Item 1.01 Entry into a Material Definitive Agreement.
Lease Agreement
On January 13, 2021, 1847 Goedeker Inc. (the "Company") entered into a Lease
Agreement (the "Lease") with Westgate 200, LLC, a Missouri limited liability
company ("Landlord"), pursuant to which the Company will lease approximately
58,000 square feet in a building located in St. Charles, Missouri, and which the
Company expects to occupy on or around February 15, 2021. The Lease, which
commenced on January 13, 2021, is for a term of 63 months and provides for a
base rent of $4.35 per square foot per year with 2.5% annual increases and a
three-month abatement, resulting in a base rent during the first year of
$20,976.79 per month, increasing to a base rent during the fifth year of
$23,146.80 per month. The Company will pay its 29% pro rata portion of the
property taxes, operating expenses and insurance costs accrued, paid or incurred
by Landlord during the term of the Lease, which is based on the portion of
square footage of the building being leased by the Company. The Company may
arrange for an annual review or audit of Landlord's books and records relating
to such property taxes, operating expenses and insurances costs. The Company is
also responsible to pay for the utilities used on the premises being leased,
including water, gas and electric, telephone, sewer, sprinkler service, refuse
and trash collection. The Company has two (2) options to renew the Lease, each
for an additional five (5) year period. Contemporaneously with the Company's
execution of the Lease, the Company paid to Landlord a security deposit in an
amount of $25,702.59 as security for the Company's performance under the Lease.
Pursuant to the Lease, Landlord will provide the Company with an improvement
allowance of $150,000 towards the expenses incurred by the Company connection
with the installation of approved office and bathroom improvements, together
with the main electrical services for the premises. The Company is responsible
for any additional work necessary to ready the premises for the Company's
occupancy thereof, such as installing furnishings, trade fixtures and equipment.
Landlord is required to maintain the property, except for those items that
remain the responsibility of the Company, which include heating, air
conditioning and other mechanical systems, serving the Company's premises.
The Lease contains mutual indemnification provisions that each party will
indemnify the other against losses, damages, and liabilities, to the extent
resulting from any injury or damage to any person (including death) or property,
that result from an act or omission of such indemnifying party, or a breach of
the Lease by such indemnifying party, except to the extent such losses, damages,
and liabilities are caused by the negligence, omission or willful misconduct of
the indemnified party.
The Lease contains customary events of default, including (i) if the Company
shall fail to pay rent within five (5) days after the due date, (ii) if the
Company shall fail to observe or perform any other terms, covenants, conditions
or provisions under the Lease and fails to cure such default within thirty (30)
days after written notice to the Company from Landlord, (iii) if the Company
fails to occupy all or any material portion of the lease premises for more than
ninety (90) consecutive days, for reasons other than force majeure, and fails to
pay all costs incurred by Landlord as a result of such failure to occupy, and
other customary representations, warranties and covenants. In the event of late
payment, interest shall accrue on the unpaid amount at the rate equal to the
greater of (i) two (2) percentage points in excess of the prime lending rate as
established by U.S. Bank, N.A., or (ii) the default rate applicable to the first
priority mortgage in effect at the time such default interest rate is imposed.
Upon the occurrence of n event of default, Landlord may, in addition to other
remedies, terminate ate the Lease.
The foregoing summary of the terms and conditions of the Lease does not purport
to be complete and is qualified in its entirety by reference to the full text of
the agreement. The Lease is filed as Exhibit 10.21herewith, and is incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
10.1 Lease Agreement, dated January 13, 2021, by and between Westgate 200,
LLC and 1847 Goedeker Inc
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