Exhibit 10.12


 





LEASE AGREEMENT


 





This Lease is entered into
effective as of October 1, 2014 ("Commencement Date”), between CJK, Inc., an Arizona corporation ("Tenant"),
and Kingman Property Group, LLC, an Arizona limited liability company ("Landlord").


 


1.PREMISES. Landlord
leases to Tenant, and Tenant leases from Landlord, that certain office real property and improvements thereon located at 2095 Northern
Avenue, Kingman, Arizona ("Premises").










 


2.TERM. The term of
this Lease shall be for a period of ten (10) years (“Term") commencing as of the Commencement Date and shall terminate
on September 30, 2024.


 


3.RENT.


 


3.1Net, Net, Net Lease. Landlord
and Tenant understand and agree that this Lease is what is commonly referred to as a “net, net, net” Lease, NNN, or
triple net lease. Tenant recognizes and acknowledges, without limiting the generality of any other terms or provisions of this
lease, that it is the intent of the parties hereto that any and all rentals in this lease provided to be paid be Tenant to Landlord,
shall be net to the Landlord, and any and all expenses incurred in connection with the Common Areas, the Premises, and the Center
or in connection with the operations thereon, including any and all taxes, assessments, general or special, license fees, insurance
premiums, public utility bills, management and administrative fees and costs of repair, maintenance and operation of the Common
Areas, the Premises, and the Center and all buildings, structures, permanent textures and other improvements comprised therein,
together with the appurtenance thereto, shall be paid by Tenant.


 


3.2Tenant shall pay to Landlord
as Rent for the Premises in advance each month at the rate pursuant to section 3.3 as of October 1, 2014, and on or before the
first day of each month thereafter; provided that, upon the date that Landlord and Tenant shall execute this Lease (“Execution
Date”), Tenant shall pay to Landlord the sum of $10,000.00 (representing prepayment of the first months’ Rent) plus
applicable rental tax.


 


3.3Beginning with the first Rental payment due on October 1, 2014, rental payments will be pursuant
to the following schedule: for months 1 through 6 of tenancy (October 1, 2014 through March 31, 2015) rent shall be $10,000 due
on or before the first of the month. For months 7 through 12 of tenancy (April 1, 2015 through September 31, 2015) rent shall
be $12,000 due on or before the first of the month. For the second rental year of tenancy (October 1, 2015 – September 30,
2016) rent shall be $12,600 due on or before the first of each month. And every twelve (12) months thereafter (each, a “Lease
Year”), the Rent of each Lease Year commencing with October 1, 2016, will be increased on a cumulative basis by five percent
(5.00%) each year thereafter. For Example, lease payments in year three beginning October 1, 2016 will be $13,230 per month,
lease payments in year four beginning October 1, 2017 will be $13,892 per month, etc. 


 



    	 		 



     

    




3.4All Rent due hereunder shall
be paid by Tenant to Landlord at 16624 N. 90th Street, Suite 101, Scottsdale, Arizona 85260, or at such other place
as Landlord may from time to time designate.


3.5REAL PROPERTY TAXES AND ASSESSMENTS,
PERSONAL PROPERTY TAXES AND ASSOCIATION FEES AND ASSESSMENTS. Together with each payment of Rent to Landlord commencing and prorated
as of the Commencement Date through the balance of the Term, Tenant shall pay to Landlord one-twelfth (1/12th) of the
prior calendar year’s real property taxes and assessments with respect to the Premises and one-twelfth (1/12th)
of the then current calendar’s year’s association assessments and fees (if any) with respect to the Premises each month.
Subject to such payment, Landlord shall pay such taxes, assessments and fees to the respective taxing authority and office association.
In addition, Tenant shall pay all personal property taxes with respect to any property of Tenant or any subtenant in or upon the
Premises prior to delinquency and directly to the respective taxing authority on or before the last day upon which the same may
be paid without interest or penalty, and Tenant shall deliver to Landlord reasonable documentation evidencing Tenant’s compliance
with the foregoing payment obligations


3.6.RENTAL TAX. In addition to the
Rent which Tenant is required to pay Landlord herein, Tenant shall pay Landlord all transaction privilege, sales, rental and/or
other taxes or licenses (but excluding income or estate taxes charged against Landlord) levied upon or assessed against Landlord
by any governmental authority having jurisdiction, which are measured by the Rent or other charges in any form paid by Tenant to
Landlord hereunder. The amount required to be paid by Tenant to Landlord pursuant to the immediately preceding sentence shall be
paid at the time the applicable Rent is due or other charges are due and shall be considered as payment of taxes or licenses, as
the case may be, and not for the payment of Rent.


 


4.SECURITY DEPOSIT.
Tenant shall pay to Landlord, upon the Execution Date, a refundable security deposit in the sum of $7,500.00 plus applicable rental
tax in connection with this Lease. If Tenant defaults with respect to any provision of the Lease after applicable grace period,
Landlord may (but shall not be required to) use, apply or retain all or any part of the Security Deposit for the payment of any
rent or any other sum in default. If any portion of the Security Deposit is so used, applied or retained, Tenant shall, within
fifteen (15) days after demand therefor, deposit cash with Landlord in an amount sufficient to restore the security deposit to
its original amount, and Tenant's failure to do so shall be a default under the Lease. Landlord shall not be required to keep the
Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on the Security Deposit. If Tenant
shall fully and faithfully perform every term and condition of the Lease to be performed by it, Tenant shall be entitled to a refund
of the Security Deposit.


 






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5. UTILITIES AND SERVICES.
Tenant shall arrange and pay (before delinquent) for the supply of all heat, air conditioning, electricity, water, and natural
gas consumed by Tenant upon the Premises or utilized in the Premises. Tenant will supply and pay (before delinquent) for all telephone
and trash collection services to the Premises.


 


6.REPAIRS AND MAINTENANCE.
Tenant shall be responsible for the repair and maintenance of the Premises, excluding damages as the result of normal wear and
tear or degradation and excluding the roof, exterior walls, foundation, and underground utilities. Tenant shall maintain the above
ground plumbing and electrical systems, parking and driveway areas and landscaping of the Premises, reasonable wear and tear excepted
and shall provide janitorial and cleaning services for the Premises at Tenant’s expense. Without limiting the generality
of the foregoing, Tenant shall remove all new graffiti on the Premises within forty-eight (48) hours after such graffiti shall
be placed on the Premises and shall promptly repair, in a good and workmanlike manner, any damage to the Premises caused by any
act or omission of Tenant, or of any employee, agent or invitee of Tenant, or failing to do so after the expiration of applicable
notice and cure periods, Tenant shall pay Landlord for the cost of all such repairs, whereupon Landlord shall cause such repairs
to be completed.


 


7. PURPOSE. Tenant
shall use and occupy the Premises only for the purpose of operating an Arizona Department of Health Services-licensed (or legally-permitted
recreational) medical marijuana dispensary or cultivation location and for no other purpose whatsoever. Immediately upon Tenant’s
or subtenant’s receipt of any and all permits and licenses relative to the Premises and the use of the Premises, copies of
such permits and licenses shall be delivered to Landlord.


 


8.SIGNAGE.Tenant
may install and shall maintain at its sole expense, any and all signs upon the interior and exterior of the Premises, subject to
the reasonable approval of Landlord and the approval of all local and County governmental agencies that are required to approve
said signage.


 


9.INSURANCE.


 


9.1Tenant agrees to obtain
and keep in force during the Term, at Tenant's sole expense, the following insurance:


 


9.1.1Public liability insurance
to protect against any liability to the public incident to the use of or resulting from any accident occurring in or about the
Premises, the liability under such insurance to be not less than $2,000,000.00 for any one person injured or $2,000,000.00 for
any one accident and $1,000,000.00 for property damage.


 






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9.1.2All insurance policies
to be obtained by Tenant hereunder shall insure by name the Landlord, Tenant and any mortgagees, and copies thereof shall be delivered
to Landlord upon the Commencement Date. Landlord shall have the right to reasonably disapprove any insurance company proposed by
Tenant. Each of the foregoing original policies are to be placed with Landlord who is authorized to deliver such policies to mortgagees
when required, and Tenant shall obtain a written obligation on the part of the insurance carriers to notify Landlord in writing
thirty (30) days prior to any cancellation thereof, and Tenant agrees, if Tenant does not keep such insurance in full force and
effect, Landlord may take out the necessary insurance and pay the premiums and the repayment thereof shall be deemed to be part
of and in addition to the rental, and payment thereof shall become due, together with interest on such payment at the rate of one
and one-half percent (1.5%) per month (compounded monthly), on the next rental payment date.


 


9.1.3Tenant shall furnish
Landlord with proof of all such insurance at least annually and at any time upon demand of Landlord.


 


9.2Tenant shall obtain and
keep in force during the Term casualty insurance covering loss or damage to the Premises, in the amount of the full replacement
value thereof against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief,
flood, mold and special extended perils ("all risk" as such term is used in the insurance industry) and shall provide
a copy of each such policy of insurance before this Lease is executed and continuously thereafter, with each renewal or replacement
of insurance. Provided that Tenant fails to obtain the necessary insurance, Landlord may obtain the necessary insurance. In such
a case, together with each payment of Rent to Landlord commencing and prorated as of the Commencement Date through the balance
of the Term, Tenant shall pay to Landlord one-twelfth (1/12th) of the premium cost of such casualty insurance. Subject
to such payment, Landlord shall pay such premiums to the insurance company. The parties shall co-operate with each other, in order
to avoid purchasing coverage on the same item or for the same acts and omissions.


 






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10.TERMINATION: In
the event that the Landlord is specifically advised in writing by any federal, state or local government that Landlord is subject
to seizure of his its property, if it does not terminate Tenant’s right to cultivate marijuana upon the Leased Premises,
or if the Arizona Medical Marijuana Act (AMMA) is declared to be unenforceable or is modified to prohibit the sale or cultivation
of medical marijuana upon the Leased Premises, or if any other zoning regulation, rule or regulation is modified to prohibit sale,
cultivation or possession of marijuana upon the Leased Premises, Landlord or may terminate this Lease. 


 


11.COMPLIANCE WITH
LAW; AS IS. Tenant accepts the Premises strictly on an “AS IS” basis, without any representations or warranties from
Landlord. Tenant agrees to be compliant with all applicable rules/laws/regulations in effect, or subsequently passed into effect,
as of and after the Commencement Date.


 


Tenant, at its sole cost
and expense, shall promptly observe and materially comply with all present and future laws, orders, regulations, rules, ordinances
and requirements of any governmental agency with respect to the use, care and control of the Premises. Without limiting the generality
of the foregoing, Tenant shall make any structural changes or additions to the Premises that are required, in order to comply with
the requirements of its business operations. Landlord makes no representations or warranties to Tenant, and hereby disclaims any
and all representations or warranties to Tenant, concerning the Premises, including without limitation, that as of the Commencement
Date the Premises are (a) in compliance with all federal, state and local laws, regulations and directives for Tenant's intended
use of the Premises, including without limitation the Environmental Laws, but excluding the Americans With Disabilities Act; and
(b) free from and of all hazardous materials, including without limitation asbestos, lead paint and polychlorinated biphenyl; provided
that Landlord represents and warrants to Tenant that Landlord has no actual knowledge, without having made any investigation or
inquiry, of any present violation by the Premises of any of the Environmental Laws. "Environmental Laws" shall include,
but not be limited to, the Resource, Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, et seq.; the Clean Water Act, 33
U.S.C. Section 1251, et seq.; the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 201,300f to j-9 and any and all environmental laws of the State of Arizona and any and all amendments
to such Environmental Laws. Tenant agrees to hold harmless Landlord, and hereby waives all rights and claims of contribution against
Landlord, with respect to any violations or alleged violations of Environmental Laws or any other federal, state and local laws,
regulations and directives concerning the Premises which arise as a result of Tenant’s activities at the Premises.


 


12.ACCESS BY LANDLORD.
Landlord, or its representatives and agents, shall have free access to the Premises at reasonable times for the purposes of inspection
and/or for examining or exhibiting the same to prospective purchasers, lenders or tenants; provided that, subject to Section 20
below, Landlord shall give Tenant at least one (1) day’s written notice or by email or by phone in advance of such examination
or exhibition, unless it would be impracticable to do so due to solely to an emergency concerning the Premises.


 






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13.RETURN OF PREMISES.
Upon the expiration of the term of this Lease or upon its termination for any cause, except for breach of this Lease by Landlord,
Tenant shall restore the Premises to the condition that Tenant received the Premises, reasonable wear and tear excepted, unless
Landlord advises Tenant to not remove any structural changes or alterations. If such non-removal shall not cause additional expense
to Tenant, Tenant shall not be required to remove them. Tenant shall surrender the Premises in as good order and condition as when
received, reasonable wear and tear excepted.


 


14.HOURS OF BUSINESS.
Tenant shall continuously during the entire term hereof conduct and carry on Tenant’s business in the Premises and shall
keep the Premises open for business and cause Tenant’s business to be conducted therein during the usual business hours of
each and every business day as is customary for businesses of like character.


 


15.ALTERATIONS AND
MODIFICATIONS. All alterations and modifications to the Premises that Tenant may desire shall be done at the expense of Tenant,
and shall become the property of Landlord and remain on the Premises (except for Tenant's removable equipment and trade fixtures)
and become Landlord’s property upon the expiration or earlier termination of the Term; provided that (a) “removable
equipment” shall mean equipment that is not permanently bolted, screwed or otherwise affixed to any walls, ceiling or floor
of the Premises, and (b) Tenant shall not make any alterations and modifications to the Premises without first obtaining the prior
written approval of Landlord, which approval shall not be unreasonably withheld. Any work done at the Premises shall be done by
duly licensed and qualified contractors. All damage or injury done to the Premises by Tenant or any person who may be in or on
the Premises with the consent of Tenant shall be paid for by Tenant.


 


16.LIENS AND ENCUMBRANCES.
Tenant shall keep the Premises free and clear of any liens or encumbrances imposed on the Premises by reason of any contract, act
or omission of Tenant. Tenant shall have the full right and authority to contest the validity of any such liens or encumbrances,
at Tenant's expense, and Landlord shall cooperate with all such contest actions, including without limitation, signing all consents
and other documents reasonably requested by Tenant or its agents in connection with such contest actions; provided that Tenant
shall not only bear the expense of such contests, but that such contest shall be undertaken at Tenant's risk as to liability for
payment of any applicable liens or encumbrances, and of penalties and/or interest imposed on any delinquencies related thereto.
Landlord may require, at Landlord’s sole option that Tenant shall provide to Landlord, at Tenant’s sole cost and expense,
a lien and completion bond in an amount equal to one and one-half (1 1⁄2) times the estimated cost of any improvements, additions,
or alterations, in the Premises which the Tenant desire to make, to insure Landlord against any liability for mechanics’
and material men’s liens and to insure completion of the work.


 






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17.DEFAULTS AND REMEDIES.


 


17.1Defaults.
The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Tenant:


 


17.1.1The vacating or abandonment
of the Premises by Tenant for more than thirty (30) days.


 


17.1.2The failure by Tenant
to make any payment of Rent or any other payment required to be made by Tenant hereunder within three (3) business days after the
due date (without any requirement of notice from Landlord, except that notice is required with regard to all items except Rent
and normal, monthly rental taxes).


 


17.1.3The failure by Tenant
to observe or perform any of the covenants, conditions, or provisions of this Lease to be observed or performed by Tenant, other
than described in Section 17.1.2, where such failure shall continue for a period of fifteen (10) days after written notice thereof
from Landlord to Tenant; provided, however, that if the nature of Tenant's default is such that more than fifteen (10) days are
reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commenced such cure within said 10-day
period and thereafter diligently prosecutes such cure to completion.


 


17.1.4(a) The making by Tenant
of and general assignment, or general arrangement for the benefit of creditors; (b) the filing by or against Tenant of a petition
to have Tenant adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless,
in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days); (c) the appointment of a trustee
or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within sixty (60) days; or (d) the attachment, execution, or other judicial seizure
of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within sixty (60) days.


 






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17.2Remedies. In the
event of any such uncured default or breach by Tenant, Landlord may at any time thereafter, with or without notice or demand and
without limiting Landlord on the exercise of any right or remedy which Landlord may have by reason of such default or breach, enter
and/or taking of possession of the Premises without a court order. Landlord may proceed by forcible detainer or by other judicial
remedy to obtain possession of the Premises.


 


17.2.1Landlord
shall not have the immediate right of re-entry (with or without notice) and may not remove all persons and property (subject to
applicable law) from the Premises without first obtaining a court order allowing Landlord to take possession of the Premises. If
Landlord obtains a court order for possession or if Tenant shall abandon the Premises for more than thirty (30) days, all property
left on the Premises will be considered abandoned and may be sold, removed, or stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant.


 


17.2.2Should Landlord elect
to re-enter as herein provided, or should Landlord take possession pursuant to legal proceedings or pursuant to any notice provided
for by law, Landlord may either terminate this Lease or may from time to time, without terminating this Lease, re-let said premises
or any part thereof for such term or terms (which may be for a term extending beyond the term of this Lease) and at such rental
or rentals and upon such other terms and conditions as Landlord in Landlord's sole discretion may deem advisable with the right
to make reasonable alterations and repairs to the Premises.


 


17.2.3Upon each such re-letting
(a) Tenant shall be immediately liable to pay to Landlord, in addition to any indebtedness other than rent due hereunder, for the
reasonable cost and expenses of such re-letting and of such alterations and repairs incurred by Landlord and the amount, if any,
by which the rent reserved in this Lease for the period of such re-letting (up to but not beyond the term of this Lease) exceeds
the amount agreed to be paid as rent for the Premises for such period on such re-letting, or (b) at the option of Landlord, rents
received by such Landlord from such re-letting shall be applied, first to the payment of any indebtedness other than rent due hereunder
from Tenant to Landlord, second to the payment of any reasonable costs and expenses of such re-letting and of such alterations
and repairs, and third to the payment of rent due and unpaid hereunder, and the residue, if any, shall be held by Landlord and
applied in payment of future rent as the same may become due and payable hereunder. If Tenant has been credited with any rent to
be received by such re-letting under option (a), and such rent shall not be promptly paid to Landlord by the new tenant, or if
such rentals received from such re-letting under option (b) during any month shall be less than that to be paid during that
month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly.


 






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17.2.4No such re-entry or
taking 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 such intention be given to Tenant. Notwithstanding any such re-letting without termination, Landlord may at
any time thereafter elect to terminate this Lease for such previous breach, unless such previous breach has already been cured
by Tenant.


 


17.2.6Pursue any other remedy
not inconsistent with the foregoing now or hereafter available to Landlord under the laws or judicial decisions of the State of
Arizona.


 


17.2.7In addition to the
foregoing rights and remedies of Landlord, Tenant acknowledges that late payment by Tenant to Landlord of Rent or other sums due
hereunder will cause Landlord to incur expenses in an amount that will be impracticable or extremely difficult to ascertain. Accordingly,
if any installment of rent or any sum due from Tenant is not received by Landlord when due, Tenant shall pay to Landlord as liquidated
damages, a late charge equal to ten percent (10%) of such overdue amount. The parties hereby agree that this late charge represents
a fair and reasonable estimate of the cost that Landlord will incur, in addition to interest on the money involved, because of
the late payment by Tenant. Landlord’s failure to demand the payment of late charges on one or more occasions shall not constitute
a waiver of landlord’s right to demand payment of past due late charges. Acceptance of late charges by Landlord shall in
no event constitute a waiver of Tenant’s default with respect to such overdue amount, nor shall such acceptance prevent Landlord
from exercising any of the other rights and remedies granted hereunder. In addition, because of late payment or any other default
by Tenant under this Lease, Landlord may also incur attorney’s fees for services whether or not in connection with litigation,
and Tenant shall pay the reasonable attorney’s fees incurred by Landlord for these services.


 






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17.3Default by Landlord.
Landlord shall not be in default unless Landlord fails to perform obligations required by Landlord within a reasonable time, but
in no event later than thirty (45) days after written notice by Tenant to Landlord specifying wherein Landlord has failed to perform
such obligations; provided however, that if the nature of Landlord's obligation is such that more than thirty (45) days are required
for performance, then Landlord shall not be in default if Landlord commences performance within such 45-day period and thereafter
diligently prosecutes the same to completion. Landlord shall not be deemed in default hereunder as long as Tenant shall be in default
hereunder.


 


17.4 Attorney’s Fees.
In addition to the provisions of Section 17.2 above in favor of Landlord, the substantially prevailing party in any lawsuit involving
the enforcement or interpretation of this Lease shall be entitled to recover from the substantially non-prevailing party the attorney’s
fees and costs reasonably incurred by the substantially prevailing party.


 


18.DESTRUCTION OR CASUALTY.
In the event that the Premises are injured, damaged or destroyed by act of God, by fire or other casualty, and Landlord in its
sole discretion decides not to repair or restore the Premises, Tenant or Landlord shall have an option to terminate this Lease
as of the date of such injury, damage or destruction. This option shall be exercised upon the giving of written notice to Landlord
or Tenant, as the case may be, within sixty (60) days following the destruction, injury or damage. In the event that Landlord determines
to repair and restore the Premises, Landlord shall so advise Tenant in writing within sixty (60) days following the destruction,
injury or damage, and shall proceed with due diligence to effect repairs or reconstruction. During the period of repair or reconstruction,
this Lease shall continue in full force and effect; provided, however, that Tenant shall be entitled to a reduction of Rent from
the date of such destruction, injury or damage until the repairs or reconstruction are completed in an amount proportionate to
the extent to which such damage, injury or destruction and the making of repairs or reconstruction interferes with the occupancy
by or business operations of Tenant with respect to the Premises.


 






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19.CONDEMNATION. In
the event that all or any portion of the Premises shall be taken by eminent domain or condemnation by any governmental or other
authority having jurisdiction to do so, Landlord shall be entitled to receive, and Tenant hereby assigns completely to Landlord,
all proceeds payable by such authority(ies) in connection with such taking, except that Tenant shall be entitled to recover from
such authority(ies) only compensation for relocation expenses to the extent payable by such authority(ies). Tenant shall be entitled
to a reduction of rent from the date of such taking in an amount proportionate to the extent to which such taking interferes with
the occupancy by or business operations of Tenant with respect to the Premises. In the event that more than ten percent (10%) of
exterior portions of the Premises or if any interior portion of any structure on the Premises are taken, Tenant may terminate this
Lease, effective as of the date of actual delivery of possession to the condemning authority.


 


20.QUIET ENJOYMENT.
Tenant, on performing the covenants and observing the conditions of this Lease, at all times during the term shall have the peaceable
enjoyment of the Premises without hindrance or disturbance by Landlord or any person claiming through or under it or any person
having or claiming paramount title; provided that during the Term Landlord shall be permitted to store at the Premises, in an area
of the Premises mutually agreed upon by Landlord and Tenant prior to the Commencement Date exclusively reserved to and freely accessed
by Landlord without prior notice to Tenant, motors and related equipment.


 


21.ASSIGNMENT. Landlord
may freely sell, assign or otherwise transfer all or any portion of its interest under this Lease or in the Premises or in the
building or the land that comprise the Premises, and in the event of any such transfer, the party originally executing this Lease
as Landlord, and any successor or affiliate of such party, shall be relieved of any and all of its obligations under this Lease
from and after the date of such transfer, provided that Landlord is not in default of this Lease at the time of transfer. Tenant
shall thereafter be bound to the transferee with the same effect as though the latter had been the original Landlord hereunder,
provided that the transferee assumes and agrees to carry out all the obligations of Landlord hereunder.


 


No assignment or sublease
of the Premises by Tenant shall be binding upon Landlord or confer any rights on the proposed assignee or subtenant without the
prior written consent of Landlord, which Landlord may withhold in its sole discretion. Upon any assignment so approved by Landlord,
Tenant shall not be relieved of any liability with respect to this Lease. In the event of any approved assignment or sublease by
Tenant, Tenant shall pay to Landlord any and all attorney’s fees and costs incurred by Landlord in its review and approval
of the assignment and/or sublease transaction and in the preparation and/or review of all documents related thereto, up to a total
charge of one thousand dollars ($1,000.00).


 


22.NOTICES. Any and
all notices, consents or other communications provided for herein shall be given in writing and delivered by hand or registered
or certified mail addressed to the Landlord at 16624 N. 90th Street #101, Scottsdale, Arizona 85260. Any and all notices,
consents or other communications provided for herein shall be given in writing and delivered by hand or registered or certified
mail addressed to the Tenant at 2095 Northern Avenue, Kingman, Arizona and/or 16624 N. 90th Street #200, Scottsdale,
Arizona 85260, or to such other address as Tenant or Landlord may designate by written notice to the other. Each such notice shall
be deemed given on the date it is personally delivered, or if mailed, on the date of mailing.


 






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23.PRIOR AGREEMENTSThis
Lease constitutes the entire agreement between the parties and supersedes and cancels any and all prior agreements between the
parties relating to the subject matter hereof.


 


24.BENEFITS. This Lease
shall bind and inure to the benefit of the parties hereto and their respective administrators, legal representatives, successors
and assigns, but neither this Lease nor any right or obligation hereunder shall be assigned by any party except as provided in
this Lease.


 


25.FURTHER ASSURANCES.
The parties hereto shall execute and deliver all such other instruments and take all such other actions as any party may reasonably
request from time to time in order to effect the terms and conditions of this Lease. The parties shall cooperate with each other
and with their respective counsel and accountants in connection with any actions to be taken as a part of their respective obligations
under this Lease.


 


26.GOVERNING LAW, DISPUTE
RESOLUTION AND VENUE. This Lease shall be construed in accordance with the laws of the State of Arizona. In the event of any dispute,
venue shall be the state court located in Maricopa County, Arizona.


 


In the event a party is
in breach of this Agreement and the failure of a party to cure said breach in a timely manner, pursuant to this Agreement, to the
other party’s satisfaction within the period set forth herein, the other party or parties, in addition to and not in limitation
of any other rights and remedies available to such other party or parties at law or in equity, shall have the right to seek injunctive
relief and/or the appointment of a receiver.


 


The forgoing notwithstanding,
the parties hereby agree to attempt to resolve all differences among themselves by nonbinding mediation. In the event of a dispute,
either party may demand mediation (a settlement conference). If the parties fail to agree upon a mediator within five (5) business
days of demand for mediation, either party may petition the Maricopa County Superior Court for the appointment of a mediator. If
the dispute is not resolved by agreement of all parties within thirty (30) calendar days of the appointment of a mediator, or within
forty-five (45) days after the written request for mediation is transmitted to the other party, either party may commence arbitration.
The parties shall split the mediator’s fee.


 


If mediation is not timely
commenced or fails, all disputes among the parties to this Agreement shall be settled by binding arbitration, by one arbitrator,
according to the Arizona Revised Statutes and the Arizona Rules of Civil Procedure. If the parties cannot unanimously agree upon
an arbitrator, any person or entity involved in the dispute may petition the Maricopa County Superior Court for the appointment
of an arbitrator. The parties to the arbitration shall split the arbitrator’s fees equally. The arbitrator’s decision
shall be final and binding and may be enforced according to the Uniform Arbitration Act and/or enforced in any court of competent
jurisdiction. The arbitrator may award injunctive relief and may award attorney fees and/or costs to the prevailing party or parties.


 






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27.WAIVER. No failure
or delay on the part of either party in exercising any right, power or privilege under this Lease shall operate as a waiver thereof
nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof.
The rights and remedies expressly specified in this Lease are cumulative and are not exclusive of any other rights or remedies
which either party would otherwise have.


 


28.CAPTIONS. All section
titles or captions contained in this Lease are for convenience only and shall not be deemed part of this Lease.


 


29.SEVERABILITY. The
provisions of this Lease are severable and the holding of any one provision as invalid or unenforceable shall have no effect on
any other provision.


 


30.COUNTERPARTS. This
Lease may be executed simultaneously in two (2) or more counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall not be necessary in making proof of this Lease to produce or account
for more than one such counterpart.


 


31.FOR RENT AND FOR
SALE SIGNS.Landlord may post any "for sale" or "for rent" signs on or at the Premises and exhibit the Premises
during normal business hours to prospective buyers and tenants, from time to time.


 


32.ESTOPPEL CERTIFICATE.Landlord
and Tenant shall, at any time and from time to time, within ten (10) business days after written request from the other party,
execute, acknowledge and deliver to the requesting party a statement in writing: (a) certifying that the Lease is unmodified
and in full force and effect or, if modified, stating the nature of such modification and certifying that the Lease, as so modified,
is in full force and effect; (b) certifying the dates to which the Rent and other charges are paid in advance, if any; and
(c) acknowledging that there are not, to such party's knowledge, any uncured defaults on the part of the requesting party
hereunder, or specifying such defaults if they are claimed. Any such statement may be relied upon by any prospective purchaser
or lender of all or any portion of the Premises or any leasehold interest therein. The failure to deliver such statement within
such time shall be conclusive and binding upon the party upon whom the request is made that: (i) the Lease is in full force
and effect, without modification except as may be represented by the requesting party; (ii) there are no uncured defaults
on the requesting party's performance; and (iii) no Rent has been paid in advance. If Tenant is required or requested to execute
more than one estoppel certificate or similar document in any twelve (12) month period, Landlord shall reimburse Tenant for its
legal fees incurred in having such documents reviewed, up to a total charge of five hundred dollars ($500.00).


 






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33.COMMISSIONS.
Landlord and Tenant acknowledge that neither of them has engaged the services of a real estate broker, salesperson or finder who
has provided real estate brokerage services in connection with this transaction, and is entitled to a commission. Landlord and
Tenant agree to indemnify and hold each other harmless in connection therewith.


 


34.USE AND SUITABILITY OF PREMISES.
Tenant acknowledges that neither Landlord nor Landlord’s agent has made any representation or warranty as to the present
or future suitability of the Premises for the conduct of Tenant’s business, or that Tenant’s proposed use of the Premises
or its manner of operation are in compliance with applicable laws or governmental regulations. It is the Tenant’s sole responsibility
to obtain building permits and/or occupancy permits, if required, and to correct code violations or code violations resulting from
changed or updated code requirements. Landlord shall not be liable for any delays or costs in obtaining said permits and Tenant
shall not withhold rents in the event of any delays or unexpected costs. Landlord and Landlord’s agent shall not, under any
circumstances, be obligated to investigate or confirm the permissibility, propriety, or legality of Tenant’s proposed use.
Tenant shall not do or permit anything to be done in or about the Premises nor bring or keep anything within the Premises which
will in any way increase the existing rate of or affect any fire or other insurance upon the Building or any of its contents, or
cause a cancellation of any insurance policy covering said Building or any part thereof or any of its contents. Tenant shall not
do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other
Tenants or occupants of the building or injure or annoy them or use or allow the Premises to be used for any improper, immoral,
unlawful or objectionable purpose; nor shall Tenant cause, maintain or permit any nuisance in, or about the Premises. Tenant shall
not commit or allow to be committed any waste in or upon the Premises. Tenant shall not use the Premises, or permit anything to
be done on or about the Premises, which will in anyway conflict with any law, statue, ordinance or governmental rule or regulation
in force or which may hereafter be enacted or promulgated. Tenant shall at its sole cost and expense, promptly comply with all
laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force
and with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant’s
improvements or acts.


 


35.SALE
OF THE PREMISES BY LANDLORD. In the event of any sale of the Premises and/or the Shopping Center by Landlord, IF ANY, Landlord
shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained
in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale; and
the purchaser, at such sale or any subsequent sale of the Premises shall be deemed without any further agreement between the parties
of their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and
all of the covenants and obligations of the Landlord under this Lease.


 






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36.HOLD HARMLESS AND
INDEMNIFICATION. Notwithstanding any provision to the contrary contained herein:


 


36.1Neither Landlord nor any
of its agents or employees shall have any liability to Tenant, or to Tenant’s employees, agents, contractors, subtenants,
invitees, patients or customers for any damage, injury, loss or claims based on or arising out of any cause whatsoever, including,
without limitation, the following: repair to any portion of the Premises; interruption in the use of the Premises or any equipment
therein; any accident or damage resulting from any use or operation by Landlord, Tenant or any other person or entity of elevators
or heating, cooling, electrical, sewerage or plumbing equipment or apparatus; termination of this Lease by reason of damage to
the Premises; fire, robbery, theft, vandalism, mysterious disappearance or any other casualty; actions of any other person or entity;
failure or inability to furnish any service specified in this Lease; and leakage in any part of the Premises from water, rain,
ice or snow that may leak into, or flow from, any part of the Premises, or from drains, pipes or plumbing fixtures in the Premises.
Any property placed by Tenant in or about the Premises shall be at the sole risk of Tenant, and Landlord shall not in any manner
be responsible therefor. Notwithstanding the foregoing, Landlord shall not be released from liability to Tenant for and to the
extent of any injury caused by Landlord’s willful misconduct or negligence or the willful misconduct or negligence of any
of Landlord’s employees, agents, partners contractors, employees, subtenants or invitees, unless Tenant is fully compensated
for its loss by insurance proceeds.


 


36.2Unless Landlord’s losses
are recovered by insurance proceeds, Tenant shall reimburse Landlord for, and shall indemnify, protect, defend and hold Landlord,
its employees and agents harmless from and against all costs, damages, claims, liabilities, expenses (including attorneys’
fees, disbursements and actual costs), losses and court costs suffered by or claimed against Landlord, directly or indirectly,
based on or arising out of, in whole or in part, (i) the use and occupancy of the Premises or the business conducted therein by
Tenant, its agents, contractors, employees, subtenants or invitees, (ii) any act or omission of Tenant, its agents, contractors,
employees, subtenants or invitees; or (iii) any breach of Tenant’s obligations under this Lease.


 


37.PROHIBITED
PERSONS AND TRANSACTIONS. Tenant represents and warrants to Landlord that as of the Commencement Date, Tenant is currently in compliance
with, and Tenant further covenants to Landlord that Tenant shall at all times during the term of the Lease (including any extension
thereof) remain in compliance with, the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department
of Treasury (including those named on OFAC’s Specially Designated Nationals and Blocked Persons List) and any statute, executive
order (including, but not limited to, Executive Order 13224, dated September 24, 2001 and entitled “Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”), or other governmental, regulatory,
or administrative action relating thereto and the Americans with Disabilities Act (“ADA”).


 






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IN WITNESS WHEREOF, the
parties have set their names effective as of the Commencement Date above set forth.





 


LANDLORD:


 


Kingman Property Group, LLC an Arizona limited
liability partnership







 


 


By_______________________________________



Its Duly Authorized Agent


 


 


By_______________________________________


Its Duly Authorized Agent


 


 


TENANT:


 





CJK, Inc., an Arizona corporation




 





 


By_______________________________________


Its Duly Authorized Agent


 


By_______________________________________


Its Duly Authorized Agent


 









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Addendum to the Lease


 


Compliance terms for Medical Marijuana Facility


  


1. Lessee acknowledges that neither the lessor nor lessor’s
representatives have made any oral or written representations or warranties whatsoever concerning the suitability or zoning of
the property with respect to its potential use as a medical marijuana facility, and that it is the sole responsibility of the Lessee
to investigate and to satisfy itself concerning the suitability of the property for such use.


 


2. Lessee understands and agrees that Lessee, and not Lessor, shall
be solely responsible at the Lessee’s own expense for full compliance with all state and local laws, rules, regulations and
ordinances pertaining to the maintenance and/or operation of a medical marijuana cultivation facility.


 


3. Lessee warrants and represents that it is eligible and qualified
to operate a medical marijuana facility in the property under all applicable state and local laws rules, regulations and ordinances,
and that Lessee has obtained all legally required licenses, permits, and approvals to do so before commencing operations on the
property.


 


4. Lessee shall indemnify, defend and hold harmless Lessor, its
trustees, agents, employees, and lenders from and against all damages, liabilities, judgments, claims, expenses, penalties, and
attorney and consultant fees arising out of or connected in any way to Lessee’s violation or alleged violation of any federal,
state, or local law, rule, regulation or ordinance, whether or not litigation or prosecution is actually commences against Lessor,
its trustees, agents, employees or lenders.


 


5. Lessee shall provide notice to Lessor immediately
in the event of the revocation, suspension, expiration, transfer, or surrender of Lessee’s lawful authority to operate a
medical marijuana facility. Such revocation, suspension, expiration, transfer or surrender, or Lessee’s failure to provide
immediate notice thereof to Lessor, shall constitute a Breach of the Lease entitling Lessor at its sole discretion to terminate
the lease.  


 


	LANDLORD:	 	TENANT:
	 	 	 
	Kingman Property Group, LLC



	 	CJK, Inc., an Arizona corporation




	 	 	 
	By______________________________ 	 	By______________________________
	               Its Duly Authorized Agent	 	               Its Duly Authorized Agent






  


 


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