Exhibit 10.1

 

FIRST AMENDMENT TO LEASE AGREEMENT

 

THIS FIRST AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is entered into
effective as of this 16th day of January, 2020 (the “Amendment Effective Date”),
by and between IIP-AZ 1 LLC, a Delaware limited liability company (“Landlord”),
and SGS ARIZONA, LLC, an Arizona limited liability company, formerly known as
Sun Grown Solutions, LLC (“Tenant”).

 

RECITALS

 

A.               WHEREAS, Landlord and Tenant are parties to that certain Lease
Agreement dated as of December 15, 2017 (the “Existing Lease”), whereby Tenant
leases the premises from Landlord located at 5900 West Greenhouse Drive in
Willcox, Arizona; and

 

B.               WHEREAS, Landlord and Tenant desire to modify and amend the
Existing Lease only in the respects and on the conditions hereinafter stated.

 

AGREEMENT

 

NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
agree as follows:

 

1.                Definitions. For purposes of this Amendment, capitalized terms
shall have the meanings ascribed to them in the Existing Lease unless otherwise
defined herein. The Existing Lease, as amended by this Amendment, is referred to
collectively herein as the “Lease.” From and after the date hereof, the term
“Lease,” as used in the Existing Lease, shall mean the Existing Lease, as
amended by this Amendment.

 

2.                Term. Section 3.1 of the Existing Lease is hereby amended and
restated in its entirety as follows:

 

“3.1.           Term. The actual term of this Lease (as the same may be extended
or earlier terminated in accordance with this Lease, the “Term”) commenced on
December 15, 2017 (the “Commencement Date”) and shall end on December 15, 2037,
subject to extension or earlier termination of this Lease as provided herein.”

 

3.               TI Allowance. Tenant has requested, and Landlord has agreed, to
increase the TI Allowance available to Tenant under the Lease by Two Million
Dollars ($2,000,000.00) (the "Additional TI Allowance"), to be used to pay or
reimburse Tenant for certain costs relating to upgrading the existing greenhouse
structure and facilities on the Premises, subject to the terms and conditions
set forth in the Lease. Accordingly, the first sentence of Section 5.1 of the
Existing Lease is hereby amended and restated in its entirety as follows:

 

"Tenant shall cause appropriate improvements consistent with the Permitted Use
(the "Tenant Improvements") to be constructed in the Premises pursuant to the
Work Letter attached hereto as Exhibit E (the "Work Letter") at a cost to
Landlord not to exceed Five Million Dollars ($5,000,000.00) (the "TI
Allowance")."

 

 

 

 

In addition, Section 5.2 of the Existing Lease is hereby amended and restated in
its entirety as follows:

 

"Tenant shall have until December 15, 2035 to request disbursement for the final
installment of the TI Allowance, with each disbursement (other than the final
disbursement) being no less than Five Hundred Thousand Dollars ($500,000.00).
Landlord's obligation to disburse any of the TI Allowance shall be conditional
upon Tenant's satisfaction of the conditions precedent to funding of the TI
Allowance set forth in Section 6.3 of the Work Letter. In addition, Landlord's
obligation to disburse any of the TI Allowance in excess of Four Million Five
Hundred Thousand Dollars ($4,500,000.00) shall be conditioned upon the
satisfaction of the following: (a) Tenant's delivery to Landlord of 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 or such other form or certification as may be reasonably acceptable
to Landlord; (b) Tenant's satisfaction of the conditions precedent to funding of
the TI Allowance set forth in Section 6.3 of the Work Letter; and (c) there
shall be no uncured event of default by Tenant under this Lease."

 

4.                Base Rent and Property Management Fee. In consideration of the
Additional TI Allowance, Tenant shall be obligated to pay an additional
Twenty-Four Thousand Eight Hundred Seventy-Four and 65/100 Dollars ($24,874.65)
of Base Rent per month (the “Additional TI Base Rent”), subject to adjustment as
set forth in the Lease; provided, however, that a portion of the Additional TI
Base Rent in the amount of Seven Thousand Four Hundred Sixty-Two and 39/100
($7,462.39) per month shall be abated for a period of three (3) months
commencing on the Amendment Effective Date and continuing through the date that
is three (3) months after the Amendment Effective Date (the “Additional TI Base
Rent Abatement Period”) for a total Base Rent abatement of Twenty-Two Thousand
Three Hundred Eighty-Seven and 17/100 Dollars ($22,387.17), in the aggregate.
Accordingly, notwithstanding anything contained in the Lease to the contrary,
the monthly aggregate Base Rent and Property Management Fee for the initial Term
of the Lease shall be as set forth in Exhibit A attached hereto and incorporated
herein by reference.

 

5.                Termination of Existing Guaranties; Delivery of New Guaranty.
Concurrently with the execution of this Amendment, The Pharm, LLC, a Delaware
limited liability company (“New Guarantor”) shall execute and deliver to
Landlord a Guaranty in the form attached as Exhibit B to this Amendment (the
“New Guaranty”) confirming New Guarantor’s full and unconditional guaranty of
Tenant’s obligations under the Lease, whether accruing before, on or after the
Execution Date of the Existing Lease, including, without limitation, all of the
obligations under the existing Guaranties (collectively, the “Existing
Guaranties”) executed by Flying Dutchman Real Estate Holdings, LLC, Flying
Dutchman Properties, LLC, Green Thumb Management, LLC, Pharm Ingram, LLC and
Sensible Growth, LLC as Guarantors (collectively, the “Existing Guarantors”). In
consideration of New Guarantor’s execution of the New Guaranty that guarantees
Tenant’s Lease obligations incurred prior to, on and after the Execution Date of
the Existing Lease, upon Landlord’s receipt of the New Guaranty duly executed by
New Guarantor, (a) the Existing Guaranties shall be deemed terminated, and the
Existing Guarantors shall be released from any and all claims of any nature
(whether absolute or contingent, asserted or unasserted, known or unknown,
primary or secondary, direct or indirect, in contract or in tort, liquidated or
unliquidated, accrued or unaccrued, and whether arising under any agreement or
understanding or otherwise at law or equity) that Landlord know has, has ever
had or may hereafter have against the Existing Guarantors, arising out of or in
any way connected with or related to the Existing Guaranties, (b) Recital C and
Section 34 of the Existing Lease shall be deemed deleted in their entirety, (c)
the obligations of New Guarantor shall be joint and several with Tenant’s
obligations under the Lease and Tenant shall be obligated to cause New Guarantor
to execute and deliver such further documentation as may be reasonably required
from time to time to confirm New Guarantor’s full and unconditional guaranty of
Tenant’s obligations under this Lease; (d) all references in the Lease to
“Guarantor” shall mean and refer to the New Guarantor; and (e) all references in
the Lease to a Guaranty shall mean and refer to the New Guaranty.

 

 2 

 

 

6.               Broker. Tenant represents and warrants that it has not dealt
with any broker or agent in the negotiation for or the obtaining of this
Amendment and agrees to reimburse, indemnify, save, defend (at Landlord’s option
and with counsel reasonably acceptable to Landlord, at Tenant’s sole cost and
expense) and hold harmless the Landlord Indemnitees for, from and against any
and all cost or liability for compensation claimed by any such broker or agent
employed or engaged by it or claiming to have been employed or engaged by it.

 

7.                No Default. Tenant represents, warrants and covenants that, to
the best of Tenant’s knowledge, Landlord and Tenant are not in default of any of
their respective obligations under the Existing Lease and no event has occurred
that, with the passage of time or the giving of notice (or both) would
constitute a default by either Landlord or Tenant thereunder.

 

8.                Effect of Amendment. Except as modified by this Amendment, the
Existing Lease and all the covenants, agreements, terms, provisions and
conditions thereof shall remain in full force and effect and are hereby ratified
and affirmed. In the event of any conflict between the terms contained in this
Amendment and the Existing Lease, the terms herein contained shall supersede and
control the obligations and liabilities of the parties.

 

9.                Successors and Assigns. Each of the covenants, conditions and
agreements contained in this Amendment shall inure to the benefit of and shall
apply to and be binding upon the parties hereto and their respective heirs,
legatees, devisees, executors, administrators and permitted successors and
assigns and sublessees. Nothing in this section shall in any way alter the
provisions of the Lease restricting assignment or subletting.

 

10.              Miscellaneous. This Amendment becomes effective only upon
execution and delivery hereof by Landlord and Tenant. The captions of the
paragraphs and subparagraphs in this Amendment are inserted and included solely
for convenience and shall not be considered or given any effect in construing
the provisions hereof. All exhibits hereto are incorporated herein by reference.
Submission of this instrument for examination or signature by Tenant does not
constitute a reservation of or option for a lease, and shall not be effective as
a lease, lease amendment or otherwise until execution by and delivery to both
Landlord and Tenant.

 

11.              Authority. Tenant guarantees, warrants and represents that the
individual or individuals signing this Amendment have the power, authority and
legal capacity to sign this Amendment on behalf of and to bind all entities,
corporations, partnerships, limited liability companies, joint venturers or
other organizations and entities on whose behalf such individual or individuals
have signed.

 

12.              Counterparts; Facsimile and PDF Signatures. This Amendment may
be executed in one or more counterparts, each of which, when taken together,
shall constitute one and the same document. A facsimile or portable document
format (PDF) signature on this Amendment shall be equivalent to, and have the
same force and effect as, an original signature.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 3 

 

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
date and year first above written.

 

LANDLORD:

 

IIP-AZ 1 LLC,

a Delaware limited liability company

 

 

By: /s/ Brian Wolfe   Name: Brian Wolfe   Title: Vice President, General Counsel
and Secretary  

 

  

TENANT:

 

SGS ARIZONA, LLC,

an Arizona limited liability company

  

 

By: /s/ Mina Guiahi   Name: Mina Guiahi   Title: CFO  

 

 

 

 

EXHIBIT A

 

BASE RENT AND PROPERTY MANAGEMENT FEE SCHEDULE

 

(See Attached)

 

 

 

 

The Pharm (AZ) Rent Schedule

 

    Initial Investment   1st Amendment   Total   Date Base Rent Rent Abatement
Total
Base Rent   Base Rent Rent Abatement Total
Base Rent   Total
Base Rent Management Fee Total Base Rent and
Management Fee 1 12/15-12/31 115,161.29 (51,182.79) 63,978.50          
63,978.50 1,727.42 65,705.92 2 1/1/2018 210,000.00 (93,333.33) 116,666.67      
    116,666.67 3,150.00 119,816.67 3 2/1/2018 210,000.00 (93,333.33) 116,666.67
          116,666.67 3,150.00 119,816.67 4 3/1/2018 210,000.00 (74,139.78)
135,860.22           135,860.22 3,150.00 139,010.22 5 4/1/2018 210,000.00 -
210,000.00           210,000.00 3,150.00 213,150.00 6 5/1/2018 210,000.00 -
210,000.00           210,000.00 3,150.00 213,150.00 7 6/1/2018 210,000.00 -
210,000.00           210,000.00 3,150.00 213,150.00 8 7/1/2018 210,000.00 -
210,000.00           210,000.00 3,150.00 213,150.00 9 8/1/2018 210,000.00 -
210,000.00           210,000.00 3,150.00 213,150.00 10 9/1/2018 210,000.00 -
210,000.00           210,000.00 3,150.00 213,150.00 11 10/1/2018 210,000.00 -
210,000.00           210,000.00 3,150.00 213,150.00 12 11/1/2018 210,000.00 -
210,000.00           210,000.00 3,150.00 213,150.00 13 12/1/2018 213,742.74 -
213,742.74           213,742.74 3,206.14 216,948.88 14 1/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 15 2/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 16 3/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 17 4/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 18 5/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 19 6/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 20 7/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 21 8/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 22 9/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 23 10/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 24 11/1/2019 216,825.00 -
216,825.00           216,825.00 3,252.38 220,077.38 25 12/1/2019 220,689.38 -
220,689.38           220,689.38 3,310.34 223,999.72 26 1/1/2020 223,871.81 -
223,871.81   12,036.12 (3,610.84) 8,425.28   232,297.10 3,538.62 235,835.71 27
2/1/2020 223,871.81 - 223,871.81   24,874.65 (7,462.39) 17,412.25   241,284.06
3,731.20 245,015.26 28 3/1/2020 223,871.81 - 223,871.81   24,874.65 (7,462.39)
17,412.25   241,284.06 3,731.20 245,015.26 29 4/1/2020 223,871.81 - 223,871.81  
24,874.65 (3,851.56) 21,023.09   244,894.90 3,731.20 248,626.10 30 5/1/2020
223,871.81 - 223,871.81   24,874.65   24,874.65   248,746.46 3,731.20 252,477.66
31 6/1/2020 223,871.81 - 223,871.81   24,874.65   24,874.65   248,746.46
3,731.20 252,477.66 32 7/1/2020 223,871.81 - 223,871.81   24,874.65   24,874.65
  248,746.46 3,731.20 252,477.66 33 8/1/2020 223,871.81 - 223,871.81   24,874.65
  24,874.65   248,746.46 3,731.20 252,477.66 34 9/1/2020 223,871.81 - 223,871.81
  24,874.65   24,874.65   248,746.46 3,731.20 252,477.66 35 10/1/2020 223,871.81
- 223,871.81   24,874.65   24,874.65   248,746.46 3,731.20 252,477.66 36
11/1/2020 223,871.81 - 223,871.81   24,874.65   24,874.65   248,746.46 3,731.20
252,477.66 37 12/1/2020 227,861.79 - 227,861.79   25,317.98   25,317.98  
253,179.76 3,797.70 256,977.46 38 1/1/2021 231,147.65 - 231,147.65   25,683.07  
25,683.07   256,830.72 3,852.46 260,683.18 39 2/1/2021 231,147.65 - 231,147.65  
25,683.07   25,683.07   256,830.72 3,852.46 260,683.18 40 3/1/2021 231,147.65 -
231,147.65   25,683.07   25,683.07   256,830.72 3,852.46 260,683.18 41 4/1/2021
231,147.65 - 231,147.65   25,683.07   25,683.07   256,830.72 3,852.46 260,683.18
42 5/1/2021 231,147.65 - 231,147.65   25,683.07   25,683.07   256,830.72
3,852.46 260,683.18 43 6/1/2021 231,147.65 - 231,147.65   25,683.07   25,683.07
  256,830.72 3,852.46 260,683.18 44 7/1/2021 231,147.65 - 231,147.65   25,683.07
  25,683.07   256,830.72 3,852.46 260,683.18 45 8/1/2021 231,147.65 - 231,147.65
  25,683.07   25,683.07   256,830.72 3,852.46 260,683.18 46 9/1/2021 231,147.65
- 231,147.65   25,683.07   25,683.07   256,830.72 3,852.46 260,683.18 47
10/1/2021 231,147.65 - 231,147.65   25,683.07   25,683.07   256,830.72 3,852.46
260,683.18 48 11/1/2021 231,147.65 - 231,147.65   25,683.07   25,683.07  
256,830.72 3,852.46 260,683.18 49 12/1/2021 235,267.29 - 235,267.29   26,140.81
  26,140.81   261,408.10 3,921.12 265,329.23 50 1/1/2022 238,659.94 - 238,659.94
  26,517.77   26,517.77   265,177.72 3,977.67 269,155.38 51 2/1/2022 238,659.94
- 238,659.94   26,517.77   26,517.77   265,177.72 3,977.67 269,155.38 52
3/1/2022 238,659.94 - 238,659.94   26,517.77   26,517.77   265,177.72 3,977.67
269,155.38 53 4/1/2022 238,659.94 - 238,659.94   26,517.77   26,517.77  
265,177.72 3,977.67 269,155.38 54 5/1/2022 238,659.94 - 238,659.94   26,517.77  
26,517.77   265,177.72 3,977.67 269,155.38 55 6/1/2022 238,659.94 - 238,659.94  
26,517.77   26,517.77   265,177.72 3,977.67 269,155.38 56 7/1/2022 238,659.94 -
238,659.94   26,517.77   26,517.77   265,177.72 3,977.67 269,155.38 57 8/1/2022
238,659.94 - 238,659.94   26,517.77   26,517.77   265,177.72 3,977.67 269,155.38
58 9/1/2022 238,659.94 - 238,659.94   26,517.77   26,517.77   265,177.72
3,977.67 269,155.38 59 10/1/2022 238,659.94 - 238,659.94   26,517.77   26,517.77
  265,177.72 3,977.67 269,155.38 60 11/1/2022 238,659.94 - 238,659.94  
26,517.77   26,517.77   265,177.72 3,977.67 269,155.38 61 12/1/2022 242,913.48 -
242,913.48   26,990.39   26,990.39   269,903.87 4,048.56 273,952.43 62 1/1/2023
246,416.39 - 246,416.39   27,379.60   27,379.60   273,795.99 4,106.94 277,902.93
63 2/1/2023 246,416.39 - 246,416.39   27,379.60   27,379.60   273,795.99
4,106.94 277,902.93 64 3/1/2023 246,416.39 - 246,416.39   27,379.60   27,379.60
  273,795.99 4,106.94 277,902.93 65 4/1/2023 246,416.39 - 246,416.39   27,379.60
  27,379.60   273,795.99 4,106.94 277,902.93 66 5/1/2023 246,416.39 - 246,416.39
  27,379.60   27,379.60   273,795.99 4,106.94 277,902.93 67 6/1/2023 246,416.39
- 246,416.39   27,379.60   27,379.60   273,795.99 4,106.94 277,902.93 68
7/1/2023 246,416.39 - 246,416.39   27,379.60   27,379.60   273,795.99 4,106.94
277,902.93 69 8/1/2023 246,416.39 - 246,416.39   27,379.60   27,379.60  
273,795.99 4,106.94 277,902.93 70 9/1/2023 246,416.39 - 246,416.39   27,379.60  
27,379.60   273,795.99 4,106.94 277,902.93 71 10/1/2023 246,416.39 - 246,416.39
  27,379.60   27,379.60   273,795.99 4,106.94 277,902.93 72 11/1/2023 246,416.39
- 246,416.39   27,379.60   27,379.60   273,795.99 4,106.94 277,902.93 73
12/1/2023 250,808.17 - 250,808.17   27,867.57   27,867.57   278,675.74 4,180.14
282,855.88 74 1/1/2024 254,424.93 - 254,424.93   28,269.44   28,269.44  
282,694.36 4,240.42 286,934.78 75 2/1/2024 254,424.93 - 254,424.93   28,269.44  
28,269.44   282,694.36 4,240.42 286,934.78 76 3/1/2024 254,424.93 - 254,424.93  
28,269.44   28,269.44   282,694.36 4,240.42 286,934.78 77 4/1/2024 254,424.93 -
254,424.93   28,269.44   28,269.44   282,694.36 4,240.42 286,934.78 78 5/1/2024
254,424.93 - 254,424.93   28,269.44   28,269.44   282,694.36 4,240.42 286,934.78
79 6/1/2024 254,424.93 - 254,424.93   28,269.44   28,269.44   282,694.36
4,240.42 286,934.78 80 7/1/2024 254,424.93 - 254,424.93   28,269.44   28,269.44
  282,694.36 4,240.42 286,934.78 81 8/1/2024 254,424.93 - 254,424.93   28,269.44
  28,269.44   282,694.36 4,240.42 286,934.78 82 9/1/2024 254,424.93 - 254,424.93
  28,269.44   28,269.44   282,694.36 4,240.42 286,934.78 83 10/1/2024 254,424.93
- 254,424.93   28,269.44   28,269.44   282,694.36 4,240.42 286,934.78 84
11/1/2024 254,424.93 - 254,424.93   28,269.44   28,269.44   282,694.36 4,240.42
286,934.78 85 12/1/2024 258,959.43 - 258,959.43   28,773.27   28,773.27  
287,732.71 4,315.99 292,048.70 86 1/1/2025 262,693.74 - 262,693.74   29,188.19  
29,188.19   291,881.93 4,378.23 296,260.16 87 2/1/2025 262,693.74 - 262,693.74  
29,188.19   29,188.19   291,881.93 4,378.23 296,260.16 88 3/1/2025 262,693.74 -
262,693.74   29,188.19   29,188.19   291,881.93 4,378.23 296,260.16 89 4/1/2025
262,693.74 - 262,693.74   29,188.19   29,188.19   291,881.93 4,378.23 296,260.16
90 5/1/2025 262,693.74 - 262,693.74   29,188.19   29,188.19   291,881.93
4,378.23 296,260.16 91 6/1/2025 262,693.74 - 262,693.74   29,188.19   29,188.19
  291,881.93 4,378.23 296,260.16 92 7/1/2025 262,693.74 - 262,693.74   29,188.19
  29,188.19   291,881.93 4,378.23 296,260.16 93 8/1/2025 262,693.74 - 262,693.74
  29,188.19   29,188.19   291,881.93 4,378.23 296,260.16 94 9/1/2025 262,693.74
- 262,693.74   29,188.19   29,188.19   291,881.93 4,378.23 296,260.16 95
10/1/2025 262,693.74 - 262,693.74   29,188.19   29,188.19   291,881.93 4,378.23
296,260.16 96 11/1/2025 262,693.74 - 262,693.74   29,188.19   29,188.19  
291,881.93 4,378.23 296,260.16 97 12/1/2025 267,375.62 - 267,375.62   29,708.40
  29,708.40   297,084.02 4,456.26 301,540.28 98 1/1/2026 271,231.28 - 271,231.28
  30,136.81   30,136.81   301,368.09 4,520.52 305,888.61 99 2/1/2026 271,231.28
- 271,231.28   30,136.81   30,136.81   301,368.09 4,520.52 305,888.61 100
3/1/2026 271,231.28 - 271,231.28   30,136.81   30,136.81   301,368.09 4,520.52
305,888.61 101 4/1/2026 271,231.28 - 271,231.28   30,136.81   30,136.81  
301,368.09 4,520.52 305,888.61 102 5/1/2026 271,231.28 - 271,231.28   30,136.81
  30,136.81   301,368.09 4,520.52 305,888.61 103 6/1/2026 271,231.28 -
271,231.28   30,136.81   30,136.81   301,368.09 4,520.52 305,888.61

 

 

 

 

The Pharm (AZ) Rent Schedule

 

    Initial Investment   1st Amendment   Total   Date Base Rent Rent Abatement
Total
Base Rent   Base Rent Rent Abatement Total
Base Rent   Total
Base Rent Management Fee Total Base Rent and
Management Fee 104 7/1/2026 271,231.28 - 271,231.28   30,136.81   30,136.81  
301,368.09 4,520.52 305,888.61 105 8/1/2026 271,231.28 - 271,231.28   30,136.81
  30,136.81   301,368.09 4,520.52 305,888.61 106 9/1/2026 271,231.28 -
271,231.28   30,136.81   30,136.81   301,368.09 4,520.52 305,888.61 107
10/1/2026 271,231.28 - 271,231.28   30,136.81   30,136.81   301,368.09 4,520.52
305,888.61 108 11/1/2026 271,231.28 - 271,231.28   30,136.81   30,136.81  
301,368.09 4,520.52 305,888.61 109 12/1/2026 276,065.32 - 276,065.32   30,673.92
  30,673.92   306,739.25 4,601.09 311,340.34 110 1/1/2027 280,046.30 -
280,046.30   31,116.26   31,116.26   311,162.55 4,667.44 315,829.99 111 2/1/2027
280,046.30 - 280,046.30   31,116.26   31,116.26   311,162.55 4,667.44 315,829.99
112 3/1/2027 280,046.30 - 280,046.30   31,116.26   31,116.26   311,162.55
4,667.44 315,829.99 113 4/1/2027 280,046.30 - 280,046.30   31,116.26   31,116.26
  311,162.55 4,667.44 315,829.99 114 5/1/2027 280,046.30 - 280,046.30  
31,116.26   31,116.26   311,162.55 4,667.44 315,829.99 115 6/1/2027 280,046.30 -
280,046.30   31,116.26   31,116.26   311,162.55 4,667.44 315,829.99 116 7/1/2027
280,046.30 - 280,046.30   31,116.26   31,116.26   311,162.55 4,667.44 315,829.99
117 8/1/2027 280,046.30 - 280,046.30   31,116.26   31,116.26   311,162.55
4,667.44 315,829.99 118 9/1/2027 280,046.30 - 280,046.30   31,116.26   31,116.26
  311,162.55 4,667.44 315,829.99 119 10/1/2027 280,046.30 - 280,046.30  
31,116.26   31,116.26   311,162.55 4,667.44 315,829.99 120 11/1/2027 280,046.30
- 280,046.30   31,116.26   31,116.26   311,162.55 4,667.44 315,829.99 121
12/1/2027 285,037.45 - 285,037.45   31,670.83   31,670.83   316,708.27 4,750.62
321,458.90 122 1/1/2028 289,147.80 - 289,147.80   32,127.53   32,127.53  
321,275.34 4,819.13 326,094.47 123 2/1/2028 289,147.80 - 289,147.80   32,127.53
  32,127.53   321,275.34 4,819.13 326,094.47 124 3/1/2028 289,147.80 -
289,147.80   32,127.53   32,127.53   321,275.34 4,819.13 326,094.47 125 4/1/2028
289,147.80 - 289,147.80   32,127.53   32,127.53   321,275.34 4,819.13 326,094.47
126 5/1/2028 289,147.80 - 289,147.80   32,127.53   32,127.53   321,275.34
4,819.13 326,094.47 127 6/1/2028 289,147.80 - 289,147.80   32,127.53   32,127.53
  321,275.34 4,819.13 326,094.47 128 7/1/2028 289,147.80 - 289,147.80  
32,127.53   32,127.53   321,275.34 4,819.13 326,094.47 129 8/1/2028 289,147.80 -
289,147.80   32,127.53   32,127.53   321,275.34 4,819.13 326,094.47 130 9/1/2028
289,147.80 - 289,147.80   32,127.53   32,127.53   321,275.34 4,819.13 326,094.47
131 10/1/2028 289,147.80 - 289,147.80   32,127.53   32,127.53   321,275.34
4,819.13 326,094.47 132 11/1/2028 289,147.80 - 289,147.80   32,127.53  
32,127.53   321,275.34 4,819.13 326,094.47 133 12/1/2028 294,301.16 - 294,301.16
  32,700.13   32,700.13   327,001.29 4,905.02 331,906.31 134 1/1/2029 298,545.11
- 298,545.11   33,171.68   33,171.68   331,716.79 4,975.75 336,692.54 135
2/1/2029 298,545.11 - 298,545.11   33,171.68   33,171.68   331,716.79 4,975.75
336,692.54 136 3/1/2029 298,545.11 - 298,545.11   33,171.68   33,171.68  
331,716.79 4,975.75 336,692.54 137 4/1/2029 298,545.11 - 298,545.11   33,171.68
  33,171.68   331,716.79 4,975.75 336,692.54 138 5/1/2029 298,545.11 -
298,545.11   33,171.68   33,171.68   331,716.79 4,975.75 336,692.54 139 6/1/2029
298,545.11 - 298,545.11   33,171.68   33,171.68   331,716.79 4,975.75 336,692.54
140 7/1/2029 298,545.11 - 298,545.11   33,171.68   33,171.68   331,716.79
4,975.75 336,692.54 141 8/1/2029 298,545.11 - 298,545.11   33,171.68   33,171.68
  331,716.79 4,975.75 336,692.54 142 9/1/2029 298,545.11 - 298,545.11  
33,171.68   33,171.68   331,716.79 4,975.75 336,692.54 143 10/1/2029 298,545.11
- 298,545.11   33,171.68   33,171.68   331,716.79 4,975.75 336,692.54 144
11/1/2029 298,545.11 - 298,545.11   33,171.68   33,171.68   331,716.79 4,975.75
336,692.54 145 12/1/2029 303,865.95 - 303,865.95   33,762.88   33,762.88  
337,628.84 5,064.43 342,693.27 146 1/1/2030 308,247.82 - 308,247.82   34,249.76
  34,249.76   342,497.58 5,137.46 347,635.05 147 2/1/2030 308,247.82 -
308,247.82   34,249.76   34,249.76   342,497.58 5,137.46 347,635.05 148 3/1/2030
308,247.82 - 308,247.82   34,249.76   34,249.76   342,497.58 5,137.46 347,635.05
149 4/1/2030 308,247.82 - 308,247.82   34,249.76   34,249.76   342,497.58
5,137.46 347,635.05 150 5/1/2030 308,247.82 - 308,247.82   34,249.76   34,249.76
  342,497.58 5,137.46 347,635.05 151 6/1/2030 308,247.82 - 308,247.82  
34,249.76   34,249.76   342,497.58 5,137.46 347,635.05 152 7/1/2030 308,247.82 -
308,247.82   34,249.76   34,249.76   342,497.58 5,137.46 347,635.05 153 8/1/2030
308,247.82 - 308,247.82   34,249.76   34,249.76   342,497.58 5,137.46 347,635.05
154 9/1/2030 308,247.82 - 308,247.82   34,249.76   34,249.76   342,497.58
5,137.46 347,635.05 155 10/1/2030 308,247.82 - 308,247.82   34,249.76  
34,249.76   342,497.58 5,137.46 347,635.05 156 11/1/2030 308,247.82 - 308,247.82
  34,249.76   34,249.76   342,497.58 5,137.46 347,635.05 157 12/1/2030
313,741.60 - 313,741.60   34,860.18   34,860.18   348,601.77 5,229.03 353,830.80
158 1/1/2031 318,265.88 - 318,265.88   35,362.88   35,362.88   353,628.75
5,304.43 358,933.18 159 2/1/2031 318,265.88 - 318,265.88   35,362.88   35,362.88
  353,628.75 5,304.43 358,933.18 160 3/1/2031 318,265.88 - 318,265.88  
35,362.88   35,362.88   353,628.75 5,304.43 358,933.18 161 4/1/2031 318,265.88 -
318,265.88   35,362.88   35,362.88   353,628.75 5,304.43 358,933.18 162 5/1/2031
318,265.88 - 318,265.88   35,362.88   35,362.88   353,628.75 5,304.43 358,933.18
163 6/1/2031 318,265.88 - 318,265.88   35,362.88   35,362.88   353,628.75
5,304.43 358,933.18 164 7/1/2031 318,265.88 - 318,265.88   35,362.88   35,362.88
  353,628.75 5,304.43 358,933.18 165 8/1/2031 318,265.88 - 318,265.88  
35,362.88   35,362.88   353,628.75 5,304.43 358,933.18 166 9/1/2031 318,265.88 -
318,265.88   35,362.88   35,362.88   353,628.75 5,304.43 358,933.18 167
10/1/2031 318,265.88 - 318,265.88   35,362.88   35,362.88   353,628.75 5,304.43
358,933.18 168 11/1/2031 318,265.88 - 318,265.88   35,362.88   35,362.88  
353,628.75 5,304.43 358,933.18 169 12/1/2031 323,938.20 - 323,938.20   35,993.13
  35,993.13   359,931.33 5,398.97 365,330.30 170 1/1/2032 328,609.52 -
328,609.52   36,512.17   36,512.17   365,121.69 5,476.83 370,598.51 171 2/1/2032
328,609.52 - 328,609.52   36,512.17   36,512.17   365,121.69 5,476.83 370,598.51
172 3/1/2032 328,609.52 - 328,609.52   36,512.17   36,512.17   365,121.69
5,476.83 370,598.51 173 4/1/2032 328,609.52 - 328,609.52   36,512.17   36,512.17
  365,121.69 5,476.83 370,598.51 174 5/1/2032 328,609.52 - 328,609.52  
36,512.17   36,512.17   365,121.69 5,476.83 370,598.51 175 6/1/2032 328,609.52 -
328,609.52   36,512.17   36,512.17   365,121.69 5,476.83 370,598.51 176 7/1/2032
328,609.52 - 328,609.52   36,512.17   36,512.17   365,121.69 5,476.83 370,598.51
177 8/1/2032 328,609.52 - 328,609.52   36,512.17   36,512.17   365,121.69
5,476.83 370,598.51 178 9/1/2032 328,609.52 - 328,609.52   36,512.17   36,512.17
  365,121.69 5,476.83 370,598.51 179 10/1/2032 328,609.52 - 328,609.52  
36,512.17   36,512.17   365,121.69 5,476.83 370,598.51 180 11/1/2032 328,609.52
- 328,609.52   36,512.17   36,512.17   365,121.69 5,476.83 370,598.51 181
12/1/2032 334,466.19 - 334,466.19   37,162.91   37,162.91   371,629.10 5,574.44
377,203.53 182 1/1/2033 339,289.33 - 339,289.33   37,698.81   37,698.81  
376,988.14 5,654.82 382,642.96 183 2/1/2033 339,289.33 - 339,289.33   37,698.81
  37,698.81   376,988.14 5,654.82 382,642.96 184 3/1/2033 339,289.33 -
339,289.33   37,698.81   37,698.81   376,988.14 5,654.82 382,642.96 185 4/1/2033
339,289.33 - 339,289.33   37,698.81   37,698.81   376,988.14 5,654.82 382,642.96
186 5/1/2033 339,289.33 - 339,289.33   37,698.81   37,698.81   376,988.14
5,654.82 382,642.96 187 6/1/2033 339,289.33 - 339,289.33   37,698.81   37,698.81
  376,988.14 5,654.82 382,642.96 188 7/1/2033 339,289.33 - 339,289.33  
37,698.81   37,698.81   376,988.14 5,654.82 382,642.96 189 8/1/2033 339,289.33 -
339,289.33   37,698.81   37,698.81   376,988.14 5,654.82 382,642.96 190 9/1/2033
339,289.33 - 339,289.33   37,698.81   37,698.81   376,988.14 5,654.82 382,642.96
191 10/1/2033 339,289.33 - 339,289.33   37,698.81   37,698.81   376,988.14
5,654.82 382,642.96 192 11/1/2033 339,289.33 - 339,289.33   37,698.81  
37,698.81   376,988.14 5,654.82 382,642.96 193 12/1/2033 345,336.34 - 345,336.34
  38,370.70   38,370.70   383,707.04 5,755.61 389,462.65 194 1/1/2034 350,316.23
- 350,316.23   38,924.03   38,924.03   389,240.26 5,838.60 395,078.86 195
2/1/2034 350,316.23 - 350,316.23   38,924.03   38,924.03   389,240.26 5,838.60
395,078.86 196 3/1/2034 350,316.23 - 350,316.23   38,924.03   38,924.03  
389,240.26 5,838.60 395,078.86 197 4/1/2034 350,316.23 - 350,316.23   38,924.03
  38,924.03   389,240.26 5,838.60 395,078.86 198 5/1/2034 350,316.23 -
350,316.23   38,924.03   38,924.03   389,240.26 5,838.60 395,078.86 199 6/1/2034
350,316.23 - 350,316.23   38,924.03   38,924.03   389,240.26 5,838.60 395,078.86
200 7/1/2034 350,316.23 - 350,316.23   38,924.03   38,924.03   389,240.26
5,838.60 395,078.86 201 8/1/2034 350,316.23 - 350,316.23   38,924.03   38,924.03
  389,240.26 5,838.60 395,078.86 202 9/1/2034 350,316.23 - 350,316.23  
38,924.03   38,924.03   389,240.26 5,838.60 395,078.86 203 10/1/2034 350,316.23
- 350,316.23   38,924.03   38,924.03   389,240.26 5,838.60 395,078.86 204
11/1/2034 350,316.23 - 350,316.23   38,924.03   38,924.03   389,240.26 5,838.60
395,078.86 205 12/1/2034 356,559.77 - 356,559.77   39,617.75   39,617.75  
396,177.52 5,942.66 402,120.19 206 1/1/2035 361,701.51 - 361,701.51   40,189.06
  40,189.06   401,890.57 6,028.36 407,918.92

 

 

 

 

The Pharm (AZ) Rent Schedule

 

    Initial Investment   1st Amendment   Total   Date Base Rent Rent Abatement
Total
Base Rent   Base Rent Rent Abatement Total
Base Rent   Total
Base Rent Management Fee Total Base Rent and
Management Fee 207 2/1/2035 361,701.51 - 361,701.51   40,189.06   40,189.06  
401,890.57 6,028.36 407,918.92 208 3/1/2035 361,701.51 - 361,701.51   40,189.06
  40,189.06   401,890.57 6,028.36 407,918.92 209 4/1/2035 361,701.51 -
361,701.51   40,189.06   40,189.06   401,890.57 6,028.36 407,918.92 210 5/1/2035
361,701.51 - 361,701.51   40,189.06   40,189.06   401,890.57 6,028.36 407,918.92
211 6/1/2035 361,701.51 - 361,701.51   40,189.06   40,189.06   401,890.57
6,028.36 407,918.92 212 7/1/2035 361,701.51 - 361,701.51   40,189.06   40,189.06
  401,890.57 6,028.36 407,918.92 213 8/1/2035 361,701.51 - 361,701.51  
40,189.06   40,189.06   401,890.57 6,028.36 407,918.92 214 9/1/2035 361,701.51 -
361,701.51   40,189.06   40,189.06   401,890.57 6,028.36 407,918.92 215
10/1/2035 361,701.51 - 361,701.51   40,189.06   40,189.06   401,890.57 6,028.36
407,918.92 216 11/1/2035 361,701.51 - 361,701.51   40,189.06   40,189.06  
401,890.57 6,028.36 407,918.92 217 12/1/2035 368,147.96 - 368,147.96   40,905.33
  40,905.33   409,053.29 6,135.80 415,189.09 218 1/1/2036 373,456.81 -
373,456.81   41,495.20   41,495.20   414,952.01 6,224.28 421,176.29 219 2/1/2036
373,456.81 - 373,456.81   41,495.20   41,495.20   414,952.01 6,224.28 421,176.29
220 3/1/2036 373,456.81 - 373,456.81   41,495.20   41,495.20   414,952.01
6,224.28 421,176.29 221 4/1/2036 373,456.81 - 373,456.81   41,495.20   41,495.20
  414,952.01 6,224.28 421,176.29 222 5/1/2036 373,456.81 - 373,456.81  
41,495.20   41,495.20   414,952.01 6,224.28 421,176.29 223 6/1/2036 373,456.81 -
373,456.81   41,495.20   41,495.20   414,952.01 6,224.28 421,176.29 224 7/1/2036
373,456.81 - 373,456.81   41,495.20   41,495.20   414,952.01 6,224.28 421,176.29
225 8/1/2036 373,456.81 - 373,456.81   41,495.20   41,495.20   414,952.01
6,224.28 421,176.29 226 9/1/2036 373,456.81 - 373,456.81   41,495.20   41,495.20
  414,952.01 6,224.28 421,176.29 227 10/1/2036 373,456.81 - 373,456.81  
41,495.20   41,495.20   414,952.01 6,224.28 421,176.29 228 11/1/2036 373,456.81
- 373,456.81   41,495.20   41,495.20   414,952.01 6,224.28 421,176.29 229
12/1/2036 380,112.77 - 380,112.77   42,234.75   42,234.75   422,347.52 6,335.21
428,682.74 230 1/1/2037 385,594.15 - 385,594.15   42,843.79   42,843.79  
428,437.95 6,426.57 434,864.52 231 2/1/2037 385,594.15 - 385,594.15   42,843.79
  42,843.79   428,437.95 6,426.57 434,864.52 232 3/1/2037 385,594.15 -
385,594.15   42,843.79   42,843.79   428,437.95 6,426.57 434,864.52 233 4/1/2037
385,594.15 - 385,594.15   42,843.79   42,843.79   428,437.95 6,426.57 434,864.52
234 5/1/2037 385,594.15 - 385,594.15   42,843.79   42,843.79   428,437.95
6,426.57 434,864.52 235 6/1/2037 385,594.15 - 385,594.15   42,843.79   42,843.79
  428,437.95 6,426.57 434,864.52 236 7/1/2037 385,594.15 - 385,594.15  
42,843.79   42,843.79   428,437.95 6,426.57 434,864.52 237 8/1/2037 385,594.15 -
385,594.15   42,843.79   42,843.79   428,437.95 6,426.57 434,864.52 238 9/1/2037
385,594.15 - 385,594.15   42,843.79   42,843.79   428,437.95 6,426.57 434,864.52
239 10/1/2037 385,594.15 - 385,594.15   42,843.79   42,843.79   428,437.95
6,426.57 434,864.52 240 11/1/2037 385,594.15 - 385,594.15   42,843.79  
42,843.79   428,437.95 6,426.57 434,864.52 241 12/1/2037-12/14/2037 174,139.30 -
174,139.30   19,348.81   19,348.81   193,488.11 2,902.32 196,390.43

  

 

 

 

EXHIBIT B

 

FORM OF NEW GUARANTY

 

(See Attached)

 

 

 

 

GUARANTY OF LEASE

 

 

This Guaranty of Lease ("Guaranty") is executed effective on the 16th day of
January, 2020, by The Pharm, LLC, a Delaware limited liability company
("Guarantor"), whose address for notices is 7201 E. Camelback Road, Suite 350,
Scottsdale, AZ 85251, in favor of IIP-AZ 1 LLC, a Delaware limited liability
company ("Landlord"), whose address for notices is 11440 West Bernardo Court,
Suite 100, San Diego, California 92127, Attn: General Counsel.

 

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor covenants and agrees as follows:

 

1.            Recitals. This Guaranty is made with reference to the following
recitals of facts which constitute a material part of this Guaranty:

 

(a)              Landlord, as Landlord, and SGS Arizona, LLC, an Arizona limited
liability company, formerly known as Sun Grown Solutions, LLC, as Tenant
("Tenant"), entered into that certain Lease dated as of December 15, 2017 (the
"Original Lease"), as amended by that certain First Amendment to Lease dated
January 16, 2020 (the "First Amendment" and together with the Original Lease,
the "Lease"), with respect to the real property located at 5900 West Greenhouse
Drive, Willcox, Arizona, as more particularly described in the Lease (the
"Leased Premises").

 

(b)              Guarantor is the direct or indirect parent company of Tenant
and is therefore receiving a substantial benefit for executing this Guaranty.

 

(c)              Landlord would not have entered into the First Amendment with
Tenant, which includes the termination of the Guaranties (collectively, the
"Existing Guaranties") executed by Flying Dutchman Real Estate Holdings, LLC,
Flying Dutchman Properties, LLC, Green Thumb Management, LLC, Pharm Ingram, LLC
and Sensible Growth, LLC as Guarantors (collectively, the "Existing
Guarantors"), without having received this Guaranty executed by Guarantor as an
inducement to Landlord.

 

(d)             By this Guaranty, effective retroactively to the commencement of
the Lease, Guarantor intends to absolutely, unconditionally and irrevocably
guarantee the full, timely, and complete (i) payment of all rent and other sums
required to be paid by Tenant under the Lease and any other indebtedness of
Tenant, (ii) performance of all other terms, covenants, conditions and
obligations of Tenant arising out of the Lease and all foreseeable and
unforeseeable damages that may arise as a foreseeable or unforeseeable
consequence of any non-payment, non-performance or non-observance of, or
non-compliance with, any of the terms, covenants, conditions or other
obligations described in the Lease (including, without limitation, all
attorneys' fees and disbursements and all litigation costs and expenses incurred
or payable by Landlord or for which Landlord may be responsible or liable, or
caused by any such default), and (iii) payment of any and all expenses
(including reasonable attorneys' fees and expenses and litigation expenses)
incurred by Landlord in enforcing any of the rights under the Lease or this
Guaranty within five (5) days after Landlord's demand thereafter (collectively,
the "Guaranteed Obligations"). For the avoidance of doubt, the Guaranteed
Obligations expressly include all of the “Guaranteed Obligations” (as defined in
each of the Existing Guaranties) of the Existing Guarantors under the Existing
Guaranties being terminated concurrently herewith.

 

 

 

 

2.            Guaranty. Effective for Guaranteed Obligations accruing before, on
and after the Execution Date (as such term is defined under the Lease),
Guarantor absolutely, unconditionally and irrevocably guarantees, as principal
obligor and not merely as surety, to Landlord, the full, timely and
unconditional payment and performance, of the Guaranteed Obligations strictly in
accordance with the terms of the Lease, as such Guaranteed Obligations may be
modified, amended, extended or renewed from time to time. This is a Guaranty of
payment and performance and not merely of collection. Guarantor agrees that
Guarantor is primarily liable for and responsible for the payment and
performance of the Guaranteed Obligations. Guarantor shall be bound by all of
the provisions, terms, conditions, restrictions and limitations contained in the
Lease which are to be observed or performed by Tenant, the same as if Guarantor
was named therein as Tenant with joint and several liability with Tenant, and
any remedies that Landlord has under the Lease against Tenant shall apply to
Guarantor as well. If Tenant defaults in any Guaranteed Obligation under the
Lease, Guarantor shall in lawful money of the United States, pay to Landlord on
demand the amount due and owing under the Lease. Guarantor waives any rights to
notices of acceptance, modifications, amendment, extension or breach of the
Lease. If Guarantor is a natural person, it is expressly agreed that this
guaranty shall survive the death of such guarantor and shall continue in effect.
The obligations of Guarantor under this Guaranty are independent of the
obligations of Tenant or any other guarantor. Guarantor acknowledges that this
Guaranty and Guarantor's obligations and liabilities under this Guaranty are and
shall at all times continue to be absolute and unconditional in all respects and
shall be the separate and independent undertaking of Guarantor without regard to
the genuineness, validity, legality or enforceability of the Lease, and shall at
all times be valid and enforceable irrespective of any other agreements or
circumstances of any nature whatsoever which might otherwise constitute a
defense to this Guaranty and the obligations and liabilities of Guarantor under
this Guaranty or the obligations or liabilities of any other person or entity
(including, without limitation, Tenant) relating to this Guaranty or the
obligations or liabilities of Guarantor hereunder or otherwise with respect to
the Lease or to Tenant. Guarantor hereby absolutely, unconditionally and
irrevocably waives any and all rights it may have to assert any defense,
set-off, counterclaim or cross-claim of any nature whatsoever with respect to
this Guaranty or the obligations or liabilities of Guarantor under this Guaranty
or the obligations or liabilities of any other person or entity (including,
without limitation, Tenant) relating to this Guaranty or the obligations or
liabilities of Guarantor under this Guaranty or otherwise with respect to the
Lease, in any action or proceeding brought by the holder hereof to enforce the
obligations or liabilities of Guarantor under this Guaranty. This Guaranty sets
forth the entire agreement and understanding of Landlord and Guarantor, and
Guarantor acknowledges that no oral or other agreements, understandings,
representations or warranties exist with respect to this Guaranty or with
respect to the obligations or liabilities of Guarantor under this Guaranty. The
obligations of Guarantor under this Guaranty shall be continuing and irrevocable
(a) during any period of time when the liability of Tenant under the Lease
continues, and (b) until all of the Guaranteed Obligations have been fully
discharged by payment, performance or compliance. If at any time all or any part
of any payment received by Landlord from Tenant or Guarantor or any other person
under or with respect to the Lease or this Guaranty has been refunded or
rescinded pursuant to any court order, or declared to be fraudulent or
preferential, or are set aside or otherwise are required to be repaid to Tenant,
its estate, trustee, receiver or any other party, including as a result of the
insolvency, bankruptcy or reorganization of Tenant or any other party (an
"Invalidated Payment"), then Guarantor's obligations under the Guaranty shall,
to the extent of such Invalidated Payment be reinstated and deemed to have
continued in existence as of the date that the original payment occurred. This
Guaranty shall not be affected or limited in any manner by whether Tenant may be
liable, with respect to the Guaranteed Obligations individually, jointly with
other primarily, or secondarily.

 

3.            No Impairment of Guaranteed Obligations. Guarantor further agrees
that Guarantor's liability for the Guaranteed Obligations shall in no way be
released, discharged, impaired or affected or subject to any counterclaim,
setoff or deduction by (a) any waiver, consent, extension, indulgence,
compromise, release, departure from or other action or inaction of Landlord
under or in respect of the Lease or this Guaranty, or any obligation or
liability of Tenant, or any exercise or non-exercise of any right, remedy, power
or privilege under or in respect to the Lease or this Guaranty, (b) any change
in the time, manner or place of payment or performance of the Guaranteed
Obligations, (c) the acceptance by Landlord of any additional security or any
increase, substitution or change therein, (d) the release by Landlord of any
security or any withdrawal thereof or decrease therein, (e) any assignment of
the Lease or any subletting of all or any portion of the Leased Premises (with
or without Landlord's consent), (f) any holdover by Tenant beyond the term of
the Lease (g) any termination of the Lease, (h) any release or discharge of
Tenant in any bankruptcy, receivership or other similar proceedings, (i) the
impairment, limitation or modification of the liability of Tenant or the estate
of Tenant in bankruptcy or of any remedy for the enforcement of Tenant's
liability under the Lease resulting from the operation of any present or future
provisions of any bankruptcy code or other statute or from the decision in any
court, or the rejection or disaffirmance of the Lease in any such proceedings,
(j) any merger, consolidation, reorganization or similar transaction involving
Tenant, even if Tenant ceases to exist as a result of such transaction, (k) the
change in the corporate relationship between Tenant and Guarantor or any
termination of such relationship, (l) any change in the direct or indirect
ownership of all or any part of the shares in Tenant, or (m) to the extent
permitted under applicable law, any other occurrence or circumstance whatsoever,
whether similar or dissimilar to the foregoing, which might otherwise constitute
a legal or equitable defense or discharge of the liabilities of Guarantor or
which might otherwise limit recourse against Guarantor. Guarantor further
understands and agrees that Landlord may at any time enter into agreements with
Tenant to amend and modify the Lease, and may waive or release any provision or
provisions of the Lease, and, with reference to such instruments, may make and
enter into any such agreement or agreements as Landlord and Tenant may deem
proper and desirable, without in any manner impairing or affecting this Guaranty
or any of Landlord's rights hereunder or Guarantor's obligations hereunder,
unless otherwise agreed in writing thereunder or under the Lease.

 

 

 

 

4.            Remedies.

 

a)               If Tenant defaults with respect to the Guaranteed Obligations,
and if Guarantor does not fulfill Tenant's obligations immediately upon its
receipt of written notice of such default from Landlord, Landlord may at its
election proceed immediately against Guarantor, Tenant, or any combination of
Tenant, Guarantor, and/or any other guarantor. It is not necessary for Landlord,
in order to enforce payment and performance by Guarantor under this Guaranty,
first or contemporaneously to institute suit or exhaust remedies against Tenant
or other liable for any of the Guaranteed Obligations or to enforce rights
against any collateral securing any of it. Guarantor hereby waives any right to
require Landlord to join Tenant in any action brought hereunder or to commence
any action against or obtain any judgment against Tenant or to pursue any other
remedy or enforce any other right. If any portion of the Guaranteed Obligations
terminates and Landlord continues to have any rights that it may enforce against
Tenant under the Lease after such termination, then Landlord may at its election
enforce such rights against Guarantor. Unless and until all Guaranteed
Obligations have been fully satisfied, Guarantor shall not be released from its
obligations under this Guaranty irrespective of: (i) the exercise (or failure to
exercise) by Landlord of any of Landlord's rights or remedies (including,
without limitation, compromise or adjustment of the Guaranteed Obligations or
any part thereof); or (ii) any release by Landlord in favor of Tenant regarding
the fulfillment by Tenant of any obligation under the Lease.

 

b)               Notwithstanding anything in the foregoing to the contrary,
Guarantor hereby covenants and agrees to and with Landlord that Guarantor may be
joined in any action by or against Tenant in connection with the Lease.
Guarantor also agrees that, in any jurisdiction, it will be conclusively bound
by the judgment in any such action by or against Tenant (wherever brought) as if
Guarantor were a party to such action even though Guarantor is not joined as a
party in such action.

 

5.            Waivers. With the exception of the defense of prior payment,
performance or compliance by Tenant or Guarantor of or with the Guaranteed
Obligations which Guarantor is called upon to pay or perform, or the defense
that Landlord's claim against Guarantor is barred by the applicable statute of
limitations, Guarantor hereby waives and releases all defenses of the law of
guaranty or suretyship to the extent permitted by law.

 

6.            Rights Cumulative. All rights, powers and remedies of Landlord
under this Guaranty shall be cumulative and in addition to all rights, powers
and remedies given to Landlord by law.

 

7.            Representations and Warranties. Guarantor hereby represents and
warrants that (a) Guarantor has goods and net worth that are sufficient to
enable Guarantor to promptly perform all of the Guaranteed Obligations as and
when they are due; (b) Landlord has made no representation to Guarantor as to
the creditworthiness or financial condition of Tenant; (c) Guarantor has full
power to execute, deliver and carry out the terms and provisions of this
Guaranty and has taken all necessary action to authorize the execution, delivery
and performance of this Guaranty; (d) Guarantor's execution and delivery of, and
the performance of its obligations under, this Guaranty does not conflict with
or violate any of Guarantor's organizational documents, or any contract,
agreement or decree which Guarantor is a party to or which is binding on
Guarantor; (e) the individual executing this Guaranty on behalf of Guarantor has
the authority to bind Guarantor to the terms and conditions of this Guaranty;
(f) Guarantor has been represented by counsel of its choice in connection with
this Guaranty; (g) this Guaranty when executed and delivered shall constitute
the legal, valid and binding obligations of Guarantor enforceable against
Guarantor in accordance with its terms; and (h) there is no action, suit, or
proceeding pending or, to the knowledge of Guarantor, threatened against
Guarantor before or by any governmental authority which questions the validity
or enforceability of, or Guarantor's ability to perform under, this Guaranty.

 

 

 

 

8.            Subordination. In the event of Tenant's insolvency or the
disposition of the assets of Tenant, through bankruptcy, by an assignment for
the benefit of creditors, by voluntary liquidation, or otherwise, the assets of
Tenant applicable to the payment of all claims of Landlord and/or Guarantor
shall be paid to Landlord and shall be first applied by Landlord to the
Guaranteed Obligations. Any indebtedness of Tenant now or hereafter held by
Guarantor, whether as original creditor or assignee or by way of subrogation,
restitution, reimbursement, indemnification or otherwise, is hereby subordinated
in right of payment to the Guaranteed Obligations. So long as an uncured event
of default exists under the Lease, (a) at Landlord's written request, Guarantor
shall cause Tenant to pay to Landlord all or any part of any funds invested in
or loaned to Tenant by Guarantor which Guarantor is entitled to withdraw or
collect and (b) any such indebtedness or other amount collected or received by
Guarantor shall be held in trust for Landlord and shall forthwith be paid over
to Landlord to be credited and applied against the Guaranteed Obligations.
Subject to the foregoing, Guarantor shall be entitled to receive from Landlord
any amounts that are, from time to time, due to Guarantor in the ordinary course
of business. Until all of Tenant's obligations under the Lease are fully
performed, Guarantor shall have no right of subrogation against Tenant by reason
of any payments, acts or performance by Guarantor under this Guaranty. The
parties also agree the provisions of Section 3.2.4 of the Lease shall be
incorporated herein by reference.

 

9.            Governing Law. This Guaranty shall be governed by and construed in
accordance with the laws of the State of Arizona, United States of America,
without regard to principles of conflicts of laws. TO THE FULLEST EXTENT
PERMITTED BY LAW, GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY.

 

10.          Attorneys' Fees. In the event any litigation or other proceeding
("Proceeding") is initiated by any party against any other party to enforce this
Guaranty, the prevailing party in such Proceeding shall be entitled to recover
from the unsuccessful party all costs, expenses, and actual reasonable
attorneys' fees relating to or arising out of such Proceeding.

 

11.          Federal Enforcement. Reference is hereby made to the provisions of
Section 35.19 of the Lease, which are hereby incorporated herein by reference.

 

12.          Modification. This Guaranty may be modified only by a contract in
writing executed by Guarantor and Landlord.

 

13.          Invalidity. If any provision of the Guaranty shall be invalid or
unenforceable, the remainder of this Guaranty shall not be affected by such
invalidity or unenforceability. In the event, and to the extent, that this
Guaranty shall be held ineffective or unenforceable by any court of competent
jurisdiction, then Guarantor shall be deemed to be a tenant under the Lease with
the same force and effect as if Guarantor were expressly named as a co-tenant
therein with joint and several liability.

 

14.          Successors and Assigns. Unless otherwise agreed in writing or under
the Lease, this Guaranty shall be binding upon and shall inure to the benefit of
the successors-in-interest and assigns of each party to this Guaranty.

 

15.          Notices. Any notice, consent, demand, invoice, statement or other
communication required or permitted to be given hereunder shall be in writing
and shall be given by (a) personal delivery, (b) overnight delivery with a
reputable international overnight delivery service, such as FedEx, or (c)
facsimile or email transmission, so long as such transmission is followed within
one (1) business day by delivery utilizing one of the methods described in
subsections (a) or (b). Any such notice, consent, demand, invoice, statement or
other communication shall be deemed delivered (x) upon receipt, if given in
accordance with subsection (a); (y) one business (1) day after deposit with a
reputable international overnight delivery service, if given if given in
accordance with subsection (b); or (z) upon transmission, if given in accordance
with subsection (c). Except as otherwise stated in this Guaranty, any notice,
consent, demand, invoice, statement or other communication required or permitted
to be given pursuant to this Guaranty shall be addressed to Guarantor or
Landlord at the address set forth above in the introductory paragraph of this
Guaranty. Either party may, by notice to the other given pursuant to this
Section, specify additional or different addresses for notice purposes.

 

16.          Waiver. Any waiver of a breach or default under this Guaranty must
be in a writing that is duly executed by Landlord and shall not be a waiver of
any other default concerning the same or any other provision of this Guaranty.
No delay or omission in the exercise of any right or remedy shall impair such
right or remedy or be construed as a waiver.

 

 

 

 

17.          Withholding. Unless otherwise agreed in the Lease, any and all
payments by Guarantor to Landlord under this Guaranty shall be made free and
clear of and without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and all liabilities with respect thereto (collectively, "Taxes"). If Guarantor
shall be required by any applicable laws to deduct any Taxes from or in respect
of any sum payable under this Guaranty to Landlord: (a) the sum payable shall be
increased as necessary so that after making all required deductions, the
Landlord receives an amount equal to the sum it would have received had no such
deductions been made; (b) Guarantor shall make such deductions; and (c)
Guarantor shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable laws.

 

18.          Financial Condition of Tenant. Landlord shall have no obligation to
disclose or discuss with Guarantor Landlord's assessment of the financial
condition of Tenant. Guarantor has adequate means to obtain information from
Tenant on a continuing basis concerning the financial condition of Tenant and
its ability to perform its Guaranteed Obligations, and Guarantor assumes
responsibility for being and keeping informed of Tenant's financial condition
and of all circumstances bearing upon the risk of Tenant's failure to perform
the Guaranteed Obligations.

 

19.          Bankruptcy. So long as the Guaranteed Obligations remain
outstanding, Guarantor shall not, without Landlord's prior written consent,
commence or join with any other person in commencing any bankruptcy or similar
proceeding of or against Tenant. Guarantor's obligations hereunder shall not be
reduced, limited, impaired, discharged, deferred, suspended or terminated by any
bankruptcy or similar proceeding (voluntary or involuntary) involving Tenant or
by any defense that Tenant may have by reason of an order, decree or decision of
any court or administrative body resulting from any such proceeding. To the
fullest extent permitted by law, Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay to Landlord or allow the claim of Landlord in
respect of any interest, fees, costs, expenses or other Guaranteed Obligations
accruing or arising after the date on which such case or proceeding is
commenced.

 

20.          Conveyance or Transfer. Guarantor shall not convey, sell, lease or
transfer any of its properties or assets to any person or entity to the extent
that such conveyance, sale, lease or transfer could have a material adverse
effect on Guarantor's ability to fulfill any of the Guaranteed Obligations. To
ensure the legal operation of the Premises in compliance with the AMMA, Landlord
has authorized Tenant to license the Premises to a Guarantor of the Lease that
is duly awarded a Medical Marijuana Dispensary Registration Certificate or other
License pursuant to Section 7 of the Authorization for Use of the Premises
attached as Exhibit “F” to the Lease, subject to the terms and conditions of the
Lease, including the terms and conditions of such Exhibit, for the sole purpose
of ensuring the Premises maintains the necessary approval to operate in
compliance with the AMMA. However, nothing herein is intended to limit the
rights or remedies of Landlord pursuant to this Guaranty nor authorize Tenant to
license the Premises in a manner that would violate this Section 20.

 

22.          Financials. To induce Landlord to enter into the Lease, Guarantor
shall provide to Landlord all information as required to be provided by Tenant
and/or Guarantor pursuant to Section 35.1 of the Lease, subject to all
conditions set forth in that Section.

 

23.          Joint and Several Liability. Guarantor's liability under this
Guaranty shall be joint and several with any and all other Guarantors in
accordance with the terms and conditions of the Lease.

 

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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be signed by its
respective officer thereunto duly authorized, all as of the date first written
above.

 

GUARANTOR

 

THE PHARM, LLC,

a Delaware limited liability company

 

 

By:     Name:     Title: