EXHIBIT 99.2
AMENDMENT 7 TO OEM SUPPLY CONTRACT
This Amendment 7 is entered into as of December 29, 1999, by and
between SULZER CARBOMEDICS INC. ("CMI"), a corporation organized and existing
under the laws of the State of Delaware, with its principal office located at
1300 East Anderson Lane, Austin, Texas 78752 and ATS MEDICAL, INC. ("ATS"), a
corporation organized and existing under the laws of the State of Minnesota with
its principal office located at 3905 Annapolis Lane, Minneapolis, Minnesota.
RECITALS:
CMI and ATS entered into an OEM supply contract dated September 24,
1990, as amended November 1, 1991, June 19, 1992, October 15, 1992, December 16,
1993, September 1, 1994 and February 19, 1999 (the "OEM Supply Contract"). The
parties now desire to further amend that Agreement.
THEREFORE, in consideration of the mutual promises set forth in this
Amendment and other good and valuable consideration, the parties agree to the
following terms.
TERMS:
1. Page 1 of Exhibit B of the OEM Supply Contract, as amended by
Amendment 4 to that Contract, and pages 2(a) and 2(b) of
Exhibit B as amended by Amendment 1 to that Contract, are
hereby deleted in their entirety and the
attached pages 1 and 2 of Exhibit B, dated December 29, 1999,
are substituted in their place.
2. The second sentence of Section 2(a) is hereby deleted in its
entirety and replaced with the following sentence:
Thereafter the minimum purchase requirement each year will be
the number of Component Sets set forth on Exhibit B.
3. Section 5(b) of the OEM Supply Contract is hereby amended to
add the following to the last sentence thereof:
; provided, however, that, if and to the extent that the
Manufacturer's order exceeds the 10% maximum variation
limitation because one or more of the milestones contained in
Section 2.5 of the Carbon Agreement have not been reached in a
timely manner, then (i) CMI may not reject that portion of the
order which exceeds 110% of the preceding order, and (ii)
notwithstanding the prices stated on Exhibit B to this
Agreement,(A)if one or more of the milestones have not been
reached in a timely manner due primarily to CMI's fault, CMI
will be obligated hereunder to supply any valve sets ordered
in excess of 110% of the preceding order at a price of $600
per equivalent valve set, adjusted for inflation in accordance
with this Exhibit B, (B)if one or more of the milestones have
not been reached in a timely manner due primarily to ATS'
fault, CMI will be obligated hereunder to supply any valve
sets ordered in excess of 110% of the preceding order at a
price of $1000 per equivalent valve set, adjusted for
inflation in accordance with this Exhibit B, and (C) if one or
more of the milestones have not been met due to the joint
fault of CMI and ATS, CMI will be obligated hereunder to
supply any valve sets ordered in excess of 110% of the
preceding order at a price of
$800 per equivalent valve set, adjusted for inflation in
accordance with this Exhibit B.
4. Section 17 of the OEM Supply Contract is amended to add a
paragraph (g) that reads as follows:
In the event of any dispute or controversy regarding this OEM
Supply Agreement, the prevailing party shall be entitled to
its reasonable attorney's fees and costs.
Unless expressly modified by this Amendment, all other provisions in
the OEM Supply Contract will remain unchanged and in full force and effect.
ATS MEDICAL, INC. SULZER CARBOMEDICS, INC.
By: /s/ Richard W. Kramp By: /s/ Terry L. Marlatt
-------------------------------- --------------------------------
Printed Name: Richard W. Kramp Printed Name: Terry L. Marlatt
---------------------- ----------------------
Title: President/COO Title: President
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PRICE and QUANTITY SCHEDULES
MINIMUM PURCHASE REQUIREMENTS PER COMPONENT SET
Contract Year(1) # Sets Per Year(2)
---------------- ------------------
Year 2000 *** (plus *** L.D.C. valve sets
ordered in accordance with the
"L.D.C. Clause" below on this
Exhibit B)
Year 2001 ***
Year 2002 ***
Year 2003 ***
Year 2004 ***
Year 2005 ***
Year 2006 ***
Year 2007 ***
PRICES
Contract Year 2000
------------------
*** per equivalent valve set
*** per L.D.C. valve set
Contract Year 2001
------------------
*** per equivalent valve set
Contract Years 2002 - 2007
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(1) Each "Contract Year" commences on January 1 of the named year
and ends on December 31 of the named year.
(2) Purchase requirements and/or actual purchases for each
Contract Year are independent of those for prior or succeeding
years.
EXHIBIT B
Page 1 - December 29, 1999
*** Denotes confidential information that has been omitted from
the exhibit and filed separately, accompanied by a
confidential treatment request, with the Securities and
Exchange Commission pursuant to Rule 24B-2 of the Securities
Exchange Act of 1934.
Previous year's price plus inflation adjustment
described below
PRICE ADJUSTMENT
The actual sales price to Manufacturer for Contract Years 2002 through 2007 will
be adjusted each year so that the price reflects the impact of inflation, if
any. To make such adjustment, CMI will use an inflation factor equal to the
12-month average percentage increase in employment cost for "private industry
workers" as reported on "Table 3. Employment Cost Index for total compensation
for private industry workers, by industry and occupational group (Not seasonally
adjusted data)" published by the Bureau of Labor Statistics of the United States
Department of Labor or, if that index should cease to be published, any
comparable category in a comparable index agreeable to both parties. The
inflation factor used for each Contract Year will be that reported as of the
September 30 immediately preceding the commencement of the Contract Year.
EXHIBIT B
Page 2 - December 29, 1999