L&V: 1/15/02









EXHIBIT

10.5.1




 




SUBLEASE

AGREEMENT




 




THIS SUBLEASE AGREEMENT

is entered into as of January 22, 2002, by and between ANGEION CORPORATION, a

Minnesota corporation (“Angeion”), and CHF SOLUTIONS INC., a Delaware corporation

(“Subtenant”).




 




RECITALS:




 




Angeion is the

“Tenant” of approximately 29,042 square feet of space (the “Premises”) within a

building located in Northland Interstate Business Center IV, which building has

an address of 7601 Northland Drive, Brooklyn Park, Hennepin County, Minnesota

(the “Building”), pursuant to that certain Lease Agreement dated June 27, 1997,

amended by that certain Lease Amendment One dated as of March 23, 1998, and

further amended by that certain Lease Amendment Two dated as of May 1, 2000

(collectively, the “Prime Lease”), whereby Minnesota Industrial Properties

Limited Partnership is the successor in interest to Ryan Companies US, Inc.,

which was the original “Landlord” (“Prime Landlord”).




 




Subtenant desires

to sublease the Premises from Angeion, and Angeion is willing to sublet the

Premises to Subtenant, pursuant to the terms of this Sublease.




 




NOW, THEREFORE, in

consideration of the foregoing and other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, the parties agree as

follows:




 




1.     Sublease.  Angeion hereby subleases the Premises to

Subtenant pursuant to the terms and conditions of this Sublease and subject to

the terms and conditions of the Prime Lease, a true and correct copy of which

is attached as Exhibit A.




 




2.     Prime

Lease.  Except as may be

inconsistent with the terms of this Sublease, all terms, covenants, conditions,

provisions and agreements of the Prime Lease shall be applicable to this

Agreement with the same force and effect as if Angeion were the Landlord and

Subtenant were the Tenant under the Prime Lease.  Subtenant shall keep and perform promptly each of the terms,

covenants, conditions, provisions and agreements of the Tenant under the Prime

Lease, except for those provisions which, under the terms of this Sublease,

Angeion is to keep or perform.  A

default by Subtenant under the terms of the Prime Lease shall constitute a

default by Subtenant under the terms of this Sublease.  Notwithstanding anything in this Sublease to

the contrary, the only services or rights to which Subtenant is entitled

pursuant to this Sublease are those to which Angeion is entitled under the

Prime Lease, and for all such services and rights, Subtenant will look to Prime

Landlord and Angeion hereby authorizes Subtenant to communicate directly with

Prime Landlord regarding the same, provided, however, that Subtenant will

provide Angeion with (a) a copy of any written notice Subtenant provides to

Prime Landlord or which Prime Landlord provides to Subtenant, and (b) notice of

any unwritten communication to or with Prime Landlord, each of which shall be

provided no later than 24 hours following such notice to or communication to or

with Prime Landlord.  Subtenant

represents that it has read and is 




 





























 




familiar with the terms of the Prime Lease.  In the event (i) Prime Landlord requires

Angeion to make application on Subtenant’s behalf with respect to any matter

regarding the Prime Lease and (ii) Angeion is provided with written notice of

such requirement, Angeion shall use commercially reasonable efforts, at

Subtenant’s expense, to make any such application.  Angeion shall also use commercially reasonable efforts, at

Subtenant’s expense, to join in any effort of Subtenant to enforce the terms of

the Prime Lease against Prime Landlord to the extent the Prime Landlord is not

performing an obligation under the Prime Lease which Prime Landlord is

obligated to perform pursuant to the Prime Lease.  In the event Prime Landlord fails or refuses to comply with any

of the terms of the Prime Lease affecting the Subleased Premises or the use or

occupancy thereof by Subtenant, Subtenant may, to the extent permitted by

applicable law, in its own name (and, if necessary, in the name of Angeion

provided that Angeion has consented to the same, which consent Angeion will not

unreasonably withhold or delay) compel performance by Prime Landlord of Prime

Landlord’s obligations under the terms and provisions of the Prime Lease, and

Angeion shall reasonably cooperate with Subtenant in connection therewith.  Angeion shall, if requested in writing by

Subtenant, commence legal proceedings, with counsel reasonably acceptable to

Subtenant, against Prime Landlord to compel Prime Landlord to perform under the

Prime Lease.  Subtenant shall reimburse

Angeion for all reasonable costs, including reasonable attorneys’ fees, that

Angeion incurs, if (i) Angeion commences legal proceedings for the benefit of

Subtenant under this Sublease; or (ii) Angeion commences any legal proceeding

in the name of Angeion.




 




3.     Term.  The term of the Sublease (“Term”) shall

commence as of February 1, 2002 (“Commencement Date”) and terminate as of

February 29, 2008, the termination date of the Prime Lease.  Notwithstanding the foregoing, if the Prime

Lease is earlier terminated for any reason except (a) Subtenant’s default under

the terms of this Sublease or (b) Angeion’s default under the terms of this

Sublease, this Sublease shall terminate as of the termination of the Prime

Lease.




 




4.     Base Rent.  Subtenant shall pay Angeion base rent in the

monthly amounts set forth on Exhibit B attached to this Sublease, which monthly

amounts are due and payable on the first day of each month for each successive

month during the Term (“Base Rent”). 

Subtenant shall not be obligated to pay the rental amount described in

Section 1.03 of the Prime Lease (“Prime Lease Base Rent”).




 




5.     Additional

Rent.  Subtenant shall

also pay Angeion as and for Additional Rent, the monthly amounts owing to Prime

Landlord pursuant to the Prime Lease for Operating Expenses and Additional

Taxes as described in Sections 5 and 6 of the Prime Lease (“Prime Lease

Additional Rent”).  Angeion shall

provide to Subtenant all information Angeion receives from Prime Landlord

concerning amounts charged for Additional Rent.  Subtenant may exercise any rights of the Tenant under the Prime

Lease regarding audit or contest of Prime Lease Additional Rent, subject to the

terms and conditions of Section 2 of this Sublease.  Subtenant and Angeion hereby acknowledge and agree that Prime

Lease Additional Rent is a “pass through” amount to be paid by Subtenant to

Angeion and which Angeion will pay to Prime Landlord.




 




6.     Utilities

and Services.  Angeion

and Subtenant hereby acknowledge that all utilities are separately metered to

the Premises.  Pursuant to Section 9 of

the Prime Lease, Subtenant shall 




 




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pay directly to the provider of any utility(ies) all

charges for the same, on or before the date such payment(s) are due.




 




7.     Use.  The Premises shall be used only in accordance

with the terms and conditions of Section 4 of the Prime Lease.




 




8.     Alterations

and Improvements. 

Subtenant may not make alterations, additions or improvements to the

Premises during the Term of this Sublease, except (a) pursuant to the terms and

conditions of the Prime Lease, including without limitation, Section 8.1,

Section 11(1), Section 11(J), and Section 12(B), and (b) with the prior written

consent of both Prime Landlord and Angeion, in the form otherwise required

pursuant to Section 11(1) of the Prime Lease, which consent Angeion will not

unreasonably withhold.




 




9.     Insurance.  Subtenant shall comply with the insurance

requirements set forth in Section 11 M of the Prime Lease and Section 18 of the

Prime Lease, provided, however, that any insurance policy shall also name

Angeion as a named insured.  On or

before the Commencement Date, Subtenant shall provide to Angeion written

evidence of such insurance coverage, in the form of a certificate of insurance

evidencing a policy.




 




10.   Indemnification.  In addition to any indemnification and hold

harmless agreements set forth in the Prime Lease and except to the extent of

Angeion’s gross negligence or willful or wanton acts, Subtenant hereby agrees

to pay and to protect, indemnify and hold Angeion, its contractors, employees,

officers, partners and shareholders harmless from and against any liabilities,

damages, costs, expenses (including reasonable attorneys’ fees and expenses),

causes of action, suits, claims, demands or judgments of any nature whatsoever

brought, made or otherwise claimed by any person or entity (including

Subtenant, which hereby specifically releases Angeion from the same) and (a)

resulting from any failure of Subtenant to comply with the terms of this

Sublease or the Prime Lease and/or (b) arising from injuries to and/or death of

persons and/or damage to property on or from the Premises or the Building or

the parking lot serving the Building or the grounds upon which the Building is

situated.  In any suit, proceeding,

demand or action as to which Angeion may seek indemnity from Subtenant, upon

written notice from Angeion of the commencement of such suit, proceeding,

demand or action, Subtenant will assume the defense thereof with counsel

reasonably satisfactory to Angeion. 

Angeion hereby agrees to indemnify and hold Subtenant, its contractors,

employees, officers, partners and shareholders harmless from and against any

and all costs, damages, claims, liabilities and expenses (including reasonable

attorneys’ fees) suffered by or claimed against Subtenant, resulting from (i)

the gross negligence of Angeion, or its employees or contractors in the

Premises, or (ii) any failure of Angeion to comply with the terms of this

Sublease or the Prime Lease, except where Angeion’s failure to so comply

results from Subtenant’s failure to comply with the terms of this Sublease or

the Prime Lease.




 




11.   As Is

Condition.  Subtenant

hereby acknowledges that Angeion is leasing the Premises AS IS.  Subtenant specifically agrees that Angeion

has no obligation to make any improvement, alteration or repair to the

Premises.  Subtenant is acquainted with

the condition of the Premises and the parking available to the Premises and

accepts the same in their AS IS condition. 

Subtenant hereby releases Angeion from any and all liability regarding

the condition 




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of the Premises. 

Subtenant further covenants to comply with all requirements regarding

the condition of the Premises as of the termination of the Sublease, pursuant

to the terms and conditions of the Prime Lease, including without limitation

the provisions of Section 1lE of the Prime Lease.




 




12.   Further

Assignment/Subletting. 

Subtenant shall have no right to assign this Sublease or further sublet

the Premises, in whole or in part, except (a) to an entity wholly owned or

controlled by Subtenant, controlling Subtenant, or under common control with

Subtenant, (b) with Angeion’s prior written consent, which consent shall not be

unreasonably withheld or delayed, and (c) with Prime Landlord’s prior written

consent pursuant to Section 11 (F) of the Prime Lease.  Any attempt to assign this Sublease or

further sublet the Premises other than pursuant to the preceding sentence shall

be an immediate default of this Sublease. 

Any approved subletting of the Premises or assignment of this Sublease

pursuant to this Section 12 shall not be deemed to release Subtenant from the

payment and performance of any of its obligations under this Sublease.




 




13.   Security

Deposit.  Upon the

execution of this Sublease, Subtenant shall deposit with First American Title

Insurance Corporation (“Escrow Agent”) the amount of One Hundred Forty–Five

Thousand Two Hundred Ten Dollars ($145,210) (the “Original Escrow Amount”), to

be held by Escrow Agent pursuant to the terms and conditions of the Escrow

Agreement attached to this Sublease as Exhibit C (the “Escrow Agreement”).  During the term of the Escrow Agreement, the

Original Escrow Amount shall be the “Security Deposit” pursuant to this Section

13.  Upon distribution of the Original

Escrow Amount pursuant to the terms and conditions of the Escrow Agreement, an

amount equal to the total of (a) one month of the monthly Base Rent then

payable pursuant to this Sublease (but in no event less than the monthly Base

Rent payable as of June 1, 2003) and (b) the estimated Additional Rent payable

pursuant to this Sublease in the month in which the Original Escrow Amount is

distributed under the Escrow Agreement, which aggregate amount shall (i) be

paid directly to Angeion and (ii) be held as the Security Deposit pursuant to

this Section 13 until the expiration or earlier termination of this

Sublease.  The Security Deposit is to be

held by Escrow Agent and/or Angeion, as the case may be, to secure the faithful

performance of all the terms, covenants and conditions of this Sublease to be

performed by Subtenant.  If Subtenant

shall default with respect to any covenant or provision hereof and fail to cure

such default within applicable time periods, Angeion may use, apply or retain

all or any portion of the Security Deposit to cure such default or to

compensate Angeion for any loss or damage which Angeion may suffer

thereby.  If Angeion so uses or applies

all or any portion of the Security Deposit, Subtenant shall within thirty (30)

days after the date of Angeion’s written demand deposit cash with Escrow Agent

and/or Angeion, as the case may be, in an amount sufficient to restore the

Security Deposit to the full amount(s) set forth in this Section 13.  Following the distribution of the Original

Escrow Amount, Angeion shall not be required to keep the Security Deposit

separate from its general accounts and Subtenant shall not be entitled to

interest on the Security Deposit.  Within

thirty (30) days after the expiration of the Lease Term and the vacation of the

Premises by Subtenant, the Security Deposit, or such part as has not been

applied to cure any default, shall be returned to Subtenant.  In the event of any bankruptcy or other

proceeding initiated by or against Subtenant, it is agreed that all such

Security Deposit held hereunder shall be deemed to be applied by Angeion to

Base Rent, Additional Rent, and any 




 




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other charges due from Subtenant to Angeion for the last

month of the Term and each preceding month until such Security Deposit is fully

applied.




 




14.   Notices.  Any notice to be given by a party to this

Agreement must be in writing and either personally delivered, be sent by

registered or certified mail, or sent by a nationally recognized overnight

courier that issues a receipt to the other parties in this Section (or to such

other address as may be designated by notice to the other parties).  Notices personally delivered are deemed

delivered (i) on the date of personally received by the recipient; (ii) three

(3) business days after the date that the notice is deposited with the U.S.

Postal Service; or (iii) one (1) business day after the date that the notice is

deposed with a nationally recognized courier that issues a receipt to the other

parties.  Refusal to accept delivery is

deemed acceptance of the notice.




 




	

  If to Angeion:


  
	

   


  
	

  Angeion

  Corporation


  
	

  350 Oak Grove

  Parkway


  
	

  St. Paul, MN

  55127


  
	

  Attention:  Rex Fasching


  
	

   


  
	

  With a copy to:


  
	

   


  
	

  Lindquist &

  Vennum P.L.L.P.


  
	

  4200 IDS Center


  
	

  Minneapolis, MN

  55402


  
	

  Attention:  Debra K. Page, Esq.


  
	

   


  
	

  If to Subtenant:


  
	

   


  
	

  CHF Solutions,

  Inc.


  
	

  Northland

  Interstate Business Center IV


  
	

  7601 Northland

  Drive


  
	

  Brooklyn Park,

  MN  55428


  
	

  Attention:

  Robert A. Garee


  
	

   


  
	

  With a copy to:


  
	

   


  
	

  Dorsey &

  Whitney LLP


  
	

  50 South Sixth

  Street


  
	

  Suite 1500


  
	

  Minneapolis,

  MN  55402


  
	

  Attention: Ken

  Cutler, Esq.


  





 




15.   Prime

Lease Not Applicable. 

Angeion and Subtenant agree that, in addition to any other amendment of

the terms of the Prime Lease described above, the terms and conditions of the

Prime Lease which are specifically not applicable to this Sublease are as

follows:




 




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Section 1.2 (“First Option to Expand”);




Section 1.3 (“Second Option to Expand”);




Section 1.4 (“Right of First Refusal”);




Section 1.5 (“Market Rent”);




Section 2.2 (“Option to Extend”);




The first paragraph of Section 8.1 (“Leasehold

Improvements”)




Section 8.2 (regarding construction allowance);




Section 8.3 (“Early Access”);




Section 16 (“Delay in Possession”);




Section 32 (“Brokers”);




Section 36B (regarding occupancy of 3540 Annapolis

Lane premises)




all of Article 1 (“Construction”) of the Addendum to

Lease;




all of Exhibit D (“Leasehold Improvements Plans and

Specifications”); and




all of Exhibit E (regarding the construction schedule

for leasehold improvements).




 




16.   Costs of

Enforcement.  In event of

any breach of this Sublease by either party, the breaching party shall

reimburse the non-breaching party for all of the breaching party’s costs,

disbursements and reasonable attorneys’ fees incurred in enforcing or

attempting to enforce the terms of the Sublease.




 




17.   Brokers.  The parties hereby agree that Griffin

Companies has acted as Angeion’s broker and Roseville Properties has acted as

Subtenant’s broker in connection with this Sublease (collectively, the

“Brokers”).  Angeion shall pay Griffin

Companies a fee for its services, a portion of which shall be paid to Roseville

Properties, pursuant to agreement between the Brokers.  Angeion shall be solely responsible for the

payment of the brokerage commission to Griffin Companies and Subtenant shall

have no responsibility for the same. 

Angeion and Subtenant warrant and represent that they have dealt with no

real estate broker in connection with this Sublease other than the

Brokers.  No other broker is entitled to

any commission on account of this Sublease. The party who breaches this

warranty will defend, hold harmless and indemnify the other from any loss,

damage or expense, including reasonable attorneys’ fees, arising from the

breach.




 




18.   All

Agreements Included. 

This instrument embodies all of the agreements between the parties

hereto respecting the Premises.  Any

subsequent changes and modifications shall be embodied in a written instrument

duly executed by both Angeion and Subtenant.




 




19.   Title and

Possession.  Subject to

receipt of the attached Prime Landlord’s Consent, Angeion covenants and agrees

that it has full right and authority to enter into this Sublease for the full

Term hereof, and that Subtenant, upon paying the Base Rent, Additional Rent and

other sums provided herein, and upon performing the duties, covenants,

agreements and obligations hereof, and upon keeping and obeying all of the

restrictions, conditions and provisions hereof, will have, hold and enjoy quiet

possession of the Premises for the Term herein granted.




 




20.   Prime

Landlord Consent.  This

Sublease is contingent upon approval by Prime Landlord manifested by Prime

Landlord’s execution of the Consent attached hereto.  Unless and 




 




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until Prime Landlord executes the Consent, this

Sublease is of no force or effect, and the parties hereto have no liability or

obligation to each other.




 




21.   Damage,

Destruction, Condemnation. 

In the event of damage or destruction of the Premises or the taking of

all or any part thereof under the power of eminent domain, this Sublease will

terminate if the Prime Lease is terminated as a result thereof, and the rent

payable hereunder will abate for as long as and in the same proportion as the

Rent due from Angeion to Prime Landlord under the Prime Lease abates as a

result thereof.  If this Sublease is not

so terminated, the provisions of the Prime Lease with regard to restoration of

the Premises shall control.




 




23.           Successors and Assigns.  All of the terms, covenants, provisions and

conditions of this Sublease are binding upon and inure to the benefit of the

parties hereto and their respective successors and permitted assigns.




 




24.           Estoppel.  Angeion hereby certifies to Subtenant, its successors and

assigns, as follows:




 




a.             The Prime Lease is in full force and effect.




 




b.             The

rent and other charges due under the Prime Lease are currently paid in full.




 




c.             There are no present defaults under the terms and

conditions of the Prime Lease.




 




d.             The

expiration date of the Prime Lease is February 29, 2008.




 




e.             Subtenant

is not required to remove, at any time, any improvements, alterations or

additions in the Premises constructed or installed by Angeion, including,

without limitation, the mezzanine discussed in Section 11(I) of the Prime

Lease, which was not constructed and does not exist.




 




IN AGREEMENT, the parties have executed

this Sublease Agreement as of the date first above written.




 




	

  ANGEION

  CORPORATION


  	

  CHF

  SOLUTIONS, INC.


  
	

   


  	

   


  
	

   


  	

   


  
	

  By:


  	

   /s/ Richard E. Jahnke 


  	

  By:


  	

   /s/ John Erb 


  
	

  Its:


  	

   President and CEO


  	

  Its:


  	

   CEO


  





 




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CONSENT




 




Minnesota

Industrial Properties Limited Partnership, as successor in interest to Ryan

Companies US, Inc., the Landlord under the Prime Lease referred to above

(“Prime Landlord”), hereby consents to the foregoing Sublease Agreement

(“Sublease”) between Angeion Corporation (“Angeion”) and CHF Solutions,  Inc.

(“Subtenant”), provided, however, that: (a) such consent shall not release or

discharge Angeion from liability for all of the obligations to be performed by

Angeion under the Prime Lease, nor shall such consent amend or modify any of

the obligations of Angeion under the Prime Lease; and (b) such consent shall

not be construed as the consent of the undersigned to any further or additional

subletting of all or any part of the Premises subject to the Prime Lease.




 




To the best of

Prime Landlord’s knowledge, no default by Angeion in the performance of the

Prime Lease exists on the date hereof, and no event has occurred which, after

the passage of time or expiration of any notice, grace or right to cure period,

would constitute a default under the Prime Lease.




 




Each of Prime

Landlord and Subtenant hereby releases the other from any liability or

responsibility to the other or anyone claiming through or under them by way of

subrogation or otherwise for any loss or damage to property caused by any of

the all risk casualties insurable under an all risk property insurance policy,

even if such casualty shall have been caused by the fault or negligence of the

other party, or anyone for whom such party may be responsible.




 




Prime Landlord

hereby acknowledges that the Sublease permits and directs Subtenant to deal

directly with Prime Landlord as to any matter regarding the Premises and/or the

Prime Lease and Prime Landlord hereby consents to such direct communications

from Subtenant.  Prime Landlord shall

deliver a copy to Subtenant of any notice given by Prime Landlord to, or any

notice received by Prime Landlord from, Angeion.  Prime Landlord shall not, as long as Subtenant is not in default

under the Prime Lease or the Sublease, disturb Subtenant’s possession of the

Premises.  Prime Landlord hereby

certifies to Subtenant, its successors and assigns, as follows:




 




	

  a.


  	

   


  	

  The Prime Lease is in full force and effect.


  
	

   


  	

   


  	

   


  
	

  b.


  	

   


  	

  The rent and other charges due under the Prime Lease

  are currently paid in full.


  
	

   


  	

   


  	

   


  
	

  c.


  	

   


  	

  There are no present defaults under the terms and

  conditions of the Lease.


  
	

   


  	

   


  	

   


  
	

  d.


  	

   


  	

  Prime Landlord is the owner in fee of the

  Premises.  The Premises are subject to

  no mortgages, deeds of trust or other voluntary liens which would entitle the

  holder thereof to interfere with or disturb the tenant’s use or enjoyment of

  the Premises or the exercise of the tenant’s rights under the Prime Lease, as

  long as the tenant is not in default thereunder beyond any applicable cure

  period.


  
	

   


  	

   


  	

   


  
	

  e.


  	

   


  	

  The expiration date of the Prime Lease is February

  29, 2008.


  





 




 




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  f.


  	

   


  	

  Subtenant is not required to remove, at any time,

  any improvements, alterations or additions in the Premises constructed or

  installed by Angeion, including, without limitation, the mezzanine discussed

  in Section 11(I) of the Prime Lease.


  
	

   


  	

   


  	

   


  
	

  g.


  	

   


  	

  Promptly following the execution of this Consent,

  Prime Landlord shall cause the Premises and the Building to comply with all

  applicable municipal, state and other local codes and laws.  Prime Landlord hereby specifically agrees

  to install a fire door in the “dead end” corridor of the Premises or to take

  such other action as may be necessary to bring the Premises within fire and

  other safety codes for the City of Brooklyn Park.


  





 




 




	

   


  	

  MINNESOTA INDUSTRIAL

  PROPERTIES 


  LIMITED PARTNERSHIP,


  a Minnesota limited partnership


  
	

   


  	

   


  
	

   


  	

  By:


  	

  RASB Industrial, LLC, a

  Minnesota limited partnership


  
	

   


  	

  Its:


  	

  General Partner


  
	

   


  	

   


  
	

   


  	

   


  	

  By:


  	

  /s/ Richard E. Jahnke


  
	

   


  	

   


  	

  Its: 


  	

  President and CEO


  
	

   


  	

   


  
	

   


  	

  CHF SOLUTIONS, INC.


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ John Erb


  
	

   


  	

  Its:


  	

  CEO


  
					





 




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