EXHIBIT 10.12.1
FIRST AMENDMENT TO LEASE
This First Amendment to Lease, dated as of December 20, 1996 (First Amendment),
between Xxxx Companies US, Inc., (Landlord) and Recovery Engineering, Inc., a
Minnesota Corporation (Tenant).
WITNESSETH, that:
WHEREAS, Landlord and Tenant have entered into a Lease dated November 8,
1996 (Lease), for approximately 97,284 square feet of area, whereby Landlord has
leased to Tenant certain premises located in the City of Xxxxxxxx Xxxx, Xxxxxx
xx Xxxxxxxx, Xxxxx xx Xxxxxxxxx, consisting of the Lease Property, as such
Leased Property is defined in the Lease; and
NOW, THEREFORE, Landlord and Tenant desire and intend hereby to amend the
Lease as specifically hereinafter set forth and provided:
1. SECTION 1.3., PARAGRAPH 5 IS HEREBY DELETED AND REPLACED WITH: FOR THE
PERIOD FROM THE COMMENCEMENT OF THE LEASE THROUGH AUGUST 31, 1999, THE
INTEREST CHARGED ON THE LAND SHALL BE 7.75% PER ANNUM. COMMENCING
SEPTMBER 1, 1999, THE INTEREST CHARGED ON THE LAND OPTION AREA SHALL
BE EQUAL TO LANDLORD'S COST OF BORROWING . ANY CHANGES OR ADJUSTMENTS
TO THE ANNUAL CARRY COSTS OR LAND OPTION AREA DURING THE YEAR SHALL BE
RECALCULATED AND ADJUSTED ON EACH ANNIVERSARY OF THE LAND OPTION.
2. SECTION 6 IS HEREBY DELETED AND REPLACED WITH: TENANT AT ITS EXPENSE
WILL KEEP THE PROPERTY AND THE ADJOINING SIDEWALKS, CURBS, AND ALL
MEANS OF ACCESS TO THE PROPERTY IN GOOD AND CLEAN ORDER AND CONDITION,
SUBJECT TO ORDINARY WEAR AND TEAR, AND WILL PROMPTLY, AT ITS OWN
EXPENSE, MAKE ALL NECESSARY OR APPROPRIATE REPAIRS, REPLACEMENTS AND
RENEWALS THEREOF, WHETHER INTERIOR OR EXTERIOR, ORDINARY OR
EXTRAORDINARY, FORESEEN OR UNFORESEEN. ALL REPAIRS, REPLACEMENTS AND
RENEWALS SHALL BE AT LEAST EQUAL IN QUALITY, UTILITY AND CLASS TO THE
ORIGINAL CONDITION OF THE PROPERTY. WHENEVER PRACTICAL, TENANT SHALL
USE CONTRACTORS WHO ARE SIGNATORIES TO THE LOCAL AFL-CIO BUILDING
TRADES COUNCIL AGREEMENT. EXCEPT AS SET FORTH IN SECTION 24(g), TENANT
WAIVES ANY RIGHT CREATED BY ANY LAW NOW OR HEREAFTER IN FORCE TO MAKE
REPAIRS TO THE PROPERTY AT LANDLORD'S EXPENSE. LANDLORD SHALL HAVE NO
OBLIGATION TO REPAIR, REBUILD OR MAINTAIN THE PROPERTY, EXCEPT AS SET
FORTH BELOW.
3. SECTION 17.1 IS HEREBY DELETED AND REPLACED WITH: RISKS TO BE INSURED.
TENANT, AT ITS EXPENSE, WILL MAINTAIN WITH INSURERS AUTHORIZED TO
ISSUE INSURANCE IN THE STATE OF MINNESOTA AND HAVING AN A.M. BEST
RATING OF "A-VIII" OR BETTER OR OTHERWISE APPROVED BY LANDLORD AND ANY
MORTGAGEE (a) INSURANCE WITH RESPECT TO THE IMPROVEMENTS AGAINST LOSS
OR DAMAGE BY FIRE, LIGHTNING AND OTHER RISKS FROM TIME TO TIME
INCLUDED UNDER "ALL-RISK" POLICIES AND AGAINST LOSS OR DAMAGE BY
SPRINKLER LEAKAGE, WATER DAMAGE, COLLAPSE, VANDALISM AND MALICIOUS
MISCHIEF, IN AMOUNTS SUFFICIENT TO PREVENT LANDLORD AND TENANT FROM
BECOMING CO-INSURERS OF ANY LOSS UNDER THE APPLICABLE POLICIES, AND IN
ANY EVENT IN AMOUNTS NOT LESS THAN 100% OF THE ACTUAL REPLACEMENT COST
OF THE IMPROVEMENTS (INITIALLY DETERMINED AS OF THE DATE ON WHICH SUCH
INSURANCE IS ORIGINALLY ISSUED, AND SUBSEQUENTLY RE-DETERMINED ON THE
BASIS ON AN ANNUAL REVIEW OF THE ACTUAL REPLACEMENT COST OF THE
IMPROVEMENT), AS DETERMINED AT THE REQUEST OF LANDLORD (SUCH INSURANCE
SHALL ALSO INCLUDE AT LEAST NINE (9) MONTHS RENTAL LOSS COVERAGE), (b)
COMPREHENSIVE GENERAL LIABILITY INSURANCE AGAINST CLAIMS ARISING OUT
OF OR CONNECTED WITH THE POSSESSION, USE, LEASING, OPERATION OR
CONDITION OF THE PROPERTY IN SUCH AMOUNTS AS ARE USUALLY CARRIED BY
PERSONS OPERATING SIMILAR PROPERTIES IN THE SAME GENERAL LOCALITY BUT
IN ANY EVENT WITH A COMBINED SINGLE LIMIT OF NOT LESS THAN $3,000,000
FOR ALL CLAIMS WITH RESPECT TO PROPERTY DAMAGE AND PERSONAL INJURY AND
DEATH WITH RESPECT TO ANY ONE OCCURRENCE, (c) EXPLOSION INSURANCE
IN RESPECT OF ANY STEAM AND PRESSURE BOILERS AND SIMILAR APPARATUS
LOCATED ON THE PROPERTY IN AMOUNTS NOT LESS THAN THOSE REQUIRED BY
SUBDIVISION (b) ABOVE, (d) IN THE EVENT THAT THE PROPERTY SHALL AT ANY
TIME BE USED AS ANYTHING OTHER THAN FOR OFFICE AND WAREHOUSE PURPOSES
AND MANUFACTURING PURPOSES OF A NATURE CONSISTENT WITH TENANT'S
CURRENT BUSINESS, SUCH OTHER INSURANCE AGAINST SUCH RISKS AND IN SUCH
AMOUNTS AS IS CUSTOMARY AND AS LANDLORD SHALL REASONABLY REQUEST. IN
ADDITION, DURING ANY PERIOD OF REPAIR, ALTERATION OR ADDITION TO THE
PROPERTY, TENANT SHALL OBTAIN AND KEEP IN EFFECT BUILDER'S RISK
INSURANCE IN SUCH AMOUNTS AS LANDLORD SHALL REASONABLY REQUEST. TENANT
MAY EFFECT ANY INSURANCE NOT REQUIRED BY THIS LEASE, BUT ANY SUCH
INSURANCE EFFECTED BY TENANT ON THE PROPERTY SHALL BE FOR THE BENEFIT
OF LANDLORD, TENANT AND ANY MORTGAGEE, AS THEIR INTERESTS MAY APPEAR,
AND SHALL BE SUBJECT TO ALL OF THE PROVISIONS OF SECTION 17.2 HEREOF.
THE INSURANCE REQUIRED UNDER THIS SECTION 17.1 MAY BE SUBJECT TO A
DEDUCTIBLE IN AN AMOUNT NOT EXCEEDING $10,000.00 AND MAY BE EFFECTED
UNDER A BLANKET POLICY OR POLICIES COVERING THE PROPERTY AND OTHER
PROPERTY AND ASSETS NOT CONSTITUTING PART OF THE PROPERTY; PROVIDED,
HOWEVER, THAT ANY SUCH POLICY SHALL SPECIFY THE PORTION OF THE TOTAL
COVERAGE OF SUCH POLICY OR POLICIES THAT IS ALLOCATED TO THE PROPERTY
AND SHALL, IN ALL OTHER RESPECTS, COMPLY WITH THE REQUIREMENTS OF THIS
SECTION 17.
4. SECTION 18 IS HEREBY DELETED AND REPLACED WITH: HAZARDOUS SUBSTANCES
OR MATERIALS. TENANT SHALL NOT (EITHER WITH OR WITHOUT NEGLIGENCE)
CAUSE OR PERMIT THE ESCAPE, DISPOSAL OR RELEASE OF ANY BIOLOGICALLY OR
CHEMICALLY ACTIVE OR OTHER HAZARDOUS SUBSTANCES OR MATERIALS. TENANT
SHALL NOT ALLOW THE STORAGE OR USE OF SUCH HAZARDOUS SUBSTANCES OR
MATERIALS IN ANY MANNER NOT SANCTIONED BY LAW OR BY THE HIGHEST
STANDARDS PREVAILING IN THE INDUSTRY FOR THE STORAGE AND USE OF SUCH
HAZARDOUS SUBSTANCES OR MATERIALS, NOR ALLOW TO BE BROUGHT INTO THE
PROPERTY ANY SUCH HAZARDOUS SUBSTANCES OR MATERIALS EXCEPT TO USE IN
THE ORDINARY COURSE OF TENANT'S BUSINESS. WITHOUT LIMITATION,
HAZARDOUS SUBSTANCES OR MATERIALS SHALL INCLUDE THOSE DESCRIBED IN THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT
OF 1980, AS AMENDED, 42 U.S.C. SECTION 9601 ET SEQ., THE RESOURCE
CONSERVATION AND RECOVERY ACT, AS AMENDED, 42 U.S.C. SECTION 6901 ET
SEQ., ANY APPLICABLE STATE OR LOCAL LAWS AND THE REGULATIONS ADOPTED
UNDER THESE ACTS. IF ANY LENDER OR GOVERNMENTAL AGENCY SHALL EVER
REQUIRE TESTING TO ASCERTAIN WHETHER OR NOT THERE HAS BEEN ANY RELEASE
OF HAZARDOUS SUBSTANCES OR MATERIALS, THEN THE REASONABLE COSTS
THEREOF SHALL BE REIMBURSED BY TENANT TO LANDLORD UPON DEMAND AS
ADDITIONAL CHARGES IF SUCH REQUIREMENT APPLIES TO THE PROPERTY AND
ONLY IF AND TO THE EXTENT LANDLORD HAS A REASONABLE BASIS TO BELIEVE
THAT A MATERIAL RELEASE HAS OCCURRED ON OR ABOUT THE PROPERTY IN
VIOLATION OF ENVIRONMENTAL LAWS WHICH HAS NOT BEEN REPORTED BY TENANT
TO THE MINNESOTA POLLUTION CONTROL AGENCY (THE "MPCA"). IN ANY EVENT,
LANDLORD SHALL GIVE TENANT AT LEAST FIFTEEN (15) DAYS PRIOR WRITTEN
NOTICE OF ITS INTENT TO CONDUCT SUCH TESTING, IDENTIFYING THE
SUSPECTED RELEASE. IF TENANT REPORTS THE SUSPECTED RELEASE IN WRITING
TO THE MPCA DURING SUCH FIFTEEN (15) DAY PERIOD, TENANT SHALL NOT BE
RESPONSIBLE FOR THE COST OF TESTS UNDERTAKEN BY LANDLORD RELATING
THERETO. IN ADDITION, TENANT SHALL EXECUTE AFFIDAVITS, REPRESENTATIONS
AND THE LIKE FROM TIME TO TIME AT LANDLORD'S REQUEST CONCERNING
TENANT'S BEST KNOWLEDGE AND BELIEF REGARDING THE PRESENCE OF HAZARDOUS
SUBSTANCES OR MATERIALS ON THE PROPERTY. IN ALL EVENTS, TENANT SHALL
INDEMNIFY LANDLORD IN THE MANNER ELSEWHERE PROVIDED IN THIS LEASE FROM
ANY RELEASE OF HAZARDOUS SUBSTANCES OR MATERIALS ON THE PROPERTY
OCCURRING WHILE TENANT IS IN POSSESSION, OR ELSEWHERE IF CAUSED BY
TENANT OR PERSONS ACTING UNDER TENANT. THE WITHIN COVENANTS SHALL
SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THE LEASE TERM.
LANDLORD WARRANTS THAT, TO THE BEST OF ITS KNOWLEDGE THE PROPERTY IS,
AS OF THE DATE OF THIS LEASE, FREE OF HAZARDOUS SUBSTANCES OR
MATERIALS. LANDLORD SHALL INDEMNIFY TENANT FROM ANY AND ALL DAMAGES,
LIABILITIES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION
REASONABLE ATTORNEY'S FEES), PAID OR INCURRED BY TENANT AS A RESULT OF
THE RELEASE OF HAZARDOUS SUBSTANCES OR MATERIALS ON THE PROPERTY
OCCURRING PRIOR TO TENANT'S POSSESSION.
EXCEPT as expressly amended or supplemented herein, the Lease as amended
shall remain and continue in full force and effect in all respects.
IN WITNESS WHEREOF, the Lease Amendment is hereby executed and delivered
effective as of the date and year first above written.
LANDLORD: XXXX COMPANIES US, INC.
BY: /s/ XXXX X. XXXXX, XX.
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Its: V. Pres.
TENANT: RECOVERY ENGINEERING, INC.
BY: /s/ XXXXXXX X. XXXXXXXXX
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Its: VP/CFO
