SUBLEASE AGREEMENT by and between GLOBAL PUBLIC SAFETY, LLC and BREKFORD CORP. Hanover, Maryland 21076 SUBLEASE AGREEMENT
Exhibit 10.5
by and
between
GLOBAL
PUBLIC SAFETY, LLC
and
0000
Xxxxxx Xxxx, Xxxxx X
Xxxxxxx,
Xxxxxxxx 00000
1
THIS
SUBLEASE ("Sublease") is made as of the 28th day of February 2017,
by and between Global Public Safety, LLC a Delaware limited
liability company (Landlord) and Brekford Corp., a Delaware
corporation ("Tenant").
WITNESSETH:
That
for and in consideration of the rent hereinafter reserved, and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Landlord hereby subleases to
Tenant, and Tenant hereby rents from Landlord, the premises
described in Section 1, upon the following terms, covenants and
conditions:
1. Premises
The
premises Subleased hereby (the "Premises") consist of 3,362 square
feet, more or less, of space, contained within the warehouse office
facility containing 22,410 square feet (“the Landlord space")
located at 0000 Xxxxxx Xxxx, Xxxxx X, Xxxxxxx, Xxxxxxxx 00000. The
occupied space is referred to herein collectively as the
“Premises." Tenant, its agents, employees and invitees shall
have the nonexclusive right to use all of the Premises,
including, without limitation, all common areas, hallways,
restrooms, conference rooms driveways, walkways, access points, and
parking areas.
2. Term
The
term of this Sublease (the "Term") shall begin on the date (the
"Sublease Commencement Date") and shall continue on a
month-to-month basis until a mutually agreed upon date that the
Landlord or Tenant requires the space for its’ own use. The
Landlord will provide to Tenant, or the Tenant will provide to
Landlord at least one hundred and twenty (120) days’ written
notice prior to termination of the Sublease to allow for the Tenant
to find other space and to move from the Sublease
premises.
The
Sublease Commencement Date is anticipated by Landlord and Tenant to
be on or about the 3rd of February 2017.
Landlord and Tenant shall be subject to the closing date of the
purchase of Assets by the Landlord of the Tenants vehicle upfitting
business.
3. Sublease
Premises Condition9
The
Subleased Premises shall be accepted “as is” by
Tenant
4. Rent
Commencing on the
Sublease Commencement Date and continuing throughout the Term,
Tenant shall pay Landlord minimum rent in accordance with the
Landlord’s Sublease which at the Sublease Commencement date
is $7.96 per square foot and shall continue at the same rate paid
by the Landlord. All minimum rent shall be paid in advance in equal
monthly installments on the 1st day of each calendar month during
the Term.
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If the
Term begins on a day other than the 1st day of the calendar month,
the rent for the period from the beginning date to the 1st day of
the first full calendar month of the Term shall be prorated at the
aforesaid monthly rate and shall be payable on the date the Term
begins.
Rent
shall be paid to the Landlord at 0000 Xxxxxx Xxxx, Xxxxx X,
Xxxxxxx, XX 00000, or to such address as Landlord may from time to
time notify Tenant, without prior demand, and without abatement,
deduction, or set-off except as set forth in this
Sublease.
Whenever, under the
terms of this Sublease, any sum of money is required to be paid by
Tenant in addition to the rent herein reserved, whether such sum is
designated as "additional rent", it shall, nevertheless, be deemed
to be additional rent and shall be collectible as
rent.
If any
installment of rent or other sum payable hereunder is not received
by Landlord within five (5) business days of the due date and
within five (5) business days after written notice to Tenant of the
delinquency, the rent or other sum shall be accompanied by a late
charge of 10% of the total amount due.
5. Security
Deposit
Tenant
is not required to pay a Security Deposit
6. Common
Area Maintenance & Utilities
Tenant
shall pay to Landlord its pro-rata share of all operating costs and
expenses incurred by Landlord in operating and maintaining the
Property. The Tenant shall pay its’ pro-rata share of all
operating costs and expenses listed in this section on a quarterly
basis. Landlord shall provide to Tenant a detailed billing showing
the expenses and the Tenant pro-rata share thereof. The Tenant
shall have 30 days to pay their share in full.
Utilities and all
other expenses will be paid by the Landlord. Landlord shall pay
common area electric, sprinkler system monitoring expenses, and
water and sewer. Operating expenses include Burglar Alarm, Waste
Removal, Internet Service, Landline phones, and office expenses
including office equipment Subleases, and cleaning. In addition,
the Tenant will pay its’ pro-rata share of any building
operating expenses billed to the Landlord including, without
limitation, gardening and landscaping, exterior wall and roof
maintenance, premiums for casualty, public liability and property
damage insurance, repairs, parking lot
striping/maintenance/repairs, exterior wall painting/sealing,
lighting, sanitary control, sprinkler system
maintenance/monitoring/repair, removal of snow, litter and other
refuse, Hillside Owners Association dues and assessments, and the
actual cost of personnel directly related to the Property's
maintenance and operation. For purposes hereof, operating costs and
expenses shall also include costs of replacement and other costs of
a capital nature, provided such costs are amortized over the useful
life of the replacement or capital item in accordance with
generally accepted accounting principles. Operating expenses shall
not include any cost of curing any violation of law, rule or
regulation in effect as of the date of this Sublease.
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7. Reservation
by Landlord
Landlord reserves
the right, at Landlord's discretion from time to time, to change
the location, layout and arrangement of the common areas within the
Land, so long as such changes do not materially impact
accessibility to the Premises or restrict Tenant's access to
outside storage areas contained within the Premises or otherwise
diminish in any material way the general level of quality or
convenience of Tenant's use of the Premises for its normal business
purposes.
8. Alterations
Tenant
shall not, without the consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed (i) make any
structural, mechanical, electrical, or plumbing alterations to the
Building, (ii) make any material additions to or modifications of
the Premises (material, for this purpose, shall mean on a
project-by-project basis any such addition or modification costing
more than $5,000.00), or (iii) place any signs on the Premises,
without the prior written consent of Landlord (such alterations,
additions, modifications and placements are referred to herein
collectively as "Material Changes"). Tenant shall notify Landlord
in writing prior to making any alteration, addition or modification
to the Premises, including Material Changes. Landlord agrees to
promptly review all Tenant requests for a Material Change upon
receipt thereof and Landlord agrees it will not unreasonably delay,
condition or withhold its approval. Tenant hereby acknowledges that
any and all modifications, alterations or additions to the Premises
(including any Material Changes) shall be required to comply with
all applicable federal, state, county and local laws, regulations
and guidelines and to conform to any applicable requirements or
restrictions set forth in the Covenants . If Landlord reasonably
denies Tenant's request to make a Material Change, Landlord will
provide alternatives, whenever reasonably feasible. Prior to making
any alteration, modification or addition, Tenant shall, at its
expense, obtain all necessary permits from appropriate governmental
authorities and, upon completion, furnish to Landlord an "as-built"
drawing of the alteration, addition or modification. All additions,
alterations and modifications made by Tenant shall be performed in
a good and workmanlike manner in accordance with all applicable
legal requirements free of liens or claim of liens and upon
completion shall be the property of Landlord (except for Tenant's
equipment, trade fixtures and personal property, which shall remain
the property of Tenant). In performing any additions, alterations
or modifications, Tenant shall be responsible for causing the
Premises to be in compliance with any additional work or
improvements which may be required by applicable law or regulation
as a result of such additions, alterations, or
modifications.
9. Liens
Tenant
shall not permit the Premises or the Property to be subjected to
any mechanic's or other liens; and if any lien attaches, Tenant
shall promptly discharge the same by payment, bond or otherwise;
and Tenant shall, at its expense, defend any proceeding for the
enforcement of any lien, discharge any judgment thereon and shall
indemnify and save Landlord harmless from all costs and expenses
resulting there from, including reasonable counsel fees and other
expenses incurred by Landlord, if Landlord elects to defend or
participate in the defense of such proceedings. Nothing herein
shall prevent Tenant from granting liens to its lenders for
Tenant-owned equipment or furnishings.
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10. Compliance
with Laws and Regulations
Tenant
shall promptly comply with the terms and provisions set forth in
the Covenants and all applicable laws, rules, regulations,
requirements and binding recommendations of governmental bodies and
public authorities, fire insurance rating organizations and
insurers, pertaining to Tenant's use and occupancy of the Premises
(referred to herein collectively, as the "Legal Requirements"),
except for structural and other alterations required for compliance
with the Americans with Disabilities Act or other laws in effect as
of the date hereof, as amended, unless such requirements arise from
Tenant's specific use or manner of use of the Premises or Tenant's
improvements to the Premises. Tenant shall not do or suffer to be
done, or keep or suffer to be kept anything in or about the
Premises, which will contravene any insurance which Landlord or
Tenant carries with respect to the Premises. No hazardous materials
or toxic substances shall be stored or kept in or about the
Premises, except as permitted by law in the course of Tenant's
ordinary business and no such substances shall be discharged from
the Premises except in strict accordance and compliance with
federal, state and local regulations and guidelines for the use,
handling treatment and discharge of said substances. No activity
may be carried on in the Premises which would produce any waste
materials that are considered or classified as hazardous or toxic
under any federal, state or local law, ordinance, rule or
regulation.
11. Indemnification;
Liability Insurance
Tenant
shall defend, indemnify and save Landlord harmless from and against
any and all claims, actions, demands, damages, liability and
expenses (including reasonable counsel fees and other litigation)
for damage to property and injury or death of persons, caused by or
arising out of or in connection with Tenant's use or occupancy of
the Premises (unless arising from the negligence of Landlord or any
of Landlord's agents, employees, invitees or contractors), or any
act or omission of Tenant, its agents, employees, invitees or
contractors, or out of any default or breach by Tenant or any term,
covenant or condition of this Sublease to be performed or observed
by Tenant.
Tenant
shall, at its expense, maintain comprehensive general public
liability insurance covering personal injury and property damage
occurring on the Premises and its appurtenances, which insurance
shall include Landlord and Tenant as named insureds, and shall
include contractual indemnity coverage for Tenant's liability
hereunder. This insurance shall be written with companies
acceptable to Landlord and have liability limits of at least two
million dollars ($2,000,000), combined single limit coverage, on an
occurrence basis.
Landlord shall
maintain comprehensive general public liability insurance covering
personal injury and property damage occurring in the common areas
or the Premises and arising from the acts or negligence of Landlord
or any of Landlord's agents, employees, invitees or contractors.
This insurance shall have liability limits of at least two million
dollars ($2,000,000), combined single limit coverage, on an
occurrence basis.
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Landlord shall
defend, indemnify and save Tenant harmless from and against any and
all claims, actions, demands, damages, liability, and expenses
(including reasonable counsel fees) for damage to property and
injury or death of persons, caused by or arising out of or in
connection with the common areas, and the use or occupancy thereof
(unless arising from the negligence of Tenant or any of Tenant's
agents, employees, invitees or contractors), or any act or omission
of Landlord, its agents, employees, invitees or contractors, or out
of a breach by Landlord or any term, covenant or condition of this
Sublease to be performed or observed by Landlord.
12. Casualty
Insurance; Damage or Destruction
Tenant
shall, at its expense, maintain at least standard fire and extended
coverage, vandalism, malicious mischief, and sprinkler damage
insurance on its trade fixtures, equipment and other personal
property in the Premises, existing improvements to the Premises, on
the Sublease hold improvements to the Premises, and all other
improvements, provided by the Tenant or Landlord to the Premises
hereafter for their full replacement cost, containing a waiver of
subrogation for the benefit of Landlord. Landlord shall not be
liable to Tenant for any damage to any property of Tenant from any
cause, unless it is due to Landlord's willful misconduct, gross
negligence, or failure to comply with terms of the Sublease.
Certificates evidencing the insurance required hereby, naming
Landlord as an additional insured shall be delivered to Landlord at
the beginning of the Term and thirty (30) days prior to the time of
any renewal or replacement of such insurance.
Landlord and Tenant
shall each insure their properties as herein required, and neither
shall be responsible to the other for any damage to its property
from any cause whatsoever. Anything in this Sublease to the
contrary notwithstanding, Landlord and Tenant each hereby waive and
resublease each other from and against any and all rights of
recovery, claims or causes of action, against the other, its
agents, officers, contractors, or employees, for any loss or damage
that may occur to the Premises, or any part thereof, or any
personal property of such party therein, by reason of fire, the
elements, or any other cause which could be insured against under
the terms of any of the insurance policies required to be
maintained by the respective parties regardless of cause or origin,
including the negligence of the other party hereto, its agents,
officers, contractors, or employees, and covenants that no insurer
shall hold any right of subrogation against the other party.
Landlord and Tenant each hereby acknowledge and agree it is not the
intention of the parties that they be relieved from liability for
negligence contrary to any statute or public policy of the State of
Maryland, but rather that each avail itself of insurance coverage
without subjecting the other to liability for losses that could
have been insured, and without subjecting the other to subrogation
claims of any insurer, and each party hereby agrees that the
availability of insurance coverage is a fair and adequate
alternative to pursuing claims for negligence against each other,
and, therefore, agree that a mutual waiver of such claims is in the
best interests of both parties.
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13. Default
(a) Each
of the following shall be deemed an event of default by Tenant and
a breach of this Sublease.
(i) The
filing of a petition by or against Tenant for adjudication as a
bankrupt under the Bankruptcy Code, as now or hereafter amended or
supplemented, or for a reorganization within the meaning of the
Bankruptcy Code, or for an arrangement within the meaning of the
Bankruptcy Code, or the commencement of any action or proceeding
for the dissolution or liquidation of Tenant, whether instituted by
or against Tenant, or for the appointment of a receiver or trustee
of the property of Tenant. Notwithstanding the foregoing, Landlord
shall grant Tenant a sixty day period after any involuntary
bankruptcy filing to vacate said filing, or to seek dismissal of
the appointment of a receiver or trustee, provided, Tenant is not
past due in its rental obligations and all post filing rents are
paid to Landlord in a prompt manner;
(ii)
The making by Tenant of an assignment for the benefit of
creditors.
(iii)
Failure of Tenant to pay, within five (5) days after written notice
from Landlord, the rent or additional rent herein reserved, or any
other sum payable by Tenant.
(iv) A
default by Tenant in the performance of any other material term,
covenant, agreement or condition of this Sublease on the part of
Tenant to be performed for a period of thirty (30) days after
receipt of written notice thereof, unless such performance shall
reasonably require a longer period in which case Tenant shall not
be deemed in default if Tenant commences the required performance
promptly and thereafter pursues and completes such action
diligently and expeditiously.
(b) In
the event of a default by Tenant as set forth above, which has not
been cured, Landlord may, at any time thereafter, at its election,
in addition and without prejudice to any and all other remedies
available to Landlord as a result of such default, terminate this
Sublease and Tenant's right to possession of the Premises, and
thereafter, by any lawful means, take possession of the Premises,
and remove Tenant, any occupants and any property there from,
without being guilty of or liable for trespass or damages and
without relinquishing any rights of Landlord against
Tenant.
(c) If
this Sublease is terminated pursuant to the above, Tenant shall be
liable to Landlord for rent and additional rent to the date of
termination together with (1) all expenses (including reasonable
attorneys' fees for any proceedings which may be necessary for
Landlord to recover possession of the Premises, and (2) damages to
be calculated and payable utilizing either of the two options (at
Landlord's sole discretion) as follows:
(i) The
monthly rent and additional rent payable by Tenant hereunder, which
shall be payable when due, less the rent directly attributable to
the existing Premises (net of attorneys' fees, leasing commissions,
tenant improvement and remodeling costs, and other related
re-leasing incurred by Landlord expenses) if any, received by
Landlord from others to whom the Premises may be rented on such
terms and conditions and at such rentals as Landlord, in its
reasonable discretion, exercised in objective good faith, shall
deem proper. In no event shall Tenant be entitled to excess rent,
if any, that Landlord may receive from any substitute
tenant.
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(d) No
act or thing done by Landlord shall be deemed to be an acceptance
of a surrender of the Premises, unless Landlord executes a written
resublease of Tenant. Tenant's liability hereunder shall not be
terminated by execution of a new Sublease of the Premises by
Landlord. The failure by Landlord to insist upon the performance of
any term, covenant or condition of this Sublease or to exercise any
right or remedy consequent upon an unremedied breach thereof, or
the acceptance of full or partial rent during the continuance of
any unremedied breach, shall not constitute a waiver of the
performance of such term, covenant or condition. No term, covenant
or condition of this Sublease to be performed or complied with by
Tenant, and no unremedied breach thereof, shall be deemed waived,
altered or modified except by a written instrument executed by
Landlord. The waiver of any breach shall not affect or alter this
Sublease, but each and every term, covenant and condition shall
continue in full force and effect with respect to any other then
existing or subsequent breach thereof. Upon any default, Tenant
waives all legal, equitable and/or statutory rights to redeem its
interest under this Sublease.
(e) In
addition to the above, if Tenant defaults in the performance or
observance of any term, covenant or condition to be performed under
this Sublease, and Tenant fails to materially pursue rectification
of said default within thirty (30) lays after written notice to
Tenant of said default by Landlord, Landlord may take any necessary
action to rectify the default on Tenant's behalf. Notwithstanding
the foregoing, if Landlord reasonably deems the default of a nature
requiring immediate resolution, it may proceed immediately to
rectify said default. All money advanced and costs and expenses
incurred by Landlord in rectifying defaults, together with interest
thereon at the rate of ten percent (10%) per annum, shall be repaid
by Tenant to Landlord promptly upon demand.
14. Quiet
Enjoyment
Landlord covenants
and agrees that Tenant, upon paying the rent and all other charges
provided for herein, and observing and keeping the terms, covenants
and conditions of this Sublease on its part to be kept and
performed, shall lawfully and quietly hold, occupy and enjoy the
Premises during the Term of this Sublease, free from any
interference by Landlord or anyone claiming by, through or under
Landlord.
15. Applicable
Law
This
Sublease shall be construed under the laws of the State of
Maryland. The parties acknowledge that this Sublease has been
drafted, negotiated, delivered and consummated in the State of
Maryland. The parties consent to suit in the state and federal
courts of the State of Maryland on or with respect to the Premises
and this Sublease. The parties hereby waive any objection to the
venue of any action filed in any state or federal court of
Maryland, and waive any claim of forum or for transfer of any
action to any other court. Nothing herein shall be deemed to
preclude the parties from obtaining Service of Process upon each
other in any other manner permitted by the laws and Rules of Court
of the state and federal courts of Maryland.
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16. Notices
All
notices, requests, demands or other communications with respect to
this Sublease and the Premises, shall be in writing, and shall be
deemed to have been duly given when mailed, postage prepaid, United
States registered or certified mail, or hand delivered, or sent by
Federal Express, or other nationally recognized courier service,
with signed receipt.
(a)
To Landlord: Global
Public Safety, LLC, 0000 Xxxxxx Xxxx, Xxxxx X, Xxxxxxx, Xxxxxxxx
00000, or at such other address as Landlord may furnish to Tenant
for this purpose.
(b)
To Tenant: Brekford
Corporation, 0000 Xxxxxx Xxxx, Xxxxx X, Xxxxxxx, Xxxxxxxx 00000, or
at such other address as Tenant may furnish to Landlord for this
purpose.
17. Successors
and Assigns
Except
as herein otherwise provided, this Sublease and the terms,
covenants and conditions hereof, shall inure to the benefit of,
apply to, and be binding upon the parties and their successors and
assigns.
18. Surrender
of the Premises
At the
expiration or sooner termination of this Sublease in accordance
with its terms, Tenant shall surrender the Premises in the same
condition as the Premises were upon Sublease Commencement,
reasonable wear and tear excepted, and shall deliver all keys for
the Premises to Landlord at the place then fixed for the payment of
rent, and shall inform Landlord of all combinations on locks, safes
and vaults, if any, in the Premises. Tenant shall remove all of its
trade fixtures and other personal property (including all racking,
vaults and all shelving installed by Tenant), and any alterations,
additions or improvements performed by Tenant, which Landlord
requires to be removed. Before surrendering the Premises and shall
repair in a good and workmanlike manner any damage caused by such
removal.
19. Force
Majeure
In the
event that either party hereto shall be delayed, hindered or
prevented from the performance of any act required within this
Sublease (except for the payment of rents or additional rents) by
reason of any act not within the reasonable control of the party
delayed, hindered or prevented, including strikes, lockouts, acts
of god, enemy acts, civil commotion, labor troubles, inability to
procure materials, failure of power, restrictive government laws or
regulations, riots, insurrections, wars, legal injunctions, or
other reasons of a comparable nature not the fault of or within the
reasonable control of the delayed, hindered or prevented party, in
performing the work or doing the acts required under the terms of
this Sublease, then performance of said act shall be excused for
the period of the delay, hindrance or prevention and the
performance of any such act shall be extended without penalty for a
period equivalent to the period of such delay, hindrance or
prevention.
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IN
WITNESS WHEREOF, the parties, being duly authorized so to do, have
executed this Sublease under seal
as of the day and year first above written.
LANDLORD:
Global
Public Safety, LLC
By:
/s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X.
Xxxxxxx
Title: President
Title: President
TENANT:
Brekford
Corporation
By:
/s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X.
Xxxxxxx
Title: President and COO
Title: President and COO
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