FIRST AMENDMENT TO LEASE

          THIS FIRST AMENDMENT TO LEASE ("Amendment") is made as of March 5,
2002, between OTR, an Ohio general partnership ("Landlord") acting as the duly
authorized nominee of the BOARD OF THE STATE TEACHERS RETIREMENT SYSTEM OF OHIO,
and BMC Industries, Inc., a Minnesota corporation ("Tenant").

          RECITALS:

A.

 

LANDLORD AND TENANT ENTERED INTO A LEASE - MERIDIAN CROSSINGS I DATED OCTOBER
29, 1997 (THE "LEASE"), FOR APPROXIMATELY 11,124 SQUARE FEET OF OFFICE SPACE
(THE "ORIGINAL PREMISES") ON THE EIGHTH FLOOR OF THE BUILDING LOCATED AT ONE
MERIDIAN CROSSINGS IN RICHFIELD, MINNESOTA (THE "BUILDING").

B.

 

TENANT WISHES TO EXPAND THE ORIGINAL PREMISES AND LANDLORD IS WILLING TO
ACCOMMODATE THE SAME ON THE TERMS CONTAINED HEREIN

AGREEMENT:

For good and valuable consideration, the receipt and sufficiency of which is
acknowledged by the parties hereto, Landlord and Tenant agree as follows:

1.

 

CAPITALIZED TERMS.  CAPITALIZED TERMS NOT DEFINED HEREIN WILL HAVE THE MEANINGS
GIVEN TO THE SAME IN THE LEASE.  

2.

 

PREMISES EXPANSION.  ON OR PRIOR TO APRIL 1, 2002 (THE "COMMENCEMENT DATE"), (A)
APPROXIMATELY 2,689 RENTABLE SQUARE FEET OF SPACE ON THE EIGHTH FLOOR OF THE
BUILDING IMMEDIATELY ADJACENT TO THE ORIGINAL PREMISES AS DEPICTED ON EXHIBIT A
ATTACHED HERETO (THE "NEW PREMISES"), WILL BE ADDED TO THE ORIGINAL PREMISES,
AND (B) FROM AND AFTER THE COMMENCEMENT DATE, THE TERM "PREMISES" AS USED IN THE
LEASE WILL INCLUDE THE ORIGINAL PREMISES AND THE NEW PREMISES AND WILL CONSIST
OF APPROXIMATELY 13,813 RENTABLE SQUARE FEET OF OFFICE SPACE.  IF LANDLORD
CANNOT DELIVER POSSESSION OF THE NEW PREMISES TO TENANT ON OR BEFORE APRIL 1,
2002, FOR ANY REASON, LANDLORD WILL NOT BE SUBJECT TO ANY LIABILITY FOR FAILURE
TO GIVE POSSESSION.  UNDER SUCH CIRCUMSTANCES, RENT FOR THE NEW PREMISES
RESERVED AND COVENANTED TO BE PAID AS STATED HEREIN WILL NOT COMMENCE UNTIL THE
NEW PREMISES IS AVAILABLE FOR OCCUPANCY, AND NO SUCH FAILURE TO GIVE POSSESSION
ON OR BEFORE SUCH DATE WILL AFFECT THE VALIDITY OF THE LEASE OR THE OBLIGATIONS
OF TENANT THEREUNDER, NOR SHALL THE SAME BE CONSTRUED TO EXTEND THE TERM. 
NOTWITHSTANDING THE FOREGOING, IF LANDLORD IS UNABLE TO DELIVER THE NEW PREMISES
TO TENANT PRIOR TO JUNE 1, 2002, TENANT MAY TERMINATE THIS AMENDMENT BY GIVING
WRITTEN NOTICE OF THE SAME TO LANDLORD ON OR PRIOR TO JUNE 3, 2002, AND, UPON
SUCH NOTIFICATION, THIS AMENDMENT WILL AUTOMATICALLY TERMINATE.

3.

 

Term.  The Term is hereby extended to run through and including March 31, 2006. 

4.

 

Base Rent.  Commencing on the date that the New Premises is delivered to Tenant
by Landlord, Base Rent for the Premises will be as follows:

 

LEASE MONTH

MONTHLY BASE

RENT

BASE RENT PER SQ. FT.

OF RENTABLE AREA

 

Delivery of New Premises to Tenant - 3/31/04

$17,266.25

$15.00

 

4/1/04 - 3/31/05

$18,705.10

$16.25

 

4/1/05 - 3/31/06

$19,280.65

$16.75

 

5.

 

Building.  The number of rentable square feet in the Building as stated in
Section (b) of the Data Sheet of the Lease is amended to be 186,307.

6.

 

Tenant's Percentage.  The term "Tenant's Percentage" as defined in Section (j)
of the Data Sheet of the Lease is amended to be 7.414%.

7.

 

Improvements.  Landlord will, at Landlord's sole expense and prior to delivery
of the New Premises to Tenant, construct (A) a demising wall separating the New
Premises from the space currently leased and occupied by Solonis, Inc., and (B)
an exit corridor extension for the New Premises, each of which will include all
taping, sanding and painting by Landlord.  The parties hereto acknowledge that
Landlord will employ MP Johnson to perform the foregoing work and that Tenant
will also use MP Johnson to perform additional tenant improvements
simultaneously with the performance of Landlord's work in the New Premises.  In
addition to the foregoing, upon delivery of the New Premises to Tenant by
Landlord, Landlord will provide Tenant with the sum of $27,626 (the "Allowance")
to be used by Tenant toward the cost of installing improvements in the Premises
(the "Improvements").  All Improvements will be constructed, installed and
completed in accordance with Article VIII of the Lease.  If the actual cost of
the Improvements is less than the Allowance, Landlord will have no claim to the
unused portion of the Allowance.  

8.

 

Signage.  Tenant may, at Tenant's sole expense, install Tenant's name and logo
on the monument sign for the Building.   The design and size of such sign must
be approved in writing by Landlord prior to installation of the same, which
approval will not be unreasonably withheld.

9.

 

Notice Address.  The notice address for Landlord in Section (l) of the Data
Sheet of the Lease is changed to the following:

               

 

 

Escom Properties, Inc.

 

 

10200 73rd Avenue North

 

 

Suite 102

 

 

Maple Grove, Minnesota 55369

 

 

Attention:  Ernest E. Swanson

 

 

 

With a copy to:

 

c/o OTR

 

 

275 East Broad Street

 

 

Columbus, Ohio 43215

 

 

Attention: Real Estate Manager

 

 

 

               

10.

 

Deleted Provisions.  Articles XXV (Termination Option), XXVI (Tenant Improvement
Allowance and Tenant Work), XXIX (Initial Expansion Right), and XXI (Additional
Space), each in the Rider to the Lease, are hereby deleted.

11.

 

Expansion Option.  Tenant is granted the right to expand its Premises by leasing
up to 3,000 contiguous, rentable square feet of space on the eighth floor of the
Building (the "Expansion Space") currently leased and occupied by  Solonis,
Inc.  upon vacation of said space by Solonis, Inc.  Any portion of the Expansion
Space desired by Tenant must be contiguous and adjacent to the Premises.  To
exercise this expansion right, Tenant must give Landlord written notice of its
desire to occupy all or any portion of the Expansion Space by November 1, 2002. 
Tenant's lease of the Expansion Space will be on the same terms, covenants and
conditions provided in the Lease except that Base Rent for the space added by
Tenant will be equal to 95% of the monthly base rent which would then be charged
by Landlord for the expansion space considering the condition of such space and
based on rates then being charged by Landlord for comparable space in the
Building.  No provisions of this Lease relating to free rent, leasehold
improvements, allowances, or other incentives or concessions, if any, will apply
to the expansion space unless hereafter agreed upon between the parties in
writing.  If Tenant timely exercises its right to expand pursuant to this
section, Landlord will deliver to Tenant an amendment to this Lease adding the
additional space to the Premises.  If  Tenant fails to timely exercise its
expansion right hereunder, or if Tenant fails to execute and deliver the lease
amendment to Landlord within 5 business days after delivery to Tenant of the
same (reflecting the terms agreed upon herein), then Landlord may lease all or
any portion of the Expansion Space to one or more third parties and the
expansion option granted hereby will terminate.

12.

 

Brokers.  Tenant represents that Tenant has directly dealt with and only with CB
Richard Ellis, who represented Landlord (whose commission, if any, shall be paid
by Landlord pursuant to separate agreement), and the Keewaydin Group, Inc., who
represented Tenant (whose commission, if any, will be paid by CB Richard Ellis
via separate agreement), as the brokers in connection with this Amendment and
Tenant will indemnify and hold Landlord harmless from all damages, liability and
expense (including reasonable attorneys' fees) arising from any claims or
demands of any other broker or brokers or finders for any commission alleged to
be due such broker or brokers or finders in connection with its participating in
the negotiation with Tenant of this Amendment.

13.

 

Contingency.  The terms of this Amendment are contingent upon Landlord entering
into a lease  amendment with Solonis, Inc. whereby said tenant will surrender
the New Premises to Landlord.  If such an amendment cannot be obtained on or
prior to March 8, 2002 (the "Contingency Date"), then either party hereto may
terminate this Amendment by written notice given to the other party within 2
business days after the Contingency Date.

14.

 

Ratification.  Except as specifically amended hereby, the Lease remains in full
force and effect.  If any conflict arises between the terms of the Lease and
this Amendment, the terms of this Amendment shall control.

        EXECUTION:

 

LANDLORD:

 

OTR, an Ohio general partnership, acting as the duly authorized nominee of the
BOARD OF THE STATE TEACHERS RETIREMENT SYSTEM OF OHIO

 

 

 

 

 

By:        /s/Alan E. Muench               

 

Its:   Director, Midwestern Region         

 

 

 

TENANT:

 

BMC INDUSTRIES, INC.

 

By:  /s/Bradley D. Carlson           

                                                                                               

Its:   Treasurer

 

EXHIBIT A

Depiction of New Premises