Exhibit 10.16

 
LEASE
FOR
STONE CREEK BUSINESS CENTER
 
 
This lease is made by and between STONE CREEK BUSINESS CENTER, LTD., a Colorado
limited partnership ("Landlord "), and GROWLIFE HYDROPONICS, INC. ("Tenant").
 
1. LEASE: For and in consideration of and upon the agreements, at the rental,
and for the Term set forth in this lease (the "Lease"), Landlord leases to
Tenant and Tenant .leases from Landlord the premises (the "Premises ") located
in the building (the "Building") in the County of Eagle, Colorado, commonly
known as STONE CREEK BUSINESS CENTER. LLLP (the "Project") and highlighted in
red on attached Schedule I, which is hereby incorporated herein by reference.
 
(a) 81620; Units 5&6, 40800 Highway 6, Avon, Colorado,
 
(b) Square feet (2502):
 
The approximate square footage of the Premises, as set forth herein, is accepted
by both Landlord and Tenant as the size and square footage of the Premises for
all purposes under this Lease and shall not be subject to challenge at a later
date, it being recognized that there are different methods by which square
footage can be measured and that no two individuals measuring the size of the
Premises are likely to come up with the same number.
 
2. PROJ ECT LEGA L: Lot 5, Eagle Vail Commercial Service Center first amendment,
a re-subdivision of Lots 2 through 6, Block 2, Eagle-Vail Commercial Service
Center, Eagle County, Colorado.
 
3. LEASE TERM:
 
1. The term of the Lease (the "Term") and the right of Tenant to take possession
of and to occupy the Premises shall commence at twelve o'clock noon on October
21, 2013 (the "Commencement Date"), and, unless extended or sooner terminated
pursuant to the Lease, shall terminate at twelve o'clock noon on the last day of
September, 2018.
 
2. Subject to the conditions hereinafter set forth, Tenant is hereby granted an
option (the "Option") for a 0 year extension of the Term (the "Renewal Term").
If Tenant intends to exercise the Option, then, at least one hundred and eighty
(180) calendar days prior to the expiration of the Term, Tenant shall give
Landlord written notice that it thereby exercises the Option. Notwithstanding
the service of such notice, it shall be a condition precedent to the effective
exercise of the Option that, at both the time of service of the written notice
and at the time of the commencement of the extension of the Term, Tenant shall
not be in default under the Lease. All terms and provisions of the Lease shall
apply and be in full force and effect during any Renewal Term resulting from
this paragraph 3.02. No additional options for further
 
 
 

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full force and effect during any Renewal Term resulting from this paragraph
3.02. No additional options for further extensions of the Term are created by
this paragraph. The foregoing notwithstanding, Landlord may, at Landlord's sole
option, upon the giving of written notice to Tenant, terminate and declare null
and void the Option described in this paragraph 3.02 in the event that, during
the Term of this Lease, Tenant fails to pay Rent when due on more than two (2)
occasions or otherwise is declared, in writing, to be in default of any
provisions of the Lease. The foregoing notwithstanding, in the event of the
exercise by Tenant of any Option to extend the term of the Lease, as provided
for herein, Landlord shall, until sixty (60) calendar days prior to the
effective date of any such Renewal Term, have the sole and absolute right to
modify the terms and conditions of this Lease, but not the "Fixed Minimum Rent"
amount or Term of the Lease, but only so as to include in the Lease any standard
Lease provisions which, since the date hereof, Landlord has incorporated into
its standard lease form for the Project. Upon receipt of any such modification,
presented by Landlord to Tenant by way of a new lease agreement or an amendment
to this Lease, Tenant shall, prior to thirty (30) calendar days after Tenant's
receipt of such new lease agreement or amendment, execute and deliver, or cause
to be delivered, to Landlord such new lease agreement or amendment to this
Lease. In the event that Tenant fails to execute and deliver to Landlord the new
lease agreement or amendment, as described in the preceding sentence, Tenant's
notice of having exercised the Option to extend the Term of the Lease shall be
void and of no effect, and the Term of the Lease shall end on the date set forth
in Section 3.01 above. In the event that Tenant exercises the Option, as allowed
by this Lease, the word "Term," as used herein, shall include the "Renewal Term"
created by such Option.
 
4. USE OF PREMISES
 
1. Tenant shall occupy and use the Premises for the purpose of conducting
thereon the business ofWholesale & Retail sales of indoor agricultural
hydroponics equipment and supplies and for no other purpose whatsoever.
 
2.  Tenant shall not use or occupy the Premises, or permit the use or occupation
of the Premises, or any part thereof, by any person other than Tenant, for any
purpose other than the one specified in paragraph 4.01 herein or for any purpose
which (a) constitutes waste or a public or private nuisance, including, but not
by way of limitation, the outside storage, display or sales of any items or
materials, construction, assembly, or work of any kind, (b) transmits light
outside of the Premises (excluding signs allowed pursuant to the Lease), sound,
odor or vibrations which are obnoxious or offensive to any one or more of the
other Tenants of the Building or to Landlord, (c) violates any governmental
(State, Federal or Local) laws, ordinances or regulations, (d) is contrary to
any leases, restrictive covenants, agreements or limitations of record, or (e)
renders the Building or the Premises, or any part of either, uninsurable with
standard insurance at ordinary rates.
 
3. Tenant shall not obtain from any governmental entity, or maintain, any
license to distill, manufacture, sell, dispense, or serve malt, vinous, or
spirituous liquors, or to operate any retail gaming establishment, as may
otherwise be obtained within the State of Colorado pursuant to Colorado Law,
except that, with the express written consent of Landlord, which consent may be
withheld for any reason, Tenant may obtain a license to operate a package
"Retail Liquor Store", as defined by C.R.S. § 12-47-103 (31) or a "Restaurant",
as defined in C.R.S. § 12-47- 103 (30) provided, however, that, in the event
that Landlord gives written permission for Tenant
 
 
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to operate a licensed "Restaurant'', pursuant to C.R.S. § 12-47-101 et seq.,
Landlord may impose restrictions pertaining to the nature of such Restaurant
operation to ensure that alcoholic beverages are served only in conjunction
with, and as part of, the service of food, and specifically prohibiting the
inclusion and operation of any bar, nightclub, live or recorded entertainment,
amusement devices, floor shows, and so forth from operating as a part of such
"Restaurant".
 
4. Tenant, its successors, assigns or sub-tenants, shall not use all or any
portion of the Premises for any one or more of the following activities:
 
(a) A wholesale or retail commercial establishment which devotes at least ten
percent (10%) of its stock-in-trade or interior floor space to, or receives at
least ten percent (10%) of its revenues from, the sale, rental or viewing of
books, magazines, periodicals or other printed matter, or photographs, films,
motion pictures, video cassettes, compact discs, slides, or other visual
representations which are characterized by the depiction or description of
"specified sexual activities" or "specified anatomical areas" or sexual
accessories or any items for sale primarily of a sexual nature. "Specified
sexual activities" shall mean and include (i) human genitals in a state of
sexual stimulation or arousal; (ii) actual or simulated acts of human
masturbation, sexual intercourse or sodomy; and (iii) actual or simulated
fondling or other erotic touching of human genitals, pubic region, buttocks or
female breasts. "Specified anatomical areas" shall mean: (i) less than
completely and opaquely covered human genitals, pubic region, buttocks, anus, or
female breasts below a point immediately above the areola; or (ii) human male
genitals in a discernibly turgid state, even if completely and opaquely covered.
 
(b) A nightclub, bar, club, restaurant, concert hall, auditorium or other
establishment which features, allows, permits, or conducts live adult
entertainment. "Adult entertainment" is defined as any exhibition, display or
dance which involves the exposure to view of any portion of the female breasts
below the top of the areola, male genitals, female genitals, or the pubic hair,
anus, or cleft of the buttocks of any person or male genitals in a discernibly
turgid state, even if completely and opaquely covered.
 
(c) Tenant, Tenant's employees, customers, patrons and all other persons on the
Premises shall not, without the express written consent of Landlord, which
consent may be withheld for any reason, sell, use, consume, purchase, produce,
manufacture, grow, or otherwise possess cannabis or marijuana, or any derivative
thereof, or any product intended for use in the manufacturing, growing, using or
consuming thereof.
 
5. RENT:
 
1. Subject to the same being increased pursuant to paragraph 5.05 herein, during
the Term and any extension thereof, Tenant shall pay Landlord a fixed minimum
rent (the "Fixed Minimum Rent") computed at the rate of:
 
(a)
  $ 31,275.00  
per year, which equates to
(b)
  $ 2,606.25  
per month.

 
 
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Notes:    1. Landlord rent concession of $1,303.12.00 for the months of Nov. &
Dec, 2013
 
3. Landlord rent concession of $ 521.25.00 for the months of Jan. & Feb, 2014
 
2. Except as is expressly provided for in the Lease, the Fixed Minimum Rent
shall be paid in twelve equal installments of monthly rent as provided for in
paragraph 5.01 herein, in advance, on the first day of each calendar month
during the Term and during any Renewal Term, if applicable, at the office of
Landlord, or such other place as Landlord may designate, without any set-off,
deduction or counterclaim whatsoever.
 
3. If the Commencement Date shall fall on a day other than the first day of a
calendar month, then the installment of the Fixed Minimum Rent due for the
calendar month during which the Commencement Date falls shall be prorated so
that, as the installment of the Fixed Minimum Rent for such month, Tenant shall
pay an amount which bears the same ratio to a regular monthly installment of the
Fixed Minimum Rent as the number of days from and including the Commencement
Date through the end of such month bears to the total number of days in such
month.
 
4. Landlord hereby acknowledges the receipt from Tenant of $ 1,617.96 ($7.76/sf)
to be applied toward the payment of the first installments of the Fixed
Additional Rent (CAM) coming due pursuant to the Lease from November 1st, 2013
through the last day of November, 2013.
 
5. Commencing with the fiscal year beginning on the first day of the calendar
month during which the First (1st) anniversary of the Commencement Date occurs
and on the first day of each such fiscal year thereafter, the Fixed Minimum Rent
set forth in paragraph 5.01.herein shall be increased by 3.5 % percent
 
6. Other than the Fixed Minimum Rent and Security Deposit (defined in paragraph
6.01 herein), all sums, costs and expenses which Tenant assumes or agrees to pay
to Landlord pursuant to the Lease shall be deemed to be additional rent (the
"Additional Rent") for the Premises. The total rent payable to Landlord by
Tenant (the "Rent") during the Term shall be the sum of the Fixed Minimum Rent
for the Term and the Additional Rent which accrues or will accrue during the
Term.
 
7. The Additional Rent provided for in paragraph 5.06 herein shall be prorated
between Landlord and Tenant in accordance with the number of days of the
applicable accounting period during which the Premises were subject to the Lease
and not subject to the Lease.
 
8. It is recognized that Landlord will incur additional costs, the exact amount
of which may be difficult to ascertain, as a result of and in handling any
payment of Rent which is not received by Landlord on or within the three (3)
business day period following its due date;
 
 
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therefore, in order to reimburse Landlord for such costs, and not as a penalty,
if Tenant fails to timely pay any Rent and/or Additional Rent, and the Rent and
Additional Rent are not received by the Landlord on or within the three (3)
business day period following its due date, in addition to and with such Rent,
Tenant shall pay Landlord an amount equal to fifteen(15%) percent of such Rent
and/or Additional Rent, as a Late Charge which shall be added to the total
balance due. A business day shall be defined as Monday through Friday of each
week, except official Federal or State holidays resulting in the closure of
either banks in Colorado and/or the U.S. Post Office.
 
6. SECURITY DEPOSIT:
 
1. To secure the timely and faithful performance of all of Tenant's obligations
under the Lease, Tenant has deposited with Landlord the sum of $ 11,163.09 as a
security deposit (the "Security Deposit"), the receipt of which is acknowledged.
At any time, if Tenant shall be in default in the performance of any of Tenant's
obligations under the Lease, at Landlord's option, Landlord may use all or so
much of the Security Deposit as Landlord deems necessary to cure any such
default without being under any obligation to do so. Upon notification thereof,
Tenant shall forthwith pay Landlord the amount of the Security Deposit so
expended so that Landlord will at all times have the full amount of the Security
Deposit as security. The Security Deposit and the use thereof shall not be
considered as liquidated damages in the event of default but only as an
application toward actual damages. Within sixty (60) days after the termination
of the Lease, Landlord shall return the unused portion of the Security Deposit
to Tenant without interest. Landlord is under no obligation to segregate the
Security Deposit and may commingle the same with other funds of Landlord.
 
2. If Landlord conveys its interest in the Premises and assigns the Lease,
Landlord shall transfer the Security Deposit, or so much thereof as remains, to
the grantee of such interest and the Lease and, thereupon, Landlord shall be
released from all liability for the return of the Security Deposit to Tenant or
for the subsequent use of the Security Deposit pursuant to paragraph 6.01
herein.
 
7. AVAILABILITY OF THE PREMISES:
 
1. Landlord shall not be liable for any damages sustained or costs or expenses
incurred by Tenant on account of Tenant's failure to obtain possession of the
Premises on or before the Commencement Date and Tenant shall have no right to
rescind, cancel or terminate this Lease because of such failure.
 
2. Occupancy of all or part of the Premises by Tenant shall be deemed possession
and acceptance thereof by Tenant in good and suitable condition in full
accordance with the provisions of the Lease.
 
3. At the expense of Tenant, Tenant shall fully comply with all provisions and
standards of the Occupational Safety and Health Act of 1970 (Chapter XVII, Title
XIX of the United States Code) and any applicable federal or state statute or
regulation adopted pursuant thereto, in lieu thereof, or in conjunction
therewith, as the same relate to the Premises, as such may be amended or
reenacted from time to time. Tenant shall in indemnify and hold Landlord
harmless from all obligations, liability, damages, costs, and expenses,
including attorney's fees, concerning any failure to so comply.
 
 
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8. COMMON AREAS:
 
1. At its option, Landlord may provide Common Areas (hereinafter defined) for
the non-exclusive use of Tenant, its employees and customers in common with
other Tenants and customers of other portions of the Building.
 
2. At all times all common facilities, if any, furnished by Landlord in or near
the Building and all such other accommodation areas as Landlord may provide and
designate (collectively, the "Common Areas"), including, but not by way of
limitation, pedestrian sidewalks, parking areas, landscaped areas, stairways,
lamps, restrooms, elevator, and driveways and similar areas and improvements
shall be subject to the exclusive control and management of Landlord. From time
to time, Landlord may establish, modify, and enforce rules and regulations with
respect to the Common Areas to be used by Tenant and its employees, customers,
guests and invitees and Tenant agrees to abide by and conform to such rules and
regulations and obtain the abidance by its employees, customers, guests and
invitees thereto.
 
3. Landlord reserves the right to change the area, location, and arrangement of
and to restrict or eliminate the use of any and all Common Areas and to do such
other acts in and to the Common Areas as Landlord deems advisable.
 
4. Tenant agrees and acknowledges that Tenant does not have any right of access
to any part or portion of the roof of the Building and that neither Tenant,
Tenant's employees, agents, guests, or invitees shall at any time enter upon the
roof of the Building without the express written approval of Landlord.
 
9. UTILITIES:
 
1. All charges for utilities, including, but not by way of limitation,
electricity, natural gas, water, sewer, cable service, and telephone pertaining
to the Premises shall be paid when due by Tenant. All utility charges that are
separately metered and/or charged solely to the Premises, and which are not
shared by any other tenant in the Project, shall be paid solely and exclusively
by Tenant when due, whether billed directly to Tenant or to Landlord. The second
floor leasable office/commercial space, excluding Common Area hall, restrooms,
utility closet, elevator, and stairway, consists of approximately 4,706 total
square feet, which is metered separately from the balance of the Building for
natural gas and electricity. The Tenant's Premises consists of approximately -0-
square feet, or -0- %, of the total second floor leasable space. Tenant shall be
billed and shall pay for said percentage of natural gas and electricity costs
for the second floor as provided for by the provisions of paragraph 12.01.
 
2. Tenant shall not install any electrical equipment which overloads the lines
or interferes with other equipment in or on the Building, or any part thereof,
and, if said lines are overloaded by such installation, Tenant shall immediately
remedy the same at its own expense.
 
 
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3. Unless caused by the acts or omissions of Landlord, Tenant shall not allow
the temperature inside the Premises to become so low as to cause damage to the
improvements, specifically including, but not limited to, water pipes and other
plumbing in or about the Premises and the Building.
 
10. TAXES: Tenant shall pay when due all personal property taxes levied or
imposed against the personal property, Trade Fixtures and/or leasehold
improvements placed by Tenant in or about the Premises.
 
11. INSURANCE:
 
1. At Tenant's sole expense, Tenant shall obtain and maintain, during the Term,
public liability insurance naming Tenant, and Landlord and it's agents, as
co-insured against any and all claims for injury to or death of persons or loss
or damage to property occurring upon, in, or about the Premises and the said
Common Areas and facilities provided by Landlord, and all portions of the
Project used or accessible for use by Tenant and its employees, agents,
contractors, subcontractors, invitees and customers. Such insurance shall afford
minimum protection of a single limit of liability of $2,000,000.00.
 
2. At Tenant's sole expense, Tenant shall obtain and maintain, during the Term,
adequate insurance which insures its fixtures, Trade Fixtures and contents
against loss by fire and causes covered by standard extended coverage
endorsements. Tenant shall cause Landlord, and it's agents, to be named as a
co-insured on all such policies to the extent of its interest in such insured
property and shall cause such insurance to be written in a manner so as to
provide that the insurance carrier waives all right of recovery by way of
subrogation against Landlord, and it's agents, in connection with any loss or
damage covered by any such policies.
 
3. All policies of insurance to be obtained by Tenant pursuant to the provisions
of the Lease shall be obtained through reputable carriers, authorized to issue
insurance policies in the State of Colorado, and acceptable to Landlord; copies
of all such policies shall be delivered to Landlord at least three (3) business
days prior to the Commencement Date, and a certificate of insurance, as proof
that such policies remain in full force and effect, shall be delivered to
Landlord on each anniversary of the Commencement Date thereafter, and at any
other time within ten (10) business days after written request of Landlord. Such
policies shall provide that they may not be cancelled without at least thirty
days prior written notice to Landlord. In the event any policy of insurance
required to be obtained by Tenant pursuant to the Lease is terminated,
cancelled, expires, or is replaced, a copy of the replacement policy shall be
immediately delivered to Landlord. Said Certificates shall include, in the
"Description of Operations/Special Provisions" section, a statement that Charles
C. Murphy, Charles C. Murphy & Associates, Inc, and Stone Creek Business Center,
LTD are included as Additionally Insured on General Liability, but only as the
Owner/Lessor of the Premises.
 
4. During the Term, Landlord may maintain insurance, with a carrier authorized
to do business in the State of Colorado, (a) insuring the Premises and the
Building against loss by fire and causes covered by standard extended coverage
endorsements, earthquake insurance, boiler insurance, loss of rents insurance,
and such other coverage as is deemed appropriate by Landlord from time to time
(the "Fire Insurance") and (b) insuring Landlord and its agents
 
 
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against all claims for injury to or death of persons or loss or damage to
property occurring upon, in or about the Project (the "Landlord's Liability
Insurance") in amounts  determined by Landlord in its sole discretion. In such
event, Tenant agrees to do all things, and to conduct its business in a manner,
reasonably requested or required by Landlord's insurer in order to lessen or
minimize risk of loss by any casualty, regardless of whether such casualty is
covered by such insurance.
 
12. OTHER TENANT EXPENSES:
 
1. As is hereinafter provided, Tenant shall pay Landlord a sum equal to 14.5 %
percent of all costs and expenses (collectively, the "Common Area Expenses" or
"C.A.M.") of owning, operating, maintaining, and repairing the Building, the
Project, the Common Areas and the real property upon which they are located,
which are allocable to the period during the Tenn. The Common Area Expenses
shall include, but shall not be limited to, the cost and expense of trash
disposal and/or hauling; parking lot sweeping and maintenance and replacement of
Common Area pavement and line striping; maintenance and replacement of exterior
lighting and interior Common Area lighting; installation and maintenance of
exterior signs; landscape maintenance, repair, painting, replacements and
plantings; snow removal; utilities pertaining to the Common Areas; all water and
sewer charges; acquisition and maintenance costs of replacement and/or rents for
the leasing of any machinery or equipment used in connection with operations,
management or maintenance; professional fees (i.e. legal, accounting,
engineering, architectural, etc.); repair and/or replacement of roofs, utility
meters, on-site water or sewer lines; repair and/or maintenance of the Building
and Project, or any part thereof; any costs incurred by Landlord in making
capital improvements or other modifications to the Building and Project, or any
part thereof, which costs shall be amortized over the useful life of such
improvement or modification with interest at the rate of twelve (12) percent per
annum, in accordance with such reasonable life and amortization schedules which
shall be determined by Landlord in accordance with generally accepted accounting
practices and principles, to the extent that other tenants are not liable for
the payment thereof; the Project's real property taxes, personal property taxes,
and any special assessments, taxes, liens and/or charges of any kind; all costs
of challenging real property tax assessments, to include legal and professional
assistance; insurance premiums pertaining to fire and extended coverage, loss of
rent, Landlord's liability insurance and other insurance deemed necessary by
Landlord; and professional management fees, which shall not exceed six percent
(6%) of the gross rents, from all sources, received from the Project. Common
Area Expense shall not include: (a) leasing commissions; (b) costs and repairs
or other work to the extent that such is insured and insurance proceeds are
received therefore; (c) costs, including permits, license and inspection costs,
incurred with respect to the installation of tenant or other occupancy
improvements in the Building or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other occupants
of the Building; (d) depreciation, amortization and interest payments as
determined in accordance with generally accepted accounting principles; (e)
Landlord's marketing costs; (f) costs incurred by Landlord due to violation by
Landlord or any tenant of the terms and conditions of any lease of space in the
Building; (g) Landlord's general corporate overhead and administrative expenses,
except that a 6% of gross rents management fee, as stated above, will be
included as a Common Area Expense, as well as any on-site management office gas
and electricity expenses for such office being connected to the C.A.M. meters;
(h) rentals and other related expenses incurred in renting HVAC systems,
elevators, or other building structural equipment, ordinarily considered to be
capital equipment; (i) Landlord's advertising and

 
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promotional expenses; (j) tax penalties incurred as a result of Landlord's
negligence, inability or unwillingness to make payments; (k) any and all costs
arising from the presence of hazardous materials or substances in or about the
Building; (1) Landlord's charitable or political contributions; (m) costs
arising from latent defects in the base shell or core of the Building; (n)
Landlord's or Manager's entertainment, dining or travel expenses; and (o)
Landlord's or Manager's in-house legal or accounting fees, not associated with
the operation or management of the Building.

 
2. From time to time, Landlord shall make reasonable projections of the
annualized Common Area Expenses allocable to the period during the Term; and,
based upon such projections, with each payment of the Fixed Minimum Rent, Tenant
shall pay Landlord installments in an amount equal to one-twelfth (1/12) of the
amount payable annually pursuant to paragraph 12.01 herein. Following the end of
each calendar year during the Term and following the end of the Term, Landlord
shall compute the amount of the actual Common Area Expenses for the preceding
calendar year, or part thereof, as is appropriate, and Tenant shall pay Landlord
any shortages and Landlord shall pay Tenant any overages in the amount of such
Common Area Expenses actually paid with respect to the amount payable pursuant
to the provisions of paragraph 12.01 herein.
 
3. No delay in the payment of the Common Area Expenses or such installments or
in the making of any demand for such payment shall constitute a waiver of the
right of Landlord to receive payment of same from Tenant pursuant to the
provisions of the Lease.
 
4. The percentage of C.A.M. to be paid by Tenant to Landlord, as described in
paragraph 12.01, represents the percentage of the approximate square footage of
the Leased Premises ( 2,502square feet) to the total approximate square feet of
all leasable floor area in the Project (17,256) square feet, which total does
not include the floor area leased to Sherwin - Williams. In the event of an
increase or decrease in either the square footage of the Premises or in the
square footage of all leased premises in the Project subject to the payment of
C.A.M., Landlord shall adjust the percentage of C.A.M. to be paid by Tenant to
reflect the then current percentage of the size of the Premises to the total
square feet of all leased premises in the Project subject to the payment of
C.A.M., which adjustment shall constitute an amendment to this Lease, and shall
notify Tenant, in writing, as to the new percentage of C.A.M. to be paid by
Tenant to Landlord from the date of such adjustment forward.
 
5. Tenant shall have the right to have Tenant's accountant, lawyer, or other
independent professional (non-company employee), review in Landlord's office, at
Tenant's expense, all documents necessary to substantiate Common Area Expenses
(C.A.M.) upon reasonable written request and the scheduling of an appointment
with Landlord. Tenant's right to review documentation substantiating the actual
Common Area Expenses imposed for each calendar year, pursuant to this paragraph
12, shall be deemed waived by Tenant unless Tenant delivers to Landlord a
written request for such review within fifteen days after Landlord's written
notification to Tenant of such actual Common Area Expenses. Tenant's right to
question, challenge, contest or object to Landlord's computation of actual
Common Area Expenses for any preceding calendar year shall be deemed waived by
Tenant unless Tenant delivers to Landlord a written objection of Landlord's
computation of actual Common Area Expenses, specifying the nature and reason for
such objection, within thirty days after Landlord's notification to Tenant of
such actual Common Area Expenses.
 
 
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13. MAINTENANCE, REPAIRS AND ALTERATIONS:
 
01. Except for repairs which become necessary by reason of the improper conduct,
carelessness, negligence or act of omission by Tenant, it's employees, agents,
servants, customers, guests, invitees, visitors or licensees, within a
reasonable time after notice of the necessity of such repairs, Landlord shall
repair the roof, foundation and exterior walls, other Common Area and Building
facilities of the Premises, except for glass and other breakable materials used
in structural portions thereof. All such repair costs involved shall be
considered as Common Area Expenses and shall be billed in accordance with the
provisions of paragraph 12. Except for repairs which become necessary by reason
of the improper conduct, carelessness, negligence or act of omission by Tenant,
its employees, agents, servants, customers, guests, invitees, visitors or
licensees, within a reasonable time after notice of the necessity of such
repairs, Landlord shall repair the roof, foundation and exterior walls, other
Common Area and Building facilities of the Premises, except for glass and other
breakable materials used in structural portions thereof. Any repairs, service,
or work contracted for by Tenant without specific written approval by the
Landlord, shall be paid for by the Tenant at its sole expense, even if
repair/work would normally be a Common Area Expense.
 
2. Except as otherwise specifically provided in this Lease, Tenant is accepting
the herein described Premises in its "AS IS" condition, without representation
from either Landlord, and/or Charles C. Murphy & Associates, Inc., and any and
all additional improvements, maintenance, repairs, changes in conditions or
alterations shall be at the sole cost and expense of Tenant.
 
3. Except as is provided specifically in paragraph 13.01 herein, at its own
expense Tenant shall maintain, repair, and replace, as necessary, the interior
of the Premises regardless of the cause of the maintenance or repair, including,
specifically, all plate glass, exterior and
interior glass surfaces, interior distribution of heating systems and HVAC
systems, overhead and entry doors, interior walls, ceilings, plumbing and
electrical fixtures, floors, walls and finishes. The foregoing notwithstanding,
Landlord reserves the right, at its option, to contract for the work described
in the preceding sentence and pass the costs thereof through to Tenant as
Additional Rent. In addition, Tenant shall keep the walks, porches, decks, and
docks adjacent to the Premises, plus a minimum of four (4) feet into the parking
lot and inside any fenced or walled areas immediately adjacent to the Premises,
.free of dirt, litter, snow and ice, and shall further be responsible for the
proper maintenance of the automobile tire stops within such area.
 
4. Tenant shall make no additions, improvements or alterations in or about the
Premises, nor shall Tenant install or attach any Trade Fixture, without first
presenting to Landlord copies of plans and specifications, created and stamped
by a licenses engineer and or architect, detailing the desired additions,
improvements, alterations or Trade Fixtures, which plans and specifications
shall include, but shall not be limited to, structural, electrical, and
mechanical detailing (loading, circuitry, and distribution), walls, doors,
flooring, fixtures and finishes. Such plans and specifications shall clearly
identify any addition, improvement, alteration, thing, item or device which
Tenant desires to classify as a Trade Fixture (see
 
 
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paragraph 16.02), and no such addition, improvement, alteration, thing, item, or
device shall be deemed a Trade Fixture unless and until Landlord agrees, in
writing, to such classification. The Tenant must, prior to the start of any such
work, obtain the written consent of Landlord for the making of such additions,
improvements or alterations, and shall provide Landlord written notice of
Tenant's intention to start such work at least five (5) days prior to the actual
start of such work, and shall also provide Landlord with the names, address, and
telephone numbers of all contractors, subcontractors, laborers, and material
suppliers (collectively "Lienors") that will provide either labor or material
for all such additions, improvements, alterations, and installations. Prior to
Tenant making any additions, improvements or alterations in or about the
Premises, Tenant shall obtain and pay for all necessary city or county
approvals, building permits, and obtain the endorsements of the insurance
referred to in paragraph numbered eleven (11) herein to extend Tenant's coverage
during the course of and pertaining to the construction of such additions,
improvements or alterations. All such additions, improvements, and alterations
shall comply with all applicable building and fire codes and shall be
constructed only by contractors and subcontractors approved by Landlord prior to
the commencement of such construction. All improvements which are made in or
about the Premises shall become property of the Landlord unless specifically
agreed otherwise in writing, executed by both Landlord and Tenant, prior to the
commencement of the making of such improvements.
 
5. In the event that Tenant makes any improvements to the Premises without first
obtaining Landlord's written permission for same, in accordance with paragraph
13.04 above, all such improvements of every kind and nature shall, at Landlord's
option, become property of Landlord.
 
6. Landlord shall have the absolute right to send to Lienors and to post at the
Premises a notice that Landlord's interest in the Premises shall not be subject
to any lien for work or materials performed or supplied by Lienors, and Tenant
shall fully cooperate with such efforts.
 
7. Repairs and replacements of any portion of the Project, other than the
Premises, which become necessary by reason of the improper conduct,
carelessness, negligence, or act of omission by Tenant, its employees, agents,
servants, customers, guests, invitees, visitors or licensees shall be repaired
by Landlord, with the cost and expense of such repairs to be paid by Tenant as
Additional Rent.
 
14. SIGNS AND AWNINGS:
 
1. Tenant shall not install, paint, display, inscribe, place or affix any sign,
picture, advertisement, notice, lettering or direction in the interior of the
Premises, without Landlord's written consent. All of Tenant's exterior signs and
identifications will conform to the sign criteria outlined by Landlord on
Schedule II (Sign Criteria) attached hereto and made a part hereof. Tenant
agrees to keep all interior and exterior signs in good repair. Landlord reserves
the right to alter Schedule II (Sign Criteria) at such times as is necessary due
to a change in events such as, but not limited to, changes in the city or county
sign ordinance or a redevelopment of the Project.
 
 
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2. Tenant shall comply with all ordinances, laws, statutes and regulations
applicable to the Premises and concerning signage.
 
3. If Landlord so desires to install, at Landlord's sole expense, an exterior or
interior "FOR LEASE" sign (banner, broker, etc.), during the one hundred eighty
(180) days prior to the expiration of this lease, Tenant shall fully cooperate,
and shall agree to sign, in Tenants name, any permit applications then required
by the city or county. Any applicable application and permit fees shall be paid
by Landlord.
 
4. Attached Exhibits As show the approved unit 5&6 sign panel locations for the
front and rear of the project. On the front there are 2 options designated as
follows:
Option #1: The upper full panel as shown in both drawing and picture. NOTE:
Trees will be trimmed properly annually after leaves fall, in order to fully
expose the panel.
 
a. Since Landlord will be providing the blank sign panel for this option, the
Tenant shall be responsible for the cost and replacing the old panel upon
expiration and vacation of the lease.
 
●
All panel fabrication and install for either option shall be done by "Sign
Design" of Eagle Vail (Contact Monte).

 
On the rear panel, the tenant has expressed a desire to use the adjacent panel
area to the west. That is acceptable; however, in that event, the blank panel
shall we moved adjacent to east, and the tenant shall be responsible for
purchasing, fabrication, and installation of the new panel in the west location.
 
15. MECHANICS' LIENS:
 
1. Tenant shall pay when due for all work performed on, for the benefit of, and
for materials furnished to, the Premises by any person at Tenant's request and
shall indemnify, defend and hold harmless Landlord and its property from all
liability and expenses, including attorney fees, resulting from any lien or
claim of lien arising from such work, labor or materials. Tenant shall have the
right to contest the validity of any such lien or claim of lien.
 
2. Upon Landlord's request, Tenant shall, within 21 days of such request, cause
any mechanic's lien filed against the Premises for work or materials supplied to
or on behalf of the Tenant to be released by following the procedure outlined in
C.R.S. §§ 38-22-101 et seq., or shall post a cash bond with Landlord, in an
amount acceptable to Landlord, sufficient to satisfy such lien.
 
16. FIXTURES:
 
1. Unless removed by Tenant pursuant to the provisions of this paragraph sixteen
(16), upon the expiration of the Term, the termination of the Lease by Landlord,
or the vacation of or removal from the Premises by Tenant, all fixtures, Trade
Fixtures, additions, improvements, and installations placed in or about the
Premises by Tenant shall be the sole and
 
 
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absolute property of Landlord and Tenant warrants title to the same free and
clear of all liens and encumbrances except those liens and encumbrances arising
out of the actions of Landlord.
 
2. The term "Trade Fixture," as used in this Lease, is defined as a fixture
which is attached to or made a part of any improvement to the Premises which is
unique to the Tenant's business and which may be removed from the Premises by
Tenant during or at the end of the Term of the Lease, provided that all damage
to the remainder of the Premises is removed and/or repaired and the Premises is
restored by Tenant in such a manner that the installation and subsequent removal
of such Trade Fixture is not visible or evident. The foregoing notwithstanding,
no improvement or fixture installed by Tenant shall be deemed to be a Trade
Fixture unless Landlord agrees, in writing, to classify such improvement or
fixture as a Trade Fixture prior to its installation.
 
3. Upon the expiration of the Term, the termination of the Lease by Landlord, or
the vacation of the Premises by Tenant and upon written notice by Landlord, and
only in such event, Tenant shall promptly remove any fixtures, Trade Fixtures,
additions, improvements, and installations placed in or about the Premises by
Tenant and designated in such notice and shall repair any damage occasioned by
such removals at Tenant's expense. If Tenant shall fail to promptly remove such
items or repair such damage, or both, Landlord may, at its option, effect such
removals and repairs and Tenant shall pay Landlord the cost thereof together
with interest
at the rate of eighteen (18) percent per annum from the date of payment of such
costs by Landlord.
 
17. EXCULPATION OF LANDLORD: Landlord and its agents, servants, employees and
contractors shall not be liable to Tenant or any other person, and Tenant hereby
releases all claims for damages arising out of the death or of injury to any
person or damage to or loss of any property or business sustained by Tenant or
any person claiming through Tenant and resulting from any fire, explosion,
theft, accident, occurrence or condition of any nature whatsoever in or upon the
Premises, the Building, or the Project, including, but not by way of limitation,
(a) any defect in or failure of plumbing, heating or air conditioning equipment,
electric wiring or installation thereof, gas lines, fixtures or equipment or
installation thereof, water pipes, plumbing, stairs, railings, walks or
elevators, (b) any equipment or appurtenances becoming out of repair, (c) the
bursting, leaking or running of any pool, tank, washstand, water closet, waste
pipe, drain or other pipe or tank, (d) the backing up of any sewer pipe or
downspout, (e) the escape of steam or hot water, (f) water, snow or ice being
upon or coming through the roof, parking areas, common areas or facilities or
any other place in or near the Building, (g) the falling of any fixture, plaster
or other building material, (h) broken glass and (i) any act or omission of
co-tenants or other tenants of the Building or of adjoining or contiguous
property or buildings and their agents, employees and contractors.
 
18. INDEMNITY TO LANDLORD:
 
1. Tenant shall indemnify and save harmless Landlord and its agents, employees
and contractors and the owners of the fee title of the Project and all mortgages
thereof from and against any and all claims, liens, actions, proceedings,
judgments, liabilities, damages, costs, attorneys fees and any and all expenses
in connection with (a) the use, occupancy, management or control of the
Premises, (b) from any injury to or death of any person or damage to any
 
 
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property or business upon the Premises, the Building, the Project, or to or upon
adjacent property or to or upon the adjoining street, avenue or sidewalk which
was caused in whole or in part by Tenant, its employees, servants, agents,
contractors, subcontractors, guests, customers or invitees, (c) from any lien or
claim or other matter arising from any construction, addition, repair,
maintenance or improvements on the Premises or from any work done in or about
the Premises or the Building or the Project by, at the instigation of, or for
Tenant, (d) from any use of the Premises for any illegal trade, manufacture or
business or for any purpose or in any manner prohibited by law, ordinance,
government regulation, regulations of Landlords insurance Company or lender, or
the provisions of the Lease, (e) from any failure of Tenant to observe or
perform the terms, covenants or conditions of the Lease and from any act or
omission by Tenant, its agents, employees, servants, contractors,
subcontractors, customers or invitees during the Term, and (f) from the
installation , operation, maintenance, repair, removal or replacement of any
sign, awning, antenna or other exterior or interior improvement made by Tenant
on, in or about the Premises, the Building and the Project.
 
2. Unless defense is actually provided by an insurance carrier, upon demand from
time to time, Tenant shall pay for the defense of any action or proceeding
brought against Landlord or its agents, employees and contractors or the said
fee owners or mortgages, upon any such claims categorized in this paragraph 18.
 
19. DAMAGE BY FIRE OR OTHER CASUALTY:
 
1. If the Premises are damaged by fire or other casualty, but not so as to
render the same untenable, after being notified of such damage by Tenant,
Landlord shall forthwith repair the damage. The Rent and Additional Rent shall
not be abated under such circumstances.
 
2. If the Premises are damaged by fire or other casualty so that any part
thereof is untenable and, after Landlord is notified of such damage by Tenant,
if any architect selected by Landlord certifies that, in his opinion, such
damage can be reasonably expected to be repaired within ninety (90) days of the
occurrence of such damage, Landlord shall forthwith repair the damage. Until
such repairs are completed, all Rent charges shall be apportioned each month
according to that part of the Premises which remains untenable and there shall
be no other abatement.
 
3. If the Premises are damaged by fire or other casualty so that any part
thereof is untenable and, if an architect selected by Landlord certifies that,
in his opinion, such damage cannot reasonably be expected to be repaired within
ninety (90) days of the occurrence of such damage, Landlord, at its option, may
do any one of the following three things:
 
(a) Give notice to Tenant that the Lease is terminated and, in such event, all
future obligations and rights hereunder shall cease.
 
(b) Give notice to Tenant that Landlord intends to raze and rebuild the
Premises, according to plans and specifications which are either substantially
similar to those for the Premises so damaged or which are mutually agreed upon
by Landlord and Tenant, and complete such rebuilding . Until the Premises are
completed and a temporary or permanent certificate for occupancy is issued, all
Rent shall abate.
 
 
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(c) Give notice to Tenant that it intends to repair the Premises and proceed to
repair the Premises. Until such repairs are completed, all Rent charges shall be
apportioned each month according to that part of the Premises which remains
untenable and there shall be no other abatement.
 
20. CONDEMNATION: Tenant waives any loss or damage to Tenant as the result of
the exercise of the power of eminent domain by any governmental body and the
right to receive any portion of any condemnation award, as a participant in the
condemnation proceeding or otherwise, whether such loss or damage results from
condemnation of part or all the Premises or any portion of the Building Project,
Common Areas or facilities or service entrances and exits. Should any power of
eminent domain be exercised after Tenant is in possession, such exercise shall
not void or impair the Lease unless the Premises shall be substantially taken
and, upon the happening of such event, all Rent charges shall proportionately
abate as of the date that possession is required by the condemning authority.
 
21. ESTOPPEL, SUBORDINATION AND ATTORNMENT:
 
1. Tenant agrees that this Lease shall be subordinate to any encumbrance
affecting the Premises now of record or recorded after the date of this Lease.
Such subordination is and shall be effective without further act of Tenant. In
the event of foreclosure by the holder or beneficiary of any encumbrance
recorded after the date of this Lease, Tenant's right to possession of the
Premises pursuant to the terms of this Lease shall continue, provided that
Tenant is not in default and all rent payments are Current and provided further
that Tenant shall attorn to such holder or beneficiary as may take title to the
Premises through foreclosure.
 
2. This Lease is and shall be subordinate to any condominium declaration, or
amendment thereto, affecting the Premises regardless of when the condominium
declaration or amendment is recorded and such subordination shall be effective
without any action by Tenant. All provisions, terms, conditions, covenants and
obligations of this Lease shall be subject to such condominium declaration and
all other governing documents of the condominium association created in
conjunction with the recording of the condominium declaration. In the event of
an inconsistency between this Lease and the condominium declaration, articles or
bylaws the latter shall control.
 
3. Tenant agrees, at any time and from time to time, to execute, acknowledge and
deliver to Landlord upon Landlord's request any documents and instruments which
may reasonably be required by Landlord or by the holder or beneficiary of a
mortgage or deed of trust to evidence or effectuate such subordination. Tenant
further agrees, at any time and from time to time, to execute, acknowledge and
deliver to Landlord a statement in writing certifying that this Lease is
unmodified and in full force and effect, or, if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications, and the dates to which any rent or other payments due hereunder
from Tenant have been paid in advance, if any, and stating such other reasonable
information about the Lease as may be requested, including, but not limited to,
whether or not, to the best of the knowledge and information of the Tenant, the
Landlord is in default in the performance of any covenant or condition of the
Lease and, if so, specifying each such default. It is intended that such a
statement will be relied upon by the
 
 
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holder or beneficiary, or prospective holder or beneficiary, of a mortgage or
deed of trust, by assignees of such holder or beneficiary or by prospective
purchasers and that the Tenant shall be estopped from asserting claims contrary
to that which is set forth in such a statement. If Tenant fails to execute and
deliver any such documents, instruments or statements, Tenant irrevocably
appoints Landlord as Tenant's special attorney-in-fact to execute and deliver
such documents, instruments and statements, and, at Landlord's election, such
failure shall be a material breach of this Lease.
 
22. SALE OF PREMISES:
 
1. If Landlord shall sell its right, title and interest in and to the Premises,
Landlord shall notify Tenant of the identity and address of the purchaser
thereof.
 
2. If Landlord shall sell its right, title and interest in and to the Premises,
Landlord shall be, and is hereby, released and discharged of all liability under
any and all of the covenants and obligations contained in or derived from the
Lease arising out of any act, occurrence or omission occurring after the
transfer of its title to the Premises by Landlord.
 
23. ACCESS TO PREMISES:
 
1. Upon reasonable notice to Tenant, Landlord shall have the right to enter the
Premises at reasonable times for the purpose of inspecting the Premises or
exhibiting it to the holder of any mortgage or deed of trust encumbering
Landlord's interest in the Project to prospective mortgages, to prospective
assignees of any such mortgages or deeds of trust, to prospective purchasers, or
to prospective lessees of the Premises and for the purpose of making such
repairs, alterations, improvements or additions as may be provided for by the
Lease, or as may be agreed upon by Landlord and Tenant, or as may be required by
any law, ordinance or regulation. Unless an emergency exists, at least twenty
four hours prior notice shall be given to Tenant prior to Landlord's entry into
the Premises pursuant to this paragraph 23.01.
 
2. During the 180 days prior to the expiration of the Term, Landlord may exhibit
the Premises to prospective lessees.
 
3. For the purpose of attending to any emergency or presumed emergency which
 
may tend to damage the property of Landlord or that of other tenants in the
Building, or endanger the lives of anyone, Landlord shall have the right of
immediate access to the Premises without notice to Tenant.
 
24. ASSIGNMENT AND SUBLETTING: Tenant shall not assign or in any manner transfer
or encumber this Lease or any estate or interest therein, or sublet the Premises
or any part thereof, or grant any license, concession or other right to occupy
any portion of the Premises without the prior written consent of Landlord, which
consent, subject to the terms and conditions set forth herein, shall not be
unreasonably withheld. This prohibition includes, without limitation: (i) any
subletting or assignment which would otherwise occur by operation of law,
merger, consolidation, reorganization, transfer or other change of Tenant's
corporate or proprietary structure; (ii) an assignment or subletting to or by a
receiver or trustee in any Federal or State bankruptcy, insolvency or other
proceedings; (iii) the sale, assignment or transfer of all
 
 
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or substantially all of the assets of Tenant, with or without specific
assignment of this Lease; (iv) the sale, encumbrance or other disposition of
stock in a corporate Tenant, or ownership in a limited liability company Tenant,
which results in the present shareholders or members therein owning or
controlling less than fifty-one percent (51%) of the stock or ownership thereof;
(v) the change in control in a Tenant partnership, directly or through a change
or changes in the ownership of fifty percent (50%) or more of the stock or
ownership of one or more corporate or limited liability company general
partners; (vi) the change in control in a Tenant limited liability company
through a change or changes in the ownership of fifty percent (50%) or more of
the stock or one or more corporate members or of a corporate general partner of
a partnership member; or (vii) the death of any individual Tenant or guarantor.
Consent by Landlord to one or more assignments or sub-lettings shall not operate
as a waiver of Landlord's rights as to any subsequent assignments and
sub-lettings. Any attempted assignment or sub-lettings by Tenant in violation of
the terms and covenants of this paragraph 24 shall be void. Notwithstanding any
approved assignment or subletting, Tenant and any guarantor of Tenant's
obligations under this Lease shall at all times remain fully responsible and
liable for the payment of the Rent herein specified and for compliance with all
of Tenant's or any assignee's or subtenant's other obligations under this Lease.
 
In the event that Tenant desires to assign this Lease, or sublet the Premises,
or any part thereof, Tenant shall give written notice of such desire to
Landlord, and shall provide Landlord with a proposed agreement for assignment or
subletting, as the case may be, together with all information and documentation
required by paragraphs (a) through (f) of this paragraph 24, together with a
written agreement to the effect that Tenant will reimburse Landlord for all of
Landlord's expenses incurred as the result of Tenant's written notice and
request of Landlord to approve such assignment or subletting. In order to
properly consider Tenants request for assignment or subletting, Landlord shall
require that the following conditions are met:
 
(a) Tenant shall not be in default under any of the terms or provisions of the
Lease.
 
(b) Any proposed new business use for the Premises shall have been approved by
Landlord in Landlord's sole and absolute discretion.
 
(c) Any assignee or sublessee shall agree faithfully to perform and to be bound
by all of the terms and provisions of the Lease, the same as if such assignee or
sublessee were the original Tenant under the Lease.
 
(d) If any assignee or sub-lessee, or any stockholder, general partner, member
thereof or venturer therein, is a corporation or a limited liability company
(other than a corporation the outstanding voting stock of which is listed on a
"national securities exchange" as defined in the Securities Exchange Act of
1934), the owners of at least seventy five percent (75%) of the issued and
outstanding shares of stock in that corporation, or owners of at least seventy
five percent (75%) of the interests of the ownerships in that limited liability
company, shall personally and unconditionally guarantee the performance of all
Lease obligations, with such guarantee to be in form and substance reasonably
satisfactory to Landlord, or, at the sole option of Landlord, shall personally
execute an agreement in a form acceptable to Landlord so as

 
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to make themselves co-tenants under the Lease, jointly and severally liable to
Landlord for all obligations arising under the Lease.
 
1. Any assignee or sub-lessee, and all required guarantors, shall submit
financial statements in a form acceptable to Landlord which establish to
Landlord's reasonable satisfaction their financial ability to perform Tenant's
Lease obligations and otherwise to succeed in their proposed business.
 
2. Any assignee or sub-lessee shall reasonably satisfy Landlord: (1) that it is
a high quality retailer or other legitimate business operation; (2) that it has
adequate prior experience in the type of business proposed for the Premises; and
(3) that a good reputation and credit standing have been established in
connection with such prior experience.
 
3. Tenant shall pay to Landlord a sum necessary to reimburse Landlord for all
costs and expenses, including accounting and/or legal fees, incurred by Landlord
as the result of Tenant's request to allow an assumption or subletting of the
Premises.
 
25. SURRENDER OF PREMISES:
 
1. Unless otherwise required by Landlord, as provided in this paragraph
twenty-five, upon the expiration or other termination of the Lease, Tenant shall
quit and surrender to Landlord the Premises in good order, condition, and
repair, ordinary wear and tear and damage by fire or other casualty which is
insured against with standard extended coverage endorsements excepted, and,
except as otherwise provided in the Lease, shall remove all of Tenant's personal
property and Trade Fixtures from the Premises.
 
2. Unless otherwise required by Landlord, as provided in this paragraph
twenty-five, upon the expiration or other termination of the Lease, Landlord,
ten (10) days after written notice to Tenant, may, at Landlord's election,
retain, sell, convey, or otherwise dispose of any or all improvements,
furniture, fixtures or other tangible personal property left remaining upon the
Premises upon termination or expiration of the term. Tenant expressly waives and
releases all claims against Landlord for any damage or loss to Tenant resulting
from Landlord’s retention or disposition of such property. In such event,
Landlord shall have no obligation to inventory or account for such tangible
personal property. Tenant shall be liable to Landlord for Landlord's costs for
storing, removing and disposing of any or all of Tenant's property.
 
3. All other provisions of the Lease notwithstanding, at Landlord's option, upon
the expiration of the Lease term and upon written notice from Landlord to
Tenant, given at least thirty (30) days prior to the expiration of the Lease
term, Tenant shall, at Tenant's cost and expense, quit and surrender the
Premises to Landlord in "Lease Ready Condition," as described and defined
paragraph 25.06 hereof. In order to insure that all work required by this
paragraph 25.03 is performed to Landlord's requirements and specifications, all
such work, demolition, construction, reconstruction, repair, replacement,
painting, and so forth required in order to place the Premises in Lease Ready
Condition shall be performed by reputable, professional contractors approved by
Landlord, with all electrical and plumbing work to be performed by Colorado
 
 
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licensed electricians and plumbers. Furthermore, all such work, demolition,
construction, reconstruction, repair, replacement, painting and so forth,
required to place the Premises in Lease Ready Condition shall be inspected and
approved by Landlord prior to acceptance by Landlord, and if such work does not
meet Landlord's requirements and specifications, such work shall be brought to
Landlord's requirements and specifications, at Tenant's sole cost and expense,
prior to being accepted by Landlord.
 
4. All other provisions of the Lease notwithstanding, at Landlord's option, upon
written notice from Landlord to Tenant at any time within sixty (60) days after
Landlord takes possession of the Premises as the result of any default or breach
of the Lease by Tenant, Landlord may, at Tenant's cost and expense, place the
Premises in "Lease Ready Condition," and Tenant shall reimburse Landlord for all
costs and expenses of such work within ten (10) days of Landlord's invoice to
Tenant there for.
 
5. In addition to the foregoing, Tenant shall, upon the expiration or other
termination of the Lease, or upon the Tenant's vacation of the Premises,
whichever first occurs, cause all exterior panel signage to be removed by a
Landlord approved sign company, with such company to then replace, at Tenant's
sole cost and expense, the sign panels so removed with new blank panels which
comply with the Sign Criteria for the Building so that the next tenant using
that sign area has new panels with which to fabricate such tenant's new sign.
Further, where such signage is attached directly to the building itself, rather
than as a sign panel, all such signage shall be removed and all areas of the
building where the sign was attached shall be properly cleaned, repaired,
patched, and, if necessary, painted or stained in order to fully repair any
damage cause by the installation, maintenance and removal of such sign.
 
6. "Lease Ready Condition," as that term is used in the Lease, shall entail
returning the Premises to as close to the condition as the Premises were in as
originally constructed as is reasonably possible, with no interior improvements
other than restrooms, dropped grid ceiling system with industry standard drop in
lighting, perimeter walls to current electrical code, freshly painted interior
walls, and a clean, smooth and flat concrete floor ready for new tenant
finishes. "Lease Ready Condition" shall also mean and include the following:
 
(a) All fixtures, furnishings, equipment, plumbing and electrical that are not
part of the original demising walls, ceilings, or restrooms, shall be removed.
 
(b) All interior partition walls, excluding only restroom walls, shall be
removed and all damage resulting from such removal shall be patched and
otherwise repaired.

 
(c) All flooring materials shall be removed and the concrete floor shall be
cleaned, repaired and returned to a flat and smooth condition.
 
(d) All demising walls and drywall shall be returned to good, sound, clean and
patched condition, and shall be painted.
 
(e) All demising wall knock out panels shall be in place, fully reconditioned,
repaired, and patched, as necessary, and painted.

 
 
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(f) All electrical circuitry throughout the Premises shall be certified by a
Colorado licensed electrician to meet current electrical codes.
 
(g) All plumbing throughout the Premises shall be certified by a Colorado
licensed plumber to meet current plumbing codes.

 
(h) The Premises shall contain a complete and fully functional dropped grid
ceiling, or other ceiling acceptable to Landlord, with industry standard
lighting included.
 
(i) All interior walls shall be freshly painted with a paint approved by
Landlord and all windows shall be cleaned.
 
7. If Tenant fails to surrender the Premises to Landlord within the time, and in
the condition, as provided for herein, Tenant shall reimburse, indemnify and
hold Landlord harmless from all damages and costs incurred by Landlord and
resulting from Tenant's failure to surrender the Premises as required herein,
including, without limitation, all costs and expenses incurred by Landlord in
completing the work required by this paragraph 25 as well as all claims made by
a succeeding tenant resulting from Tenant's failure to surrender the Premises as
required.
 
8. Tenant's obligation to observe and perform the provisions of this paragraph
twenty-five shall survive the expiration of the Lease term, shall survive any
other termination of the Lease, and shall survive Landlord's possession of the
Premises pursuant to any provision of this Lease or as otherwise allowed by law.
 
26. HOLDING OVER: If, after the expiration Term or other termination of the
Lease, Tenant shall remain in possession of the Premises without a written
agreement as to such possession, then such holding over shall be deemed to be a
holding over upon a month-to-month tenancy under the same agreements and
provisions as the Lease and for a Fixed Minimum Rent equal to one hundred fifty
percent of the Fixed Minimum Rent under the Lease. However, nothing contained
herein shall give Tenant the right to hold over at any time, and Landlord may
exercise any and all remedies at law or equity to recover possession of the
Premises, as well as to collect any damages incurred by Landlord due to failure
by Tenant to vacate the Premises in accordance herewith.
 
27. COVENANT OF QUIET ENJOYMENT: Upon Tenant paying the Rent herein reserved and
observing and performing all of the agreements and provisions of the Lease which
are to be observed and performed by Tenant, subject to the agreements and
provisions of the Lease, Tenant may peaceably and quietly hold, occupy and enjoy
the Premises for the Term of the Lease.
 
28. DEFAULTS BY TENANT AND REMEDIES OF LANDLORD:
 
1. Subject to the other provisions of this paragraph twenty-eight, each of the
following events shall constitute a default by Tenant and a breach of the Lease
and the occurrence of any one of them shall give Landlord the rights and
remedies set forth in this paragraph twenty-eight, to wit:
 
 
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(a) If the Fixed Minimum Rent, or any part thereof, shall be unpaid when due.
 
(b) If any Additional Rent or charges, or any part thereof, shall be unpaid when
due.
 
(c) If Tenant does not comply with any provision of the Lease which imposes an
obligation on Tenant, other than obligations for the payment of Rent or other
charges, and shall not cure such failure within three (3) days after written
notice thereof from Landlord, and thereafter refrain from further violations of
such provision.
 
(d) If Tenant should violate or fail to comply with any of the statutes,
ordinances, rules, orders, regulations and requirements of the federal
government or any state, county or city government, or any other governmental
body having jurisdiction over the Project, or any pm1thereof, or any of their
departments and bureaus applicable to the Premises heretofore or hereafter
established, and shall not cure such violation of failure within three (3) days
after written notice thereof from Landlord, and thereafter refrain from further
violations of the same or similar nature.
 
(e) If the Premises should be abandoned or vacated.
 
(f) If Tenant should attempt to sell, assign or mortgage all or any pai1of or
interest in the Lease or sublet all or any part of the Premises without the
prior written consent of Landlord having been first had and obtained.
 
(g) If by operation of law the Lease should be transferred to, or pass to, or
devolve upon any person other than Tenant except, if Tenant is a corporation, by
merger or consolidation.
 
(h) If Tenant is a corporation, if (I) Tenant should dissolve its corporate
existence or (II) an action or proceeding for the dissolution or liquidation of
Tenant should be commenced.
 
(i) If Tenant should be adjudicated a bankrupt or insolvent and such
adjudication should not be vacated within fifteen (15) days.
 
G) If Tenant should file a petition of bankruptcy or make a general assignment
for the benefit of creditors.
 
(k) If Tenant should file a petition or answer seeking reorganization or
readjustment under federal bankruptcy laws.
 
(1) If a receiver or trustee should be appointed with respect to all or
substantially all property of Tenant in any suit or proceeding against Tenant or
in any bankruptcy proceeding.
 
(m) If any execution or attachment shall be issued against Tenant or any of
Tenant's property whereupon someone other than Tenant shall take or occupy the
Premises.
 
 
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2. Upon the occurrence of any of the events of default set forth in paragraph
28.01 herein, Landlord shall have the option to pursue any one or more of the
following remedies without any prior notice or demand whatsoever:
 
(a) Terminate this Lease, in which event Tenant shall immediately surrender the
Premises to Landlord and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in
Rent, enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying such Premises or any part thereof,
provided that such action can be taken without a breach of the peace, without
being liable for prosecution of any claim of damages therefor and Tenant hereby
specifically waives any and all claims for damages that may otherwise result
therefrom.
 
(b) Without terminating this Lease, enter upon and take possession of the
Premises and expel or remove Tenant and any other person who may be occupying
such Premises or any part thereof, provided that such action can be taken
without a breach of the peace, without being liable for prosecution or any claim
for damages therefore, and Tenant hereby specifically waives any and all claims
for damages that may otherwise result therefrom; and re-let the Premises and
receive the rent therefor.
 
(c) Enter upon the Premises, provided that such action can be taken without a
breach of the peace, without being liable for prosecution or any claim for
damages therefore, and Tenant hereby specifically waives any and all claims for
damages that may otherwise result therefrom; and do whatever Tenant is obligated
to do under the terms of this Lease; and Tenant agrees to reimburse Landlord on
demand for any expenses which Landlord my incur in thus effecting compliance
with Tenant's obligations under this Lease and Tenant further agrees that
Landlord shall not be liable for any damages resulting to Tenant from such
action, and Tenant hereby specifically waives any and all claims for damages
that may otherwise result therefrom, whether caused by the negligence of
Landlord or otherwise.
 
(d) Alter all locks and other security devices at the Premises without
terminating this Lease.
 
(e) Take any action allowed by law.
 
3. In the event Landlord serves or causes to be served upon Tenant a notice to
pay/for compliance or for possession pursuant to C.R.S. § 13-40-104 ("Demand
Notice"), such Demand Notice shall not be construed as an election on Landlord's
part to terminate the Lease. Further, Tenant's delivery of the Premises in
compliance with a Demand Notice, or Tenant's forfeiture or Landlord's lawful
reentry of the Premises, shall not serve to terminate the Lease or relieve
Tenant's obligations under this Lease for any Rents or other amounts currently
due hereunder, or which may become due after service of the Demand Notice until
the end of the Term.
 
4. Exercise by Landlord of any one or more of the remedies herein granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises by
 
 
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Tenant, whether by agreement or by operation of law, it being understood that
such surrender can be effected only by the written agreement of Landlord and
Tenant. No such alteration of locks or other security devices and no removal or
other exercise of dominion by Landlord over the property of Tenant or others at
the Premises shall be deemed unauthorized or constitute a conversion, Tenant
hereby consenting, after any event of default, to the aforesaid exercise of
dominion over Tenant's prope11y within the Premises. All claims for damages by
reason of such reentry and/or repossession and/or alteration of locks or other
security devices are hereby waived, as all claims for damages by reason of any
distress warrant, forcible detainer proceedings, sequestration proceedings or
other legal process, to the extent permitted by law. Tenant agrees that any
reentry by Landlord may be pursuant to judgment obtained in forcible detainer
proceedings or other legal proceedings or without the necessity for any legal
proceedings, as Landlord may elect, and Landlord shall not be liable in trespass
or otherwise.
 
5. In the event Landlord elects to terminate the Lease by reason of an event of
default then, notwithstanding such termination, Tenant shall be liable for and
shall pay to Landlord, at the address specified for notice to Landlord herein,
the sum of all Rent and other indebtedness accrued to date of such termination,
plus, as damages for loss of the bargain and not as a penalty, an aggregate sum
which, at the time of such te1mination of this Lease, represents the excess, if
any, of (a) the aggregate of all Rent and other sums payable by Tenant hereunder
that would have accrued for the balance of the Lease Term, or extension thereof,
over (b) the aggregate rental value of the Premises for the balance of the Lease
Term, or extension thereof, both discounted to present value at the rate of 8%
per annum.
 
6. In the event that Landlord elects to repossess the Premises without
terminating the Lease, whether by legal process or otherwise, then Tenant shall
be liable for and shall pay to Landlord, at the address specified for notice to
Landlord herein, all Rent and other indebtedness accrued to the date of such
repossession, all plus Rent required to be paid by Tenant to Landlord during the
remainder of the Lease Term until the date of expiration of the Term as stated
herein, all of which Rent, including future Rent, shall be immediately due and
payable. Provided that Tenant pays all such Rent, including future Rent,
Landlord shall, on an annual basis beginning twelve months after Tenant has paid
all such Rent, pay to Tenant all rental income, if any, Landlord has received
for the Premises during the remainder of the Term of the Lease, less Landlord's
costs and expenses in re-letting the Premises, including any and all management
fees and expenses incurred by Landlord. However, in no event shall Tenant be
entitled to any excess of any rental obtained by re-letting over and above the
rental herein reserved.
 
7. In the event of any default or breach by Tenant or threatened or anticipatory
breach or default, Tenant shall also be liable and shall pay to Landlord, in
addition to any sums provided to be paid above, broker's fees and all other
expenses incurred by Landlord in connection with re-letting the whole or any
part of the Premises; the costs of removing and storing Tenant's or other
occupants' property; the costs of repairing, altering, remodeling or otherwise
putting the Premises into condition acceptable to a new tenant or tenants; and
all reasonable expenses incurred by Landlord in enforcing or defending
Landlord's rights and/or remedies, including reasonable attorney fees and
related expenses, whether suit was actually filed or not.
 
 
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8. In the event of termination of the Lease, or the retaking of possession of
the Premises for any event of default, whether through legal process or
otherwise, or breach of the Lease on the part of Tenant, Tenant hereby waives
and releases Landlord from any obligation that Landlord may otherwise have to
mitigate Landlord's damages resulting from Tenant's default or breach of Lease,
and Landlord shall not have any obligation to re-let or attempt to re­ let the
Premises or any portion thereof or to collect rental after re-letting; and in
the event or re­ letting, Landlord may re-let the whole or any portion of the
Premises for any period to any Tenant and for any use or purpose.
 
9. If Tenant shall fail to make any payment or cure any default hereunder within
the time herein permitted, Landlord, without being under any obligation to do so
and without thereby waiving such default, may make such payment and/or remedy
such other default for the account of Tenant (and enter the Premises for such
purpose) and thereupon Tenant shall be obligated to and hereby agrees to pay
Landlord upon demand all costs, expenses and disbursements,
including reasonable attorney fees, and other expenses related thereto, incurred
by Landlord in taking such remedial action.
 
10. Landlord is entitled to accept, receive in cash or deposit any payment made
by Tenant for any reason or purpose or in any amount whatsoever and apply the
same at Landlord's option to any obligation of Tenant and the same shall not
constitute payment of any amount owed except that to which Landlord has applied
the same. No endorsement, restrictive endorsement, or statement on any check or
letter of Tenant shall be deemed an accord and satisfaction or recognized for
any purpose whatsoever. The acceptance of any such check or payment shall be
without prejudice to Landlord's rights to recover any and all amounts owed by
Tenant hereunder and shall not be deemed to cure any other default nor prejudice
Landlord's rights to pursue any other available remedy.
 
29. LANDLORD'S RIGHT TO CURE: Landlord shall not be in breach or default under
any term or provision of this Lease unless and until Tenant has first given to
Landlord written notice of such breach or default and Landlord has failed or
refused to cure such breach or default within thirty (30) days of Landlord's
receipt of such notice, except where such failure or refusal constitutes a
threat to Tenant's ability to conduct normal business operations, in which event
such breach or default shall be cured or corrected as promptly as is reasonably
possible after receipt by Landlord of such written notice.
 
30. RIGHT TO CURE DEFAULTS: If at any time Tenant should be in default in the
performance of any covenant or condition of the Lease, other than the payment of
Rent, in addition to any other remedies Landlord may have, Landlord may cure any
such default at the expense of Tenant after giving Tenant three (3) day’s notice
of Landlord's intention to take curative action. All costs and expenses incurred
by Landlord in taking such curative action, including attorney fees, and related
expenses, shall be deemed to be Additional Rent due upon demand of Landlord.

31. RELATIONSHIP OF PARTIES: Landlord and Tenant are lessor and lessee,
respectively, and are not, nor shall they become by virtue of the Lease or any
actions taken pursuant hereto, anything other than lessor and lessee. Landlord
and Tenant are not joint ventures, partners, employed by one and the other or
agents of one and the other.
 
 
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32. NOTICES: All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been sufficiently given or
served if delivered in person, if delivered by a nationally recognized delivery
service, such a Federal Express, United Parcel Service, or if deposited for
mailing with the United States Postal Service, registered or certified, return
receipt requested, postage prepaid and addressed as follows:
 
 
If to Landlord:
Stone Creek Commercial Center, Ltd.
% Charles C. Murphy & Associates,
P.O. Box 769,
Littleton CO. 80160-0769
8151 So. Peninsula Dr.
Littleton, CO 80120

 
 
If to Tenant:
GrowLife Hydroponics, Inc. 20301 Ventura Blvd, Suite 126 Woodland Hills, CA
91364

 
33. ATTORNEY FEES: If Tenant shall be in violation or breach of any provision of
this Lease, Tenant shall pay to Landlord all attorney fees incurred by Landlord
in connection with such violation or breach, or Landlord's enforcement of any of
Tenant's obligations hereunder, or all of them, and in addition Tenant shall pay
all costs and attorney fees incurred by Landlord and associated with any
litigation commenced by Landlord against Tenant, or commenced by Tenant against
Landlord, including, but not limited to, all costs, expenses and attorney fees
incurred in enforcing any judgment obtained by Landlord against Tenant and
Tenant's guarantors.
 
34. BROKERAGE: Both Landlord and Tenant represent to each other that no broker
was influential in negotiating the Lease or was a procuring cause thereof except
for NAI Mountain Commercial, representing Stone Creek Commercial Center, LTD
 
35. INTEREST : Any delinquent payments of Rent or any other sum or amounts due
from Tenant to Landlord pursuant to the terms of the Lease, including any Late
Charges specified above, shall accrue interest at the rate of eighteen percent
(18%) per annum, compounded monthly, from the date such Rent, Late Charge, or
other sum or amount became due. The provisions of this paragraph 35 shall in no
way relieve Tenant of the obligation to pay Rent, Late Charges, and all other
sums and amounts due on or before the date on which such are due, or affect
Landlord's remedies under paragraph 28, but shall be in addition thereto.
 
36. AUCTIONS: Tenant shall not conduct or permit to be conducted any sale by
auction on the Premises, whether said auction is voluntary, involuntary,
pursuant to any assignment for the payment of creditors, or pursuant to any
bankruptcy or other insolvency proceeding.
 
37. JOINT OBLIGATION: If there shall be more than on Tenant, the obligations of
Tenant hereunder imposed shall be the joint and several obligations of all
Tenants.
 
 
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38. MARGINAL HEADINGS: The marginal headings and titles to the paragraphs of
this Lease are not a part of the Lease and shall have no effect upon the
construction or interpretation of any part hereof.
 
39. TIME: Time is of the essence with respect to all obligations set forth in
this Lease and each and all of its provisions in which performance is a factor.
 
40. INABILITY TO PERFORM: This Lease and the obligations of the Tenant hereunder
shall not be affected, waived, delayed, or impaired because Landlord is unable
to fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason of strike, labor troubles, acts of God,
or any other cause beyond the reasonable control of the Landlord.
 
41. AUTHORITY OF TENANT: If Tenant is a corporation, limited liability company,
or other similar entity, each individual executing this Lease on behalf of such
entity represents and warrants that (i) he is duly authorized to execute and
deliver this Lease on behalf of said entity, in accordance with the governing
documents of said entity; (ii) this Lease is binding upon said entity; and (iii)
an appropriate entity resolution to that effect in form reasonably acceptable to
Landlord shall be provide immediately upon request.
 
42. LANDLORD EXCULPATION: Landlord and all partners, shareholders, or members of
Landlord, as the case may be, shall have absolutely no personal liability with
respect to any provision of this Lease, or any obligation or liability arising
in connection herewith. Tenant shall look solely to the equity in the Premises
for the satisfaction of any remedies of Tenant in the event of a breach by the
Landlord of any of its obligations or in the event of any claim of Tenant
arising in law or equity. Such exculpation of liability shall be absolute
without any exception whatsoever.
 
43. LANDLORD'S LIEN: Tenant hereby grants to Landlord a lien against and a
security interest in and to any and all of Tenant's furniture, fixtures, Trade
Fixtures, equipment and inventory whenever acquired, their proceeds and the
proceeds of any and all insurance policies carried thereon as and for additional
security for the faithful performance by Tenant of all of its obligations
hereunder. Tenant agrees to execute and deliver to Landlord, upon request, such
additional documents as Landlord may require to establish and perfect such
security interest including, without limitation, a security agreement and/or
financing statement in forms satisfactory to Landlord, which are to be executed
and delivered by Tenant to Landlord. The exercise by Landlord of any rights in
and to such furniture, fixtures, Trade Fixtures, equipment and inventory upon
default hereunder shall be governed by Article 9 of the Colorado Uniform
Commercial Code, as in effect at the time of such default, but such exercise
shall not preclude Landlord from exercising any or all other rights and remedies
hereunder or as provided by law or herein.
 
44. NO RECORDATION: Without the prior written consent of Landlord, which consent
may be withheld in Landlord's sole discretion, Tenant shall not record this
Lease or any evidence of this Lease. Any recordation of this Lease in violation
hereof shall constitute an Event of Default under paragraph 28 of this Lease.
 
 
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45. WAIVER OF JURY TRIAL: LANDLORD AND TENANT HEREBY MUTUALLY WAIVE ANY AND ALL
RIGHTS WHICH EITHER PARTY MIGHT OTHERWISE HAVE TO REQUEST A TRIAL BY JURY IN ANY
PROCEEDING AT LAW OR IN EQUITY IN ANY COURT OF COMPETENT JURISDICTION IN ANY
ACTION ARISING FROM OR PERTAINING TO THIS LEASE.
 
46. TIME: In computing any period of time prescribed or allowed by this Lease,
the day of the act or triggering event from which the designated time begins to
run shall not be included and all references to days shall be calendar days.
 
47. COUNTERPART SIGNATURES: This Lease may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which,
when taken together, constitute one and the same document. The signature,
including facsimile signatures, of any party to any counterpart shall be deemed
a signature to, and may be appended to, any other counterpart
 
48. ENTIRE AGREEMENT: The Lease, with all Schedules and addendum's annexed
hereto, contains the entire understanding and agreement between Landlord and
Tenant and supersedes and incorporates all prior understandings, discussions,
agreements, representations and other communications between Landlord and Tenant
concerning the subject matter hereof and any agreement hereafter made between
Landlord and Tenant shall be ineffective to change, waive, release, discharge,
terminate or effect an abandonment of the Lease, in whole or in part, unless
such agreement is in writing and signed by the party against whom it is sought
to be enforced.
 
49. SEVERABILITY: If any provision, sentence, phrase, or word of the Lease or
application thereof to any person or circumstance shall be held invalid, the
remainder of the Lease or the application of such provision, sentence, phrase or
word to persons or circumstance other than those as to which it is held invalid
shall not be affected thereby.
 
50. INTERPRETATION: When necessary for proper construction, the masculine of any
word used in the Lease shall include the feminine and neuter gender, and the
singular shall include the plural and vice versa.
 
51. BINDING EFFECT: Except as is otherwise provided for herein, the Lease shall
be binding upon and inure to the benefit of the heirs, devisees, personal
representatives, successors and assigns of Tenant and the successors and assigns
of Landlord.

 
52. DUMPSTER USE: Tenant agrees not to place equipment, furniture, cabinetry, or
other large items in, near, at, or about any dumpster serving the Project, the
Building, or the Premises. All trash must be cut up or broken down into pieces
with maximum measurements of 3'x 5' and placed in an appropriate dumpster. Under
no circumstance shall any trash of any kind be placed outside the dumpster
containers. Tenant shall not transport and dump Tenant's offsite project trash
into Project Common Area dumpster containers. The Landlord, at its sole
discretion, may assess a charge up to $500.00 against Tenant for each violation
of this paragraph 52, which charge Tenant acknowledges is imposed in order to
reimburse Landlord for time and expenses incurred by Landlord in enforcing this
provision of the Lease, and not as a penalty.
 
 
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Landlord, the County of Eagle, the waste management provider servicing the
Project, or other governmental agency may require Tenant to obtain and use one
or more special use dumpsters or waste receptacles. In such event, all cost
associated with such special use dumpster or waste receptacle shall be borne by
Tenant, and such dumpster or receptacle shall be placed and maintained in a
manner and location as reasonably required by the Landlord. In such event, and
so long as Tenant is still permitted by Landlord to use the Project Common Area
dumpsters, Tenant shall remain responsible for C.A.M. dumpster fees.
 
53. OVERNIGHT PARKING: No outside, overnight parking or storage of any vehicle,
product, trash, and/or equipment under the control of Tenant or Tenant's
employees, agents, guests, customers, or invitees is allowed. The Landlord, at
its sole discretion, may assess a charge up to $500.00 for each violation of
this paragraph 53, which charge Tenant acknowledges is imposed in order to
reimburse Landlord for time and expenses incurred by Landlord in enforcing this
provision of the Lease, and not as a penalty. Said charge shall be accompanied
by pictures of vehicle, and license plate with date and time attached.
 
54. TENANT/EMPLOYEE PARKING: All Tenants and their employees shall park their
vehicles in the designated Tenant/Employee parking spots as shown on the
attached "Schedule I". No vehicle shall be larger than a standard size SUV, or
3/4 ton pick-up. The Landlord, at its sole discretion, may assess a charge of up
to $500.00 for each violation of this paragraph 54, which charge Tenant
acknowledges is imposed in order to reimburse Landlord for time and expenses
incurred by Landlord in enforcing this provision of the Lease, and not as a
penalty.
 
55. LANDLORDS RESPONSIBILITY TO COMPLETE:
 
56. NO PETS ALLOWED ON PREMISES: Tenant may make provisions to allow for
Tenant's customers to enjoy a dog friendly (canine only) atmosphere allowing
such customers to temporarily, and for short periods of time to bring their
canines onto the Property and into the Premises. No canine shall, however, be
left on the Property or Premises overnight. The foregoing notwithstanding,
neither, Tenant nor Tenant's employees shall be allowed to bring or keep any pet
(canine, feline, reptile, rodent, marsupials, birds, amphibians, or any other
domestic or wild animals) on or about the Premises or Property.
 
57. ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a
lesser amount than any and all rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated rent, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment as
rent be deemed an accord and satisfaction, and Landlord shall accept such check
or payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy provided in this Lease. TENANT HEREBY EXPRESSLY
WAIVES AND RELINQUISHES ANY AND ALL RIGHTS IT MIGHT HAVE TO CLAIM AN ACCORD AND
SATISFACTION UNDER OR PURSUANT TO C.R.S. ' 4-3-311.
 
58. GOVERNING LAW; JURISDICTION. The laws of the State of Colorado shall govern
the interpretation, validity, performance and enforcement of this Lease. Tenant
and Landlord understand and agree that the State Courts of the State of Colorado
located in the County of Eagle, State of Colorado shall have sole and exclusive
subject matter jurisdiction to
 
 
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entertain any action brought to enforce this Lease or with respect to any
dispute arising herefrom and, by execution hereof, Tenant and any guarantors of
this Lease voluntarily submit to the personal jurisdiction of such Courts.
 
59. BUILDING CONDOMINIUMIZATION. Landlord reserves the right to condominimise
the Building and/or the Project at any time and without notice to Tenant so as
to create two or more condominium units. In such event, the Premises may become
one or more condominium units, or portions of one or more condominium units, as
defined and described in the condominium declaration and condominium map. In the
event that the Building and/or the Project is condominimised, all assessments of
every kind, nature and description imposed upon the condominium unit or units
making up the Premises shall, at the option of Landlord, be paid by Tenant as
Additional Rent, it being recognized that such assessments may take the place of
some, but not all, other charges due hereunder as Additional Rent as the result
of some expenses being converted from Landlord expenses to condominium
association expenses. In the event that the Premises, or any portion thereof, is
a part of, but not all of, a condominium unit, Tenant shall pay a pro-rata share
of the assessments for such condominium unit based upon the ratio of the area of
the Premises to the area of the condominium unit. The foregoing notwithstanding,
Landlord may, in the event of the condominimisation of the Building and/or the
Project, adjust the Rent and or additional rent (Common Area Expense or C.A.M.),
due under this Lease so as to insure that such total Rent due hereunder does not
increase or decrease solely as the result of such condominimisation process, and
the assessments due resulting there from. Also, in no way, shall the use of this
provision cancel any additional lease extensions herein grated.
 
 

Landlord: Stone Creek Commercial Center LLP     Tenant: GrowLife Hydroponics,
Inc.             By /s/ Charles C. Murphy     By /s/ Sterling Scott            
Charles C. Murphy
   
/s/ Sterling Scott
 
as agent for Landlord
   
President and CEO
           
Date: October 21, 2013
   
Date: October 21, 2013
 

 
 
 
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SCHEDULE I
Stone Creek Business Center
Avon, Colorado
 

Floor Plan

 
 
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SCHEDULE II
Stone Creek Business Center
Avon, Colorado
 
Sign Criteria
 
 
I. INTENT:
 
These criteria are established on the principle that the success of the center,
as a whole, benefits the individual merchant. Their purpose is to establish an
appearance of orderliness and neatness associated with any successful business.
Architectural coordination of signs also adds an element of professionalism to
the entire center for the benefit of all concerned. In the interest of
maintaining quality standards, proper illumination, and good contemporary
design, signs must be manufactured in accordance with these criteria.
Conformance will be strictly enforced and all non-conforming or unapproved signs
will be brought into conformance at the expense of the tenant.
 
II. GENERAL REQUIREMENTS :
 
a. Tenant shall be responsible for the fulfillment of all requirements of these
criteria.
 
b. Tenant shall submit or cause to be submitted to the Landlord for approval,
prior to fabrication, at least two (2) copies of detailed shop drawings
indicating size, layout, location, design, construction, and color of the
proposed signs, including all lettering, logos and/or graphics.
 
c. All permits, if any or required, for signs and their installation shall be
obtained and paid for by the tenant or it's designated representative prior to
fabrication and installation.
 
d. All signs shall be constructed and installed, including electrical hook-up
(when applicable), at Tenant's expense. Every effort should be made to have
sign(s) fabricated and installed prior to Tenant's opening. TEMPORARY BANNERS
WILL NOT BE PERMITTED.
 
e. The sign contractor, for the Center shall have to be approved by the
Landlord, prior to any construction.
 
f. No signage shall be permitted on the East and West ends of the building.
 
g. Any willful deviation from these criteria that is not corrected immediately
upon written notification by the Landlord shall be considered a default under
the default provisions of the lease.
 
III. SPECIFIC REQUIREMENTS:
 
A. WHERE SIGN BAND IS PROVIDED:
 
1. Stone Creek Business Center will provide the sign band including all
electrical components.
 
2. The sign band will be powered from the house meter and the cost for
electricity will be included into the C.A.M. charges.
 
3. Elevation drawings are attached. The portion of the sign band designated for
the Tenant will be redlined.
 
4. Each Tenant will be required to provide the sign face panels, after
Landlord's approval of design, at Tenant's expense. The sign face will be, .125
aluminum, paint color and specifications to be determined by the Landlord. Copy
will be routed and backed with 3/16" Plexiglas. Copy color will be Tenant's
option. If Landlord has provided the sign face panels, Landlord shall be
re-reimbursed the cost of said panels in the amount of $ Cost as provided by
Sign Design located on Highway 6. Eagle Vail, CO, option #'2 paragraph of the
lea se.
 
5. The horizontal dimension of the copy may not exceed 75% of the sign band area
designated for the Tenant space. Vertical dimension of the copy may not exceed
21".
 
B. WHERE SIGN BAND IS NOT PROVIDED (Single story north and south exposure only)
 
1. All signs are to be individual pan channel letters, internally illuminated
with remote transformers.
 
2. The horizontal dimension of the Tenant's sign shall not exceed 40% of the
leased storefront (including logo cabinets).
 
3. Overall sign height shall not exceed 30".
 
4. Letters shall be constructed of 22-gage Paint Loe sheet metal or equivalent
strength aluminum and shall have 5" returns. Channel me or similar materials
will not be permitted.
 
5. All letters shall have 3/16" Plexiglas faces with l" Jewel Late trim.
 
6. All letters shall be illuminated by neon on 60 MA transformers, or by red
neon on 30 MA transformers .
 
7. Letter style and color shall be selected by Tenant.
 
8. Logo cabinets will be permitted. Logo cabinets shall not exceed 30"x30" and
will be illuminated by neon (see number 6 above).
 
9. Raceways will not be permitted.
 
10. Approval or disapproval sl1all remain the sole right of the Landlord.
 
11. All signs must be constructed to meet UL standards and must carry UL labels.
 
C. EXTERIOR TENANT SOFFIT IDENTIFICATION SIGNS.
 
1. All Tenants shall be required to have an exterior walkway soffit
identification sign mounted contiguous to the Tenant's entry.
 
2. All soffit signs will be fabricated, installed, and maintained by the
Landlord.
 
3. All costs of fabrication, installation, and maintenance shall be included in
Common Area Charges (C.A.M.).

 
 
 
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