DEVELOPMENT AGREEMENT
Exhibit 10.2
THIS DEVELOPMENT AGREEMENT is made and entered into effective this 13th day of March, 2019 (the “Effective Date”), by and between IIP-OH 1 LLC, a Delaware limited liability company (“Landlord”), PHARMACANN OHIO LLC, an Ohio limited liability company (“Tenant”), and IIP OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“Parent Company”). Landlord, Tenant and Parent Company shall sometimes collectively be referred to herein as the “Parties.”
“AAA” shall have the meaning given to such term in Section 11.2 of this Agreement.
“AAA Rules” shall have the meaning given to such term in Section 11.9(a) of this Agreement.
“Architect Arbitrator” shall have the meaning given to such term in Section 11.4 of this Agreement.
“Affiliate” shall mean any person or entity that, directly or indirectly, controls or is controlled by or is under common control with any other entity.
“Agreement” shall mean this Development Agreement, as amended from time to time.
“Application” shall have the meaning given to such term in Section 6.1 of this Agreement.
“Attorney Arbitrator” shall have the meaning given to such term in Section 11.4 of this Agreement.
“Authorized Excess Development Costs” shall have the meaning ascribed to such term in Section 8 of this Agreement.
"Bankruptcy Code" means the United States Bankruptcy Code or any successor statute (as the same may be amended from time to time).
“Budgeted Development Costs” shall mean all Development Costs which are authorized pursuant to the Development Plan and Budget, which shall include, without limitation, (a) a fee to Landlord equal to Twenty-Five Thousand Dollars ($25,000.00) to cover Landlord's overhead and expenses for plan review, engineering review, coordination, scheduling and supervision of the Development and (b) reimbursement for Landlord's third-party costs actually incurred in connection with the Development, including Landlord's engagement of a construction consultant to oversee the Development, provided that any such costs shall be reasonable and shall be reasonably consistent with market rates paid for similar services.
“Buildings” shall mean an approximately Thirty-One Thousand Four Hundred Sixty-Nine (31,469) square foot greenhouse facility and an approximately Twenty-Six Thousand Two Hundred Eight (26,208) square foot industrial building suitable for the Permitted Use, subject to changes as may be made in accordance with this Agreement.
“Completion Date” shall mean the date which corresponds to the last to occur of each of the Completion Events.
“Completion Events” shall mean the following events: (a) the substantial completion of the construction, development and installation of the Improvements and the performance of all other construction and development work for the Development in accordance with the Development Plan and Budget, as evidenced by a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, executed by the project architect and the general contractor; (b) Landlord has received copies of all certifications and approvals with respect to the Improvements that may be required from any governmental authority and any board of fire underwriters or similar body for the use and occupancy of the Premises, including the issuance of a certificate of occupancy or similar governmental approval suitable for the Permitted Use; (c) the full performance by the general contractor(s) of all of its (their) duties and obligations under the construction contracts with regard to the Development in accordance with the Development Plan and Budget, other than those items set forth on a Punch-List prepared by the Tenant and delivered to the general contractor(s); (d) Landlord has received the general contractor’s final unconditional waiver and release of lien and final unconditional waivers and releases of liens from each subcontractor and material supplier with respect to the Improvements; (e) Landlord has received complete “as built” drawing print sets, project specifications and shop drawings and electronic CADD files on disc for the Improvements; (f) Landlord has received an as-built ALTA survey depicting the Improvements and otherwise reasonably acceptable to Landlord; (g) Landlord has received a commissioning report prepared by a licensed, qualified commissioning agent hired by Tenant and approved by Landlord for all mechanical, electrical and plumbing systems installed in connection with the Development; (h) Landlord, at Tenant’s sole cost and expense, has received an ALTA owner’s policy of title insurance with extended coverage, with liability coverage in the amount of Twenty Million Dollars ($20,000,000.00), affirmative coverage for any appurtenant easements to the Premises and such endorsements as Buyer may request (to the extent available), which title policy shall be issued by a title company reasonably acceptable to Landlord and shall otherwise be in form and substance reasonably acceptable to Landlord; and (i) Landlord has received such other “close out” materials as Landlord reasonably requests.
“Construction Contribution Amount” shall mean an amount not to exceed Nineteen Million Three Hundred Thousand Dollars ($19,300,000).
“Construction Payment” shall have the meaning ascribed to such term in Section 6.2 of this Agreement.
“Contractor Arbitrator” shall have the meaning given to such term in Section 11.4 of this Agreement.
“Default” shall have the meaning ascribed to such term in the Lease.
“Development” shall have the meaning ascribed to such term in Section 2.2 of this Agreement.
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“Development Approvals” shall mean: (a) any and all land use and development entitlements, permits and authorizations relating to the Development; (b) utility hook-up rights, water allocations, water rights, sewer capacity, density allocations and other similar rights or approvals regarding the Development; (c) any and all documents, agreements, instruments and/or understandings with any local, state or federal governmental agency concerning the construction and development of any on-site or off-site improvements by one or more of such governmental agencies; and (d) any and all approvals and/or consents required to be obtained in connection with the Development for compliance with any CC&Rs and/or the Oil and Gas Lease (as such terms are defined in the Lease).
“Development Costs” shall mean, with respect to the Improvements, any and all costs, fees and expenses incurred by Tenant arising out of and in connection with the Improvements.
“Development Plan and Budget” shall have the meaning ascribed to such term in Section 5.1 of this Agreement.
“Disbursement Claim” shall have the meaning ascribed to such term in Section 11.1 of this Agreement.
“Disapproved Matters” shall have the meaning ascribed to such term in Section 4.6 of this Agreement.
“Effective Date” shall the meaning ascribed to such term in the introductory paragraph of this Agreement.
“Excess Development Costs” shall mean those Development Costs which are in excess of the aggregate amounts allocated to Development Costs in the Development Plan and Budget.
“Final Arbitration Decision” shall have the meaning ascribed to such term in Section 11.10 of this Agreement.
“Improvements” shall mean the Buildings and related improvements and facilities to be constructed on the Land, as generally depicted on Exhibit B attached hereto, in accordance with the Development Plan and Budget and any work, improvements or items reasonably inferable therefrom as necessary to produce a functional facility consistent with the Permitted Use, including, without limitation, all water control systems, utility lines and related fixtures and improvements, drainage facilities, landscaping, fencing, signs, parking facilities, access ways, walkways and related facilities.
“Initial Meeting” shall have the meaning ascribed to such term in Section 11.1 of this Agreement.
“Insolvency” shall mean either: (a) when the Tenant (i) has an order for relief entered with respect to it under Chapter 7 or Chapter 11 of the Bankruptcy Code; (ii) makes a general assignment for the benefit of creditors; (iii) files a voluntary petition under the Bankruptcy Code; (iv) files a petition or answer seeking for the Tenant any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the Bankruptcy Code, any statute, law or regulation; (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Tenant in any proceeding of this nature; and/or (vi) seeks, consents to or acquiesces the appointment of a trustee, receiver or liquidator of the Tenant or of all or any substantial part of the Tenant’s properties; or (b) (i) sixty (60) calendar days after the commencement of any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the Bankruptcy Code, any statute, law or regulation, the proceeding has not been dismissed; or (ii) if, within sixty (60) calendar days after the appointment without the Tenant’s consent or acquiescence of a trustee, receiver or liquidator of the Tenant or of all or any substantial part of the property or estate of the Tenant, the appointment is not vacated or stayed or within sixty (60) calendar days after the expiration of any such stay, the appointment if not vacated.
“Land” shall have the meaning ascribed to such term in the recitals to this Agreement.
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“Lease” shall have the meaning ascribed to such term in the recitals to this Agreement.
“Landlord” shall the meaning ascribed to such term in the introductory paragraph of this Agreement.
“Landlord Event of Default” shall have the meaning ascribed to such term in Section 9.7 of this Agreement.
“Legal Requirements” shall mean any and all laws, statutes, ordinances, codes, orders, rules, regulations, permits, licenses, authorizations, entitlements (including, without limitations, any and all Development Approvals), official orders and requirements of, or conditions imposed by, all federal (to the extent not in direct conflict with applicable state, municipal or local cannabis licensing and program laws, rules and regulations), state, municipal and local laws, codes, ordinances, rules and regulations of governmental authorities, committees, associations, or other regulatory committees, agencies or governing bodies having jurisdiction over the Premises or any portion thereof, Landlord or Tenant, including both statutory and common law, hazardous waste rules and regulations, and state cannabis licensing and program laws, rules and regulations, state, and local governmental regulatory agencies and authorities and any covenants, conditions and restrictions of record encumbering the Land, in each case which are as of the date hereof or hereafter become applicable to the construction, development or operation of the Improvements, including, without limitation, any of the foregoing relating in any way to hazardous material and/or hazardous waste.
“Notice of Demand” shall have the meaning ascribed to such term in Section 11.2 of this Agreement.
“Panel” shall have the meaning ascribed to such term in Section 11.3 of this Agreement.
“Parent Company” shall the meaning ascribed to such term in the introductory paragraph of this Agreement.
“Parties” shall have the meaning ascribed to such term in the introductory paragraph of this Agreement.
“Permitted Use” shall have the meaning ascribed to such term in the Lease.
“Premises” shall have the meaning ascribed to such term in the Lease.
“Prior Course of Dealing” shall have the meaning ascribed to such term in the Lease.
“Project Agreements” shall have the meaning ascribed to such term in Section 3.5 of this Agreement.
“Punch-Lists” shall have the meaning ascribed to such term in Section 3.12 of this Agreement.
“Required Arbitration Construction Payments” shall have the meaning ascribed to such term in Section 11.10 of this Agreement.
“Revised Development Plan and Budget” shall have the meaning ascribed to such term in Section 5.2 of this Agreement.
"SEC Information" shall have the meaning ascribed to such term in Section 3.19 of this Agreement.
“Submission” shall have the meaning ascribed to such term in Section 4.1 of this Agreement.
“Tenant” shall the meaning ascribed to such term in the introductory paragraph of this Agreement.
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“Tenant Event of Default” shall have the meaning ascribed to such term in Section 9.2 of this Agreement.
“Term” shall have the meaning ascribed to such term in Section 9.1 of this Agreement.
“Termination Event” shall have the meaning ascribed to such term in Section 9.1 of this Agreement.
“Unauthorized Excess Development Costs” shall have the meaning ascribed to such term in Section 8 of this Agreement.
During the Term of this Agreement, Tenant shall fully and timely perform all of the duties, responsibilities and obligations required to be performed by Tenant pursuant to this Agreement and the Development Plan and Budget in a commercially reasonable manner, comparable with other similar quality industrial developments to be used for similar uses in the greater Ohio market. In connection with the foregoing, Tenant hereby covenants to furnish its commercially reasonable skill and judgment in performing its obligations hereunder. Tenant shall perform its duties, responsibilities and obligations under this Agreement in a reasonably timely, efficient, expeditious, prudent and economical manner, consistent with the interest of Landlord, subject in any event to and in accordance with commercially reasonable standards, and this Agreement and the Development Plan and Budget.
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3.1 Secure all Development Approvals and all other necessary permits, licenses, consents, authorizations, zoning variances or changes, (whether regulatory, governmental, quasi-governmental or otherwise), which may be reasonably necessary or appropriate in connection with the Development.
3.2 Secure all surveys, soil tests and other studies and reports necessary to secure all Development Approvals reasonably required for the Development and provide Landlord with electronic copies of all of the foregoing to the extent in Tenant’s possession or reasonable control.
3.3 Cause to be prepared and review all preliminary plans, working drawings, plans and specifications and construction cost estimates reasonably required for the Development (and provide Landlord with electronic copies of all of the foregoing to the extent in Tenant’s possession or reasonable control), and verify the compliance of such plans, working drawings, plans and specifications and construction cost estimates with this Agreement and the Development Plan and Budget.
3.4 Secure all other documents, agreements, instruments, reports, studies, surveys, maps, and all other materials reasonably necessary for the Development.
3.5 Solicit and negotiate all agreements, contracts, documents and other instruments reasonably necessary in order to undertake the activities required to be performed by Tenant pursuant to Sections 3.1, 3.2, 3.3 and 3.4 above and/or to otherwise commence and/or complete the Development (“Project Agreements”), which Project Agreements may include, without limitation, any and all construction contracts and subcontracts, architectural and engineering contracts, supply contracts, applications and/or agreements with governmental authorities, as the same may be amended from time to time. In the event any proposed Project Agreements are with any Affiliate of Tenant, Tenant shall specifically notify Landlord when processing such proposed Project Agreement with Landlord for Landlord’s approval pursuant to Section 4 hereof. In connection with Landlord’s review of such Project Agreements pursuant to Section 4 hereof, Landlord shall not unreasonably disapprove a proposed Project Agreement which is consistent with the Development Plan and Budget. In no event shall Tenant be authorized to enter into or execute any such Project Agreements in the name of or on behalf of Landlord.
3.6 Oversee, supervise and manage the planning, design, construction, and development of the Improvements, all in accordance with the Development Plan and Budget and in compliance with the Development Approvals and other Legal Requirements.
3.7 Oversee, supervise, manage and coordinate on a daily basis, the services of all employees, architects, contractors, subcontractors, supervisors, engineers and other individuals and entities to carry out the Development, or any portion thereof.
3.8 Coordinate and conduct bi-weekly on-site meetings with members of the construction and development team.
3.9 Prepare and submit to Landlord a monthly status report with respect to the progress of the Development, which status report shall be in form and substance reasonably satisfactory to Landlord.
3.10 Review applications for payment by its contractors and their subcontractors in connection with the Development and process applications for payment in accordance with the terms and conditions of this Agreement, including satisfying the conditions necessary to secure any disbursement of funds for payment of such application pursuant to Section 6 below.
3.11 Undertake commercially reasonable efforts to determine and verify the substantial and final completion of all construction and development work to be performed and/or services to be provided in connection with the Development including, without limitation, the substantial and final completion of all obligations to be performed pursuant to the applicable Project Agreements.
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3.12 Undertake commercially reasonable efforts to ensure that its contractor prepares any and all punch-lists of incomplete or unsatisfactory work and other activities in connection with the Development (“Punch-Lists”), and undertake commercially reasonable efforts to cause contractor to complete all items on such Punch-Lists.
3.13 Coordinate and arrange for all utility services and required easements necessary for the Development.
3.14 Prepare and submit all applications, forms and packages to secure the payment of any and all discounts, rebates, refunds, subsidies, or other concessions referenced in the Development Plan and Budget (if any).
3.15 Upon completion of the Development, procure an as-built ALTA survey that depicts the Improvements and is otherwise reasonably acceptable to Landlord.
3.16 Promptly notify Landlord of any material disputes with contractors, vendors, materialmen or suppliers, in any case, of which it has received written notice, and exert all commercially reasonable efforts to give notice to Landlord prior to any liens filed against all or any portion of the Land to the extent the Tenant has received written notice of the same. As soon as reasonably practicable following its receipt of written notice of, or otherwise becoming aware of, any labor or materialmen’s liens or any other liens, liabilities or encumbrances against all or any portion of the Land relating to the Development, Tenant shall provide written notice of such liens, liabilities or encumbrances to Landlord. The amount of such lien, liability or encumbrance shall be fully paid or otherwise satisfied by Tenant (or insured over by the title company selected by Tenant, at Tenant's sole cost and expense). As used herein, "actual knowledge" of Tenant shall mean the actual (and not imputed) knowledge of each of Xxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxxxx, and Xxxx Xxxxxx without duty to inquire or investigate.
3.17 Promptly notify Landlord in writing of any potential construction defects and warranty claims in connection with the Development of which Tenant has actual knowledge and Tenant’s recommendation for prosecuting such matters. Upon instruction from Landlord, Tenant shall pursue the course of action directed by Landlord.
3.18 Secure and maintain at Tenant’s principal place of business all guarantees, warranties, affidavits, waivers, releases, bonds, keys, operating and maintenance manuals, certificates of occupancy and other permits and approvals with respect to the Development and provide Landlord with electronic copies of all of the foregoing to the extent in Tenant’s possession or reasonable control.
3.19 Establish and maintain complete and accurate books and records with respect to the Development, together with sufficient documentation to fully support each of the entries in such books and records. Such books and records shall include proper entries of all receipts, income and disbursements pertaining to the Development. Such books and records shall be and remain the property of the Landlord (subject to Tenant’s right to retain copies) and be maintained by Tenant at Tenant’s principal place of business or at the on-site construction office on or near the Land. In connection with the foregoing, Tenant shall make such books and records available to Landlord and its representatives for inspection and audit at Tenant’s principal place of business or at the on-site office (or at another location previously approved by Landlord) at any time and from time to time during regular business hours. Without limiting the foregoing, Tenant shall provide, as reasonably requested by Landlord, any necessary or appropriate documents, periodic reports, materials and information to Landlord and/or any other financial institution or lenders designated by Landlord, or attorneys and accountants selected by Landlord. Tenant shall cooperate with accountants and attorneys selected by Landlord in the preparation of all tax returns and reports required to be filed by Landlord and/or its Affiliates (including, without limitation, federal income tax returns, state income tax and/or franchise tax returns, if any, state intangible tax returns, if any, and state annual reports, if any) and shall provide to such accountants and/or attorneys all books and records pertaining to the Development that are requested and that are in the possession and control of Tenant, it being understood and agreed that Tenant shall have no authority or responsibility to execute or file any returns of Landlord or its Affiliates. Additionally, Tenant acknowledges that Landlord or one of its Affiliates may be required to file various reports and other information with the Securities and Exchange Commission and other regulatory agencies. Accordingly, Tenant hereby agrees to and shall timely provide to Landlord and/or such Affiliates any and all reports and other information required pursuant to this Section (provided such reports and other information pertain directly to the services to be performed by Tenant pursuant to this Agreement), together with all other reports and other information that may be reasonably requested from time to time by Landlord and/or its Affiliates (provided such reports and other information pertain directly to the services to be performed by Tenant pursuant to this Agreement), all of which shall be in form and content reasonably satisfactory to Landlord or such Affiliate (“SEC Information”). All SEC Information requested by Landlord and/or any of its Affiliates shall be delivered by Tenant to Landlord or such Affiliate within ten (10) calendar days of the date of such request by Landlord and/or such Affiliate.
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3.20 Establish and maintain complete and orderly files containing correspondence, insurance policies, receipts, all paid and unpaid bills, vouchers and all other documents and papers pertaining to the Development, all of which shall be and remain the property of Landlord (subject to Tenant’s right to retain copies) and shall be available to Landlord and its representatives for inspection at Tenant’s principal place of business, the construction office located on-site for the Development or at another location previously approved by Landlord at any time and from time to time during regular business hours.
3.21 Immediately advise Landlord of the discovery of any hazardous substances or materials in, on or about the Land.
3.22 Promptly advise the Landlord of any actual or threatened legal action, condemnation proceeding, claim, tax assessment or damage adversely affecting the Land and/or the Development which becomes known to Tenant.
3.23 At all times comply with all statutes, ordinances, rules and regulations, licenses and permits, and other Legal Requirements applicable to the performance of its duties, responsibilities and obligations under this Agreement.
3.24 At all times comply with all covenants, conditions and restrictions of record affecting the Land, including, without limitation, all Project Agreements.
3.25 Perform all other duties and obligations to be performed by Tenant in accordance with the terms and conditions of this Agreement and in accordance with the Prior Course of Dealing.
4.1 Tenant shall prepare and submit to the Landlord, for Landlord’s review and approval, all matters expressly required to be reviewed and approved by Landlord pursuant to this Agreement, together with any original documents, agreements, instruments, correspondence and other information reasonably required by Landlord to make a determination as to the matters being reviewed and approved “Submission”). All Submissions to be made to Landlord pursuant to this Section 4 shall only be effective if such Submissions are delivered pursuant to the provisions of this Agreement.
4.2 Each Submission shall include a notation on the transmittal letter accompanying such Submission, which states that the matters being delivered to Landlord shall be deemed approved by Landlord, unless Landlord timely delivers its notice of disapproval pursuant to this Section 4.
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4.3 Landlord shall have a period of ten (10) calendar days after receipt by Landlord of each Submission in which to review such Submission and deliver to Tenant written notice of either its approval or disapproval with respect to the matters being reviewed or of any additional information reasonably required by Landlord in order to make such a determination. Landlord shall notify Tenant as soon as reasonably practicable in the event Landlord requires such additional information.
4.4 In the event Landlord fails to timely deliver to Tenant written notice of its approval or disapproval of the Submission pursuant to Section 4.3 hereof, the Submission shall be deemed approved.
4.5 In the event Landlord timely approves (or is deemed to have approved) any such Submission, the Landlord and/or the Tenant, as applicable, shall take such actions required to implement such approved matters.
4.6 In the event Landlord disapproves of any of the matters of such Submission (“Disapproved Matters”), Landlord shall advise Tenant in writing of its disapproval and the basis for such disapproval. In such a case, Tenant may take such actions required to satisfy Landlord with respect to the Disapproved Matters and resubmit such matters to Landlord, for Landlord’s review and approval, pursuant to this Section 4.
5. Development Plan and Budget.
On or before the expiration of ten (10) calendar days after receipt of the proposed Revised Development Plan and Budget, Landlord shall deliver written notice to Tenant setting forth Landlord’s approval or disapproval of all or any portion of the same. In the event Tenant does not receive a written notice of approval or disapproval from Landlord within such ten (10) calendar day period, then the proposed Revised Development Plan and Budget shall be deemed approved by Landlord. Notwithstanding the foregoing, until such time as the Revised Development Plan and Budget has been approved (or deemed approved) by the Landlord in accordance with the terms and conditions of this Section 5.2, the Tenant shall perform its duties in accordance with the Development Plan and Budget (or any Revised Development Plan and Budget, as the case may be), currently then in effect. Following the approval (or deemed approval) by the Landlord of the Revised Development Plan and Budget (if required hereunder), with respect to the period of time in question, all references in this Agreement to the Development Plan and Budget shall mean the Revised Development Plan and Budget.
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(a) A statement setting forth the total amount of the Construction Contribution Amount requested and supporting invoices from the general contractor, architect and any subcontractors, material suppliers and other parties requesting payment with respect to the amount of the Construction Contribution Amount then being requested, as evidenced by AIA document G 702 Application and Certificate for Payment.
(b) A certification by the general contractor that the Improvements, or the portion thereof for which payment is requested in that Application, has been completed pursuant to this Agreement and the applicable construction documents;
(c) Except with respect to the final Application, conditional lien waivers signed by every contractor, subcontractor and supplier who has a mechanics lien right for any work for which payment is requested stating:
(i) the contractor, subcontractor, supplier or other claimant waives conditionally any liens or right to lien with respect to any work for which payment is being requested in that Application;
(ii) the amount theretofore received by such contractor, subcontractor or supplier;
(iii) that the contract with the contractor, subcontractor or supplier has not been changed, or, if the contract has been changed, indicating the increase or decrease in the amount of the contract; and
(iv) A list of the names and addresses of major subcontractors and major suppliers of labor and materials used in connection with the work for which payment is requested.
(d) With respect to any work covered by the immediately preceding Application, copies of sworn statements and unconditional lien waivers signed by each contractor, subcontractor and supplier for whom such payment was made stating:
(i) that such contractor, subcontractor or material supplier unconditionally waives any liens or right to lien with respect to work for which payment has been received by such contractor, subcontractor and material supplier;
(ii) the amount theretofore received by such contractor, subcontractor and material supplier; and
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(iii) that the contract with the contractor, subcontractor or supplier has not been changed, or, if the contract has been changed, indicating the increase or decrease in the amount of the contract.
In the event Tenant incurs any Unauthorized Excess Development Costs, Tenant hereby agrees to and shall indemnify, defend, hold harmless and protect Landlord and the Land from and against any mechanic’s or materialmen’s liens, or other liens, liabilities or encumbrances arising out of or in connection with any such Unauthorized Excess Development Costs.
Tenant shall follow the procedures set forth in Section 6 of this Agreement with respect to processing any Application for payment requests in connection with securing the payment of: (i) any Budgeted Development Costs; and (ii) any Authorized Excess Development Costs.
(i) The Completion Date, provided, however, that in the event there are any items of work on any Punch-Lists to be performed subsequent to the Completion Date, the Term of this Agreement shall be extended until such time as the work to be performed pursuant to such Punch-Lists has been completed to the reasonable satisfaction of the Landlord; or
(ii) Upon the termination of the Lease.
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(i) The failure of Tenant to timely perform and satisfy any of the material duties and obligations of Tenant under this Agreement and/or the Development Plan and Budget; provided, however, Tenant shall not be deemed to be in default of this Agreement if: (i) in the event the default is a monetary default and Tenant cures such monetary default within ten (10) business days after receipt of written notice from the Landlord of such monetary default; or (ii) in the event the default is a non-monetary default and Tenant commences the cure of such non-monetary default as soon as reasonably practicable following written notice thereof from the Landlord and completes such cure within thirty (30) calendar days after receipt of such written notice provided, however if such non-monetary default cannot reasonably be cured within such thirty (30) calendar day period, Tenant shall not be deemed to be in default of this Agreement if Tenant commences to cure such non-monetary default within such thirty (30) calendar day period, and thereafter diligently pursues the same to completion; or
(ii) The commission of any act of gross negligence, willful misconduct, fraud, or intentional misrepresentation by Tenant, or any executive-level employee of Tenant, in connection with the performance by Tenant of its duties and obligations under this Agreement; or
(iii) The occurrence of any Default by Tenant under the Lease.
Upon the occurrence of a Tenant Event of Default, Landlord and Tenant acknowledge and agree that such Tenant Event of Default shall constitute a Default by Tenant under the Lease and Landlord shall have all of the rights and remedies afforded to Landlord upon the occurrence of a Default by Tenant under the Lease, as well as any other rights and remedies afforded to Landlord at law or in equity, including, without limitation, the right to seek specific performance. Notwithstanding the foregoing, each of Landlord and Tenant hereby waive the right to recover consequential, special or punitive damages under this Agreement.
(i) Tenant shall deliver to Landlord all notes, inspections, documents, agendas, instruments, studies, reports, surveys, maps, working plans, plans and specifications, correspondence, books and records, and all other materials in Tenant’s possession or control relating to the Development, including, without limitation, all original Project Agreements and Development Approvals; and
(ii) Tenant shall assign and transfer to Landlord all of Tenant’s right, title and interest in and under to all Development Approvals and all Project Agreements in connection with the Development.
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(a) The failure of Landlord to timely perform and satisfy any of the material duties and obligations of Landlord under this Agreement; provided, however, Landlord shall not be deemed to be in default of this Agreement if: (i) in the event the default is a monetary default and Landlord cures such monetary default within ten (10) business days after receipt of written notice from the Tenant of such monetary default; or (ii) in the event the default is a non-monetary default and Landlord commences the cure of such non-monetary default as soon as reasonably practicable following written notice thereof from the Tenant and completes such cure within thirty (30) calendar days after receipt of such written notice; provided, however if such non-monetary default cannot reasonably be cured within such thirty (30) calendar day period, Landlord shall not be deemed to be in default of this Agreement if Landlord commences to cure such non-monetary default within such thirty (30) calendar day period, and thereafter diligently pursues the same to completion; and
(b) The commission of any act of gross negligence, willful misconduct, fraud, or intentional misrepresentation, or any executive-level employee of Landlord, in connection with the performance by Landlord of its duties and obligations under this Agreement.
Upon the occurrence of a Landlord Event of Default, Landlord and Tenant acknowledge and agree that such Landlord Event of Default shall constitute a Default by Landlord under the Lease and Tenant shall have all of the rights and remedies afforded to Tenant upon the occurrence of a Default by Landlord under the Lease, as well as any other rights and remedies afforded to Tenant at law or in equity, including, without limitation, the right to seek specific performance.
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10.1 Builder’s all-risk insurance covering the Improvements and all materials stored on the Land, together with such endorsements as may be reasonably required by Landlord.
10.2 Owner’s/Contractor’s protective liability insurance written on a broad-based occurrence coverage form against claims for personal injury (including bodily injury and death) and property damage, with a reasonably acceptable deductible, with a combined single limit for bodily injury and property damage of at least Two Million Dollars ($2,000,000) per occurrence.
10.3 Comprehensive or commercial general liability insurance written on a broad-based occurrence coverage form against claims for personal injury (including bodily injury and death) and property damage, with a reasonably acceptable deductible, with a combined single limit for bodily injury and property damage of at least Two Million Dollars ($2,000,000) per occurrence.
10.4 Owned, hired and non-owned automobile liability insurance on a broad-based occurrence coverage form covering all use of all automobiles, trucks and other motor vehicles utilized by Tenant and Tenant’s employees in connection with this Agreement with a combined single limit for bodily injury and property damage of at least One Million Dollars ($1,000,000) per occurrence.
10.5 Workers’ compensation insurance for Tenant’s employees to the extent required by applicable law and such other insurance that is necessary in connection with this Agreement that may be required by applicable law.
10.6 In the event specific insurance coverage is required under any of the Project Agreements, the Tenant shall cause all insurance coverages required under such Project Agreements to be obtained and maintained by the appropriate parties under the Project Agreements in accordance with the terms and conditions of such Project Agreements.
Landlord and any of its Affiliates designated by Landlord shall be included as an additional insured under the coverage specified in Sections 10.1 and 10.2 hereof. The insurance provided in this Section is primary and any other insurance maintained by such additional insured is non-contributing with the insurance provided in this Section with respect to all claims or liabilities arising out of or resulting from acts or omissions by or on behalf of the named insured. Each of the applicable insurance policies shall be issued by such companies authorized to do business in the State of Ohio. As evidence of the insurance coverage required pursuant to this Section, Landlord will accept certificates issued by Tenant’s insurance carrier, acceptable to Landlord, showing such policies are in full force and effect for the specified period, but Landlord has the right to review certified policies as reasonably necessary. Such evidence shall be delivered to Landlord promptly upon execution of this Agreement. Each policy and certificate shall be subject to Landlord’s reasonable approval and shall provide that such policy shall not be subject to material alteration to the detriment of Landlord or Tenant or cancellation without thirty (30) calendar days’ notice in writing to be delivered by certified mail to Landlord. Should any such policy of insurance expire or be canceled before the expiration of this Agreement and Tenant fails to immediately replace such other insurance as specified, Landlord reserves the right, but shall have no obligation, to procure such insurance at Tenant’s sole cost and expense.
In addition to the insurance required to be maintained by Tenant pursuant to this Section 10, Tenant shall be responsible for requiring all of the contractors and subcontractors doing construction work relating to the Development to purchase and maintain such insurance in conformance to the requirements set forth on Exhibit D attached hereto and incorporated herein by reference. Tenant shall also allow Landlord to inspect such evidence of insurance as Tenant obtains it from such contractors and subcontractors.
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(a) At the hearing, the claimant shall present evidence to support the applicable Disbursement Claim(s). The respondent shall then present evidence supporting its defense. Witnesses for each party shall also submit to questions from the arbitrator and the adverse party. Each party shall have the opportunity to question and review subpoenaed documents and witnesses based on its brief or memorandum submitted under Section 11.8, above. The arbitrator has the discretion to vary this procedure, provided that the parties are treated with equality and that each party has the right to be heard and is given a fair opportunity to present its case. Evidence shall be permitted in accordance with the current AAA Construction Industry Arbitration Rules (the “AAA Rules”).
(b) The arbitrator, exercising his or her discretion, shall conduct the proceedings with a view toward expediting the resolution of the dispute and may direct the order of proof, bifurcate proceedings, and direct the parties to focus their presentations on issues the decision of which could dispose of all or part of the case.
(c) When deemed appropriate, the arbitrator may also allow for the presentation of evidence by alternative means including video conferencing, internet communication, telephonic conferences and means other than an in-person presentation. Such alternative means must still afford a full opportunity for all parties to present any evidence that the arbitrator deems material and relevant to the resolution of the dispute and when involving witnesses, provide an opportunity for cross-examination.
(d) The parties may mutually agree to waive oral hearings in any case.
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12.11 Governing Law and Adjudication. This Agreement shall be governed by and interpreted in accordance with the laws (other than that body of law relating to conflicts of law) of the State of Ohio.
12.15 Venue. EACH PARTY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE COURTS SITUATED IN OR HAVING JURISDICTION OVER THE COUNTY OF LICKING, OHIO IN ANY ACTION THAT MAY BE BROUGHT FOR THE ENFORCEMENT OF THIS AGREEMENT (WITH THE EXPRESS AGREEMENT THAT NO ACTION MAY BE BROUGHT IN FEDERAL COURT RELATING IN ANY WAY TO THIS AGREEMENT).
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
| LANDLORD: | ||
| IIP-OH 1 LLC, a Delaware limited liability company | ||
| By: | /s/ Xxxxx Xxxxx | |
| Name: | Xxxxx Xxxxx | |
| Title: | Vice President, General Counsel and Secretary | |
| TENANT: | ||
| PHARMACANN OHIO LLC, an Ohio limited liability company | ||
| By: | /s/ Xxxxx X. Xxxxx | |
| Name: | Xxxxx X. Xxxxx | |
| Title: | Authorized Signatory | |
The undersigned hereby executes this agreement to guaranty the payment obligations of the Landlord under this Agreement.
| PARENT COMPANY: | ||
| IIP OPERATING PARTNERSHIP, LP | ||
| By: | /s/ Xxxxx Xxxxx | |
| Name: | Xxxxx Xxxxx | |
| Title: | Vice President, General Counsel and Secretary | |
[Signature Page to Development Agreement]
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EXHIBIT A
LEGAL DESCRIPTION OF LAND
BEING PART OF AN 82.45-ACRE TRACT OF LAND OWNED BY XXXXX X. XXXXXX AND XXXXXXXXX X. XXXXXX AS
CONVEYED IN DEED BOOK 823, PAGE 779 OF THE LICKING COUNTY DEED RECORDS, SITUATE IN SECTION 12, TOWN 17, RANGE 18, BUCKEYE LAKE VILLAGE, UNION TOWNSHIP, LICKING COUNTY, OHIO AND BEING MORE FULLY DESCRIBED AS FOLLOWS:
Commencing for reference at a stone found at the southeast corner of the southeast quarter of Section 12 and being the Grantor's southeast property corner and being on the north right-of-way line of Hunts Landing Road;
thence, North 86°-03'-54" West, 783.66 feet, along the north right-of-way line of Hunts Landing Road to an iron pin with cap set at a new division line and being the principal place of beginning of the tract herein described;
thence, North 86° -03' -54" West, 1227.05 feet, along the north right-of-way line of Hunts Landing Road to an iron pin with cap set at a new division line;
thence, North 03°-56'-06" East, 882.75 feet, along a new division line to an iron pin with cap set;
thence, South 86°-03'-54" East, 1240.37 feet, along a new division line to an iron pin with cap set;
thence, South 04°-47'-59" West, 882.85 feet, along a new division line to the principal place of beginning.
Containing 25.001 acres more or less and all being subject to any legal highways and easements of record. The bearings are based on NAD 83 CORS 2011 adjustment, Ohio South Zone, ODOT VRS CORS Network.
The above description was prepared by Xxxxxx X. Xxxxxxxx, Ohio Professional Surveyor Number 8254, based on a field survey performed under his direct supervision and dated October 17, 2018 and shown on Licking County Recorders Instrument No. 201811200024765. All iron pins set are 5/8" x 30" rebar with caps reading "CHOICE ONE ENGR-WDG PS 8254."
Together with the benefits and subject to the burdens as contained in that certain Easement Agreement between Xxxxx X. Xxxxxx and PharmaCann Ohio LLC dated December 19, 2018, recorded January 3, 2019 in Official Records Instrument Xx. 000000000000000, Xxxxxxx Xxxxxx, XX.
[END OF LEGAL DESCRIPTION]
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EXHIBIT B
DEPICTION OF IMPROVEMENTS
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EXHIBIT C
DEVELOPMENT PLAN AND BUDGET
XXXXXXXX CONSTRUCTION CO. PHARMACANN Tue 1/8/19 0000 XXXXXX XXXXXXXXX XX. BUCKEYE LAKE FACILITY XXXXXXXX, XX 00000 PRELIMINARY SCHEDULE ID Task Name Jan '19 Feb '19 Mar '19 Apr '19 May '19 Jun '19 Jul '19 Aug '19 Sep '19 1/6 1/131/201/27 2/3 2/102/172/24 3/3 3/103/173/243/31 4/7 4/144/214/28 5/5 5/125/195/26 6/2 6/9 6/166/236/30 7/7 7/147/217/28 8/4 8/118/188/25 9/1 9/8 9/15 1 PRECONSTRUCTION ACTIVITIES 2 DRAWINGS ISSUED FOR BID 1/18 3 XXXXXXXX ESTABLISH GMP PRICING 1/21 2/6 4 APPROVE/ISSUE XXXXXXXX GMP CONTRACT 2/7 2/15 5 XXXXXXXX PURCHASING 2/18 3/15 6 PERMITTING 7 SITE/CIVIL/ZONING 2/18 8 BUILDING COMPLETE WITH MEP'S 4/1 9 10 SITE CONSTRUCTION 11 SITE GRADING/BUILDING PAD/STONE BASE 4/1 4/12 12 SITE UTILITIES 4/15 5/3 13 SITE CONCRETE 4/1 4/19 14 ASPHALT PAVING 4/22 5/3 15 FINAL GRADING & SEEDING 5/6 5/10 16 PROCESSING HEADHOUSE 17 CONCRETE FOUNDATIONS 4/15 5/3 18 LOAD BEARING PRECAST 4/29 5/3 19 SLAB ON GRADE 5/20 5/24 20 INTERIOR MASONRY & PRECAST PLANK 5/27 6/7 21 STRUCTURAL STEEL & DECKING 5/6 5/17 22 MEMBRANE ROOF 5/20 5/31 23 EXTERIOR FINISHES 8/5 8/30 24 INTERIOR FINISHES 5/27 8/16 25 UNDERSLAB PLUMBING/TRENCH DRAINS 5/6 5/17 26 MECHANICAL 6/3 8/23 27 ELECTRICAL 6/3 8/9 28 CLEAN UP & PUNCH LIST 8/26 9/6 29 GREENHOUSE 30 CONCRETE FOUNDATIONS 5/6 5/17 31 SLAB ON GRADE 8/12 8/16 32 GREENHOUSE ERECTION 5/20 8/9 33 INTERIOR FINISHES 7/8 8/30 34 MECHANICAL 7/8 8/30 35 ELECTRICAL 7/1 8/30 36 CLEAN UP & PUNCH LIST 9/2 9/6
| C-1 |
ACRE Project Management Group Proj No/Description: PharmaCann New Cultivation Facility As of 03/11/19 Location: Buckeye Lake, Ohio Report by: Xxxxxxxxxx App. Budget Date: January, 2019 56,000 Rentable Square Feet Proj. Sq. Ft. 56,000 Month end: January, 2019 Budget Information Anticipated Cost Variance Anticipated Sq. Total Outstanding Description Original Adjustments Current Committed Pending Anticipated $ % Foot Costs Invoices Amount Construction $11,000,000 $0 $11,000,000 $0 $11,000,000 $11,000,000 $0 0% $196.43 $0 $0 Greenhouse $5,744,140 $0 $5,744,140 $0 $5,744,140 $5,744,140 $0 0% $102.57 $0 $0 Security System $750,000 $0 $750,000 $0 $750,000 $750,000 $0 0% $13.39 $0 $0 Furniture $0 $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Lab Equipment $0 $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Kitchen Equipment $0 $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Data Cabling in construction $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Greenhouse Lighting $500,000 $0 $500,000 $0 $500,000 $500,000 $0 0% $8.93 $0 $0 Land Purchase $700,000 $0 $700,000 $700,000 $0 $700,000 $0 0% $12.50 $0 $700,000 Hard Cost Totals: $18,694,140 $0 $18,694,140 $700,000 $17,994,140 $18,694,140 $0 0% $333.82 $0 $700,000 Civil Engineer In Architect fees $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Architect Fees $439,460 $0 $439,460 $411,000 $10,000 $421,000 ($18,460) -4% $7.52 $0 $411,000 MEP Engineer's Fees $145,000 $0 $145,000 $0 $163,460 $163,460 $18,460 13% $2.92 $0 $0 Structural Engineer Fees In Architect Fees $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Security Consultant $25,000 $0 $25,000 $0 $25,000 $25,000 $0 0% $0.45 $0 $0 Other Consultants $0 $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Attorney Fees $0 $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Internal Allocations $0 $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 Project Management Fee $146,400 $0 $146,400 $0 $146,400 $146,400 $0 0% $2.61 $0 $0 Soft Cost Subtotals: $755,860 $0 $755,860 $411,000 $344,860 $755,860 $0 0% $13.50 $0 $411,000 Contingency $0 $0 $0 $0 $0 $0 $0 0% $0.00 $0 $0 GRAND TOTALS: $19,450,000 $0 $19,450,000 $1,111,000 $18,339,000 $19,450,000 $0 0% $347.32 $0 $1,111,000
| C-2 |
EXHIBIT D
INSURANCE SCHEDULE
Tenant shall be responsible for requiring all of Tenant contractors doing construction or renovation work to purchase and maintain such insurance as shall protect it from the claims set forth below which may arise out of or result from any work performed in connection with the Development, whether such work is completed by Tenant or by any contractors or by any person directly or indirectly employed by Tenant or by any person for whose acts Tenant or any contractors may be liable:
1. Claims under workers’ compensation, disability benefit and other similar employee benefit acts which are applicable to the work to be performed.
2. Claims for damages because of bodily injury, occupational sickness or disease, or death of employees under any applicable employer’s liability law.
3. Claims for damages because of bodily injury, or death of any person other than Tenant’s employees or any contractors’ employees.
4. Claims for damages insured by usual personal injury liability coverage which are sustained (a) by any person as a result of an offense directly or indirectly related to the employment of such person by Tenant or any contractors or (b) by any other person.
5. Claims for damages, other than for the work itself, because of injury to or destruction of tangible property, including loss of use therefrom.
6. Claims for damages because of bodily injury or death of any person or property damage arising out of the ownership, maintenance or use of any motor vehicle.
Each contractor’s Commercial General, Automobile, Employers and Umbrella Liability Insurance shall be written for not less than limits of liability as follows:
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a. Commercial General Liability:
Bodily Injury and Property Damage |
Commercially reasonable amounts, but in any event no less than $1,000,000 per occurrence and $2,000,000 general aggregate, with $2,000,000 products and completed operations aggregate. |
|
b. Commercial Automobile Liability:
Bodily Injury and Property Damage |
$1,000,000 per accident |
| c. Employer’s Liability: | |
|
Each Accident Disease – Policy Limit Disease – Each Employee |
$500,000 $500,000 $500,000 |
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d. Umbrella Liability:
Bodily Injury and Property Damage |
Commercially reasonable amounts (excess of coverages a, b and c above), but in any event no less than $5,000,000 per occurrence / aggregate. |
All subcontractors shall carry the same coverages and limits as specified above, unless different limits are reasonably approved by Landlord. The foregoing policies shall contain a provision that coverages afforded under the policies shall not be canceled or not renewed until at least thirty (30) days’ prior written notice has been given to Landlord. Certificates of insurance including required endorsements showing such coverages to be in force shall be filed with Landlord prior to the commencement of any work by such contractor or subcontractor and prior to each renewal. Coverage for completed operations must be maintained for the lesser of ten (10) years and the applicable statue of repose following completion of the Improvements, and certificates evidencing this coverage must be provided to Landlord. The minimum A.M. Best’s rating of each insurer shall be A- VII. Landlord shall be named as an additional insured under each contractor’s Commercial General Liability, Commercial Automobile Liability and Umbrella Liability Insurance policies as respects liability arising from work or operations performed, or ownership, maintenance or use of autos, by or on behalf of such contractor. Each contractor and its insurers shall provide waivers of subrogation with respect to any claims covered or that should have been covered by valid and collectible insurance, including any deductibles or self-insurance maintained thereunder.
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