nd months as provided
in Section 5(b).
O. TENANT'S USE
OF PREMISES:
Any lawful commercial purpose.
P. BROKERS:
Douglas Hanafin, Washington Partners, Inc.
TO
BE PAID BY:
Landlord
Q. GUARANTOR:
N/A
R. EXHIBITS:
Exhibit A - Premises / Floor Plans
Exhibit B - The Building
Exhibit C - Tenant Work Letter
Exhibit D - Building Shell and
Core Specifications
Exhibit E - Plans and Specifications
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2. PREMISES.
(A)
PREMISES. Landlord
does hereby lease to Tenant, upon the terms and
conditions set forth
herein, the premises described in Section 1(d)
and shown on Exhibit A attached hereto (the "Premises"), within
the
Building described in Section 1(e) and in Section 4(a) below
and
depicted on Exhibit B hereto (the "Building"), which Building shall
be
located at 333 Elliott Avenue West, Seattle, Washington 98119 on
the
real property described as follows (the "Property"):
Lots 1, 2, 3, 4, 5, and 6 in Block 160 of Seattle Tide Lands,
according to the official maps on file in the office of the
Commission of public lands in Olympia, Washington.
Except any portion thereof lying within the railroad right of
way.
Upon
completion of the Tenant Improvements to the Premises, Landlord
shall cause the rentable square footage of the Premises to be
measured
by Landlord's architect using the BOMA American National
Standard
Institute Publication, ANSI Z65.1-1996 Standards (the "Rentable
Square
Footage"), to determine the Building Rentable Area, which
measurement
shall govern with respect to the Premises Area of Section 1(d).
Tenant
shall have the right to have a Washington-licensed surveyor
approved
by Landlord and jointly responsible to Landlord and Tenant verify
the
Premises Rentable Square Footage determined by Landlord's
Architect,
if it does so within twenty (20) days after receipt of the notice
from
Landlord's Architect. If based on such verification Tenant
disagrees
with the Rentable
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Square Footage determined by Landlord's Architect it shall
advise
Landlord and its Architect of the deviation within ten (10)
days
thereafter or be deemed to have accepted Landlord's Architect's
determination. If Tenant gives a timely notification of
disagreement,
then the parties shall jointly select a Washington-licensed
surveyor
or architect to review the calculations of Landlord's architect
and
the Tenant selected surveyor and make the determination of
Premises
Rentable Square Footage, which determination shall be final and
binding on the parties.
(B)
COMMON AREAS. As used
in this Lease, "Common Areas" shall mean all
portions of the Building and Property leased but not demised to
specific tenants. During the term of this Lease, Tenant and its
licensees, invitees, customers and employees shall have the
exclusive
right to use the Common Areas, including all parking areas,
landscaped
areas, entrances, lobbies, elevators, stairs, corridors, and
public
restrooms, and shall have exclusive control and management of
the
same.
3. TERM.
(A)
INITIAL TERM. The
Lease Commencement Date shall occur on the latter of
the ninetieth (90th) day after the Delivery Date or upon
Substantial
Completion, as both terms are hereinafter defined, and shall expire
on
the last day of the one hundred twentieth (120th) full calendar
month
after the Lease Commencement Date (the "Initial Term").
(B) EARLY POSSESSION. Commencing on
the Effective Date, Tenant and
Tenant's contractors shall have the non-exclusive right to possess
the
Premises seven days per week and twenty-four hours per day (the
"Early
Possession Period") for the purpose of the installation of
Tenant's
improvements, furniture, fixtures and equipment and completion
of
Tenant's Work (as defined in the Tenant Work Letter attached hereto
as
Exhibit C), and to perform such other activities in order to
permit
and facilitate Tenant's ability to fully occupy and conduct its
business on all portions of the Premises as of the Lease
Commencement
Date. During the Early Possession Period, Tenant shall not be
charged
Base Monthly Rent, parking charges for stalls located in the
Parking
Garage or in surface parking lots on the Property, or operating
expense charges. Tenant shall coordinate Tenant's Work move-in
activities with the contractors working on the site so as not
to
impede Landlord's Work and the final completion of the Shell and
Core
Improvements, including punch list type activities. Tenant shall
be
responsible for the removal and disposal of Tenant's furniture
and
fixture vendor's cartons and trash.
(C)
RENEWAL. Provided that
Tenant is not then in material default under
the terms of this Lease, Tenant shall have the option(s) to renew
this
Lease for two (2) additional terms of five (5) years each or,
if
Tenant so elects, for one (1) additional term of ten (10) years
(the
"Renewal Terms"). If Tenant elects to renew this Lease, Tenant
shall
notify Landlord in writing of its intent to exercise such
renewal
option(s) no later than twelve (12) months prior to the expiration
of
the then existing Lease term; in the event Tenant exercises its
right
to initially renew for one (1) additional five (5) year Renewal
Term
(rather than an additional term of ten (10) years), Tenant
shall
notify Landlord no later than twelve (12) months prior to the
expiration of the first five (5) year Renewal Term if Tenant elects
to
renew for
an additional five (5) year Renewal Term. All provisions of
this Lease shall continue in full force and effect during any
Renewal
Term, except Base Monthly Rent for the Renewal Term shall be at
the
then fair market rate (as determined based on the following
criteria)
for comparable space in a comparable Seattle location taking
into
account and making appropriate modifications for concessions
and
costs, such as Tenant improvement allowances, free or
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reduced rent periods, construction periods during which rent is
not
payable and the like, which would be incident to a new lease but
that
are avoided by Landlord by virtue of the extension of the term of
this
Lease. If Landlord and Tenant are unable to agree as to the
fair
market rent within sixty (60) days following Tenant's notice to
Landlord of its intent to renew the Lease, fair market rent shall
then
be determined by appraisal as follows:
Within ten (10) days after expiration of the sixty (60) day
period,
Landlord and Tenant shall give notice to each other stating the
name
and address of an impartial person to act as appraiser. Each
party's
appraiser shall be a licensed commercial real estate broker
doing
business in Seattle having not less than ten years of active
experience as a commercial real estate broker in Seattle, or may be
an
MAI appraiser with commercial property experience in the Seattle
area.
The named appraisers shall, together, determine the fair market
rent
as of the commencement of the particular Renewal Term and according
to
the standards provided for above herein within thirty (30) days
after
their appointment. If the two appraisers shall fail to agree upon
fair
market rent within thirty (30) days of their appointments, and
the
difference in their conclusions about fair market rent is ten
percent
(10%) or less of the lower of the two determinations, then fair
market
rent shall be the average of the two determinations. If the two
appraisers fail to agree on fair market rent and the difference
between the two determinations exceeds ten percent (10%) of the
lower
of the two determinations, then the appraisers shall appoint a
third
appraiser similarly impartial and qualified to determine fair
market
rent. Such third expert shall determine the market rent within
thirty
(30) day of his/her appointment and the average of the
determinations
of the two closest experts shall be final, conclusive and binding
on
Landlord and Tenant. Landlord and Tenant shall then execute and
deliver an amendment to this Lease confirming Base Monthly Rent to
be
applicable during the particular Renewal Term. Landlord and
Tenant
shall each pay the fees of any appraiser appointed by Landlord
and
Tenant respectively, and Landlord and Tenant shall each pay
one-half
of the fees of any third appraiser appointed pursuant to the
provisions of this paragraph.
(D)
EARLY TERMINATION.
Without limiting any other provisions set forth
herein, in the event Tenant vacates its offices in the 401
Elliott
Avenue Building, Tenant shall have the one-time right and option
to
cancel and terminate this Lease effective as of the expiration of
the
fifth (5th) year of the Initial Term by giving Landlord no less
than
twelve (12) months prior written notice and paying to Landlord
an
Early Termination Fee calculated as follows: (i) the
unamortized
portion of the Tenant Allowance, (ii) the unamortized portion
of
Pre-Paid Rent for months 12, 24 and 48 of the Initial Term, paid
on
behalf of Landlord for a portion of the Leasing Fee, and (iii)
the
unamortized portion of the Rent that would have been payable by
Tenant
to Landlord on Space Pocket Areas (defined in Section 5(d) below),
had
no portion of the Premises been designated as a Space Pocket
Areas
pursuant to Section 5(d), all amortized on a straight-line basis
with
interest at 8% per annum over the Initial Term, such payment to
be
made to Landlord no later than one hundred twenty (120) days prior
to
the effective Lease termination date; provided, however, that
the
Early Termination Fee shall be reduced by the Base Monthly Rent
otherwise due, and pre-paid, for the said 72nd month of the
Initial
Term.
4. DESIGN,
CONSTRUCTION AND COMPLETION.
(A)
DESIGN. Landlord shall
cause the Building to be designed, constructed
and completed according to the design criteria, specifications
and
construction standards described on Exhibit D ("Building Shell
and
Core Outline Specifications"), the architectural, structural
and
mechanical plans referred to on Exhibit E (the "Plans", which
plans
are incorporated
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herein as if fully set forth) and the floor plans depicted on
Exhibit
A, each of which Exhibits is attached hereto and incorporated
herein
by this reference, together with the other terms and conditions
of
this Lease. Landlord shall provide Tenant true and correct copies
of
all plans and specifications, and all material modifications
thereto
as they occur.
(B)
CONSTRUCTION. The
contract(s) for construction of the Building shall
impose schedules and deadlines on Landlord's contractor(s) so as
to
assure timely Substantial Completion and a timely Delivery
Date.
Whenever the construction schedule is revised, Landlord shall
notify
Tenant and promptly provide Tenant with a true and correct copy of
the
revised schedule.
(C)
PROGRESS. Landlord
shall instruct its architect to issue a certificate
to Tenant at such times as the Building is at seventy-five
percent
(75%) and one hundred percent (100%) of Substantial Completion,
stating that the completed work fully complies with (i) the
plans
approved by all necessary governmental agencies and (ii) Exhibits
C
and D attached hereto. To the extent that City of Seattle
inspectors
or inspectors for Landlord's construction lender also provide
progress
certifications, copies of the same shall be provided to Tenant
promptly after being received by Landlord.
(D)
DELIVERY AND
COMPLETION. Landlord shall achieve Substantial Completion
of the Building and the Premises in accordance with the
permitted
plans and specifications, and terms of the Exhibits hereto, by
no
later than January 31, 2008. For purposes of this Lease,
"Substantial
Completion"
means issuance of the final City of Seattle shell and core
Certificate of Occupancy for the Building and with respect to
each
floor of the Building and the parking garage. For purposes of
this
Lease, "Delivery Date" shall mean the date on which:
(1) The Building is
fully enclosed and water tight, including the
roof and permanent exterior walls and windows;
(2) Power and lighting
and electrical service are available as
described in Exhibit D to the Lease for distribution by Tenant;
and
(3) There shall be
evidence reasonably satisfactory to Tenant that:
(i) The balance of the
Landlord Work can be completed prior to
Lease Commencement; and
(ii) The Tenant's contractor is able to proceed efficiently
with
the Tenant Work, subject to a requirement of reasonable
coordination and cooperation with the Landlord's shell and
core contractor.
(E)
LATE DELIVERY. For
each day that Delivery Date is delayed past
November 1, 2007, Tenant shall be entitled to a credit as
provided
below against its Rent otherwise first falling due (exclusive
of
pre-paid rent) under this Lease during the Initial Term, except to
the
extent any such delay was caused by a Force Majuere Event. A
"Force
Majeure Event" means only acts of God, strikes, lockouts, labor
troubles, inability to procure materials despite commercially
reasonable efforts to do so, discovery of archeologically
significant
artifacts which halt construction, reasonably unforeseen
sub-surface
conditions materially delaying project excavation, acts of civil
or
military authorities, fires, floods and earthquakes. Landlord
shall
notify Tenant in writing of each delay Landlord contends was caused
by
a Force Majeure Event within ten (10) business days of its
occurrence,
describing the impact on the then current construction
schedule.
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More specifically:
(1) In the event the
Delivery Date is delayed for up to sixty (60)
days past November 1, 2007, then Tenant shall be entitled to
rent
abatement in an amount equal to two (2) days pro-rata Base
Monthly Rent for each one (1) day of such delay;
(2) In the event the
Delivery Date is delayed for up to an additional
one hundred twenty (120) days after December 30, 2007, then
Tenant shall be entitled to rent abatement in an amount equal
to
three (3) days pro-rata Base Monthly Rent for each one (1) day
of
such additional delay; and
(3) Notwithstanding
the foregoing, in the event the Delivery Date is
delayed past April 29, 2008, or in the event at any time the
construction schedule prepared by Landlord's prime contractor
or
certified by Landlord's architect reasonably indicates the
Delivery Date will occur after April 29, 2008, then in either
event Tenant may terminate this Lease after thirty (30) days
written notice to the Landlord unless the Delivery Date is
attained during such thirty (30) day period.
(F)
LATE COMPLETION. For
each day that Substantial Completion is delayed
past January 31, 2008, Tenant shall be entitled to a credit as
provided below against its Rent otherwise first falling due
(exclusive
of pre-paid rent) under this Lease during the Initial Term, except
to
the extent any such delay was caused by a Force Majuere Event.
A
"Force Majeure Event" means only acts of God, strikes, lockouts,
labor
troubles, inability to procure materials despite commercially
reasonable efforts to do so, discovery of archeologically
significant
artifacts which halt construction, reasonably unforeseen
sub-surface
conditions materially delaying project excavation, acts of civil
or
military authorities, fires, floods and earthquakes. Landlord
shall
notify Tenant in writing of each delay Landlord contends was caused
by
a Force Majeure Event within ten (10) business days of its
occurrence,
describing the impact on the then current construction
schedule.
More specifically:
(1) In the event
Substantial Completion is delayed for up to sixty
(60) days past January 31, 2008, then Tenant shall be entitled
to
rent abatement in an amount equal to two (2) days pro-rata Base
Monthly Rent for each one (1) day of such delay;
(2) In the event
Substantial Completion is delayed for up to an
additional one hundred twenty (120) days after March 31, 2008,
then Tenant shall be entitled to rent abatement in an amount
equal to three (3) days pro-rata Base Monthly Rent for each one
(1) day of such additional delay; and
(3) Notwithstanding
the foregoing, in the event Substantial
Completion is
delayed past July 29, 2008, or in the event at any
time the construction schedule prepared by Landlord's prime
contractor or certified by Landlord's architect reasonably
indicates Substantial Completion will occur after July 29,
2008,
then in either event Tenant may terminate this Lease after
thirty
(30) days written notice to the Landlord unless Substantial
Completion is attained during such thirty (30) day period.
5. RENT.
(A)
BASE MONTHLY RENT.
Subject to Section 5(d), Tenant shall pay Landlord
monthly base rent in the initial amount set forth in Section 1
which
shall be payable monthly in advance on the
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first day of each and every calendar month ("Base Monthly
Rent")
beginning on the Lease Commencement Date until the expiration
or
earlier termination of this Lease.
(B)
PRE-PAID RENT. As
otherwise provided in Section 37 below herein, upon
Broker's certification to Landlord that the Leasing Fee has been
paid,
Tenant shall be deemed to have paid in full all Base Monthly
Rent
otherwise due hereunder applicable to months twelve (12),
twenty-four
(24), forty-eight (48) and seventy-two (72) of the Initial Term
hereof.
(C)
RENT ADJUSTMENT. Base
Monthly Rent shall be increased on each
anniversary of the Lease Commencement Date by an amount equal to
$1.00
per rentable square foot per annum as set forth in Section
1(j).
(D)
RENT ABATEMENT.
Notwithstanding anything to the contrary herein,
within thirty (30) days after commencing to conduct business in
the
Building, Tenant shall have the option to designate up to 20,000
RSF
as a space pocket area, which area may be comprised of space
located
in various areas and floors of the Building as Tenant may
select
(collectively, the "Space Pocket Area"), thereafter, space pockets
may
not be switched or otherwise reconfigured. For each of the
eighteen
(18) months immediately following the Lease Commencement Date,
Tenant
shall not pay Rent on the Space Pocket Area as long as the
Space
Pocket Area remains unoccupied by Tenant. Tenant shall promptly
notify
Landlord of its use and occupancy of any portion of the Space
Pocket
Area, and shall commence paying Rent on each portion of the
Space
Pocket Area at such time as Tenant occupies such area. Occupancy
of
any portion of the Space Pocket Area shall mean the date on
which
Tenant first has an employee actually working in such area.
(E)
RENT WITHOUT OFFSET
AND LATE CHARGE. All Base Monthly Rent shall be
paid by Tenant to Landlord without prior notice or demand in
advance
on the first day of every calendar month, at the address shown
in
Section 1(c), or such other place as Landlord may designate in
writing
from time to time. Whether or not so designated, all other sums
due
from Tenant under this Lease shall constitute Additional Rent,
payable
without prior notice or demand when specified in this Lease, but
if
not specified, then within thirty (30) days of demand, during
which
time the parties will work to resolve any good faith disagreements
on
the amount due. All Rent shall be paid without any deduction or
offset
whatsoever except as otherwise specifically provided herein. All
Rent
shall be paid in lawful currency of the United States of
America.
Proration of Rent due for any partial month shall be calculated
by
dividing the number of days in the month for which Rent is due by
the
actual number of days in that month and multiplying by the
applicable
monthly rate. Tenant acknowledges that late payment by Tenant
to
Landlord of any Rent, Additional Rent or other sums due under
this
Lease will cause Landlord to incur costs not contemplated by
this
Lease, the exact amount of such cost being extremely difficult
and
impracticable to ascertain. Such costs include, without
limitation,
processing and accounting charges and late charges that may be
imposed
on Landlord by the terms of any encumbrance or note secured by
the
Premises. Therefore, if any Rent or other sum due from Tenant is
not
received within ten (10) business days of the date due, Tenant
shall
pay to Landlord a sum equal to five percent (5%) of such
overdue
payment. Landlord and Tenant hereby agree that such late charge
represents a fair and reasonable estimate of the costs that
Landlord
will incur by reason of any such late payment and that the late
charge
is in addition to any and all remedies available to the Landlord
and
that the assessment and/or collection of the late charge shall not
be
deemed a waiver of any other default.
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6. USE AND
ACCESS.
(A)
TENANT'S USE. Tenant
may use and occupy the Premises for any lawful
commercial purpose. Tenant shall have access to the Premises and
to
the parking 24 hours per day, 7 days per week, 365 days per
year,
including all holidays. Tenant shall promptly comply with all
laws,
ordinances, orders and regulations affecting the Premises and
the
Building, including, without limitation, any rules and
regulations
that may be attached to this Lease and to any reasonable
modifications
to these rules and regulations as Landlord may adopt from time
to
time. Tenant will not knowingly use or permit to be used in
said
Premises anything that will materially increase the rate of
insurance
on said Building or any part thereof, nor anything that may be
dangerous to life or limb; nor in any manner deface or injure
said
Building or any part thereof; nor overload any floor or part
thereof;
nor permit any unreasonably objectionable noise or odor to escape
or
to be emitted from said Premises, or do anything or permit anything
to
be done upon said Premises in any way tending to create a nuisance
or
to disturb any other tenant or occupant of any part of said
Building.
Tenant, at Tenant's expense, will comply with all health, fire
and
police regulations respecting said Premises.
(B)
LANDLORD ACCESS.
Landlord, its engineer or other agents may retain a
pass key to said Premises to enable Landlord to examine the
Premises
from time to time with reference to any emergency or to the
general
maintenance of said Premises. In recognition that Tenant will
be
conducting business that may involve matters of a non-public or
confidential nature, if no emergency exists, Landlord shall
provide
Tenant at least 24 hours notice of any entry into the Premises,
and
Tenant shall have the right to have a party present during any
such
entry by Landlord, Landlord's engineer or any other agents.
(C) LANDLORD ALTERATIONS. Tenant
acknowledges that Landlord may from time
to time, at its reasonable discretion, make such modifications,
alterations, deletions or improvements to the Building as Landlord
may
deem necessary or desirable, without compensation or notice to
Tenant
as long as such modifications, alterations, deletions or
improvements
do not materially alter Tenant's use of its Premises.
7. HAZARDOUS
SUBSTANCES. Landlord hereby covenants and warrants to Tenant
that
the
Premises will not contain any Hazardous Material, or if such
material
does
exist, it exists in compliance with all applicable federal, state
or
local law, and agrees that if during the term of the Lease
Hazardous
Material not introduced by Tenant is discovered within the
Premises, or any
state, federal or local governmental authority or agency having
jurisdiction requires the removal of any Hazardous Material,
Landlord shall
at
Landlord's expense remove, encapsulate or take other accepted
abatement
measures with respect to such Hazardous Material in compliance with
or as
required by all applicable laws, rules and regulations of local,
state and
federal governmental authorities. Landlord shall defend, indemnify
and save
Tenant harmless from and against any injuries, claims, accidents,
damages,
liabilities and expenses (including reasonable counsel fees)
arising out of
any
breach of the foregoing representation and warranty of Landlord.
The
provisions of this paragraph shall survive the expiration or
termination of
the
Lease.
For
purposes of this Section 7, Hazardous Material shall include
flammables, explosives, radioactive materials, hazardous wastes
or
materials, toxic wastes or materials, or other similar
substances,
petroleum products or derivatives thereof or any substance subject
to
regulation by or under any federal, state and local laws and
ordinances
relating to the protection of the environment or the keeping, use
or
disposition of environmentally hazardous materials, substances, or
wastes,
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presently in effect or hereafter adopted, all amendments to any of
them,
and
all rules and regulations issued pursuant to any of such laws
or
ordinances.
The
parties anticipate that Landlord may be required to conduct
certain
environmental work at, about or beneath the Building following
completion
of
the Building and commencement of the Initial Term, which may
involve
monitoring and pumping sub-surface water. Any and all such work
shall be
the
entire responsibility of Landlord to be conducted at Landlord's
sole
cost
and risk including additional water/sewer charges for such water,
and
without interference to Tenant's quiet enjoyment of the
Premises.
8. BUILDING
SERVICES, COSTS AND REPAIRS. This is a "triple net", NNN Lease.
During the term of this Lease, Tenant shall be responsible for
payment of
all
costs and expenses incurred for electric light and power, heat,
air
conditioning, elevators, water, sewer, janitorial services,
parking
services, all building maintenance contracts (except those which
are
Landlord's
responsibility as provided in Section 12 below), recycling and
trash removal, window washing, security, landscaping, real estate
taxes and
insurance, and all other services to the Building. Tenant shall
contract
directly with utility and service providers for the provision and
payment
of
all such utilities and other services. Landlord shall be fully
responsible for the cost of, and shall promptly and regularly
perform, all
repairs and maintenance to the roof, exterior walls and foundation.
To the
extent Tenant's repair and maintenance obligations hereunder relate
to work
performed for or goods supplied to Landlord, Landlord shall assign
to
Tenant all applicable warranties and service contracts. In the
event this
Lease is hereafter amended to contract the scope of the Premises,
such
amendment shall then also provide for pro-ration or separate
metering of
Tenant's utility/operating/repair costs, taxes to be paid by Tenant
and
insurance premiums to be paid by Tenant to reflect Tenant's
reduced
occupancy.
9. TAXES AND
OTHER CHARGES.
(A)
OBLIGATION FOR
PAYMENT. Tenant shall pay, satisfy and discharge as the
same become due and payable and prior to delinquency all ad
valorem
real and personal property taxes and assessments and any other
taxes
or charges levied or imposed upon or against Tenant's
proportionate
share of the real estate on which the Building is to be
situated
and/or any improvements now or hereafter made or constructed upon
the
real estate on which the Building is to be situated (the
"Improvements") during the term of this Lease (collectively,
"Taxes"). If any Taxes are levied against Landlord or
Landlord's
property and if Landlord elects to pay the same or if the
assessed
value of Landlord's property is increased by inclusion of
personal
property and trade fixtures placed by Tenant in the Premises
and
Landlord elects to pay the Taxes based on such increase, Tenant
shall
pay to Landlord upon demand that part of such Taxes for which
Tenant
is primarily liable hereunder.
(B)
TAXES PAYABLE IN
INSTALLMENTS. If, by law, any Taxes may, at the
option of the taxpayer, be paid in installments (whether or not
interest accrues on the unpaid balance of such tax), Tenant may
pay
such Taxes (and any accrued interest on the unpaid balance of
such
Taxes) in
installments, as they become due during the Term of this
Lease.
(C)
PRORATION OF TAXES FOR
PERIOD OTHER THAN TERM. Any Taxes, including
Taxes which have been converted into installment payments, relating
to
a part of a fiscal period of the taxing authority which has
been
included within the term and a part of which has been included in
a
period of time prior to the commencement or after the end of the
term,
shall, whether or not the Taxes are assessed, levied,
confirmed,
imposed upon or in respect of,
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or become a lien upon the Premises, or become payable during the
term,
be adjusted between Landlord and Tenant as of the commencement or
end
of the term, so that Tenant will only pay that portion of such
Taxes
applicable to the term, and Landlord will pay the remainder.
(D)
RIGHT TO CONTEST
TAXES. Tenant shall have the right to contest the
amount or validity, in whole or in part, of any Taxes by
appropriate
proceedings diligently conducted in good faith, only after paying
the
same or posting such security as Landlord may reasonably require
in
order to
protect the Premises against loss or forfeiture. Upon the
termination of any such proceedings, Tenant will pay the amount
of
such Taxes or part of such Taxes as finally determined to be due
and
payable, the payment of which may have been deferred during the
prosecution of such proceedings, together with any costs, fees,
interest, penalties, or other related liabilities. Landlord will
not
be required to join in any such contest or proceedings unless
the
provisions of any law or regulations then in effect require that
such
proceedings be brought by or in the name of Landlord. In that
event,
Landlord will join in such proceedings or permit them to be brought
in
its name; however, Landlord will not be subject to any liability
for
the payment of any costs or expenses in connection with any
such
contest or proceedings, and Tenant shall indemnify Landlord
against
and save Landlord harmless from any such costs and expenses.
(E)
ADDITIONAL TAXES OR
ASSESSMENTS. Should there presently be in effect
or should there be enacted during the term of this Lease, any
law,
statute or ordinance levying any assessments or any tax upon
the
Premises other than federal or state income taxes, Tenant shall
reimburse Landlord for Tenant's proportionate share of said taxes
or
assessments at the same time as rental payments.
10. SIGNAGE. Tenant
shall have the exclusive right to name the Building the "F5
Building" or such other appropriate name as Tenant may select.
Tenant shall
have
the exclusive right, at Tenant's expense, to place its corporate
logo
or
other identifying signage on the exterior of the Building, the
size,
location and design of which are depicted on Exhibit B hereto, or
as
otherwise reasonably approved by Landlord; provided, however, that
Landlord
hereby approves exterior signage consistent with the size, scope
and nature
of
that currently in place at the 401 Elliott Building. No other
sign,
picture, advertising or notice shall be displayed, inscribed,
painted or
affixed to any of the glass or exterior of the Building without the
prior
approval of Landlord, which approval shall not be unreasonably
withheld,
conditioned or delayed.
11. BUILDING PARKING
GARAGE.
(A)
GRANT OF EXCLUSIVE
RIGHT. Landlord grants to Tenant and Tenant's
customers, suppliers, employees and invitees, the exclusive right
to
use the Building Garage and the surface parking located on the
Property. The Building Garage shall contain not less than one
hundred
twenty-three (123) parking stalls, there shall be not less than
twenty-three (23) surface lot parking stalls on the Property,
and
Landlord shall provide to Tenant not less than one hundred
(100)
parking stalls at lots located within a two and one-half block
radius
of the Property (the "Off-Site Parking"). The initial charge will
be
$125.00 per month per stall for spaces within the Building Garage
and
$100.00 per month for spaces exterior to the Building Garage. In
the
event Landlord sells the Building, Landlord will no longer have
an
obligation to provide the Off-Site Parking.
(B)
CHARGES. The initial
monthly charge for the parking to be provided to
Tenant by Landlord shall be the amounts set forth in Section 1(i)
of
the Lease. Such rate shall be in
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effect upon the Commencement Date of the Lease, subject to
adjustment
during each year of the Lease term based upon comparable parking
rates
for similar Buildings in the Lower Queen Anne area (reflecting
any
applicable federal, state and local taxes and levies);
provided,
however, in no event shall the rates set forth in Section 1(i)
be
increased during the initial twelve (12) months of the Lease
term.
Tenant's monthly parking charge for all parking permits and the
charges for all validated parking, if any, shall be billed to
Tenant
and shall be due as Additional Rent within ten (10) days after
such
billing.
12. MAINTENANCE.
Landlord shall maintain and repair, in good condition, the
structural parts of the Premises and the Building, which shall
include the
foundations, bearing and exterior walls (excluding glass),
subflooring and
roof
(excluding skylights), the electrical, plumbing and sewerage
systems
outside the Building, gutters and downspouts (excluding cleaning,
which
shall be Tenant's responsibility) on the Building. Except as
provided
above, Tenant shall maintain and repair the Premises in good
condition,
including, without limitation, maintaining and repairing all
walls,
storefronts, floors, ceilings, HVAC systems, interior and exterior
doors,
exterior and interior windows and fixtures and interior plumbing.
Upon
expiration or termination of this Lease, Tenant shall surrender
the
Premises to Landlord in the same condition as existed on the
Lease
Commencement Date, except for reasonable wear and tear or damage
caused by
fire
or other casualty. Except as provided below, Tenant shall have
no
obligation to remove Tenant's Work from the Premises at the time
Tenant
surrenders possession of the Premises to Landlord.
13. ALTERATIONS.
Tenant shall have the right to make alterations or additions
to
the Premises, or construct additional improvements on the
Premises,
subject to the prior written consent of Landlord, which consent
shall not
be
unreasonably withheld, conditioned or delayed; provided, however,
that
Landlord's prior written consent will not be necessary for any
alteration,
addition, or improvement of a cosmetic and non-structural nature.
All work
shall be made with due diligence, in a good and workmanlike manner
and in
compliance with all laws, ordinances, orders, rules,
regulations,
certificates of occupancy, or other governmental requirements, and
provided
Tenant shall provide Landlord with thirty (30) days advance notice
before
commencing such work, excepting the cosmetic work. Title to all
improvements constructed or installed by Tenant shall be and remain
vested
in
Tenant during the term of this Lease. All alterations,
additions,
fixtures, and improvements, whether temporary or permanent in
character,
made
to the Premises by Tenant, will immediately vest in Landlord at
the
end
of the Term of this Lease and will remain on the Premises
without
compensation to Tenant. Notwithstanding anything to the contrary in
this
section, all equipment, shelves, bins, machinery and trade
fixtures
installed by Tenant may be removed by Tenant prior to the
termination of
this
Lease if Tenant so elects, and shall be removed by the date of
termination of this Lease or upon earlier vacating of the Premises
if
required by Landlord; upon any such removal, Tenant shall repair
the
portion of the Premises from which such equipment, shelves, bins,
machinery
or
trade fixtures were removed. Upon Lease expiration, Tenant shall,
upon
Landlord's request, remove its cabling from the Premises and the
Building.
All
such removals and restoration shall be accomplished in good
workmanlike
manner so as not to damage the primary structure or structural
qualities of
the
Buildings and other improvements situated on the Premises.
14. RELEASE AND
INDEMNITY. Either party (each as the "Indemnifying Party") will
defend, indemnify and hold harmless the other from any claim,
liability or
suit
including attorney's fees by any person, persons, and/or entity
for
any
injuries or damages occurring in or about the said Premises or on
or
about the sidewalk, stairs, or thoroughfares adjacent thereto where
said
damages or injury was caused by the negligence or intentional act
of the
Indemnifying Party, its agents, employees, servants, customers or
clients.
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15. INSURANCE.
(A)
CASUALTY INSURANCE.
Landlord shall, at Tenant's expense, obtain and
keep in force, throughout the Initial Term and any Renewal Term(s)
of
this Lease, a policy or policies of "all-risk" casualty
insurance,
insuring the Premises against loss or damage by fire or other
casualty
(including earthquake and flood), naming Tenant and such other
parties
as Landlord or Tenant may designate as additional insureds as
their
interests may appear. The amount of such insurance will be not
less
than the full replacement value of the Building. Tenant shall
be
provided with full copies of all policies as revised or
supplemented
from time to time.
(B)
GENERAL LIABILITY
INSURANCE. Landlord shall, at Tenant's expense,
obtain and keep in force during the Initial Term and all
Renewal
Term(s) of this Lease, a policy or policies of general
liability
insurance with a combined single limit of not less than $1,000,000
for
injury to or death of any one person, $100,000 for injury to or
death
of any number of persons in any one occurrence, and $100,000
for
damage to property, insuring against any and all liability of
Landlord
and Tenant including, without limitation, coverage for
contractual
liability, broad form property damage, host liquor liability,
and
non-owned automobile liability, with respect to the Premises or
arising out of the maintenance, use, or occupancy of the
Premises.
Such insurance
will be separate from any insurance which may be
carried by Tenant and will contain a provision that Tenant, as
an
additional named insured, will be entitled to recover under the
policy
for any loss, injury, or damage to Tenant, its agents, and
employees,
or the property of such persons.
(C)
PASS-THROUGH PREMIUMS.
Tenant shall be responsible for payment of all
premiums for insurance provided by Landlord under this section to
the
extent
such premiums are applicable only to the Premises, and shall
reimburse Landlord for the same within thirty (30) days after
receipt
of Landlord's invoice for the same; provided, however, that if
Tenant
can replace Landlord's insurance provided for herein at a more
economical rate to Tenant and otherwise fully consistent with
the
insurance requirements of this section, Tenant may with the
Landlord's
approval, which shall not be unreasonably withheld, delayed or
conditioned, contract directly for such insurance coverage,
with
Landlord as an additional named insured, in which case Tenant shall
no
longer be responsible for reimbursement to Landlord for the cost
of
any insurance Landlord elects to retain.
(D)
OTHER MATTERS. All
insurance required in this paragraph and all
renewals of it will be issued by companies authorized to
transact
business in the State of Washington. All insurance policies shall
be
subject to approval by Landlord and Tenant as to form and
substance,
shall expressly provide that such policies shall not be canceled
or
altered without thirty (30) days' prior written notice to Landlord
and
Tenant and shall, to the extent obtainable, provide that no act
or
omission of Tenant which would otherwise result in forfeiture
or
reduction of the insurance will affect or limit the obligation of
the
insurance company to pay the amount of any loss sustained. Upon
issuance each insurance policy, a duplicate or certificate of
such
policy shall be delivered to Landlord and Tenant. Landlord may
satisfy
its obligation under this paragraph by appropriate endorsements of
its
blanket insurance policies.
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<PAGE>
(E)
MUTUAL WAIVER.
Landlord and Tenant waive all rights to recover against
each other or against any other Tenant or occupant of the Building,
or
against the officers, directors, shareholders, partners, joint
venturers, employees, agents, customers, invitees or business
visitors
of each of theirs or of any other Tenant or occupant of the
Building,
for any loss or damage arising from any cause covered by any
insurance
required to be carried by each of them pursuant to this section or
any
other insurance actually carried by each of them to the extent
actually covered by any such insurance. Landlord and Tenant will
cause
their respective insurers to issue appropriate waiver of
subrogation
endorsements to all policies of insurance carried in connection
with
the Premises, Improvements or the contents of either of them.
Tenant
will cause all other occupants of the Premises claiming by, under,
or
through Tenant to execute and deliver to Landlord a waiver of
claims
similar to the waiver in this paragraph and to obtain such waiver
of
subrogation rights endorsements.
16. DESTRUCTION. If
during the Term, more than twenty-five percent (25%) of the
Premises are destroyed from any cause, or rendered inaccessible or
unusable
from
any cause, Landlord may, in its sole discretion, terminate this
Lease
by
delivery of notice to Tenant within thirty (30) days of such
event
without compensation to Tenant. If in Landlord's estimation, the
Premises
cannot be restored within one hundred eighty (180) days following
such
destruction, then Landlord shall notify Tenant and Tenant may
terminate
this
Lease by delivery of notice to Landlord within thirty (30) days
of
receipt of Landlord's notice. If neither Landlord nor Tenant
terminates
this
Lease as provided above, then Landlord shall commence to restore
the
Premises in compliance with then existing laws and shall complete
such
restoration with due diligence. In such event, this Lease shall
remain in
full force and effect,
but there shall be an abatement of Base Monthly Rent
and
Tenant's obligation for the payment of expenses under Section 8
above
between the date of destruction and the date of completion of
restoration,
based on the extent to which destruction interferes with Tenant's
use of
the
Premises.
17. CASUALTY;
CONDEMNATION.
(A)
CASUALTY. In the event
the leased Premises or the Building is
destroyed or injured by fire, earthquake or other casualty to
the
extent that they are no longer satisfactory for the conduct of
Tenant's business, in whole or in part, then Landlord will engage
a
registered architect to certify within sixty (60) days after
such
destruction or injury to Landlord and Tenant the amount of time
needed
to restore the Building and the Premises to substantially the
same
condition as existed immediately prior to the casualty. If the
time
needed to so restore the Building and Premises exceeds twelve
(12)
months from the date of the casualty, then either the Landlord
or
Tenant may terminate this Lease by giving the other party such
notice
of termination within thirty (30) days after the notifying
party's
receipt of the architect's certificate. If a casualty causes
damages
to the Building and this Lease is not terminated by either party
under
the provisions of this section, then Landlord shall diligently
rebuild
and restore the
Building and the Premises. Upon a casualty event, the
rent shall be abated equitably on a per diem basis for the portion
of
the Premises that is unfit for occupancy commencing upon the date
of
the casualty and ending on the completion of the repair and
restoration so as to permit Tenant's full and regular occupancy
thereof or the earlier termination of this Lease. During any period
of
abatement of rent due to casualty or destruction of the
Premises,
unless this Lease has been terminated, Landlord shall use its
best
efforts to locate comparable space for Tenant at the fair market
rate
not to exceed Tenant's rental rate hereunder. Landlord shall not
be
liable for any consequential damages by reason of inability, after
use
of its best efforts, to locate alternative space comparable to
the
Premises. Notwithstanding anything to the contrary in this
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