EXHIBIT 10.34
SUBLEASE
THIS SUBLEASE made and entered into this 31st day of December, 1996,
between ANCHOR PAPER COMPANY, a Minnesota corporation ("Sublessor"), and
INFINITE GRAPHICS INCORPORATED, a Minnesota corporation ("Sublessee").
RECITALS:
A. A lease ("Prime Lease") dated December 20, 1990 was made and entered
into between Xxxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx, as Landlord and Sublessor, as
Tenant, pertaining to a one-story office/warehouse building located at 00000
Xxxxxxx 00, Xxxxxxxx, Xxxxxxxxx containing approximately 30,250 square feet.
B. It is the wish of the parties hereto that the Sublessor sublet to
the Sublessee and that the Sublessee take from the Sublessor a portion of the
premises leased under the Prime Lease (hereinafter referred to as the "sublet
Area") comprising approximately 3,000 square feet as cross-hatched on Exhibit A,
attached hereto and made a part hereof.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter contained, but subject to the consent thereto by Landlord,
the Sublessor does hereby sublet the Sublessee and the Sublessee does hereby
rent and take from Sublessor, the Sublet Area together with the non-exclusive
right for so long as this Sublease is in effect to the use in common of the
parking lot and the lavatory facilities, subject to the following terms and
conditions:
1. Subject to the provisions of paragraph 17 below, this Sublease shall
commence January 1, 1997 and shall continue thereafter for a term of 12 calendar
months to and including December 31, 1997. This lease may be terminated by
either party upon 90 days written notice.
2. As rent for the Sublet Area, Sublessee shall pay to the Sublessor
$2,042.50 per month, consisting of $1,437.50 (Base rate of $5.75 per square
foot) rent plus $605.00 (Base rent $2.42 per square foot) common area
maintenance and taxes, payable in advance on the first day of each month during
the term of this Sublease, such rent to be paid to the Sublessor at the address
set forth below. For any monthly rent payment not actually received by Sublessor
by the 5th day of the calendar month, Sublessee shall also be obligated to pay a
late charge of $50.00 per day for each day beyond the 5th day of the month.
3. In addition to the monthly rent payable pursuant to paragraph 2
above, Sublessee shall also pay to Sublessor as additional rent hereunder,
$500.00 per month in advance on the first day of each calendar month during the
term of this Sublease commencing January 1, 1997, such amount to be deemed
payment for the electricity consumed by the "clean room" to be operated by
Sublessee pursuant to the provisions of this Sublease. At the option of the
Sublessor and at its expense, Sublessor may cause the "clean room" to be
separately metered in which case Sublessee shall pay the electricity for the
"clean room" directly in lieu of the $500.00 per month payments otherwise
required pursuant to this paragraph 3. Sublessee shall also pay Sublessor as
additional rent hereunder commencing on the first day of 1997 and on the first
day of each and every calendar month thereafter during the term of this Sublease
the amount, if any, by which 1/12th of the Sublessee's prorata portion of the
real estate taxes payable for the calendar
year in question for the premises of which the Sublet Area is a part, and any
installments of special assessments payable therewith exceeds $342.43. For the
purposes hereof, the Sublessee's prorata portion shall be deemed to be 9.92%.
4. The Sublessee may use the Sublet Area for generating photo tools for
the electronics industry and for no other purposes whatsoever.
5. The Sublessee will not use the Sublet Area of permit the Sublet Area
to be used in violation of any of the terms, covenants or conditions of the
Prime Lease. Sublessee will maintain and operate the Sublet Area in compliance
with all applicable governmental rules and regulations. Sublessee will keep at
its own expense said Sublet Area and the equipment, plumbing, drains, fixtures,
appliances and machinery in, upon, serving or appurtenant to said Sublet Area,
in good repair and in good sanitary condition during the term of this Sublease.
Sublessee shall not release, threaten to release, permit or allow the release or
threatened release of pollutants and/or contaminants (including petroleum
products or by-products), or hazardous wastes or hazardous substances into the
ground water, soils or atmosphere. Sublessee shall not make any undue or
unseemly noise or otherwise and shall not do or permit to be done in and about
the Sublet Area anything which will be dangerous to life or limb. Sublessee will
make no alterations in or additions to the Sublet Area, without first obtaining
the prior written consent of the Sublessor and of the Landlord. Sublessee will
not use or permit anything upon said Sublet Area that will increase the rate of
insurance thereon above the rate being paid by Sublessee when it was the fee
owner of the premises of which the Sublet Area is a part. All of Sublessee's
employees shall be bonded and shall be subject to the same rules and regulations
that are applicable to the employees of Sublessor relative to the use of the
premises of which the Sublet Area is a part, including, without limitation,
restrictions on access, loud noises, use of lavatory facilities, lighting and
cleaning of the Sublet Area. Parking by Sublessee and its employees and invitees
shall be limited to the southwest quadrant of the parking lot. Notwithstanding
the foregoing, up to four Sublesse's employees shall have the access to the
Sublet Area on a 24-hour per day basis. Sublessee shall provide Sublessor with
the names of such employees.
6. The Sublessor will keep and perform promptly, each of the terms,
covenants and conditions of the Prime Lease except for those provisions thereof
which, under the terms of this Sublease, the Sublessee is to keep or perform.
7. Subject to the provisions of paragraph 3 above whereby Sublessee
will pay Sublessor $500.00 per month for the electricity consumed by the "clean
room", all utilities, including sewer, water, gas and electricity shall be
furnished by Sublessor at its expense.
8. Addendum to water service with regard to Section 2 of lease for
Sublessee and Sublessor, Sublessee agrees to be responsible for the water used
in their clean room and rented area. The water will be tracked by a dedicated
water meter on a dedicated waterline that is routed directly to Sublessee's
leased area.
Sublessee will be billed on a monthly basis and it is to be understood
by both Sublessor and Sublessee that these bills will be paid in a timely
manner.
A reading will be made at the beginning of each month and a xxxx will
be given to Sublessee. The rates will be at the current charges the city uses as
the time of the billing. The billing will include usage of water, sewage, and
any applicable taxes and/or improvements.
9. On the last day of the term or upon the sooner termination thereof,
Sublessee shall peaceably surrender the Sublet Area leaving it in the condition
which, by the terms of the Prime Lease, Sublessor is obliged to leave the same.
On or before the last day of the term or the sooner termination thereof,
Sublessee shall at its own expense remove all of its equipment and other
personal property from the Sublet Area, repairing any damage caused thereby, and
any property not removed shall be deemed abandoned. In addition, all
alterations, additions, fixtures and leasehold improvements made by Sublessee,
including the "clean room" shall be removed by Sublessee on or before the last
day of the term or the sooner termination thereof, with Sublessee repairing any
damage to the Sublet Area caused thereby.
10. Neither Sublessor nor Landlord shall be liable to Sublessee, or
those claiming through or under Sublessee, for injury, death or property damage
occurring in, on or about the Sublet Area or the building of which the Sublet
Area is a part, and appurtenances thereto, and Sublessee shall indemnify
Sublessor and Landlord and hold them harmless from any claim or damage arising
out of any injury, death or property damage occurring in, on or about the Sublet
Area or said building and appurtenances to Sublessee or an employee, customer or
invitee of the Sublessee.
11. Without limiting the generality of the immediately preceding
paragraph, Sublessee shall, at its expense, maintain public liability insurance
during the term of this Sublease as required under Article 10 of the Prime Lease
in one or more companies acceptable to Sublessor and Landlord, naming Sublessor,
Landlord and Sublessee as insureds, in form and substance reasonably acceptable
to Sublessor and Landlord (such insurance to insure performance by Sublessee of
its obligations under the immediately preceding paragraph), such insurance to be
in those amounts as set forth under Article 10 of the Prime Lease. In addition,
Sublessee shall also carry and cause to be in full force and effect fire and
extended coverage insurance on the equipment and other property owned, leased to
or otherwise in possession of Sublessee. Each policy of insurance hereunder
shall contain a provision requiring thirty (30) days' written notice to
Sublessor and to Landlord before cancellation of the policy.
Sublessor shall carry and cause to be in full force and effect the
insurance coverages required to be carried by it pursuant to Article 10 of the
Prime Lease, including fire and extended coverage insurance under Article 10(b).
Sublessor and Sublessee hereby release the other from any and all 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 fire or
any of the extended coverage or supplementary contract casualties, even if such
fire or other casualty shall have been caused by default or negligence of the
other party, or anyone for whom such party may be responsible, provided,
however, that this release shall be applicable and in force and effect only with
respect to loss or damage occurring during such times as the releasing party's
policy shall contain a clause or endorsement to the effect that any such release
would not adversely affect or impair said policy or prejudice the right of the
releasing party to recover thereunder. Sublessor and Sublessee agree that they
will request their insurance carriers to include in their policies such a clause
or endorsement. The parties shall provide the other with evidence of the
insurance coverages required to be carried under this paragraph 11 and shall
provide the other with at least 15 days' written notice prior to any
modification of the terms of coverage.
12. The Landlord shall have no obligations whatsoever to the Sublessee
hereunder.
13. The Sublessor and Landlord, their authorized agents or attorneys,
may at any reasonable time, enter the Sublet Area to inspect, make repairs,
improvements and/or changes in the Sublet Area or other premises in the building
of which the Sublet Area is a part as the Sublessor and/or Landlord may deem
proper; and there shall be no diminution of rent or liability on the part of the
Sublessor or Landlord
by reason of any reasonable inconvenience, annoyance, or injury to business.
14. If the Sublessee defaults in the observance or performance of any
of the Sublessee's covenants, agreements or obligations hereunder wherein the
default can be cured by the expenditure of money, either the Sublessor or the
Landlord may, but without obligation and without limiting any other remedies
which they may have by reason of such default, cure the default, charge the
costs thereof to the Sublessee and the Sublessee shall pay the same forthwith
upon demand, together with interest thereon at the highest permissible rate of
interest allowed under the usury statues of the State of Minnesota or in case no
such maximum rate of interest is provided, at the rate of 12% per annum.
15. If the Sublessee shall default in the payment of any installment of
monthly or additional rent and such continues for a period of 10 days or in the
observance or performance of any of the Sublessee's covenants, agreements or
obligations hereunder and such continues for a period of 30 days after written
notice thereof by Sublessor, or if any proceeding is commenced by or against the
Sublessee for the purpose of subjecting the assets of the Sublessee to any law
relating to bankruptcy or insolvency or for an appointment of a receiver of
Sublessee or of any of Sublessee's assets, or if Sublessee makes a general
assignment of Sublessee's assets for the benefit of creditors, then, in any such
event, the Sublessor may, without process, re-enter immediately into the Sublet
Area and remove all persons and property therefrom, and at its option, nullify
and cancel this Sublease as to all future rights of the Sublessee and have
regain, repossess and enjoy the Sublet Area, anything herein to the contrary
notwithstanding, and Sublessee hereby expressly waives the service of any notice
in writing of intention to re-enter as aforesaid, and also all right of
restoration to possession of the Sublet Area after re-entry or after judgment
for possession thereof. Notwithstanding re-entry by Sublessor or forfeiture,
termination or cancellation of this Sublease, the liability of Sublessee for the
rent and all other sums provided for herein shall continue for a period ending
as of the last day of the first full calendar month following such re-entry or
forfeiture, termination or cancellation. Sublessee shall be responsible for, in
addition to the rentals and other sums agreed to be paid hereunder, the costs of
any necessary maintenance, repair, restoration, reletting (including related
cost of removal or modification of tenant improvements) or cure as well as
reasonable attorney's fees incurred or awarded in any suit or action instituted
by Sublessor to enforce the provisions of this Sublease, regain possession of
the Sublet Area or the collection of the rentals due Sublessor hereunder.
Sublessee agrees to pay interest at the highest permissible rate of interest
allowed under the usury statues of the State of Minnesota or in case no such
maximum rate of interest is provided, at the rate of 12% per annum on all
rentals and other sums due Sublessor hereunder not paid within 10 days from the
date the same becomes due and payable. Each right or remedy of Sublessor
provided for in the Sublease shall be cumulative and shall be in addition to
every other right or remedy provided for in this Sublease now or hereafter
existing at law or in equity or by statute or otherwise.
16. The Sublessee shall not have the right to assign this Sublease or
sublet all or any part of the Sublet Area without the prior written consent of
the Sublessor and of the Landlord.
Landlord's right to assign the Prime Lease and Sublessor's right to
assign this Sublease are and shall remain unqualified provided Sublessee's right
to quiet possession of the Sublet Area shall not be disturbed if Sublessee is
not in default under this Sublease and so long as Sublessee shall pay the rent
and observe and perform all of the provisions of this Sublease, unless this
Sublease is otherwise terminated pursuant to its terms.
17. At any time Sublessee may terminate this Sublease by giving at
least ninety (90) days prior written notice to Sublessor to correspond with the
calendar month end.
18. It is mutually agreed that this Sublease shall be subordinate to
any and all mortgages, including any renewals, modification, consolidations,
replacements and extensions thereof now or hereafter imposed on the premises of
which the Sublet Area is a part by Landlord. Sublessee's right to quiet
possession of the Sublet Area shall not be disturbed if Sublessee is not in
default and so long as Sublessee shall pay the rent and observe and perform all
of the provisions of this Sublease, unless this Sublease is otherwise terminated
pursuant to its terms. In confirmation of such subordination, Sublessee, upon
request, shall promptly execute and deliver a subordination, non-disturbance and
attornment agreement, as required by Landlord's mortgagee, if any.
19. 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: Anchor Paper Company
000 Xxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
If to Sublessee: Infinite Graphics Incorporated
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
or to such other address with respect to either party hereto, as such party
shall notify the other party hereto in writing.
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease
as of the day and year first above written.
SUBLESSOR: SUBLESSEE:
Anchor Paper Company Infinite Graphics Incorporated
By: /s/ XXXXX X. XXXXXX By: /s/ XXXXX X. XXXXXXXX
-------------------- ----------------------
Its CFO Its Finance Manager
-------------------- ----------------------
