EXHIBIT 10.2
AMENDMENT NO. 2 TO LEASE
THIS AMENDMENT NO. 2 TO LEASE ("Amendment") made as of September 1, 2006,
by and between ST. PAUL PROPERTIES, INC., a Delaware corporation ("Landlord")
and ATS MEDICAL, INC., a Minnesota corporation ("Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant are parties to that certain Lease dated April
29, 2000 (the "Original Lease"), for premises described therein (the
"Premises"); and
WHEREAS, Landlord and Tenant entered into a certain Amendment No. 1 to
Lease dated May 1, 2001 (the "First Amendment"; the Original Lease and the First
Amendment are collectively, hereinafter the "Lease"); and
WHEREAS, Landlord and Tenant wish to amend the Lease to reflect certain
additional agreements between them.
NOW, THEREFORE, in consideration of the Premises and for good and valuable
consideration, the parties agree as set forth below.
1. Defined Terms. Unless otherwise indicated, capitalized terms shall be
defined in the manner set forth in the Lease.
2. Extension of Term. The Term of the Lease is hereby extended for a period
of twenty four (24) months commencing August 1, 2008 (the "Extension
Commencement Date") and ending on July 31, 2010 (such period the "Extension
Term").
3. Base Rent. During the Extension Term, Tenant shall pay Base Rent for the
Premises in the amount of
(a) $123,937.68 per annum, ($10,328.14 per month) for the period from
the Extension Commencement Date through and including July 31, 2009; and
(b) $126,416.40 per annum ($10,534.70 per month), for the period from
August 1, 2009, through and including July 31, 2010,
without deduction or setoff therefrom, payable at the time and in the manner set
forth in the Lease for the payment of Base Rent.
4. Amendment. Paragraphs 30 and 31 of the Lease are hereby deleted in their
entirety.
5. Additional Agreements.
(a) HVAC Units. The parties agree that to the extent Landlord, in its
sole discretion, determines that any or all of the HVAC units serving the
Premises need replacement at any time on or after the Extension
Commencement Date, Landlord shall do so, and the cost thereof shall be
amortized over a twelve year period from the date of installation thereof,
which amortization shall be based upon equal payments of principal and
interest over said twelve year period, and interest shall be at the rate of
nine percent (9%) per annum. Throughout that portion of the Term during
which such amortization occurs, Tenant shall pay, as a part of Operating
Costs, all of such amortization, including interest as specified above.
(b) Cross Default. Any default by Tenant under that certain Lease
December 22, 1987, between Helix BioCore, Inc. and Crow Plymouth Land
Limited Partnership, as amended and assigned, for premises located at 3905
Annapolis Lane, Plymouth, Minnesota, shall be a default under the Lease, as
amended by this Amendment.
(c) Condition of Premises. The Premises shall be taken by Tenant, as
of the Extension Commencement Date in their then AS-IS, WHERE-IS, WITH ALL
FAULTS condition.
(d) Renewal of Lease. Landlord hereby grants to Tenant a one-time
option to renew the Lease as to the Premises upon the terms and conditions
of this Paragraph 5(d) if:
(i) Tenant is not in default under this Lease, as the same may
have been renewed beyond any time to cure at the time such option is
exercised; and
(ii) Tenant gives Landlord written notice of the exercise of the
renewal of this Lease not later than nine months prior to the end of
the term (the "Renewal Notice of Exercise"), time being of the
essence. Tenant's failure to notify Landlord of its intent to exercise
its option to renew the Term granted herein on or before the dates
specified in this subparagraph (ii) for such renewal shall be deemed a
waiver of Tenant's right to exercise its option to renew.
If Tenant elects to renew this Lease under this Paragraph 5(d) the
following terms and conditions shall apply:
(i) The renewal term in question shall commence on August 1, 2010
continue thereafter for a period of three (3) years.
(ii) Base Rent for the Premises for the renewal term shall be
Market Rent (as defined in Paragraph 5(e) of this Amendment); and
(iii) All of the other terms and conditions contained in this
Lease, as it may have been amended from time to time, shall be as set
out in the Lease, it being understood that there shall be no rights of
renewal or extension except as provided in
this Paragraph 5(d), and, upon the exercise of the right of renewal
granted by this Paragraph 5(d), this Paragraph 5(d) shall be of no
further force or effect and Tenant shall have no right to further
renew or extend the term at the expiration of the renewal term.
Within fifteen (15) business days after request thereof from Landlord,
Tenant shall execute and deliver to Landlord those instruments which
Landlord may request to evidence the renewal described in this Paragraph
5(d). The rights of Tenant under this Paragraph 5(d) shall not be severed
from the Lease or separately sold, assigned, or otherwise transferred, and
shall expire on the expiration or earlier termination of the Lease.
Notwithstanding the foregoing, the renewal option contemplated in this
Paragraph 5(d) shall automatically terminate and become null and void and
of no further force and effect upon the earlier to occur of (i) the
expiration or termination of the Lease; (ii) the termination of the
Tenant's right to possession of the Premises; or (iii) the failure of
Tenant to timely or properly exercise the rights granted by this Paragraph
5(d). The right contemplated by this Paragraph shall not survive the
expiration or termination of this Lease, and shall not be available to any
assignee, sublessee, or successor to Tenant's interests hereunder.
(e) Market Rent. "Market Rent' means the amount of base rent, which
may or may not include concessions, improvements, and other matters
(exclusive of Operating Costs) which Landlord would receive by then renting
similar space (including similar square footage) for premises in the
project in which the Building is located. Within 45 days after Tenant
exercised its right to renew the Term pursuant to Paragraph 5(d), Landlord
shall give Tenant notice of Market Rent for the renewal term (the "Market
Rent Notice"). If Tenant does not agree with Landlord's determination of
Market Rent as set forth in the Market Rent Notice, Tenant shall so notify
Landlord in writing within ten (10) days after Tenant's receipt of the
Market Rent Notice ("Tenant's Notice"). Landlord and Tenant shall, for ten
(10) days after Landlord's receipt of the Tenant's Notice, negotiate in
good faith to come to an agreement as to Market Rent for the renewal term.
If Landlord and Tenant are unable to agree upon Market Rent within said ten
day period, then, notwithstanding the provisions of Paragraph 5(d), Tenant
shall have the right to rescind the Renewal Notice of Exercise by written
notice (the "Rescission Notice") to Landlord given not later than twenty
(20) days after the date of the Tenant's Notice, it being understood and
agreed that if the Rescission Notice is not given within such time period,
Tenant shall be deemed to have waived its right to rescind the Renewal
Notice of Exercise. In such case, to the extent that the Renewal Notice of
Exercise was effectively exercised, Landlord and Tenant shall execute and
deliver and amendment to the Lease which amendment shall be executed and
delivered within ten (10) days following the determination of Market Rent.
Tenant's failure to give the Tenant's Notice within the time period
provided above shall be deemed an acceptance of Landlord's determination of
Market Rent as set forth in the Market Rent Notice, and the term shall be
deemed renewed pursuant to the Renewal Notice of Exercise.
6. Reference to and Effect on the Lease.
(a) Upon the effectiveness of this Amendment, each reference in the
Lease to "this Lease", "hereunder", "hereof", "herein" or words of like
import referring to the Lease shall mean and be a reference to the Lease as
amended hereby.
(b) Except as specifically set forth above, the Lease remains in full
force and effect and is hereby ratified and confirmed; provided, however,
that the parties agree that the rights and obligations of each of them
occurring prior to the Extension Commencement Date shall survive the
execution and delivery of this Amendment.
(c) Wherever there exists a conflict between this Amendment and the
Lease, the provisions of this Amendment shall control.
7. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Minnesota.
8. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. Time of Essence. Time shall be of the essence as to each and every
provision of this amendment.
IN WITNESS WHEREOF, this Amendment has been executed as of the date first
written above.
TENANT: LANDLORD:
ATS MEDICAL, INC. ST. PAUL PROPERTIES, INC.
By: /s/ Michael D. Dale By: /s/ Michael D. Elnicky
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Name: Michael D. Dale Name: Michael D. Elnicky
Title: President & CEO Title: Asset Manager