Lease Agreement between Dover Mills L.P. and PC Connection Sales Corporation for Cocheco Falls Millworks Premises

Summary

This lease agreement is between Dover Mills L.P. (Lessor) and PC Connection Sales Corporation (Lessee) for 45,474 square feet of office space at Cocheco Falls Millworks, Dover, New Hampshire. The lease covers two spaces with terms of five and three years, respectively, starting May 1, 2000, with an option for a five-year renewal. The Lessee pays monthly rent adjusted annually by the Consumer Price Index or 5%, whichever is less, and is responsible for utilities and certain improvements. The Lessor handles exterior maintenance and major repairs. The agreement outlines responsibilities for alterations, maintenance, and property rights.

EX-10.39 5 0005.txt LEASE PC CONNECTION SALES & DOVER MILLS Exhibit 10.39 LEASE AGREEMENT Lease made the first day of May, 2000, by and between Dover Mills L.P., Joseph Sawtelle Enterprises, Inc., General Partner, Joseph Sawtelle, 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, 100 Main Street, Dover, New Hampshire. 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 Mills LLC. C/o Joseph Sawtelle, 5 Greenleaf Woods, Suite 102, Portsmouth, New Hampshire 03801. 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. 1 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 Mills, 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. 2 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 3 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 bill the Lessee for the additional insurance cost and Lessee shall pay the bill 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 4 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 5 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 Mills L.L.C., c/o Joseph Sawtelle, 5 Greenleaf Woods, Suite 102, Portsmouth, New Hampshire, 03801. 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 6 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 7 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 MILLS LCC Joseph Sawtelle Enterprises, Inc. /s/ T. C. Sheldon /s/ Joseph Sawtelle - ------------------- --------------------------------- Witness Joseph Sawtelle, President PC CONNECTION SALES CORPORATION /s/ R. A. Pratt /S/ Robert Wilkins, President - ----------------- --------------------------------- Witness Duly Authorized 8