Exhibit 10.22
LEASE AGREEMENT
Lease made the first day of August, 1998, by and between Dover Xxxxx
L.L.C., Xxxxxx Xxxxxxxx Enterprises, Inc., President, hereinafter referred to as
"Lessor", and PC Connection, Inc., hereinafter referred to as "Lessee".
WITNESSETH
That the Lessor, for and in consideration and upon the terms, conditions,
and provisions hereinafter set forth, does hereby agree to lease to the Lessee,
its successors, heirs, and assigns, the following described premises: 10,000
square feet of space on the second floor, southerly extent of Mill Number 3,
Cocheco Falls Millworks, Dover, New Hampshire, as set forth on Exhibit A.
1. TERM. The term of this lease shall be for one (1) year, beginning of
September 1, 1998 and ending on August 31, 1999. Lessee shall have the option to
renew this Lease Agreement for two (2) additional option periods. The first
option would be for one (1) year, beginning September 1, 1999 and ending on
August 31, 2000. The second option period would be for five (5) years, beginning
September 1, 2000 and ending on August 31, 2005. If the Lessee has not vacated
the leased premises at the close of the lease or any option period, it shall be
considered a holdover tenant and shall serve at the will of the Lessor. As such,
Lessee shall be governed by the same terms and obligations as set forth herein.
2. RENT. The Lessee agrees to pay to the Lessor as rent for the leased
premises for the first year of this lease the annual sum of $52,500. Said sum
shall be paid to the Lessor in six equal monthly installments beginning on March
1, 1999 and ending on August 31, 1999. The rent for the first option period of
this Lease shall be $105,000. Twelve equal monthly payments of $8,750 shall be
paid to Lessor beginning September 1, 1999 and ending on August 31, 2000.
The rent for any subsequent option year shall be increased by the increase of
the Boston Metro Region Consumer Price Index (CPI) from the preceding year or
five percent (5%), whichever is less.
Rent shall be paid to the Lessor on the first day of each and every calendar
month. If the rent or any other payment due Lessor from the Lessee has not been
received by the Lessor within ten (10) days after notice of nonpayment from
Lessor, then Lessee shall be charged a late payment penalty equal to 10% of the
late payment.
3. IMPROVEMENTS BY LESSOR. Lessor shall lease the premises "as is", with the
exception of the following improvements:
-Install utility metering on electrical distribution system.
4. IMPROVEMENTS BY LESSEE. Lessee shall be fully responsible for all other
improvements to the leased premises not specified above.
5. MASTER KEY. Lessee shall provide Lessor with one copy of an entry key for
use by the Lessor to gain emergency access into the leased premises. If Lessee
has a security system monitoring the leased premises, Lessor shall be given an
entry number so that emergency access can be gained.
6. LIENS. Lessee shall keep all of the leased premises and Dover Xxxxx,
L.L.C. free and clear of mechanics', materialmen's and other liens in connection
with work and/or labor done or services provided to the leased premises by
Lessee.
7. UTILITIES. Lessee shall be solely responsible for the cost of
heating/cooling the leased premises. The Lessee agrees to pay to the Lessor a
heating/cooling charge of $1.00 per square foot. Accordingly, a monthly
heating/cooling charge of $833.33 shall be paid Lessor along with the monthly
rental payment. This charge shall remain fixed over the initial lease term and
the first of the two option periods. The building standard for heating/cooling
runs between 68 - 73 degrees.
Lessee shall be solely responsible for the cost of electrical usage
resulting from business operations within the leased premises. Lessor shall
install a sub meter (demand and conventional metering) on the electrical service
that serves the leased premises. Lessor shall read the meter(s) every month and
Lessee shall be responsible for reimbursing Lessor for usage. Lessee shall
reimburse Lessor within ten (10) days from the date invoice is received.
8. ALTERATIONS. All planned improvements by the Lessee within the leased
premises shall be reviewed and approved by the Lessor prior to their
undertaking, which approval Lessor shall not reasonably withhold. All
improvements shall meet the rules and regulations and applicable Code
requirements that are in force by local and State development and building
authorities. Lessor reserves the right to enter onto the leased premises, at
reasonable times after reasonable prior notice, to inspect, maintain, and
construct/expand the buildings utility infrastructure. Any planned expansion of
utilities within the leased premises shall first be reviewed with the Lessee and
any construction will be scheduled so as not to impede or disrupt business
activities.
9. MAINTENANCE. Lessor shall be responsible for all exterior repairs to the
building to include, but not necessarily limited to structural, roof walls, and
HVAC units. Lessor shall be responsible for installing doors and windows in the
leased premises that are in good working order. Lessee shall, however, be
responsible for their repairs (windows, glass, and doors) necessitated by
Lessee's usage. Lessor shall be responsible for all snow and ice clearing of on-
site parking spaces and walkways. Lessor shall keep all interior common access
ways free and clear of debris and in a clean state. Exterior grounds shall also
be adequately maintained, with landscaping kept trimmed and neat by the Lessor.
10. PROPERTY OF LESSEE. It is hereby covenanted and agreed between the parties
hereto that unless otherwise stipulated by agreement in writing from time to
time, all trade fixtures, machinery, and equipment installed on the leased
premises by the Lessee shall be deemed to be the property of the Lessee.
Accordingly, Lessor hereby waives all its rights, title, and interest in and to
the same at the expiration thereof, except that Lessor does not waive the rights
of attachment of the same if Lessee be in default of its covenants at the time
of such expiration or termination, and written notice of such default shall have
been given by the Lessor to the Lessee not less than thirty (30) days before the
end of the term hereof. At the termination of this Lease Agreement such
improvements or alterations as may have been made by the Lessee may be removed
therefrom at Lessee's own expense, except such alterations or improvements that
are integral to the structural and/or infra structural integrity of the leased
premises or the building at large. At the termination of this Lease Agreement
all improvements or alterations so characterized shall revert to the Lessor at
no cost to or payment by the Lessor.
11. DESTRUCTION OF PREMISES. In case said leased premises or any substantial
part thereof shall at any time during the term of this Lease Agreement be so
destroyed or damaged by fire and/or water or other unavoidable casualties as to
be unfit for occupation or use by Lessee for Lessee's business, then the rent,
herein before reserved, or a fair and just proportion thereof, according to the
nature and extent of the damage sustained, shall be suspended and cease to be
payable until said premises are rebuilt and put in proper condition by said
Lessor for use and occupancy by said Lessee; provided that unless the Lessor
shall give to the Lessee written notice of its intention to rebuild/reconstitute
said premises within thirty (30) days after such destruction or damage, the
Lessee shall have the option by written notice to the Lessor given within ten
(10) days after the expiration of thirty (30) days from such destruction or
damage to cancel and terminate this Lease Agreement. In case Lessor shall have
given such written notice of its intention to rebuild, it shall proceed to
rebuild as soon as reasonably possible, but Lessee may terminate this Lease
Agreement if the premises are not tenant able by Lessee for the carrying on of
its business within ninety (90) days after the receipt of such notice from
Lessor.
12. HOLD HARMLESS. The Lessee covenants and agrees with the Lessor that
Lessee will indemnify and save harmless the Lessor from any and all loss, cost,
damage and expense pertaining to, connected with, or resulting from the use and
occupancy of the leased premises by the Lessee, or arising out of any accident
or other occurrence causing injury to any person or to property by reason of or
in connection with the use and occupation of the demised premises by said
Lessee, or Lessee's agents, employees, or guests, or which may arise out of
business which the Lessee may carry on in said demised premises. It is
understood that the provisions of this section do not apply to any loss, cost
damage or expense attributable to the negligent, intentional or tortuous acts or
omissions of the Lessor, its agents, employees or assigns and Lessor hereby
agrees to indemnify and save Lessee harmless from same.
13. USE OF PREMISES. The Lessee covenants and agrees that the Lessee will
not carry on therein any offensive trade or business, not do any act, not
transact any business by which the insurance on said premises may be affected.
With respect to acts or transactions as a result of which the insurance on said
premises may be affected, Lessee shall consult in advance with Lessor who in
turn shall consult with its insurers for a determination of the facts and to
resolve whether said acts or transactions shall be undertaken, and if any
additional insurance cost or coverage is required it shall be at the expense of
the Lessee. Lessee shall be responsible for the increase in insurance above use
for normal business offices that results from the Lessee's use of the premises.
Lessor shall xxxx the Lessee for the additional insurance cost and Lessee shall
pay the xxxx within seven (7) days of its receipt.
14. PEACEFUL ENJOYMENT. The Lessor covenants and agrees with the Lessee that
the Lessee, paying the rent herein reserved and observing, keeping and
performing the covenants and agreements herein contained, and on the Lessee's
part to be observed, kept and performed, shall and may peaceably and quietly
have, hold, occupy, possess and enjoy the demised premises and all of the
rights, privileges, easements and fixtures thereto belonging for and during the
full term of this Lease Agreement.
15. SURRENDER OF PREMISES. The Lessee covenants and agrees with the Lessor
that at the expiration or sooner termination of the lease or renewal or
extension thereof, the Lessee will quietly and peaceably surrender up possession
of the demised premises to the Lessor in as good a condition as the demised
premises were in the beginning of this lease, ordinary wear and tear or damage
by fire or other casualty excepted.
16. SUBORDINATION. This Lease Agreement shall be subject to any mortgage that
now effects the demised premises or that the Lessor or any owner of the premises
may hereafter at any time elect to place on such premises, and to all advances
already made or that may be hereafter made on account of any such mortgage, to
the I full extent of the principal sum secured thereby and interest thereon.
Furthermore, Lessee shall on request hereafter execute any paper or papers that
Lessor's counsel may reasonably deem necessary to accomplish such subordination
of Lessee's interest in this Lease. Lessor agrees to obtain a nondisturbance
agreement with respect to any mortgage to which this Lease agreement is
subordinated, and in a form reasonably acceptable to Lessee's counsel.
17. DEFAULT. If the Lessee either:
(a) Shall fail to pay to Lessor any installment of rent due, and such
default shall continue for ten (10) days after receipt of written
notice from Lessor; or
(b) Shall fail to comply with any other covenant or obligation on its part
to be performed hereunder and shall fail within thirty (30) days after
receipt by Lessee from Lessor of written notice specifying the nature
of such default, either to cure such default or in good faith and with
reasonable diligence to commence remedy of such default, then in
either such event Lessor may at its option either:
(i) Terminate the possession and right of possession of Lessee,
and in such case Lessee shall be liable for and shall pay
the Lessor damages in an amount equal to any rent past due
on the date of such termination; or
(ii) Take possession of said property and rent the same as agent
for and for the account of the Lessee, in which case the
Lessee shall be liable for and shall pay to the Lessor the
difference between the rent herein stipulated and the
amount, if any, for which the Lessor is able to re-rent said
property;
(iii) Terminate this Lease Agreement and take possession of the
property.
said bankruptcy, assignment or receivership is not cured within thirty (30)
days, or if the interest of the Lease in said leased premises shall be sold
under execution or other legal process, voluntarily or involuntarily, then in
such event Lessor may at its option either:
(i) Terminate the possession and right of possession of Lessee,
and in such case Lessee shall be liable for and shall pay
the Lessor damages in an amount equal to any rent past due
on the date of such termination; or
(ii) Take possession of said property and rent the same as agent
for and for the account of the Lessee, in which case the
Lessee shall be liable for and shall pay to the Lessor the
difference between the rent herein stipulated and the
amount, if any, for which the Lessor is able to re-rent said
property,
(iii) Terminate this Lease Agreement and take possession of the
property.
18. ASSIGNMENT. It is hereby covenanted and agree between the parties, hereto,
that Lessee shall be permitted to assign this Lease Agreement to another party,
with the written consent of the Lessor, said consent shall not be unreasonably
withheld. Lessor shall make its decision based on the financial strength of the
proposed sublet party and on the basis of the proposed use of the premises.
Lessor agrees to respond to any request to assign or sublet within five (5)
business days.
19. USE OF CAFETERIA. The Millworks cafeteria located on the third floor of
Mill 3 will be made available to all employees of the Lessee between the hours
of 7:00 AM and 2:00 PM, Monday through Friday, holidays excluded.
20. INSURANCE. The Lessee shall procure and maintain in force at Lessee's
expense during the term of this lease and any extension thereof public liability
insurance. Such insurance shall be adequate against liability for damage claims
through public use or arising out of accidents occurring in the leased premises,
in an amount not less than $1,000,000.00 combined single limits. The insurance
policies shall provide coverage for contingent liability of Lessor on any claims
or losses. All insurance provided by the Lessee as required by this section
shall be carried in favor of Lessor (as additional insured, but only as respects
operations of Lessee) and Lessee as their respective interest may appear. All
policies shall require ten (10) days notice to Lessor of any cancellation or
change effecting any interest of Lessor. If the insurance policies are not kept
in force during the term of this lease or any extension thereof, Lessor may
procure the necessary insurance and pay the premium thereof, and the premium
shall be repaid to the Lessor as an additional rent installment for the month
following the date on which the premiums were paid by Lessor. Lessor shall be
responsible for carrying general liability and fire coverage on Mill #3.
21. NOTICE. Any notice required under the terms of this Lease Agreement shall
be sent by certified mail or hand delivered to the signers of this Lease
Agreement. The address of the Lessor is Dover Xxxxx L.L.C., c/o Xxxxxx Xxxxxxxx,
X.X. Xxx 000, Xxx Xxxxxx, Xxx Xxxxxxxxx, 00000.
22. NOISE, SMOKE, ETC. The Lessee agrees that in conducting Lessee's business
in or on the premises by itself or those in Lessee's employ, due regard shall be
given to limiting the noise and vibration generated by such business operation.
The discharge of smoke, soot, fumes, vapors, waste material, or other irritants,
contaminants, or pollutants into or upon the premises,
land, the atmosphere, sewer connections or pipes, or any water course or
adjacent body of water shall not be permitted. The Lessee represents that with
respect to the operation of the Lessee's business there shall be no discharge
from Lessee's operation which would adversely affect the property of others,
including, but not limited to property of the City of Dover including its sewer
system and water/sewer treatment facility. Furthermore, in the event the
Lessee's operation in or on the leased premises shall cause damage to such
property of others, the Lessee agrees to save the Lessor harmless from any
claims, liability, costs, attorney's fees, or exposure arising out of or in
connection with such damage.
23. MISUSE. The Lessee agrees to be responsible and pay for all damages and
assessments, and or other charges to the City of Dover for any misuse made or
suffered on the premises by the Lessee, or its agents or employees.
24. SECURITY DEPOSIT. The Lessor shall waive security deposit for Lessee.
25. INTEGRATION. This Lease set forth the entire agreement by the parties, and
no custom, act, forbearance or words or silence at any time by any party shall
waive or release either party from any default in the performance or fulfillment
of any obligation or liability or operate against either party as a supplement,
alteration, amendment or change of any term or provision set forth herein,
including this clause, unless set forth in written instrument duly executed by
both parties stating that it is intended to impose such an additional obligation
or liability or to constitute such a waiver or release, or that it is intended
to operate as such supplement, alteration, amendment or change.
26. INVALID PROVISIONS. If any term or provision of this Lease Agreement or
the application there of to any person, property or circumstance shall to any
extent be invalid or unenforceable, the remainder of this Lease Agreement, or
the application of such term or revisions to person or property and
circumstances other than as to which it is invalid or unenforceable, shall not
be affected thereby, and each term and provision of this Lease Agreement shall
be valid and enforced to the full extent permitted by law.
The provisions of the Indenture and Lease Agreement shall be binding upon the
inure to the benefit of the successors and assigns of the Lessor and Lessee.
27. OPTION TO RENEW. Written notice of the exercise of the option to renew
this Lease Agreement by the Lessee shall be given to the Lessor at least 120
days prior to the expiration of the original lease term or the expiration of the
term of an option period previously exercised and provided that said option may
be exercised by Lessee only in the event that rents or other payments due Lessor
as set forth by this Lease Agreement (including any applicable grace periods
have been paid in full and that all material provisions of this Lease Agreement
have been fully observed. A new Lease Agreement shall be unnecessary as this
agreement constitutes a present demise for the original and any extended terms.
28. SOLID WASTE. Lessor shall require Lessee to remove any solid waste/trash
generated from business operations. Lessor does operate an on-site trash
compactor and Lessee
may dispose of its trash via this facility, the price to be negotiated once
occupancy takes place and a quantifiable trash volume can be determined by
Lessor.
29. PARKING. Lessor shall reserve fifty-five (55) parking spaces. Fifty (50)
shall be allocated in the Steam Plant parking lot and five (5) parking spaces
allocated in the Central Towers parking lot. Refer to Attachment B. For
enforcement purposes, Lessee shall be responsible for signage designating these
spaces. Signs shall be approved by the Lessor as to size and language. Lessor
shall be responsible for snow and ice clearance. The balance of the parking
demand shall be located at the B & M Railroad Parking Lot. Said parking lot is
accessible by Lessor's 34 seat trolley that operates between the hours of 6:15 -
9:30 AM and 3:30 - 7:30 PM, five days a week. The 475 car parking lot has a
police security substation on-site. Lessee shall provide an identification tag
for all employees utilizing the B & M lot.
Lessor proposes to construct a multilevel parking facility over the Main Street
and Steam Plant parking lots at a future date. During said construction, Lessor
shall provide an alternative location for any reserved parking spaced impacted
by said construction. Said interim parking shall be located as close to the
lease premises as possible.
30. LOADING ACCESS. Lessee has the right to utilize the existing Central
Avenue loading docks and freight elevator at the southerly end of the leased
space for the transport of goods to and from the leased premises. Lessee shall
be responsible for keeping all loading areas free and clear of refuse that may
be generated via business operations.
31. RIGHTS TO LEASE ADJACENT SPACE. Lessor agrees to reserve the balance of
the second floor of Mill Number 3 (approximately 24,000 square feet) for the
expansion of Lessee's business operations. Refer to Attachment C. Said
reservation shall begin on September 1, 1998 and end on August 31, 1999. Upon
expiration of this one year reservation period, Lessee shall be granted a first
right of refusal on said space. Upon Lessor's receipt of a written offer for the
lease of all or a portion of said space, Lessor shall notify Lessee in writing
of such offer and Lessee shall have ten (10) days to exercise their right to
lease said additional space.
Lessor shall further grant Lessee a second right of refusal on a 22,000 square
foot adjacent space located on the third floor of Mill Number 3. This second
right of refusal shall begin upon Lease execution and shall be subject to terms
and conditions established above. Refer to Attachment D.
32. IMPROVEMENTS WITHIN RESERVED/ADDITIONAL SPACE. Commercial grade carpeting
shall be replaced, where necessary. Partition walls shall be removed, where
specified, and HVAC, electrical distribution/lighting and ceilings systems shall
be modified to accommodate the alterations. Interior walls shall be painted,
where necessary. Any additional renovations and improvements within said
additional leased space shall be the sole cost, expense and responsibility of
the Lessee.
33. SIGNAGE. Lessee shall be permitted to place directional signs within the
Mill 3 entryways directing employees and visitors to the leased premises. The
size, location, design and content of said signs shall be reviewed and approved
by the Lessor. Lessee shall also be permitted to place an exterior wall sign on
the fascade of the Mill 3 building. The design and location of the sign shall be
reviewed and approved by the Lessor, said approval shall not be unreasonably
withheld.
IN WITNESS WHEREOF, the parties do hereby agree to the terms and conditions of
this Lease Agreement on the day and year first written above.
DOVER XXXXX L.L.C.
XXXXXX XXXXXXXX ENTERPRISES, INC.
/S/ X. X. XXXXXXX /S/ XXXXXXX XXXXXXXX
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Witness Xxxxxx Xxxxxxxx, President
PC CONNECTION, INC.
/S/ XXXXXX X. XXXXXXXXX /S/ XXXX X. XXXXX
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Witness Duly Authorized Officer
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