exv10w1







Exhibit 10.1




FOURTH AMENDMENT OF LEASE



THIS FOURTH AMENDMENT OF LEASE (“Fourth Amendment”) is made and entered into effective as of 4th
day of August, 2008 by and between CSM INVESTORS, INC., a Minnesota corporation (“Landlord”) and
SYNOVIS LIFE TECHNOLOGIES, INC., a Minnesota corporation (“Tenant”).




RECITALS





	A.	 	Landlord and Tenant are parties to a Lease dated February 28, 1995, as amended by that
certain First Amendment of Lease dated September 23, 2002, as further amended by that certain
Second Amendment of Lease dated January 1, 2004, and as further amended by that certain Third
Amendment of Lease dated August 1, 2005 (collectively, the “Lease”), pursuant to which Tenant
leases from Landlord the Premises, consisting of approximately 65,022 square feet (comprised
of 40,120 square feet of office space, 18,436 square feet of lab space, and 6,466 square feet
of warehouse space) within the WESTGATE BUSINESS CENTER PHASE IV located at 2575 University
Avenue West, Suite 180, St. Paul, Minnesota, as more particularly described in the Lease.
	 
	B.	 	The parties wish to amend certain terms and conditions of the Lease as more particularly set
forth herein.




NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Tenant agree that the Lease is hereby amended as follows:




AGREEMENT





	1.	 	Section 1.4 Lease Term: The term of the Lease shall be extended for an additional
sixty (60) month period, commencing January 1, 2009 and expiring December 31, 2013.
	 
	2.	 	Option Terms; Market Rate: Landlord and Tenant acknowledge and agree that execution
of this Fourth Amendment by both parties is in lieu of Tenant’s election to exercise its
second and final option to extend the term of the Lease, as set forth in Section 14.14 of the
initial Lease dated February 28, 1995.






	 	A.	 	Option Term. Tenant shall have the option (“Option”) to extend the term
of the Lease for either: (i) one (1) additional consecutive thirty-six (36) month
term; or (ii) one (1) additional consecutive sixty (60) month term (“Option Term”)
under the same terms and conditions contained herein, provided however, that upon
Tenant’s exercise of the Option, the Base Rent shall be adjusted in each instance to
equal the then current market rate for similar space in the “midway” area of
Minneapolis/St. Paul, “mid-city” area of Minneapolis, and Roseville areas (“Market
Area”) determined in accordance with Section 2.B. below; provided, however, that in no
case shall the market rate be less than the Base Rental rate then in effect at the time
of expiration of the initial term of the Lease. Tenant may exercise its Option by
delivering written notice to Landlord, stating its irrevocable intent to exercise the
Option and specifying the preferred length of the Option (as
described above), not less than two hundred forty (240) days and not more than




 









 






	 	 	 	three
hundred sixty-five (365) days prior to the expiration of the initial Lease Term.
Tenant’s failure to specify the desired length within its written notice will result
in an automatic sixty (60) month long Option Term. In the event that Tenant fails
to deliver timely notice of its intent to exercise its Option, Tenant’s right to the
Option shall be deemed null and void. Conditions of the exercise of the Option
shall be that Tenant is not in Default pursuant to Article 11 of the Lease and that
the Lease is in full force and effect.






	 	B.	 	Market Rate Determination. If the market rate must be determined in
accordance with the provisions of Section 2.A. above, the parties hereto agree as
follows:
	 
	 	(1)	 	Within fifteen (15) days following receipt of Tenant’s Renewal Notice for the
Option Term, Landlord will submit to Tenant Landlord’s proposed market rate
determination (“Landlord’s Proposed Market Rate”).
	 
	 	(2)	 	If Tenant does not notify Landlord within fifteen (15) days after receipt of
Landlord’s Proposed Market Rate that Tenant disagrees with Landlord’s Proposed Market
Rate, then Landlord’s Proposed Market Rate shall be deemed approved and accepted by
Tenant. If Tenant timely notifies Landlord of Tenant’s disagreement with Landlord’s
Proposed Market Rate, then the parties agree to negotiate in good faith for a period of
thirty (30) days following Landlord’s receipt of Tenant’s notice of disagreement (the
“Negotiation Period”) in an attempt to reach agreement on the market rate. In
connection therewith, each party shall submit to the other party such evidence as it
then has to substantiate its proposed market rate; including, but not limited to rental
rates, tenant improvements, and abated rent associated with other lease renewal
transactions completed within the Market Area. If the market rate is not mutually
agreed upon by the parties within the Negotiation Period, the Renewal Notice shall
remain in full force and effect and the market rate shall be determined by arbitration
in accordance with the remaining provisions of this Section 2.B.
	 
	 	(3)	 	If the market rate is not mutually agreed upon within the Negotiation Period,
then within ten (10) days after the expiration of the Negotiation Period, the parties
shall choose a neutral individual having at least ten (10) years recognized brokerage
experience with first-hand knowledge in the determination of commercial rental rates in
the Market Area (“Expert”), and the Expert shall determine the market rate within
twenty (20) business days after expiration of the Negotiation Period. If the parties
cannot mutually agree on an Expert within ten (10) days after expiration of the
Negotiation Period, each party shall notify the other as to the name, address, and
telephone number of an arbitrator (having similar experience and qualifications
required of the Expert) it has selected to serve on the board of arbitration (“Board”).
The two (2) arbitrators will appoint a third arbitrator having such experience and
qualifications as promptly as reasonably possible and the three (3) arbitrators will
constitute the Board. All three (3) arbitrators must also be persons totally
disinterested in any economic way in the ultimate resolution of the market rate.
	 
	 	(4)	 	After the Board is appointed, it will proceed as expeditiously as reasonably
possible to resolve the dispute in accordance with the commercial rules of arbitration
of the National Arbitration Forum and to notify the parties of its
decision as to the market rate within twenty (20) business days of the




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	 	 	 	appointment
of the last member of the Board. Both Landlord and Tenant may each state in writing
what it proposes the market rate should be including whatever support for such
contention it wishes to have considered by the Board. The Board shall arrange for
such simultaneous exchange of such written information to both Landlord and Tenant
and shall accept additional evidence, rebuttals or other matters the parties may
wish to present until five days prior to the date on which the Board shall render
its decision. The Board shall not be limited to choosing between one (1) of the two
(2) market rates proposed by the parties but may substitute its opinion as to market
rate, provided, however, that the determination of the Board shall be made as
follows:






	 	(a)	 	Each member of the Board will independently determine the
market rate and simultaneously disclose to each other his or her separate
determination.
	 
	 	(b)	 	If the high market rate is less than ten percent (10%) higher
than the middle market rate and the low market rate is less than ten percent
(10%) lower than the middle market rate, then the average market rate of the
three Board members shall be the market rate.
	 
	 	(c)	 	If either the high market rate or the low market rate deviates
from the middle market rate by more than ten percent (10%), then the average of
the two market rate determinations closest by dollar amount shall be the market
rate.






Upon the determination of the market rate pursuant to the foregoing terms, such
determination shall be final and binding upon the parties. If for any reason the
determination of the market rate has not been made as of the commencement of the Option
Term, then Tenant shall nevertheless pay Base Rent at Landlord’s Proposed Market Rate
pending determination of the market rate pursuant to the mechanism described above; provided
that if the final determination of market rate is less than Landlord’s Proposed Market Rate,
Tenant may offset any overpayments against Base Rents next due. Any rent paid by Tenant at
a rate other than the market rate determined pursuant to the foregoing terms shall be
adjusted retroactively. Any and all fees and expenses charged by the Expert shall be
divided equally between Landlord and Tenant, or alternatively, Landlord and Tenant shall
each pay any and all fees and expenses incurred in connection with such party’s own Board
member and the fees and expenses of the third Board member shall be divided equally between
Landlord and Tenant.




	3.	 	Section 1.6. Base Rent: Commencing January 1, 2009, Base Rent shall be adjusted as
follows:





	 	 	 	 	 	 	 	 	 
	Months	 	Monthly Base Rent	 	Per Rentable Sq. Ft.
	Initial Term:
	 	 	 	 	 	 	 	 
	01/01/09 — 12/31/13
	 	$60,325.65	 	$11.133
	 
	Option Terms:
	 	 	 	 	 	 	 	 
	01/01/14 — 12/31/16 (or 18)
	 	Market Rate	 	Market Rate






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	4.	 	Tenant’s Work. Tenant shall coordinate, contract, finance and construct additional
improvements to the Premises at Tenant’s sole cost and expense, except as set forth in
subparagraph (vi) of this section, including preparation of all necessary plans and drawings,
under the following conditions:






	 	(i)	 	Prior to commencement of construction of the tenant
improvements, Tenant shall forward to Landlord, for Landlord’s approval, copies
of the proposed plans and specifications of the proposed work. Landlord agrees
that HVAC replacement shall be an acceptable use of the Allowance (as defined
in Section 4(vi) below). Landlord’s approval of said plans and specifications
shall not be unreasonably withheld or delayed.
	 
	 	(ii)	 	Prior to commencement of construction of the tenant
improvements, Tenant shall forward to Landlord names and addresses of all
contractors and subcontractors which will be working in or on the Premises, and
Tenant will post notices in content and locations on the Premises acceptable to
Landlord notifying contractors and subcontractors that work performed on the
Premises is not lienable.
	 
	 	(iii)	 	Tenant shall be responsible for ensuring that all work
complies with the approved plans and specifications and applicable laws, codes,
ordinances, regulations and the like (collectively, “Building Requirements”);
provided Tenant shall not be responsible for the cost of remedying any
non-compliance of Landlord’s Improvements (as defined in Section 1.3 of the
Lease).
	 
	 	(iv)	 	Landlord shall have no responsibility for the quality,
maintenance, repair or replacement of the tenant improvements.
	 
	 	(v)	 	Tenant shall indemnify, defend (with counsel reasonably
approved by Landlord), and hold Landlord harmless from and against any and all
claims, causes of action, damages or expenses (including, without limitation,
mechanic’s liens) arising out of, by reason of, or as a result of Tenant’s
construction and installation of the tenant improvements.
	 
	 	(vi)	 	Landlord agrees to provide Tenant an amount not to exceed
$200,000.00 (the “Allowance”) to be applied against the actual costs incurred
by Tenant in making the tenant improvements to the Premises, subject to the
following terms and conditions. A condition precedent of Landlord’s obligation
to pay the Allowance to Tenant shall be that Tenant has first paid for the
entire cost of the tenant improvements in excess of the Allowance and
demonstrated the same to Landlord’s reasonable satisfaction in accordance with
the following procedures. Upon completion of the tenant improvements, Tenant
shall deliver to Landlord the following documentation, all in form and content
acceptable to Landlord: (a) a sworn construction statement signed by Tenant
and the general contractor confirming the total cost of labor and materials
provided for the tenant improvements, including a cost breakdown by
subcontractor or cost type including any change orders; (b) a copy of the
construction contract and all change orders and amendments thereto, if any,
relative to the tenant
improvements; and (c) original unconditional lien waivers verifying that




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	 	 	 	Tenant has paid for the total cost of the tenant improvements less the
Allowance. Upon the later of (i) ten (10) days of receipt of such
documentation, or (ii) the date Tenant takes occupancy of the Premises and
pays Landlord the first monthly installment of Rent, Landlord agrees to pay
all or such part of the Allowance as applicable directly to Tenant’s general
contractor. It shall be a condition precedent of Landlord’s obligation to
pay the Allowance that this Lease is in full force and effect and Tenant is
not in default under any of the terms of this Lease.






	5.	 	HVAC Replacement. Commencing on the Effective Date of this Fourth Amendment, the
parties agree that if replacement of the HVAC system or equipment is necessary as reasonably
determined by Landlord, and is not required due to Tenant’s negligent acts or omissions then
Landlord will perform the replacement work and bear the initial cost thereof, and Tenant shall
reimburse Landlord, as additional rent on a monthly basis at the same time Base Rent is due,
for cost of such replacement work over ten (10) years without interest, it being the
understanding of the parties that in no event shall Tenant’s obligation for reimbursement of
such amounts extend beyond the term of this Lease as it may be extended.
	 
	6.	 	Brokerage. Landlord and Tenant each represents and warrants to the other that there
is no obligation to pay any brokerage fee, commission, finder’s fee or other similar charge in
connection with this Fourth Amendment. Each party covenants that it will defend, indemnify
and hold harmless the other party from and against any loss or liability by reason of
brokerage or similar services alleged to have been rendered to, at the instance of, or agreed
upon by said indemnifying party.
	 
	7.	 	Miscellaneous. Except as otherwise provided herein, all capitalized terms used
herein shall have the meaning ascribed to them in the Lease. Except as specifically modified
herein, all of the covenants, conditions, and obligations under the Lease shall remain
unchanged and in full force and effect. In the event of a conflict between the terms of the
Lease and this Fourth Amendment, the terms of this Fourth Amendment shall prevail. This Fourth
Amendment shall be binding upon the parties hereto and their respective successors and
assigns. This Fourth Amendment may be executed in one or more counterparts each of which when
so executed and delivered shall constitute an original, but together said counterparts shall
constitute one and the same instrument. Execution copies of this Fourth Amendment may be
delivered by facsimile, and the parties hereto agree to accept and be bound by facsimile
signatures hereto.





IN WITNESS WHEREOF, the parties have executed this Fourth Amendment as of the day and year first
above written.



	 	 	 	 	 	 	 	 	 
	LANDLORD:

	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	CSM INVESTORS, INC.	 	SYNOVIS LIFE TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	/s/ Bradley Kittleson	 	By:	 	/s/ Brett A. Reynolds	 	 
	 

	 	 

	 	 
	Print Name:

	 	Bradley Kittleson	 	Print Name:	 	Brett A. Reynolds	 	 
	 

	 	 

	 	 	 	 

	 	 
	Print Title:

	 	VP of Property Management		 	Print Title:	 	VP of Finance and CFO	 	 
	 

	 	 

	 	 	 	 

	 	 







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