Exhibit 10.12

 

PHG/CWP/JBB/kt

01/18/08

 

FIRST LEASE AMENDMENT

 

THIS FIRST LEASE AMENDMENT (the “First Amendment”) is executed this 25th day of
January, 2008, and effective October 1, 2007, by and between DUGAN REALTY,
L.L.C., an Indiana limited liability company (“Landlord”), and GAIAM, INC., a
Colorado corporation (“Tenant”).

 

W I T N E S S E T H :

 

WHEREAS, Landlord and Tenant entered into a certain lease dated October 5, 2005
(the “Lease”), whereby Tenant leases from Landlord certain premises consisting
of approximately 147,000 square feet of space (the “Current Premises”) in a
building commonly known as Building 7 (the “Building”), located at 5455 West
Chester Road, West Chester, Ohio 45069, in World Park at Union Centre (the
“Park”); and

 

WHEREAS, the Lease Term expired September 30, 2007; and

 

WHEREAS, Tenant has continuously remained in the Current Premises and has
continued to pay rent therefor during such period of holdover; and

 

WHEREAS, Landlord and Tenant desire to extend the Lease Term; and

 

WHEREAS, Landlord and Tenant desire to reduce the Current Premises by
approximately 73,250 square feet (the “Relinquished Space”); and

 

WHEREAS, Landlord and Tenant desire to amend certain provisions of the Lease to
reflect such extension, reduction and other changes to the Lease;

 

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
herein contained and each act performed hereunder by the parties, Landlord and
Tenant hereby agree that the Lease is amended as follows:

 

1.                                      Incorporation of Recitals. The above
recitals are hereby incorporated into this First Amendment as if fully set forth
herein.

 

2.                                      Extension of Lease Term. The Lease Term
is hereby extended through June 30, 2010.

 

3.                                      Amendment of Section 1.01. Basic Lease
Provisions and Definitions.

 

(a)                                   Commencing October 1, 2007, Section 1.01
of the Lease is hereby amended by deleting subsections D, E, G and K and
substituting the following in lieu thereof:

 

“D.                              Minimum Annual Rent:

 

October 1, 2007 – February 29, 2008

 

$219,734.40 per year.

 

E.                                      Monthly Rental Installments:

 

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October 1, 2007 – February 29, 2008

 

$ 43,946.88 per month.

 

G.                                     Lease Term: extended through June 30,
2010.

 

K.                                    Brokers: Duke Realty Services, LLC
representing Tenant, and Colliers Turley Martin Tucker representing Tenant.

 

(b)                                 Provided Tenant has surrendered the
Relinquished Space in accordance with Paragraph 8 of this First Amendment,
commencing March 1, 2008, Section 1.01 of the Lease is further amended by
incorporating Exhibit A-1, attached hereto and incorporated herein by reference,
on which the Current Premises less the Relinquished Space is depicted, in lieu
of Exhibit A to the Lease which is hereby deleted. Hereinafter, the Current
Premises less the Relinquished Space shall be referred to as the “Leased
Premises”.

 

(c)                                  Provided Tenant has surrendered the
Relinquished Space in accordance with Paragraph 8 of this First Amendment,
commencing March 1, 2008, Section 1.01 of the Lease is further amended by
deleting subsections A, B, C, D and E and substituting the following in lieu
thereof:

 

“A.                             Leased Premises (shown on Exhibit A-1 attached
hereto): 5455 West Chester Road, West Chester, Ohio 46069; Building No. 7 (the
“Building”); located in World Park at Union Centre (the “Park”);

 

B.                                     Rentable Area: 73,750 square feet;

 

C.                                     Tenant’s Proportionate Share: 50.17%;

 

D.                                    Minimum Annual Rent:

 

March 1, 2008 – February 28, 2009

 

$272,874.96 per year

March 1, 2009 - February 28, 2010

 

$278,037.48 per year

March 1, 2010 – June 30, 2010

 

$ 94,645.84 (4 months);

 

E.                                     Monthly Rental Installments:

 

March 1, 2008 – February 28, 2009

 

$ 22,739.58 per month

March 1, 2009 - February 28, 2010

 

$ 23,169.79 per month

March 1, 2010 – June 30, 2010

 

$ 23,661.46 per month;”

 

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4.                                      Amendment of Section 2.02. Construction
of Tenant Improvements. Section 2.02 of the Lease is hereby amended by
incorporating the following:

 

“Tenant is presently in possession of the Leased Premises, has inspected same,
and accepts the same “AS IS” without representation or warranty by Landlord of
any kind and with the understanding that Landlord shall have no responsibility
with respect thereto. Tenant acknowledges that the Tenant Improvements in
Exhibit B of the Lease have been completed in a satisfactory manner.
Notwithstanding the foregoing, in the event Landlord leases the Relinquished
Space, or any portion thereof, to a third party, Landlord shall, at its sole
cost and expense, demise the Current Premises and Relinquished Space.”

 

5.                                      Amendment of Section 9.02. Tenant’s
Insurance. Section 9.02 of the Lease is hereby amended as follows:

 

(a)                                   Subparagraph B. of Section 9.02 of the
Lease is hereby deleted in its entirety and the following shall be substituted
in lieu thereof:

 

“B.                              Commercial General Liability Insurance (which
insurance shall not exclude blanket, contractual liability, broad form property
damage, personal injury, or fire damage coverage) covering the Leased Premises
and Tenant’s use thereof against claims for bodily injury or death and property
damage, which insurance shall provide coverage on an occurrence basis with a per
occurrence limit of not less than $11,000,000 for each policy year, which limits
may be satisfied by any combination of primary and excess or umbrella per
occurrence policies.”

 

(b)                                  Subparagraph D. of Section 9.02 of the
Lease is hereby amended by adding the following: “with limits of not less than
an amount equal to two (2) years rent hereunder.”

 

(c)                                   The last paragraph of Section 9.02 of the
Lease is hereby deleted in its entirety and the following shall be substituted
in lieu thereof:

 

“All insurance required by Tenant hereunder shall (i) be issued by one or more
insurance companies reasonably acceptable to Landlord, licensed to do business
in the State in which the Leased Premises is located and having an AM Best’s
rating of A IX or better, and (ii) provide that said insurance shall not be
materially changed, canceled or permitted to lapse on less than thirty (30)
days’ prior written notice to Landlord. In addition, Tenant’s insurance shall
protect Tenant and Landlord as their interests may appear, naming Landlord,
Landlord’s managing agent, and any mortgagee requested by Landlord, as
additional insureds under its commercial general liability policies. On or
before November 1, 2007, and thereafter, within thirty (30) days prior to the
expiration of each such policy, Tenant shall furnish Landlord with certificates
of insurance in the form of ACORD 25 or ACORD 25-S (or other evidence of
insurance reasonably acceptable to Landlord), evidencing all required coverages,
together with a copy of the endorsements to Tenant’s commercial general
liability policies evidencing primary and non-contributory coverage afforded to
the appropriate additional insureds. Upon Tenant’s receipt of a request from
Landlord, Tenant shall provide Landlord with copies of all insurance policies,
including all endorsements, evidencing the coverages required hereunder. If
Tenant fails to carry such insurance and furnish Landlord with such

 

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certificates of insurance or copies of insurance policies (if applicable),
Landlord may obtain such insurance on Tenant’s behalf and Tenant shall reimburse
Landlord upon demand for the cost thereof as Additional Rent. Landlord reserves
the right from time to time to require Tenant to obtain higher minimum amounts
or different types of insurance if it becomes customary for other landlords of
similar buildings in the area to require similar sized tenants in similar
industries to carry insurance of such higher minimum amounts or of such
different types.”

 

6.                                       Incorporation of Section 16.14. The
following is hereby incorporated as Section 16.14 of the Lease:

 

“Section 16.14. Patriot Act. Each of Landlord and Tenant, each as to itself,
hereby represents its compliance with all applicable anti-money laundering laws,
including, without limitation, the USA Patriot Act, and the laws administered by
the United States Treasury Department’s Office of Foreign Assets Control,
including, without limitation, Executive Order 13224 (“Executive Order”). Each
of Landlord and Tenant further represents (i) that it is not, and it is not
owned or controlled directly or indirectly by any person or entity, on the SDN
List published by the United States Treasury Department’s Office of Foreign
Assets Control and (ii) that it is not a person otherwise identified by
government or legal authority as a person with whom a U.S. Person is prohibited
from transacting business. As of the date hereof, a list of such designations
and the text of the Executive Order are published under the internet website
address www.ustreas.gov/offices/enforcement/ofac.”

 

7.                                       Incorporation of Section 16.15. Option
to Extend. The following is hereby incorporated as Section 16.15 of the Lease:

 

“Section 16.15. Option to Extend.

 

(a)                                     Grant and Exercise of Option. Provided
that (i) no default has occurred and is then continuing, (ii) the
creditworthiness of Tenant is then reasonably acceptable to Landlord and
(iii) Tenant originally named herein or its Permitted Transferee remains in
possession of and has been continuously operating in the entire Leased Premises
throughout the Lease Term, Tenant shall have one (1) option to extend the Lease
Term for one (1) additional period of eight (8) months (the “Extension Term”).
The Extension Term shall be upon the same terms and conditions contained in the
Lease except (x) Tenant shall not have any further option to extend, (y) any
improvement allowances or other concessions applicable to the Leased Premises
under the Lease shall not apply to the Extension Term, and (z) the Minimum
Annual Rent shall be adjusted as set forth herein (“Rent Adjustment”). Tenant
shall exercise such option by delivering to Landlord, no later than six
(6) months prior to the expiration of the current Lease Term, written notice of
Tenant’s desire to extend the Lease Term. Tenant’s failure to properly exercise
such option shall be deemed a waiver of such option. If Tenant properly
exercises its option to extend, Landlord shall notify Tenant of the Rent
Adjustment no later than ninety (90) days prior to the commencement of the
Extension Term. Tenant shall be deemed to have accepted the Rent Adjustment if
it fails to deliver to Landlord a written objection thereto within five
(5) business days after receipt thereof. If Tenant properly exercises its option
to extend, Landlord and Tenant shall execute an amendment to the Lease (or, at
Landlord’s option, a new lease on the form then in use for the

 

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Building) reflecting the terms and conditions of the Extension Term within
thirty (30) days after Tenant’s acceptance (or deemed acceptance) of the Rent
Adjustment.

 

(b)                                 Rent Adjustment. The Minimum Annual Rent for
the Extension Term shall be an amount equal to the Minimum Annual Rent then
being quoted by Landlord to prospective renewing tenants of the Building for
space of comparable size and quality and with similar or equivalent improvements
as are found in the Building, and if none, then in similar buildings in the
vicinity; provided, however, that in no event shall the Minimum Annual Rent
during the Extension Term be less than the highest Minimum Annual Rent payable
during the immediately preceding term. The Monthly Rental Installments shall be
an amount equal to one-twelfth (1/12) of the Minimum Annual Rent for the
Extension Term and shall be paid at the same time and in the same manner as
provided in the Lease.”

 

8.                                      Incorporation of Section 16.16. Right of
First Refusal. The following is hereby incorporated as Section 16.16 of the
Lease:

 

“Section 16.16. Right of First Refusal.

 

(a)                                  Provided that (i) no default has occurred
and is then continuing, (ii) the creditworthiness of Tenant is then reasonably
acceptable to Landlord, and (iii) Tenant originally named herein or a Permitted
Transferee remains in possession of and has been continuously operating in the
entire Leased Premises throughout the Lease Term, and subject to any rights of
other tenants to the Refusal Space (as defined herein) and Landlord’s right to
renew or extend the lease term of any other tenant with respect to the portion
of the Refusal Space now or hereafter leased by such other tenant, Tenant shall
have a on-going right of first refusal (“Refusal Option”) to lease additional
space in the Building located contiguous to the Leased Premises as shown
crosshatched on the attached Exhibit G (“Refusal Space”). Prior to entering into
any lease that includes all or any portion of the Refusal Space, Landlord shall
notify Tenant in writing (“Landlord’s Notice”) of Landlord’s receipt of an
arms-length offer to lease such space that Landlord is willing to accept from a
bona fide third party offeror (“Bona Fide Offer”) and setting forth the material
terms of the Bona Fide Offer and such other terms as are herein provided. If the
Bona Fide Offer includes space in the Building in addition to the Refusal Space,
then the Refusal Space shall be deemed to include, and this Refusal Option shall
be deemed to apply to, all of the space included in the Bona Fide Offer. Tenant
shall have five (5) days after Tenant receives Landlord’s Notice in which to
notify Landlord in writing of its election to lease the Refusal Space upon the
terms set forth in Landlord’s Notice. If Tenant declines to exercise this
Refusal Option or fails to give such written notice within the time period
required, Tenant shall be deemed to have waived this Refusal Option, and
thereafter this Refusal Option shall be void and of no further force or effect,
and Landlord shall be free to lease the Refusal Space to the bona fide offeror
or any other third party. The Refusal Space shall be offered to Tenant at the
rental rate and upon such other terms and conditions as are set forth in the
Bona Fide Offer and herein.

 

(b)                                 If Tenant shall exercise the Refusal Option,
the parties shall enter into an amendment to this Lease adding the Refusal Space
to the Leased Premises upon the terms and conditions set forth herein and making
such other modifications to this Lease

 

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as are appropriate under the circumstances. If Tenant shall fail to enter into
such amendment within ten (10) days following Tenant’s exercise of the Refusal
Option, then Landlord may terminate this Refusal Option, by notifying Tenant in
writing, in which event this Refusal Option shall become void and of no further
force or effect, and Landlord shall thereafter be free to lease the Refusal
Space to the bona fide offeror or any other third party.

 

9.                                     Incorporation of Section 16.17. Option to
Expand. The following is hereby incorporated as Section 16.17 of the Lease:

 

“Section 16.17. Option to Expand. Any time during the Lease Term and provided
that (i) no default has occurred and is then continuing, (ii) the
creditworthiness of Tenant is then reasonably acceptable to Landlord, and
(iii) Tenant originally named herein or its Permitted Transferee remains in
possession of and has been continuously operating in the entire Leased Premises
throughout the Lease Term, subject to any rights of other tenants to the
Expansion Space (as defined herein) and Landlord’s right to renew or extend the
lease term of any other tenant with respect to the portion of the Expansion
Space now or hereafter leased by such other tenant, Tenant shall have the right
to expand the Leased Premises to include all or a portion of the Relinquished
Space (the “Expansion Space”).  In the event Tenant elects to exercise its
expansion option, Tenant hereby agrees that Tenant shall provide Landlord with
written notice of its desire to expand, and Tenant may, at its election, extend
the Lease Term for the existing Leased Premises to be coterminous with the term
for the Expansion Space and the Minimum Annual Rent for such extension term
shall be an amount equal to the Minimum Annual Rent then being quoted by
Landlord to prospective renewal tenants of the Building for space of comparable
size and quality and with similar or equivalent improvements as are found in the
Building, and if none, then in similar buildings in the Park; provided, however,
that in no event shall the Minimum Annual Rent during such extension term be
less than the highest Minimum Annual Rent payable during the immediately
preceding term. If such extension is at least twenty-eight (28) months then
(i) the lease term of Tenant’s lease with Landlord’s affiliate, Dugan Financing
LLC at Building 8 in the Park shall also be extended to be coterminous with the
Lease Term, and (ii) Landlord shall provide Tenant with a tenant improvement
allowance of up to Thirty Thousand Dollars ($30,000.00) to be used toward
improvements for the Leased Premises, as expanded; provided, however, if Tenant
elects not to extend the Lease Term for the existing Leased Premises or elects
to extend the Lease Term and such extension is for less than twenty-eight (28)
months, the per square foot rate for the Leased Premises shall be Three and
50/100 Dollars ($3.50) per square foot.

 

10.                               Surrender of Relinquished Space. Tenant hereby
agrees to surrender the Relinquished Space to Landlord on or before March 1,
2008 in accordance with the terms of Section 2.03 of the Lease. Provided Tenant
surrenders the Relinquished Space as provided herein, Tenant’s obligation to pay
rent for the Relinquished Space shall terminate on February 29, 2008; provided
that Tenant shall continue to be liable for rent obligations accruing prior to
March 1, 2008. In the event, however, that Tenant fails to deliver the
Relinquished Space to Landlord in accordance with this paragraph before March 1,
2008, in addition to any other rights and remedies that Landlord has under the
Lease, Tenant shall pay rent for the Relinquished Space in accordance with
Section 2.04 of the Lease until Tenant delivers the Relinquished Space to
Landlord in accordance with this paragraph.

 

11.                               Brokerage Commissions. The parties hereby
represent and warrant that the only real estate brokers involved in the
negotiation and execution of this First Amendment are Duke Realty Services, LLC,
representing Landlord, and Colliers Turley Martin Tucker representing Tenant.
Each

 

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party shall indemnify the other party from any and all liability for the breach
of this representation and warranty on its part and shall pay any compensation
to any other broker or person who may be entitled thereto.

 

12.                               Tenant’s Representations and Warranties. The
undersigned represents and warrants to Landlord that (i) Tenant is duly
organized, validly existing and in good standing in accordance with the laws of
the state under which it was organized; (ii) all action necessary to authorize
the execution of this First Amendment has been taken by Tenant; and (iii) the
individual executing and delivering this First Amendment on behalf of Tenant has
been authorized to do so, and such execution and delivery shall bind Tenant.
Tenant, at Landlord’s request, shall provide Landlord with evidence of such
authority.

 

13.                               Examination of Amendment. Submission of this
instrument for examination or signature to Tenant does not constitute a
reservation or option, and it is not effective until execution by and delivery
to both Landlord and Tenant.

 

14.                               Definitions. Except as otherwise provided
herein, the capitalized terms used in this First Amendment shall have the
definitions set forth in the Lease.

 

15.                               Incorporation. This First Amendment shall be
incorporated into and made a part of the Lease, and all provisions of the Lease
not expressly modified or amended hereby shall remain in full force and effect.

 

(SIGNATURES CONTAINED ON FOLLOWING PAGE)

 

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IN WITNESS WHEREOF, the parties have caused this First Amendment to be executed
on the day and year first written above.

 

 

LANDLORD:

 

 

 

DUGAN REALTY, L.L.C.,

 

an Indiana limited liability company

 

 

 

By:

Duke Realty Limited Partnership,
an Indiana limited partnership, its member

 

 

 

 

 

By:

Duke Realty Corporation,
an Indiana corporation, its general partner

 

 

 

 

 

 

 

By:

/s/ Jon C. Burger

 

 

 

 

Jon C. Burger

 

 

 

 

Senior Vice President
Cincinnati Group

 

STATE OF OHIO

)

 

 

) SS:

 

COUNTY OF HAMILTON

)

 

 

Before me, a Notary Public in and for said County and State, personally appeared
Jon C. Burger, by me known to be the Senior Vice President, Cincinnati Group of
Duke Realty Corporation, an Indiana corporation, the general partner of Duke
Realty Limited Partnership, the member of Dugan Realty, L.L.C., an Indiana
limited liability company, who acknowledged the execution of the foregoing
“First Lease Amendment” on behalf of said limited liability company.

 

WITNESS my hand and Notarial Seal this 25th day of January, 2008.

 

[g359921kui001.jpg]

 

 

 

 

 

 

ROSE ANDRIACCO

 

/s/ Rose Andriacco

Notary Public, State of Ohio

 

Notary Public

My Commission Expires March 8, 2010

 

 

 

 

 

 

 

(Printed Signature)

 

 

My Commission Expires:

 

 

 

 

 

My County of Residence:

Clermont

 

 

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TENANT:

 

 

 

GAIAM, INC., a Colorado corporation

 

 

 

By:

/s/ Mark Lipien

 

 

 

 

Printed:

    Mark Lipien

 

 

 

 

Title:

   VP

 

STATE OF COLORADO

)

 

 

) SS:

 

COUNTY OF BROOMFIELD

)

 

 

Before me, a Notary Public in and for said County and State, personally appeared
Mark Lipien, by me known and by me known to be the Vice President of
Gaiam, Inc., a Colorado corporation, who acknowledged the execution of the
foregoing “First Lease Amendment” on behalf of said corporation.

 

WITNESS my hand and Notarial Seal this 21st day of January, 2008.

 

 

 

/s/ Chelli Lalik

 

Notary Public

 

 

 

 

 

    Chelli Lalik

 

(Printed Signature)

 

 

My Commission Expires:

4-12-2008

 

 

 

 

My County of Residence:

Jefferson

 

 

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EXHIBIT A-1

 

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EXHIBIT G

 

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