Item 1.01. Entry into a Material Definitive Agreement.
On
The expansion consists of approximately 10,800 square feet of additional
greenhouse space that will be used for the cultivation of cannabis. The Tenant
is responsible for implementing the expansion and PropCo will fund the cost of
such expansion up to a total of
As part of the agreement, PropCo and Tenant have amended the Lease to increase the rent whereby after a six-month period, the additional rental payments provide PropCo with a full return of its invested capital related to the expansion over the next three years in equal monthly payments. Thereafter, rent is structured to provide a 12.5% return on the original invested capital amount which will increase at a 3% rate per annum. At any time after year six of the Lease, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return on the original invested capital amount and will increase at a 3% rate per annum based on a starting date of the start of year seven.
The Lease provides that Tenant is responsible for paying all expenses related to the Properties, including maintenance expenses, insurance and taxes.
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