EXHIBIT 10.27
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT is entered into effective as of the 17th day of
September, 1996, by and between IVI PUBLISHING, INC., a Minnesota corporation
("SUBLESSOR") and REALITY INTERACTIVE, a Minnesota corporation ("SUBLESSEE").
RECITALS
Sublessor is the tenant under a lease with Xxxx/Xxxxxx Limited Partnership,
a Minnesota limited partnership (the "OWNER") dated March 30, 1994 (the "MAIN
LEASE") for the Leased Premises as defined in the Main Lease and as shown on
attached EXHIBIT A, (the "MAIN LEASE PREMISES") located in the building at 0000
Xxxxxx Xxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000 (the "BUILDING").
The Main Lease is incorporated herein by reference as fully as if the terms
and provisions were set forth in full in this Sublease Agreement, except those
terms specifically excluded in or modified by this Sublease Agreement.
Sublessee desires to sublease from Sublessor that portion of the Main Lease
Premises located on the fourth (4th) floor of the Building, and shown by
cross-hatching on attached EXHIBIT A (the "PREMISES") and Sublessor desires to
sublease the Premises to Sublessee.
THEREFORE, in consideration of the mutual promises of the parties set forth
in this Sublease Agreement and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee agree as
follows:
1. PREMISES
Sublessor hereby leases to Sublessee, and Sublessee hereby takes from
Sublessor, the Premises, subject to and together with the benefit of the terms,
covenants, conditions and provisions of this Sublease Agreement applicable
thereto. The Premises shall be deemed to be comprised of 21,184 rentable square
feet.
2. TERM
The term of this Sublease Agreement (the "TERM") shall be two (2) years and
six (6) months commencing on December 1, 1996 (the "COMMENCEMENT DATE") and
terminating on the day of May 31, 1999, unless sooner terminated as provided
herein.
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3. USE
Sublessee shall use the Premises for any purpose permitted in the Main
Lease.
4. BASE RENT AND ADDITIONAL RENT
A. Sublessee agrees to pay Sublessor during the Term, Base Rent at
the rate or rates set forth on the Addendum attached hereto as EXHIBIT B,
payable in equal monthly installments, in advance, on the first day of each and
every month during the Term. In the event the Term commences on a day other
than the first day of a calendar month, Sublessee shall pay Base Rent for said
fractional month prorated on the basis of a thirty (30) day period.
B. Sublessee agrees to pay Sublessor during the Term, Additional
Rent, as defined in the Main Lease, at the same rates and on the same basis as
Sublessor has agreed to pay to Owner under the Main Lease. If the Premises are
comprised of less than the entire Main Lease Premises, then the Additional Rent
payable by Sublessee hereunder shall be calculated by multiplying the Additional
Rent payable by Sublessor under the Main Lease by a fraction, the numerator of
which is the rentable area of the Premises, and the denominator of which is the
rentable area of the Main Lease Premises.
C. Sublessee shall also be responsible for paying a pro-rata share of
the utility charges for which Sublessor is responsible under the Main Lease.
This share shall be a fraction, the numerator of which is the rentable area of
the Premises, and the denominator of which is the rentable area of the Main
Lease Premises.
D. The parties acknowledge and agree that Sublessee shall timely pay
all Base Rent, Additional Rent, and any other charges which are Sublessee's
obligation hereunder.
E. All Base Rent and Additional Rent payable by Sublessee under this
Sublease shall be paid, without notice or prior demand therefor and without any
deduction or set-off whatsoever, to Sublessor, at the address set out in Article
14 hereof or at such place as Sublessor may designate from time to time by
written notice to Sublessee given in the manner set out in Article 14 hereof.
F. The parties acknowledge that the Additional Rent currently payable
by Sublessor under the Main Lease equals $9.56 per square foot annually. The
parties also acknowledge that the Additional Rent is subject to the adjustments
and increases set forth in the Main Lease.
5. MAIN LEASE
A. Except as may be inconsistent with the provisions of this
Sublease Agreement, the terms, provisions, covenants and conditions of the Main
Lease are incorporated
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herein by reference in like manner as though the same were specifically set
forth herein. Except as may be otherwise specifically provided herein,
Sublessee shall have all rights and privileges and assumes and agrees to keep
and perform, as to the Premises, all of the obligations, conditions and
covenants of the Tenant set forth under the Main Lease as though Sublessee were
substituted as Tenant thereunder. It is agreed and understood between the
parties hereto that the Sublessee obtains and is granted no more rights and
privileges, as to the Premises, under this Sublease Agreement than Sublessor was
granted as Tenant under the Main Lease.
B. The obligations, conditions and covenants of the Owner as the
Landlord under the Main Lease shall remain the Owner's, and Sublessor shall not
be required to perform the same in the event of a default by the Owner.
Notwithstanding the foregoing, Sublessor shall have, with respect to the
Premises, all of the rights and privileges of the Owner as Landlord under the
Main Lease, except as herein otherwise specifically provided.
C. Sublessor and Sublessee each agree not to do, suffer, or permit
anything to be done which would result in a default under the Main Lease, or
cause the Main Lease to be terminated or forfeited.
6. PAYMENT OF COSTS AND FEES
Sublessee will pay and discharge all costs, attorneys fees and expenses
that may be incurred by Sublessor in enforcing the covenants and agreements of
this Sublease Agreement, or which may be incurred by Owner in enforcing the
covenants and agreements of the Main Lease as a result of a default by Sublessee
hereunder.
7. INSURANCE
Sublessee shall maintain, as to the Premises, all insurance required to be
maintained, by Sublessor as Tenant, under the Main Lease, and have Sublessor and
Owner named as additional insureds thereon. The insurance policies maintained
by Sublessee shall provide that the same may not be cancelled, terminated or
altered without thirty (30) days' prior written notice sent by certified mail,
return receipt requested, to Sublessor and Owner. The insurance maintained by
Sublessee shall contain an express waiver of claims and subrogation in favor of
Sublessor and Owner.
8. INDEMNIFICATION
Sublessee agrees that it will indemnify and hold Sublessor and Owner
forever harmless as provided in Article 12 of the Main Lease, which
indemnification shall also include any and all responsibility or liability which
Sublessor may incur by virtue of this Sublease Agreement arising out of any
failure of Sublessee in any respect to comply with and perform the requirements
and provisions of the Main Lease (attributable to the Premises), or this
Sublease Agreement.
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9. ASSIGNMENT/TRANSFER
Sublessee shall not transfer, sell, assign or pledge this Sublease or
further sublease the Premises, or any part thereof, without (i) compliance with
the requirements of the Main Lease relating thereto and (ii) obtaining the prior
written consent of the Sublessor and Owner. Owner and Sublessor have legitimate
concerns regarding the compatibility of new or different occupants of the
Premises, including concerns based upon the use to which such occupants may make
of the Premises, and may therefore withhold their consent to any such transfer
based upon any concern they or either of them may have regarding the use to
which the proposed transferee may put the Premises or based upon other
justifiable concerns related to possible lack of harmony between the use of the
proposed transferee and other uses or occupants in the Building or concerns
related to the financial strength, character or reputation of the proposed
transferee. No transfer of any nature shall relieve Sublessee of primary
liability to Sublessor hereunder unless Sublessor agrees in writing.
10. ALTERATIONS AND IMPROVEMENTS
Sublessee shall not make any alterations or improvements to the Premises
without (i) complying with the terms of the Main Lease relating thereto and (ii)
obtaining the prior written consent of Sublessor and Owner. Sublessor's consent
may be conditioned upon Sublessor being provided with plans and specifications
for the proposed alteration or improvement, information regarding the identity
of the persons who will perform the work or provide the materials, security
against mechanic's liens (all of which must be reasonably acceptable to
Sublessor) and receipt of Owner's consent. All such work must be done in a
workmanlike fashion using new, first-grade materials. Sublessee shall be
responsible for the reasonable costs incurred by Sublessor and Owner in
reviewing any plans and specifications to be submitted pursuant to this Article.
11. SURRENDER OF THE PREMISES
Upon the expiration of the Term of this Sublease Agreement, Sublessee shall
remove its equipment and trade fixtures promptly (immediately repairing any
damage caused thereby) and quit and surrender the Premises in the condition
existing as of the date hereof.
12. DEFAULT/REMEDIES
A. If any one or more of the following events occurs, then Sublessee
shall be deemed to be in default under this Sublease Agreement:
1. Sublessee fails to pay, when due, the Base Rent, Additional
Rent or other charges provided for under this Sublease Agreement;
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2. Sublessee fails to keep, observe or perform any of the other
terms, covenants and conditions herein to be kept, observed and
performed by Sublessee under this Sublease Agreement for more
than (i) five (5) days after payment is due (in the case of a
monetary default) or (ii) twenty (20) days after written notice
is given to Sublessee specifying the nature of such default (in
the case of a non-monetary default). Notwithstanding the
foregoing, if the applicable grace period set forth in the Main
Lease shall be shorter than that provided herein, the grace
period set forth in the Main Lease shall supersede the grace
period set forth in this subparagraph.
B. If a default occurs, then Sublessor shall be entitled to exercise
any and all of the rights and remedies available at law or in equity, including
those provided to the Owner as Landlord under the Main Lease. Any remedies
under this Sublease Agreement shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other remedies available to Sublessor
existing at law or in equity. Owner shall be entitled to enforce the provisions
of the Main Lease against Sublessee to the extent the same are violated by
Sublessee.
13. CONSENTS
A. Wherever the Owner's consent as Landlord is required by the
provisions of the Main Lease, the Sublessee must, in addition to securing such
consent, also obtain the prior written consent of the Sublessor.
B. In no event shall Sublessee be entitled to any damages for any
withholding or delay in either Sublessor or Owner giving its consent and
Sublessee understands and agrees that its remedies shall be limited to an action
for summary judgment, an injunction or declaratory judgment.
14. NOTICES
A. Sublessor shall immediately forward to Sublessee all notices of
default received by Sublessor from Owner as Landlord under the Main Lease.
Sublessee shall forward to Sublessor all reports and written statements
concerning the Premises required of the Tenant under the Main Lease at least ten
(10) days prior to the date such reports or written statements are due under the
Main Lease.
B. Any notice, demand, request or other communication which may be
or is required to be given to the Owner as Landlord under the Main Lease shall
be effective only if a copy of the notice to the Owner is either delivered
personally or sent to Sublessor as provided under subparagraph C below.
C. Any notice which one party wishes or is required to give to the
other party
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will be regarded as given and received if in writing and either delivered
personally to such party or sent certified or registered mail, return receipt
requested, postage pre-paid, to the addresses below, or such other addresses as
either party may, from time to time, designate by written notice to the other
party:
Sublessor: IVI Publishing, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attention: CFO
Sublessee: Reality Interactive
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx, CFO
Owner: Xxxx Properties, Inc.
000 Xxxxxxxxxxxxx Xxxxxx
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
15. RELATIONSHIP OF THE PARTIES
Nothing contained in this Sublease Agreement shall be deemed or construed
by the parties hereto, or by a third party, to create the relationship of
principal and agent or of partnership or joint venture or of any association
whatsoever between Owner, Sublessor, or Sublessee. It is hereby expressly
understood and agreed that no provision contained in this Sublease Agreement,
nor any act or acts of the parties hereto shall be deemed to create any
relationship between Sublessor and Sublessee other than the relationship of
Sublessor and Sublessee.
16. INVALIDITY
If any part of this Sublease Agreement or any part of any provision hereof
shall be adjudicated to be void or invalid, then the remaining provisions
hereof, not specifically so adjudicated to be invalid, shall be executed without
reference to the part or portion so adjudicated as invalid, insofar as such
remaining provisions are capable of execution.
17. IMPORTANCE OF EACH COVENANT
Each covenant and agreement on the part of one party is understood and
agreed to constitute an essential part of the consideration for each covenant
and agreement on the part of
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the other party.
18. CONDITIONS
This Sublease Agreement is dependent and conditioned upon the Owner
executing its consent to this Sublease Agreement in the form attached hereto as
EXHIBIT C.
19. SUCCESSORS AND ASSIGNS
This Sublease Agreement and all covenants and agreements contained herein
shall be binding upon, apply and inure to the benefit of the respective
successors and assigns of the parties to this Agreement, subject to the
restrictions imposed under this Sublease Agreement and the Main Lease relating
to assignment or further sublease by the Sublessee.
20. NON-WAIVER
Sublessor's failure to insist upon strict performance of any covenant in
this Sublease Agreement or to exercise any option or right herein contained
shall not be a waiver or relinquishment of such covenant, right or option, but
the same shall remain in full force and effect. Sublessor is specifically
authorized to accept a partial payment (no matter how such payment may be
labelled or conditionally delivered) without such acceptance being deemed a
waiver of the balance of the amount owed.
21. APPLICABLE LAW
This Sublease Agreement shall be construed under the laws of the State of
Minnesota.
22. ENTIRE AGREEMENT/AMENDMENTS
This Sublease Agreement and the Exhibits attached hereto set forth all of
the covenants, promises, agreements, conditions and understanding between
Sublessor and Sublessee concerning the Premises and there are no other
covenants, promises, agreements, conditions or understandings, either oral or
written, between them other than those which are set forth in this Sublease
Agreement. Except as otherwise provided herein, no subsequent alteration,
amendment, change or addition to this Sublease Agreement shall be binding upon
Sublessor or Sublessee unless reduced to writing and signed by both parties.
23. ADDENDUM
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Attached to this Sublease is an Addendum, the terms and provisions of which
are hereby incorporated into this Sublease by reference.
24. COUNTERPARTS
This Sublease Agreement and the Consent attached hereto may be separately
executed as counterparts which shall be then read together and enforced.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above-written.
SUBLESSOR: IVI PUBLISHING, INC.
By /s/ Xxx Xxxxxxx
-----------------------
Its CEO
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SUBLESSEE: REALITY INTERACTIVE
By /s/ Xxx Xxxxxxxxx
-----------------------
Its CFO
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EXHIBIT A
Site Plan of the Main Lease Premises and the Premises
EXHIBIT B
Addendum to Sublease
Sublessee shall pay Base Rent in the amount of $3.94 per square foot annually.
EXHIBIT C
ACKNOWLEDGEMENT AND CONSENT
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This Agreement is entered into effective as of Sept. 19, 1996 by and
between Xxxx/Xxxxxx Limited Partnership, a Minnesota limited partnership,
("OWNER") and IVI Publishing, Inc., a Minnesota corporation ("TENANT").
RECITALS
Owner and Tenant are parties in the respective capacities of landlord and
tenant in the Lease dated March 30, 1994 (the "LEASE") for the premises
described in the Lease (the "PREMISES") located at 0000 Xxxxxx Xxxxx Xxxxx, Xxxx
Xxxxxxx, Xxxxxxxxx.
Tenant has requested that Owner grant Tenant permission to sublease a
portion of the Subleased Premises to Reality Interactive, a Minnesota
corporation ("SUBLESSEE") pursuant to the terms of the attached Sublease
Agreement.
Owner is willing to grant that consent subject to certain terms and
conditions.
PROVISIONS
In consideration of the mutual covenants of the parties and other valuable
consideration, the receipt and sufficiency is hereby acknowledged, the parties
agree as follows:
1. Owner grants permission to Tenant to sublease the Subleased Premises
to Sublessee for a term commencing on December 1, 1996 and terminating May 31,
1999 (the "TERM") and pursuant to the terms and conditions of the attached
Sublease Agreement.
2. This consent shall not be construed as a consent to any other
transfer, or any further subleasing of all or any portion of the Premises.
3. Owner agrees that Sublessee's possession of the Premises pursuant to
the terms of the Sublease Agreement shall not be disturbed so long as Sublessee
is not in default under the terms of such Sublease Agreement and Tenant is not
in default under the terms of the Main Lease.
XXXX/XXXXXX LIMITED PARTNERSHIP
By Xxxx Properties, Inc, its General Partner
By: /s/ Xxxx X. Xxxxx
---------------------------
Its: Pres.
--------------------------
IVI PUBLISHING, INC.
By: /s/ Xxx Xxxxxxx
------------------------
Its: CEO
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