INDUSTRIAL REAL ESTATE LEASE (Multi-Tenant Facility)
Exhibit 10.1
(Multi-Tenant Facility)
This
Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and
Paragraphs of the Lease referred to in this Article One explain and
define the Basic Terms and are to be read in conjunction with the
Basic Terms.
Section 1.01. Date of Lease:
May 10,
2019.
Section
1.02. Landlord (include legal entity): JM SKY HARBOR PROPERTIES LLC, an
Arizona limited liability company.
Address
of Landlord: 0000 Xxxxx
Xxxxxx Xxxx., Xxx Xxxxxxx, XX 00000.
Section 1.03. Tenant (include legal
entity): Wrap
Technologies, Inc., a Delaware corporation.
Address
of Tenant:4620 Xxxxxxx
Xxxxxx, Xxxxx X, Xxx Xxxxx, XX 00000.
an approximate 11,256 square foot office/warehouse located at 0000
X. 0xx
Xxxxxx,
Xxxxx, XX (the “Property”). For purposes of the Lease, it is
agreed and stipulated by both Landlord and Tenant that the rentable
area shall be deemed to be 11,256 square feet regardless of any
inaccuracy therein.
Landlord's
Broker: Commercial
Properties (Xxxxxxxxx, Xxxxx & Xxxxxxx).
Tenant's
Broker: Xxx &
Associates (Xxxxx & Xxxxxxx).
Section 1.09. Commission Payable to Landlord's Broker:
(See Article Fourteen) Per
separate agreement.
Section
1.12. Rent and Other Charges Payable by Tenant:
(a) BASE RENT: SEVEN THOUSAND SIX HUNDRED FIFTY FOUR
AND NO/100 Dollars ($7,654.00) per month for months
three (3) through
twelve (12), as
provided in Section 3.01, and shall be increased on the first day
of the 13th,
25th
and 37th
month(s) after the Commencement Date as provided in Rider No. 1 attached
hereto.
(b) OTHER PERIODIC PAYMENTS: (i) Real
Property Taxes (See Section 4.02); (ii) Utilities (See Section
4.03); (iii) Insurance Premiums (See Section 4.04); (iv) Tenant's
Initial Pro Rata Share of Common Area Expenses 100% (See Section 4.05); (v)
Maintenance, Repairs and Alterations (See Article
Six).
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(a) Landlord shall not
be liable to Tenant if Landlord does not deliver possession of the
Property to Tenant on the Commencement Date. Landlord's
non-delivery of the Property to Tenant on that date shall not
affect this Lease or the obligations of Tenant under this Lease
except that the Commencement Date shall be delayed until Landlord
delivers possession of the Property to Tenant and the Lease Term
shall be extended for a period equal to the delay in delivery of
possession of the Property to Tenant, plus the number of days
necessary to end the Lease Term on the last day of a month. If
Landlord does not deliver possession of the Property to Tenant
within thirty (30) days after the Commencement Date, Tenant may
elect to cancel this Lease by giving written notice to Landlord
within ten (10) days after the thirty (30)-day period ends. If
Tenant gives such notice, the Lease shall be canceled and neither
Landlord nor Tenant shall have any further obligations to the
other. If Tenant does not give such notice, Tenant's right to
cancel the Lease shall expire and the Lease Term shall commence
upon the delivery of possession of the Property to Tenant. If
delivery of possession of the Property to Tenant is delayed,
Landlord and Tenant shall, upon such delivery, execute an amendment
to this Lease setting forth the actual Commencement Date and
expiration date of the Lease. Failure to execute such amendment
shall not affect the actual Commencement Date and expiration date
of the Lease.
(b) Landlord shall not
be required to deliver possession of the Property to Tenant until
Tenant complies with its obligation to provide evidence of
liability insurance to Landlord as outlined in Section 4.04 of this
Lease. Pending delivery of such evidence to Landlord, Tenant shall
be required to perform all of its obligations under this Lease from
and after mutual Lease execution, including the payment of Rent,
regardless of Landlord’s election to withhold possession
pending receipt of such evidence of liability insurance.
Furthermore, if Tenant is required to perform any other conditions
prior to or concurrent with the Commencement Date, the Commencement
Date shall occur, but Landlord may elect to withhold possession
until such conditions are satisfied.
Section
2.04.Holding
Over. Tenant shall vacate the
Property upon the expiration or earlier termination of this Lease.
Tenant shall reimburse Landlord for and indemnify Landlord against
all actual damages which Landlord incurs from Tenant's delay in
vacating the Property. If Tenant does not vacate the Property upon
the expiration or earlier termination of the Lease and Landlord
thereafter accepts rent from Tenant, Tenant's occupancy of the
Property shall be a "month-to-month" tenancy, subject to all of the
terms of this Lease applicable to a month-to-month tenancy, except
that the Base Rent then in effect shall be increased by fifty
percent (50%).
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(i) Tenant shall pay all taxes
charged against trade fixtures, furnishings, equipment or any other
personal property belonging to Tenant. Tenant shall try to have
personal property taxed separately from the Property.
(ii) If any of Tenant's personal
property is taxed with the Property, Tenant shall pay Landlord the
taxes for the personal property within fifteen (15) days after
Tenant receives a written statement from Landlord for such personal
property taxes.
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(i) Any insurance which Tenant is
required to maintain under this Lease shall include a provision
which requires the insurance carrier to give Landlord not less than
thirty (30) days' written notice prior to any cancellation or
modification of such coverage.
(ii) If Tenant fails to deliver any
policy, certificate or renewal to Landlord required under this
Lease within the prescribed time period or if any such policy is
canceled or modified during the Lease Term without Landlord's
consent, Landlord may obtain such insurance, in which case Tenant
shall reimburse Landlord for the cost of such insurance within
fifteen (15) days after receipt of a statement that indicates the
cost of such insurance.
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(iii) Tenant shall maintain all
insurance required under this Lease with companies holding a
"General Policy Rating" of A-12 or better, as set forth in the most
current issue of "Best Key Rating Guide". Landlord and Tenant
acknowledge the insurance markets are rapidly changing and that
insurance in the form and amounts described in this Section 4.04
may not be available in the future. Tenant acknowledges that the
insurance described in this Section 4.04 is for the primary benefit
of Landlord. If at any time during the Lease Term, Tenant is unable
to maintain the insurance required under the Lease, Tenant shall
nevertheless maintain insurance coverage which is customary and
commercially reasonable in the insurance industry for Tenant's type
of business, as that coverage may change from time to time.
Landlord makes no representation as to the adequacy of such
insurance to protect Landlord's or Tenant's interests. Therefore,
Tenant shall obtain any such additional property or liability
insurance which Tenant deems necessary to protect Landlord and
Tenant.
(iv) Unless prohibited under any
applicable insurance policies maintained, Landlord and Tenant each
hereby waive any and all rights of recovery against the other, or
against the officers, employees, agents or representatives of the
other, for loss of or damage to its property or the property of
others under its control, if such loss or damage is covered by any
insurance policy in force (whether or not described in this Lease)
at the time of such loss or damage. Upon obtaining the required
policies of insurance, Landlord and Tenant shall give notice to the
insurance carriers of this mutual waiver of
subrogation.
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(a) Except as provided in Article
Seven (Damage or Destruction) and Article Eight (Condemnation),
Landlord shall keep the following in good order, condition and
repair: the foundations, exterior walls and roof of the Property
(including painting the exterior surface of the exterior walls of
the Property not more often than once every five (5) years, if
necessary) and all components of electrical, mechanical, plumbing,
heating and air conditioning systems and facilities located in the
Property which are concealed or used in common by tenants of the
Project. However, Landlord shall not be obligated to maintain or
repair windows, doors, plate glass or the interior surfaces of
exterior walls. Landlord shall make repairs under this Section 6.03
within a reasonable time after receipt of written notice from
Tenant of the need for such repairs.
(b) Tenant shall pay or reimburse
Landlord for all costs Landlord incurs under Paragraph 6.03(a)
above as Common Area costs as provided for in Section 4.05 of the
Lease. Tenant waives the benefit of any statute in effect now or in
the future which might give Tenant the right to make repairs at
Landlord’s expense or to terminate this Lease due to
Landlord’s failure to keep the Property in good order,
condition and repair.
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(a) Except as provided in Section
6.03, Article Seven (Damage or Destruction) and Article Eight
(Condemnation), Tenant shall keep all portions of the Property
(including structural, nonstructural, interior, systems and
equipment) in good order, condition and repair (including interior
repainting and refinishing, as needed). If any portion of the
Property or any system or equipment in the Property which Tenant is
obligated to repair cannot be fully repaired or restored, Tenant
shall promptly replace such portion of the Property or system or
equipment in the Property, regardless of whether the benefit of
such replacement extends beyond the Lease Term. Tenant shall
maintain a preventive maintenance contract providing for the
regular inspection and maintenance of the heating, air conditioning
system and evaporative cooling system by a licensed heating and air
conditioning contractor, unless Landlord maintains such equipment
under Section 6.03 above or if the
equipment is not used in common with other tenants of the Project,
Landlord may, at Landlord's option, elect to maintain the heating,
air conditioning and evaporative cooling systems (if any) and
Tenant shall pay or reimburse Landlord for all costs Landlord
incurs for such maintenance or replacement. If any part of
the Property or the Project is damaged by any act or omission of
Tenant, Tenant shall pay Landlord the cost of repairing or
replacing such damaged property, whether or not Landlord would
otherwise be obligated to pay the cost of maintaining or repairing
such property. It is the intention of Landlord and Tenant that at
all times Tenant shall maintain the portions of the Property which
Tenant is obligated to maintain in an attractive, first-class and
fully operative condition.
(b) Tenant shall fulfill all of
Tenant's obligations under this Section 6.04 at Tenant's sole
expense. If Tenant fails to maintain, repair or replace the
Property as required by this Section 6.04, Landlord may, upon ten
(10) days' prior notice to Tenant (except that no notice shall be
required in the case of an emergency), enter the Property and
perform such maintenance or repair (including replacement, as
needed) on behalf of Tenant. In such case, Tenant shall reimburse
Landlord for all costs incurred in performing such maintenance or
repair immediately upon demand.
(a) Tenant shall not make any
alterations, additions, or improvements to the Property without
Landlord's prior written consent, except for non-structural
alterations which do not exceed Ten Thousand Dollars ($10,000) in
cost cumulatively over the Lease Term and which are not visible
from the outside of any building of which the Property is part.
Landlord may require Tenant to provide demolition and/or lien and
completion bonds in form and amount satisfactory to Landlord.
Tenant shall promptly remove any alterations, additions, or
improvements constructed in violation of this Paragraph 6.05(a)
upon Landlord's written request. All alterations, additions, and
improvements shall be done in a good and workmanlike manner, in
conformity with all applicable laws and regulations, and by a
contractor approved by Landlord. Upon completion of any such work,
Tenant shall provide Landlord with "as built" plans, copies of all
construction contracts, and proof of payment for all labor and
materials.
(b) Tenant shall pay when due all
claims for labor and material furnished to the Property. Tenant
shall give Landlord at least ten (10) days' prior written notice of
the commencement of any work on the Property, regardless of whether
Landlord's consent to such work is required. Landlord may elect to
record and post notices of non-responsibility on the
Property.
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(a) Tenant shall notify Landlord in
writing immediately upon the occurrence of any damage to the
Property. If the Property is only partially damaged (i.e., less
than fifty percent (50%) of the Property is untenantable as a
result of such damage or less than fifty percent (50%) of Tenant's
operations are materially impaired) and if the proceeds received by
Landlord from the insurance policies described in Paragraph 4.04(b)
are sufficient to pay for the necessary repairs, this Lease shall
remain in effect and Landlord shall repair the damage as soon as
reasonably possible. Notwithstanding the foregoing, in event
Landlord does not elect to file a claim under its insurance
policies, however elects to repair the damage or destruction to the
Property, Tenant shall pay Landlord the amount of the deductible
set forth in Paragraph 4.04(b) of this Lease or the cost to repair
the damage, whichever is the lesser amount. Landlord may elect (but
is not required) to repair any damage to Tenant's fixtures,
equipment, or improvements.
(b) If the insurance proceeds
received by Landlord are not sufficient to pay the entire cost of
repair, or if the cause of the damage is not covered by the
insurance policies which Landlord maintains under Paragraph
4.04(b), Landlord may elect either to (i) repair the damage as soon
as reasonably possible, in which case this Lease shall remain in
full force and effect, or (ii) terminate this Lease as of the date
the damage occurred. Landlord shall notify Tenant within thirty
(30) days after receipt of notice of the occurrence of the damage
whether Landlord elects to repair the damage or terminate the
Lease. If Landlord elects to repair the damage, Tenant shall pay
Landlord the "deductible amount" under Landlord's insurance
policies and, if the damage was due to an act or omission of
Tenant, or Tenant's employees, agents, contractors or invitees, the
difference between the actual cost of repair and any insurance
proceeds received by Landlord. Notwithstanding the foregoing, in
event Landlord does not file a claim under its insurance policies,
however elects to repair the damage or destruction, Tenant shall
pay Landlord the amount of the deductible set forth in Paragraph
4.04(b) of this Lease or the cost to repair the damage, whichever
is the lesser amount. If Landlord elects to terminate the Lease,
Tenant may elect to continue this Lease in full force and effect,
in which case Tenant shall repair any damage to the Property and
any building in which the Property is located. Tenant shall pay the
cost of such repairs, except that upon satisfactory completion of
such repairs, Landlord shall deliver to Tenant any insurance
proceeds received by Landlord for the damage repaired by Tenant.
Tenant shall give Landlord written notice of such election within
ten (10) days after receiving Landlord's termination
notice.
(c) If the damage to the Property
occurs during the last six (6) months of the Lease Term and such
damage will require more than thirty (30) days to repair, either
Landlord or Tenant may elect to terminate this Lease as of the date
the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give
written notification to the other party of such election within
thirty (30) days after Tenant's notice to Landlord of the
occurrence of the damage.
Section 7.02. Substantial or Total Destruction. If the
Property is substantially or totally destroyed by any cause
whatsoever (i.e., the damage to the Property is greater than
partial damage as described in Section 7.01), and regardless of
whether Landlord receives any insurance proceeds, this Lease shall
terminate as of the date the destruction occurred. Notwithstanding
the preceding sentence, if the Property can be rebuilt within six
(6) months after the date of destruction, Landlord may elect to
rebuild the Property at Landlord's own expense, in which case this
Lease shall remain in full force and effect Landlord shall notify
Tenant of such election within thirty (30) days after Tenant's
notice of the occurrence of total or substantial destruction. If
Landlord so elects, Landlord shall rebuild the Property at
Landlord's sole expense, except that if the destruction was caused
by an act or omission of Tenant, Tenant shall pay Landlord the
difference between the actual cost of rebuilding and any insurance
proceeds received by Landlord. If Landlord so elects to rebuild the
Property and does not complete such rebuilding within the six (6)
month period specified herein, either Landlord or Tenant may elect
to terminate this Lease as of the date the damage occurred provided
the party electing to terminate this Lease shall give written
notification to the other party of such election within ten (10)
days after the expiration of the six (6) month period specified
above.
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If all
or any portion of the Property is taken under the power of eminent
domain or sold under the threat of that power (all of which are
called "Condemnation"), this Lease shall terminate as to the part
taken or sold on the date the condemning authority takes title or
possession, whichever occurs first. If more than twenty percent
(20%) of the floor area of the building in which the Property is
located, or which is located on the Property, is taken, either
Landlord or Tenant may terminate this Lease as of the date the
condemning authority takes title or possession, by delivering
written notice to the other within ten (10) days after receipt of
written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority takes title or
possession). If neither Landlord nor Tenant terminates this Lease,
this Lease shall remain in effect as to the portion of the Property
not taken, except that the Base Rent and Additional Rent shall be
reduced in proportion to the reduction in the floor area of the
Property. Any Condemnation award or payment shall be distributed in
the following order: (a) first, to any ground lessor, mortgagee or
beneficiary under a deed of trust encumbering the Property, the
amount of its interest in the Property; (b) second, to Tenant, only
the amount of any award specifically designated for loss of or
damage to Tenant's trade fixtures or removable personal property;
and (c) third, to Landlord, the remainder of such award, whether as
compensation for reduction in the value of the leasehold, the
taking of the fee, or otherwise. If this Lease is not terminated,
Landlord shall repair any damage to the Property caused by the
Condemnation, except that Landlord shall not be obligated to repair
any damage for which Tenant has been reimbursed by the condemning
authority. If the severance damages received by Landlord are not
sufficient to pay for such repair, Landlord shall have the right to
either terminate this Lease or make such repair at Landlord's
expense.
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(a) Tenant's request for consent to
any transfer described in Section 9.01 shall set forth in writing
the details of the proposed transfer, including the name, business
and financial condition of the prospective transferee, financial
details of the proposed transfer (e.g., the term of and the rent
and security deposit payable under any proposed assignment or
sublease), and any other information Landlord deems relevant.
Landlord shall have the right to withhold consent, if reasonable,
or to grant consent, based on the following factors: (i) the
business of the proposed assignee or subtenant and the proposed use
of the Property; (ii) the net worth and financial reputation of the
proposed assignee or subtenant; (iii) Tenant's compliance with all
of its obligations under the Lease; and (iv) such other factors as
Landlord may reasonably deem relevant. If Landlord objects to a
proposed assignment solely because of the net worth and/or
financial reputation of the proposed assignee, Tenant may
nonetheless sublease (but not assign), all or a portion of the
Property to the proposed transferee, but only on the other terms of
the proposed transfer.
(b) If Tenant assigns or subleases,
the following shall apply:
(i) Tenant shall pay to Landlord as
Additional Rent under the Lease the Landlord's Share (stated in
Section 1.13) of the Profit (defined below) on such transaction as
and when received by Tenant, unless Landlord gives written notice
to Tenant and the assignee or subtenant that Landlord's Share shall
be paid by the assignee or subtenant to Landlord directly. The
"Profit" means (A) all amounts paid to Tenant for such assignment
or sublease, including "key" money, monthly rent in excess of the
monthly rent payable under the Lease, and all fees and other
consideration paid for the assignment or sublease, including fees
under any collateral agreements, less (B) costs and expenses
directly incurred by Tenant in connection with the execution and
performance of such assignment or sublease for real estate broker's
commissions and costs of renovation or construction of tenant
improvements required under such assignment or sublease. Tenant is
entitled to recover such costs and expenses before Tenant is
obligated to pay the Landlord's Share to Landlord. The Profit in
the case of a sublease of less than all the Property is the rent
allocable to the subleased space as a percentage on a square
footage basis.
(ii) Tenant shall provide Landlord
a written statement certifying all amounts to be paid from any
assignment or sublease of the Property within thirty (30) days
after the transaction documentation is signed, and Landlord may
inspect Tenant's books and records to verify the accuracy of such
statement. On written request, Tenant shall promptly furnish to
Landlord copies of all the transaction documentation, all of which
shall be certified by Tenant to be complete, true and correct.
Landlord's receipt of Landlord's Share shall not be a consent to
any further assignment or subletting. The breach of Tenant's
obligation under this Paragraph 9.04(b) shall be a material default
of the Lease.
(a)
If Tenant abandons the Property without making adequate provision
for the maintenance and security thereof;
(b)
If Tenant fails to
pay rent or any other charge when due;
(c)
If Tenant fails to
provide liability insurance pursuant to Paragraph 4.04(a) of the
Lease for a period of five (5) days after written notice from
Landlord;
(d) If Tenant fails to perform any
of Tenant's non-monetary obligations under this Lease for a period
of ten (10) days after written notice from Landlord; provided that
if more than ten (10) days are required to complete such
performance, Tenant shall not be in default if Tenant commences
such performance within the ten (10) -day period and thereafter
diligently pursues its completion. However, Landlord shall not be
required to give such notice if Tenant's failure to perform
constitutes a non-curable breach of this Lease. The notice required
by this Paragraph is intended to satisfy any and all notice
requirements imposed by law on Landlord and is not in addition to
any such requirement.
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(e) (i) If Tenant makes a general
assignment or general arrangement for the benefit of creditors;
(ii) if a petition for adjudication of bankruptcy or for
reorganization or rearrangement is filed by or against Tenant and
is not dismissed within thirty (30) days; (iii) if a trustee or
receiver is appointed to take possession of substantially all of
Tenant's assets located at the Property or of Tenant's interest in
this Lease and possession is not restored to Tenant within thirty
(30) days; or (iv) if substantially all of Tenant's assets located
at the Property or of Tenant's interest in this Lease is subjected
to attachment, execution or other judicial seizure which is not
discharged within thirty (30) days. If a court of competent
jurisdiction determines that any of the acts described in this
subparagraph (d) is not a default under this Lease, and a trustee
is appointed to take possession (or if Tenant remains a debtor in
possession) and such trustee or Tenant transfers Tenant's interest
hereunder, then Landlord shall receive, as Additional Rent, the
excess, if any, of the rent (or any other consideration) paid in
connection with such assignment or sublease over the rent payable
by Tenant under this Lease.
(f) If any guarantor of the Lease
revokes or otherwise terminates, or purports to revoke or otherwise
terminate, any guaranty of all or any portion of Tenant's
obligations under the Lease. Unless otherwise expressly provided,
no guaranty of the Lease is revocable.
(a) Terminate this Lease and the Term
created hereby, in which event Landlord may forthwith repossess the
Property and be entitled to recover forthwith as damages a sum of
money equal to the value of the Base Rent and Additional Rent
provided to be paid by Tenant for the balance of the stated Term of
the Lease, less the fair rental value of the Property for said
period, and any other sum of money and damages owed by Tenant to
Landlord.
(b) Terminate Tenant's right of
possession and may repossess the Property by forcible entry or
detainer suit or otherwise, without demand or notice of any kind to
Tenant and without terminating this Lease, in which event Landlord
may, but shall be under no obligation so to do, relet all or any
part of the Property for such rent and upon such terms as shall be
satisfactory to Landlord (including the right to relet the Property
for a term greater or lesser than that remaining under the Term of
this Lease and the right to relet the Property as a part of a
larger area and the right to change the character or use made of
the Property). For the purpose of such reletting, Landlord is
authorized to decorate or to make any repairs, changes, alterations
or additions in or to the Property that may be necessary or
convenient, and if Landlord shall fail or refuse to relet the
Property, or if the Property are relet and a sufficient sum shall
not be realized from such reletting after paying all of the costs
and expenses of such decorations, repairs, changes, alterations and
additions, and the expenses of such reletting (including leasing
commissions) and of the collection of the rent accruing therefrom
to satisfy the rent provided for in this Lease to be paid, then
Tenant shall pay to Landlord as damages a sum equal to the amount
of the Base Rent and rent adjustments reserved in this Lease for
such period or periods, or, if the Property have been relet, Tenant
shall satisfy and pay any such deficiency upon demand therefore
from time to time, and Tenant agrees that Landlord may file suit to
recover any sums falling due under the terms of this paragraph and
any other sums due under this Lease from time to time, and that no
suit or recovery of any portion due Landlord hereunder shall be any
defense to any subsequent action brought for any amount not
theretofore reduced to judgment in favor of Landlord.
(c) Obtain the appointment of a receiver
in any court of competent jurisdiction, and the receiver may take
possession of any personal property belonging to Tenant and used in
the conduct of the business of Tenant being carried on in the
Property. Tenant agrees that the entry upon the Property or
possession of said personal property by said receiver shall not
constitute an eviction of Tenant from the Property or any portion
thereof, and Tenant agrees to indemnify, defend and hold Landlord
harmless for, from and against any claim of any character by any
person arising out of or in any way connected with the entry by
said receiver in taking possession of the Property or said personal
property.
(d) Pursue any other remedy now or
hereafter available to Landlord under the laws or judicial
decisions of the state in which the Property is
located.
No act
or conduct of the Landlord, whether consisting of reentry, taking
possession, or reletting the Property or obtaining appointment of a
receiver or accepting the keys to the Property, or otherwise, prior
to the expiration of the Lease Term shall be deemed to be or
constitute an acceptance of the surrender of the Property by the
Landlord or an election to terminate this Lease unless Landlord
exercises its election under Section 10.03(a) above. Such
acceptance or election by Landlord shall only be effected, and must
be evidenced, by written acknowledgement of acceptance of surrender
or notice of election to terminate signed by Landlord.
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Section 10.05. Cumulative Remedies.
Landlord's exercise of any right or remedy shall not prevent it
from exercising any other right or remedy.
(a) Upon Landlord's written
request, Tenant shall execute, acknowledge and deliver to Landlord
a written statement certifying: (i) that none of the terms or
provisions of this Lease have been changed (or if they have been
changed, stating how they have been changed); (ii) that this Lease
has not been canceled or terminated; (iii) the last date of payment
of the Base Rent and other charges and the time period covered by
such payment; (iv) that Landlord is not in default under this Lease
(or, if Landlord is claimed to be in default, stating why); and (v)
such other representations or information with respect to Tenant or
the Lease as Landlord may reasonably request or which any
prospective purchaser or encumbrancer of the Property may require.
Tenant shall deliver such statement to Landlord within ten (10)
days after Landlord's request. Landlord may give any such statement
by Tenant to any prospective purchaser or encumbrancer of the
Property. Such purchaser or encumbrancer may rely conclusively upon
such statement as true and correct.
(b) If Tenant does not deliver such
statement to Landlord within such ten (10)-day period, Landlord,
and any prospective purchaser or encumbrancer, may conclusively
presume and rely upon the following facts: (i) that the terms and
provisions of this Lease have not been changed except as otherwise
represented by Landlord; (ii) that this Lease has not been canceled
or terminated except as otherwise represented by Landlord; (iii)
that not more than one month's Base Rent or other charges have been
paid in advance; and (iv) that Landlord is not in default under the
Lease. In such event, Tenant shall be estopped from denying the
truth of such facts.
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(a) As used in this Lease, the term
"Landlord" means only the current owner or owners of the fee title
to the Property or Project or the leasehold estate under a ground
lease of the Property or Project at the time in question. Each
Landlord is obligated to perform the obligations of Landlord under
this Lease only during the time such Landlord owns such interest or
title. Any Landlord who transfers its title or interest is relieved
of all liability with respect to the obligations of Landlord under
this Lease to be performed on or after the date of transfer.
However, each Landlord shall deliver to its transferee all funds
that Tenant previously paid if such funds have not yet been applied
under the terms of this Lease.
(b) Tenant shall give written
notice of any failure by Landlord to perform any of its obligations
under this Lease to Landlord and to any ground lessor, mortgagee or
beneficiary under any deed of trust encumbering the Property whose
name and address have been furnished to Tenant in writing. Landlord
shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such
non-performance within thirty (30) days after receipt of Tenant's
notice. However, if such non-performance reasonably requires more
than thirty (30) days to cure, Landlord shall not be in default if
such cure is commenced within such thirty (30)-day period and
thereafter diligently pursued to completion.
-15-
(c) Notwithstanding any term or
provision herein to the contrary, the liability of Landlord for the
performance of its duties and obligations under this Lease is
limited to Landlord's interest in the Property and the Project, and
neither the Landlord nor its partners, shareholders, officers or
other principals shall have any personal liability under this
Lease.
Section 13.08. No
Recordation. Tenant shall not record this Lease or any
memorandum thereof.
-16-
Section 13.15. VENUE. Tenant
acknowledges and agrees that this Lease shall be construed and
enforced in accordance with the law of the State of Arizona. Tenant
consents and submits to the jurisdiction of the state court located
in Maricopa County, Arizona, and any action or suit concerning this
Lease or related matters shall only be brought by the parties in
state court exclusively with appropriate subject matter
jurisdiction sitting in Maricopa County, Arizona. The parties
hereby waive any of their rights to remove any court action to
Federal court. Tenant acknowledges and agrees that Tenant shall not
raise in connection with any dispute arising hereunder, and hereby
waive, any defenses based upon venue, inconvenience of forum or
lack of personal jurisdiction in any action or suit brought in
accordance with the foregoing.
Section 13.16. WAIVER OF RIGHT TO JURY
TRIAL. TENANT WAIVES THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY OF ANY CONTRACT OR TORT CLAIM, COUNTERCLAIM, CROSS-COMPLAINT
OR CAUSE OF ACTION IN ANY ACTION, PROCEEDING OR HEARING BROUGHT BY
EITHER LANDLORD OR TENANT AGAINST THE OTHER ON ANY MATTER ARISING
OUT OF OR IN ANY WAY CONNECTED TO THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT OR TENANT'S USE OR OCCUPANCY OF THE PROPERTY,
INCLUDING ANY CLAIM OF INJURY OR DAMAGE OR THE ENFORCEMENT OF ANY
REMEDY UNDER ANY CURRENT OR FUTURE LAW, STATUTE, REGULATION, CODE
OR ORDINANCE.
In the
event that Commercial
Properties represents both Landlord and Tenant, Landlord and
Tenant hereby confirm that they were timely advised of the dual
representation and that they consent to the same, and that they do
not expect said broker to disclose to either of them the
confidential information of the other party.
The
parties hereto agree to comply with all applicable federal, state
and local laws, regulations, codes, ordinances and administrative
orders having jurisdiction over the parties, property or the
subject matter of this Agreement, including, but not limited to,
the 1964 Civil Rights Act and all amendments thereto, the Foreign
Investment In Real Property Tax Act, the Comprehensive
Environmental Response Compensation and Liability Act, and The
Americans With Disabilities Act.
ADDITIONAL
PROVISIONS ARE SET FORTH IN RIDER NO. 1 ATTACHED
HERETO.
[SIGNATURES
ON FOLLOWING PAGE]
-17-
Landlord
and Tenant have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialed all
Riders which are attached to or incorporated by reference in this
Lease.
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"LANDLORD":
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Signed on June 4,
2019
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JM SKY HARBOR PROPERTIES LLC,
an
Arizona limited liability
company
By: /s/
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx,
Authorized
Representative
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"TENANT":
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Signed on May 30,
2019
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Wrap Technologies, Inc., a
Delaware
corporation
By: /s/ Xxxxx
Xxxxxx
Printed Name: Xxxxx Xxxxxx
Its: CEO
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IN ANY
REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH A
PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR
OTHER PERSON WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE
PROPERTY, INCLUDING THE POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS
MATERIALS AND UNDERGROUND STORAGE TANKS.
-18-
RIDER N0. 1
THIS RIDER NO. 1 ("Rider No. 1") is dated for reference
purposes as of May 10,
2019, and is made by and between JM SKY HARBOR PROPERTIES LLC, an
Arizona limited liability company ("Landlord") and Wrap Technologies, Inc., a Delaware
corporation ("Tenant") to be a part of that certain
Industrial Real Estate Lease (Multi-Tenant Form) of even date
herewith between Landlord and Tenant (the "Lease") concerning
Property more commonly known as 0000 X. 0xx
Xxxxxx, Xxxxx, XX (
the "Property"). Landlord and Tenant agree that the
Lease is hereby modified and supplemented as follows:
1.
Section 1.12(a) (Base Rent) of the Lease shall be amended by adding
the following:
“The Base
Rent during the Term shall be as follows:
Months:
Monthly Amount:
June 1, 2019
– July 31, 2019
$ 0.00 per month
NNN
August 1, 2019
– May 31, 2020
$7,654.00 per month
NNN
June 1, 2020
– May 31, 2021
$7,884.00 per month
NNN
June 1, 2021
– May 31, 2022
$8,120.00 per month
NNN
June 1, 2022
– July 31, 2022
$8,364.00 per month
NNN
In
addition to Base Rent and other charges payable under the terms of
this Lease, Tenant shall pay Landlord the amount of any transaction
privilege tax, rent tax, sales tax, gross proceeds tax, use tax,
occupancy tax or like tax (excluding income taxes) levied, assessed
or imposed by any federal, state, county or municipal governmental
authority, or any subdivision thereof, upon or measured by any rent
or other charge payable under this Lease.”
2. Property Condition: The Property is being leased in broom
clean “As-Is” condition with all systems in good
working condition as of the date Tenant takes possession of the
Property or the Commencement Date in Section 1.05, whichever is the
earliest to occur.
If any
improvements or other work is required by any local, state or
federal agencies for Tenant’s occupancy and/or use of the
Property, Tenant shall be solely responsible for the cost of said
improvements and work.
a)
Parking or storage
of vehicles overnight is prohibited, except temporary (including
overnight and weekend) parking of delivery trucks and trailers at
the dock and grade level door positions of the Property. In no
event may Tenant park trucks or trailers behind any other tenants
leased property in the Project, or any other areas not specifically
designated for truck and trailer parking.
b)
Absolutely no
parking at any time in any areas designated as "No Parking" or
"Fire Lane" or in any truck dock or ramp position not a part of the
Property.
c)
Absolutely no
parking of trailers, boats or any other vehicles or
equipment.
d)
Absolutely no
maintenance is to be performed on any trucks, automobiles, trailers
or other equipment other than tire changes and safety
checks.
e)
Unusual expenses
created by the washing of vehicles will result in special
assessment to Tenant for water and/or physical repair of the
Property.
f)
Absolutely no
outside storage is allowed, including but not limited to pallets,
equipment, work in progress, or raw materials.
g)
Tenant shall not do
or permit anything to be done which is a nuisance or interferes
with any other tenant in the Project.
h)
No pets or
livestock are allowed in or about the Property or
Project.
4.
Mechanic's
Lien: Should any mechanics or other lien be filed against
the Property or any part thereof by reason of Tenant's acts or
omissions or because of a claim against Tenant, Tenant shall cause
the same to be canceled and discharged of record by bond or
otherwise with ten (10) days of Tenant's receipt of notice by
Landlord.
5.
Financial
Strength: Tenant and its officers covenant and warrant that
as of the Commencement Date of the Lease,
Tenant has the financial strength and assets to meet all of its
obligations under the terms and conditions of the Lease. Tenant and
its officers also covenants and warrants, at the time of Lease
signature, that neither Tenant or any Tenant affiliate are: 1) in
default under any terms and conditions of any other lease for real
property, 2) in default for any monetary obligation, 3) in
foreclosure on any real property, or 4) under the protection of any
bankruptcy codes.
-19-
6.
Binding
Force: Submission of this Rider No. 1 is not an offer to
lease or amend the Lease. This Rider No. 1 shall become binding
upon Landlord and Tenant only when this Rider No. 1 is fully
executed and delivered by Landlord. In the event Landlord does not
execute and deliver this Rider No. 1, then this Rider No. 1 shall
be void and of no force or effect.
7.
Ratification of
Lease: The terms of the Lease are amended to reflect the
changes set forth above. In all other respects the terms of the
Lease shall be in full force and effect. In the event of any
conflict between this Rider No. 1 and the Lease, the terms of this
Rider No. 1 shall be deemed controlling.
8.
Capitalized
Terms: Except as otherwise expressly provided herein, the
capitalized terms and phrases in this Rider No. 1 shall have the
same meanings as are given such terms in the Lease.
9.
Authority:
If Tenant is a corporation, limited liability company, trust or
general or limited partnership, each individual executing this
Rider No. 1 on behalf of such entity represents and warrants that
he or she is duly authorized to execute and deliver this Rider No.
1 on behalf of said entity.
LANDLORD:
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TENANT:
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JM SKY
HARBOR PROPERTIES LLC, an Arizona limited liability
company
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Wrap
Technologies, Inc., a Delaware corporation
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By
/s/ Xxxxx Xxxxxxxx
Xxxxx
Xxxxxxxx,
Authorized Representative
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By:
/s/ Xxxxx
Xxxxxx
Printed
Name: Xxxxx Xxxxxx
Its:
CEO
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-20-
This
Rider is attached to and made part of that certain Lease (the
“Lease”) dated May 10, 2019 between, JM SKY HARBOR PROPERTIES LLC, an
Arizona limited liability company (“Landlord”)
and Wrap
Technologies, Inc., a Delaware corporation
(“Tenant”), covering the Property commonly known as
0000 X.
0xx
Xxxxxx, Xxxxx, XX
(the “Property”). The terms used herein shall have the
same definitions as set forth in the Lease. The provisions of this
Rider shall supersede any inconsistent or conflicting provisions of
the Lease.
1. Grant
of Option.
Landlord hereby
grants to Tenant one (1) option(s) (the
“Option”) to extend the Lease Term for additional
term(s) of three
(3) years (the “Extension”), on the same terms and
conditions as set forth in the Lease, but at an increased rent as
set forth below. Each Option shall be exercised only by written
notice delivered to Landlord at least one hundred eighty (180) days
before the expiration of the Lease Term. If Tenant fails to deliver
Landlord written notice of exercise of an Option within the
prescribed time period, such Option shall lapse, and there shall be
no further right to extend the Lease Term. The Option shall be
exercisable by Tenant on the expressconditions that (a) at the time
of the exercise, and at all time prior to the commencement of such
Extension, Tenant shall not be in default under any of the
provisions of the Lease and (b) Tenant has not been ten (10) or
more days late in the payment of rent more than a total of three
(3) times during the Lease Term.
2. Personal
Options.
The
Base Rent during the Extension(s)shall be determined by the
following method:
Rental
Adjustment Date(s): The first day of the first (1st)
month(s) of the one (1) and only
Extension(s) of the Lease Term.
The
Base Rent shall be increased on the date(s) specified above (the
“Rental Adjustment Date(s)”) to the “fair rental
value” of the Property, determined in the following
manner:
(a)
Not later than one
hundred twenty (120) days prior to any applicable Rental Adjustment
Date, Landlord and Tenant shall meet in an effort to negotiate, in
good faith, the fair rental value of the Property as of such Rental
Adjustment Date. If Landlord and Tenant have not agreed upon the
fair rental value of the Property at lease ninety (90) days prior
to the applicable Rental Adjustment Date, the fair rental value
shall be determined by appraisal, by one or more brokers (herein
called “Broker(s)”), as provided in Section B.1(b),
below. Such broker(s) shall have at least five (5) years’
experience in the sales and leasing of commercial/industrial real
property in the area in which the Property is located and shall be
members of professional organizations such as the Society of
Industrial and Office Realtors or equivalent.
-21-
(b)
If Landlord and
Tenant are not able to agree upon the fair rental value of the
Property within the prescribed time period, then Landlord and
Tenant shall attempt to agree in good faith upon a single Broker
not later than seventy-five (75) days prior to the applicable
Rental Adjustment Date. If Landlord and Tenant are unable to agree
upon a single Broker within such time period, then Landlord and
Tenant shall each appoint one Broker not later than sixty-five (65)
days prior to the applicable Rental Adjustment Date. Within ten
(10) days thereafter, the two (2) appointed Brokers shall appoint a
third (3rd) Broker. If either
Landlord or Tenant fails to appoint its Broker within the
prescribed time period, the single Broker appointed shall determine
the fair rental value of the Property. If both parties fail to
appoint Brokers within the prescribed time periods, then the first
Broker thereafter selected by a party shall determine the fair
rental value of the Property. Each party shall bear the cost of its
own Broker and the parties shall share equally the cost of the
single or third Broker, if applicable.
(c)
For the purposes of
such appraisal, the term “fair market value” shall mean
the price that a ready and willing tenant would pay, as of the
applicable Rental Adjustment Date, as monthly rent to a ready and
willing landlord of property comparable to the Property if such
property were exposed for lease on the open market for a reasonable
period of time and taking into account all of the purposes for
which such property may be used. If a single Broker is chosen, then
such Broker shall determine the fair rental value of the Property.
Otherwise, the fair rental value of the Property shall be the
arithmetic average of the two (2) of the three (3) appraisals which
are closest in amount, and the third appraisal shall be
disregarded. In no event, however, shall the Base Rent be reduced
by reason of such computation. The fair rental value of the
Property shall also include annual rental escalations in accordance
with prevailing market customs and practices for properties
comparable to the Property. Landlord and Tenant shall instruct the
Broker(s) to complete the determination of the fair rental value
not later than thirty (30) days prior to the applicable Rental
Adjustment Date. If the fair rental value is not determined prior
to the applicable Rental Adjustment Date, then Tenant shall
continue to pay to Landlord the Base Rent applicable to the
Property immediately prior to such Extension, until the fair rental
value is determined. When the fair rental value of the Property is
determined, Landlord shall delivernotice thereof to Tenant, and
Tenant shall pay to Landlord, within ten (10) days after receipt of
such notice, the difference between the Base Rent actually paid by
Tenant to Landlord and the new Base Rent determined hereunder. In
no event shall the monthly base rent during the option period be
less than the monthly base rent for the immediate preceding rent
paying period.
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"LANDLORD":
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Signed on June 4,
2019
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JM SKY HARBOR PROPERTIES LLC,
an
Arizona limited liability
company
By: /s/
Xxxxx Xxxxxxxx
Xxxxx
Xxxxxxxx,
Authorized
Representative
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"TENANT":
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Signed on May 30,
2019
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Wrap Technologies, Inc., a
Delaware
corporation
By: /s/ Xxxxx
Xxxxxx
Printed Name: Xxxxx Xxxxxx
Its: CEO
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-22-