Exhibit 10.1
THIRD AMENDMENT TO Licensed
Medical Marijuana
(Regulated Marijuana) Facility Triple Net (NNN) LEASE AGREEMENT
This Third Amendment to the
Licensed Medical Marijuana (Regulated Marijuana) Facility Triple Net (NNN) Lease Agreement (the “Third Amendment”) is made
this 1st day of September, 2021 (the “Effective Date”), by and between Chino Valley Properties, LLC (“Landlord”)
and Broken Arrow Herbal Center, Inc. (“Tenant”), collectively (the “Parties”).
RECITALS
A. The
Parties previously entered into a Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018, as amended by
that certain First Amendment to Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated January 1, 2019, and that certain
Second Amendment to Licensed Medical Marijuana Facility Triple Net (NNN) dated May 31, 2020 (the “Lease”) for the premises
commonly known as 2144 and 2148 North Road 1 East Chino Valley, Arizona 83462 (the “Premises”).
B. The
Parties previously agreed that the Tenant would invest no less than eight million dollars ($8,000,000) of capital improvements into the
Premises. The Tenant has satisfied its contractual obligation having invested more than eight million dollars ($8,000,000) of capital
improvements into the Premises.
C. The
Parties previously agreed that Base Rental Payments would increase commensurate to any and all expanded and operational square footage
on the Premises by calculating the fixed rate of $0.82 per square foot per month by the new operational square footage.
D. The
Parties acknowledge that as of the Effective Date an additional 27,312 square feet have become operational, in addition to the existing
40,000 square feet of operational space, increasing to a total of 67,312 square feet of operational space on the Premises, causing the
rental payment to increase to $55,195 base rental payment monthly plus additional rental payments, and causing this Third Amendment. See
Exhibit B-1.
E. The
Parties acknowledge that another 30,000 square feet will become operational in the forthcoming months, which will require an additional
lease amendment to be executed, increasing the total operational square footage on the Premises to 97,312 square feet, causing the rental
payment to increase to $79,795 base rental payment monthly plus additional rental payments. See Exhibit B-2.
F. The
Parties acknowledge that the Premises has received approval for its Master Plan that currently authorizes an additional 60,000 square
feet of operational square footage that can be constructed, which would increase the total to 157,312 square feet if built to full capacity,
causing the rental payments to increase to $128,995 base rental payment monthly plus additional rental payments. The Parties acknowledge
that the Tenant is under no contractual obligation to complete this additional expansion; however, if they choose to do so, any increased
operational square footage would be subject to the same fixed rate of $0.82 per square foot per month increase in base rental payments
as noted above.
G. The
Parties hereto desire to amend the Lease Agreement in accordance with the terms herein and below as of the Effective Date.
NOW, THEREFORE, in
consideration of the mutual covenants herein contained, and for good and valuable consideration, the sufficiency and receipt of which
are acknowledged, the Parties agree as follows to take place immediately as of the Effective Date:
THIRD AMENDMENT
1. Defined
Terms. Terms in this Third Amendment shall have the same meaning as such terms have in the Lease Agreement unless otherwise noted
in this Third Amendment.
2. Amendment.
a. Current
section of the Lease entitled “Licensed Marijuana Facility” document (Page 5 of Lease Agreement) to be replaced in its entirely
by a new Licensed Marijuana Facility document (the “2021 Licensed Marijuana Facility” section), included here as Exhibit
A.
b. Substitution
of the term “Medical Marijuana” to be replaced throughout the Lease Agreement in its entirety with the term “Regulated
Marijuana”.
c. Exhibit
B: Rental Payment Schedule to the Lease Agreement is deleted in its entirety and replaced with Exhibit B-1: Rental Payment
Schedule attached to this Third Amendment.
3. Ratification.
Landlord and Tenant each hereby reaffirm its rights and obligations under the Lease and all Exhibits. In the event of a conflict or ambiguity
between the Lease and this Amendment, the terms and provisions of this Amendment shall control.
4. Counterparts.
This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of such counterparts
shall constitute one Amendment. Execution copies of this Amendment may be delivered by email, and the parties hereto agree to accept and
be bound by scanned signatures transmitted via email hereto, which signatures shall be considered as original signatures with the transmitted
Amendment having the same binding effect as an original signature on an original Amendment.
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Chino Valley
Properties, LLC
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Broken Arrow
Herbal Center, Inc.
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By:
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/s/ Bryan McLaren
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By:
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/s/
Delano Phillips
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Name:
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Bryan McLaren
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Name:
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Delano Phillips
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Title:
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Authorized Agent
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Title:
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General Counsel
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Landlord
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Tenant
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EXHIBIT A
LICENSED MARIJUANA FACILITY
This LEASE ("Lease" or “Lease
Agreement”) for a Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018, as amended by that certain
First Amendment to Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated January 1, 2019, and that certain Second
Amendment to Licensed Medical Marijuana Facility Triple Net (NNN) dated May 31, 2020, and that certain Third Amendment to Licensed Regulated
Marijuana Facility Triple Net (NNN) dated September 01, 2021 (the “Lease”) for the premises commonly known as 2144 and 2148
North Road 1 East Chino Valley, Arizona 83462 (the “Premises”), is made by and between Chino Valley Properties, LLC, a Limited
Liability Company of Arizona (“Landlord” or “Lessor”), and Broken Arrow Herbal Center, Inc., a non-profit Corporation
or Arizona (“Tenant” or “Lessee”).
Net, Net, Net Lease. Tenant understands and agrees
that this Lease is what is commonly referred to as a “Net, Net, Net” Lease, NNN, or triple net lease. Tenant acknowledges
and agrees, without limiting the generality of any other terms or provisions of this Lease, that it is the intent of the parties hereto
that any and all rentals in this Lease to be paid by Tenant to Landlord, shall be net to Landlord, and any and all costs, expenses, sums,
and charges incurred in connection with any common areas associated with or relating to the Premises (the “Common Areas”),
and the Premises, and the Project or in connection with the operations thereon, including any and all taxes, assessments, general or special,
license fees, insurance premiums, public utility bills, management and administrative fees and costs of repair, maintenance and operation
of the Common Areas (including any declaration or covenants, conditions and restrictions affecting the Premises), the Premises, and the
Project, and all buildings, structures, permanent textures and other improvements comprised therein, together with the appurtenance thereto,
shall be paid by Tenant.
Tenant plans to operate an Arizona state-legal
marijuana business at the Premises as its sole use. In the event that (a) Landlord is advised in writing by any federal, state or local
government or governmental authority that Landlord is subject to seizure of its property, if it does not terminate Tenant’s right
to cultivate, extract, infuse and/or dispense and/or sell cannabis/marijuana from the Premises or possess or distribute cannabis/marijuana
from the Premises, (b) if the Arizona Medical Marijuana Act, Ariz. Rev. Stat. §§ 36-2801, et seq., as amended from time
to time, and the regulations promulgated thereunder by the Arizona Department of Health Services (the “Department”)
(the “Med Rules”) (the immediately aforementioned statutes and Med Rules are referred to collectively herein as “AMMA”)
is declared to be unenforceable or modified to prevent or preclude or otherwise not allow the activities contemplated herein, (c) if the
Arizona Responsible Adult Use of Marijuana Act, Ariz. Rev. Stat. §§ 36-2850 et seq., as amended from time to time and
the rules promulgated pursuant thereto by the Department (the “Adult Use Rules”) (the immediately aforementioned statutes
and Adult Use Rules are referred to collectively herein as “ARAUMA” or “SASAA”) is declared to be
unenforceable or modified to prevent or preclude or otherwise not allow the activities contemplated herein, or (d) if any federal, state
or local governmental authority enforces any laws that prohibit the dispensing, sale or cultivation of cannabis/marijuana upon the Premises,
or if any other zoning regulation, rule or regulation is modified to prohibit any use contemplated by this Lease, then in any such event
Landlord may immediately terminate this Lease without prior notice or any cure period or cure obligation at its sole discretion, without
liability to Tenant or to Landlord, except as set forth herein.
EXHIBIT B-1
RENTAL PAYMENT SCHEDULE
(Effective 09/01/21)
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Monthly Base Rent:
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Updated to $55,195.84 Monthly Base Rent plus NNN’s
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09/01/21-04/30/40
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$0.82 monthly per square foot of Rentable Area of the Premises ($55,195.84 monthly based on 67,312 operational square feet per Master Plan), plus all other amounts due under the Lease, including, without limitation, Rent Tax and Property Taxes.
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EXHIBIT B-2
RENTAL PAYMENT SCHEDULE
(Effectiveness To be determined upon Operational
Readiness)
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Monthly Base Rent:
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Updated to $79,795.84 Monthly Base Rent plus NNN’s
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XX/01/21-4/30/40
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$0.82 monthly per square foot of Rentable Area of the Premises ($79,795.84 monthly based on 97,312 operational square feet per Master Plan), plus all other amounts due under the Lease, including, without limitation, Rent Tax and Property Taxes.
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Exhibit 10.2
Zoned Properties, Inc. - Indemnification Agreement
Dated as of [________], 2021
This Indemnification Agreement
(this “Agreement”), dated as of the date first set forth above (the “Effective Date”) is entered into by and between
Zoned Properties, Inc., a Nevada corporation (the “Company”), and [_______________] (“Indemnitee”). The Company
and Indemnitee may be referred to individually as a “Party” and collectively as the “Parties”.
WHEREAS, Indemnitee is current
serving as a director and/or officer of the Company;
WHEREAS, Indemnitee’s
service to the Company substantially benefits the Company;
WHEREAS, individuals are reluctant
to serve as directors or officers of corporations or in certain other capacities unless they are provided with adequate protection through
insurance or indemnification against the risks of claims and actions against them arising out of such service;
WHEREAS, Indemnitee does not
regard the protection currently provided by applicable Law, the Company’s governing documents and any insurance as adequate under
the present circumstances, and Indemnitee may not be willing to serve as a director or officer without additional protection;
WHEREAS, in order to induce
Indemnitee to continue to provide services to the Company, it is reasonable, prudent and necessary for the Company to contractually obligate
itself to indemnify, and to advance expenses on behalf of, Indemnitee as permitted by applicable Law; and
WHEREAS, this Agreement is
a supplement to and in furtherance of the indemnification provided in the Company’s articles of incorporation and bylaws, and any
resolutions adopted pursuant thereto, and this Agreement shall not be deemed a substitute therefor, nor shall this Agreement be deemed
to limit, diminish or abrogate any rights of Indemnitee thereunder;
NOW THEREFORE, on the stated
premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties
to be derived here from, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the Parties hereby agree as follows:
Article I. Definitions
and Interpretation
Section 1.01 Defined
Terms. For purposes of this Agreement, the following terms shall have the following meanings:
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(a)
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“Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange
Act; provided, however, that “Beneficial Owner” shall exclude any Person otherwise becoming a Beneficial Owner by reason of
(i) the shareholders of the Company approving a merger of the Company with another entity or (ii) the Company’s board of directors
approving a sale of securities by the Company to such Person.
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(b)
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“Corporate Status” describes the status of a person who is or was a director, trustee, general
partner, managing member, officer, employee, agent or fiduciary of the Company or any other Enterprise.
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(c)
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“Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.
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(d)
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“Enterprise” means the Company and any other corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as
a director, trustee, general partner, managing member, officer, employee, agent or fiduciary.
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(e)
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“Exchange Act” means the Securities Exchange Act of 1934, as amended.
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(f)
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“Expenses” include all reasonable attorneys’ fees, retainers, court costs, transcript
costs, fees and costs of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding, and
“Expenses” also include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond or other appeal bond or their equivalent,
and (ii) for purposes of Section 12(c), Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense
of Indemnitee’s rights under this Agreement or under any directors’ and officers’ liability insurance policies maintained
by the Company, and provided that “Expenses” shall not include amounts paid in settlement by Indemnitee or the amount of judgments
or fines against Indemnitee.
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(g)
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“Governmental Authority” means any federal, state, local or foreign government or political
subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization
or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of
such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
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(h)
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“Independent Counsel” means a law firm, or a partner or member of a law firm, that is experienced
in matters of corporation Law and neither presently is, nor in the past five years has been, retained to represent (i) the Company or
Indemnitee in any matter material to either such Party (other than as Independent Counsel with respect to matters concerning Indemnitee
under this Agreement, or other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder, provided that, notwithstanding the foregoing, the term “Independent Counsel”
shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest
in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
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(i)
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“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution,
treaty, common Law, judgment, decree, other requirement or rule of law of any Governmental Authority.
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(j)
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“NRS” means the Nevada Revised Statutes.
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(k)
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“Person” shall have the meaning as set forth in Section 13(d) and Section 14(d) of the Exchange
Act; provided, however, that “Person” shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of stock of the Company.
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(l)
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“Proceeding” means any threatened, pending or completed action, suit, arbitration, mediation,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or proceeding, whether brought in the right of
the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, including any appeal therefrom and
including without limitation any such Proceeding pending as of the date of this Agreement, in which Indemnitee was, is or will be involved
as a party, a potential party, a non-party witness or otherwise by reason of (i) the fact that Indemnitee is or was a director or officer
of the Company, (ii) any action taken by Indemnitee or any action or inaction on Indemnitee’s part while acting as a director or
officer of the Company, or (iii) the fact that he or she is or was serving at the request of the Company as a director, trustee, general
partner, managing member, officer, employee, agent or fiduciary of the Company or any other Enterprise, in each case whether or not serving
in such capacity at the time any liability or Expense is incurred for which indemnification or advancement of expenses can be provided
under this Agreement.
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Section 1.02 Change
in Control. For purposes of this Agreement, a “Change in Control” shall be deemed to occur upon the earliest to occur
after the date of this Agreement of any of the following events:
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(i)
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Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial
Owner (as defined below), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined
voting power of the Company’s then-outstanding securities.
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(ii)
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Change in Board Composition. During any period of two consecutive years (not including any period
prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Company’s board of directors,
and any new directors (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction
described in Sections 1(a)(i), 1(a)(iii) or 1(a)(iv)) whose election by the board of directors or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority
of the members of the Company’s board of directors;
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(iii)
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Corporate Transactions. The effective date of a merger or consolidation of the Company with any
other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately
after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of
such surviving entity.
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(iv)
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Liquidation. The approval by the shareholders of the Company of a complete liquidation of the Company
or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.
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(v)
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Other Events. Any other event of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the
Exchange Act, whether or not the Company is then subject to such reporting requirement.
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Section 1.03 Interpretation.
Unless the express context otherwise requires (i) the words “hereof,” “herein,” and “hereunder”
and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision
of this Agreement; (ii) terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa; (iii)
the terms “Dollars” and “$” mean United States Dollars; (iv) references herein to a specific Section shall
refer, respectively, to Sections of this Agreement; (v) wherever the word “include,” “includes,” or “including”
is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; (vi) references herein to
any gender shall include each other gender; (vii) references herein to any Person shall include such Person’s heirs, executors,
personal Representatives, administrators, successors and assigns; provided, however, that nothing contained in herein is intended to
authorize any assignment or transfer not otherwise permitted by this Agreement; (viii) references herein to a Person in a particular
capacity or capacities shall exclude such Person in any other capacity; (ix) with respect to the determination of any period of time,
the word “from” means “from and including” and the words “to” and “until” each means
“to but excluding”; (xi) references herein to any Law or any license mean such Law or license as amended, modified, codified,
reenacted, supplemented or superseded in whole or in part, and in effect from time to time; (xii) references herein to any Law shall
be deemed also to refer to all rules and regulations promulgated thereunder; (xiii) references to “other enterprises” shall
include employee benefit plans, references to “fines” shall include any excise taxes assessed on a person with respect to
any employee benefit plan, references to “serving at the request of the Company” shall include any service as a director,
officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants or beneficiaries; and (xiv) a person who acted in good faith and in a manner
he or she reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.
Article II. Indemnification
Section 2.01 Indemnity
in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 2.01 if Indemnitee
is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company
to procure a judgment in its favor. Pursuant to this Section 2.01, Indemnitee shall be indemnified to the fullest extent permitted by
applicable Law against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or
on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful.
Section 2.02 Indemnity
in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this
Section 2.02 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company
to procure a judgment in its favor. Pursuant to this Section 2.02, Indemnitee shall be indemnified to the fullest extent permitted by
applicable Law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 2.02 in
respect of any claim, issue or matter as to which Indemnitee shall have been adjudged by a court of competent jurisdiction to be liable
to the Company, unless and only to the extent that any court in which the Proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled
to indemnification for such expenses as such court shall deem proper.
Section 2.03 Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. To the extent that Indemnitee is a party to or a participant in and is
successful (on the merits or otherwise) in defense of any Proceeding or any claim, issue or matter therein, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
To the extent permitted by applicable Law, if Indemnitee is not wholly successful in such Proceeding but is successful, on the merits
or otherwise, in defense of one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with (a) each successfully
resolved claim, issue or matter and (b) any claim, issue or matter related to any such successfully resolved claim, issue or matter.
For purposes of this Section 2.03, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or matter.
Section 2.04 Indemnification
for Expenses of a Witness. To the extent that Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding
to which Indemnitee is not a party, Indemnitee shall be indemnified to the extent permitted by applicable Law against all Expenses actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
Section
2.05 Additional Indemnification.
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(a)
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Notwithstanding any limitation in Section 2.01, Section 2.02, Section 2.03 or Section 2.04, the Company
shall indemnify Indemnitee to the fullest extent permitted by applicable Law if Indemnitee is, or is threatened to be made, a party to
or a participant in any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against
all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf in
connection with the Proceeding or any claim, issue or matter therein.
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(b)
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For purposes of Section 2.05(a), the meaning of the phrase “to the fullest extent permitted by applicable
Law” shall include, but not be limited to:
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(i)
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the fullest extent permitted by the provision of the NRS that authorizes or contemplates additional indemnification
by agreement, or the corresponding provision of any amendment to or replacement of the NRS; and
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(ii)
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the fullest extent authorized or permitted by any amendments to or replacements of the NRS adopted after
the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
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Section 2.06 Exclusions.
Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in
connection with any Proceeding (or any part of any Proceeding):
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(a)
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for which payment has actually been made to or on behalf of Indemnitee under any statute, insurance policy,
indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;
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(b)
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for an accounting or disgorgement of profits pursuant to Section 16(b) of the Exchange Act, or similar
provisions of federal, state or local statutory Law or common Law, if Indemnitee is held liable therefor (including pursuant to any settlement
arrangements);
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(c)
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for any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based
compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange
Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley
Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee
of securities in violation of Section 306 of the Sarbanes-Oxley Act), if Indemnitee is held liable therefor (including pursuant to any
settlement arrangements);
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(d)
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initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee
against the Company or its directors, officers, employees, agents or other indemnitees, unless (i) the Company’s board of directors
authorized the Proceeding (or the relevant part of the Proceeding) prior to its initiation, (ii) the Company provides the indemnification,
in its sole discretion, pursuant to the powers vested in the Company under applicable Law, (iii) otherwise authorized in Section 2.11(c)
or otherwise required by applicable Law; or
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(e)
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if prohibited by applicable Law.
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Section 2.07 Advances
of Expenses. The Company shall advance the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement
shall be made as soon as reasonably practicable, but in any event no later than 30 days, after the receipt by the Company of a written
statement or statements requesting such advances from time to time (which shall include invoices received by Indemnitee in connection
with such Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditure
made that would cause Indemnitee to waive any privilege accorded by applicable Law shall not be included with the invoice). Advances
shall be unsecured and interest free and made without regard to Indemnitee’s ability to repay such advances. Indemnitee hereby
undertakes to repay any advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the
Company. This Section 2.07 shall not apply to the extent advancement is prohibited by Law and shall not apply to any Proceeding for which
indemnity is not permitted under this Agreement, but shall apply to any Proceeding referenced in Section 2.06(a) or Section 2.06(c) prior
to a determination that Indemnitee is not entitled to be indemnified by the Company.
Section 2.08 Procedures
for Notification and Defense of Claim.
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(a)
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Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends
to seek indemnification or advancement of Expenses as soon as reasonably practicable following the receipt by Indemnitee of notice thereof.
The written notification to the Company shall include, in reasonable detail, a description of the nature of the Proceeding and the facts
underlying the Proceeding. The failure by Indemnitee to notify the Company will not relieve the Company from any liability which it may
have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a
waiver by Indemnitee of any rights, except to the extent that such failure or delay materially prejudices the Company.
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(b)
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If, at the time of the receipt of a notice of a Proceeding pursuant to the terms hereof, the Company has
directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of the Proceeding
to the insurers in accordance with the procedures set forth in the applicable policies. The Company shall thereafter take all commercially-reasonable
action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the
terms of such policies.
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(c)
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In the event the Company may be obligated to make any indemnity in connection with a Proceeding, the Company
shall be entitled to assume the defense of such Proceeding with counsel approved by Indemnitee, which approval shall not be unreasonably
withheld, upon the delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee for any fees or expenses
of counsel subsequently incurred by Indemnitee with respect to the same Proceeding. Notwithstanding the Company’s assumption of
the defense of any such Proceeding, the Company shall be obligated to pay the fees and expenses of Indemnitee’s counsel to the extent
(i) the employment of counsel by Indemnitee is authorized by the Company, (ii) counsel for the Company or Indemnitee shall have reasonably
concluded that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense such that Indemnitee
needs to be separately represented, (iii) the Company is not financially or legally able to perform its indemnification obligations or
(iv) the Company shall not have retained, or shall not continue to retain, such counsel to defend such Proceeding. The Company shall have
the right to conduct such defense as it sees fit in its sole discretion. Regardless of any provision in this Agreement, Indemnitee shall
have the right to employ counsel in any Proceeding at Indemnitee’s personal expense. The Company shall not be entitled, without
the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Company.
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(d)
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Indemnitee shall give the Company such information and cooperation in connection with the Proceeding as
may be reasonably appropriate.
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(e)
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The Company shall not be liable to indemnify Indemnitee for any settlement of any Proceeding (or any part
thereof) without the Company’s prior written consent, which shall not be unreasonably withheld.
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(f)
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The Company shall have the right to settle any Proceeding (or any part thereof) without the consent of
Indemnitee.
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Section 2.09 Procedures
upon Application for Indemnification.
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(a)
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To obtain indemnification, Indemnitee shall submit to the Company a written request, including therein
or therewith such documentation and information as is reasonably available to Indemnitee and as is reasonably necessary to determine whether
and to what extent Indemnitee is entitled to indemnification following the final disposition of the Proceeding. The Company shall, as
soon as reasonably practicable after receipt of such a request for indemnification, advise the board of directors that Indemnitee has
requested indemnification. Any delay in providing the request will not relieve the Company from its obligations under this Agreement,
except to the extent such failure is prejudicial.
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(b)
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Upon written request by Indemnitee for indemnification pursuant to Section 2.09(a), a determination, if
required by applicable Law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case (i) if a Change
in Control shall have occurred, by Independent Counsel in a written opinion to the Company’s board of directors, a copy of which
shall be delivered to Indemnitee or (ii) if a Change in Control shall not have occurred (A) by a majority vote of the Disinterested Directors,
even though less than a quorum of the Company’s board of directors, (B) by a committee of Disinterested Directors designated by
a majority vote of the Disinterested Directors, even though less than a quorum of the Company’s board of directors, (C) if there
are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the
Company’s board of directors, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Company’s board
of directors, by the shareholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee
shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making the determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable
advance request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements)
reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the
Company, to the extent permitted by applicable Law.
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(c)
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In the event the determination of entitlement to indemnification is to be made by Independent Counsel
pursuant to Section 2.09(b), the Independent Counsel shall be selected as provided in this Section 2.09(c). If a Change in Control shall
not have occurred, the Independent Counsel shall be selected by the Company’s board of directors, and the Company shall give written
notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred,
the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Company’s
board of directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising
it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within
ten days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a
written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of “Independent Counsel” as defined herein, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent
Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel
unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after
the later of (i) submission by Indemnitee of a written request for indemnification pursuant to Section 2.09(a) and (ii) the final disposition
of the Proceeding, the Parties have not agreed upon an Independent Counsel, either the Company or Indemnitee may petition a court of competent
jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and for the appointment as Independent Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 2.09(b). Upon the due commencement of any judicial proceeding pursuant to Section 2.11(a), the Independent Counsel
shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct
then prevailing).
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(d)
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The Company agrees to pay the reasonable fees and expenses of any Independent Counsel and to fully indemnify
such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
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Section 2.10 Presumptions
and Effect of Certain Proceedings.
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(a)
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The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement
or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement)
of itself create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in
or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause
to believe that his or her conduct was unlawful.
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(b)
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For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith
to the extent Indemnitee relied in good faith on (i) the records or books of account of the Enterprise, including financial statements,
(ii) information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, (iii) the advice of legal counsel
for the Enterprise or its board of directors or counsel selected by any committee of the board of directors or (iv) information or records
given or reports made to the Enterprise by an independent certified public accountant, an appraiser, investment banker or other expert
selected with reasonable care by the Enterprise or its board of directors or any committee of the board of directors. The provisions of
this Section 2.10(b) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed
to have met the applicable standard of conduct set forth in this Agreement.
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(c)
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Neither the knowledge, actions nor failure to act of any other director, officer, agent or employee of
the Enterprise shall be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
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Section 2.11 Remedies
of Indemnitee.
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(a)
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Subject to Section 2.11(d), in the event that (i) a determination is made pursuant to Section 2.09 that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section
2.07 or Section 2.11(c), (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 2.09 within
90 days after the later of the receipt by the Company of the request for indemnification or the final disposition of the Proceeding, (iv)
payment of indemnification pursuant to this Agreement is not made (A) within ten days after a determination has been made that Indemnitee
is entitled to indemnification or (B) with respect to indemnification pursuant to Section 2.03, Section 2.04 and Section 2.11(c), within
30 days after receipt by the Company of a written request therefor, or (v) the Company or any other person or entity takes or threatens
to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed
to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be
entitled to an adjudication by a court of competent jurisdiction of his or her entitlement to such indemnification or advancement of Expenses.
Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 2.11(a); provided, however, that the foregoing clause shall not apply in respect
of a proceeding brought by Indemnitee to enforce his or her rights under Section 2.03. The Company shall not oppose Indemnitee’s
right to seek any such adjudication in accordance with this Agreement.
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(b)
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Neither (i) the failure of the Company, its board of directors, any committee or
subgroup of the board of directors, Independent Counsel or shareholders to have made a determination that indemnification of Indemnitee
is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor (ii) an actual determination by the
Company, its board of directors, any committee or subgroup of the board of directors, Independent Counsel or shareholders that Indemnitee
has not met the applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has or has not
met the applicable standard of conduct. In the event that a determination shall have been made pursuant to Section 2.09 that Indemnitee
is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 2.11 shall be conducted in all respects
as a de novo trial, on the merits, and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding
commenced pursuant to this Section 2.11, the Company shall, to the fullest extent not prohibited by Law, have the burden of proving Indemnitee
is not entitled to indemnification or advancement of Expenses, as the case may be.
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(c)
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To the extent not prohibited by Law, the Company shall indemnify Indemnitee against
all Expenses that are incurred by Indemnitee in connection with any action for indemnification or advancement of Expenses from the Company
under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company to the extent
Indemnitee is successful in such action, and, if requested by Indemnitee, shall (as soon as reasonably practicable, but in any event no
later than 30 days, after receipt by the Company of a written request therefor) advance such Expenses to Indemnitee, subject to the provisions
of Section 2.07.
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(d)
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Notwithstanding anything in this Agreement to the contrary, no determination as
to entitlement to indemnification shall be required to be made prior to the final disposition of the Proceeding.
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Section 2.12 Contribution.
To the fullest extent permissible under applicable Law, if the indemnification provided for in this Agreement is unavailable to Indemnitee,
the Company, in lieu of indemnifying Indemnitee, shall contribute to the amounts incurred by Indemnitee, whether for Expenses, judgments,
fines or amounts paid or to be paid in settlement, in connection with any claim relating to an indemnifiable event under this Agreement,
in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the
relative benefits received by the Company and Indemnitee as a result of the events and transactions giving rise to such Proceeding and
(ii) the relative fault of the Company (and its other directors, officers, employees and agents) and Indemnitee in connection with such
events and transactions.
Section 2.13 Non-exclusivity.
The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable Law, the Company’s articles of incorporation
or bylaws, any agreement, a vote of shareholders or a resolution of directors, or otherwise. To the extent that a change in Nevada Law,
whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently
under the Company’s articles of incorporation and bylaws and this Agreement, it is the intent of the Parties that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change, subject to the restrictions expressly set forth herein or therein.
Except as expressly set forth herein, no right or remedy herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at Law or in equity or otherwise. Except as expressly set forth herein, the assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
Section 2.14 No Duplication
of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder
(or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received payment for such
amounts under any insurance policy, contract, agreement or otherwise.
Section 2.15 Insurance.
To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, trustees, general
partners, managing members, officers, employees, agents or fiduciaries of the Company or any other Enterprise, Indemnitee shall be covered
by such policy or policies to the same extent as the most favorably-insured persons under such policy or policies in a comparable position.
Section 2.16 Subrogation.
In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution
of such documents as are necessary to enable the Company to bring suit to enforce such rights.
Section 2.17 Services
to the Company. Indemnitee agrees to serve as a director or officer of the Company or, at the request of the Company, as a director,
trustee, general partner, managing member, officer, employee, agent or fiduciary of another Enterprise, for so long as Indemnitee is
duly elected or appointed or until Indemnitee tenders his or her resignation or is removed from such position. Indemnitee may at any
time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation
of Law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement
shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee
specifically acknowledges that any employment with the Company (or any of its subsidiaries or any Enterprise) is at will, and Indemnitee
may be discharged at any time for any reason, with or without cause, with or without notice, except as may be otherwise expressly provided
in any executed, written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), any existing
formal severance policies adopted by the Company’s board of directors or, with respect to service as a director or officer of the
Company, the Company’s articles of incorporation or bylaws or the NRS. No such document shall be subject to any oral modification
thereof.
Section 2.18 Duration
of Agreement. This Agreement shall continue until and terminate upon the later of (a) ten years after the date that Indemnitee shall
have ceased to serve as a director or officer of the Company or as a director, trustee, general partner, managing member, officer, employee,
agent or fiduciary of any other Enterprise, as applicable; or (b) one year after the final termination of any Proceeding, including any
appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of
any proceeding commenced by Indemnitee pursuant to Section 2.11 relating thereto.
Article III. Miscellaneous.
Section 3.01 Notices.
Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally
delivered to it or sent by reputable overnight courier, by registered or certified U.S. mail with a follow up copy by overnight courier,
or electronic mail with return receipt requested to the addresses as set forth below. Notices shall be deemed to have been received (i)
upon receipt, if personally delivered or sent by electronic mail with return receipt requested and received, (ii) on the day after dispatch,
if sent by overnight by a reputable overnight courier, and (iii) three (3) days after mailing, if sent by registered or certified U.S.
mail with a follow up copy by overnight courier. Notices shall be addressed as follows or to such other addresses as shall be furnished
in writing by any Party in the manner for giving notices hereunder:
If to the Company:
Zoned Properties,
Inc.
Attn: Bryan McLaren
14269 N. 87th
Street, Suite # 205
Scottsdale, AZ 85260
Email: bryan@zonedproperties.com
If to Indemnitee:
[_______________]
[_______________]
[_______________]
Email: [_______________]
Section 3.02 Governing
Law. This Agreement shall be governed by, enforced, and construed under and in accordance with the Laws of Nevada, without giving
effect to principles of conflicts of Law thereunder. Venue for all matters arising hereunder shall be exclusively in the State of Arizona
and the United States Courts located in Scottsdale, Arizona (the “Selected Courts”) and each of the Parties (a) irrevocably
consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought
exclusively in the Selected Courts. By execution and delivery of this Agreement, each Party hereto irrevocably submits to and accepts,
with respect to any such action or proceeding, generally and unconditionally, the jurisdiction of the aforesaid court, and irrevocably
waives any and all rights such Party may now or hereafter have to object to such jurisdiction.
Section 3.03 Waiver
of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN. EACH PARTY CERTIFIES
AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT
SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C)
SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 3.03.
Section 3.04 Specific
Performance. The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance
with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy
to which they are entitled at Law or in equity.
Section 3.05 Attorneys’
Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including reasonable attorneys’ fees,
incurred in connection therewith and in enforcing or collecting any judgment rendered therein.
Section 3.06 Third-Party
Beneficiaries. This Agreement is strictly between the Parties and, except as specifically provided, no director, officer, shareholder,
employee, agent, independent contractor or any other Person shall be deemed to be a third-party beneficiary of this Agreement.
Section 3.07 Entire
Agreement. This Agreement represents the entire agreement between the Parties relating to the subject matter thereof and supersede
all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter, provided that any other
employment agreement or engagement agreement between the Parties with respect to the Indemnitee’s service to the Company shall
also apply with respect thereto to the extent set forth therein.
Section 3.08 Severability;
Waiver. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or
provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the
Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible
in a mutually acceptable manner. Other than as specifically set forth herein, every right and remedy provided herein shall be cumulative
with every other right and remedy, whether conferred herein, at Law, or in equity, and may be enforced concurrently herewith, and no
waiver by any Party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default
then, theretofore, or thereafter occurring or existing.
Section 3.09 Amendment.
This Agreement may by amended only by a writing signed by both Parties.
Section 3.10 Successors
and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and
permitted assigns. No Party may assign its rights or obligations hereunder without the prior written consent of the other Party. No assignment
shall relieve the assigning Party of any of its obligations hereunder.
Section 3.11 Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together
shall be but a single instrument. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission
shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties
have executed this Agreement as of the Effective Date.
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Zoned Properties, Inc.
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By:
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Name:
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Its:
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[____________________]
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By:
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Exhibit
99.1
Zoned
Properties Announces Completion of $8 Million Expansion at its Chino Valley Cultivation Facility
Subsequent
Lease Amendments to Significantly Increase Portfolio Rental Revenue & Cash Flow
68%
Increase to Chino Valley Rental Revenue Effective September 1, 2021
SCOTTSDALE,
Ariz., August 24, 2021 /BusinessWire/ -- Zoned Properties®, Inc. (the “Company”) (OTCQB: ZDPY), a leading
real estate development firm for emerging and highly regulated industries including legalized cannabis, today announced an amendment
to the lease agreement with its significant tenant related to its cultivation facility located in Chino Valley, Arizona.
“After
years of project positioning, local collaboration, and real estate entitlement efforts to make the Chino Valley project possible, we
are extremely grateful to have a deal structure that benefits both our operating tenant and Zoned Properties as the owner and landlord,
for long term expansion and increasing value for our shareholders,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties.
“The
increasing demand for regulated marijuana cultivation space and consumer products in Arizona has gone far beyond initial projections
as the result of the recently approved and implemented adult-use marijuana program. Industry experts are estimating consumer demand in
Arizona could increase above $1 Billion in the next few years, which will require increased cultivation capacity and square footage of
entitlement and properly zoned properties such as Chino Valley.”
Transaction
Highlights
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●
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Over
$8 Million of capital has been invested to-date by the Company’s Significant Tenants
at the Chino Valley Cultivation Facility. The Company’s Significant Tenant will maintain
the master rights to the property and facilities through the remainder of the Lease Agreement.
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●
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Effective
September 1st, 2021, operational square footage will increase from 40,000 square
feet to 67,512 square feet, and the new base rental payments at the facility will increase
68% from $32,800 per month to $55,195 per month including three out of four new building
structures in the phase one expansion that are now fully completed and operational.
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●
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The
fourth additional building site is in completion stages for technology and operational packages
along with compliance inspections. The parties expect that, upon final completion, they will
enter into another lease amendment reflecting the increased operational square footage and
increased base rental payments. Operational square footage would increase from 67,512 square
feet to 97,512 square feet, and base rental payments at the facility would increase an additional
69% from $55,195 per month to $79,795 per month reflecting the entirety of the phase one
expansion.
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●
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Upon
completion of the entirety of the phase one expansion, the annualized base rental payments
will increase to $957,550 reflecting an increase of 143% from previous annualized base rental
payments of $393,600.
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●
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The
Chino Valley property also includes an approved master plan for a phase two expansion of
operational and rentable square footage that is construction ready and may proceed at the
Tenant’s election. If the Tenant elects to proceed with phase two, the additional square
footage of operational and rentable building space could include another 60,000 square feet
for a total of 157,512 square feet of operational and rentable building space at the facility,
which would equate to an annualized rental rate of $1,549,918 plus additional rental payments
under the triple-net lease.
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“This
lease amendment is not only highly accretive for our own operational cash flow, but also marks a critical milestone for the increase
in cultivation capacity and operational expansion for our Significant Tenant,” said Berekk Blackwell, Chief Operating Officer of
Zoned Properties.
About
Zoned Properties, Inc. (OTCQB: ZDPY):
Zoned
Properties is a leading real estate development firm for emerging and highly regulated industries, including regulated cannabis. The
company is redefining the approach to commercial real estate investment through its integrated growth services.
Headquartered
in Scottsdale, Arizona, Zoned Properties has developed a full spectrum of integrated growth services to support its real estate development
and investment model; Advisory Services, Brokerage Services, Franchise Services, and PropTech Data Services each cross-pollinate within
the model to drive project value associated with complex real estate projects. With national experience and a team of experts devoted
to the emerging cannabis industry, Zoned Properties is addressing the specific needs of a modern market in highly regulated industries.
Zoned
Properties is an accredited member of the Better Business Bureau, the U.S. Green Building Council, and the Forbes Real Estate Council.
Zoned Properties does not grow, harvest, sell or distribute cannabis or any substances regulated under United States law such as the
Controlled Substance Act of 1970, as amended (the “CSA”). Zoned Properties corporate headquarters are located at 14269 N.
87th Street, Suite 205, Scottsdale, Arizona. For more information, call 877-360-8839 or visit www.ZonedProperties.com.
Twitter:
@ZonedProperties
LinkedIn:
@ZonedProperties
Safe Harbor
Statement
This
press release contains forward-looking statements. All statements other than statements of historical facts included in this press release
are forward-looking statements. In some cases, forward-looking statements can be identified by words such as "believe," "expect,"
"anticipate," "plan," "potential," "continue" or similar expressions. Such forward-looking statements
include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed
or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in the Company's filings with the
Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known
and unknown, uncertainties and other factors which are, in some cases, beyond the Company's control which could, and likely will, materially
affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company's current
views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results
of operations, growth strategy and liquidity. The Company assumes no obligation to publicly update or revise these forward-looking statements
for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements,
even if new information becomes available in the future.
COVID-19
Statement
In
March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide.
We are monitoring this closely, and although operations have not been materially affected by the COVID-19 outbreak to date, the ultimate
duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. Currently, all of the
properties in our portfolio are open to our Significant Tenants and their customers and will remain open pursuant to state and local
government requirements. We did not experience in 2020, and to date have not experienced in 2021, any material changes to our operations
from COVID-19. We do not anticipate any such material changes for the remainder of 2021. Our tenants are continuing to generate revenue
at these properties and they have continued to make rental payments in full and on time and we believe the tenants’ liquidity position
is sufficient to cover its expected rental obligations. Accordingly, while we do not anticipate an impact on our operations, we cannot
estimate the duration of the pandemic and potential impact on our business if the properties must close or if the tenants are otherwise
unable or unwilling to make rental payments. In addition, a severe or prolonged economic downturn could result in a variety of risks
to our business, including weakened demand for our properties and a decreased ability to raise additional capital when needed on acceptable
terms, if at all. At this time, the Company is unable to estimate the impact of this event on its operations.
Media
Relations
Proven Media
Neko Catanzaro
Tel (401)
484-4980
neko@provenmediaservices.com
Investor
Relations
Zoned Properties,
Inc.
Bryan McLaren
Tel (877)
360-8839
Investors@zonedproperties.com
www.zonedproperties.com