Exhibit 10.7

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT is made and entered into by and between: Shamira. LLC whose
address is 8051 NW 159th Terrace. Miami Lakes. FL 33016 as Landlord, and Diego
Pellicer Worldwide, Inc a Delaware Corporation, as Tenant, which is liable for
all provisions, covenants and obligations hereunder.

 

Landlord wishes to lease to Tenant and Tenant wishes to lease from Landlord,
certain real property, further identified and defined herein. (Landlord and
Tenant, together, herein sometimes referred to as the "Parties").

 

NOW THEREFORE, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, and under the warranties, representations, conditions and
covenants herein, the Parties agree to the following:

 

W I T N E S S E T H:

 

Leased Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, upon the terms and conditions as hereinafter set forth, premises
described as follows:

 

L 1 TO 10 INC & FRACTL L 11 LYG NLY UP ROW BLK 66 1ST ADD TO SWANSEA

 

Also known as
4242 Elizabeth Street Denver CO 80216

 

Together with all rights privileges, easements, appurtenances and Amenities to
or in any way pertaining to the premises and together with the buildings and
other improvements situated upon said premises (said real property, buildings
and improvements hereinafter referred to as the "premises"). Equipment will be
included in this Lease agreement which will be listed and attached as Exhibit A.

 

Base Term. To have and to hold the same for a term of (5) years commencing on
the First day of July, 2014 until June 30, 2019 with a Five (5) year extension
which must be exercised no less than 60 days prior to the end of the first lease
period.

 

Base Rent. Tenant hereby agrees to pay to Landlord. Rent as Follows:

 

Base Rent: D0,000.00 per month for 18,566 sqft plus NNN. The NNN Shall be $
1771.00 per month approximate. The base rent shall increase by 3% per year
throughout the initial 5 year term August 2014 and September 2014 shall be Rent
Free.

 

Lease period Monthly rent Annual Rent Year 1 $30,000.00 + NNN $360,000 + NNN
Year 2 $30,900.00 + NNN $370,800 + NNN Year 3 $31,827.00 + NNN $381,924 + NNN
Year 4 $32,781.81 + NNN $393,382 + NN Year 5 $33,765.26 + NNN $405,183 + NNN

 

The Payment, Plus "NNN" expenses shall be payable in equal monthly installments
as listed in the schedule above, in advance without notice on the first day of
each month during said term, at the offices of Landlord located
at_____________________________________________ (or at such other place as
Landlord may designate in writing from time to time) without any set-off or
deduction whatsoever ("Base Rent").

 

Said payments shall be in legal tender and lawful money of the United States. If
the term herein commences on a day other than the first day of a calendar month,
then Tenant shall pay to Landlord the rent for the number of days that exist
prior to the first of the succeeding month, with a similar adjustment being made
at the termination of this Lease, if necessary. If Tenant exercises its option
to renew for an additional Five (5) year term, the Base Rent and estimated NNN
expenses shall increase three (3%) annually over the last year rate of the
initial term.

 

 

 

Tenant shall tender to Landlord a payment of First Month's Payment:  $30,000.00 
Last 2 Month’s:  $60,000.00  Security Deposit:  $60,000.00  Total of Initial
payment  $150,000.00 

 

The initial payment consists of first month's payment, two month’s rent for
security deposit and .last month's. Landlord shall not be obligated to pay
interest on the security deposit. Tenant shall begin payments on July 1, 2014.
Landlord shall have the right to commingle such security deposit with other
funds of Landlord. The portion of the deposit not held back for damage done to
the space shall be refunded within 30 days of the end of Tenant's lease.

 

Additional Rent. All rent not defined. as base rent shall he considered
"Additional Rent". In addition to the Base Rent specified above, Tenant shall
pay to the Landlord an amount which Landlord shall Estimate for the cost of all
personal property and real property (real estate) taxes and assessments
attributable to the building and the operation thereof, all insurance as
specified in this Lease and all maintenance of the building in order to keep it
in good operational condition, this rent is also called NNN. The sum of the
expenses shall be estimated by Landlord each year and divided by 12 then divided
by three (3 units) and Tenant shall pay such rent along with his base rent.
Landlord shall also be entitled to such other sums due in excess of the base
rent which shall also be titled Additional Rent as specified in the Lease. As of
the signing of this lease annual real estate taxes are to be determined at the
beginning of each calendar year.

 

NNN Items. Included in the NNN items are all expenses related to the operation
of the building, including ail taxes levied against the building, insurance and
maintenance, legal and professional fees, charges by any city authority,
sidewalk improvements, and any other expense not considered a capital expense
incurred by Landlord in operating the property. In addition, in the event the
actual NNN Expenses exceed the budgeted NNN Expense payments, Tenant shall pay
the difference within thirty (30) days of written notice by Landlord. Landlord
will give the appropriate credit if the budgeted NNN Expense exceeds the actual.

 

In addition, Tenant shall be responsible for obtaining and maintaining insurance
sufficient to protect Landlord as outlined below. In the event the NNN charges
have been underestimated by Landlord, he may present a bill to Tenant and Tenant
shall pay such bill within 10 days.

 

Exclusions from NNN items. None

 

Maintenance Portion of NNN Items included.

 

Tenant, shall perform maintenance on the building and therefore avoid payment of
the maintenance portion of the NNN directly to Landlord. To the extent Tenant
fails to perform the maintenance of the property Landlord may perform such
maintenance and bill Tenant for the cost of same.

 

Tenant shall keep in good order, condition and repair the Premises and every
part thereof, (regardless of whether the damaged portion of the Premises or the
means of repairing the same are accessible to Lessee) including, without
limiting the generality of the foregoing, all plumbing, heating, air
conditioning, ventilating, electrical and lighting facilities and equipment
within or about the Premises, fixtures, interior walls and interior surfaces of
exterior walls. ceilings, windows, doors, plate glass, showcases, skylights,
entrances and vestibules located within or about the Premises and all sidewalks,
including prompt snow removal as required by the City and County of Denver, and
signs located on the building. In the event of 00 any fine or charge assessed by
the City and County of Deliver or it's subdivisions for failure to maintain the
building or sidewalks, Tenant shall promptly pay the same.

 

2

 

 

If Lessee fails to perform Lessee's obligations under this section Lessor or his
agents or contractors may at Lessor's option enter upon the Premises, after ten
(10) days' prior written notice to Lessee. and put the same in good order,
condition and repair. and the cost thereof together with interest thereon at the
rate of 18% per annum shall be due and payable as additional rent to Lessor
together with Lessee's next rental installment. Landlord shall be entitled to a
fee of 20% of the cost of any repairs or maintenance performed by Landlord.

 

Insurance Portion of NNN Items.

 

All-Risk Insurance. In the name of the Landlord, Tenant shall keep all
improvements located on or appurtenant to the Premises insured against loss or
damage by fire and such other perils as are now or hereafter included in the
standard "All-Risk" policy in common use for commercial structures, including
vandalism and malicious mischief. The amount of the All-Risk insurance shall be
equal to one hundred percent (100%) of the then actual replacement cost of
existing improvements, estimated at $370,000.00, including the value of any
leasehold improvements or betterments but excluding costs of replacing
excavations and foundations, but without deductions for depreciation. Landlord
may, on each anniversary date of this Lease, request the carrier of the
insurance (or the agent for the carrier) to determine the amount of insurance
required by the provisions of this paragraph, and the resulting determination
shall be conclusive between the parties. Upon Landlord's request, Tenant shall
include the holder of any mortgage encumbering the Premises by virtue of a
standard mortgagee's clause to the extent of that mortgagee's interest. In
addition to the insurance set forth above, Tenant shall provide Rental Income
Insurance (loss of rents insurance) in the name of Landlord in an amount
sufficient to cover the full Base Rent as well as all other payments which are
the responsibility of Tenant under the terms and conditions of this Lease.
Further, if there is a boiler or similar equipment on the Premises, Tenant shall
provide a separate policy covering boiler explosion, together with rental income
insurance resulting from a boiler explosion. In lieu of Tenant acquiring the
insurance as above set forth, Landlord shall have the exclusive right to
purchase the insurance required by the provisions of this subsection 6(a) in
Landlord's name and to forward Tenant a bill for the premium for such insurance.
Tenant shall pay said bill within ten (10) calendar days after receipt of the
same. Landlord, at his option, may arrange for insurance acceptable to Landlord
covering the structure and include same in the NNN expenses.

 

Liability Insurance. Tenant shall at all times keep in force a comprehensive
general combined liability insurance policy providing protection of at least
$2,000,000 against claims and liability for personal injury, bodily injury,
death and property damage arising from the use, ownership, maintenance, disuse
or condition of the Premises, any improvements located on or appurtenant to the
Premises, improvements or adjoining areas or ways. Landlord shall be named and
protected under the terms and conditions of said policy as Landlord of the
Premises.

 

Personal Property. Tenant shall be responsible for insuring any and all personal
property that may be owned by Tenant. Any insurance that may be purchased
pursuant to this section 6 or any proceeds that may be payable as a result of a
loss under any such insurance shall in no way reduce, alter, diminish or modify
any provisions of this Lease and specifically the indemnity provisions of
section 11 hereof.

 

Forfeiture and Seizure. Tenant shall carry insurance which protects and covers
Landlord in the event the building is seized, or subject to asset forfeiture.
All insurance required by virtue of this section 6 shall be written with an
insurance company licensed to do business in the State of Colorado and approved
by Landlord (which approval shall not be unreasonably withheld), with such
policies to be non-assessable. Tenant shall provide Landlord with the original
insurance policies or a Certificate of Insurance (with proof of payment
thereon), which shall provide that the insuring company shall give notice in
writing to Landlord thirty (30) calendar days prior to cancellation, termination
or, in the event of a material change in such insurance, for any reason
whatsoever. An endorsement shall provide that any proceeds (except liability
insurance proceeds) of any loss shall be payable to Landlord and Tenant as their
respective interests may appear, except that in the event Landlord purchases the
All-Risk Insurance, then any loss shall be payable to Landlord.

 

3

 

 

Surrender. On the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
broom clean, ordinary wear and tear excepted. Lessee shall repair any damage to
the Premises occasioned by the removal of its trade fixtures, furnishings and
equipment.

 

Hold Over. Any rule or law to the contrary notwithstanding, in the event Tenant
remains in possession of the Premises or any part thereof subsequent to the
expiration of the term of this Lease or any extension thereof and such holding
over shall be with the consent of Landlord, it shall be conclusively deemed that
such possession and occupancy shall be a tenancy from month-to-month only. at a
rental which was existing at the end of the term of this Lease or any extension
thereof, unless increased by Landlord upon not less than 30 days' prior written
notice, and, further, such possession shall be subject to all of the other terms
and conditions (except any option to renew or option to purchase) contained in
this Lease. In the event Tenant otherwise Holds Over. Tenant shall pay to
Landlord the sum of 150% of the rent.

 

Inspection and Acceptance of Premises. Tenant acknowledges that it has inspected
or has had opportunity to inspect and accepts the premises in its condition as
suitable for the purpose for which the premises are leased to the Tenant. Taking
of possession by Tenant shall be deemed conclusively to establish that said
premises are in good and satisfactory condition as of when possession was taken.
Tenant further acknowledges that no representations as to the repair of the
premises. nor promises to alter. remodel or improve the premises have been made
by Landlord, unless such are expressly set forth in the lease. If this lease is
executed before the premises become vacant or otherwise available and ready for
occupancy. or if any present tenant or occupant of the premises holds over, and
Landlord cannot acquire possession of the premises prior to the date above
recited as the commencement date of this lease, Landlord shall not be deemed to
be in default hereunder, and Tenant agrees to accept possession of the premises
at such time as Landlord is able to tender the same, which date shall
thenceforth be deemed the "commencement date"; and Landlord hereby waives
payment of rents covering any period prior to the tendering of possession to
Tenant hereunder. After the commencement date Tenant shall, upon demand, execute
and deliver a letter of acceptance of delivery of the premises. Tenant
specifically accepts the premises as follows: Leased premises shall be as is
where is. Tenant shall he responsible for their own electric bill and shall be
due monthly.

 

Use of Premises. Tenant shall have the right to use and occupy the Premises for
the following purposes and no other which is a marijuana operation, legal under
the constitution of the State of Colorado or permitted by Colorado law. Tenant
asserts he will not sell any product in the property which is illegal for sale.
Tenant shall not use any portion of the premises outside of the building
structures to sell products, including the yard, patios, driveways and
sidewalks. Tenant shall grow marijuana under the approved laws of the state of
Colorado. Tenant shall not, on September, open a retail store to public for the
sale of medical or recreational marijuana or dispensary of any kind.

 

Expansion of Use. In the event Tenant seeks to expand the use of the Premises,
Tenant shall advise Landlord and Landlord and Tenant shall negotiate such
additional sums which may be due for such expansion of Tenant's business, if
any.

 

Tenant's Additional Obligations. Tenant covenants, throughout the term of this
Lease and at Tenant's sole cost and expense, to promptly comply with all laws
and ordinances and the orders, rules, regulations and requirements of all state
and municipal governments, special districts and all appropriate departments,
commissions, boards and officers thereof.

 

4

 

 

Assignment and Subleasing, Neither this Lease nor any interest herein may be
assigned by Tenant, voluntarily or involuntarily, by operation of law or
otherwise, and neither all nor any part of the Premises shall be subleased by
Tenant without the written consent of Landlord first had and obtained. Any
consent to assignment or sublease given by Landlord shall not constitute a
waiver of necessity for such consent to a subsequent assignment or sublease. In
the event, upon application by Tenant and sub-lessor, Landlord approves the
Sub-lessor, Tenant shall remain fully liable under the terms and conditions of
this Lease and shall not be released from performing any of the terms, covenants
and conditions hereof. In addition to Tenant, any sub lessee or assignee shall
be personally liable for all payments, conditions, covenants and agreements in
this Lease. Any subleasing or assignment in violation of this paragraph shall be
null and void. Landlord shall be entitled to a reasonable fee for his time and
effort in reviewing the new tenant's credit and use of the property upon
application for subleasing. Landlord shall not unreasonably withhold approval of
a sublease, and may take into consideration the Sub-lessor's prospective use of
the property. his business experience, his capital resources and his credit
rating.

 

The Landlord authorizes the Premises to be sublet to licensed medical and/or
recreational marijuana growers, processors and/or retailers, including DPCO. Inc
(the "Subtenant"), and those affiliates of subtenant controlled by or under
direct common control of subtenant. Tenant shall have the right to replace the
Subtenant with Landlord's approval, which approval shall not be unreasonably
withheld; however Tenant shall remain responsible for all terms and conditions
of this Lease. Notice shall include name and contact information of the new
Subtenant and proof of licensing approval from the MMED and City of Denver. New
Subtenants must meet all other requirements of this Lease.

 

Utilities. Tenant shall promptly pay all charges for water, sewer, heat, gas,
light, electricity, and any and all other utilities used on or in connection
with the operation and maintenance of the Premises.

 

Indemnity Provisions. Tenant agrees to exonerate, save harmless, protect and
indemnify Landlord, or any owner of the Premises, from and against any and all
losses, damages, claims, suits or actions, judgments and costs which may arise
during the term hereof for personal injury, loss of life or damaged property
sustained in or about the Premises or the improvements and appurtenances thereto
or upon the adjacent sidewalks and streets and from and against all costs,
attorney fees, expenses and liabilities incurred in, as a result of and about
any such claims, the investigation thereof or the defense of any action or
proceeding brought thereon, and from and against any judgments, orders, decrees
or liens resultant there from and any fines levied by any authority for
violation of any law, regulation or ordinance by virtue of the use of the
improvements and appurtenances thereto situated upon the Premises. This
indemnity shall include any loss from the filing of mechanic's and/or material
men's liens.

 

Occupational Safety and Health Act. Tenant shall fully comply with the
Occupational Safety and Health Act of 1970 (as amended) (Chapter XVII, Title XIX
of the United States Code) (OSHA) or applicable state statute adopted pursuant
to OSHA. It shall be Tenant's obligation to fully comply with the provisions and
standards as contained in said Act (or as the same may be amended) and Tenant
shall hold Landlord harmless from any obligations or responsibilities, if any,
created under said OSHA or other applicable federal or state statute. Further,
Tenant shall be responsible to make any and ail repairs and alterations to the
structural and non-structural components of the Premises, or to any
appurtenances situated upon the Premises that may be required of Landlord as
provided in any OSHA or any other statute, law or ordinance in effect at the
time of the execution of this Lease or which may hereafter be enacted.

 

Care of the Premises. Tenant shall not commit or allow any waste or damage to be
committed on any portion of the Premises. At the termination of this Lease, by
lapse of time or otherwise, Tenant shall deliver up the Premises to Landlord in
as good condition as at date of possession by Tenant ordinary wear and tear
excepted; and Tenant shall remove all of Tenant's trade fixtures, furniture and
other effects. All movable furniture and other effects not so removed shall
conclusively he deemed to have been abandoned and may be appropriated, sold,
stored, destroyed or otherwise disposed of by Landlord without notice to Tenant
or any other person and without obligation to account therefore, and Tenant
shall pay Landlord all expenses incurred in connection with such property.
Tenant's obligation to observe or perform this covenant shall survive the
termination of this Lease.

 

5

 

 

Tenant shall pay before delinquency all taxes, assessments, license taxes and
other charges levied. assessed or imposed upon Tenant's operation, occupancy or
conduct of business at the Premises or upon Tenant's equipment, furniture, trade
fixtures, leasehold improvements and other personal property of any kind
installed or located on the Premises. which become payable during the term of
this Lease.

 

Alterations to Premises. Tenant shall have the right. at is sole cost and
expense, to make changes or alterations to the Premises upon written approval of
Landlord. Tenant may, without written approval, change the flooring in the
Premises at Tenant's expense, may paint the interior and remove or change the
dividers currently on the floor. In the event Tenant removes the existing tile
on the floor, he shall place new floor coverings such that, in the event of
removal of any dividers, the floor remains intact and as one floor, without
holes or vacant spots where the dividers are placed.

 

Tenant shall make no alterations in or additions or repairs to the Premises
without first obtaining the written consent of Landlord, which consent shall not
be unreasonably withheld; and Tenant shall notify Landlord at least ten (I0)
business days in advance of any alterations in or repairs or additions to the
Premises which Tenant proposes to make. Tenant shall post notice pursuant to the
Colorado Mechanics Lien Act so that any lien recorded against the property of
which the Premises are a part does not attach to Landlord's interest.

 

All such alterations, additions or improvements shall be made at Tenant's sole
cost and expense and, except for furniture and trade fixtures, shall become the
property of Landlord and shall be surrendered with the Premises, as a part
thereof, at the end of the term hereof. Landlord may require Tenant to remove
all such improvements installed by the Tenant and to repair any damage to the
Premises from such removal. Tenant shall construct such improvements,
alterations or repairs in conformance with any and all applicable rules and
regulations of any Federal. State, or Municipal or special authority code or
ordinance. At least ten (10) days before the commencement of any such work,
Tenant agrees to provide Landlord with lien waivers from all persons performing
such work and material men providing materials used in connection therewith. In
the event Tenant orders any construction, alterations, decorating or repair work
directly from Landlord, the charges for such work shall be payable to Landlord
upon satisfactory completion of such work. If not paid when invoiced, such
nonpayment shall be deemed an event of default hereunder. In the event any lien
shall be filed for labor performed or materials supplied, Tenant shall cause
such lien to be released within thirty (30) days. Failure to do so will be
considered a material breach of this Lease Agreement.

 

In all cases any changes or alterations shall conform to all building and zoning
regulations, and shall be performed in a workman like manner, with all building
permits which may be required by the city or state being obtained by the Tenant,
and the follow up inspections completed including final inspections by the
appropriate authorities. Further, Tenant shall be responsible for any costs
pertaining to the City and County of Denver's mandatory frontage paint and or
color requirements. Tenant shall be responsible for their own signage which must
adhere to the City and County of Denver's Signage control policy.

 

Condemnation. Complete Taking. lf, during the term of this Lease, or any
extension hereof, the whole or substantially all of the Premises shall be taken
as a result of the exercise of the power of eminent domain or transferred under
threat of condemnation, this Lease shall terminate as of the date of vesting of
title of the Premises or delivery of possession, whichever event shall first
occur, pursuant to such proceeding or transfer. For the purpose of this section
15. "substantially all of the Premises" shall be deemed to have been taken if a
taking under any such proceeding shall involve such an area, whether the area be
improved with building or be utilized for a parking area or for other use, that
Tenant cannot reasonably operate in the remainder of the Premises the business
being conducted on the Premises at the time of such proceeding.

 

Partial Taking. If, during the term of this Lease, or any extension hereof, less
than substantially all of the Premises shall be taken in any such proceeding,
this Lease shall not terminate. The rent thereafter due and payable by Tenant
shall be reduced in such proportion as the nature, value and extent of the part
so taken bears to the whole of the Premises. Landlord shall, from the proceeds
of the condemnation, restore the Premises for use of Tenant.

 

6

 

 

Award. Any award granted for either partial or complete taking regarding the
Premises shall he the sole property of Landlord.

 

Destruction of Premises. If any building or improvement standing or erected upon
the Premises shall be destroyed or damaged ("Damage") in whole or in part by
fire or other casualty, Landlord shall promptly repair. replace or rebuild
("Restoration") the same at least to the extent of the value and as nearly as
practical to the character of the Building or improvements existing immediately
prior to the Damage. During such Restoration, Tenant shall be entitled to a
proportionate reduction of rent while such Restoration work is being completed,
such proportionate reduction to be based upon the extent to which such
Restoration interferes with Tenant's use of the Premises. If: (a) the Premises
are encumbered by a mortgage or deed of trust ("Mortgage") and the holder of the
Mortgage requires that all or a portion of the proceeds of the insurance be paid
to said holder, or (b) the insurance proceeds available for the Restoration are
less than 90 percent of the cost of the Restoration, or (c) the Restoration
cannot be completed within 120 days, then Landlord may, at its option, declare
this Lease terminated and all parties shall be relieved from further obligation
hereunder from the Date of the Damage. If the Restoration cannot be completed
within 120 days from the date of the Damage, then Tenant shall likewise have the
right, at its option, to declare this Lease terminated and all parties shall be
relieved from further obligation hereunder from the date of the Damage. In the
event that either Landlord or Tenant is entitled to declare this Lease
terminated as set forth above, than such notice shall be given within thirty
(30) calendar days from the date of determination that the Restoration cannot be
completed within 120 days by the party declaring such to the other party.

 

Anything in this section 17 to the contrary notwithstanding, if the improvements
contained on the Premises are substantially damaged or destroyed from any cause
whatsoever during the last eighteen (18) month period of this Lease, Landlord
may, at its option, declare this Lease terminated and all parties shall be
relieved from further obligation hereunder from that date of said damage.
However, if an option to extend the term of this Lease is granted herein, then
if Tenant exercises said option within twenty (20) calendar days from the date
of Damage and if the remaining term plus the option period is for a period of
time longer than eighteen (18) months, Restoration and the parties' obligations
and rights shall be as set forth in the preceding paragraph. All insurance
proceeds paid as a result of a casualty shall be the sole and exclusive property
of the Landlord.

 

Default. The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Tenant:

 

Tenant failing to pay Base Rent or Additional Rent within Ten days of its due
date;

 

Tenant failing to make any other payments required to be made by Tenant when
due, where such failure shall continue for a period of seven (7) calendar days
following notice from Landlord to Tenant;

 

Tenant failing to perform or keep any of the other terms, covenants and
conditions herein contained for which it is responsible, and such failure
continuing and not being cured for a period of thirty (30) calendar days after
notice from Landlord or if such default is a default which cannot be cured
within a 30 calendar day period, then Tenant's failing to commence to correct
the same within said 30 calendar day period and thereafter failing to prosecute
the same to completion with reasonable diligence: If the default occurs due to
order or citation by the governing authority having jurisdiction over the
premises, whether such default or order is issued to the Landlord or to the
Tenant, the time for cure shall conform to the time granted by such governing
authority, including any time granted by any tribunal.

 

7

 

 

Tenant abandoning the Premises.

 

Tenant being adjudicated as bankrupt or insolvent or filing in any court a
petition in bankruptcy or for reorganization or for the adoption of an
arrangement under the Bankruptcy Act (as now or in the future amended) or the
filing of an involuntary bankruptcy against Tenant unless said involuntary
bankruptcy is terminated within thirty (30) calendar days from the date of said
filing, or Tenant filing in any court for the appointment of a receiver or
trustee of all or a portion of Tenant's property or there being appointed a
receiver or trustee for ail or a portion of Tenant's property, unless said
receiver or trustee is terminated within thirty (30) calendar days from the date
of said appointment; Tenant making any general assignment or general arrangement
of its property for the benefit of its creditors.

 

In the event of an occurrence of default as set forth above, Landlord shall have
the right to: Terminate this Lease and end the term hereof by giving to Tenant
written notice of such termination, in which event Landlord shall be entitled to
recover from Tenant at the time of such termination the present value of the
excess, if any, of the amount of rent reserved in this Lease for the then
balance, not to exceed 6 months, hereof over the then reasonable rental value of
the Premises for the same period. The present value shall be determined by
discounting all future excess rent amounts at the rate of eight percent (8%) per
annum. It is understood and agreed that the "reasonable rental value" shall be
the amount of rental which Landlord can obtain as rent for the remainder of the
initial term or renewal term, whichever is applicable; or without resuming
possession of the Premises or terminating this Lease, to sue monthly for and
recover all rents, other required payments due under this Lease, not to exceed 6
months, and other sums including damages and legal fees at any time from time to
time accruing hereunder; or without terminating this Lease, re-enter and take
possession of the Premises or any part thereof and repossess the same as of
Landlord's former estate or expel Tenant and those claiming through or under
Tenant and remove the effects of both or either (forcibly, if necessary) without
being, deemed guilty in any manner of trespass and without prejudice to any
remedies for rent delinquencies or preceding lease defaults, in which event
Landlord may from time to time without terminating this Lease re-let the
Premises or any part thereof for such term or terms and at such rental or
rentals and upon such other terms and conditions as Landlord may, in its sole
discretion, deem advisable. with the right to make alterations and repairs to
the Premises, and neither the serving of a demand for possession nor the
re-entry or taking of possession of the Premises by Landlord shall be construed
as an election on Landlord's part to terminate this Lease unless a written
notice of termination be given to Tenant. In the event of Landlord's election to
proceed under this subsection (c), then such repossession shall not relieve
Tenant of its obligation and liability under this Lease, ail of which shall
survive such repossession, and Tenant shall pay to Landlord as current damages
the basic rental and other sums hereinabove provided which would be payable
hereunder if such repossession had not occurred, less the net proceeds (if any)
of any re letting of the Premises after deducting all of Landlord's expenses in
connection therewith, including but without limitation all repossession costs,
brokerage commissions, legal expenses, attorneys' fees, expenses of employees,
alteration costs and expenses of preparation of such re letting. Tenant shall
pay such current damages to landlord on the days on which the basic rent would
have been payable hereunder and as if possession had not been retaken, and
Landlord shall be entitled to receive the same from Tenant on each such day. Any
Late Payment shall bear a penalty of $200.00.

 

Subordination and Estoppel. This Lease is subject and subordinate to all
mortgages and deeds of trust which now or hereafter may affect the Premises, and
Tenant shall execute and deliver upon demand of Landlord any and all instruments
desired by Landlord subordinating this Lease in the manner requested by Landlord
to any new or existing mortgage or deed of trust. Should Tenant fail to execute
and deliver any such documents or instruments within ten (10) calendar days
after receipt of such demand, Tenant irrevocably constitutes and appoints
Landlord as Tenant's special attorney-in-fact for the purpose solely of
executing and delivering any such documents or instruments pursuant to this
paragraph. Any holder of a mortgage or deed of trust may rely upon the terms and
conditions of this paragraph. Further, Tenant shall at any time and from time to
time, upon not less than five (5) calendar days' prior written notice from
Landlord, execute, acknowledge and deliver to Landlord a statement in writing
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying, that this
Lease as so modified is in full force and effect) and the dates to which rental
and other charges are paid in advance, if any, and acknowledging that there are
not, to Tenant's knowledge, any uncured defaults on the part of the Landlord, or
specifying such defaults, if any are claimed. Tenant shall attorney to any
purchaser at any foreclosure sale or to any grantee or transferee designated in
any deed given in lieu of foreclosure. Any subordination agreement to be
executed by Tenant shall provide that as long as Tenant is current and not in
default under the terms and conditions of this Lease, the holder of the mortgage
shall not disturb the tenancy of Tenant.

 

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Hazardous Use. Tenant shall not occupy or use. or permit any portion of the
Premises to be occupied or used for any business or purpose which is unlawful,
disreputable or deemed to be extra hazardous, or permit anything to be done
which would in any way increase the rate of casualty or liability insurance
coverage on the Premises or the Building and/or its contents. Tenant will not
store, create or use any Hazardous Materials (as they are defined in section 21,
below) on or about the Premises without the prior written consent of Landlord,
which approval may be withheld at Landlord's discretion. With respect to any
such storage, creation or use of Hazardous Materials, Tenant agrees to use,
store, and dispose of same as required by applicable local, state and federal
laws; to provide immediate notice of any releases; to provide in advance the
identity of specific Hazardous Materials which will be stored, created or used
on the Premises; and to maintain the Premises free of contamination and return
the property to its pre-lease condition.

 

Indemnification. Tenant and all other signatories and guarantors hereof jointly
and severally agree to indemnify, protect and save Landlord harmless against and
from any and all damages, losses, liabilities, obligations, penalties, claims,
litigation, demands. defenses, judgments, suits. proceedings, costs,
disbursements or expenses of any kind or of any nature whatsoever (including,
without limitation, attorneys' and experts' fees and disbursements) which may at
any time be imposed upon, incurred by or asserted or awarded against Landlord,
and arising from or out of any Hazardous Materials, as hereinafter defined,
hereafter located upon or within all or any portion of the Premises as a result
of Tenant's actions, including without limitation (i) the cost of removal of all
such Hazardous Materials from all or any portion of the Premises, (ii)
additional costs required to take necessary precautions to protect against the
release of Hazardous Materials on, in, under or affecting the Premises, into the
air, any body of water, any other public domain or any surrounding areas, and
(iii) costs incurred to comply, in connection with all or any part of the
Premises, with all applicable laws, orders, judgments and regulations with
respect to Hazardous Materials.

 

For the purposes of this Lease, the term "Hazardous Materials" shall mean any
hazardous or toxic materials, wastes and substances including any substance
identified in CERCLA, RCRA, or other federal, state or local legislation,
regulations or ordinances whether now existing or hereafter enacted or
promulgated or any judicial or administrative interpretation of such laws, rules
or regulations.

 

This Indemnification shall be a continuing indemnity for 6 months and shall
remain in full force and effect until released and cancelled by Landlord or its
successors and assigns.

 

Subrogation. Landlord shall cause each insurance policy carried or to be carried
by Landlord insuring the Premises against loss, and Tenant shall cause each
insurance policy carried or to be carried by Tenant on or relating to the
Premises, its fixtures and contents, to be written in a manner so as to provide
that the insurance company waives all right to recovery by way of subrogation
against damage covered by any such policies (but only with respect to claims
against the other party.) Neither party, its agents, officers and employees
shall be liable to the other for any loss or damage caused (regardless of cause
or origin, including the negligence of any party hereto, its agents, officers or
employees) by fire or any other risk or risks against which any such policy
insures, provided such waiver was obtainable. If the release of either Landlord
or Tenant as set forth herein shall contravene any law with respect to
exculpatory agreements, the liability of the party in question shall be deemed
not released but shall be secondary to that of the other party's insurer.
Notwithstanding anything contained herein to the contrary, any insurance
policies maintained by Tenant (Public Liability and Personal Property) shall
name Landlord as an additional insured.

 

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Surrender of Premises. Upon expiration or termination of the term of this Lease,
or any extension thereof, Tenant shall peaceably and quietly leave and surrender
the Premises in as good condition as they are now, ordinary wear and tear
excepted. Tenant shall surrender and deliver up the building and Premises
broom-clean and free of Tenant's property. Provided Tenant is not in default, it
shall have the right to remove all of its trade fixtures, equipment, machinery
and other personal property, provided that upon such removal the Premises are
delivered in the same condition as existed at the time of commencement of this
Lease. Further, in the event Tenant does not remove any of its fixtures,
equipment or personal property or any additions or alterations made to the
Premises during the term of this Lease, Landlord may, at its option, require
Tenant to remove any such improvements, alterations, fixtures and equipment and
restore the Premises to the condition that existed at the commencement of the
Lease, at Tenant's sole cost and expense. or retain the same.

 

Recommendation of Legal Counsel. Landlord advises and recommends that all
parties hereto obtain legal counsel to represent them in connection with the
examination of title, zoning of the Premises, the contents and execution of this
Lease, tax implications of the transaction and all other aspects relative to the
transaction contemplated hereby.

 

Notices. All notices, demands and requests required to he given by either party
to the other shall be in writing and shall be hand delivered or sent by
certified or registered mail, return receipt requested. postage prepaid,
addressed to the party at the address set forth below or at such other addresses
as the parties may designate in writing delivered pursuant to the provisions
hereof. Any notice when given as provided herein shall be deemed to have been
delivered on the date personally served or two (2) banking days subsequent to
the date that said notice was deposited with the United States Postal Service.
Landlord address: 535 Dover Street Lakewood Co 80226-1149.

 

Time is of the Essence. Time is of the essence hereof.

 

Quiet Enjoyment. Landlord represents and warrants that Landlord has the right to
enter into and make this Lease: and Tenant, upon paying the rent herein reserved
and upon performing all of the terms and conditions of this Lease on its part to
be performed, shall at all times during the term herein demised peacefully and
quietly have, hold and enjoy the Premises.

 

Acceptance of Premises. Tenant accepts the Premises subject to all zoning
ordinances and regulations pertaining to the Premises, without responsibility or
warranty by Landlord, and further Tenant accepts the Premises subject to
easements, rights-of-way, restrictive covenants and reservations of record.

 

Right to Inspect or Show Premises. Landlord, or Landlord's agent and
representative. shall have the right to enter into and upon the Premises or any
part thereof at all reasonable hours for the purpose of examining the same.
Landlord, or Landlord's agent and representative, shall also have the right to
show the Premises to persons wishing to purchase or lease the same at all
reasonable hours. During the 90 calendar day period prior to the expiration of
this Lease, or any extension thereof, Landlord, or Landlords agent and
representative, shall have the right to place "to let" or "for sale" notices on
the Premises, and the Tenant agrees to permit the same to remain thereon.
Landlord will observe and follow all marijuana laws and regulations as defined
by state and local regulations.

 

Severability. If any sentence, paragraph or article of this Lease is held to be
illegal or invalid, this shall not affect in any manner those other portions of
the Lease not illegal or invalid and this Lease shall continue in full force and
effect as to those provisions,

 

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Confidentiality and Nondisclosure. Both Parties agree not to disclose the
confidential information obtained from the discloser and this Lease to anyone
unless required to do so by law. In consideration of each Party's disclosure of
Confidential Information to the other Party, each Party agrees with respect to
the Confidential Information received from the other Party, that it: (a) will
maintain such Confidential Information in the strictest confidence; (b) will not
disclose, transfer or otherwise make available any of such Confidential
Information to any third party without the prior written consent of the other
Party; and (c) will not use the Confidential Information for any purpose other
than related to this letter. Each Party shall take reasonable measures to
protect the Confidential Information of the other Party. Those measures shall
not be less than the measures taken to protect the receiving Party's own
confidential information. Confidential Information of the other Party may be
provided to a Party's Representatives only on a need-to-know basis, and prior to
such provision, the Party will notify each Representative to whom such
disclosure is made that such Confidential Information is received in confidence
and shall be kept in confidence by such Representative. Neither Party may
disclose Confidential Information to current or previous employees without the
prior consent of the other party.

 

If at any time during the term of the Lease Landlord receives an offer from a
third party to purchase the Premises which Landlord wishes to accept. Landlord
shall deliver to Tenant a copy of the complete proposed contract received and
allow Tenant to purchase the Premises under the same terms and conditions.

 

If Federal, Colorado or Denver laws or regulations prohibit the Tenant's
operation of a marijuana operation at this location during the term of this
Lease or if a governmental notice is delivered to Landlord or Tenant which
requires the cessation of marijuana cultivation or infusion on the Premises,
Landlord or Tenant may terminate this Lease with no penalties and Tenant shall
vacate the Premises within 30 days, any deposits shall forthwith be returned by
Landlord to Tenant.

 

If Premises' location or Tenant's leases, licenses or operations is not
approved, issued and/or licensed by the Marijuana. Enforcement Division, City of
Denver Zoning and/or City of Denver Excise and License Department, then this
lease will become null and void without penalty, any deposits shall forthwith be
returned by Landlord to Tenant.

 

This Lease may he executed in counterparts, all of which shall collectively be
considered the original. A facsimile signature shall be sufficient and shall
constitute an original signature for all purposes.

 

This Agreement shall be governed by and construed in accordance with laws of the
State of Colorado.

 

IN WITNESS WHEREOF the parties have set their hands and seals as of the day and
year first written above.

 

Agreed and Accepted

 

Landlord: [ex10xii_001.jpg]     Shamira, LLC         Date: 6-12-14        
Tenant: [ex10xii_002.jpg]   Diego Pellicer Worldwide, Inc.
it’s CFO/SECRETARY         Date: 6/12/14  

 

 

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