Exhibit 99.1
SURRENDER AGREEMENT
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SURRENDER AGREEMENT, made as of this 31st day of March, 2005, by and
between 469 OWNERS LLC., having an office at c/o Sitt Asset Management, P.O. Box
2300, New York, NY 10116-2300 ("Landlord") and MANCHESTER TECHNOLOGIES, INC.,
having an office at 160 Oser Avenue, Hauppauge, NY 11788 ("Tenant").
WITNESSETH:
WHEREAS:
A. Landlord (successor in interest to First Willow, LLC) and Tenant
(formerly known as Manchester Equipment Company, Inc.) have heretofore entered
into that certain lease dated June 23, 1997, as amended by Supplementary
Agreement Fixing Term dated April 1, 1998 (collectively the "Lease") with
respect to the entire rentable area of the fifth (5th) floor (the "Premises") in
the building known as 469 Seventh Avenue, New York; New York;
B. The term of the Lease by its terms shall expire on October 31, 2007; and
C. Tenant desires to surrender the Lease to Landlord and Landlord is
willing to accept such surrender in the manner and upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter contained, it is mutually covenanted and agreed as follows:
1. (a) Tenant hereby surrenders to Landlord as of the date hereof (the
"Surrender Date"), the Lease and the term and estate thereby granted, together
with the Premises thereby demised, to the intent and purpose that the estate of
Tenant in and to the Premises shall be wholly extinguished and that the term of
the Lease shall expire on the Surrender Date in the same manner and with the
same effect as if such date was the date set forth in the Lease for the
expiration of the term thereof; provided, however, the parties have agreed that
Tenant's obligation to pay fixed rent and any additional rent or charges
pursuant to the Lease (collectively, "Tenant's Rent") shall be deemed to have
terminated and has been apportioned as of 11:59 p.m. on February 28, 2005 (the
"Rent End Date") except that the following payments are apportioned as of a date
following the Rent End Date: (i) payment of electric charges through the
Surrender Date in the amount of $2,023.66, which shall be paid simultaneously
herewith as an increase to the Surrender Amount, as defined in Paragraph 4
hereof, and (ii) payments made on account of real estate tax escalation under
the Lease through June 30, 2005, which have been pre-paid by Tenant. Landlord
acknowledges and confirms that Tenant has paid all of Tenant's Rent through the
Rent End Date, except for the remaining outstanding balance of Tenant's Rent in
the amount of $168.45 which shall be paid simultaneously herewith as an increase
to the Surrender Amount. In addition, Landlord acknowledges and confirms that
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Tenant has paid fixed rent and operating expense escalation under the Lease for
March 2005 in the amount of $29,869.52, which shall be netted from the Surrender
Amount.
(b) Landlord and Tenant agree that (i) Tenant has surrendered and Landlord
has accepted the Premises in its "as is" condition on the date hereof, (ii)
Tenant shall not be required to make any alterations, repairs or replacements in
or to the Premises or the building in which the Premises are located and (iii)
Tenant shall not be required to remove any installations, HVAC units,
improvements, trade fixtures, alterations or changes which exist in the Premises
or such building as of the Surrender Date, and (iv) Tenant shall abandon in
place in the Premises the fixtures, furniture and equipment listed on the
Inventory List annexed hereto as Exhibit A (the "Inventory"), and Tenant hereby
warrants and represents that no one other than Tenant has acquired or will
acquire through or under Tenant any right, title or interest in or to the
Inventory and that same is and shall be abandoned without liens or encumbrances
from any third parties. It is understood and agreed that, anything to the
contrary contained in the Lease notwithstanding, Tenant shall be deemed to have
complied with its surrender obligations pursuant to the Lease if Tenant shall
deliver the Premises to Landlord in the condition required in this Paragraph 1.
2. Tenant hereby represents and covenants that nothing has been or will be
done or suffered by Tenant whereby the Lease, or the term or estate thereby
granted or the Premises, or any part thereof, or any alterations, decorations,
installations, additions and improvements in and to the Premises, or any part
thereof, have been or will be encumbered in any way whatsoever, and that Tenant
owns and will own the Lease and has and will have good right to surrender the
same, and that no one has acquired or will acquire through or under Tenant any
right, title or interest in or to the Premises, or any part thereof, or in or to
said alterations, decorations, installations, additions and/or improvements or
any part thereof, other than with respect to any subleases that shall have
expired by their terms prior to the Surrender Date,
3. Landlord shall accept such surrender as of the Surrender Date and in
consideration of such surrender by Tenant and of the acceptance of such
surrender by Landlord, Tenant and Landlord do hereby mutually release each
other, their respective successors and assigns of and from any and all claims,
damages, obligations, liabilities, actions and causes of action, of every kind
and nature whatsoever and whenever arising under or in connection with the
Lease, except that nothing herein contained shall be deemed to constitute a
release or discharge: (a) of Tenant and Landlord with respect to claims for
contribution or indemnification or both arising out of third-party claims
against the other party, or (b) of either Tenant or Landlord with respect to
their obligations pursuant to this Surrender Agreement.
4. In consideration of the acceptance by Landlord of such surrender of the
Lease and the Premises by Tenant, Tenant is simultaneously herewith making a
surrender payment to Landlord in the amount of $325,000.00 in addition to the
pre-paid payment of real estate tax escalation under the Lease as described in
Paragraph 1(a) hereof (the "Surrender Amount"). After giving effect to the
provisions of Paragraph 1(a) above, Tenant is simultaneously herewith making a
final net payment to Landlord by certified or official bank check in the sum of
$297,322.59. Concurrently with the payment by Tenant to Landlord of such final
net amount, Landlord shall return to Tenant (thereby being deemed to have
relinquished all
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right, title and interest with respect thereto) the original letter of credit
being held by Landlord under Article 49 of the Lease (as the same may have been
renewed, replaced, modified, amended and/or supplemented from time to time, the
"Letter of Credit"), together with a letter from Landlord substantially in the
form of Exhibit B annexed hereto.
5. Tenant shall indemnify and hold Landlord harmless from any and all
liability for real property transfer tax that may be due and owing to the City
or State of New York as a result of the surrender of the Premises to Landlord
pursuant to this Surrender Agreement. Tenant hereby irrevocably constitutes and
appoints Landlord (and any partner or officer of Landlord) as Tenant's agent and
attorney-in-fact (coupled with an interest) to execute and file such real
property transfer tax returns as may be required by law.
6. Landlord and Tenant represent and warrant to the other that neither has
had any dealings or communications with any broker or agent in connection
herewith other than Byrnam Wood LLC and Sitt Leasing LLC. Landlord and Tenant
each covenants and agrees to pay, hold harmless and indemnify the other from and
against any and all cost, expense (including reasonable attorneys' fees) or
liability for any compensation, commissions or charges claimed by any broker or
agent claiming to have dealt with the indemnifying party with respect hereto.
Tenant agrees to be responsible for any commission or fees due and owing to
Byrnam Wood LLC and that the foregoing indemnity by Tenant of Landlord shall
cover claims against Landlord by Byrnam Wood LLC. Landlord agrees to be
responsible for any commission or fees due and owing to Sitt Leasing LLC and
that the foregoing indemnity by Landlord of Tenant shall cover claims against
Tenant by Sitt Leasing LLC.
7. This Surrender Agreement may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
8. The covenants, agreements, terms, provisions and conditions contained in
this Surrender Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Each of Landlord and
Tenant represents and warrants that it has the right, power and authority to
execute and deliver this Surrender Agreement and to perform its respective
obligations hereunder and that this Surrender Agreement is a valid and binding
obligation of such party enforceable against such party in accordance with the
terms hereof. Moreover, Landlord covenants, represents and warrants that
Landlord shall obtain and shall deliver to Tenant the written consent to the
termination of the Lease from the holder of the existing mortgage on the
Building in effect on the Surrender Date. Landlord represents that no other
consent to this transaction is required from any other entity having an interest
in the Building.
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9. This Surrender Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same original, and the
execution of separate counterparts by Landlord and Tenant (including by
facsimile transmission) shall bind Landlord and Tenant as if they had each
executed the same counterpart. This Surrender Agreement shall be governed by and
enforced in accordance with the laws of the State of New York. Landlord and
Tenant, each upon request of the other, at any time and from time to time
hereafter and without further consideration, shall execute, acknowledge and
deliver to the other any instruments or documents, or take such further action,
as shall be reasonably requested or as may be necessary to more effectively
assure the surrender of the Premises, the termination of the Lease and the full
benefits intended to be created by this Agreement. The provisions of this
Surrender Agreement shall survive the Surrender Date.
IN WITNESS WHEREOF, the parties hereto have respectively executed this
Surrender Agreement as of the day and year first above written.
469 OWNERS LLC, Landlord
By: /s/ Ralph Sitt
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MANCHESTER TECHNOLOGIES, INC.,
Tenant
By: /s/ Seth Collins
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Name: Seth Collins
Title: President
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