EXHIBIT 10.12
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REAL ESTATE LEASE
This Lease Agreement (this "Lease") is dated November 11, 2014, by and
between TJ INVESTMENTS LLC ("Landlord"), and STRAINWISE ("Tenant"). The parties
agree as follows:
PREMISES. Landlord, in consideration of the lease payments provided in this
Lease, leases to Tenant A 2,976 SQUARE FOOT OFFICE BUILDING AT 0000 XXXXXXX
XXXX. $23.00/sf. NNN LEASE. 5-YEAR TERM WITH (2) CONSECUTIVE 5 YEAR OPTIONS.
(the "Premises") located at 0000 XXXXXXX XXXX., XXXXXXX XXXXXXX, Xxxxxxxx 00000.
TERM. The lease term will begin on November 15, 2014 and will terminate on
November 30, 2019. It is understood that either party must provide written
notification to the other thirty (30) days in advance of intent to vacate the
Premises. Termination must occur at the end of the calendar month. Upon vacating
the Premises, Tenant hereby agrees to return same in as good repair and "Broom
Cleaned" condition as of the commencement date of the Lease, acceptable to
Landlord 's designated representative.
TRIPLE NET LEASE. This Lease is what is commonly referred to as a "Triple Net
Lease", it being the intention of the parties that Landlord shall not have any
responsibility of any kind or nature whatsoever to maintain, repair, improve,
alter or in any way incur any expense in connection with the Property, and that
the rent and any other payments to be made by Tenant to or on behalf of Landlord
under the terms hereof, are to be free and clear of any impositions, expenses or
setoffs of any kind or nature whatsoever, including without limitation, any
taxes, charges or expenses in connection with the ownership, maintenance, repair
and operation of the Property, all such expenses, charges and taxes to be paid
by Tenant as provided herein.
Tenant shall pay for all water, gas, heat, light, power, telephone and other
utilities and services supplied to the Premises, together with any taxes thereon
and a proportionate share of real property taxes, all-risk and earthquake
insurance, and common area maintenance expenses. If any such services are not
separately metered to Tenant, Tenant shall pay a reasonable, proportionate share
as determined by Landlord of all charges jointly metered with other Premises.
LEASE PAYMENTS. Tenant shall pay to Landlord monthly installments of $5,704.00,
payable in advance on the first day of each month, for a total lease payment of
$347,944.00. Lease payments shall be made to the Landlord at 0000 X. 00XX XXX.,
XXXXXXXXXXX, Xxxxxxxx 00000, which address may be changed from time to time by
the Landlord.
ESTIMATED PAYMENTS. Tenant shall be notified by Landlord of Estimated Payments
for taxes, insurance, maintenance of the landscaping and parking lot, and
landscaping and parking lot utilities and services from time to time. The
Estimated Payments shall be paid by Tenant together with rent, on the first day
of each month throughout the Term. The Estimated Payments may be increased or
decreased by Landlord upon written notice to Tenant based upon statements
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received or charges incurred by Landlord, information available to Landlord as
to the probable cost of expected charges and expenses, or the reasonable
estimate of Landlord as to the probable amount of expected charges or expenses.
Landlord shall be entitled to retain the monies received from such payments in
its general fund pending payment of all such costs and charges. No more
frequently than once each calendar quarter, the actual costs shall be determined
by Landlord, and Tenant shall remit to Landlord on demand its unpaid pro rata
share of the actual expense. In the event Tenant paid more than the actual
expenses for such period of time, Landlord shall apply such overpayment towards
the next Estimated Payments owing by Tenant. At the termination of this Lease,
an accounting for such charges and expenses shall be made to the nearest
practical accounting period, and Tenant shall pay to Landlord any balance due,
or the Landlord shall refund to Tenant any excess amount paid.
SECURITY DEPOSIT. At the time of the signing of this Lease, Tenant shall pay to
Landlord, in trust, a security deposit of $6,000.00 to be held and disbursed for
Tenant damages to the Premises (if any) as provided by law.
POSSESSION. Tenant shall be entitled to possession on the first day of the term
of this Lease, and shall yield possession to Landlord on the last day of the
term of this Lease, unless otherwise agreed by both parties in writing. At the
expiration of the term, Tenant shall remove its goods and effects and peaceably
yield up the Premises to Landlord in as good a condition as when delivered to
Tenant, ordinary wear and tear excepted.
USE OF PREMISES. Tenant may use the Premises only for ESTABLISHMENT AS A MEDICAL
MARIJUANA RETAILER AND OR AS ALLOWED BY THE LOCAL MUNICIPALITY. The Premises may
be used for any other purpose only with the prior written consent of Landlord,
which shall not be unreasonably withheld. Tenant shall notify Landlord of any
anticipated extended absence from the Premises not later than the first day of
the extended absence.
ALTERATIONS. Tenant covenants and agrees that all Alterations constructed on the
Property or work performed or caused to be performed by Tenant shall be in full
compliance with all laws, rules, orders, ordinances, directions, codes,
regulations and requirements of all governmental agencies, offices, departments,
bureaus and boards having jurisdiction over the Property. Tenant shall provide
Landlord with at least 45 days' notice prior to having any construction
materials delivered to the Property or commencing construction of any
improvements, and shall reasonably cooperate with Landlord in the posting of a
notice of non-responsibility.
COST OF ALTERATIONS. Tenant shall pay all costs of constructing any such
Alterations approved by Landlord including but not limited to fees and costs
charged by architects, engineers, the general contractor, subcontractors, and
laborers and material men, and shall not permit any mechanic's or materialmen's
lien to be filed against the Property in connection therewith.
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PARKING. Tenant shall be entitled to use 23 parking space(s) for the parking of
the Tenant's customers'/guests/ motor vehicle(s).
PROPERTY INSURANCE. Tenant shall maintain casualty property insurance on the
Premises and all improvements against loss or damage by fire and lightning and
against loss or damage by other risks in an amount not less than 100% of the
full replacement value. Landlord shall be named as an additional insured in such
policies. Tenant shall deliver appropriate evidence to Landlord as proof that
adequate insurance is in force issued by companies reasonably satisfactory to
Landlord. Landlord shall receive advance written notice from the insurer prior
to any termination of such insurance policies. All insurance proceeds payable by
the occurrence of any covered loss shall be payable to Landlord, and Tenant
shall have no right or claim to any such insurance proceeds payable with respect
to the Improvements, excluding, however, any such proceeds that may be payable
with respect to Tenant's personal property or trade fixtures.
Tenant shall also maintain any other insurance which Landlord may reasonably
require for the protection of Landlord's interest in the Premises. Tenant is
responsible for maintaining casualty insurance on its own property.
LIABILITY INSURANCE. Tenant shall maintain liability insurance on the Premises
in a total aggregate sum of at least $1,000,000.00. Tenant shall deliver
appropriate evidence to Landlord as proof that adequate insurance is in force
issued by companies reasonably satisfactory to Landlord. Landlord shall receive
advance written notice from the insurer prior to any termination of such
insurance policies.
RENEWAL TERMS. This Lease shall automatically renew for an additional period of
ONE MONTH per renewal term, unless either party gives written notice of
termination no later than SIXTY DAYS days' prior to the end of the term or
renewal term. The lease terms during any such renewal term shall be the same as
those contained in this Lease except that the lease installment payments shall
be $5,952.00 per month.
MAINTENANCE. Tenant shall have the responsibility to maintain the Premises in
good repair at all times during the term of this Lease.
UTILITIES AND SERVICES. Tenant shall be responsible for all utilities and
services incurred in connection with the Premises.
Tenant acknowledges that Landlord has fully explained to Tenant the utility
rates, charges and services for which Tenant will be required to pay to Landlord
(if any), other than those to be paid directly to the third-party provider.
TAXES. Taxes attributable to the Premises or the use of the Premises shall be
allocated as follows:
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REAL ESTATE TAXES. Tenant shall pay all real estate taxes and assessments
which are assessed against the Premises during the time of this Lease. Real
Property Taxes" shall include any form of assessment, license, fee, rent,
tax, levy, penalty or tax imposed by any authority having the direct or
indirect power to tax, including any improvement district, as against any
legal or equitable interest of Landlord in the Premises or as against
Landlord 's business of renting the Premises. Tenant's share of Real
Property Taxes shall be equitably prorated to cover only the period of time
within the fiscal tax year during which this Lease is in effect. With
respect to any assessments which may be levied against or upon the
Premises, and which may be paid in annual installments, only the amount of
such annual installments (with appropriate proration for any partial year)
and interest due thereon shall be included within the computation of the
annual Real Property Taxes. Landlord represents that, to the best of his
knowledge, there are no assessment or improvement districts being planned
which would affect the Premises other than as in effect as of the date of
this Lease.
PERSONAL TAXES. Tenant shall pay all personal taxes and any other charges
which may be levied against the Premises and which are attributable to
Tenant's use of the Premises, along with all sales and/or use taxes (if
any) that may be due in connection with lease payments. Accordingly, Tenant
shall pay before delinquency all taxes levied or assessed on Tenant's
fixtures, improvements, furnishings, merchandise, equipment and personal
property in and on the Premises, whether or not affixed to the real
property. If Tenant in good faith contests the validity of any such
personal property taxes, then Tenant shall at its sole expense defend
itself and Landlord against the same and shall pay and satisfy any adverse
determination or judgment that may be rendered thereon and shall furnish
Landlord with a surety bond satisfactory to Landlord in an amount equal to
150% of such contested taxes.
Tenant shall indemnify Landlord against liability for any such taxes and/or
any liens placed on the Premises in connection with such taxes. If at any
time after any tax or assessment has become due or payable Tenant or its
legal representative neglects to pay such tax or assessment, Landlord shall
be entitled, but not obligated, to pay the same at any time thereafter and
such amount so paid by Landlord shall be repaid by Tenant to Landlord with
Tenant's next rent installment together with interest at the highest rate
allowable by law.
TERMINATION UPON SALE OF PREMISES. Notwithstanding any other provision of this
Lease, Landlord may terminate this lease upon SIXTY DAYS days' written notice to
Tenant that the Premises have been sold.
TERMINATION CLAUSE. Tenant may, upon 45 days' written notice to Landlord,
terminate this lease provided that the Tenant pays a termination charge equal to
1 months' rent or the maximum allowable by law, whichever is less. Termination
will be effective as of the last day of the calendar month following the end of
the 45 day notice period. Termination charge will be in addition to all rent due
up to the termination day.
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MILITARY TERMINATION CLAUSE. In the event, the Tenant is, or hereafter becomes,
a member of the United States Armed Forces on extended active duty and hereafter
the Tenant receives permanent change of station orders to depart from the area
where the Premises are located, or is relieved from active duty, retires or
separates from the military, or is ordered into military housing, then in any of
these events, the Tenant may terminate this lease upon giving thirty (30) days
written notice to the Landlord. The Tenant shall also provide to the Landlord a
copy of the official orders or a letter signed by the tenant's commanding
officer, reflecting the change, which warrants termination under this clause.
The Tenant will pay prorated rent for any days (he/she) occupy the dwelling past
the first day of the month. Any security deposit will be promptly returned to
the tenant, provided there are no damages to the premises.
DEFAULTS. Tenant shall be in default of this Lease if Tenant fails to fulfill
any lease obligation or term by which Tenant is bound. Subject to any governing
provisions of law to the contrary, if Tenant fails to cure any financial
obligation within 5 days (or any other obligation within 10 days) after written
notice of such default is provided by Landlord to Tenant, Landlord may take
possession of the Premises without further notice (to the extent permitted by
law), and without prejudicing Landlord's rights to damages. In the alternative,
Landlord may elect to cure any default and the cost of such action shall be
added to Tenant's financial obligations under this Lease. Tenant shall pay all
costs, damages, and expenses (including reasonable attorney fees and expenses)
suffered by Landlord by reason of Tenant's defaults. All sums of money or
charges required to be paid by Tenant under this Lease shall be additional rent,
whether or not such sums or charges are designated as "additional rent". The
rights provided by this paragraph are cumulative in nature and are in addition
to any other rights afforded by law.
LATE PAYMENTS. For any payment that is not paid within 5 DAYS AFTER IT IS DUE
days after its due date, Tenant shall pay a late fee of $50.00.
CUMULATIVE RIGHTS. The rights of the parties under this Lease are cumulative,
and shall not be construed as exclusive unless otherwise required by law.
NON-SUFFICIENT FUNDS. Tenant shall be charged $40.00 for each check that is
returned to Landlord for lack of sufficient funds.
REMODELING OR STRUCTURAL IMPROVEMENTS. Tenant shall have the obligation to
conduct any construction or remodeling (at Tenant's expense) that may be
required to use the Premises as specified above. Tenant may also construct such
fixtures on the Premises (at Tenant's expense) that appropriately facilitate its
use for such purposes. Such construction shall be undertaken and such fixtures
may be erected only with the prior written consent of the Landlord which shall
not be unreasonably withheld. Tenant shall not install awnings or advertisements
on any part of the Premises without Landlord's prior written consent. At the end
of the lease term, Tenant shall be entitled to remove (or at the request of
Landlord shall remove) such fixtures, and shall restore the Premises to
substantially the same condition of the Premises at the commencement of this
Lease.
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ACCESS BY LANDLORD TO PREMISES. Subject to Tenant's consent (which shall not be
unreasonably withheld), Landlord shall have the right to enter the Premises to
make inspections, provide necessary services, or show the unit to prospective
buyers, mortgagees, tenants or workers. However, Landlord does not assume any
liability for the care or supervision of the Premises. As provided by law, in
the case of an emergency, Landlord may enter the Premises without Tenant's
consent. During the last three months of this Lease, or any extension of this
Lease, Landlord shall be allowed to display the usual "To Let" signs and show
the Premises to prospective tenants.
INDEMNITY REGARDING USE OF PREMISES. To the extent permitted by law, Tenant
agrees to indemnify, hold harmless, and defend Landlord from and against any and
all losses, claims, liabilities, and expenses, including reasonable attorney
fees, if any, which Landlord may suffer or incur in connection with Tenant's
possession, use or misuse of the Premises, except Landlord's act or negligence.
DANGEROUS MATERIALS. Tenant shall not keep or have on the Premises any article
or thing of a dangerous, flammable, or explosive character that might
substantially increase the danger of fire on the Premises, or that might be
considered hazardous by a responsible insurance company, unless the prior
written consent of Landlord is obtained and proof of adequate insurance
protection is provided by Tenant to Landlord. However, Tenant shall be entitled
to use and store only those Hazardous Materials, that are necessary for Tenant
's business, provided that such usage and storage is in full compliance with all
applicable local, state and federal statutes, orders, ordinances, rules and
regulations (as interpreted by judicial and administrative decisions). Tenant
shall not keep or store on the Premises chemicals in quantities, amounts,
concentrations or type which are in excess of those permitted by local, state or
federal laws, regulations or ordinances.
Tenant shall give to Landlord immediate verbal and follow-up written notice of
any spills, releases or discharges of Hazardous Materials on the Premises, or in
any common areas or parking lots (if not considered part of the Premises),
caused by the acts or omissions of Tenant, or its agents, employees,
representatives, invitees, licensees, subtenants, customers or contractors.
Tenant covenants to investigate, clean up and otherwise remediate any spill,
release or discharge of Hazardous Materials caused by the acts or omissions of
Tenant, or its agents, employees, representatives, invitees, licensees,
subtenants, customers or contractors at Tenant 's cost and expense; such
investigation, clean up and remediation to be performed after Tenant has
obtained Landlord 's written consent, which shall not be unreasonably withheld;
provided, however, that Tenant shall be entitled to respond immediately to an
emergency without first obtaining Landlord 's written consent. Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses, suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees) arising from or related to the use, presence,
transportation, storage, disposal, spill, release or discharge of Hazardous
Materials on or about the Premises caused by the acts or omissions of Tenant,
its agents, employees, representatives, invitees, licensees, subtenants,
customers or contractors.
Tenant shall not be entitled to install any tanks under, on or about the
Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlords sole
discretion.
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COMPLIANCE WITH REGULATIONS. Tenant shall promptly comply with all laws,
ordinances, requirements and regulations of the federal, state, county,
municipal and other authorities, and the fire insurance underwriters. However,
Tenant shall not by this provision be required to make alterations to the
exterior of the building or alterations of a structural nature.
MECHANICS LIENS. Neither the Tenant nor anyone claiming through the Tenant shall
have the right to file mechanics liens or any other kind of lien on the Premises
and the filing of this Lease constitutes notice that such liens are invalid.
Further, Tenant agrees to (1) give actual advance notice to any contractors,
subcontractors or suppliers of goods, labor, or services that such liens will
not be valid, and (2) take whatever additional steps that are necessary in order
to keep the premises free of all liens resulting from construction done by or
for the Tenant.
ARBITRATION. Any controversy or claim relating to this contract, including the
construction or application of this contract, will be settled by binding
arbitration under the rules of the American Arbitration Association, and any
judgment granted by the arbitrator(s) may be enforced in any court of proper
jurisdiction.
SUBORDINATION OF LEASE. This Lease is subordinate to any mortgage that now
exists, or may be given later by Landlord, with respect to the Premises.
OTHER.
FOR RENEWAL. The contract will automatically renew after 60 months, the Landlord
will increase the rent to no more than 5% in comparison with the current lease
rate.
LICENSE CONTINGENCIES. This lease is contingent upon licensing approval issued
by the State of Colorado and shall not be binding if the State of Colorado
Medical Marijuana Center store license is not granted.
ASSIGNABILITY/SUBLETTING. Lessee shall have the right to assign the lease or to
sublet the premises or any part thereof to a LLC or Corporation that Xxxxx
Xxxxxxxx has controlling interest, without the consent of the Lessor, provided,
however, that no such assignment or subletting shall relieve Lessee from its
duty to perform fully all of the agreements, covenants, and conditions set forth
in this lease.
GOVERNING LAW. This Lease shall be construed in accordance with the laws of the
State of Colorado.
ENTIRE AGREEMENT/AMENDMENT. This Lease Agreement contains the entire agreement
of the parties and there are no other promises, conditions, understandings or
other agreements, whether oral or written, relating to the subject matter of
this Lease. This Lease may be modified or amended in writing, if the writing is
signed by the party obligated under the amendment.
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SEVERABILITY. If any portion of this Lease shall be held to be invalid or
unenforceable for any reason, the remaining provisions shall continue to be
valid and enforceable. If a court finds that any provision of this Lease is
invalid or unenforceable, but that by limiting such provision, it would become
valid and enforceable, then such provision shall be deemed to be written,
construed, and enforced as so limited.
WAIVER. The failure of either party to enforce any provisions of this Lease
shall not be construed as a waiver or limitation of that party's right to
subsequently enforce and compel strict compliance with every provision of this
Lease.
BINDING EFFECT. The provisions of this Lease shall be binding upon and inure to
the benefit of both parties and their respective legal representatives,
successors and assigns.
SIGNATURES AND NOTICE. This Lease shall be signed by the following parties. No
notice under this Lease shall be deemed valid unless given or served in writing
and forwarded by mail, postage prepaid, addressed to the parties below:
LANDLORD:
TJ INVESTMENTS LLC
XXX XXXX, President
0000 X. 00XX Xxx.
Xxxxxxxxxxx, Xxxxxxxx 00000
TENANT:
STRAINWISE
XXXXX XXXXXXXX, CEO
LANDLORD:
TJ INVESTMENTS LLC
By: /s/ Xxx Xxxx Date: November 13, 2014
-------------------------
Xxx Xxxx, President
TENANT:
STRAINWISE
By: /s/ Xxxxx Xxxxxxxx Date: November 13, 2014
-------------------------
Xxxxx Xxxxxxxx, CEO
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