EXHIBIT 10.40
SUBLEASE
THIS SUBLEASE, made and entered into this 18th day of November between RACOTEK,
INC., a Delaware corporation, ("Sublessor") and ATIO CORPORATION USA, INC., a
Minnesota corporation ("Sublessee").
RECITALS:
A. A lease ("Prime Lease") dated May 2, 1994, was made and entered into
between Connecticut General Life Insurance Company, on behalf of its Closed
End Real Estate Fund I, as Landlord, and Racotek, Inc., as Tenant, pertaining
to Premises consisting of the entire second and sixth floors at 0000 Xxxx
Xxxx, Xxxx xx Xxxxx, Xxxxxx of Hennepin, State of Minnesota and is attached
hereto as Exhibit B.
B. The parties hereto desire that the Sublessor sublet to the Sublessee
and that the Sublessee take from the Sublessor that portion of the sixth
floor of the Premises leased under the Prime Lease containing approximately
13,494 square feet of rentable area (hereinafter referred to as the "Sublet
Area" and designated "Suite 600") as depicted on Exhibit A, attached hereto.
C. As an inducement to Sublessor to enter into this Sublease,
Sublessee's parent, Venturian Corp., a Minnesota corporation, has agreed to
guarantee Sublessee's performance under this Sublease.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants hereinafter contained, but subject to the consent thereto by
Landlord, the Sublessor does hereby sublet to the Sublessee and the Sublessee
does hereby rent and take from Sublessor, the Sublet Area, subject to the
following terms and conditions:
1. Except for those portions of Articles 5, 6 and 13 contained in the
Addendum to the Prime Lease and Articles 4, 34, 35, 36 and 37 of the Prime
Lease (hereinafter collectively referred to as the "Excluded Provisions")
which shall not apply to this Sublease, all other applicable terms and
conditions of the Prime Lease are incorporated into and made a part of this
Sublease as if the Sublessor were the Landlord under the Prime Lease, the
Sublessee was the Tenant under the Prime Lease, and the Sublet Area were the
Premises under the Prime Lease. Sublessee hereby assumes and agrees to be
bound by all terms, covenants, and conditions of the Prime Lease except for
the Excluded Provisions and except as otherwise provided for herein.
2. The term of this Sublease shall commence November 24, 1997, and
shall terminate July 31, 2000.
3. The Sublessee shall pay to Landlord on behalf of Sublessor $7,872
per month from January 1, 1998, to July 31, 1998, and 8,434 per month from
August 1, 1998, to July 31, 2000, as Minimum Rent for the Sublet Area, due
and payable on the first day of each month during the entire term of this
Sublease. Commencing January 1, 1998, Sublessee shall also pay to Landlord
on behalf of Sublessor, as Additional Rent, its share of Real Estate Taxes
and Operating Expenses pursuant to Article 6 of the Prime Lease based on
13,494 rentable square feet for the term of this Sublease. Sublessee shall
initially pay estimated 1998 Real Estate Taxes and Operating Expenses in the
amount of $9,828 per month ($8.74 per rentable square foot per year) subject
to adjustment at the end of 1998 as provided for in said Article 6.
All rent shall be paid to the Landlord at the address and in the manner
set forth in the Prime Lease for the payment of rentals or at such other
address and/or to such other party as the Landlord may from time to time
elect by giving not less that ten (10) days advance written notice thereof to
the Sublessee. All such payments shall be credited against the obligations of
Sublessor under the Prime Lease.
4. The Sublessee may use the Sublet Area for the purpose stated in the
Prime Lease and for no other purposes whatsoever.
5. The Sublessee will notify the Landlord forthwith in the event of any
default that occurs under the provisions of this Sublease, such notice to be
given to the Landlord by United States Mail, registered or certified, postage
prepaid, at the address provided for Landlord in the Prime Lease or as such
other address as Tenant shall be advised to use by Landlord.
6. Any notice provided for herein shall be deemed to be duly given if
made in writing and delivered in person to an office of such party or mailed
by first class registered or certified mail, postage prepaid, addressed as
follows:
If to Sublessor: If to Sublessee:
Racotek, Inc. ATIO Corporation USA, Inc.
0000 Xxxx Xxxx, Xxxxx 000 0000 Xxxx Xxxx/Xxxxx 000
Xxxxx, Xxxxxxxxx 00000 Xxxxx, Xxxxxxxxx 00000
or to such other address with respect to either party hereto as such party shall
notify the other party hereto in writing. Any notice so given, if mailed as
aforesaid, shall be deemed received the second (2nd) day after it is deposited
in the United States Mail.
7. Sublessee shall, at its expense, during the term of this Sublease,
maintain public liability insurance and such other insurance coverages in the
amount required under Article 24 of the Prime Lease in one or more companies
acceptable to Sublessor and Landlord, naming Sublessor, Landlord and
Landlord's manager of the Building as additional insureds. No policy of
insurance obtained by the Sublessee in compliance with the Prime Lease may be
canceled or terminated except upon not less that ten (10) days written notice
to Sublessor and Landlord. True and correct copies of each policy or such
insurance, and renewals thereof, obtained by the Sublessee in compliance with
the Prime Lease shall be delivered to the Sublessor and to Landlord.
8. Sublessor agrees to pay United Properties Brokerage Company
("United") a leasing commission in the amount of $60,723 payable in full upon
full execution of this Sublease. United has agreed under separate agreement
that upon receipt thereof from Sublessor, that it shall pay half of said
commission to Sublessee's agent, Xxxxx Real Estate Company. It is hereby
agreed that United shall be deemed a third-party beneficiary of Sublessor's
agreement to pay the leasing commission specified above. In no event shall
Sublessee have any liability whatsoever with respect to fees or commissions
as a result of this Sublease.
9. In all respects, Sublessee accepts the Sublet Area in its "as-is"
condition. Sublessee agrees that it shall make no alterations or improvements
to the Sublet Area except as are consented to in writing by Sublessor and by
Landlord as to the nature of such alterations or improvements and the manner
of doing the work as provided for under the Prime Lease.
10. Sublessee agrees that upon the full execution of this Sublease, that
in order to provide security to Sublessor for the payment of rent and the
performance by Sublessee of all of the terms of this Sublease, that Sublessee
will deposit $18,000 with Landlord (the "Security Deposit"). The Parties
agree that upon the occurrence of a default by Sublessee under this Sublease
(beyond any applicable period of cure), that Landlord shall have the
authority to utilize such portion of the Security Deposit as is necessary to
cure such default. Sublessee agrees that in the event any portion of the
Security Deposit is so utilized to cure any such default, that Sublessee will
immediately deposit with Landlord an amount sufficient to maintain the
required $18,000 balance. Sublessee agrees to indemnify, defend and hold
Sublessor harmless from any damage which may be suffered by Sublessor as a
result of any default by Sublessee under the terms of this sublease including
any failure by Sublessee to pay when due any of the rentals provided for
under Paragraph 3 of this Sublease. Notwithstanding anything to the contrary
contained herein, Sublessee acknowledges that its liability under this
Sublease is not limited to the Security Deposit and that the use of any
portion of the Security Deposit shall not constitute a waiver but shall be in
addition to any other remedies available to Sublessor under this Sublease,
available to Landlord under the Prime Lease, and available to either party
under law. The parties agree that so long as no such default exists as of
the expiration of this Sublease, that Landlord shall return to Sublessee the
entire remaining balance of the Security Deposit, without interest.
11. Not withstanding anything contained in this Sublease to the contrary,
a default (beyond any applicable period of cure) by Sublessee under that
certain Personal Property, Installment, Sale and Security Agreement dated of
even date herewith and by and between Sublessor and Sublessee shall
constitute a default under this Sublease.
IN WITNESS WHEREOF, each of the parties hereto has caused their presence
to be duly executed as of the day and year first above written.
SUBLESSOR: SUBLESSEE:
RACOTEK, INC. ATIO CORPORATION USA, INC.
BY: /s/ BY: /s/
Xxx X. Xxxxxxx Xxxxxxx X. Xxxxxxxx
Its: Secretary and Attorney Chief Financial Officer
CONSENT OF LANDLORD
A. The undersigned Landlord does hereby consent to the above Sublease provided,
however, in no event shall: (i) the Tenant under the Prime Lease be in any
way whatsoever relieved of its obligations to keep and perform promptly each
of the terms, covenants or conditions to be kept or performed by it under
the Prime Lease, or (ii) the terms, covenants or conditions of the Prime
Lease be, in any manner whatsoever, amended or otherwise changed or (iii)
the undersigned be deemed to consent to any further subletting or
assignment under the Prime Lease, or (iv) the acceptance of rent by
Landlord be deemed to create privity of contract by and between Sublessee
and Landlord. This consent shall not be effective unless Sublessee
delivers to Landlord, prior to taking possession of the Sublet Area,
evidence that Sublessee is in full compliance with all insurance
requirements of the Prime Lease including but not limited to the
requirement that Landlord and Landlord's manager of the Building are
named as an additional insured in all insurance policies required under
the Prime Lease.
B. Landlord agrees that so long as Sublessee makes the payments of Minimum
Rent and Additional Rent directly to Landlord as required pursuant to
Paragraph 3 of the Sublease and performs all of the other terms,
conditions, covenants and agreements on Sublessee's part to be observed
and performed under the Sublease, Sublessee may peaceably and quietly
enjoy the Sublet Area for the uses permitted under the Sublease even
though Tenant may be in default under one or more of the terms,
conditions, covenants or agreements on Tenant's part to be observed and
performed under the Prime Lease. Such agreement to allow Sublessee to
peaceably and quietly enjoy the Sublet Area in the event of a default by
Tenant under the Prime Lease shall be contingent upon Landlord continuing
to hold the Security Deposit provided for under Paragraph 10 of this
Sublease and Paragraph 10 to cure any default by Sublessee. The previous
agreements to the contrary notwithstanding, nothing herein shall be
construed so as to prohibit Landlord from requiring Tenant to observe and
perform all of the terms, conditions, covenants and agreements of Tenant
under the Prime Lease and/or to pursue any and all remedies under the
Prime Lease against Tenant for a breach or default thereunder. Landlord
acknowledges that any payments of Minimum Rent and Additional Rent made
by Sublessee directly to Landlord pursuant to the Sublease shall be
credited against the obligations of Tenant under the Prime Lease.
LANDLORD:
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
On behalf of its Closed End Real Estate Fund 1
By: CIGNA Investments, Inc.
By: /s/ Xxxxx X. Xxxxxx
Its: Managing Director
SUBLEASE AND SECURITY AGREEMENT GUARANTEE
FOR VALUE RECEIVED, and consideration for, and as an inducement to
RACOTEK, INC. a Delaware corporation (hereinafter referred to as "SUBLESSOR")
to enter into that certain Personal Property, Sale and Security Agreement,
dated November 19, 1997 ("SECURITY AGREEMENT") and that certain Sublease
pertaining to a Sublet Area consisting of approximately 13,494 rentable
square feet on the sixth floor at 0000 Xxxx Xxxx in Edina, Minnesota
("Sublease") (hereafter the Sublease and Security Agreement shall be
collectively referred to as the "SUBLEASE AND AGREEMENT") which Sublease and
Agreement are between Sublessor and ATIO Corporation USA, Inc., a Minnesota
corporation (hereinafter referred to as "SUBLESSEE"), the undersigned hereby
absolutely, unconditionally and irrevocably guarantee to Sublessor the full
and complete performance of all of the Sublessee's covenants and obligations
under each of said Sublease and Agreement and the full payment by Sublessee
of all rentals, and other charges and amounts required to be paid thereunder,
and the undersigned will pay all Sublessors's expenses, including attorney's
fees, incurred in enforcing the obligations of Sublessee under each of said
Sublease and Agreement or incurred in enforcing this Guarantee. The
undersigned further represent to Sublessor as an inducement for Sublessor to
make both of said Sublease and Agreement, that the execution and delivery of
this Guarantee is not in contravention of any other lease, mortgage, loan
agreement or other agreement to which the undersigned is party. This
Guarantee shall be binding upon the undersigned for obligations which accrue
during the original term of each of the Sublease and Agreement. The
undersigned acknowledge and covenant to Sublessor that the undersigned has a
beneficial interest in Sublessee and, accordingly, has a direct financial
interest in the making of the Sublease and Agreement.
The undersigned does hereby waive all requirements of notice of the
acceptance of this Guarantee and all requirements of notice of breach or
non-performance by Sublessee. The undersigneds' obligations hereunder shall
remain fully binding although Sublessor may have waived one or more defaults by
Sublessee, extended the time of performance by Sublessee, released, returned or
misapplied other collateral given later as additional security (including other
guaranties) or released Sublessee from the performance of its obligation under
either of such Sublease and Agreement. The undersigned further agree that the
undersigneds' liability under this Guarantee shall be primary, and that in any
right of action which shall accrue to Sublessor under said Sublease and
Agreement, Sublessor may, at Sublessor's option, proceed against the undersigned
and Sublessee, jointly or severally, or may proceed against the undersigned
without having commenced any action against or having obtained any judgment
against Sublesse. The undersigneds' obligations hereunder shall remain fully
binding, notwithstanding any course of dealings between Sublessor and Sublessee
and notwithstanding that Sublessee may assign either the Sublease or Security
Agreement or sublet all or part of the Sublet Area to third parties. Without
notice to or consent by the undersigned, Sublessor and Sublessee may at any
time, modify, amend, or make other covenants respecting either the Sublease or
the Security Agreement as they may deem appropriate. The undersigned shall not
be released, but shall continue to be fully liable for payment and performance
of all liabilities, obligations, and duties of Sublease under both the Sublease
and Agreement as modified, amended or assigned (provided modifications or
amendments do not materially increase gross rentals contemplated in the
Sublease).
This Guarantee shall be binding upon the undersigned, their respective
heirs, executors, administrators, representatives, successors and assigns. This
Guarantee may be enforced by Sublessor or the successors or assigns of Sublessor
under the Sublease or the Security Agreement respectively. The foregoing
notwithstanding, the guarantee of Venturian Corp. and the guarantee of Atio
Corporation International Inc. shall each be limited to one-half of the amount
of any default by Atio USA in the initial term of the Sublease. The undersigned
agree (i) that any obligations arising out of this Guarantee shall be paid in
U.S. dollars; (ii) that this guarantee shall be governed under the laws of the
State of Minnesota; (iii) that any legal action arising out of this guarantee
shall be in District Court in the County of Hennepin, State of Minnesota; and
(iv) that Sublessor may rely upon copies of signatures transmitted via
facsimile.
IN WITNESS WHEREOF, the undersigned guarantor(s) have caused this Guarantee
to be executed this 4th day of December, 1997.
GUARANTOR(S):
ATIO CORPORATION INTERNATIONAL INC. VENTURIAN CORP.,
a Delaware corporation a Minnesota corporation
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
Its: Chairman & C.E.O. President and Chief Executive Officer
