exv10w8






Exhibit 10.8




FIRST AMENDMENT TO LEASE




     THIS FIRST AMENDMENT TO LEASE (this “Amendment”) is made as of the 31st day of
March, 2009, by and between Windsor Plaza, LLC, a Minnesota limited liability company, as landlord
(hereinafter “Landlord”) and Virtual Radiologic Corporation, a Delaware corporation, as tenant
(hereinafter “Tenant”)



W I T N E S S E T H:




     WHEREAS, Landlord and Tenant entered into that certain Lease dated November 30, 2007 (the
“Lease”), covering certain premises in Windsor Plaza in the City of Eden Prairie, County of
Hennepin, State of Minnesota, as described in the Lease (“Premises”); and



     WHEREAS, the parties to this Amendment hereby wish to amend the Lease as set forth in this
Amendment;



     NOW, THEREFORE, for and in consideration of the mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:



     1. Definitions. Capitalized terms used, but not defined, herein have the meanings
ascribed to them in the Lease, unless defined otherwise herein.



     2. Rent for VRC-Dedicated Electrical Room and VRC-Generator Room. Attached hereto as
Exhibit A is the updated garage floor plan for the Project (“Garage Level Floor Plan”).
The Garage Level Floor Plan identifies, among other items, the VRC-Generator Room and the UPS Room.
The UPS Room is the VRC-Dedicated Electrical Room (as said term is defined in the Lease), and will
be hereinafter defined as the UPS Room. The location and size of the VRC-Generator Room and UPS
Room identified on Exhibit A attached hereto replaces any reference to said rooms on
Exhibits Q and R of the Lease.



     Pursuant to Section 2.7 of the Lease, Tenant will pay, in addition to the Base Rent for the
Leased Premises (as set forth in the Schedule of Basic Terms (E)), Twelve and No/100 Dollars
($12.00) per square foot in gross rent for the VRC-Generator Room and UPS Room, which amount shall
increase by two percent (2%) per year (cumulatively) during the Lease Term, effective as of each
anniversary of the Rent Commencement Date. Said gross rent will be calculated as follows:




	 	a.	 	the UPS Room is 625 square feet. The gross rent to be paid by
Tenant for said room is based on 419 square feet (67% of the total square
footage), which is a stipulated number in recognition of the fact that the UPS
(as defined below) will also be used by Landlord to power the life safety
systems of the Project. The 419 square feet figure equates to Tenant’s payment
of gross rent for the UPS Room initially being $5,025.00 per year or $419.00
per month, to be paid along with the Base Rent for the Leased
Premises for




 









 






	 	 	 	the Lease Term. Tenant and Landlord will each have access to
the UPS Room at all times.
	 
	 	b.	 	the VRC-Generator Room is 1,350 square feet. The gross rent to
be paid by Tenant for said room is based on 905 square feet (67% of the total
square footage), which is a stipulated number in recognition of the fact that
the Generators (as defined below) will also be used by Landlord to power the
life safety systems of the Project. The 905 square feet figure equates to
Tenant’s payment of gross rent for the VRC-Generator Room initially being
$10,860 per year or $905.00 per month, to be paid along with the Base Rent for
the Leased Premises for the Lease Term. Landlord and Tenant will each have
access to the VRC-Generator Room at all times.





     The obligation to pay said gross rent will commence on the Rent Commencement Date, and be paid
pursuant to Section 2.3 of the Lease.



     3. Generators. Landlord and Tenant acknowledge that they jointly determined after the
Effective Date (and following completion of Landlord’s initial plans for the installation of
equipment to supply power for the base building life safety systems for the Project) that three (3)
250kVA generators, totaling 750kVA (collectively “Generators”) and uninterruptable power supply
equipment (the “UPS”) are needed for the operation of (i) Tenant’s business within the Leased
Premises (“Tenant’s Generator/UPS Use”) and (ii) the base building life safety systems of the
Project (“Landlord’s Generator/UPS Use”). The term “Generator” or “Generators” also includes any
replacement Generators. Landlord’s initial plans called for only one (1) 166kVA generator to
satisfy Landlord’s Generator/UPS Use. As a result, the Landlord and Tenant agree to the following
with respect to the installation, maintenance, repair, use and ownership of the Generators, the UPS
and related fixtures and equipment:




	 	a.	 	Tenant will contract directly with Amcon Construction, LLC
(“Amcon”), the general contractor for the Project (as well as Tenant’s Work),
to install the Generators in the VRC-Generator Room and the UPS in the UPS
Room. A summary of the improvements required for operation of the Generators
and the UPS is set forth on Exhibit B (collectively referred to as
“Generator/UPS Improvements”) attached hereto and incorporated herein. The
cost of the Generator/UPS Improvements will be paid directly by Tenant to
Amcon, and Landlord will have no responsibility therefor.
	 
	 	b.	 	Landlord’s Work is hereby amended to exclude any of the items
on Exhibit B which are part of the Generator/UPS Improvements.
Following installation of the Generator/UPS Improvements, Tenant will own the
Generators and the UPS (collectively, the “Tenant Generator/UPS Equipment”),
and Landlord will own all other Generator/UPS Improvements, for purposes of
depreciation and insurance (and any applicable provision of the Lease relating
to Tenant’s property).




 









 






	 	c.	 	During the Lease Term, Landlord will be responsible for
maintaining, repairing and replacing the Generator/UPS Improvements, which
Landlord shall at all times keep in good working order, condition and repair.
Tenant will reimburse Landlord for sixty-seven percent (67%) of the costs and
expenses for the same within thirty (30) days after receiving invoices from
Landlord. If not reimbursed within said thirty (30) days, then Landlord will
have all rights and remedies under the Lease, arising out of a monetary default
by Tenant. Landlord shall deliver to Tenant copies of all maintenance and
repair records, documentation and invoices as and when the same are prepared or
received by Landlord. Landlord shall confer with Tenant and reasonably
cooperate with Tenant in connection with the maintenance and repair of the
Generator/UPS Improvements. At all times, Tenant shall have access to the
Generator/UPS Improvements and the right, but not the obligation, to inspect
and test the Generator/UPS Improvements. Landlord shall comply with reasonable
recommendations from Tenant with respect to the maintenance, repair and/or
replacement of all or any part of the Generator/UPS Improvements. If any of
the Generators need to be replaced, if the UPS needs to be replaced, or if any
other component of the Generator/UPS Improvements needs to be replaced, and
cost of replacing the same will exceed $25,000.00, Landlord will first notify
Tenant and Landlord will accept reasonable recommendations by Tenant with
respect to the same. No costs or expenses in connection with maintaining,
repairing or replacing the Generator/UPS Improvements or any part thereof shall
be included as Operating Costs (it being understood that Tenant’s sole payment
obligations for such items are set forth in this Section 3.c).
	 
	 	d.	 	Subject to Landlord’s right to purchase the Tenant
Generator/UPS Equipment (as set forth in Section 3.f herein), Tenant, at the
end of the Lease Term, and following at least 180 days written notice to
Landlord, may remove the Tenant Generator/UPS Equipment. Tenant’s removal of
the Tenant Generator/UPS Equipment must be in compliance with the terms and
conditions of the Lease, and Tenant may only remove the Tenant Generator/UPS
Equipment, and may not remove any of the hardware, electrical, piping, fire
protection, switchboard modification, equipment pads, or other items (besides
the Tenant Generator/UPS Equipment) identified on Exhibit B (or future
improvements installed in order to operate the Tenant Generator/UPS Equipment).
	 
	 	e.	 	Prior to execution of this Amendment, Landlord acknowledges
that Tenant paid Landlord Nine Thousand Nine Hundred Forty-Six and 39/100
Dollars ($9,946.39) for reimbursement to Landlord for a portion of costs
incurred in the redesign of the Generator/UPS Improvements.
	 
	 	f.	 	Landlord has the option to purchase the Tenant Generator/UPS
Equipment as set forth herein. In order to exercise said option, Landlord must
deliver written notice to Tenant of Landlord’s election to exercise said option
within




 









 






	 	 	 	thirty (30) days after of receipt of Tenant’s 180 day notice (required to be
delivered in Section 3.d), in which case Tenant will not remove the Tenant
Generator/UPS Equipment from the VRC-Generator Room or UPS Room. If
Landlord does not deliver said exercise notice within said thirty (30) days,
then Landlord will be deemed to have waived said right and the option will
be deemed terminated. If Landlord timely exercises said option, then the
purchase price for the Tenant Generator/UPS Equipment will be an amount
equal to the unamortized useful life of the same at the time of purchase,
determined as follows. For purposes of this Section 3.f, the initial value
of the Generators is $423,242.40 and the useful life thereof shall be deemed
to be twenty (20) years; and the initial value of the UPS is $188,404.65,
and the useful life thereof shall be deemed to be fifteen (15) years. Each
respective amortization schedule will be on a straight line basis, will be
based on a 365 day year, and will be calculated starting as of the
Commencement Date and ending as of the date that Tenant vacates the Leased
Premises. Landlord’s exercise notice must include Landlord’s calculation of
the purchase price, based on the formulas in the preceding sentence.
Landlord will accept the Tenant Generator/UPS Equipment in its then AS-IS
condition, with no representations or warranties by Tenant.
	 
	 	g.	 	Each of the three (3) Generators is 250 kVA, for a total of 750
kVA. Landlord represents and warrants that the amount of power required for
Landlord’s Generator/UPS Use is estimated to be 166kVA and in no event will
exceed 166kVA at any given time. Landlord agrees that Landlord will not cause
or permit the power consumption from landlord’s Generator/UPS use to exceed
said 166kVA and that the power available for Tenant’s Generator/UPS Use will
never be less than the total amount of power available from the Generators and
the UPS, minus 166kVA. Landlord further agrees that Landlord will not cause or
permit any other use of the Tenant Generator/UPS Equipment or other
Generator/UPS Improvements without obtaining the prior written consent of
Tenant.





     4. Parking. Section 3.9 of the Lease is supplemented as follows:




	 	a.	 	Pursuant to Section 3.9(ii) of the Lease, the Tenant has the
exclusive right to lease twenty (20) parking stalls within the Parking Garage.
Said twenty (20) parking stalls are identified as stalls 17-27 and 39-47 on the
Garage Level Floor Plan.
	 
	 	b.	 	In addition to Tenant’s other parking rights under the Lease
(as hereby amended), at no additional cost to Tenant, Tenant shall have the
exclusive right to use the fifteen (15) covered (but not enclosed) parking
stalls identified on Exhibit C attached hereto (the “Covered Stalls”)
during the Lease Term. The Covered Stalls are located on the sub-deck level of
the parking deck, which is located on the same level as the vehicle entrance to
the enclosed portion of the Parking Garage. At Tenant’s expense, Tenant




 









 






	 	 	 	shall have the right to install signs identifying the Covered Stalls as
being reserved or dedicated exclusively for the use of Tenant.





     5. Storage Space. Attached hereto as Exhibit E is a floor plan of a portion
of the garage level of the Project that identifies, among other areas, a room designated “Storage –
VRC,” consisting of 522 square feet (the “VRC Storage Room”). Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the VRC Storage Room. In addition to the other amounts payable
by Tenant under the Lease, as hereby amended, Tenant will pay $12.00 per square foot per year in
gross rent for the VRC Storage Room. The gross rent for the VRC Storage Room will increase by two
percent (2%) per year (cumulatively) during the Lease Term, effective as of each anniversary of the
Rent Commencement Date. Tenant’s initial gross rent for the VRC Storage Room is $6,264.00 per year
or $522.00 per month, to be paid along with Base Rent for the Leased Premises. Tenant will have
access to the VRC Storage Room at all times. The obligation to pay said gross rent for the VRC
Storage Room will commence on the Rent Commencement Date.



     6. Tenant Improvements. The plans and Amcon’s 12/16/08 restroom revision bulletin
attached hereto as Exhibit D shall be deemed to be a part of Tenant’s Plans and
Specifications (as said term is defined in Section 8.2(b) of the Lease) and the improvements and
work shown and described therein (the “New Restroom Improvements”) shall be included among the
Tenant Improvements to be completed by Landlord. Tenant has or will pay for the New Restroom
Improvements, and Landlord agrees, pursuant to paragraph 7 herein, to contribute one half
($32,447.50) for said improvements through the Base Rent Credit described in Paragraph 7 herein.



     7. Base Rent Credit. One half (1/2) of the total cost of the New Restroom
Improvements estimated at $64,895.00 will be a credit against Tenant’s first month of Base Rent due
Landlord, resulting in a decrease in the Tenant’s Base Rent for the first month following the Rent
Commencement Date, in the amount of $32,447.50.



     8. Commencement Date and Rent Commencement Date. The Commencement Date is hereinafter
defined as March 2, 2009, and the Rent Commencement Date is hereinafter defined as September 2,
2009.



     9. Ratification. Except as expressly amended hereby, all of the terms, provisions,
covenants and conditions of the Lease are hereby ratified and confirmed and shall continue in full
force and effect. In the event of any conflict or inconsistency between the Lease and this
Amendment, the terms of this Amendment shall govern and control.



     10. Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and assigns.



     11. Authority. The individuals executing this Amendment hereby represent and warrant
that they are empowered and duly authorized to so execute this Amendment on behalf of the parties
they represent.



 









 





     12. Counterparts. This Amendment may be executed in several counterparts, each of
which shall be deemed an original, and all of which together shall constitute one and the same
instrument.



[Signatures Appear On Next Page]




 









 








[Signature page to First Amendment to Lease]




     IN WITNESS WHEREOF, the parties have hereunto set their hands this 31st day of
March, 2009.



	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 	 	Windsor Plaza, LLC, a Minnesota limited	 	 
	 	 	liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jay Scott
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:
	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 	 	Virtual Radiologic Corporation, a Delaware	 	 
	 	 	corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert C. Kill	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:
	 	President and Chief Executive Officer