Exhibit 10.2


 


DEVELOPMENT AGREEMENT


 


THIS DEVELOPMENT AGREEMENT
is made and entered into effective this 31st day of May, 2018 (the “Effective Date”), by and between IIP-MA
1 LLC, a Delaware limited liability company (“Landlord”), PHARMACANNIS MASSACHUSETTS INC., a Massachusetts corporation
(“Tenant”), and IIP OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“Parent Company”).
Landlord, Tenant and Parent Company shall sometimes collectively be referred to herein as the “Parties.”


 


RECITALS


 


A.           WHEREAS,
concurrent with the execution of this Agreement, Landlord acquired certain real property located at Lot 1, Hopping Brook Road,
Holliston, Massachusetts 01746, as more particularly described on Exhibit A attached hereto and incorporated herein by reference
(the “Land”);


 


B.           WHEREAS,
concurrent with the execution of this Agreement, Landlord and Tenant entered into that certain Lease dated May 31, 2018 (as the
same may be amended, supplemented or otherwise modified from time to time, the “Lease”), pursuant to which Tenant
leases the Premises;


 


C.           WHEREAS,
Tenant desires to construct and develop certain industrial and greenhouse Improvements on the Land for medical-use cannabis cultivation
and processing, subject to and in accordance with the terms and conditions of this Agreement and the Lease;


 


D.           WHEREAS,
Landlord has agreed to pay or reimburse Tenant for the costs of completing the Improvements up to the Construction Contribution
Amount, subject to and in accordance with the terms and conditions of this Agreement and the Lease; and


 


E.           WHEREAS,
Tenant will derive certain direct and indirect benefits from the construction of the Improvements pursuant to this Agreement and
the Lease.


 


NOW, THEREFORE, FOR
GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, the Parties hereby agree as follows:


 


1.           Definitions.
In addition to those terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth below:


 


“AAA”
shall have the meaning given to such term in Section 11.2 of this Agreement.


 


“AAA Rules”
shall have the meaning given to such term in Section 11.9(a) of this Agreement.


 


“Architect Arbitrator”
shall have the meaning given to such term in Section 11.4 of this Agreement.


 


“Affiliate”
shall mean any person or entity that, directly or indirectly, controls or is controlled by or is under common control with any
other entity.


 


“Agreement”
shall mean this Development Agreement, as amended from time to time.


 


“Application”
shall have the meaning given to such term in Section 6.1 of this Agreement.


 


“Attorney Arbitrator”
shall have the meaning given to such term in Section 11.4 of this Agreement.


 


“Authorized
Excess Development Costs” shall have the meaning ascribed to such term in Section 8 of this Agreement.


 




    	 



     


    

 


"Bankruptcy Code"
means the United States Bankruptcy Code or any successor statute (as the same may be amended from time to time).


 


“Budgeted Development
Costs” shall mean all Development Costs which are authorized pursuant to the Development Plan and Budget, which shall
include, without limitation, (a) a fee to Landlord equal to Thirty-Seven Thousand Five Hundred Dollars ($37,500.00) to cover Landlord's
overhead and expenses for plan review, engineering review, coordination, scheduling and supervision of the Development and (b)
reimbursement for Landlord's third-party costs actually incurred in connection with the Development, including Landlord's engagement
of a construction consultant to oversee the Development, provided that any such costs shall be reasonable and shall be reasonably
consistent with market rates paid for similar services.


 


“Buildings”
shall mean an approximately Thirty-Two Thousand (32,000) square foot greenhouse facility and an approximately Twenty-Six Thousand
(26,000) square foot industrial building suitable for the Permitted Use, subject to changes as may be made in accordance with this
Agreement.


 


“Completion
Date” shall mean the date which corresponds to the last to occur of each of the Completion Events.


 


“Completion
Events” shall mean the following events: (a) the substantial completion of the construction, development and installation
of the Improvements and the performance of all other construction and development work for the Development in accordance with the
Development Plan and Budget, as evidenced by a Certificate of Substantial Completion in the form of the American Institute of Architects
document G704, executed by the project architect and the general contractor; (b) Landlord has received copies of all certifications
and approvals with respect to the Improvements that may be required from any governmental authority and any board of fire underwriters
or similar body for the use and occupancy of the Premises, including the issuance of a certificate of occupancy or similar governmental
approval suitable for the Permitted Use; (c) the full performance by the general contractor(s) of all of its (their) duties and
obligations under the construction contracts with regard to the Development in accordance with the Development Plan and Budget,
other than those items set forth on a Punch-List prepared by the Tenant and delivered to the general contractor(s); (d) Landlord
has received the general contractor’s final unconditional waiver and release of lien and final unconditional waivers and
releases of liens from each subcontractor and material supplier with respect to the Improvements; (e) Landlord has received complete
“as built” drawing print sets, project specifications and shop drawings and electronic CADD files on disc for the Improvements;
(f) Landlord has received an as-built ALTA survey depicting the Improvements and otherwise reasonably acceptable to Landlord; (g)
Landlord has received a commissioning report prepared by a licensed, qualified commissioning agent hired by Tenant and approved
by Landlord for all mechanical, electrical and plumbing systems installed in connection with the Development; and (h) Landlord
has received such other “close out” materials as Landlord reasonably requests.


 


“Construction
Contribution Amount” shall mean an amount not to exceed Fifteen Million Five Hundred Thousand Dollars ($15,500,000).


 


“Construction
Payment” shall have the meaning ascribed to such term in Section 6.2 of this Agreement.


 


“Contractor
Arbitrator” shall have the meaning given to such term in Section 11.4 of this Agreement.


 


“Default”
shall have the meaning ascribed to such term in the Lease.


 


“Development”
shall have the meaning ascribed to such term in Section 2.2 of this Agreement.


 


“Development
Approvals” shall mean: (a) any and all land use and development entitlements, permits and authorizations relating to
the Development; (b) utility hook-up rights, water allocations, water rights, sewer capacity, density allocations and other similar
rights or approvals regarding the Development; and (c) any and all documents, agreements, instruments and/or understandings with
any local, state or federal governmental agency concerning the construction and development of any on-site or off-site improvements
by one or more of such governmental agencies.


 




    	2



     


    

 


“Development
Costs” shall mean, with respect to the Improvements, any and all costs, fees and expenses incurred by Tenant arising
out of and in connection with the Improvements.


 


“Development
Plan and Budget” shall have the meaning ascribed to such term in Section 5.1 of this Agreement.


 


“Disbursement
Claim” shall have the meaning ascribed to such term in Section 11.1 of this Agreement.


 


“Disapproved
Matters” shall have the meaning ascribed to such term in Section 4.6 of this Agreement.


 


“Effective Date”
shall the meaning ascribed to such term in the introductory paragraph of this Agreement.


 


“Excess Development
Costs” shall mean those Development Costs which are in excess of the aggregate amounts allocated to Development Costs
in the Development Plan and Budget.


 


“Final Arbitration
Decision” shall have the meaning ascribed to such term in Section 11.10 of this Agreement.


 


“Improvements”
shall mean the Buildings and related improvements and facilities to be constructed on the Land, as generally depicted on Exhibit
B attached hereto, in accordance with the Development Plan and Budget and any work, improvements or items reasonably inferable
therefrom as necessary to produce a functional facility consistent with the Permitted Use, including, without limitation, all water
control systems, utility lines and related fixtures and improvements, drainage facilities, landscaping, fencing, signs, parking
facilities, access ways, walkways and related facilities.


 


“Initial Meeting”
shall have the meaning ascribed to such term in Section 11.1 of this Agreement.


 


“Insolvency”
shall mean either: (a) when the Tenant (i) has an order for relief entered with respect to it under Chapter 7 or Chapter 11
of the Bankruptcy Code; (ii) makes a general assignment for the benefit of creditors; (iii) files a voluntary petition under the
Bankruptcy Code; (iv) files a petition or answer seeking for the Tenant any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the Bankruptcy Code, any statute, law or regulation; (v) files an answer or other
pleading admitting or failing to contest the material allegations of a petition filed against the Tenant in any proceeding of this
nature; and/or (vi) seeks, consents to or acquiesces the appointment of a trustee, receiver or liquidator of the Tenant or of all
or any substantial part of the Tenant’s properties; or (b) (i) sixty (60) calendar days after the commencement of any proceeding
seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the Bankruptcy
Code, any statute, law or regulation, the proceeding has not been dismissed; or (ii) if, within sixty (60) calendar days after
the appointment without the Tenant’s consent or acquiescence of a trustee, receiver or liquidator of the Tenant or of all
or any substantial part of the property or estate of the Tenant, the appointment is not vacated or stayed or within sixty (60)
calendar days after the expiration of any such stay, the appointment if not vacated.


 


“Land”
shall have the meaning ascribed to such term in the recitals to this Agreement.


 


“Lease”
shall have the meaning ascribed to such term in the recitals to this Agreement.


 


“Landlord”
shall the meaning ascribed to such term in the introductory paragraph of this Agreement.


 




    	3



     


    

 


“Landlord Event
of Default” shall have the meaning ascribed to such term in Section 9.7 of this Agreement.


 


“Legal Requirements”
shall mean any and all laws, statutes, ordinances, codes, orders, rules, regulations, permits, licenses, authorizations, entitlements
(including, without limitations, any and all Development Approvals), official orders and requirements of, or conditions imposed
by, all federal (to the extent not in direct conflict with applicable state, municipal or local cannabis licensing and program
laws, rules and regulations), state, municipal and local laws, codes, ordinances, rules and regulations of governmental authorities,
committees, associations, or other regulatory committees, agencies or governing bodies having jurisdiction over the Premises or
any portion thereof, Landlord or Tenant, including both statutory and common law, hazardous waste rules and regulations, and state
cannabis licensing and program laws, rules and regulations, state, and local governmental regulatory agencies and authorities and
any covenants, conditions and restrictions of record encumbering the Land, in each case which are as of the date hereof or hereafter
become applicable to the construction, development or operation of the Improvements, including, without limitation, any of the
foregoing relating in any way to hazardous material and/or hazardous waste.


 


“Notice of Demand”
shall have the meaning ascribed to such term in Section 11.2 of this Agreement.


 


“Panel”
shall have the meaning ascribed to such term in Section 11.3 of this Agreement.


 


“Parent Company”
shall the meaning ascribed to such term in the introductory paragraph of this Agreement.


 


“Parties”
shall have the meaning ascribed to such term in the introductory paragraph of this Agreement.


 


“Permitted Use”
shall have the meaning ascribed to such term in the Lease.


 


“Premises”
shall have the meaning ascribed to such term in the Lease.


 


“Prior Course
of Dealing” shall have the meaning ascribed to such term in the Lease.


 


“Project Agreements”
shall have the meaning ascribed to such term in Section 3.5 of this Agreement.


 


“Punch-Lists”
shall have the meaning ascribed to such term in Section 3.12 of this Agreement.


 


“Required Arbitration
Construction Payments” shall have the meaning ascribed to such term in Section 11.10 of this Agreement.


 


“Revised Development
Plan and Budget” shall have the meaning ascribed to such term in Section 5.2 of this Agreement.


 


"SEC Information"
shall have the meaning ascribed to such term in Section 3.19 of this Agreement.


 


“Submission”
shall have the meaning ascribed to such term in Section 4.1 of this Agreement.


 


“Tenant”
shall the meaning ascribed to such term in the introductory paragraph of this Agreement.


 


“Tenant Event
of Default” shall have the meaning ascribed to such term in Section 9.2 of this Agreement.


 


“Term”
shall have the meaning ascribed to such term in Section 9.1 of this Agreement.


 




    	4



     


    

 


“Termination
Event” shall have the meaning ascribed to such term in Section 9.1 of this Agreement.


 


“Unauthorized
Excess Development Costs” shall have the meaning ascribed to such term in Section 8 of this Agreement.


 


2.           Tenant
Improvements.


 


2.1           Incorporation
Into Lease. The Parties acknowledge and agree that the terms and conditions of this Agreement shall be deemed part of and incorporated
into the Lease. For the avoidance of doubt, the occurrence of a Tenant Event of Default or a Landlord Event of Default under this
Agreement shall constitute a Default by such Party under the Lease.


 


2.2           General
Requirements. Tenant hereby agrees to secure all necessary Development Approvals in connection with the construction and development
of the Improvements, all in accordance with the Development Plan and Budget (collectively, the “Development”);
and (b) perform all other duties and obligations to be performed by Tenant in accordance with the terms and conditions of this
Agreement, including without limitation, those duties, responsibilities and obligations set forth in Section 3 hereof. Without
limiting the foregoing, Tenant shall use commercially reasonable and diligent efforts to cause the Completion Date to occur no
later than fifteen (15) months following the Effective Date, provided that the Completion Date shall be subject to a day-for-day
extension for any actual delays resulting from events of force majeure beyond the reasonable control of Tenant.


 


During the Term of
this Agreement, Tenant shall fully and timely perform all of the duties, responsibilities and obligations required to be performed
by Tenant pursuant to this Agreement and the Development Plan and Budget in a commercially reasonable manner, comparable with other
similar quality industrial developments to be used for similar uses in the greater Massachusetts market. In connection with the
foregoing, Tenant hereby covenants to furnish its commercially reasonable skill and judgment in performing its obligations hereunder.
Tenant shall perform its duties, responsibilities and obligations under this Agreement in a reasonably timely, efficient, expeditious,
prudent and economical manner, consistent with the interest of Landlord, subject in any event to and in accordance with commercially
reasonable standards, and this Agreement and the Development Plan and Budget.


 


2.3           Employees
and Independent Contractors. Tenant shall employ, on its own behalf and not as employees or independent contractors of Landlord,
at all times a sufficient number of capable employees and/ or independent contractors to enable it to fulfill Tenant’s duties,
responsibilities and obligations under this Agreement. All salaries, wages, compensation and benefits paid or payable to any employees
and/ or independent contractors of Tenant shall be borne solely by Tenant and shall not be borne by Landlord, provided such costs
shall be reimbursable to Tenant as a Budgeted Development Cost to the extent the same is included in the Development Plan and Budget,
subject to the terms and conditions of this Agreement.


 


2.4           Other
Activities. This Agreement shall not restrict Tenant or any of its Affiliates from engaging in any other development or business
activities. Notwithstanding the foregoing, in no event shall Tenant, during the Term of this Agreement, engage in any other development
or business activities which might or will materially interfere with Tenant’s ability to perform its duties, responsibilities
and obligations under this Agreement.


 


3.           Duties
of Tenant. Subject to the terms and conditions of this Agreement and the Development Plan and Budget, and in addition to the
other duties, responsibilities and obligations of Tenant under this Agreement, Tenant hereby agrees to and shall, at Tenant’s
sole cost and expense, fully and timely perform (or cause to be performed) in a commercially reasonable manner the duties, responsibilities
and obligations set forth in this Agreement including, without limitation, the duties, responsibilities and obligations set forth
below. Tenant shall not undertake the performance of any of the duties, responsibilities and obligations set forth in this Section
3 or elsewhere in this Agreement unless such duties, responsibilities and obligations are expressly authorized pursuant to the
Development Plan and Budget or are otherwise approved by Landlord pursuant to Section 4 hereof.


 




    	5



     


    

 


3.1           Secure
all Development Approvals and all other necessary permits, licenses, consents, authorizations, zoning variances or changes, (whether
regulatory, governmental, quasi-governmental or otherwise), which may be reasonably necessary or appropriate in connection with
the Development.


 


3.2           Secure
all surveys, soil tests and other studies and reports necessary to secure all Development Approvals reasonably required for the
Development and provide Landlord with electronic copies of all of the foregoing to the extent in Tenant’s possession or reasonable
control.


 


3.3           Cause
to be prepared and review all preliminary plans, working drawings, plans and specifications and construction cost estimates reasonably
required for the Development (and provide Landlord with electronic copies of all of the foregoing to the extent in Tenant’s
possession or reasonable control), and verify the compliance of such plans, working drawings, plans and specifications and construction
cost estimates with this Agreement and the Development Plan and Budget.


 


3.4           Secure
all other documents, agreements, instruments, reports, studies, surveys, maps, and all other materials reasonably necessary for
the Development.


 


3.5           Solicit
and negotiate all agreements, contracts, documents and other instruments reasonably necessary in order to undertake the activities
required to be performed by Tenant pursuant to Sections 3.1, 3.2, 3.3 and 3.4 above and/or to otherwise commence and/or complete
the Development (“Project Agreements”), which Project Agreements may include, without limitation, any and all
construction contracts and subcontracts, architectural and engineering contracts, supply contracts, applications and/or agreements
with governmental authorities, as the same may be amended from time to time. In the event any proposed Project Agreements are with
any Affiliate of Tenant, Tenant shall specifically notify Landlord when processing such proposed Project Agreement with Landlord
for Landlord’s approval pursuant to Section 4 hereof. In connection with Landlord’s review of such Project Agreements
pursuant to Section 4 hereof, Landlord shall not unreasonably disapprove a proposed Project Agreement which is consistent with
the Development Plan and Budget. In no event shall Tenant be authorized to enter into or execute any such Project Agreements in
the name of or on behalf of Landlord.


 


3.6           Oversee,
supervise and manage the planning, design, construction, and development of the Improvements, all in accordance with the Development
Plan and Budget and in compliance with the Development Approvals and other Legal Requirements.


 


3.7           Oversee,
supervise, manage and coordinate on a daily basis, the services of all employees, architects, contractors, subcontractors, supervisors,
engineers and other individuals and entities to carry out the Development, or any portion thereof.


 


3.8           Coordinate
and conduct bi-weekly on-site meetings with members of the construction and development team.


 


3.9           Prepare
and submit to Landlord a monthly status report with respect to the progress of the Development, which status report shall be in
form and substance reasonably satisfactory to Landlord.


 


3.10         Review
applications for payment by its contractors and their subcontractors in connection with the Development and process applications
for payment in accordance with the terms and conditions of this Agreement, including satisfying the conditions necessary to secure
any disbursement of funds for payment of such application pursuant to Section 6 below.


 


3.11         Undertake
commercially reasonable efforts to determine and verify the substantial and final completion of all construction and development
work to be performed and/or services to be provided in connection with the Development including, without limitation, the substantial
and final completion of all obligations to be performed pursuant to the applicable Project Agreements.


 




    	6



     


    

 


3.12         Undertake
commercially reasonable efforts to ensure that its contractor prepares any and all punch-lists of incomplete or unsatisfactory
work and other activities in connection with the Development (“Punch-Lists”), and undertake commercially reasonable
efforts to cause contractor to complete all items on such Punch-Lists.


 


3.13         Coordinate
and arrange for all utility services and required easements necessary for the Development.


 


3.14         Prepare
and submit all applications, forms and packages to secure the payment of any and all discounts, rebates, refunds, subsidies, or
other concessions referenced in the Development Plan and Budget (if any).


 


3.15         Upon
completion of the Development, procure an as-built ALTA survey that depicts the Improvements and is otherwise reasonably acceptable
to Landlord.


 


3.16         Promptly
notify Landlord of any material disputes with contractors, vendors, materialmen or suppliers, in any case, of which it has received
written notice, and exert all commercially reasonable efforts to give notice to Landlord prior to any liens filed against all or
any portion of the Land to the extent the Tenant has received written notice of the same. As soon as reasonably practicable following
its receipt of written notice of, or otherwise becoming aware of, any labor or materialmen’s liens or any other liens, liabilities
or encumbrances against all or any portion of the Land relating to the Development, Tenant shall provide written notice of such
liens, liabilities or encumbrances to Landlord. The amount of such lien, liability or encumbrance shall be fully paid or otherwise
satisfied by Tenant (or insured over by the title company selected by Tenant, at Tenant's sole cost and expense). As used herein,
"actual knowledge" of Tenant shall mean the actual (and not imputed) knowledge of each of Teddy Scott, Jeremy Unruh,
Brett Novey, Chris Atkinson, and Matt Levine without duty to inquire or investigate.


 


3.17         Promptly
notify Landlord in writing of any potential construction defects and warranty claims in connection with the Development of which
Tenant has actual knowledge and Tenant’s recommendation for prosecuting such matters. Upon instruction from Landlord, Tenant
shall pursue the course of action directed by Landlord.


 


3.18         Secure
and maintain at Tenant’s principal place of business all guarantees, warranties, affidavits, waivers, releases, bonds, keys,
operating and maintenance manuals, certificates of occupancy and other permits and approvals with respect to the Development and
provide Landlord with electronic copies of all of the foregoing to the extent in Tenant’s possession or reasonable control.


 


3.19         Establish
and maintain complete and accurate books and records with respect to the Development, together with sufficient documentation to
fully support each of the entries in such books and records. Such books and records shall include proper entries of all receipts,
income and disbursements pertaining to the Development. Such books and records shall be and remain the property of the Landlord
(subject to Tenant’s right to retain copies) and be maintained by Tenant at Tenant’s principal place of business or
at the on-site construction office on or near the Land. In connection with the foregoing, Tenant shall make such books and records
available to Landlord and its representatives for inspection and audit at Tenant’s principal place of business or at the
on-site office (or at another location previously approved by Landlord) at any time and from time to time during regular business
hours. Without limiting the foregoing, Tenant shall provide, as reasonably requested by Landlord, any necessary or appropriate
documents, periodic reports, materials and information to Landlord and/or any other financial institution or lenders designated
by Landlord, or attorneys and accountants selected by Landlord. Tenant shall cooperate with accountants and attorneys selected
by Landlord in the preparation of all tax returns and reports required to be filed by Landlord and/or its Affiliates (including,
without limitation, federal income tax returns, state income tax and/or franchise tax returns, if any, state intangible tax returns,
if any, and state annual reports, if any) and shall provide to such accountants and/or attorneys all books and records pertaining
to the Development that are requested and that are in the possession and control of Tenant, it being understood and agreed that
Tenant shall have no authority or responsibility to execute or file any returns of Landlord or its Affiliates. Additionally, Tenant
acknowledges that Landlord or one of its Affiliates may be required to file various reports and other information with the Securities
and Exchange Commission and other regulatory agencies. Accordingly, Tenant hereby agrees to and shall timely provide to Landlord
and/or such Affiliates any and all reports and other information required pursuant to this Section (provided such reports and other
information pertain directly to the services to be performed by Tenant pursuant to this Agreement), together with all other reports
and other information that may be reasonably requested from time to time by Landlord and/or its Affiliates (provided such reports
and other information pertain directly to the services to be performed by Tenant pursuant to this Agreement), all of which shall
be in form and content reasonably satisfactory to Landlord or such Affiliate (“SEC Information”). All SEC Information
requested by Landlord and/or any of its Affiliates shall be delivered by Tenant to Landlord or such Affiliate within ten (10) calendar
days of the date of such request by Landlord and/or such Affiliate.


 




    	7



     


    

 


3.20         Establish
and maintain complete and orderly files containing correspondence, insurance policies, receipts, all paid and unpaid bills, vouchers
and all other documents and papers pertaining to the Development, all of which shall be and remain the property of Landlord (subject
to Tenant’s right to retain copies) and shall be available to Landlord and its representatives for inspection at Tenant’s
principal place of business, the construction office located on-site for the Development or at another location previously approved
by Landlord at any time and from time to time during regular business hours.


 


3.21         Immediately
advise Landlord of the discovery of any hazardous substances or materials in, on or about the Land.


 


3.22         Promptly
advise the Landlord of any actual or threatened legal action, condemnation proceeding, claim, tax assessment or damage adversely
affecting the Land and/or the Development which becomes known to Tenant.


 


3.23         At
all times comply with all statutes, ordinances, rules and regulations, licenses and permits, and other Legal Requirements applicable
to the performance of its duties, responsibilities and obligations under this Agreement.


 


3.24         At
all times comply with all covenants, conditions and restrictions of record affecting the Land, including, without limitation, all
Project Agreements.


 


3.25         Perform
all other duties and obligations to be performed by Tenant in accordance with the terms and conditions of this Agreement and in
accordance with the Prior Course of Dealing.


 


4.           Landlord’s
Approvals. In connection with the performance by Tenant of all of its duties and obligations as set forth in this Agreement,
Tenant acknowledges and agrees that it is obligated to secure the prior written approval from Landlord with respect to all matters
not previously authorized pursuant to the Development Plan and Budget in accordance with the procedures set forth below. Without
limiting the foregoing, Tenant shall submit to Landlord, for Landlord’s review and approval, which approval shall not be
unreasonably withheld, such items expressly requiring Landlord’s prior written approval pursuant to this Agreement. Landlord’s
prior written approval shall be secured by Tenant in accordance with the following procedures:


 


4.1           Tenant
shall prepare and submit to the Landlord, for Landlord’s review and approval, all matters expressly required to be reviewed
and approved by Landlord pursuant to this Agreement, together with any original documents, agreements, instruments, correspondence
and other information reasonably required by Landlord to make a determination as to the matters being reviewed and approved “Submission”).
All Submissions to be made to Landlord pursuant to this Section 4 shall only be effective if such Submissions are delivered pursuant
to the provisions of this Agreement.


 


4.2           Each
Submission shall include a notation on the transmittal letter accompanying such Submission, which states that the matters being
delivered to Landlord shall be deemed approved by Landlord, unless Landlord timely delivers its notice of disapproval pursuant
to this Section 4.


 


4.3           Landlord
shall have a period of ten (10) calendar days after receipt by Landlord of each Submission in which to review such Submission and
deliver to Tenant written notice of either its approval or disapproval with respect to the matters being reviewed or of any additional
information reasonably required by Landlord in order to make such a determination. Landlord shall notify Tenant as soon as reasonably
practicable in the event Landlord requires such additional information.


 




    	8



     


    

 


4.4           In
the event Landlord fails to timely deliver to Tenant written notice of its approval or disapproval of the Submission pursuant to
Section 4.3 hereof, the Submission shall be deemed approved.


 


4.5           In
the event Landlord timely approves (or is deemed to have approved) any such Submission, the Landlord and/or the Tenant, as applicable,
shall take such actions required to implement such approved matters.


 


4.6           In
the event Landlord disapproves of any of the matters of such Submission (“Disapproved Matters”), Landlord shall
advise Tenant in writing of its disapproval and the basis for such disapproval. In such a case, Tenant may take such actions required
to satisfy Landlord with respect to the Disapproved Matters and resubmit such matters to Landlord, for Landlord’s review
and approval, pursuant to this Section 4.


 


5.          Development
Plan and Budget.


 


5.1           Development
Plan and Budget. Tenant shall prepare the initial Development Plan and Budget in connection with the Development (as may be
modified from time to time hereunder, the “Development Plan and Budget”). Tenant will consult with Landlord
in connection with the preparation of the initial Development Plan and Budget. Following Landlord’s approval of the initial
Development Plan and Budget, Landlord and Tenant shall attach the same as Exhibit C to this Agreement. During the Term of
this Agreement, Tenant shall use commercially reasonable efforts to comply with the terms and conditions of the Development Plan
and Budget. Notwithstanding the foregoing, Tenant may exceed the line item amount allocated to any such expenditure as set forth
in the Development Plan and Budget, without the approval by Landlord, provided the following conditions are satisfied: (a) such
expenditure does not exceed the applicable line item (determined on an aggregate basis), by more than One Hundred Thousand Dollars
($100,000.00), or thirty percent (30%), whichever is less; (b) Tenant has recognized cost savings in other categories of the Development
Plan and Budget of equal or greater amounts thereby resulting in no net overall increase in the Development Plan and Budget; and
(c) any such expenditure or cost savings does not result in a material modification of the conceptual plan for the Improvements
as set forth in the Development Plan and Budget.


 


5.2           Revision
of the Development Plan and Budget. During the Term of this Agreement, Tenant or Landlord may determine that the Development
Plan and Budget is no longer applicable because of changes in conditions, circumstances, planned operations, or otherwise. In such
case, Tenant shall prepare and submit to the Landlord, for Landlord’s review and approval, a revised Development Plan and
Budget (as modified hereunder, the “Revised Development Plan and Budget”) for the remainder of the Term of this
Agreement, indicating in narrative form the reasons why the assumptions used as the basis of preparing the original Development
Plan and Budget (or any Revised Development Plan and Budget currently in effect) are no longer valid.


 


On or before the expiration
of ten (10) calendar days after receipt of the proposed Revised Development Plan and Budget, Landlord shall deliver written notice
to Tenant setting forth Landlord’s approval or disapproval of all or any portion of the same. In the event Tenant does not
receive a written notice of approval or disapproval from Landlord within such ten (10) calendar day period, then the proposed Revised
Development Plan and Budget shall be deemed approved by Landlord. Notwithstanding the foregoing, until such time as the Revised
Development Plan and Budget has been approved (or deemed approved) by the Landlord in accordance with the terms and conditions
of this Section 5.2, the Tenant shall perform its duties in accordance with the Development Plan and Budget (or any Revised Development
Plan and Budget, as the case may be), currently then in effect. Following the approval (or deemed approval) by the Landlord of
the Revised Development Plan and Budget (if required hereunder), with respect to the period of time in question, all references
in this Agreement to the Development Plan and Budget shall mean the Revised Development Plan and Budget.


 




    	9



     


    

 


5.3           Emergency
Expenditures. As more fully set forth in Section 5.1 hereof, Tenant shall use commercially reasonable efforts to comply with
the Development Plan and Budget. Notwithstanding anything contained in this Agreement to the contrary, in the event of any emergency
affecting the safety of persons or property, or which is likely to result in substantial injury, damage or loss to the Landlord,
Tenant is hereby authorized to act in a manner intended to mitigate or prevent threatened damage, injury or loss and, in connection
therewith, if deemed prudent by the Tenant, and Tenant shall be entitled to make expenditures in excess of the limitations set
forth in the Development Plan and Budget, without the necessity of securing the approval by the Landlord prior to such expenditure.
Tenant shall deliver written notice to Landlord summarizing such emergency expenditures, together with copies of all invoices,
receipts and other written documentation evidencing the amounts owing and/or payable. Upon Landlord’s approval of such expenditures,
which approval shall not be unreasonably withheld, such expenditures shall be deemed to constitute Budgeted Development Costs.


 


6.           Landlord's
Obligations.


 


6.1           Applications.
Once each calendar month, but in no event earlier than twenty-one (21) calendar days after the last such submission, Tenant may
submit to Landlord a request for payment of a portion of Development costs (each, an “Application”). Each Application
shall include the following:


 


(a)          A
statement setting forth the total amount of the Construction Contribution Amount requested and supporting invoices from the general
contractor, architect and any subcontractors, material suppliers and other parties requesting payment with respect to the amount
of the Construction Contribution Amount then being requested, as evidenced by AIA document G 702 Application and Certificate for
Payment.


 


(b)          A
certification by the general contractor that the Improvements, or the portion thereof for which payment is requested in that Application,
has been completed pursuant to this Agreement and the applicable construction documents;


 


(c)          Except
with respect to the final Application, conditional lien waivers signed by every contractor, subcontractor and supplier who has
a mechanics lien right for any work for which payment is requested stating:


 


(i)          the
contractor, subcontractor, supplier or other claimant waives conditionally any liens or right to lien with respect to any work
for which payment is being requested in that Application;


 


(ii)         the
amount theretofore received by such contractor, subcontractor or supplier;


 


(iii)        that
the contract with the contractor, subcontractor or supplier has not been changed, or, if the contract has been changed, indicating
the increase or decrease in the amount of the contract; and


 


(iv)        A
list of the names and addresses of major subcontractors and major suppliers of labor and materials used in connection with the
work for which payment is requested.


 


(d)          With
respect to any work covered by the immediately preceding Application, copies of sworn statements and unconditional lien waivers
signed by each contractor, subcontractor and supplier for whom such payment was made stating:


 


(i)          that
such contractor, subcontractor or material supplier unconditionally waives any liens or right to lien with respect to work for
which payment has been received by such contractor, subcontractor and material supplier;


 


(ii)         the
amount theretofore received by such contractor, subcontractor and material supplier; and


 




    	10



     


    

 


(iii)        that
the contract with the contractor, subcontractor or supplier has not been changed, or, if the contract has been changed, indicating
the increase or decrease in the amount of the contract.


 


6.2           Construction
Payment. Within ten (10) calendar days of receiving a complete Application, Landlord will pay to Tenant the amount requested
by Tenant in such Application (each such payment, a “Construction Payment”), provided that the aggregate amount
of the Construction Payments does not exceed the Construction Contribution Amount. Notwithstanding the foregoing or any provision
herein to the contrary, Landlord may withhold any Construction Payment, in whole or in part, upon the occurrence and continuation
of any Tenant Event of Default.


 


7.           No
Other Compensation. Tenant acknowledges that Landlord’s agreement to enter into the Lease with Tenant and Landlord’s
agreement to pay the amounts required hereunder relating to the construction and completion of the Development constitute the only
compensation that Tenant is entitled to receive for the services to be performed and the work to be completed by Tenant pursuant
to this Agreement. Other than the Construction Payments paid to Tenant in accordance with the terms and conditions of this Agreement,
Tenant shall not be entitled to receive any payments, reimbursements or other compensation in connection with the performance of
its duties, responsibilities and obligations under this Agreement. Furthermore, to the extent that the Development Costs exceed
the amount of the Construction Contribution Amount, Tenant shall be solely responsible for all fees, costs and expenses incurred
in connection with the completion of the Development, including, without limitation, the following: (a) all salaries, wages, compensation,
bonuses and other benefits paid or payable to any and all employees, representatives, consultants, independent contractors and
agents of Tenant; (b) rent and overhead for the offices of Tenant; (c) telephone, telegraph, postage and utility charges incurred
by Tenant; (d) office supplies and materials of Tenant; and (e) any and all costs, fees and expenses incurred by Tenant with respect
to the purchase, lease, maintenance and/or repair of any equipment, machines, furniture, fixtures and other personal property of
Tenant.


 


8.           Authorized
Excess Development Costs. In the event Tenant incurs any Excess Development Costs without first obtaining Landlord’s
prior written approval, such expenses shall be deemed to constitute “Unauthorized Excess Development Costs,”
and Tenant shall be obligated to pay or otherwise satisfy such Unauthorized Excess Development Costs. If Tenant has obtained Landlord’s
advanced written approval prior to incurring any Excess Development Costs in accordance with the provisions of Section 4 hereof,
such approved expenses shall be deemed to constitute “Authorized Excess Development Costs,” and Landlord agrees
to authorize the payment of (and reimburse Tenant for) such Authorized Excess Development Costs, subject to and in accordance with
the terms and conditions of Section 6 of this Agreement.


 


In the event Tenant
incurs any Unauthorized Excess Development Costs, Tenant hereby agrees to and shall indemnify, defend, hold harmless and protect
Landlord and the Land from and against any mechanic’s or materialmen’s liens, or other liens, liabilities or encumbrances
arising out of or in connection with any such Unauthorized Excess Development Costs.


 


Tenant shall follow
the procedures set forth in Section 6 of this Agreement with respect to processing any Application for payment requests in connection
with securing the payment of: (i) any Budgeted Development Costs; and (ii) any Authorized Excess Development Costs.


 


9.           Term
and Termination.


 


9.1           Term.
The term of this Agreement (“Term”) shall commence on the Effective Date and shall terminate on the earlier
to occur of the following events (each, a “Termination Event”):


 


(i)          The
Completion Date, provided, however, that in the event there are any items of work on any Punch-Lists to be performed subsequent
to the Completion Date, the Term of this Agreement shall be extended until such time as the work to be performed pursuant to such
Punch-Lists has been completed to the reasonable satisfaction of the Landlord; or


 


(ii)         Upon
the termination of the Lease.


 




    	11



     


    

 


9.2           Default
by Tenant. The occurrence of one or more of the following events shall constitute an event of default by Tenant under this
Agreement (“Tenant Event of Default”):


 


(i)          The
failure of Tenant to timely perform and satisfy any of the material duties and obligations of Tenant under this Agreement and/or
the Development Plan and Budget; provided, however, Tenant shall not be deemed to be in default of this Agreement if: (i) in the
event the default is a monetary default and Tenant cures such monetary default within ten (10) business days after receipt of written
notice from the Landlord of such monetary default; or (ii) in the event the default is a non-monetary default and Tenant commences
the cure of such non-monetary default as soon as reasonably practicable following written notice thereof from the Landlord and
completes such cure within thirty (30) calendar days after receipt of such written notice provided, however if such non-monetary
default cannot reasonably be cured within such thirty (30) calendar day period, Tenant shall not be deemed to be in default of
this Agreement if Tenant commences to cure such non-monetary default within such thirty (30) calendar day period, and thereafter
diligently pursues the same to completion; or


 


(ii)         The
commission of any act of gross negligence, willful misconduct, fraud, or intentional misrepresentation by Tenant, or any executive-level
employee of Tenant, in connection with the performance by Tenant of its duties and obligations under this Agreement; or


 


(iii)        The
occurrence of any Default by Tenant under the Lease.


 


Upon the occurrence
of a Tenant Event of Default, Landlord and Tenant acknowledge and agree that such Tenant Event of Default shall constitute a Default
by Tenant under the Lease and Landlord shall have all of the rights and remedies afforded to Landlord upon the occurrence of a
Default by Tenant under the Lease, as well as any other rights and remedies afforded to Landlord at law or in equity, including,
without limitation, the right to seek specific performance. Notwithstanding the foregoing, each of Landlord and Tenant hereby waive
the right to recover consequential, special or punitive damages under this Agreement.


 


9.3           Procedure
Upon Termination – Tenant Event of Default. Upon the effective date of any termination of this Agreement by Landlord
due to a Tenant Event of Default, Landlord and Tenant hereby agree as follows:


 


(i)          Tenant
shall deliver to Landlord all notes, inspections, documents, agendas, instruments, studies, reports, surveys, maps, working plans,
plans and specifications, correspondence, books and records, and all other materials in Tenant’s possession or control relating
to the Development, including, without limitation, all original Project Agreements and Development Approvals; and


 


(ii)         Tenant
shall assign and transfer to Landlord all of Tenant’s right, title and interest in and under to all Development Approvals
and all Project Agreements in connection with the Development.


 


9.4           Effect
of Termination. The termination of this Agreement shall not affect the rights of the terminating party with respect to any
damages it has suffered as a result of any breach of this Agreement by the other party, nor shall it affect the rights of either
party with respect to liability or claims accrued, or arising out of, events occurring prior to the date of termination. Neither
the right of termination nor the right to sue for damages, nor any other remedy available to either party hereunder, shall be exclusive
of any other remedy given hereunder or now or hereafter existing at law or in equity.


 


9.5           Inspections
by Landlord. Landlord shall have the right to inspect the Development at any time that it may elect, subject only to reasonable
notice to Tenant and reasonable safety and security precautions which Tenant may impose with respect to inspection of the Development.
At any time upon reasonable notice to Tenant, Landlord shall also have the right to inspect the books and records of Tenant relating
to the construction, development and operation of the Development. To the extent that Landlord desires to copy books and records
or other information in the files of Tenant relating to any aspect of the Development or Tenant’s performance hereunder,
it may do so upon reasonable notice during normal business hours.


 




    	12



     


    

 


9.6           Indemnification.


 


(a)          Indemnification
by Tenant. Tenant hereby agrees to and shall indemnify, defend and hold harmless Landlord and its Affiliates, and their respective
managers, members, partners, shareholders, officers, directors, agents, employees, successors and assigns, from and against any
and all claims, demands, liabilities, causes of action, losses, costs, damages, expenses (including reasonable attorneys’
fees) or judgments arising out of, or in connection with, the following matters: (a) a default in the performance by Tenant of
any of the covenants, duties or obligations to be performed by Tenant under this Agreement, including, without limitation, the
occurrence of a Tenant Event of Default; (b) the performance by Tenant of any acts in connection with the Development or the Property
outside the scope or the authority granted to Tenant under this Agreement; or (c) any gross negligence, fraud or intentional misconduct
on the part of Tenant in connection with the performance, or any attempted performance of its duties, responsibilities or obligations
under this Agreement; or (d) any negligence on the part of Tenant in connection with the performance, or any attempted performance
of its duties, responsibilities or obligations under this Agreement to the extent such claims, demands, liabilities, causes of
action, losses, costs, damages, expenses (including reasonable attorneys’ fees) or judgments are not otherwise paid or fully
satisfied from the proceeds of any of the insurance policies maintained by the Parties hereunder.


 


(b)          Indemnification
by Landlord. Landlord hereby agrees to and shall indemnify, defend and hold harmless Tenant and its Affiliates, and their respective
managers, members, partners, shareholders, officers, directors, agents, employees, successors and assigns, from and against any
and all claims, demands, liabilities, causes of action, losses, costs, damages, expenses (including reasonable attorneys’
fees) or judgments arising out of, or in connection with, the following matters: (a) a default in the performance by Landlord of
any of the covenants, duties or obligations to be performed by Landlord under this Agreement, including, without limitation, the
occurrence of an Landlord Event of Default; (b) any gross negligence, fraud or intentional misconduct on the part of Landlord in
connection with the performance, or any attempted performance of its duties, responsibilities or obligations under this Agreement;
or (d) any negligence on the part of Landlord in connection with the performance, or any attempted performance of its duties, responsibilities
or obligations under this Agreement to the extent such claims, demands, liabilities, causes of action, losses, costs, damages,
expenses (including reasonable attorneys’ fees) or judgments are not otherwise paid or fully satisfied from the proceeds
of any of the insurance policies maintained by the Parties hereunder.


 


9.7           Default
by Landlord. The occurrence of one or more of the following events shall constitute an event of default by Landlord under this
Agreement (“Landlord Event of Default”):


 


(a)          The
failure of Landlord to timely perform and satisfy any of the material duties and obligations of Landlord under this Agreement;
provided, however, Landlord shall not be deemed to be in default of this Agreement if: (i) in the event the default is a monetary
default and Landlord cures such monetary default within ten (10) business days after receipt of written notice from the Tenant
of such monetary default; or (ii) in the event the default is a non-monetary default and Landlord commences the cure of such non-monetary
default as soon as reasonably practicable following written notice thereof from the Tenant and completes such cure within thirty
(30) calendar days after receipt of such written notice; provided, however if such non-monetary default cannot reasonably be cured
within such thirty (30) calendar day period, Landlord shall not be deemed to be in default of this Agreement if Landlord commences
to cure such non-monetary default within such thirty (30) calendar day period, and thereafter diligently pursues the same to completion;
and


 


(b)          The
commission of any act of gross negligence, willful misconduct, fraud, or intentional misrepresentation, or any executive-level
employee of Landlord, in connection with the performance by Landlord of its duties and obligations under this Agreement.


 


Upon the occurrence
of a Landlord Event of Default, Landlord and Tenant acknowledge and agree that such Landlord Event of Default shall constitute
a Default by Landlord under the Lease and Tenant shall have all of the rights and remedies afforded to Tenant upon the occurrence
of a Default by Landlord under the Lease, as well as any other rights and remedies afforded to Tenant at law or in equity, including,
without limitation, the right to seek specific performance.


 


10.         Insurance
to Be Maintained by Tenant. During the Term of this Agreement, Tenant shall, at Tenant’s sole cost and expense, obtain
and keep in full force and effect the following specified insurance:


 




    	13



     


    

 


10.1         Builder’s
all-risk insurance covering the Improvements and all materials stored on the Land, together with such endorsements as may be reasonably
required by Landlord.


 


10.2         Owner’s/Contractor’s
protective liability insurance written on a broad-based occurrence coverage form against claims for personal injury (including
bodily injury and death) and property damage, with a reasonably acceptable deductible, with a combined single limit for bodily
injury and property damage of at least Two Million Dollars ($2,000,000) per occurrence.


 


10.3         Comprehensive
or commercial general liability insurance written on a broad-based occurrence coverage form against claims for personal injury
(including bodily injury and death) and property damage, with a reasonably acceptable deductible, with a combined single limit
for bodily injury and property damage of at least Two Million Dollars ($2,000,000) per occurrence.


 


10.4         Owned,
hired and non-owned automobile liability insurance on a broad-based occurrence coverage form covering all use of all automobiles,
trucks and other motor vehicles utilized by Tenant and Tenant’s employees in connection with this Agreement with a combined
single limit for bodily injury and property damage of at least One Million Dollars ($1,000,000) per occurrence.


 


10.5         Workers’
compensation insurance for Tenant’s employees to the extent required by applicable law and such other insurance that is necessary
in connection with this Agreement that may be required by applicable law.


 


10.6         In
the event specific insurance coverage is required under any of the Project Agreements, the Tenant shall cause all insurance coverages
required under such Project Agreements to be obtained and maintained by the appropriate parties under the Project Agreements in
accordance with the terms and conditions of such Project Agreements.


 


Landlord and any of its
Affiliates designated by Landlord shall be included as an additional insured under the coverage specified in Sections 10.1 and
10.2 hereof. The insurance provided in this Section is primary and any other insurance maintained by such additional insured is
non-contributing with the insurance provided in this Section with respect to all claims or liabilities arising out of or resulting
from acts or omissions by or on behalf of the named insured. Each of the applicable insurance policies shall be issued by such
companies authorized to do business in the Commonwealth of Massachusetts. As evidence of the insurance coverage required pursuant
to this Section, Landlord will accept certificates issued by Tenant’s insurance carrier, acceptable to Landlord, showing
such policies are in full force and effect for the specified period, but Landlord has the right to review certified policies as
reasonably necessary. Such evidence shall be delivered to Landlord promptly upon execution of this Agreement. Each policy and certificate
shall be subject to Landlord’s reasonable approval and shall provide that such policy shall not be subject to material alteration
to the detriment of Landlord or Tenant or cancellation without thirty (30) calendar days’ notice in writing to be delivered
by certified mail to Landlord. Should any such policy of insurance expire or be canceled before the expiration of this Agreement
and Tenant fails to immediately replace such other insurance as specified, Landlord reserves the right, but shall have no obligation,
to procure such insurance at Tenant’s sole cost and expense.


 


In addition to the insurance
required to be maintained by Tenant pursuant to this Section 10, Tenant shall be responsible for requiring all of the contractors
and subcontractors doing construction work relating to the Development to purchase and maintain such insurance in conformance to
the requirements set forth on Exhibit D attached hereto and incorporated herein by reference. Tenant shall also allow Landlord
to inspect such evidence of insurance as Tenant obtains it from such contractors and subcontractors.


 


11.         Arbitration
Procedure. In the event there is a dispute with respect to Landlord’s obligation to fund any Construction Payment to
Tenant pursuant to Section 6.2, such dispute shall be resolved in accordance with this Section 11. For the avoidance of doubt,
neither party shall be relieved of its obligations under this Agreement or the Lease during the pendency of any arbitration proceeding
conducted pursuant to this Section.


 




    	14



     


    

 


11.1         Initial
Meeting. If there is a claim, dispute, or other matter in question between Landlord and Tenant arising out of, or relating
to, Landlord’s obligation to make a Construction Payment to Tenant under this Agreement (each, a “Disbursement Claim”),
either party may give the other party written notice thereof and representatives of the parties (with or without accompanying legal
counsel) shall meet in person or via telephone conference (an “Initial Meeting”) at a mutually agreed upon date
and time (and location, if in person) within two (2) business days after the date of such notice. Each party’s representative
attending the Initial Meeting shall have plenary authority to resolve the Disbursement Claim and shall attempt in good faith
to resolve the Disbursement Claim in a mutually agreed upon manner at the Initial Meeting. If such Initial Meeting does not result
in a mutually agreed upon resolution of the Disbursement Claim, then the parties’ only options shall be to either (i) waive
the applicable Disbursement Claim, or (ii) pursue binding arbitration of the Disbursement Claim, as provided below. If a party
does not initiate the binding arbitration procedure as provided for below, then such party shall be deemed to have waived the applicable
Disbursement Claim (subject, however, to a party’s right to assert any appropriate counterclaims in the arbitration procedure
if the other party does in fact commence the binding arbitration procedure as provided below).


 


11.2         Notice
of Demand. No later than three (3) business days after the Initial Meeting, the complaining party may file a notice of demand
for arbitration (the “Notice of Demand”) with the Regional Office of the American Arbitration Association (the
“AAA”) nearest to the location of the Property and simultaneously give notice of such filing with a copy of
the Notice of Demand to the other party. The Notice of Demand shall set forth the nature of the Disbursement Claim including the
relief sought and the amount at issue.


 


11.3         Arbitrators.
The parties shall use a panel of three (3) arbitrators to resolve the Disbursement Claim (the “Panel”). All
arbitrators shall (A) be certified by the AAA, (B) have at least ten (10) years of experience in construction arbitration,
(C) be independent and unrelated in business or otherwise to the parties, and (D) have demonstrated a continuing commitment
to arbitration education and training.


 


11.4         Selection
of Arbitrator(s). The Panel shall consist of one (1) architect, engineer, licensed attorney, or former judge (the “Architect
Arbitrator”), one (1) general contractor, construction manager, licensed attorney, or former judge (the “Contractor
Arbitrator”), and one (1) licensed attorney or former judge (the “Attorney Arbitrator”). The Attorney
Arbitrator shall act as the chairperson of the Panel. The parties shall attempt to mutually agree upon the composition of the entire
Panel. If the parties are unable to agree upon the composition of the entire Panel within three (3) business days after delivery
of the Notice of Demand, the parties shall thereafter have two (2) business days to propose the arbitrators as follows. Tenant
shall select the Contractor Arbitrator and the Landlord shall select the Architect Arbitrator. The two party-appointed arbitrators
shall select the Attorney Arbitrator as the third arbitrator within two (2) business days thereafter. If any arbitrators required
to be selected are not selected within the foregoing time periods for any reason whatsoever, the AAA shall select the applicable
arbitrator(s) as soon as reasonably possible.


 


11.5         Answer
/ Counterclaims. Within five (5) business days after receipt of the Notice of Demand, the other party shall deliver to the
Panel an answering statement. If no answering statement is filed within the stated time, the respondent will be deemed to deny
the claims in the Notice of Demand (and shall be deemed to have waived the right to assert any counterclaims). Failure to file
an answering statement shall not operate to delay the arbitration.


 


11.6         Joinder
of Parties. Any arbitration may include by consolidation, joinder, or otherwise, any person or entity not a party to this Agreement
if it is shown at the time the Notice of Demand is filed that (A) such person or entity is substantially involved in a common
question of fact or law, (B) the presence of such person or entity is required if complete relief is to be afforded in the arbitration,
and (C) the interest or responsibility of such person or entity in the matter is substantial; and such person or entity consents
to such consolidation or joinder. All Disbursement Claims alleged within the same Notice of Demand shall be heard by the same Panel
in the same arbitration.


 


11.7         Location.
The arbitration hearing shall take place in the Boston, MA area at a specific location mutually agreed to by Landlord and Tenant.


 




    	15



     


    

 


11.8         Brief.
At least five (5) business days before the arbitration hearing, each party shall prepare and submit to the other party and the
arbitrator(s) a brief or memorandum not to exceed five (5) pages discussing the issues, facts, applicable law and/or contract provisions
and their position on the applicable Disbursement Claims together with a copy of any documents (or pertinent part thereof) referenced
therein, except that any statutes or judicial decisions may simply be cited without attaching a copy. Each party’s brief
should also specify any witnesses or documents it wishes to subpoena for the hearing.


 


11.9         Hearing.


 


(a)          At
the hearing, the claimant shall present evidence to support the applicable Disbursement Claim(s). The respondent shall then present
evidence supporting its defense. Witnesses for each party shall also submit to questions from the arbitrator and the adverse party.
Each party shall have the opportunity to question and review subpoenaed documents and witnesses based on its brief or memorandum
submitted under Section 11.8, above. The arbitrator has the discretion to vary this procedure, provided that the parties are treated
with equality and that each party has the right to be heard and is given a fair opportunity to present its case. Evidence shall
be permitted in accordance with the current AAA Construction Industry Arbitration Rules (the “AAA Rules”).


 


(b)          The
arbitrator, exercising his or her discretion, shall conduct the proceedings with a view toward expediting the resolution of the
dispute and may direct the order of proof, bifurcate proceedings, and direct the parties to focus their presentations on issues
the decision of which could dispose of all or part of the case.


 


(c)          When
deemed appropriate, the arbitrator may also allow for the presentation of evidence by alternative means including video conferencing,
internet communication, telephonic conferences and means other than an in-person presentation. Such alternative means must still
afford a full opportunity for all parties to present any evidence that the arbitrator deems material and relevant to the resolution
of the dispute and when involving witnesses, provide an opportunity for cross-examination.


 


(d)          The
parties may mutually agree to waive oral hearings in any case.


 


11.10         Written
Opinion. The arbitrators shall render a written reasoned opinion regarding their decision (the “Final Arbitration
Decision”) with respect to the applicable Disbursement Claims as soon as practicable after conclusion of the arbitration
hearing, but in no event later than five (5) business days after conclusion of the arbitration hearing. The Final Arbitration Decision
shall be limited to whether or not Landlord breached its obligation to fund any Construction Payments that are the subject of the
Disbursement Claims and any resulting damages, including reimbursement of attorneys’ fees, awarded by the arbitrators to
the prevailing party; provided that, in rendering such Final Arbitration Decision, the arbitrators shall take into account the
remedies afforded to each party in the event of a default by the other party under the Lease so as to avoid either party having
the right to recover amounts, directly or indirectly, in excess of the total damages awarded to such party pursuant to the Final
Arbitration Decision, including, without limitation, any adjustment to Base Rent (as defined in the Lease) pursuant to Section
5.2.3 of the Lease. Any such Construction Payment amounts required by be funded by Landlord pursuant to the Final Arbitration Decision
are referred to in the Lease as “Required Arbitration Construction Payments.” Furthermore, the parties acknowledge
and agree that the Final Arbitration Decision shall not be deemed or construed so as to imply that Landlord has granted its consent,
approval or authorization to the construction of any Improvements under this Agreement or the Lease or to any other matters requiring
Landlord’s consent.


 


11.11         Fees
and Expenses for Arbitration. The arbitrators shall be authorized and directed to award the substantially prevailing party
in the arbitration with reimbursement of its arbitration and reasonable attorney’s fees, costs, and expenses. The arbitrators
shall select the substantially prevailing part in their reasonable discretion.


 


11.12         Final
and Binding. In accordance with the Federal Arbitration Act, the agreement to arbitrate in this Section 11 shall be final and
incontestably binding upon the parties, and judgment may be entered in any court having jurisdiction.


 




    	16



     


    

 


11.13         Confidentiality.
The parties (including the arbitrators) shall keep confidential and not disclose to third-parties the existence or outcome of any
arbitration proceedings, except to the extent that disclosure is required by government authorities or under applicable law, or
as necessary to preserve or pursue a claim for reimbursement, contribution, or indemnity against a third-party, or to preserve
or pursue an insurance claim.


 


12.         Miscellaneous.


 


12.1         Notices.
Any notice, request, demand, statement, authorization, approval, consent or other communication required or permitted under this
Agreement shall be in writing and shall be delivered in accordance with the notice provisions set forth in Section 31 of
the Lease.


 


12.2         Entire
Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter covered by
this Agreement. This Agreement supersedes all previous representations, arrangements, understandings and agreements by and between
the Parties and/or their Affiliates, with respect to the subject matter covered by this Agreement, and any such representations,
arrangements, understandings and agreements (other than this Agreement) are hereby cancelled and terminated in all respects. This
Agreement may not be amended, changed or modified except by a writing duly executed by both of the Parties hereto.


 


12.3         Severability.
If any provision of this Agreement, or any portion of any such provision, is held to be unenforceable or invalid, the remaining
provisions and portions shall nevertheless be carried into effect.


 


12.4         Remedies.
All rights and remedies of the Parties are separate and cumulative, and no one of them, whether exercised or not, shall be deemed
to be to the exclusion of or to limit or prejudice any other legal or equitable rights or remedies which the Parties may have.
The Parties shall not be deemed to waive any of their rights or remedies under this Agreement or otherwise unless such waiver is
in writing and signed by the party to be bound. No delay or omission on the part of either party in exercising any right or remedy
shall operate as a waiver of such right or remedy or any other right or remedy. A waiver on any one occasion shall not be construed
as a bar to a waiver of any right or remedy on any future occasion.


 


12.5         Headings.
The headings contained in this Agreement are for convenience only and are not a part of this Agreement, and do not in any way interpret,
limit or amplify the scope, extent or intent of this Agreement, or any of the provisions of this Agreement.


 


12.6         Assignment
and Binding Effect. Neither Party may assign its rights or obligations under this Agreement, in whole or in part, without the
written consent of the other Party. This Agreement shall be binding upon and inure to the benefit of Landlord and Tenant and, subject
to the foregoing limitations, their respective successors and assigns.


 


12.7         Incorporated
by Reference. The Exhibits referred to in and attached to this Agreement are incorporated herein by reference.


 


12.8         Survival.
Each provision of this Agreement which establishes rights and/or obligations which are intended to be enforceable after termination
of this Agreement (including, without limitation, Sections 9.4 and 9.6) shall survive the termination of this Agreement and shall
be binding upon the Parties for such period of time as may reasonably be required to give full effect to the intended application
thereof.


 


12.9         Capacity
to Sign. All of the parties covenant that they possess all necessary capacity and authority to sign and enter into this Agreement.
All individuals signing this Agreement for a party that is a corporation, a limited liability company, a partnership or other legal
entity, covenant that they have the necessary capacity, authority and power to act on behalf of, sign for and bind the respective
entity on whose behalf they are signing.


 


12.10         Attorneys’
Fees. In the event any action is initiated for any breach or default in any of the terms or conditions of this Agreement, then
the party in whose favor judgment shall be entered shall be entitled to have and recover from the non-prevailing party all costs
and expenses (including attorneys’ fees) incurred in such action and any appeal therefrom.


 




    	17



     


    

 


12.11         Governing
Law and Adjudication. This Agreement shall be governed by and interpreted in accordance with the laws (other than that body
of law relating to conflicts of law) of the Commonwealth of Massachusetts.


 


12.12         Further
Assurances. Landlord and Tenant shall reasonably cooperate and execute such other documents and instruments reasonably requested
by the other Party to more clearly evidence or carry out the provisions of this Agreement. Each Party shall cooperate with the
other as reasonably appropriate to facilitate performance by the other Party of its obligations under this Agreement.


 


12.13         Counterparts.
This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which together shall constitute
one and the same agreement.


 


12.14         Waiver
of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF LANDLORD AND TENANT HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY
ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR IN ANY WAY PERTAINING OR RELATING TO THIS
CONTRACT OR IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT
TO THIS CONTRACT OR IN CONNECTION WITH THE TRANSACTIONS RELATED HERETO OR CONTEMPLATED HEREBY OR THE EXERCISE OF ANY PARTY’S
RIGHTS AND REMEDIES HEREUNDER, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE. EACH OF LANDLORD AND TENANT MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF
THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF THE OTHER PARTY TO WAIVE ITS RIGHT TO TRIAL BY JURY, AND THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN LANDLORD AND TENANT SHALL INSTEAD BE TRIED IN A COURT
OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.


 


12.15         Venue.
EACH PARTY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE COURTS SITUATED IN OR HAVING JURISDICTION OVER BOSTON, MASSACHUSETTS
IN ANY ACTION THAT MAY BE BROUGHT FOR THE ENFORCEMENT OF THIS AGREEMENT (WITH THE EXPRESS AGREEMENT THAT NO ACTION MAY BE BROUGHT
IN FEDERAL COURT RELATING IN ANY WAY TO THIS AGREEMENT).


 


[Signature Page Follows]


 




    	18



     


    

 


IN WITNESS WHEREOF,
the Parties have executed this Agreement as of the date first above written.


 


	 	LANDLORD:
	 	 
	 	IIP-MA 1 LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Catherine Hastings
	 	Name: Catherine Hastings
	 	Title: Chief Financial Officer, Chief Accounting Officer and Treasurer
	 	 
	 	TENANT:
	 	 
	 	PHARMACANNIS MASSACHUSETTS INC., a Massachusetts corporation
	 	 
	 	By:	/s/ Teddy Scott
	 	Name: Teddy Scott
	 	Title: CEO


 


The undersigned hereby executes this agreement
to guaranty the payment obligations of the Landlord under this Agreement.


 


	 	PARENT COMPANY:
	 	 
	 	IIP OPERATING PARTNERSHIP, LP
	 	 
	 	By:	 /s/ Catherine Hastings
	 	Name: Catherine Hastings
	 	Title: Chief Financial Officer, Chief Accounting Officer and Treasurer


 


[Signature Page to Development Agreement]


 




    	19



     


    

 


EXHIBIT A


 


LEGAL DESCRIPTION OF LAND


 




A certain parcel of land located in Holliston, MA on Hopping Brook
Road, Middlesex County, Massachusetts, and shown as Lot #1 on a plan entitled "Plan of Land in Holliston, Massachusetts, prepared
for New Hopping Brook Trust," prepared by Engineering Design Consultants, Inc., dated November 27, 2017, and recorded in the
Middlesex South Registry of Deeds as Plan No. 96 of 2018 (the "ANR Plan").




 


 


  


 




    	A-1



     


    

 


EXHIBIT B


 


DEPICTION OF IMPROVEMENTS


 


 





 






    B-1


     


    

 


 






    B-2


     


    

 

 

 




    B-3


     


    

 

 

 




    B-4


     


    

 

 

 




    B-5


     


    

 

 

 




    B-6


     


    

 

 

 




    B-7


     


    

 

 

 




    B-8


     


    

 

 

 




    B-9


     


    

 

 

 




    B-10


     


    

 

 

 




    B-11


     


    

 

 

 




    B-12


     


    

 

 

 




    B-13


     


    

 

 

 




    B-14


     


    

 

 

 


 




    B-15


     


    

 


EXHIBIT C


 


DEVELOPMENT PLAN AND BUDGET


 





Total Budget: $16,387,962


 


Greenhouse - $5,651,462, pursuant to the specifications included
in the proposal dated February 23, 2018 (Proposal Number 1810002 revision 04), which proposal is incorporated by reference herein.


 


Industrial building: $10,736,500, in accordance with the budget
set forth below:


 


 


	 	
         

        Description
	
         

        Quantity
	
         

        Totals

	 	SUMMARY	 	 
	00	GENERAL REQUIREMENTS	 	278,500
	01	GENERAL CONDITIONS	 	350,776
	03	CONCRETE	 	1,668,961
	04	MASONRY	 	66,280
	05	METALS	 	389,457
	06	WOOD, PLASTICS, COMPOSITES	 	82,796
	07	THERMAL, MOISTURE PROTECTION	 	403,688
	08	OPENINGS	 	273,300
	09	FINISHES	 	814,235
	10	SPECIALTIES	 	40,600
	11	EQUIPMENT	 	5,000
	21	FIRE SUPPRESSION	 	329,183
	22	PLUMBING	 	542,998
	23	HVAC	 	626,966
	26	ELECTRICAL	 	1,407,965
	28	ELECTRONIC SAFETY, SECURITY	 	826,864
	31	EARTHWORK	 	831,739
	32	SITE IMPROVEMENTS	 	569,609
	33	SITE UTILITIES	 	527,000
	 	SUB-TOTALS	 	10,035,916
	 	O&P based on $8.5M	 	325,000
	 	Add'l O&P	5.00%	62,870
	 	TOTAL O&P	 	387,870
	 	CONSTRUCTION SUBTOTALS	 	10,423,786
	 	Construction Contingency	3.00%	312,714
	 	CONSTRUCTION TOTALS	 	10,736,500


 







 




    	C-1



     


    

 


EXHIBIT D


 


INSURANCE SCHEDULE


 


Tenant shall be responsible
for requiring all of Tenant contractors doing construction or renovation work to purchase and maintain such insurance as shall
protect it from the claims set forth below which may arise out of or result from any work performed in connection with the Development,
whether such work is completed by Tenant or by any contractors or by any person directly or indirectly employed by Tenant or by
any person for whose acts Tenant or any contractors may be liable:


 


1.          Claims
under workers’ compensation, disability benefit and other similar employee benefit acts which are applicable to the work
to be performed.


 


2.          Claims
for damages because of bodily injury, occupational sickness or disease, or death of employees under any applicable employer’s
liability law.


 


3.          Claims
for damages because of bodily injury, or death of any person other than Tenant’s employees or any contractors’ employees.


 


4.          Claims
for damages insured by usual personal injury liability coverage which are sustained (a) by any person as a result of an offense
directly or indirectly related to the employment of such person by Tenant or any contractors or (b) by any other person.


 


5.          Claims
for damages, other than for the work itself, because of injury to or destruction of tangible property, including loss of use therefrom.


 


6.          Claims
for damages because of bodily injury or death of any person or property damage arising out of the ownership, maintenance or use
of any motor vehicle.


 


Each contractor’s
Commercial General, Automobile, Employers and Umbrella Liability Insurance shall be written for not less than limits of liability
as follows:


 


	
        a.           Commercial
        General Liability:

        Bodily Injury and Property Damage

         
	
        Commercially reasonable amounts,
but in any event no less than $1,000,000 per occurrence and $2,000,000 general aggregate, with $2,000,000 products and completed
operations aggregate.

	
        b.           Commercial
        Automobile Liability:

        Bodily Injury and Property Damage
	$1,000,000 per accident
	
        c.           Employer’s
        Liability:

        Each Accident

        Disease – Policy Limit

        Disease – Each Employee
	
         

        $500,000

        $500,000

        $500,000

	
        d.           Umbrella
        Liability:

        Bodily Injury and Property Damage
	Commercially reasonable amounts (excess of coverages a, b and c above), but in any event no less than $5,000,000 per occurrence / aggregate.


 


All subcontractors shall carry the same
coverages and limits as specified above, unless different limits are reasonably approved by Landlord. The foregoing policies shall
contain a provision that coverages afforded under the policies shall not be canceled or not renewed until at least thirty (30)
days’ prior written notice has been given to Landlord. Certificates of insurance including required endorsements showing
such coverages to be in force shall be filed with Landlord prior to the commencement of any work by such contractor or subcontractor
and prior to each renewal. Coverage for completed operations must be maintained for the lesser of ten (10) years and the applicable
statue of repose following completion of the Improvements, and certificates evidencing this coverage must be provided to Landlord.
The minimum A.M. Best’s rating of each insurer shall be A- VII. Landlord shall be named as an additional insured under each
contractor’s Commercial General Liability, Commercial Automobile Liability and Umbrella Liability Insurance policies as respects
liability arising from work or operations performed, or ownership, maintenance or use of autos, by or on behalf of such contractor.
Each contractor and its insurers shall provide waivers of subrogation with respect to any claims covered or that should have been
covered by valid and collectible insurance, including any deductibles or self-insurance maintained thereunder.


 




    	D-1