Exhibit 10.39
LEASE AGREEMENT
Lease made the first day of May, 2000, by and between Dover Xxxxx X.X.,
Xxxxxx Xxxxxxxx Enterprises, Inc., General Partner, Xxxxxx Xxxxxxxx, President,
hereinafter referred to as "Lessor", and PC Connection Sales Corporation,
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: 45,474
square feet of space at the Cocheco Falls Millworks, 000 Xxxx Xxxxxx, Xxxxx, Xxx
Xxxxxxxxx. The leased premises are described as follows:
Space A: 31,666 sq/ft on 2nd floor Mill 3
Space B: 13,808 sq/ft on first floor, southerly side of Mill 3
1. TERM. The term of this lease for Space A shall be for five (5) years,
beginning on May 1, 2000, and ending on April 31, 2005. The term of this lease
for Space B shall be for three (3) years beginning May 1, 2000 and ending on
April 31, 2003. For both leases, Lessee shall have the option to renew this
Lease Agreement for one (1) additional five (5) year option period. 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 Agreement a sum based on the following
schedule:
May 1, 2000 - $ 27,707.75
June 1, 2000 - $ 27,707.75
July 1, 2000 - $ 39,789.75
August 1, 2000 - $ 39,789.75
September 2000 through April 2001 - Rent shall be adjusted
by the increase of the Boston Metro Region Consumer Price Index (CPI) from the
preceding twelve months or five (5%), whichever is less.
All rents shall be forwarded to Dover Xxxxx LLC. X/x Xxxxxx Xxxxxxxx, 0
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000. The rent for each
subsequent year of the initial lease term and any option period shall be
adjusted by the increase of the Boston Metro Region Consumer Price Index (CPI)
from the preceding twelve months or five (5%), whichever is less.
Rent shall be paid to the Lessor on the first day of each and every calendar
month. If the rent of any other payment due Lessor from Lessee has not been
received by the Lessor within ten (10) days after notice on non-payment from
Lessor, then Lessee shall be charged a late payment penalty equal to 10% of the
late payment. If additional space is leased over the term of the lease
agreement, Lessee shall pay Lessor an amount similar to the rental rate
currently being paid on the initial leased space and with the same term
requirements.
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3. IMPROVEMENTS BY LESSOR. The above-described leased premises shall be leased
to the Lessee "as is".
4. IMPROVEMENTS BY LESSEE. Lessee shall be fully responsible for all other
improvements to the leased premises not specified above. Said improvements shall
include, but not be limited to: telephone and data distribution, electrical
distribution in addition to that currently available, signage, lighting and door
locks.
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.
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 electricity.
Lessor shall install a sub meter (demand and conventional metering) on the
electrical service that serves the leased premises. Lessor shall read the meter
every thirty (30) days and Lessee shall be responsible for reimbursing Lessor
for usage. Lessee shall reimburse Lessee within seven (7) days from the date the
invoice is received.
Lessee shall be solely responsible for cost associated in heating/cooling the
leased premises. The Lessee agrees to pay to Lessor a heating/cooling charge of
$1.00 per square foot. A monthly heating/cooling charge of $3,789.50 shall be
paid Lessor along with the rental payment. A credit of $38.35 shall be given to
Lessee for every day the space remains closed prior to occupancy. All HVAC will
be shut down until occupancy begins. Lessee shall notify Lessor is HVAC is
needed before such time as occupancy begins.
The $1.00 per square foot HVAC charge shall remain fixed over the initial lease
term. The building standard for heating/cooling runs between 68-72 degrees.
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 unreasonably 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.
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Lessee shall, however, be responsible for their repairs (windows, glass, and
doors) necessitated by Lessee's usage, reasonable wear and tear excluded. Lessee
shall be solely responsible for keeping the leased premises clean at all times
in the manner of a first class office space. 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. Lessee shall have access to all common
areas of the building. Lessor shall subordinate its rights contained herein to
any bank or financial institution which requires a security interest in the
assets of the Lessee.
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 fifteen (15) 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 fifteen (15) 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 thirty (30) days after the receipt of such notice from
Lessor.
Lessor agrees to provide Lessee with comparable workspace within the Millworks,
provided said space is available, for use as temporary workspace. Said space
shall be made available to Lessee while reconstruction takes place.
12. HOLD HARMLESS. The Lessee covenants and agrees with the Lessor that Lessee
will
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indemnify and save harmless the Lessor from any and all reasonable 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 lessees
negligence, and 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. Lessor agrees to obtain a non-disturbance
agreement reasonably satisfactory to Lessee.
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 full I 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 non-disturbance
agreement with respect to any mortgage to which
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this Lease agreement is subordinated.
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 forty five (45) 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.
(c) If the Lessee shall be adjudged to be bankrupt or shall make as
assignment for the benefit of creditors, or if a receiver of the property of the
Lessee in or upon said leased premises be appointed in any action (accept a
stockholder dispute), suit or proceedings by or against the Lessee, 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 an 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 any other party
given Lessor's written consent, 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.
Lessor grants Lessee the right to assign the Lease to a wholly owned subsidiary
of Lessee, consent by Lessor shall not be unreasonably withheld.
19. LOADING DOCK USE. Lessee shall be permitted to utilize the loading dock
located
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in Mill 3. The loading dock shall be kept clear at all times and maintained in a
clean, debris-free state. Lessor shall maintain the loading dock in good repair.
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.
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,
5 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, 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
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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 thereof 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 provisions 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 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.
29. PARKING. Lessor shall reserve sixty (60) parking spaces. Fifty (50) shall
be allocated in the lower level of the Steam Plant parking lot, two in the upper
level of the Steam Plant parking lot, and eight (8) in the Central Towers
parking lot. Lessee shall be solely responsible for erecting signs to reserve
said spaces, the size and character of which shall be reviewed and approved by
the Lessor. Lessor shall be responsible for snow and ice clearance. The balance
of the parking shall be provided for in the off-site Chestnut Street parking
lot. Said parking is accessible by Lessor's 34 seat trolly that operates between
the hours of 6:00 AM - 8:30 PM, five days a week.
30. HOURS OF OPERATION. Lessee shall have access to the leased space twenty-
four hours a day, 365 days a year.
31. CAFETARIA SERVICE. Lessee shall have use of the third floor cafeteria
between the hours of 7:00 AM - 2:00 PM.
32. The Lessor grants to Lessee. The option to furnish and install an emergency
generator in one of the following locations, immediate to the leased premises:
roof top of existing structure; within the existing structure; or a pad mounted
at ground level. Lessee shall bear the
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coordination, design (including structural assessment if appropriate), and
installation of the generator system. Final layout of the system shall be
subject to lessor's approval, which shall not be unreasonably withheld.
33. Lessee hereby agrees to pay to lessor a monthly fee of $3,425.00 for that
portion of the trolley service that runs from 9:30 AM - 3:30 PM and from 7:30PM-
8:30PM. This fee shall be paid along with all other required payments at the
beginning of each and every calendar month. The hours that Lessee pays for may
be adjusted by Lessee at an increase/decrease rate of $425.00 per month/hour,
provided written notice is given to Lessor thirty (30) days prior to said
adjustment.
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 LCC
Xxxxxx Xxxxxxxx Enterprises, Inc.
/s/ X. X. Xxxxxxx /s/ Xxxxxx Xxxxxxxx
------------------- ---------------------------------
Witness Xxxxxx Xxxxxxxx, President
PC CONNECTION SALES CORPORATION
/s/ X. X. Xxxxx /S/ Xxxxxx Xxxxxxx, President
----------------- ---------------------------------
Witness Duly Authorized
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