LEASE AGREEMENT Dated June 26, 2020 Between HIGH PROPERTIES A Pennsylvania limited partnership and ARMSTRONG FLOORING, INC. A Delaware corporation Relating to Lancaster, Pennsylvania 17601
Exhibit 10.1
Dated June 26, 2020
Between
HIGH PROPERTIES
A Pennsylvania limited partnership
“Landlord”
and
XXXXXXXXX FLOORING, INC.
A Delaware corporation
“Tenant”
Relating to
1740 – 0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
PART I - BASIC LEASE INFORMATION
This Lease Agreement (this “Lease”) is made and executed this 26th day of June, 2020, by and between HIGH PROPERTIES, a Pennsylvania limited partnership, as successor to HIGH PROPERTIES, a Pennsylvania general partnership, (herein called “Landlord”), and XXXXXXXXX FLOORING, INC., a Delaware corporation (herein called “Tenant”).
This Lease consists of the following two parts: Part I which sets forth terms defined in this Lease (and certain obligations under the Lease) and which is sometimes referred to as the “Basic Lease Information,” and Part II which provides the terms and conditions for this Lease and which is sometimes referred to as the Standard Terms and Conditions. Part I and Part II collectively, are referred to as this “Lease.” Capitalized terms not otherwise defined in this Part I - Basic Lease Information shall have the meaning provided in Part II of the Lease.
The Basic Lease Information is as follows:
| 1. Landlord: | HIGH PROPERTIES, a Pennsylvania limited partnership, as successor to HIGH PROPERTIES, a Pennsylvania general partnership | |
| 2. Tenant: | XXXXXXXXX FLOORING, INC., a Delaware corporation | |
| 3. Permitted Use: | The Premises may be used by Tenant, its affiliates and successors, and its approved assignees, subtenants, and transferees, for any lawful office use, and all legally permitted ancillary uses thereto (including without limitation as a showroom), excluding weapons of war or mass destruction, firearms, pornography, alcohol, tobacco and nuisance uses or prohibited uses not allowed elsewhere in Greenfield Corporate Center. | |
| 4. Campus: | Greenfield Corporate Center, located in the township of East Lampeter Township, County of Lancaster, Commonwealth of Pennsylvania | |
| 5. Building: | Buildings 380 and 227 of the Campus located at 1740 -1770 Hempstead Road, Lancaster, Pennsylvania 17601 | |
| 6. Premises: | The Building and related improvements as outlined on the plan attached hereto as Exhibit A | |
| 7. Tenant Improvements: | Those improvements to be completed by Landlord as defined in Section 25 of Part I. Landlord will provide Tenant with a $75.00 PSF Tenant Improvement Allowance (“TIA”) for the Office and Showroom space. Should the TIA be insufficient to fund the construction of the Premises, the TIA shall be extinguished prior to Tenant’s capital being utilized. In the event any portion of the TIA is not used, any unused amount shall be retained by Landlord. | |
| 8. Term: | Ten (10) Years and Four (4) Months | |
| 9. Term Commencement Date: | June 1, 2021, except as otherwise provided in Sections 2.2 and 3 of Part II of this Lease | |
| 10. Expiration Date: | September 30, 2031, except as otherwise provided in Sections 2.2 and 3 of Part II of this Lease. | |
| 11. Rentable Area of the Building: | 58,500 Square Feet, subject to Tenant’s remeasurement right set forth in Section 1.2 of Part II of this Lease. | |
| 12. Rentable Area of the Premises: | 58,500 Square Feet, subject to Tenant’s remeasurement right set forth in Section 1.2 of Part II of this Lease. | |
| 13. Tenant’s Share: | 100 Percent (100%) | |
| (For pro-ration of Additional Rent)
14. Monthly Base Rent: |
Term Commencement Date – Sixteen (16) months following Term Commencement Date - $130,406.25 - $26.75 PSF | |
| (Less $130,406.25 per month for the period of Term Commencement Date – four (4) months following Term Commencement Date (“Concession Rent”), during which Tenant pays Additional Rent) | ||
| Months 17-28 - $132,990.00 - $27.28 PSF | ||
| Months 29-40 - $135,671.25 - $27.83 PSF | ||
| Months 41-52 - $138,401.25 - $28.39 PSF | ||
| Months 53-64 - $141,180.00 - $28.96 PSF | ||
| Months 65-76 - $143,958.75 - $29.53 PSF | ||
| Months 77-88 - $146,883.75 - $30.13 PSF | ||
| Months 89-100 - $149,808.75 - $30.73 PSF | ||
| Months 101-112 - $152,782.50 - $31.34 PSF | ||
|
15. Base Rent Over Term: |
Months 113-124 - $155,853.75 - $31.97 PSF
$17,656,860.00 | |
| 16. Base Year: | (Less $521,625.00 in Concession Rent equals Tenant’s total Base Rent obligation of $17,135,235.00)
Not Applicable | |
| 17. Additional Rent: | All amounts and charges required to be paid by Tenant hereunder | |
| 18. Rent: | (other than Base Rent) as described more particularly in Section 5.2 of Part II of this Lease
Includes both the Base Rent and Additional Rent to be paid by Tenant hereunder | |
| 19. Security Deposit: | $130,406.25 | |
| 20. Landlord’s Address for Notices: | HIGH PROPERTIES | |
| c/o High Associates Ltd. 0000 Xxxxxxx Xxxx Xxx | ||
| X.X. Xxx 00000 | ||
| Xxxxxxxxx, XX 00000-0000 | ||
| With copies, in all cases, to: | ||
| HIGH COMPANY, LLC 0000 Xxxxxxx Xxxx Xxx | ||
| X.X. Xxx 00000 | ||
| Xxxxxxxxx, XX 00000-0000 | ||
| Attn: General Counsel | ||
| 21. Tenant’s Address for Notices: | Prior to the Term Commencement Date: | |
| Xxxxxxxxx Flooring, Inc. | ||
| Attn: General Counsel | ||
| 0000 Xxxxxxxx Xxxxxx | ||
| X.X. Xxx 0000 | ||
| Xxxxxxxxx, XX 00000 | ||
| On and after the Term Commencement Date: | ||
| Xxxxxxxxx Flooring, Inc. | ||
| Attn: General Counsel | ||
| 1740 – 0000 Xxxxxxxxx Xxxx | ||
| Xxxxxxxxx, Xxxxxxxxxxxx 00000 | ||
| With copies, in all cases, to: | ||
| Xxxxxx Xxxxxxxx LLP | ||
| Attn: Xxxxxx Xxxx McPhelin | ||
| 000 Xxxxxx Xxxxxx, Xxxxx 000 | ||
| X.X. Xxx 0000 | ||
| Xxxxxxxxxx, XX 00000-0000 | ||
| For courier deliveries, ZIP code 17101-2044 | ||
| and | ||
| CBRE | ||
| Attn: Xxxxx Xxxxxx, Executive Vice President | ||
| 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxxx, XX 00000 | ||
| 22. Rent Payment/Address: | Payable to: | |
| HIGH PROPERTIES | ||
| X.X. Xxx 00000 | ||
| Xxxxxxxxx, XX 00000-0000 | ||
| 23. Commissions: | Broker’s commission to be paid to: Xxxxx Xxxxxx | |
| CBRE, Inc. | ||
| 000 Xxxx Xxxxxxxxx Xxx, Xxxxx 000 | ||
| Xxxxxx, XX 00000 | ||
| 24. Calculation of Rentable Area: | Single-Tenant Building. The Premises are part of a building which is leased entirely by Tenant. “Rentable Area” has been calculated to include the entire building. | |
| 25. Condition of Premises: | Separate from the Base Building, Landlord shall improve the Premises with the improvements shown on Exhibit B-3 (the “Tenant Improvements”), subject to minor modifications requested by Tenant. The Tenant Improvements shall be designed in accordance with Exhibit B. Such improvements are referred to in Part II of the Lease and exhibits hereto as the “Tenant Improvements.” Except as may be expressly provided in this Lease (including any exhibits hereto), Tenant acknowledges that neither Landlord nor any of Landlord’s Affiliates (as defined in Section 15(c) of Part II of the Lease), nor any of their agents, have made any representations, warranties or covenants, either express or implied, with respect to the Premises, the Building, the Common Areas (as defined in Section 1.3 of Part II of the Lease), or the Campus, or the condition of any of the foregoing. Except as set forth in Section 9, | |
| Part II of the Lease, Landlord makes no representation that the building systems are appropriate for Tenant’s proposed use. If Tenant is intending to install racking or other equipment, Tenant should verify with the municipality regarding permitting and other requirements. Based upon Tenant manufacturing processes or its distribution methods which may include style of racking, type of palletization, materials being stored and quantities being stored, modifications may be required to building systems such as life safety, electrical or mechanical systems. These costs shall be borne solely by Tenant. | ||
| 26. Payment of Operating Expenses: | Tenant shall pay Tenant’s Share (as defined herein) of annual Operating Expenses (as defined in Section 6.3 of Part II of the Lease). | |
| 27. Payment of Utilities: | Tenant shall pay all charges for utilities used or incurred by Tenant at the Premises, including without limitation heat, water, sewer, gas and electricity. | |
| 28. Responsibility for HVAC Systems: | Landlord shall perform all maintenance, repair and replacement of the HVAC Systems (as defined in Section 7.2 of Part II of the Lease) serving the Premises, including without limitation the scheduled maintenance set forth on Exhibit C to the Lease and any increased maintenance or replacements required to comply with CDC guidelines and the most current ASHRAE standards with respect to COVID-19. The cost of any such maintenance, repair or replacement of the HVAC Systems shall be paid by Tenant as part of Operating Expenses. Landlord shall, however, provide Tenant with a one (1) year warranty on all HVAC Systems. This warranty shall start as of the Term Commencement Date. If after the one-year warranty period expires, a replacement is required, the Tenant shall be responsible for a prorated share of the replacement expense amortized over the life expectancy of the replacement, as part of Operating Expenses. The proration shall be based upon a fifteen (15) year life expectancy of the replacement. | |
| 29. Obligation for Snow Removal and Grounds Maintenance: |
Landlord shall mow lawns, maintain and replace shrubbery, weed where appropriate, and remove snow and ice from walkways, roadways and parking areas in accordance with the requirements specified on Exhibit D to the Lease. The cost of such services shall be included as an Operating Expense. | |
| 30. Special Lease Terms: | Landlord represents that other than the two existing leases, there are no encumbrances affecting the availability of the Premises or Tenant’s contemplated use thereof. Relocation of the two existing tenants shall begin upon execution of this Lease and the termination/amendment of both tenants’ leases shall be finalized within forty-five (45) days thereafter. | |
| Tenant has two (2) renewal options for five (5) years each upon the terms and conditions set forth in Rider 1 and Rider 2. | ||
| 31. Attachments: | The following are attached to and made a part of this Lease: | |
| Part II – Standard Terms and Conditions | ||
| Exhibit A - Depiction of the Premises | ||
| Exhibit A-1 - Delivery Condition | ||
| Exhibit B - Design Process Narrative | ||
| Exhibit B-1 - Construction Schedule | ||
| Exhibit B-2 - Exterior Façade and Landscaping Plans | ||
| Exhibit B-3 - Tenant Improvements | ||
| Exhibit C - Specifications for HVAC Maintenance Agreement | ||
| Exhibit D - Lawn Care and Snow Removal Requirements | ||
| Exhibit E - Rules and Regulations | ||
| Exhibit F - Escrow Agreement | ||
| Exhibit G - Janitorial Specifications | ||
| Exhibit H - Landlord’s Lien Subordination Agreement | ||
| Rider 1 - Renewal Option #1 | ||
| Rider 2 - Renewal Option #2 |
The registrant will provide supplementally any of the foregoing attachments to the Securities and Exchange Commission upon request.
IN WITNESS WHEREOF, and intending to be legally bound, Landlord and Tenant have caused this Part I of the Lease to be signed by their duly authorized officers or agents under seal, as of the date set forth above.
| LANDLORD | ||||||
| HIGH PROPERTIES, | ||||||
| a Pennsylvania Limited Partnership | ||||||
| and as successor to High Properties, a general partnership | ||||||
| By: | High General Corporation, | |||||
| Sole General Partner | ||||||
| June 26, 2020 | ||||||
|
|
By: | /s/ Xxxx X. Xxxxxxxxxx | ||||
| Date | Print Name: Xxxx X. Xxxxxxxxxx | |||||
| Title: Executive Vice President & Chief Operating Officer | ||||||
| TENANT | ||||||
| XXXXXXXXX FLOORING, INC., | ||||||
| a Delaware corporation | ||||||
| June 26, 2020 | ||||||
|
|
By: | /s/ Xxxxxxxxxxx X. Xxxxxx | ||||
| Date | Print Name: Xxxxxxxxxxx X. Xxxxxx | |||||
| Title: SVP, General Counsel | ||||||
