Exhibit 10.15

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 1 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

THIS LEASE AGREEMENT (the "Lease") is entered into and effective as of this 19th
day of September, 2013, between M-P Properties ("Landlord"), and Diego Pellicer
Worldwide, Inc., a Delaware corporation ("Tenant"). Landlord and Tenant agree as
follows:

 

1.            LEASE SUMMARY.

 

a.              Leased Premises. The leased commercial real estate (the
"Premises") consist of the real property legally described on attached Exhibit
A, and all improvements thereon, and commonly described as 2215 4th Ave S.,
Seattle, WA 98134.

 

b.              Lease Commencement Date. The term of this Lease shall be for a
period of sixty (60) months and shall commence on October 1, 2013 or such
earlier or later date as provided in Section 3 (the "Commencement Date").

 

c.              Lease Termination Date. The term of this Lease shall terminate
at midnight on September 30, 2018 or such earlier or later date as provided in
Section 3 (the "Termination Date"). Tenant shall have no right or option to
extend this Lease, unless otherwise set forth in a rider attached to this Lease
(e.g., Option to Extend Rider, CBA Form OR).

 

d.              Base Rent. The base monthly rent shall be (check one): ☐
$             , or ☒ according to the Rent Rider attached hereto ("Base Rent").
Rent shall be payable at Landlord's address shown in Section 1(h) below, or such
other place designated in writing by Landlord.

 

e.              Prepaid Rent. Upon execution of this Lease, Tenant shall deliver
to Landlord the sum of $15.648.32 as prepaid REAL ESTATE TAXES & INSURANCE FOR
OCTOBER 2013. THIS PREPAID RENT SHALL ALSO BE APPLIED TO BASE RENT, REAL ESTATE
TAXES AND INSURANCE FOR NOVEMBER 2013 AND SEPTEMBER 2018 (2 MONTHS) of the
Lease. REAL ESTATE TAXES AND INSURANCE ARE ESTIMATES AND MAY BE ADJUSTED
ACCORDINGLY.

 

f.               Security Deposit. Upon execution of this Lease, Tenant shall
deliver to Landlord the sum of $20.000.00 to be held as a security deposit
pursuant to Section 5 below. The security deposit shall be in the form of (check
one): ☒ cash, or ☒ letter of credit according to the Letter of Credit Rider (CBA
Form LCR) attached hereto.

 

g.              Permitted Use. The Premises shall be used only for lawful
production and sale of cannabis and other related products and for no other
purpose without the prior written consent of Landlord (the "Permitted Use").

 

h.              Notice and Payment Addresses.

 

Landlord: M-P Properties PO Box 306

Carnation, WA 98014

                          

Fax No.:              

Email:              

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 2 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

Tenant: Diego Pellicer Worldwide, Inc.

2215 4th Ave S.  

Seattle, WA 98134

               

Fax No.:              

Email:            

 

2.            PREMISES.

 

a.              Lease of Premises. Landlord leases to Tenant, and Tenant leases
from Landlord the Premises upon the terms specified in this Lease.

 

b.              Acceptance of Premises. Except as specified elsewhere in this
Lease, Landlord makes no representations or warranties to Tenant regarding the
Premises, including the structural condition of the Premises or the condition of
all mechanical, electrical, and other systems on the Premises. Except for any
tenant improvements to be completed by Landlord as described on attached Exhibit
B (the "Landlord's Work"), Tenant shall be responsible for performing any work
necessary to bring the Premises into a condition satisfactory to Tenant. By
signing this Lease, Tenant acknowledges that it has had an adequate opportunity
to investigate the Premises; acknowledges responsibility for making any
corrections, alterations and repairs to the Premises (other than the Landlord's
Work); and acknowledges that the time needed to complete any such items shall
not delay the Commencement Date.

 

c.              Tenant Improvements. Attached Exhibit B sets forth all Tenant's
Work, if any, and all tenant improvements to be completed by Tenant (the
"Tenant's Work"), if any, that will be performed on the Premises. Responsibility
for design, payment and performance of all such work shall be as set forth on
attached Exhibit B. If Tenant fails to notify Landlord of any defects in the
Landlord's Work within thirty (30) days of delivery of possession to Tenant,
Tenant shall be deemed to have accepted the Premises in their then condition. If
Tenant discovers any major defects in the Landlord's Work during this 30-day
period that would prevent Tenant from using the Premises for the Permitted Use,
Tenant shall notify Landlord in writing and the Commencement Date shall be
delayed until after Landlord has notified Tenant that Landlord has corrected the
major defects and Tenant has had five (5) days to inspect and approve the
Premises. The Commencement Date shall not be delayed if Tenant's inspection
reveals minor defects in the Landlord's Work that will not prevent Tenant from
using the Premises for the Permitted Use. Tenant shall prepare a punch list of
all minor defects in Landlord's Work and provide the punch list to Landlord,
which Landlord shall promptly correct.

 

3.            TERM. The term of this Lease shall commence on the Commencement
Date specified in Section 1, or on such earlier or later date as may be
specified by notice delivered by Landlord to Tenant advising Tenant that the
Premises are ready for possession and specifying the Commencement Date, which
shall not be less than             days (thirty (30) days if not filled in)
following the date of such notice. TENANT MAY TAKE EARLY POSSESSION OF THE
PREMISES FOLLOWING FULL EXECUTION OF THE LEASE. TENANT SHALL TRANSFER UTILITIES
INTO ITS NAME UPON THE EARLIER OF POSSESSION OR ON THE COMMENCEMENT DATE.

 

a.             Early Possession. If Landlord permits Tenant to possess or occupy
the Premises prior to the Commencement Date specified in Section 1, then such
early occupancy shall not advance the Commencement Date or the Termination Date
set forth in Section 1, but otherwise all terms and conditions of this Lease
shall nevertheless apply during the period of early occupancy before the
Commencement Date.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 3 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

b.             Delayed Possession. Landlord shall act diligently to make the
Premises available to Tenant; provided, however, neither Landlord nor any agent
or employee of Landlord shall be liable for any damage or loss due to Landlord's
inability or failure to deliver possession of the Premises to Tenant as provided
in this Lease. If possession is delayed, the Commencement Date set forth in
Section 1 shall also be delayed. In addition, the Termination Date set forth in
Section 1 shall be modified so that the length of the Lease term remains the
same. If Landlord does not deliver possession of the Premises to Tenant within
_________ days (sixty (60) days if not filled in) after the Commencement Date
specified in Section 1, Tenant may elect to cancel this Lease by giving written
notice to Landlord within ten (10) days after such time period ends. If Tenant
gives such notice of cancellation, the Lease shall be cancelled, all prepaid
rent and security deposits shall be refunded to Tenant, and neither Landlord nor
Tenant shall have any further obligations to the other. The first "Lease year"
shall commence on the Commencement Date and shall end on the date which is
twelve (12) months from the end of the month in which the Commencement Date
occurs. Each successive Lease year during the initial term and any extension
terms shall be twelve (12) months, commencing on the first day following the end
of the preceding Lease year. To the extent that the tenant improvements are not
completed in time for the Tenant to occupy or take possession of the Premises on
the Commencement Date due to the failure of Tenant to fulfill any of its
obligations under this Lease, the Lease shall nevertheless commence on the
Commencement Date set forth in Section 1.

 

4.            RENT.

 

a.              Payment of Rent. Tenant shall pay Landlord without notice,
demand, deduction, or ffset, in lawful money of the United States, the monthly
Base Rent stated in Section 1 in advance on or before the first day of each
month during the Lease term beginning on (check one): ☐ the Commencement Date,
or ☐ _________ (if no date specified, then on the Commencement Date), and shall
also pay any other additional payments due to Landlord ("Additional Rent"),
including Operating Costs (collectively the "Rent") when required under this
Lease. Payments for any partial month at the beginning or end of the Lease shall
be prorated. All payments due to Landlord under this Lease, including late fees
and interest, shall also constitute Additional Rent, and upon failure of Tenant
to pay any such costs, charges or expenses, Landlord shall have the same rights
and remedies as otherwise provided in this Lease for the failure of Tenant to
pay rent.

 

b.              Triple Net Lease. This Lease is what is commonly called a "Net,
Net, Net" or "triple-net" Lease, which means that, except as otherwise expressly
provided herein, Landlord shall receive all Base Rent free and clear of any and
all other impositions, taxes, liens, charges or expenses of any nature
whatsoever in connection with the ownership and operation of the Premises. In
addition to Base Rent, Tenant shall pay to the parties respectively entitled
thereto, or satisfy directly, all Additional Rent and other impositions,
insurance premiums, repair and maintenance charges, and any other charges,
costs, obligations, liabilities, requirements, and expenses„ which arise with
regard to the Premises or may be contemplated under any other provision of the
Lease during its term, except for costs and expenses expressly made the
obligation of Landlord in this Lease.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 4 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

c.           Late Charges; Default Interest. If any sums payable by Tenant to
Landlord under this Lease are not received within five (5) business days after
their due date, Tenant shall pay Landlord an amount equal to the greater of $100
or five percent (5%) of the delinquent amount for the cost of collecting and
handling such late payment in addition to the amount due and as Additional Rent.
All delinquent sums payable by Tenant to Landlord and not paid within five (5)
business days after their due date shall, at Landlord's option, bear interest at
the rate of fifteen percent (15%) per annum, or the highest rate of interest
allowable by law, whichever is less (the "Default Rate"). Interest on all
delinquent amounts shall be calculated from the original due date to the date of
payment.

 

d.           Less Than Full Payment. Landlord's acceptance of less than the full
amount of any payment due from Tenant shall not be deemed an accord and
satisfaction or compromise of such payment unless Landlord specifically consents
in writing to payment of such lesser sum as an accord and satisfaction or
compromise of the amount which Landlord claims. Any portion that remains to be
paid by Tenant shall be subject to the late charges and default interest
provisions of this Section 4.

 

5.            SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall
deliver to Landlord the security deposit specified in Section 1 above.
Landlord's obligations with respect to the security deposit are those of a
debtor and not of a trustee, and Landlord may commingle the security deposit
with its other funds. If Tenant breaches any covenant or condition of this
Lease, including but not limited to the payment of Rent, Landlord may apply all
or any part of the security deposit to the payment of any sum in default and any
damage suffered by Landlord as a result of Tenant's breach. Tenant acknowledges,
however, that the security deposit shall not be considered as a measure of
Tenant's damages in case of default by Tenant, and any payment to Landlord from
the security deposit shall not be construed as a payment of liquidated damages
for Tenant's default. If Landlord applies the security deposit as contemplated
by this Section, Tenant shall, within five (5) days after written demand
therefore by Landlord, deposit with Landlord the amount so applied. If Tenant
complies with all of the covenants and conditions of this Lease throughout the
Lease term, the security deposit shall be repaid to Tenant without interest
within thirty (30) days after the surrender of the Premises by Tenant in the
condition required hereunder by Section 11 of this Lease.

 

6.            USES. The Premises shall be used only for the Permitted Use
specified in Section 1 above, and for no other business or purpose without the
prior written consent of Landlord. No act shall be done on or around the
Premises that is unlawful IN THE STATE OF WASHINGTON or that will increase the
existing rate of insurance on the Premises, or cause the cancellation of any
insurance on the Premises. Tenant shall not commit or allow to be committed any
waste upon the Premises, or any public or private nuisance. Tenant shall not do
or permit anything to be done on the Premises which will obstruct or interfere
with the rights of other tenants or occupants of the Premises, or their
employees, officers, agents, servants, contractors, customers, clients,
visitors, guests, or other licensees or invitees or to injure or annoy such
persons.

 

7.            COMPLIANCE WITH LAWS. Tenant shall not cause or permit the
Premises to be used in any way which violates any WASHINGTON STATE law,
ordinance, or governmental regulation or order. Landlord represents to Tenant
that, as of the Commencement Date, to Landlord's knowledge, but without duty of
investigation, and with the exception of any Tenant's Work, the Premises comply
with all applicable laws, rules, regulations, or orders, including without
limitation, the Americans With Disabilities Act, if applicable, and Landlord
shall be responsible to promptly cure at its sole cost any noncompliance which
existed on the Commencement Date. Tenant shall be responsible for complying with
all laws applicable to the Premises as a result of the Permitted Use, and Tenant
shall be responsible for making any changes or alterations as may be required by
law, rule, regulation, or order for Tenant's Permitted Use at its sole cost and
expense. Otherwise, if changes or alterations are required by rule, law,
regulation, or order unrelated to the Permitted Use, Landlord shall make changes
and alterations at its expense.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 5 of 24  

 

LEASE AGREEMENT 

(Single Tenant For Entire Parcel - NNN)

  

8.            UTILITIES. Landlord shall not be responsible for providing any
utilities to the Premises and shall not be liable for any loss, injury or damage
to person or property caused by or resulting from any variation, interruption,
or failure of utilities due to any cause whatsoever, and rent shall not abate as
a result thereof, except to the extent due to the intentional misconduct or
gross negligence of Landlord. Tenant shall be responsible for determining
whether available utilities and their capacities will meet Tenant's needs.
Tenant shall install and connect, if necessary, and directly pay for all water,
sewer, gas, janitorial, electricity, garbage removal, heat, telephone, and other
utilities and services used by Tenant on the Premises during the term, whether
or not such services are billed directly to Tenant. Tenant will also procure, or
cause to be procured, without cost to Landlord, all necessary permits, licenses
or other authorizations required for the lawful and proper installation,
maintenance, replacement, and removal on or from the Premises of wires, pipes,
conduits, tubes, and other equipment and appliances for use in supplying all
utilities or services to the Premises. Landlord, upon request of Tenant, and at
the sole expense and liability of Tenant, shall join with Tenant in any
reasonable applications required for obtaining or continuing such utilities or
services.

 

9.            TAXES. Tenant shall pay all Taxes (defined below) applicable to
the Premises during the Lease term. All payments for Taxes shall be made at
least ten (10) days prior to their due date. Tenant shall promptly furnish
Landlord with satisfactory evidence that Taxes have been paid. If any Taxes paid
by Tenant cover any period of time before or after the expiration of the term,
Tenant's share of those Taxes paid will be prorated to cover only the period of
time within the tax fiscal year during which this Lease was in effect, and
Landlord shall promptly reimburse or credit Tenant to the extent required. If
Tenant fails to timely pay any Taxes, Landlord may pay them, and Tenant shall
repay such amount to Landlord upon demand. Landlord may also elect to pay all
such Taxes directly to the appropriate taxing authority/ies and receive
reimbursement thereof from Tenant within ten (10) days after invoice, either of
the full amount paid or at Landlord's election in equal monthly installments.

 

The term "Taxes" shall mean: (i) any form of tax or assessment imposed on the
Premises by any authority, including any city, county, state or federal
government, or any improvement district, as against any legal or equitable
interest of Landlord or Tenant in the Premises or in the real property of which
the Premises are a part, or against rent paid for leasing the Premises; and (ii)
any form of personal property tax or assessment imposed on any personal
property, fixtures, furniture, tenant improvements, equipment, inventory, or
other items, and all replacements, improvements, and additions to them, located
on the Premises, whether owned by Landlord or Tenant. "Taxes" shall exclude any
net income tax imposed on Landlord for income that Landlord receives under this
Lease.

 

Tenant may, upon reasonable prior notice to Landlord, contest the amount or
validity, in whole or in part, of any Taxes at its sole expense, only after
paying such Taxes or posting such security as Landlord may reasonably require in
order to protect the Premises against loss or forfeiture. Upon the termination
of any such proceedings, Tenant shall pay the amount of such Taxes or part of
such Taxes as finally determined, together with any costs, fees, interest
penalties, or other related liabilities. Landlord shall reasonably cooperate
with Tenant in contesting any Taxes, provided Landlord incurs no expense or
liability in doing so.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 6 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

10.         ALTERATIONS. Tenant may make alterations, additions or improvements
to the Premises, including any Tenant Work, TO BE MATUALLY AGREED UPON BETWEEN
LANDLORD AND TENANT WITHIN THIRTY (30) DAYS OF LEASE EXECUTION, identified on
attached Exhibit C (the "Alterations"), only with the prior written consent of
Landlord, which, with respect to Alterations not affecting the structural
components of the Premises or utility systems therein, shall not be unreasonably
withheld, conditioned, or delayed. Landlord shall have thirty (30) days in which
to respond to Tenant's request for any Alterations so long as such request
includes the name of Tenant's contractors and reasonably detailed plans and
specifications therefore. The term "Alterations" shall not include the
installation of shelves, movable partitions, Tenant's equipment, and trade
fixtures that may be performed without damaging existing improvements or the
structural integrity of the Premises and Landlord's consent shall not be
required for Tenant's installation or removal of those items. Tenant shall
perform all work at Tenant's expense and in compliance with all applicable laws
and shall complete all Alterations in accordance with plans and specifications
approved by Landlord, using contractors approved by Landlord. Tenant shall pay,
when due, or furnish a bond for payment (as set forth in Section 18) all claims
for labor or materials furnished to or for Tenant at or for use in the Premises,
which claims are or may be secured by any mechanics' or materialmens' liens
against the Premises or any interest therein. Tenant shall remove all
Alterations at the end of the Lease term unless Landlord conditioned its consent
upon Tenant leaving a specified Alteration at the Premises, in which case Tenant
shall not remove such Alteration, and it shall become Landlord's property.
Tenant shall immediately repair any damage to the Premises caused by removal of
Alterations.

 

11.         REPAIRS AND MAINTENANCE; SURRENDER. Tenant shall, at its sole
expense, maintain the entire Premises including without limitation the roof
surface and normal repairs and maintenance to all heating, ventilation, and air
conditioning ("HVAC") equipment at the Premises, in good condition and promptly
make all repairs and replacements, whether structural or non-structural,
necessary to keep the Premises in safe operating condition, including all
utilities and other systems serving the Premises, but excluding the roof
structure, subfloor, foundation, exterior walls, and capital repairs and
replacements to the HVAC system (collectively, "Landlord's Repair Items"), which
Landlord shall maintain in good condition and repair at Landlord's expense,
provided that Tenant shall not damage any Landlord's Repair Items and shall
promptly repair any damage or injury done thereto caused by Tenant or its
employees, officers, agents, servants, contractors, customers, clients,
visitors, guests, or other licensees or invitees . Notwithstanding anything in
this Section to the contrary, Tenant shall not be responsible for any repairs to
the Premises made necessary by the negligence or willful misconduct of Landlord
or its employees, officers, agents, servants, contractors, customers, clients,
visitors, guests, or other licensees or invitees therein. If Tenant fails to
perform Tenant's obligations under this Section, Landlord may at Landlord's
option enter upon the Premises after ten (10) days' prior notice to Tenant and
put the same in good order, condition and repair and the cost thereof together
with interest thereon at the default rate set forth in Section 4 shall be due
and payable as Additional Rent to Landlord together with Tenant's next
installment of Base Rent. Upon expiration of the Lease term, whether by lapse of
time or otherwise, Tenant shall promptly and peacefully surrender the Premises,
together with all keys, to Landlord in as good condition as when received by
Tenant from Landlord or as thereafter improved, reasonable wear and tear and
insured casualty excepted.

 

12.         ACCESS AND RIGHT OF ENTRY. After twenty-four (24) hours' notice from
Landlord (except in cases of emergency, when no notice shall be required),
Tenant shall permit Landlord and its agents, employees and contractors to enter
the Premises at all reasonable times to make repairs, inspections, alterations
or improvements, provided that Landlord shall use reasonable efforts to minimize
interference with Tenant's use and enjoyment of the Premises. This Section shall
not impose any repair or other obligation upon Landlord not expressly stated
elsewhere in this Lease. After reasonable notice to Tenant, Landlord shall have
the right to enter the Premises for the purpose of (a) showing the Premises to
prospective purchasers or lenders at any time, and to prospective tenants within
one hundred eighty (180) days prior to the expiration or sooner termination of
the Lease term; and, (b) for posting "for lease" signs within one hundred eighty
(180) days prior to the expiration or sooner termination of the Lease term.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 7 of 24  

 

LEASE AGREEMENT

 (Single Tenant For Entire Parcel - NNN)

 

 

13.         SIGNAGE. Tenant shall obtain Landlord's written consent as to size,
location, materials, method of attachment, and appearance, before installing any
signs upon the Premises. Tenant shall install any approved signage at Tenant's
sole expense and in compliance with all applicable laws. Tenant shall not damage
or deface the Premises in installing or removing signage and shall repair any
injury or damage to the Premises caused by such installation or removal.

 

14.         DESTRUCTION OR CONDEMNATION.

 

a.             Damage and Repair. If the Premises are partially damaged but not
rendered untenantable, by fire or other insured casualty, then Landlord shall
diligently restore the Premises to the extent required below and this Lease
shall not terminate. The Premises shall not be deemed untenantable if
twenty-five percent (25%) or less of the Premises are damaged. Landlord shall
have no obligation to restore the Premises if insurance proceeds are not
available to pay the entire cost of such restoration. If insurance proceeds are
available to Landlord but are not sufficient to pay the entire cost of restoring
the Premises, or if Landlord's lender shall not permit all or any part of the
insurance proceeds to be applied toward restoration, then Landlord may elect to
terminate this Lease and keep the insurance proceeds, by notifying Tenant within
sixty (60) days of the date of such casualty.

 

If the Premises are entirely destroyed, or partially damaged and rendered
untenantable, by fire or other casualty, Landlord may, at its option: (a)
terminate this Lease as provided herein, or (b) restore the Premises to their
previous condition to the extent required below; provided, however, if such
casualty event occurs during the last six (6) months of the Lease term (after
considering any option to extend the term timely exercised by Tenant) then
either Tenant or Landlord may elect to terminate the Lease. If, within sixty
(60) days after receipt by Landlord from Tenant of written notice that Tenant
deems the Premises untenantable, Landlord fails to notify Tenant of its election
to restore the Premises, or if Landlord is unable to restore the Premises within
six (6) months of the date of the casualty event, then Tenant may elect to
terminate the Lease upon twenty (20) days' written notice to Landlord unless
Landlord, within such twenty (20) day period, notifies Tenant that it will in
fact restore the Premises or actually completes such restoration work to the
extent required below, as applicable.

 

If Landlord restores the Premises under this Section 14, Landlord shall proceed
with reasonable diligence to complete the work, and the base monthly rent shall
be abated in the same proportion as the untenantable portion of the Premises
bears to the whole Premises, provided that there shall be a rent abatement only
if the damage or destruction of the Premises did not result from, or was not
contributed to directly or indirectly by the act, fault or neglect of Tenant, or
Tenant's employees, officers, agents, servants, contractors, customers, clients,
visitors, guests, or other licensees or invitees. No damages, compensation or
claim shall be payable by Landlord for inconvenience, loss of business or
annoyance directly, incidentally or consequentially arising from any repair or
restoration of any portion of the Premises. Landlord shall have no obligation to
carry insurance of any kind for the protection of Tenant or any alterations or
improvements paid for by Tenant; any Tenant Improvements identified in Exhibit B
(regardless of who may have completed them); Tenant's furniture; or on any
fixtures, equipment, improvements or appurtenances of Tenant under this Lease,
and Landlord's restoration obligations hereunder shall not include any
obligation to repair any damage thereto or replace the same.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 8 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

b.             Condemnation. If the Premises are made untenantable by eminent
domain, or conveyed under a threat of condemnation, this Lease shall
automatically terminate as of the earlier of the date title vests in the
condemning authority or the condemning authority first has possession of the
Premises and all Rents and other payments shall be paid to that date. If the
condemning authority takes a portion of the Premises that does not render the
Premises untenantable, then this Lease shall continue in full force and effect
and the base monthly rent shall be equitably reduced based on the proportion by
which the floor area of any structures is reduced The reduction in Rent shall be
effective on the earlier of the date the condemning authority first has
possession of such portion or title vests in the condemning authority. Landlord
shall be entitled to the entire award from the condemning authority attributable
to the value of the Premises and Tenant shall make no claim for the value of its
leasehold. Tenant shall be permitted to make a separate claim against the
condemning authority for moving expenses, provided that in no event shall
Tenant's claim reduce Landlord's award.

 

15.           INSURANCE.

 

a.              Tenant's Liability Insurance. During the Lease term, Tenant
shall pay for and maintain commercial general liability insurance with broad
form property damage and contractual liability endorsements. This policy shall
name Landlord, its property manager (if any), and other parties designated by
Landlord as additional insureds using an endorsement form acceptable to
Landlord, and shall insure Tenant's activities and those of Tenant's employees,
officers, agents, servants, contractors, customers, clients, visitors, guests,
or other licensees or invitees with respect to the Premises against loss, damage
or liability for personal injury or bodily injury (including death) or loss or
damage to property with not less than $6,000,000 PER OCCURRENCE, $7,000,000
AGGREGATE, and a deductible of not more than $10,000. THIS AMOUNT CAN BE REACHED
BY USING “UMBRELLA/EXCESS” LIABILITY IF NEEDED. TENANT SHALL ALSO CARRY
COMMERCIAL AUTOMOBILE LIABILITY INSURANCE IN THE AMOUNT OF $1,000,000 FOR
OWNED/NON OWNED/HIRED AUTOS. WORKERS COMPENSATION/EMPLOYERS LIABILITY SHALL ALSO
BE EVIDENCED ON A CERTIFICATE OF LIABILITY INSURANCE. ADDITIONAL INSURED FORM(S)
SHOULD BE INCLUDED WITH THE CERTIFICATE OF INSURANCE. Tenant's insurance will be
primary and noncontributory with any liability insurance carried by Landlord.
Landlord may also require Tenant to obtain and maintain business income coverage
for at least six (6) months, business auto liability coverage, and, if
applicable to Tenant's Permitted Use, liquor liability insurance and/or
warehouseman's coverage.

 

b.              Tenant's Property Insurance. During the Lease term, Tenant shall
pay for and maintain special form clauses of loss coverage property insurance
(with coverage for earthquake if required by Landlord's lender and, if the
Premises are situated in a flood plain, flood damage) for all of Tenant's
personal property, fixtures and equipment in the amount of their full
replacement value, with a deductible of not more than $10,000.

 

c.              Miscellaneous. Tenant's insurance required under this Section
shall be with companies rated A-NII or better in Best's Insurance Guide, and
which are admitted in the state in which the Premises are located. No insurance
policy shall be cancelled or reduced in coverage and each such policy shall
provide that it is not subject to cancellation or a reduction in coverage except
after thirty (30) days prior written notice to Landlord. Tenant shall deliver to
Landlord upon commencement of the Lease and from time to time thereafter, copies
of the insurance policies or evidence of insurance and copies of endorsements
required by this Section. In no event shall the limits of such policies be
considered as limiting the liability of Tenant under this Lease. If Tenant fails
to acquire or maintain any insurance or provide any policy or evidence of
insurance required by this Section, and such failure continues for three (3)
days after notice from Landlord, Landlord may, but shall not be required to,
obtain such insurance for Landlord's benefit and Tenant shall reimburse Landlord
for the costs of such insurance upon demand. Such amounts shall be Additional
Rent payable by Tenant hereunder and in the event of non-payment thereof,
Landlord shall have the same rights and remedies with respect to such
non-payment as it has with respect to any other non-payment of rent hereunder.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 9 of 24  

 

LEASE AGREEMENT

 (Single Tenant For Entire Parcel - NNN)

 

d.             Waiver of Subrogation. Landlord and Tenant hereby release each
other and any other tenant, their agents or employees, from responsibility for,
and waive their entire claim of recovery for any loss or damage arising from any
cause covered by property insurance required to be carried or otherwise carried
by each of them. Each party shall provide notice to the property insurance
carrier or carriers of this mutual waiver of subrogation, and shall cause its
respective property insurance carriers to waive all rights of subrogation
against the other. This waiver shall not apply to the extent of the deductible
amounts to any such property policies or to the extent of liabilities exceeding
the limits of such policies.

 

16.         INDEMNIFICATION.

 

a.              Indemnification by Tenant. Tenant shall defend, indemnify, and
hold Landlord and its property manager, if any, harmless against all
liabilities, damages, costs, and expenses, including attorneys' fees, for
personal injury, bodily injury (including death) or property damage arising from
any negligent or wrongful act or omission of Tenant or Tenant's employees,
officers, agents, servants, contractors, customers, clients, visitors, guests,
or other licensees or invitees on or around the Premises, or arising from any
breach of this Lease by Tenant. Tenant shall use legal counsel reasonably
acceptable to Landlord in defense of any action within Tenant's defense
obligation.

 

b.              Indemnification by Landlord. Landlord shall defend, indemnify
and hold Tenant harmless against all liabilities, damages, costs, and expenses,
including attorneys' fees, for personal injury, bodily injury (including death)
or property damage arising from any negligent or wrongful act or omission of
Landlord or Landlord's employees, officers, agents, servants, contractors,
customers, clients, visitors, guests, or other licensees or invitees on or
around the Premises, or arising from any breach of this Lease by Landlord.
Landlord shall use legal counsel reasonably acceptable to Tenant in defense of
any action within Landlord's defense obligation.

 

c.              Waiver of Immunity. Landlord and Tenant each specifically and
expressly waive any immunity that each may be granted under the Washington State
Industrial Insurance Act, Title 51 RCW. Neither party's indemnity obligations
under this Lease shall be limited by any limitation on the amount or type of
damages, compensation, or benefits payable to or for any third party under the
Worker Compensation Acts, Disability Benefit Acts or other employee benefit
acts.

 

d.              Exemption of Landlord from Liability. Except to the extent of
claims arising out of Landlord's gross negligence or intentional misconduct,
Landlord shall not be liable for injury to Tenant's business or assets or any
loss of income therefrom or for damage to any property of Tenant or of its
employees, officers, agents, servants, contractors, customers, clients,
visitors, guests, or other licensees or invitees, or any other person in or
about the Premises.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 10 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

e.             Survival. The provisions of this Section 16 shall survive
expiration or termination of this Lease.

 

17.         ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet,
mortgage, encumber or otherwise transfer any interest in this Lease
(collectively referred to as a "Transfer") or any part of the Premises, without
first obtaining Landlord's written consent which shall not be unreasonably
withheld, conditioned, or delayed. No Transfer shall relieve Tenant of any
liability under this Lease notwithstanding Landlord's consent to such Transfer.
Consent to any Transfer shall not operate as a waiver of the necessity for
Landlord's consent to any subsequent Transfer. In connection with each request
for consent to a Transfer, Tenant shall pay the reasonable cost of processing
same, including attorneys' fees, upon demand of Landlord, up to a maximum of
$1,250. Tenant may sublet to Deigo Pellicer Inc. without landlord approval.

 

If Tenant is a partnership, limited liability company, corporation, or other
entity, any transfer of this Lease by merger, consolidation, redemption or
liquidation, or any change in the ownership of, or power to vote, which
singularly or collectively represents a majority of the beneficial interest in
Tenant, shall constitute a Transfer under this Section.

 

As a condition to Landlord's approval, if given, any potential assignee or
sublessee otherwise approved by Landlord shall assume all obligations of Tenant
under this Lease and shall be jointly and severally liable with Tenant and any
guarantor, if required, for the payment of Rent and performance of all terms of
this Lease. In connection with any Transfer, Tenant shall provide Landlord with
copies of all assignments, subleases and assumption agreement or documents.

 

18.         LIENS. Tenant is not authorized to subject the Landlord's assets to
any liens or claims of lien. Tenant shall keep the Premises free from any liens
created by or through Tenant. Tenant shall indemnify and hold Landlord harmless
from liability for any such liens including, without limitation, liens arising
from any Alterations. If a lien is filed against the Premises by any person
claiming by, through or under Tenant, Tenant shall, within 10 days after
Landlord's demand, at Tenant's expense, either remove the lien or furnish to
Landlord a bond in form and amount and issued by a surety satisfactory to
Landlord, indemnifying Landlord and the Premises against all liabilities, costs
and expenses, including attorneys' fees, which Landlord could reasonably incur
as a result of such lien.

 

19.         DEFAULT. The following occurrences shall each constitute a default
by Tenant (an "Event of Default):

 

a.             Failure To Pay. Failure by Tenant to pay any sum, including Rent,
due under this Lease following five (5) days' notice from Landlord of the
failure to pay.

 

b.            Vacation/Abandonment. Vacation by Tenant of the Premises (defined
as an absence for at least fifteen (15) consecutive days without prior notice to
Landlord), or abandonment of the Premises (defined as an absence of five (5)
days or more while Tenant is in breach of some other term of this Lease).
Tenant's vacation or abandonment of the Premises shall not be subject to any
notice or right to cure.

 

c.             Insolvency. Tenant's insolvency or bankruptcy (whether voluntary
or involuntary), or appointment of a receiver, assignee or other liquidating
officer for Tenant's business; provided, however, that in the event of any
involuntary bankruptcy or other insolvency proceeding, the existence of such
proceeding shall constitute an Event of Default only if such proceeding is not
dismissed or vacated within sixty (60) days after its institution or
commencement.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 11 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

d.            Levy or Execution. The taking of Tenant's interest in this Lease
or the Premises, or any part thereof, by execution or other process of law
directed against Tenant, or attachment of Tenant's interest in this Lease by any
creditor of Tenant, if such attachment is not discharged within fifteen (15)
days after being levied.

 

e.             Other Non-Monetary Defaults. The breach by Tenant of any
agreement, term or covenant of this Lease other than one requiring the payment
of money and not otherwise enumerated in this Section or elsewhere in this
Lease, which breach continues for a period of thirty (30) days after notice by
Landlord to Tenant of the breach.

 

f.              Failure to Take Possession. Failure by Tenant to take possession
of the Premises on the Commencement Date or failure by Tenant to commence any
Tenant's Work in a timely fashion.

 

Landlord shall not be in default unless Landlord fails to perform obligations
required of Landlord within a reasonable time, but in no event less than thirty
(30) days after notice by Tenant to Landlord. If Landlord fails to cure any such
default within the allotted time, Tenant's sole remedy shall be to seek actual
money damages (but not consequential or punitive damages) for loss arising from
Landlord's failure to discharge its obligations under this Lease. Nothing herein
contained shall relieve Landlord from its duty to perform of any of its
obligations to the standard prescribed in this Lease.

 

Any notice periods granted herein shall be deemed to run concurrently with and
not in addition to any default notice periods required by law.

 

20.             REMEDIES. Landlord shall have the following remedies upon an
Event of Default. Landlord's rights and remedies under this Lease shall be
cumulative, and none shall exclude any other right or remedy allowed by law.

 

a.             Termination of Lease. Landlord may terminate Tenant's interest
under the Lease, but no act by Landlord other than notice of termination from
Landlord to Tenant shall terminate this Lease. The Lease shall terminate on the
date specified in the notice of termination. Upon termination of this Lease,
Tenant will remain liable to Landlord for damages in an amount equal to the Rent
and other sums that would have been owing by Tenant under this Lease for the
balance of the Lease term, less the net proceeds, if any, of any reletting of
the Premises by Landlord subsequent to the termination, after deducting all of
Landlord's Reletting Expenses (as defined below). Landlord shall be entitled to
either collect damages from Tenant monthly on the days on which rent or other
amounts would have been payable under the Lease, or alternatively, Landlord may
accelerate Tenant's obligations under the Lease and recover from Tenant: (i)
unpaid rent which had been earned at the time of termination; (ii) the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of rent loss that Tenant proves could
reasonably have been avoided; (iii) the amount by which the unpaid rent for the
balance of the term of the Lease after the time of award exceeds the amount of
rent loss that Tenant proves could reasonably be avoided (discounting such
amount by the discount rate of the Federal Reserve Bank of San Francisco at the
time of the award, plus 1%); and (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under the Lease, or which in the ordinary course would be likely
to result from the Event of Default, including without limitation Reletting
Expenses described in Section 20(b) below.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 12 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

b.             Re-Entry and Reletting. Landlord may continue this Lease in full
force and effect, and without demand or notice, re-enter and take possession of
the Premises or any part thereof, expel the Tenant from the Premises and anyone
claiming through or under the Tenant, and remove the personal property of
either. Landlord may relet the Premises, or any part of them, in Landlord's or
Tenant's name for the account of Tenant, for such period of time and at such
other terms and conditions as Landlord, in its discretion, may determine.
Landlord may collect and receive the rents for the Premises. To the fullest
extent permitted by law, the proceeds of any reletting shall be applied: first,
to pay Landlord all Reletting Expenses (defined below); second, to pay any
indebtedness of Tenant to Landlord other than rent; third, to the rent due and
unpaid hereunder; and fourth, the residue, if any, shall be held by Landlord and
applied in payment of other or future obligations of Tenant to Landlord as the
same may become due and payable, and Tenant shall not be entitled to receive any
portion of such revenue. Re-entry or taking possession of the Premises by
Landlord under this Section shall not be construed as an election on Landlord's
part to terminate this Lease, unless a notice of termination is given to Tenant.
Landlord reserves the right following any re-entry or reletting, or both, under
this Section to exercise its right to terminate the Lease. Tenant will pay
Landlord the Rent and other sums which would be payable under this Lease if
repossession had not occurred, less the net proceeds, if any, after reletting
the Premises and after deducting Landlord's Reletting Expenses. "Reletting
Expenses" is defined to include all expenses incurred by Landlord in connection
with reletting the Premises, including without limitation, all repossession
costs, brokerage commissions and costs for securing new tenants, attorneys'
fees, remodeling and repair costs, costs for removing persons or property, costs
for storing Tenant's property and equipment, and costs of tenant improvements
and rent concessions granted by Landlord to any new Tenant, prorated over the
life of the new lease.

 

c.             Waiver of Redemption Rights. Tenant, for itself, and on behalf of
any and all persons claiming through or under Tenant, including creditors of all
kinds, hereby waives and surrenders all rights and privileges which they may
have under any present or future law, to redeem the Premises or to have a
continuance of this Lease for the Lease term, or any extension thereof.

 

d.             Nonpayment of Additional Rent. All costs which Tenant is
obligated to pay to Landlord pursuant to this Lease shall in the event of
nonpayment be treated as if they were payments of Rent, and Landlord shall have
the same rights it has with respect to nonpayment of Rent.

 

e.             Failure to Remove Property. If Tenant fails to remove any of its
property from the Premises at Landlord's request following an uncured Event of
Default, Landlord may, at its option, remove and store the property at Tenant's
expense and risk. If Tenant does not pay the storage cost within five (5) days
of Landlord's request, Landlord may, at its option, have any or all of such
property sold at public or private sale (and Landlord may become a purchaser at
such sale), in such manner as Landlord deems proper, without notice to Tenant.
Landlord shall apply the proceeds of such sale: (i) to the expense of such sale,
including reasonable attorneys' fees actually incurred; (ii) to the payment of
the costs or charges for storing such property; (iii) to the payment of any
other sums of money which may then be or thereafter become due Landlord from
Tenant under any of the terms hereof; and (iv) the balance, if any, to Tenant.
Nothing in this Section shall limit Landlord's right to sell Tenant's personal
property as permitted by law or to foreclose Landlord's lien for unpaid rent.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 13 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

21.            MORTGAGE SUBORDINATION AND ATTORNMENT. This Lease shall
automatically be subordinate to any mortgage or deed of trust created by
Landlord which is now existing or hereafter placed upon the Premises including
any advances, interest, modifications, renewals, replacements or extensions
("Landlord's Mortgage"). Tenant shag attorn to the holder of any Landlord's
Mortgage or any party acquiring the Premises at any sale or other proceeding
under any Landlord's Mortgage provided the acquiring party assumes the
obligations of Landlord under this Lease. Tenant shall promptly and in no event
later than fifteen (15) days after request execute, acknowledge and deliver
documents which the holder of any Landlord's Mortgage may reasonably require as
further evidence of this subordination and attornment. Notwithstanding the
foregoing, Tenant's obligations under this Section to subordinate in the future
are conditioned on the holder of each Landlord's Mortgage and each party
acquiring the Premises at any sale or other proceeding under any such Landlord's
Mortgage not disturbing Tenant's occupancy and other rights under this Lease, so
long as no uncured Event of Default by Tenant exists.

 

22.            NON-WAIVER. Landlord's waiver of any breach of any provision
contained in this Lease shall not be deemed to be a waiver of the same provision
for subsequent acts of Tenant. The acceptance by Landlord of Rent or other
amounts due by Tenant hereunder shall not be deemed to be a waiver of any
previous breach by Tenant.

 

23.            HOLDOVER. If Tenant shall, without the written consent of
Landlord, remain in possession of the Premises and fail to return them to
Landlord after the expiration or termination of the term, the tenancy shall be a
holdover tenancy and shall be on a month-to-month basis, which may be terminated
according to Washington law. During such tenancy, Tenant agrees to pay to
Landlord 150% of the rate of rental last payable under this Lease, unless a
different rate is agreed upon by Landlord. All other terms of the Lease shall
remain in effect. Tenant acknowledges and agrees that this Section does not
grant any right to Tenant to holdover, and that Tenant may also be liable to
Landlord for any and all damages or expenses which Landlord may have to incur as
a result of Tenant's holdover.

 

24.            NOTICES. All notices under this Lease shall be in writing and
effective (i) when delivered in person or via overnight courier to the other
party, (ii) three (3) days after being sent by registered or certified mail to
the other party at the address set forth in Section 1; or (iii) upon confirmed
transmission by facsimile to the other party at the facsimile numbers set forth
in Section 1. The addresses for notices and payment of rent set forth in Section
1 may be modified by either party only by written notice delivered in
conformance with this Section.

 

25.            COSTS AND ATTORNEYS' FEES. If Tenant or Landlord engage the
services of an attorney to collect monies due or to bring any action for any
relief against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of Rent or other payments, or
possession of the Premises, the losing party shall pay the prevailing party a
reasonable sum for attorneys' fees in such action, whether in mediation or
arbitration, at trial, on appeal, and in any bankruptcy proceeding. 

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 14 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

26.            ESTOPPEL CERTIFICATES. Tenant shall, from time to time, upon
written request of Landlord, execute, acknowledge and deliver to Landlord or its
designee a written statement specifying the following, subject to any
modifications necessary to make such statements true and complete: (i) the total
rentable square footage of the Premises; (ii) the date the Lease term commenced
and the date it expires; (iii) the amount of minimum monthly Rent and the date
to which such Rent has been paid; (iv) that this Lease is in full force and
effect and has not been assigned, modified, supplemented or amended in any way;
(v) that this Lease represents the entire agreement between the parties; (vi)
that all obligations under this Lease to be performed by either party have been
satisfied; (vii) that there are no existing claims, defenses or offsets which
the Tenant has against the enforcement of this Lease by Landlord; (viii) the
amount of Rent, if any, that Tenant paid in advance; (ix) the amount of security
that Tenant deposited with Landlord; (x) if Tenant has sublet all or a portion
of the Premises or assigned its interest in the Lease and to whom; (xi)    if
Tenant has any option to extend the Lease or option to purchase the Premises;
and (xii) such other factual matters concerning the Lease or the Premises as
Landlord may reasonably request. Tenant acknowledges and agrees that any
statement delivered pursuant to this Section may be relied upon by a prospective
purchaser of Landlord's interest or assignee of any mortgage or new mortgagee of
Landlord's interest in the Premises. If Tenant shall fail to respond within ten
(10) days to Landlord's request for the statement required by this Section,
Landlord may provide the statement and Tenant shall be deemed to have admitted
the accuracy of the information provided by Landlord.

 

27.            TRANSFER OF LANDLORD'S INTEREST. This Lease shall be assignable
by Landlord without the consent of Tenant. In the event of any transfer or
transfers of Landlord's interest in the Premises, other than a transfer for
collateral purposes only, upon the assumption of this Lease by the transferee,
Landlord shall be automatically relieved of obligations and liabilities accruing
from and after the date of such transfer, including any liability for any
retained security deposit or prepaid rent, for which the transferee shall be
liable, and Tenant shall attorn to the transferee.

 

28.            LANDLORD'S LIABILITY. Anything in this Lease to the contrary
notwithstanding, covenants, undertakings and agreements herein made on the part
of Landlord are made and intended not as personal covenants, undertakings and
agreements for the purpose of binding Landlord personally or the assets of
Landlord but are made and intended for the purpose of binding only the
Landlord's interest in the Premises, as the same may from time to time be
encumbered. In no event shall Landlord or its partners, shareholders, or
members, as the case may be, ever be personally liable hereunder.

 

29.            RIGHT TO PERFORM. If Tenant shall fail to timely pay any sum or
perform any other act on its part to be performed hereunder, Landlord may make
any such payment or perform any such other act on Tenant's behalf. Tenant shall,
within ten (10) days of demand, reimburse Landlord for its expenses incurred in
making such payment or performance. Landlord shall (in addition to any other
right or remedy of Landlord provided by law) have the same rights and remedies
in the event of the nonpayment of sums due under this Section as in the case of
default by Tenant in the payment of Rent.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 15 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

30.            HAZARDOUS MATERIAL. As used herein, the term "Hazardous Material"
means any hazardous, dangerous, toxic or harmful substance, material or waste
including biomedical waste which is or becomes regulated by any local
governmental authority, the State of Washington or the United States Government,
due to its potential harm to the health, safety or welfare of humans or the
environment. Landlord represents and warrants to Tenant that, to Landlord's
knowledge without duty of investigation, there is no Hazardous Material on, in,
or under the Premises as of the Commencement Date except as may otherwise have
been disclosed to Tenant in writing before the execution of this Lease. If there
is any Hazardous Material on, in, or under the Premises as of the Commencement
Date which has been or thereafter becomes unlawfully released through no fault
of Tenant, then Landlord shall indemnify, defend and hold Tenant harmless from
any and all claims, judgments, damages, penalties, fines, costs, liabilities or
losses including without limitation sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees, incurred or suffered by Tenant
either during or after the Lease term as the result of such contamination.
Tenant shall not cause or permit any Hazardous Material to be brought upon,
kept, or used in or about, or disposed of on the Premises by Tenant, its
employees, officers, agents, servants, contractors, customers, clients,
visitors, guests, or other licensees or invitees, except with Landlord's prior
consent and then only upon strict compliance with all applicable federal, state
and local laws, regulations, codes and ordinances. If Tenant breaches the
obligations stated in the preceding sentence, then Tenant shall indemnify,
defend and hold Landlord harmless from any and all claims, judgments, damages,
penalties, fines, costs, liabilities or losses including, without limitation,
diminution in the value of the Premises; damages for the loss or restriction on
use of rentable or usable space or of any amenity of the Premises, or elsewhere;
damages arising from any adverse impact on marketing of space at the Premises;
and sums paid in settlement of claims, attorneys' fees, consultant fees and
expert fees incurred or suffered by Landlord either during or after the Lease
term. These indemnifications by Landlord and Tenant include, without limitation,
costs incurred in connection with any investigation of site conditions or any
clean-up, remedial, removal or restoration work, whether or not required by any
federal, state or local governmental agency or political subdivision, because of
Hazardous Material present in the Premises, or in soil or ground water on or
under the Premises. Tenant shall immediately notify Landlord of any inquiry,
investigation or notice that Tenant may receive from any third party regarding
the actual or suspected presence of Hazardous Material on the Premises.

 

Without limiting the foregoing, if the presence of any Hazardous Material
brought upon, kept or used in or about the Premises by Tenant, its employees,
officers, agents, servants, contractors, customers, clients, visitors, guests,
or other licensees or invitees, results in any unlawful release of any Hazardous
Materials on the Premises or any other property, Tenant shall promptly take all
actions, at its sole expense, as are necessary to return the Premises or any
other property to the condition existing prior to the release of any such
Hazardous Material; provided that Landlord's approval of such actions shall
first be obtained, which approval may be withheld at Landlord's sole discretion.
The provisions of this Section shall survive expiration or termination of this
Lease.

 

31.            QUIET ENJOYMENT. So long as Tenant pays the Rent and performs all
of its obligations in this Lease, Tenant's possession of the Premises will not
be disturbed by Landlord or anyone claiming by, through or under Landlord.

 

32.            MERGER. The voluntary or other surrender of this Lease by Tenant,
or a mutual cancellation thereof, shall not work a merger and shall, at the
option of Landlord, terminate all or any existing subtenancies or may, at the
option of Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.

 

33.            GENERAL.

 

a.             Heirs and Assigns. This Lease shall apply to and be binding upon
Landlord and Tenant and their respective heirs, executors, administrators,
successors and assigns.

 

b.             Brokers' Fees. Tenant represents and warrants to Landlord that
except for Tenant's Broker, if any, described or disclosed in Section 35 of this
Lease, it has not engaged any broker, finder or other person who would be
entitled to any commission or fees for the negotiation, execution or delivery of
this Lease and shall indemnify and hold harmless Landlord against any loss,
cost, liability or expense incurred by Landlord as a result of any claim
asserted by any such broker, finder or other person on the basis of any
arrangements or agreements made or alleged to have been made by or on behalf of
Tenant. Landlord represents and warrants to Tenant that except for Landlord's
Broker, if any, described and disclosed in Section 35 of this Lease, it has not
engaged any broker, finder or other person who would be entitled to any
commission or fees for the negotiation, execution or delivery of this Lease and
shall indemnify and hold harmless Tenant against any loss, cost, liability or
expense incurred by Tenant as a result of any claim asserted by any such broker,
finder or other person on the basis of any arrangements or agreements made or
alleged to have been made by or on behalf of Landlord.

 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 16 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

c.             Entire Agreement. This Lease contains all of the covenants and
agreements between Landlord and Tenant relating to the Premises. No prior or
contemporaneous agreements or understandings pertaining to the Lease shall be
valid or of any force or effect and the covenants and agreements of this Lease
shall not be altered, modified or amended to except in writing signed by
Landlord and Tenant.

 

d.             Severability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision of this Lease.

 

e.             Force Majeure. Time periods for either party's performance under
any provisions of this Lease (excluding payment of Rent) shall be extended for
periods of time during which the party's performance is prevented due to
circumstances beyond such party's control, including without limitation, fires,
floods, earthquakes, lockouts, strikes, embargoes, governmental regulations,
acts of God, public enemy, war or other strife.

 

f.              Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State of Washington.

 

g.             Memorandum of Lease. Neither this Lease nor any memorandum or
"short form" thereof shall be recorded without Landlord's prior consent.

 

h.             Submission of Lease Form Not an Offer. One party's submission of
this Lease to the other for review shall not constitute an offer to lease the
Premises. This Lease shall not become effective and binding upon Landlord and
Tenant until it has been fully signed by both of them.

 

i.              No Light, Air or View Easement. Tenant has not been granted an
easement or other right for light, air or view to or from the Premises. Any
diminution or shutting off of light, air or view by any structure which may be
erected on or adjacent to the Premises shall in no way effect this Lease or the
obligations of Tenant hereunder or impose any liability on Landlord.

 

j.              Authority of Parties. Each party signing this Lease represents
and warrants to the other that it has the authority to enter into this Lease,
that the execution and delivery of this Lease has been duly authorized, and that
upon such execution and delivery, this Lease shall be binding upon and
enforceable against the party on signing.

 

k.             Time. "Day" as used herein means a calendar day and "business
day" means any day on which commercial banks are generally open for business in
the state where the Premises are situated. Any period of time which would
otherwise end on a non-business day shall be extended to the next following
business day. Time is of the essence of this Lease.

 

L.             LANDLORD'S OPTION To TERMINATE. SHOULD ANY GOVERNMENTAL AGENCY
REQUEST TENANT TO SEIZE OPERATIONS, CLOSE BUSINESS, AND/OR VACATE, TENANT SHALL
VACATE WITHIN THIRTY (30) DAYS WRITTEN NOTICE FROM SUCH GOVERNMENTAL AGENCY
AND/OR LANDLORD. UPON TERMINATION, TENANT SHALL BE RESPONSIBLE FOR PAYMENT TO
LANDLORD OF ANY UNAMORTIZED REAL ESTATE COMMISSIONS, FORFEIT SECURITY DEPOSIT
AND LAST MONTHS RENT, AND RETURN THE PREMISES TO ITS ORIGINAL CONDITION AT
LANDLORD'S DISCRETION. 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 17 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

IN ADDITION, TENANT GRANTS TO LANDLORD THE RIGHT TO TERMINATE THIS LEASE AFTER
SEPTEMBER 30, 2018 ON THE FOLLOWING TERMS AND CONDITIONS:

 

(A)          LANDLORD'S RIGHT TO TERMINATE THIS LEASE SHALL BE CONDITIONED UPON
EITHER: (I) LANDLORD DETERMINING IN ITS SOLE DISCRETION THAT SUCH TERMINATION IS
REQUIRED FOR THE REDEVELOPMENT, MODIFICATION, OR RECONSTRUCTION OF THE PREMISES;
OR LANDLORD DETERMINING IN ITS SOLE DISCRETION THAT SUCH TERMINATION IS REQUIRED
BY THE SALE OF THE PREMISES.

 

(B)          LANDLORD MAY EXERCISE ITS RIGHT TO TERMINATE THIS LEASE BY
PROVIDING TENANT WITH WRITTEN NOTICE OF TERMINATION, WHICH NOTICE SHALL SET
FORTH THE DATE THE LEASE WILL TERMINATE. IN NO EVENT SHALL THE DATE OF
TERMINATION OCCUR ANY SOONER THAN TWELVE (12) MONTHS AFTER LANDLORD'S ISSUANCE
OF THE NOTICE OF TERMINATION.

 

(C)          ON OR BEFORE THE TERMINATION DATE SET FORTH IN THE NOTICE, TENANT
WILL SURRENDER POSSESSION OF THE PREMISES TO LANDLORD IN ACCORDANCE WITH THE
PROVISION OF THIS LEASE, AS IF THE TERMINATION DATE WERE THE EXPIRATION DATE OF
THIS LEASE AND UPON TERMINATION, LANDLORD AND TENANT WILL BE RELIEVED OF THEIR
OBLIGATIONS UNDER THIS LEASE, EXCEPT FOR THOSE ACCRUING BEFORE THE TERMINATION
DATE.

 

(D)          LANDLORD'S RIGHT TO TERMINATE AS PROVIDED IN THIS SECTION IS
MATERIAL CONSIDERATION FOR LANDLORD ENTERING INTO THIS LEASE AND LANDLORD IS
RELYING ON THIS RIGHT OF TERMINATION IN EXECUTING AND DELIVERING THIS LEASE. BUT
FOR THE RIGHT OF TERMINATION GRANTED HEREIN, LANDLORD WOULD NOT ENTER INTO THIS
LEASE.

 

M.            TENANT'S OPTION To TERMINATE. IF THERE IS A CHANGE IN THE EXISTING
LAWS GOVERNING THE LEGALITY OF TENANT'S BUSINESS, OR IN THE ENFORCEMENT OF
EXISTING LAWS, WHICH MAKE IT IMPOSSIBLE TO CONTINUE OPERATING UNDER THE STATED
USE, OR A SIMILAR USE ACCEPTABLE TO TENANT, TENANT SHALL BE ALLOWED TO TERMINATE
THE REMAINDER OF THIS LEASE WITHIN SIXTY (60) DAYS WRITTEN NOTICE TO LANDLORD.
UPON TERMINATION, TENANT SHALL BE RESPONSIBLE FOR PAYMENT TO LANDLORD OF ANY
UNAMORTIZED REAL ESTATE COMMISSIONS, FORFEIT SECURITY DEPOSIT AND LAST MONTHS
RENT, AND RETURN THE PREMISES TO ITS ORIGINAL CONDITION AT LANDLORD'S
DISCRETION. TENANT MAY EXERCISE OPTION TO TERMINATE, IN ITS SOLE DISCRETION, IN
THE EVENT DIEGO PELLICER INC IS NOT GRANTED A MARIJUANA RETAIL LICENSE BY
WASHINGTON LIQUOR CONTROL BOARD.

 

N.             TENANTS RIGHT OF FIRST REFUSAL To PURCHASE PROPERTY: DURING THE
LEASE TERM;
TENANT SHALL HAVE A ONE TIME RIGHT OF FIRST REFUSAL TO PURCHASE THE PROPERTY FOR
THE SAME PRICE AND IN ACCORDANCE WITH THE SAME TERMS AND CONDITIONS AS MAY BE
TENDERED TO LANDLORD IN A BONA FIDE OFFER TO PURCHASE BY A PROSPECTIVE
PURCHASER. TENANT SHALL HAVE TEN (10) DAYS FOLLOWING RECEIPT OF WRITTEN NOTICE
FROM LANDLORD INDICATING LANDLORD'S INTENT TO ACCEPT THE SUBJECT OFFER, TOGETHER
WITH A COPY OF THE PROPOSED PURCHASE AND SALE AGREEMENT, IN WHICH TO NOTIFY
LANDLORD IN WRITING OF TENANT'S INTENT TO PURCHASE THE PROPERTY FOR THE SAME
PURCHASE PRICE AND ON THE SAME TERMS AND CONDITIONS AS SET FORTH IN LANDLORD'S
WRITTEN NOTICE. IF TENANT FAILS TO NOTIFY LANDLORD IN WRITING OF TENANT'S
ELECTION TO PURCHASE THE PROPERTY, TENANT'S RIGHT OF FIRST REFUSAL SHALL BE NULL
AND VOID, AND LANDLORD IRREVOCABLY MAY THEN SELL THE PROPERTY TO THE THIRD
PARTY.

 

TENANT UNDERSTANDS THAT LANDLORD CONSISTS OF TWO (2) INDIVIDUALS. SHOULD ONE (1)
OF THE INDIVIDUALS WANT TO BUY THE OTHER INDIVIDUALS SHARE OF THE PROPERTY,
TENANTS RIGHT OF FIRST REFUSAL TO PURCHASE PROPERTY SHALL NOT INHIBIT THE
INDIVIDUALS RIGHT TO PURCHASE THE OTHER INDIVIDUALS SHARE OF THE PROPERTY. 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 18 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

34.           EXHIBITS AND RIDERS. The following exhibits and riders are made a
part of this Lease, and the terms thereof shall control over any inconsistent
provision in the sections of this Lease:

 

Exhibit A: Legal Description of the Property

Exhibit B — Tenant Improvement Schedule

 

CHECK THE BOX FOR ANY OF THE FOLLOWING THAT WILL APPLY. CAPITALIZED TERM USED IN
THE RIDERS SHALL HAVE THE MEANING GIVEN TO THEM IN THE LEASE.

 

☒              Rent Rider

☐              Arbitration Rider

☐              Letter of Credit Rider

☐              Guaranty of Tenant's Lease Obligations Rider

☒              Option to Extend Rider

 

35.           AGENCY DISCLOSURE. At the signing of this Lease, Landlord is
represented by None (insert both the name of the Broker and the Firm as
licensed) (the "Landlord's Broker"), and Tenant is represented by Paul Jacobson
with Regency Group, Inc. (insert both the name of the Broker and the Firm as
licensed) (the "Tenant's Broker").

 

This Agency Disclosure creates an agency relationship between Landlord,
Landlord's Broker (if any such person is disclosed), and any managing brokers
who supervise Landlord's Broker's performance (collectively the "Supervising
Brokers"). In addition, this Agency Disclosure creates an agency relationship
between Tenant, Tenant's Broker (if any such person is disclosed), and any
managing brokers who supervise Tenant's Broker's performance (also collectively
the "Supervising Brokers"). If Tenant's Broker and Landlord's Broker are
different real estate licensees affiliated with the same Firm, then both Tenant
and Landlord confirm their consent to that Firm and both Tenant's and Landlord's
Supervising Brokers acting as dual agents. If Tenant's Broker and Landlord's
Broker are the same real estate licensee who represents both parties, then both
Landlord and Tenant acknowledge that the Broker, his or her Supervising Brokers,
and his or her Firm are acting as dual agents and hereby consent to such dual
agency. If Tenants' Broker, Landlord's Broker, their Supervising Brokers, or
their Firm are dual agents, Landlord and Tenant consent to Tenant's Broker,
Landlord's Broker and their Firm being compensated based on a percentage of the
rent or as otherwise disclosed on the attached addendum. Neither Tenant's
Broker, Landlord's Broker nor either of their Firms are receiving compensation
from more than one party to this transaction unless otherwise disclosed on an
attached addendum, in which case Landlord and Tenant consent to such
compensation. Landlord and Tenant confirm receipt of the pamphlet entitled "The
Law of Real Estate Agency."

 

36.            COMMISSION AGREEMENT. If Landlord has not entered into a listing
agreement (or other compensation agreement with TENANT'S Broker), Landlord
agrees to pay a commission to TENANT'S Broker (as identified in the Agency
Disclosure paragraph above) as follows:

☒             $7,500.00

☐             _____% of the gross rent payable pursuant to the lease

☐             $_____ per square foot of the Permises

☐             Other _____ 

 

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 19 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

Landlord's Broker ☐ shall ☐ shall not (shall not if not filled in) be entitled
to a commission upon the extension by Tenant of the Lease term pursuant to any
right reserved to Tenant under the Lease calculated ☐ as provided above or ☐ as
follows ______ (if no box is checked, as provided above). Landlord's Broker ☐
shall ☐ shall not (shall not if not filled in) be entitled to a commission upon
the extension by Tenant of the Lease term pursuant to any right reserved to
Tenant under the Lease calculated ☐ as provided above or ☐ as follows ______ (if
no box is checked, as provided above). Landlord's Broker ☐ shall ☐ shall not
(shall not if not filled in) be entitled to a commission upon any expansion of
Premises pursuant to any right reserved to Tenant under the Lease, calculated ☐
as provided above or ☐ as follows_______ (if no box is checked, as provided
above).

 

Any commission shall be earned upon execution of this Lease, and paid one-half
upon execution of the Lease, and one-half upon occupancy of the Premises by
Tenant AND TENANT BEING OPEN FOR BUSINESS.

 

If any other lease or sale is entered into between Landlord and Tenant pursuant
to a right reserved to Tenant under the Lease, Landlord ☐ shall ☐ shall not
(shall not if not filled in) pay an additional commission according to any
commission agreement or, in the absence of one, according to the commission
schedule of Landlord's Broker in effect as of the execution of this Lease.
Landlord's successor shall be obligated to pay any unpaid commissions upon any
transfer of this Lease and any such transfer shall not release the transferor
from liability to pay such commissions.

 

 

 

 

 

[ex10xv_20.jpg] 

1

 

 

[ex10xv_21.jpg] 

2

 

 

[ex10xv_22.jpg] 

3

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 23 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

EXHIBIT A

[Legal Description of the Property]

 

A unit of land with a 3,700 square foot (approximate size) building located in
the state of Washington within the county of King, with an address of 2215 4th
Ave. S., Seattle, WA 98134-1516. Tax parcel number 766620-5165. BLK 293 Lot 3
Seattle Tide LDS.

 

Exhibit A

 

4

 

 

 

© Commercial Brokers

Association 2011

ALL RIGHTS RESERVED

 

CBA Form ST-NNN

Single Tenant NNN Lease

[ex10xi_002.jpg]    Page 24 of 24  

 

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

 

EXHIBIT B

 

[Tenant Improvement Schedule (Landlord's Work)]

 

1. Tenant Improvements to be Completed by Landlord

 

Tenant accepts the Premises in an "as is," "where is," "with all faults"
condition. However, Landlord at Landlord's expense will replace the metal roof
over the back warehouse portion of the building prior to December 1, 2013.
Tenant shall cooperate with Landlords contractors.

 

2. Tenant Improvements to be Completed by Tenant

 

Tenant at Tenant's expense shall make floor plan, decor, security and air
filtration modifications as necessary with Landlord's approval, which shall not
unreasonably be delayed or withheld. All construction work shall be completed to
building code and, as necessary, by licensed bonded contractors.

 

5

 

 

[ex10xv_25.jpg] 

6

 

 

OPTION TO EXTEND RIDER

 

This Option to Extend Rider ("Rider") is made part of the Lease Agreement dated
September 19, 2013 (the "Lease") between M-P Properties ("Landlord") and Diego
Pellicer Worldwide, Inc., a Delaware corporation ("Tenant") concerning the
Premises located at the property commonly known as 2215 4th Ave S., Seattle, WA
98134 (the "Property").

 

1.Extension of Lease. Provided Tenant is not in default of any provision of the
Lease at the time that Tenant exercises the right to extend the Lease or at the
time the new term begins, Tenant shall have one (1) successive option to extend
the term of the Lease for five (5) years. The term of the Lease shall be
extended on the same terms, conditions and covenants set forth in the Lease,
except that (i) the amount of the Base Rent stated in the Lease shall be
adjusted as set forth below; (ii) there shall be no free or abated rent periods,
tenant improvement allowances or other concessions that may have been granted to
Tenant at the beginning of the initial term hereof; and (iii) after exercise of
Tenant's final extension term option, there shall be no further extension or
renewal term options.

 

2.Notice. To extend the Lease, Tenant must deliver written notice to Landlord
not less than one hundred twenty (120) days prior to the expiration of the
then-current Lease term. Time is of the essence of this Rider.

 

3.Base Rent.

 

Term Base Monthly Rent 10/1/18 — 9/30/19 $7,126.12 plus NNN's 10/1/19 — 9/30/20
$7,375.53 plus NNN's 10/1/20 — 9/30/21 $7,633.68 plus NNN's 10/1/21 — 9/30/22
$7,900.85 plus NNN's 10/1/22 — 9/30/23 $8,177.38 plus NNN's

 

[ex10xv_26.jpg]