EXHIBIT 10.59
(SED INTERNATIONAL LOGO)
March 20, 2006
Diamond Chip Group, LLC
000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
RE: Lease Agreement Extension
Dear Sir or Madam:
SED International, Inc. wishes to exercise its' option to extend the Term of the
Lease for the property located at 0000 Xxxxx Xxxxx Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxxx.
It is our understanding that the extension will begin at 12:01 AM, October 1,
2006 and continue for a period of three years. The base monthly rent will be
adjusted as per the schedule shown in section 12.25 of the Lease Agreement. A
copy of that section is attached for reference.
Sincerely,
/s/ Xxxx XxXxxx
-------------------------------------
Xxxx XxXxxx
Vice President Operations
SED International. Inc.
SED International, Inc.
0000 X. Xxxxx Xxxxxxx Xx.
Xxxxxx, XX 00000-0000
Toll-Free 0-000-000-0000
Metro-Atlanta 770/491-8962
Fax 770/000-0000
xxx.xxxxxxxxx.xxx
YOUR WORLDWIDE DISTRIBUTOR OF COMPUTERS & COMMUNICATION TECHNOLOGY.
times during the Lease Term, have peaceful and quiet use, possession and
enjoyment of the Premises against any person claiming by, through or under
Landlord, or otherwise.
12.25. Extension Options. Landlord grants to Tenant one (1) extension option, to
extend the Term of the Lease for three (3) year (herein referred to as the
"Extension Term") upon the same terms and conditions as stated herein,
except that the Base Monthly Rent payable during each Lease year of the
three (3) year Extension Term shall be adjusted as follows:
(a) The Base Monthly Rent payable during the first Lease Year of the
Extension Term shall be adjusted to an amount equal to the product of
multiplying the Base Monthly Rent paid during the last month of the
initial Term by a fraction, the numerator of which shall be the Index
(as hereinafter defined) published for October, 2006, and the
denominator shall be the Index for October, 2005, but in no event less
than a three percent (3%) increase over Base Monthly Rent paid during
the last month of the initial Term;
(b) The Base Monthly Rent payable during the second Lease Year of the
Extension Term shall be adjusted to an amount equal to the product of
multiplying the Base Monthly Rent paid during the last month of the
prior Lease Year by a fraction, the numerator of which shall be the
Index (as hereinafter defined) published for October, 2007, and the
denominator shall be the Index for October, 2006, but in no event less
than a three percent (3%) increase over Base Monthly Rent paid during
the last month of the prior Lease Year; and
(c) The Base Monthly Rent payable during the Third Lease Year of the
Extension Term shall be adjusted to an amount equal to the product of
multiplying the Base Monthly Rent paid during the last month of the
prior Lease Year by a fraction, the numerator of which shall be the
Index (as hereinafter defined) published for October, 2008, and the
denominator shall be the Index for October, 2007, but in no event less
than a three percent (3%) increase over Base Monthly Rent paid during
the last month of the prior Lease Year.
Tenant must exercise this option by delivering written notice to Landlord
no later than 180 days prior to the end of the initial Term. The word
"Term" as used in this Lease shall mean and include the initial Term and
the Extension Term if exercised by Tenant. For purposes of this Lease the
term "Index" shall mean the Consumer Price Index for United States All
Urban Consumers, All Items (Base
31 ATLANTA:4075369.6
Year 1982 - 1984 = 100), published by the United States Department of
Labor, Bureau of Labor Statistics. If the Index is modified so that the
Base Year differs from the Base Year 1982 - 1984 = 100, the Index shall be
converted in accordance with the conversion factor published by the United
States Department of Labor. Should the increase made hereby not be
calculable due to delay in publishing of the Index, Tenant shall continue
to pay the Base Monthly Rent payable during the immediately preceding
portion of the Term of the Lease until the Base Monthly Rent adjustment is
determined hereunder, at which time Tenant shall commence payment of the
adjusted Base Monthly Rent and shall pay to Landlord a lump-sum retroactive
adjustment.
12.26. Right of First Refusal to Purchase Premises. Landlord hereby grants to
Tenant the continuing right of first refusal, throughout the Term of the
Lease, to purchase the Premises pursuant to the terms of this Section
12.26. If at any time during the Term Landlord enters into a bona fide
agreement to sell all or any part of the Premises (the "Offer"), Landlord
shall submit written notice thereof to Tenant (together with a copy of such
Offer). Upon receipt of the aforesaid notice and a copy of such Offer from
Landlord, Tenant shall have the right (the "Right of First Refusal")
exercisable at any time within ten (10) business days from the date of
receipt of such notice and Offer, to purchase the Premises, or portion
thereof, which is the subject of the Offer upon the same terms and
conditions set forth in the Offer, except that the dates for Tenant's
performance under the Offer shall be adjusted to afford Tenant the same
time periods for performance as were afforded the original purchaser under
the Offer, with Tenant's time periods for performance to run from the date
of Tenant's exercise of the Right of First Refusal. If Tenant elects to
exercise the Right of First Refusal, it shall, prior to the end to said ten
(10) day period, deliver written notice of such exercise to Landlord. In
the event Tenant fails to timely exercise the Right of First Refusal,
Tenant shall be deemed to have waived such right in that instance only,
except that if the closing pursuant to the original Offer does not take
place within thirty (30) days after the date set forth in the Offer for
closing, this Right of First Refusal shall again be deemed applicable to
the transaction in the Offer. It is further understood that, in the event
Tenant does not exercise this Right of First Refusal, this provision shall
nevertheless be applicable to any further and future transfers of the
Premises, or any part thereof, by any successor to Landlord. Landlord
represents and warrants that no person or entity holds any right of refusal
on the Premises, option to purchase, or other right, to acquire all or any
part of the Premises, which is prior to or superior to the Right of First
Refusal granted to Tenant hereunder. Notwithstanding the terms of this
Section 12.26, Tenant's Right of First Refusal shall not apply to any gift
or transfer of the Premises for less than the Premises' fair market value
to (i) a charity as a tax deductible charitable contribution, (ii) Xxxxxx
Xxxxxxx, Xxxx Xxxxxxx, their
32 ATLANTA:4075369.6
