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C-20-107 Ascent Redacted
Applicant (Entity) Information Application Type Proposed Location Commercial Cannabis Business Permit Application C-20-107 Submitted On: Dec 04, 2020 Applicant Robert Calvert 3104287886 pia@cultcollective.com Applicant (Entity) Name: ALLUVIAL MANAGEMENT Co. LLC DBA: ASCENT Physical Address: 49-51 WEST ALLUVIAL AVENUE City: FRESNO State: CA Zip Code: 93650 Primary Contact Same as Above? Yes Primary Contact Name: PIA LINDSTROM Primary Contact Title: CONSULTANT Primary Contact Phone: 310 428 7886 Primary Contact Email: PIA@CULTCOLLECTIVE.COM HAS ANY INDIVIDUAL IN THIS APPLICATION APPLIED FOR ANY OTHER CANNABIS PERMIT IN THE CITY OF FRESNO?: Yes Select one or more of the following categories. For each category, indicate whether you are applying for Adult-Use (“A”) or/and Medicinal (“M”) or both Both Please make one selection for permit type. If making multiple applications, please submit a new application for each permit type and proposed location. Permit Type Retail (Storefront) Business Formation Documentation: Limited Liability Company Property Owner Name: CHRISTINE A SMITH Proposed Location Address: 49-51 WEST ALLUVIAL City: FRESNO State: CA Zip Code: 93650 Property Owner Phone: 3104287886 Property Owner Email: -- Assessor's Parcel Number (APN): APN 303-053-19 Proposed Location Square Footage: Supporting Information Application Certification Owner Information 2500 List all fictitious business names the applicant is operating under including the address where each business is located: BLACKSTONE MANAGEMENT CO. LLC DBA ASCENT 444 NORTH BLACKSTONE AVENUE FRESNO CA 93701 ASCENT MANAGEMENT CO. LLC DBA ASCENT 3399 MAIN STREET MAMMOTH LAKES CA 93546 Has the Applicant or any of its owners been the subject of any administrative action, including but not limited to suspension, denial, or revocation of a cannabis business license at any time during the past three (3) years? No Is the Applicant or any of its owners currently involved in an application process in any other jurisdiction? No I hereby certify, under penalty of perjury, on behalf of myself and all owners, managers and supervisors identified in this application that the statements and information furnished in this application and the attached exhibits present the data and information required for this initial evaluation to the best of my ability, and that the facts, statements, and information presented are true and correct to the best of my knowledge and belief. I understand that a misrepresentation of fact is cause for rejection of this application, denial of the permit, or revocation of a permit issued. In addition, I understand that the filing of this application grants the City of Fresno permission to reproduce submitted materials for distribution to staff, Commission, Board and City Council Members, and other Agencies to process the application. Nothing in this consent, however, shall entitle any person to make use of the intellectual property in plans, exhibits, and photographs for any purpose unrelated to the City's consideration of this application. Furthermore, by submitting this application, I understand and agree that any business resulting from an approval shall be maintained and operated in accordance with requirements of the City of Fresno Municipal Code and State law. Under penalty of perjury, I hereby declare that the information contained in within and submitted with the application is true, complete, and accurate. Iunderstand that a misrepresentation of the facts is cause for rejection of this application, denial of a permit or revocation of an issued permit. A denial or revocation on these grounds shall not be appealable (FMC 9-3319(d)). Name and Digital Signature true Title MANAGING DIRECTOR Please note: the issuance of a permit will be determined based on the application you submit and any major changes to your business or proposal (i.e. ownership, location, etc.) after your application is submitted may result in a denial. All applications submitted are considered public documents for Public Records Act request purposes. For details about the information required as part of the application process, see the Application Procedures & Guidelines, City of Fresno Municipal Code Article 33 and any additional requirements to complete the application process. All documents can be found online via this link. For questions please contact the City Manager’s Office at 559.621.5555. Owner Name: ROBERT CALVERT Owner Title: MANAGING DIRECTOR Owner Address:Owner City: P.O BOX 2127 MAMMOTH LAKES Owner State: CA Owner Zip: 93546 Has Owner Completed Background Check Application? Yes Ownership Percentage (%): 50 Owner Name: PAUL RUDDER Owner Title: MANAGING MEMBER Owner Address: P.O BOX 2127 Owner City: MAMMOTH LAKES Owner State: CA Owner Zip: 913546 Has Owner Completed Background Check Application? Yes Ownership Percentage (%): 50 Capital source is 100% liquid (cash in owners bank, no debt obligation)20 20 20 Capital souce is debt obligation (letter of credit/loan from individual or institution) 10 10 - Capital consists of non-liquid assets (i.e. real property)8 8 - Capital consists of a mixture of liquid and non-liquid assets 15 15 - 1.3 Sub-Total:50 40 Three Years of Data Provided: Score 10 10 8 6 8 Needs detail Total Gross Revenue Estimates Provided:3 3 3 Total Gross Revenue by Product Type (flower and manufactured) Identified:3 3 0 not included Total Personnel Costs Provided:5 5 4 3 4 Has some breakdown but no benefits/insurance Total Property Rental or Purchase Costs Provided:2 2 2 Total Utilities Costs Provided:2 2 2 Total Cannabis Product Purchase Expense Provided 2 2 2 All Contract Services Identified:2 2 2 Annual Net Revenue Identified:3 3 3 Annual Cost Escalators Identified:4 4 3 2 2 Few costs shown as escalating, no explanations Annual Estimated Sales Tax Payments to State Provided:2 2 2 Annual Estimated Sale Tax Payments to City of Fresno Provided:5 5 5 Annual Business Tax License and Cannabis Permit Fee Provided:2 2 0 not included Annual Net Income Provided:5 5 5 Scoring Guidance: full points for realistic figures for all three years. Dock points for severe miscalculations, unrealistic estimates, or providing less than the request three years. 1.4 Sub-Total:50 40 Hours of Operation Provided: Score 5 5 5 Hours of Operation Provided for all 7 days of the week: Score 3 3 3 Described under customer check-in section Hours of Operation Provided for Holidays: Score 2 2 0 Holidays not mentioned Opening and Closing Procedures Provided: Score 10 10 8 6 10 Scoring Guidance: full points for describing information in detail. Dock points for leaving information out or not providing enough detail. 1.5 Sub-Total:20 18 1.6.1 Fully describe the day-to-day operations if your applying for a retail permit: i. Describe customer check-in procedures.20 20 15 10 20 II. Identify location and procedures for receiving deliveries during business hours.10 10 8 6 10 iii. Identify the name of the Point-of-sale system to be used and the number of Point-of-Sale locations.10 10 10 Flow Grow; 5 POS locations iv. The estimated number of customers to be served per hour/day.20 20 15 10 15 Did not describe source of estimation (i.e. other owned stores, market analysis, etc.) v. Describe the proposed product line to be sold and estimate the percentage of sales of flower and manufactured products.20 20 15 10 15 Did not break down by product type 1.6 Daily operations. With as much detail as possible, the Business Plan should describe the day-to-day operations which meet industry best practices. This should include at a minimum the following criteria for each permit type in which you are applying for a permit. (100 points possible) 1.4 Pro forma for at least three years of operation. 1.5 Fully describe hours of operation and opening and closing procedures. (20 points possible) Criteria Narrative: Criteria Narrative: Criteria Narrative: vi. If proposed, describe delivery service procedures, number of vehicles and product security during transportation. (if no delivery service application must state this clearly for full points)20 20 15 10 20 Confirms that no delivery service is proposed. 1.6 Sub-Total:100 90 Section 1 Total:300 234 SECTION 2: SOCIAL POLICY AND LOCAL ENTERPRISE 400 Points Possible for Section 2 Description of Commitment to pay a Living Wage provided: Score 10 10 8 6 8 Inconsistency - states per hour bu for Assistant Manager Definition of Living Wage Provided: Score 5 5 4 3 0 Does not define living wage Living Wage Defined as Greater than Minimum Wage: Score 5 5 0 Does not define living wage 2.1 Sub-Total:20 8 Wages and Salary CCB Entry-Level Hourly Wage Greater than Minimum Wage 5 5 5 States minimum hourly wage i . This is more than th salary proposed for Assistant Managers. CCB Entry-Level Annual Salary Greater than Median Household Income ($50,432)5 5 5 Health Care Benefits CCB Offers Medical Coverage to All Employees: Score 5 5 5 CCB Offers Dental Coverage to All Employees: Score 3 3 3 CCB Offers Vision Coverage to All Employees: Score 3 3 3 CCB Offers Health Reimbursement Account for Qualified Medical Expenses: Score 1 1 0 Did not describe HRA Employee Pays $0 for Employee Medical Premium: Score 3 3 3 Employee Pays $0 for Employee Dental Premium: Score 2 2 2 Employee Pays $0 for Employee Vision Premium: Score 2 2 2 Employee Pays less than $500 per month for Family Health Care Coverage (Medical, Dental, Vision): Score 2 2 - Leave Benefits Number of Paid Vacation/PTO Days Per Year: (10+ days = excep; 6-9 days = Good; 3-5 days Acceptable)5 5 4 3 5 Number of Paid Holidays Per Year: (10 or more paid holidays = excep; 4-10 = Good; 1-3 Acceptable)5 5 4 3 0 Holidays not described Number of days paid time off for Sick/Medical time: (7+ days= Exceptional, 4-6 days = Good, 3 days = acceptable (8 hour day))5 5 4 3 5 Retirement Offers employee retirement plan 2 2 0 Not mentioned Offers company match for employee retirement plan 2 2 0 Not mentioned 2.2 Sub-Total:50 38 Criteria Narrative: Criteria Narrative: Criteria Narrative: 2.1 Describe whether the Commercial Cannabis Business is committed to offering employees a Living Wage. (20 points possible) Scoring Guidance: https://livingwage.mit.edu/counties/06019 2.2 Briefly describe benefits provided to employees such as health care, vacation, and medical leave, to the degree they are offered as part of employment. (50 points possible) CCB Provides Tuition Reimbursement for Certificates: Score 3 3 3 Describes 2 weeks of tuition reimbursement at community and local colleges. CCB Provides Tuition Reimbursement for associate degrees: Score 3 3 0 Benefit unclear. Since "2 weeks" was specified, credit was given only for certificate programs. CCB Provides Tuition Reimbursement for bachelor's degrees: Score 3 3 0 Benefit unclear. Since "2 weeks" was specified, credit was given only for certificate programs. CCB Provides Tuition Reimbursement for master's degrees: Score 3 3 0 Benefit unclear. Since "2 weeks" was specified, credit was given only for certificate programs. CCB Provides Tuition Reimbursement for Specialized Commercial Cannabis Business Operations Training: Score 3 3 0 Benefit unclear. Since "2 weeks" was specified, credit was given only for certificate programs. CCB Offers General Training for Health and Safety, Workplace Environment, Customer Service, etc. 5 5 4 3 3 Refers to training program but does not describe in detail nor provide training topics. 2.3 Sub-Total:20 6 General Recruitment Plan Provided: Score 10 10 8 6 10 Social Policy Recruitment Plan Provided: Score 10 10 8 6 6 Did not refer to specific hiring target % nor describe strategies in detail. Recruitment Plan Includes Demographic Data for District, City or County: Score 10 10 8 6 0 Did not refer to community data Recruitment Plan Includes List of CBOs, Non-Profits and Public-Agency Hiring Partners: Score 10 10 8 6 0 Did not name or describe hiring partners Recruitment Plan Includes Hiring Targets (percentages) by Demographic Groups: Score 10 10 8 6 0 Did not refer to specific hiring targets 2.4 Sub-Total:50 16 Owners Number of Owners:2 Number of Owners that live within the City of Fresno:0 Number of Owners that live in the County of Fresno:0 Number of Owners that Own a Business in the City of Fresno:0 51%+ ownership interest percent of the Owners live or own a business in the City: Score 80 80 0 51%+ ownership interest percent of the Owners live or own a business in the County: Score 40 40 0 Less than 50 percent of the Owners live or own a business in the Cityf no owners are local, score zero)20 20 0 Managers Number of Managers (salaried, non-owners)2 Number of Managers that live in the City of Fresno:2 Criteria Narrative: Criteria Narrative: Data, non-scored. Write response in Evaluation Notes column. Data, non-scored. Write response in Evaluation Notes column IF full points achieved for Ownership category, don't score managers. Section is total of 80 points possible. 2.3 Describe compensation to and opportunities for continuing education and employee training.(20 points possible) 2.4 Describe the Commercial Cannabis Business plan to recruit individuals who meet the criteria listed in the Social Policy Section 9-3316 (b) (1) of the Fresno Municipal Code (FMC) and the percentage of local employees it hires. (50 points possible) 2.5 Describe the extent to which the Commercial Cannabis Business will be a locally managed enterprise whose owners and /or managers reside within or own a commercial business within the City of Fresno, for at least one year prior to March 2, 2020.(80 points possible) Number of Managers that Own a Business in the City of Fresno:0 100 percent of the Managers live or own a business in the City: Score 20 20 20 75 to 99 percent of the Managers live or own a business in the City: Score 15 15 - 50 to 74 percent of the Managers live or own a business in the City: Score 10 10 - Less than 50 percent of the Managers live or own a business in the City: Score 5 5 - 2.5 Sub-Total:80 20 Responsibilities Described for All Titles/Positions: Score 20 20 15 10 15 Number of positions does not seem sufficient considering 5 POS locations with only 4 employees for daily 13-hour shifts. 2.6 Sub-Total:20 15 Does CCB have more than five employees: 5 5 0 States company will have 4 employees, does not seems sufficient given other details of Business Plan. See comment on 2.6 above. CCB has signed a peace agreement: Score 5 5 5 Will sign at 5th hire 2.7 Sub-Total:10 5 Work Force Plan Provided: Score 10 10 8 6 10 Commitment to Local Hire Provided:10 10 8 6 10 100% local hire committment Commitment to Offer Apprenticeships Provided:10 10 8 6 6 Committed to offer but did not describe the program Commitment paying for continuing education provided 10 10 8 6 6 Unclear benefit - describe 2 week tuition reimbursement for community and local college. Description of commitment to paying a living wage provide. (Score same as sec. 2.1)10 10 8 6 8 Inconsistency - offer hour but for Assistant Manager 2.8 Sub-Total:50 40 CCB is willing to serve as Social Equity Business Incubator: Score 100 100 80 60 60 Commits to services but lacks detail. Mentorship seems to only apply to medicinal cannabis businesses. Mentorship and Training: Score yes Criteria Narrative: 2.9 Describe whether the business is willing to serve as a Social Equity Business Incubator by offering support to local cannabis social equity businesses in the form of mentorship, training, equipment donation, a percentage of shelf space dedicated to Fresno equity business products, legal assistance, financial services assistance, or other technical assistance support.(100 points possible) Criteria Narrative: column. 2.8.3. Commitment to pay a living wage to its employees 2.6 Describe the number of employees, title/position and their respected responsibilities.(20 points possible) 2.7 Describe whether the CCB has five (5) or more employees and whether it has signed a labor peace agreement allowing employees to unionize without interference. (10 points possible) 2.8 Provide a workforce plan that includes at a minimum the following provisions: (50 points possible) 2.8.1. Commitment for 30% of employees to be local hires; the business must show that it has either hired or made a good faith effort to hire bona fide residents of Fresno who have not established residency after the submission of an application for employment with the applicant/permittee. 2.8.2. Commitment to offer apprenticeships and/or compensation for continuing education in the field; and Criteria Narrative: Criteria Narrative: Equipment Donation: Score yes Shelf Space: Score Legal Assistance: Score yes Finance Services Assistance: Score yes Other Technical Assistance: Score Scoring Guidance: full points for willingness to serve with detailed plan offering at least three aspects mentioned above or of similar benefit. Less points for willingness to serve but vague or unclear commitment. Zero points if there is no clear commitment to serve as Incubator. 2.9 Sub-Total:100 60 Section 2 Total:400 208 SECTION 3: NEIGHBORHOOD COMPATIBILITY PLAN 300 Points Possible for Section 3 CCB will document complaints (time of complaint, nature of complaint, resolution of complaint): Score 10 10 8 6 0 Info not provided CCB will established a dedicated contact person to receive complaints: Score 10 10 0 Info not provided CCB will establish a dedicated phone number to receive complaints: Score 5 5 0 Info not provided CCB will establish a dedicated email address to receive complaints: Score 5 5 0 Info not provided CCB will establish a response time standard for returning complaint calls and emails: Score 5 5 0 Info not provided CCB will schedule or participate in periodic community meetings to engage with residents about the CCB operation: Score 10 10 0 Info not provided Other measure unique to business (i.e. website complaint form)5 5 0 Info not provided Scoring Guidance: full points for detailed proactive plan addressing all aspects mentioned. Dock points for leaving out aspect, vagueness, or reactive plans. 3.1 Sub-Total:50 0 CCB will maintain a listserv of community residents to update and information residents of business operations. 10 10 0 Info not provided CCB will schedule or attend periodic community meetings (at least annually) to engage with residents about the CCB operation: Score 10 10 0 Info not provided CCB will prepare a community outreach and engagement plan: Score 50 50 40 30 0 Info not provided CCB will issue periodic Newsletters to community providing information about CCB operations 10 10 0 Info not provided CCB will hire residents from the community work at the CCB: Score 20 20 0 Info not provided Scoring Guidance: full points for detailed proactive plan. Dock points for leaving out aspect, vagueness, or reactive plans. 3.2 Sub-Total:100 0 Criteria Narrative: Criteria Narrative: Criteria Narrative: 3.1 Describe how the CCB will proactively address and respond to complaints related to noise, light, odor, litter, vehicles, and pedestrian traffic.(50 points possible) 3.2 Describe how the CCB will be managed to avoid becoming a nuisance or having impacts on its neighbors and the surrounding community.(100 points possible) 3.3 Describe odor mitigation practices.(40 points possible) Data to inform score on first line of this section. Write response in Evaluation Notes column. CCB has identified sensitive receptors to nuisance odors in vicinity of business operations: Score 5 5 0 Info not provided CCB has prepared a nuisance odor control plan: Score 10 10 8 6 10 Nuisance odor control plan identifies locations where fugitive emissions may exit the premise boundary: Score 5 5 0 Info not provided Nuisance odor control plan describes specific odor control measures to reduce fugitive emissions exiting the premise boundary: Score 5 5 5 CCB has established an odor reporting system: Score 5 5 0 Info not provided CCB will install a nuisance odor monitoring system: Score 10 10 0 Info not provided 3.3 Sub-Total:40 15 CCB has identified the potential sources of nuisance odors for the business operation: Score 10 10 8 6 8 Needs more detail Scoring Guidance: full points for detailed proactive plan. Dock points for vagueness or reactive plans. 3.4 Sub-Total:10 8 Nuisance odor control plan describes specific odor control equipment: Score 10 10 8 6 10 Nuisance odor control plan describes specific odor control measures/techniques: Score 10 10 8 6 10 Odor control measures are identified for different nuisance odor sources: Score 10 10 10 3.5 Sub-Total:30 30 Nuisance odor control plan describes the operation, monitoring, and maintenance requirements for odor control measures: Score 10 10 0 Info not provided Nuisance odor control plan describes the staff training required for system operations, maintenance, repair, and troubleshooting.10 10 0 Needs more specificity 3.6 Sub-Total:20 0 CCB has identified the sources of waste generated by the business operation: Score 10 10 0 Info not provided CCB has prepared a source-separation plan to segregate different sources of waste generated by business operations: Score 10 10 10 The source-separation plan identifies policy, procedures, and locations where different sources of waste are to be collected for disposal: Score 10 10 8 6 6 Needs more detail The source-separation plan describes specific measures to control the collection and disposal cannabis waste: Score 10 10 10 The name of licensed cannabis disposal company provided: Score 10 10 10 3.7 Sub-Total:50 36 Criteria Narrative: 3.7 Describe the waste management plan. (50 points possible) Criteria Narrative: 3.4 Identify potential sources of odor. (10 points possible) 3.5 Describe odor control devices and techniques employed to ensure that odors from cannabis are not detectable beyond the permitted premises. (30 points possible) 3.6 Describe all proposed staff odor training and system maintenance.(20 points possible) Criteria Narrative: Criteria Narrative: Section 3 Total:300 89 SECTION 4: SAFETY PLAN 300 Points Possible for Section 4 Safety Plan Prepared by Consultant: Score 10 10 10 Safey Plan Assessed by Consultant: Score (if prepared by, also give points for assessed by)10 10 10 Safety Plan Prepared for CCB Address (specific proposed location): Score 10 10 0 not specific Safety Plan includes Site Plan of Premise: Score 10 10 10 Safety Plan includes Building Layout Plan: Score 10 10 10 4.1 Sub-Total:50 40 Written Accident/Incident Procedure Provided: Score 20 20 15 10 20 Procedures Address Multiple Accident/Incident Scenarios: Score 10 10 8 6 0 no multiple Total Number of Scenarios Described: Score 0 Active Shooter Incident Described: Score 10 10 0 not addressed Robbery Incident Described: Score 10 10 0 not addressed 4.2 Sub-Total:50 20 Evacuation Plan Provided: Score 20 20 15 10 20 Adequate Number of Evacuation Routes Identified: Score 20 20 15 10 20 Evacuation Route Distance to Public Right of Way: Score 10 10 8 6 10 4.3 Sub-Total:50 50 Location of Fire Suppression System Elements Identified: Score 10 10 0 not identified Type of Fire Suppression System Elements Identified: Score 20 20 15 10 10 none, but said so Location of Fire Extinguishers Identified: Score 10 10 10 Adequate Number of Fire Extinguisher Locations Identified: Score 10 10 8 6 10 4.4 Sub-Total:50 30 Written Procedure for Fire Emergencies Provided: Score 20 20 15 10 10 vague Written Procedure for Medical Emergencies Provided: Score 20 20 15 10 10 vague Cardiac Arrest Medical Emergency Described: Score 20 20 15 10 0 not mentioned Gunshot Wound Medical Emergency Described: Score 20 20 15 10 0 not mentioned Other Medical Emergency Conditions Described: Score 20 20 15 10 0 not mentioned 4.5 Sub-Total:100 20 4.3 Describe evacuation routes. (50 points possible) 4.2 Describe accident and incident reporting procedures. (50 points possible) Criteria Narrative: 4.5 Describe procedures and training for all fire and medical emergencies.(100 points possible) 4.1 The Safety Plan shall be prepared and/or assessed by a professional fire prevention and suppression consultant. (50 points possible) Criteria Narrative: Criteria Narrative: 4.4 Location of fire extinguishers and other fire suppression equipment. (50 points possible) Criteria Narrative: Criteria Narrative: Data-write response in Evaluation Notes Column Section 4 Total:300 160 SECTION 5: SECURITY PLAN 300 Points Possible for Section 5 Security Plan Prepared by Consultant: Score 10 10 10 Security Plan Assessed by Consultant(if prepared by, also give points for assessed by): Score 10 10 10 Security Plan Prepared for CCB Address (specific proposed location): Score 10 10 10 Security Plan includes Site Plan of Premise: Score 10 10 10 Security Plan includes Building Layout Plan: Score 10 10 10 5.1 Sub-Total:50 50 Premises (Security) Diagram Provided: Score 20 20 15 10 20 Diagram is drawn to correct scale: Score 5 5 5 Diagram provides required details for premise: Score 5 5 5 Diagram shows the location of all security cameras: Score 5 5 5 Descriptions of activities to be conducted in each area of the premise 5 5 5 Limited-Access Areas Clearly Marked: Score 5 5 5 Number and Location of All Security Cameras Identified: Score 5 5 5 5.2 Sub-Total:50 50 Intrusion Alarm and Monitoring System Identified: Score 15 15 15 Name and Contact Information for Monitoring Company Provided: Score 5 5 5 Total Points of Entry into Premise Identified: Score 5 5 5 All Points of Entry to be Alarmed Identified:5 5 5 Type of Alarm Identified (motion, infrared, glass break, etc.): Score 10 10 10 Backup Power Supply Identified: Score 10 10 10 5.3 Sub-Total:50 50 5.2.3 Description of cannabis activity that will be conducted in each area of the premise. Commercial cannabis activities that must be identified on the diagram/site plan may include but are not limited to the following if applicable to the business operations; storage areas, batch sampling areas, loading/unloading of shipment areas, packaging and labeling, customer sales areas, training areas, employee break room areas, extractions, infusions, processing, and testing areas. 5.1 The Security Plan shall be prepared and/or assessed by a professional security consultant.(50 points possible) 5.2.4 Limited-access areas, defined as areas in which cannabis goods are stored or held and only accessible to permittees, or its employees or contractors and areas used for video surveillance monitoring and storage devices (Pursuant to CCR Title 16, Division 42, §5000 (m) Limited-Access Area and §5042 Limited-Access Area. 5.2.5 Number and location of all video surveillance cameras. (50 points possible) 5.3 Identify intrusion alarm and monitoring system including the name and contact information for the monitoring company (if the company has been selected).(50 points possible) Criteria Narrative: Criteria Narrative: 5.2 Premises (Security) Diagram. In addition to diagrams submitted for other sections of the application, applicants are expected to submit a premises diagram (or site plan) which, focuses on the proposed security measures and how they relate to the overall business. (Pursuant to CCR Title 16, Division 42, §5006. Premises Diagram). 5.2.1 The diagram shall be accurate, dimensioned and to scale (minimum scale ¼"). The scale may be smaller if the proposed location exceeds more than a 1/2-acre parcel but must not be printed on larger than an 11" x 17" sheet of paper. (Blueprints and engineering site plans are not required at this point of the application process) 5.2.2 The diagram must be drawn to scale and clearly identify property boundaries, entrances, exits, interior partitions, walls, rooms, windows, and doorways. The activity in each room and the location of all cameras must be identified in the diagram. Criteria Narrative: Criteria Narrative: Written Cash-Handling Procedure Provided: Score 30 30 20 15 30 Dual-Custody is Practiced for all cash handling: Score 10 10 10 Video Surveillance Used to Monitor All Cash Handling: Score 20 20 20 Armored Car Service Used for Bank Deposits: Score 10 10 10 All Cash Deposited weekly with Bank: Score 10 10 10 Onsite Vault Provided to Secure Cash Prior to Bank Deposit: Score 20 20 20 5.4 Sub-Total:100 100 CCB will use onsite security guards: Score 10 10 10 All onsite guards will be licensed and bonded: Score 10 10 0 No mention of being bonded All onsite security guards will be licensed to carry firearms: Score 10 10 0 No mention of firearms Onsite security guards will be on duty before CCB opens for business: Score 10 10 0 no mention Onsite security guards will be on duty after CCB closes for business: Score 10 10 0 no mention 5.5 Sub-Total:50 10 Section 5 Total:300 260 Section 1: Business Plan Total Points:300 234 Section 2: Social Policy & Local Enterprise Total Points:400 208 Section 3: Neighborhood Compatibility Total Points:300 89 Section 4: Safety Plan Total Points:300 160 Section 5: Security Plan Total Points:300 260 Total Points Achieved:1600 951 59.44% TOTAL SCORE 5.4 Briefly describe cash handling procedures which covers day to day transactions with customers, vendors armor carrier vehicles and transporting it to the bank.(100 points possible) 5.5 Discuss whether the CCB will utilize the services of on-site security guards. Include in the discussion: (50 points possible) 5.5.1 Number of guards. 5.5.2 Hours guards will be on-site. Criteria Narrative: Criteria Narrative: 5.5.3 Locations at which they will be positioned. 5.5.4 Guards' roles and responsibilities. SAFETY PLAN PREPARED FOR ALLUVIAL AVENUE RETAIL PREPARED BY POOMI ENGINEERS DISCLAIMER This report is property of Alluvial Avenue Retail and was prepared exclusively for use by Alluvial Avenue Retail for the storage & occupancy conditions described in this report. Alluvial Avenue Retail facility conditions and storage operations addressed herein are based on information provided by Alluvial Avenue Retail. Any discrepancies between the information presented in this report and actual are the responsibility of Alluvial Avenue Retail. Compliance with the code requirements and provisions addressed herein is outside the scope of this report and is the responsibility of Alluvial Avenue Retail. This Safety Plan shall not be used for the purpose of construction. SAFETY PLAN Rev: New 11/26/2020 2 Table of Contents 1 PURPOSE ....................................................................................................................................... 3 2 REFERENCES ................................................................................................................................ 3 3 PROCEDURES & TRAINING FOR REPORTING ACCIDENT AND INCIDENTS, INCLUDING MEDICAL AND REPORTING FIRE EMERGENCIES .......................................................................... 3 3.1 FIRE EMERGENCIES PROCEDURES................................................................................... 4 3.2 MEDICAL EMERGENCIES PROCEDURES ......................................................................... 4 3.3 TRAINING .............................................................................................................................. 4 4 EVACUATION ROUTES ............................................................................................................... 5 4.1 FLOOR PLAN: IN ATTACHMENTS ..................................................................................... 5 4.2 SITE MAP: IN ATTACHMENTS............................................................................................ 5 4.3 OCCUPANT LOAD CALCULATIONS .................................................................................. 5 4.4 EGRESS ANALYSIS .............................................................................................................. 5 5 FIRE EXTINGUISHERS AND FIRE SUPRESSION EQUIPMENT ............................................... 6 5.1 FIRE EXTINGUISHER LOCATIONS: SEE SITE PLAN ATTACHMENT ............................ 6 5.2 SUPRESSION EQUIPMENT .................................................................................................. 6 6 HAZARD CONSIDERATIONS FOR FIRE, MEDICAL, AND HAZARDOUS SITUATIONS ....... 6 7 RESPONSIBLE PERSONNEL ........................................................................................................ 7 8 CONFIRMATION ........................................................................................................................... 8 9 ATTACHMENTS ........................................................................................................................... 9 SAFETY PLAN Rev: New 11/26/2020 3 Safety Plan 1 PURPOSE The purpose of this plan is to have a standard procedure for reporting a fire or other emergency and identifying and mitigating potential fire hazards. 2 REFERENCES • Application Procedures & Guidelines for a Commercial Cannabis Business Permit [October 19,2020] Section 4 • City of Fresno Municipal Code Amendments to the California Fire Code • 2019 California Fire Code 3 PROCEDURES & TRAINING FOR REPORTING ACCIDENT AND INCIDENTS, INCLUDING MEDICAL AND REPORTING FIRE EMERGENCIES Fires and other emergencies will be reported according to the California Fire Code (CFC) §401.3.1 (all references to CFC in this Safety Plan are to the 2019 edition) by immediately reporting such condition to the fire department. Whenever there is an imminent or actual emergency such as an explosion, fire, medical aid, or release, the manager on duty will contact the Fire Department. Staff have been instructed to contact the City of Fresno Fire Department for general information and non-emergencies at (559) 621-4199. The closest fire station to the facility is Fresno Fire Station 13 located at 815 E. Nees St., Fresno, CA. The closest emergency room to the facility is Kaiser Permanente Fresno Medical Center located at 7300 N Fresno St., Fresno, CA 93720 and can be reached at (559) 448-4500. The life safety strategy includes the following: • Procedures for notifying occupants: Occupants within the building will be verbally notified or to evacuate the premise in the event of an emergency. Staff members and security will evacuate customers out of the building and towards the closest building exit in an orderly manner. • Procedures for occupants under a defend-in-place response have been deemed not applicable; occupants within the building are ambulatory staff, and customers. • Procedures for evacuating occupants, including those who need evacuation assistance have been deemed not applicable. All staff have been trained to exit the building through the nearest exits and meet at the assembly points as shown on the site map. If assistance is required by a customer(s), on site security personnel will assist and aid in evacuating occupants. SAFETY PLAN Rev: New 11/26/2020 4 3.1 FIRE EMERGENCIES PROCEDURES • Get help through vocal and/or phone to notify Manager on duty • If fire incipient, safely extinguish with nearby fire extinguisher. Avoid fighting even a small fire alone, if possible. • Quickly proceed to the safest exit, shouting to evacuate, visually sweeping for downed personnel, and go to muster point (see site map and floor maps in Section 8 Attachments) to report to Manager on duty • Employees shall remain at the muster point to be accounted for and wait for further instruction from Manager on duty • Manager on duty call 911 (within 5 minutes, no matter how small the fire), secure facility, ensure all employees accounted for, and report any missing employee counts to emergency services. Manager shall provide 911 with the following information: o Address of the facility: 49-51 W. Alluvial Avenue o Cross streets: W. Alluvial Avenue and N. Sugar Pine Avenue o Nature of the emergency (e.g. medical, fire, etc.) o Designate an individual to meet the Fire Department outside and direct them to the location of emergency. • Security shall evacuate customers out through the main customer exit. Security shall ensure that the number of customers entered the building have also exited the building. Report any missing customer counts to emergency services. 3.2 MEDICAL EMERGENCIES PROCEDURES • Employees trained in First Aid, Cardiopulmonary Resuscitation (CPR), and automated external defibrillator (AED) are responsible for responding to and providing initial care of an illness or injury until emergency services arrives. • General response o Request help, and notify Manager on duty o Administer First Aid/CPR, if trained and needed, until emergency personnel take over • Manager shall call 911 and provide the following information: o Address of the facility: 49-51 W. Alluvial Avenue o Cross streets: W. Alluvial Avenue and N. Sugar Pine Avenue o Nature of the emergency (e.g. medical, fire, etc.) o Designate an individual to meet the Fire Department outside and direct them to the location of emergency. 3.3 TRAINING • Before implementing the Safety Plan, the facility shall designate and train sufficient number of employees to assist in the safe and orderly emergency evacuation of employees initially when plan is developed, whenever employee’s responsibilities or designated actions under the plan change, and whenever the plan is changed. SAFETY PLAN Rev: New 11/26/2020 5 4 EVACUATION ROUTES 4.1 FLOOR PLAN: IN ATTACHMENTS The floor plan is in Figure 1.0 with the following information: • Exits • Primary evacuation routes • Secondary evacuation routes (N/A) • Accessible egress routes (N/A) • Areas of refuge (N/A) • Exterior areas for assisted rescue (N/A) • Refuge areas associated with smoke barriers and horizontal exits (N/A) • Manual fire alarm boxes (N/A) • Portable fire extinguishers • Occupant-use hose stations (N/A) • Fire alarm annunciators and controls (N/A) 4.2 SITE MAP: IN ATTACHMENTS The site plan is in Figure 2.0 with the following information: • The occupancy assembly point • The location of fire hydrants • The normal routes of fire department vehicle access 4.3 OCCUPANT LOAD CALCULATIONS Table 1.0 – 24 Persons Occupant Load Calculation Area (SQFT) Occupant Load Factor Occupant Load Storage 275 300 1 Break Room 121 150 1 Retail 1,060 150 7 Lobby 765 150 5 Total 14 4.4 EGRESS ANALYSIS • Construction Type: V-II • Occupancy: B • Fire Area: 2,556 ft2 • Sprinklered: Sprinklered • Required Width of Egress Components Other Than Stairs: 2.8”, Minimum widths shall be used: o Minimum Width of Corridors: 36” [CFC Table 1020.2] o Minimum Width of Doors: 32” [CFC §1010.1.1] • Travel Distances: o Exit Access Travel Distance: 300’ [CFC Table 1017.2] • Required Number of Exits: 1 [CFC Table 1006.2.1] • Maximum Common Path of Egress Travel: 100’ [CFC Table 1006.2.1] SAFETY PLAN Rev: New 11/26/2020 6 5 FIRE EXTINGUISHERS AND FIRE SUPRESSION EQUIPMENT 5.1 FIRE EXTINGUISHER LOCATIONS: SEE SITE PLAN ATTACHMENT 5.2 SUPRESSION EQUIPMENT • Sprinklers: Not required. Sprinklered. • Portable Fire Extinguishers: Required o Type: 2A, 10-B or 20-B o Maximum Travel to an Extinguisher: 50’ • Fire Alarm: Not required per CFC §907.2.2 • Smoke Control: Not required per CFC §909.1 and CBC §403.5.4, 405.7.2, and 412.2.2.1. • Smoke and Heat Removal: Not required • Explosion Control: Not required • Carbon Monoxide Detection: Not required per CFC §915.1.1 • Gas Detection: Not required per CFC §916.1.1 6 HAZARD CONSIDERATIONS FOR FIRE, MEDICAL, AND HAZARDOUS SITUATIONS A list of major fire hazards associated with the normal use and occupancy of the premises, including maintenance and housekeeping procedures, have been identified by areas below: • Limited Access Corridor: The limited access corridor is the main corridor used for staff to evacuate the building. No major fire, medical, or hazardous situations are expected during normal operations. Maintenance and housekeeping practices are as follows: o Storage of combustible materials shall be prohibited in the access corridor. Area shall be kept free and clear to maintain a minimum of 36” of clear space for egress. o Storage are separated from ignition sources to prevent fires. o Storage on shelves maintain a 18” clearance from the ceiling. o Maintain clear access around fire extinguishers. • Security and Break Rooms: No major fire, medical, or hazardous situations are expected during normal operations. The office areas have electronics (e.g. Computers, monitors, laptops, etc.) and shall be plugged directly into a dedicated electrical receptacle. Extension cords and multi taps shall be prohibited. • Storage: The packaging and labeling areas will be used to store cannabis products and currency. No major fire, medical, or hazardous situations are expected during normal operations. Maintenance and housekeeping practices are as follows: o Storage of combustible materials shall be prohibited in the access corridor. Area shall be kept free and clear to maintain a minimum of 36” of clear space for egress. o Storage are separated from ignition sources to prevent fires. o Storage on shelves maintain a 18” clearance from the ceiling. o Maintain clear access around fire extinguishers. • Retail: The retail area will be used to display and conduct transaction of cannabis. No major fire, medical, or hazardous situations are expected during normal operations. SAFETY PLAN Rev: New 11/26/2020 7 7 RESPONSIBLE PERSONNEL The following personnel in Table 2.0 are responsible for maintenance of systems and equipment to prevent and control fires. Fire control equipment includes automatic fire sprinklers and portable fire extinguishers. Table 2.0 Responsible Personnel - Maintenance of Fire Sprinklers and Fire Extinguishers Responsibility Contact Name Phone (24 Hour Availability) Responsible Personnel, Primary Robert Calvert Responsible Personnel, Secondary Pia Lindstrom Fire Sprinkler,Extinguisher Contractor The following personnel in Table 3.0 are responsible for maintenance, housekeeping and controlling fuel hazard sources. Table 3.0 Responsible Personnel - Maintenance, Housekeeping, and Fuel Hazard Sources Responsibility Contact Name Phone (24 Hour Availability) Responsible Personnel, Primary Robert Calvert Responsible Personnel, Secondary Pia Lindstrom SAFETY PLAN Rev: New 11/26/2020 8 8 CONFIRMATION This plan was compiled by Poomi Engineers LLC. and its best interpretation and application of the 2019 Edition of the California Fire Code and City of Fresno Municipal Code, for the type of occupancy and use of this project. By signing below, Alluvial Avenue Retail agrees to meet the requirements outlined in this report and verifies the accuracy of the plan. X Management Signature Professional Engineer- Fire Protection X Management Print and Date X Print and Date Sa-ing Poomiwatracanont, 12/04/2020 SAFETY PLAN Rev: New 11/26/2020 9 9 ATTACHMENTS • Plans o Floor Plan o Site Plan • References Commercial Cannabis Business Application Procedure Guidelines 9 3.NEIGHBORHOOD COMPATIBILTY PLAN Criteria required in Phases II and III 3.1. Describe how the CCB will proactively address and respond to complaints related to noise, light, odor, litter, vehicles, and pedestrian traffic. 3.2. Describe how the CCB will be managed to avoid becoming a nuisance or having impacts on its neighbors and the surrounding community. 3.3. Describe odor mitigation practices. 3.4. Identify potential sources of odor. 3.5. Describe odor control devices and techniques employed to ensure that odors from cannabis are not detectable beyond the permitted premises. 3.6. Describe all proposed staff odor training and system maintenance. 3.7. Describe the waste management plan. 4.SAFETY PLAN Criteria required in Phases II and III The Safety Plan should consider all possible fire, medical and hazardous situations. Complete policy/procedures manuals are not required at this point in the application process. Please only provide a description for each criterion which incorporates the following provisions: 4.1. The Safety Plan shall be prepared and/or assessed by a professional fire prevention and suppression consultant. 4.2. Describe accident and incident reporting procedures. 4.3. Describe evacuation routes. 4.4. Location of fire extinguishers and other fire suppression equipment. 4.5. Describe procedures and training for all fire and medical emergencies. 5.SECURITY PLAN** 1 ALLUVIAL MANAGEMENT CO. LLC OPERATING AGREEMENT This Operating Agreement (the “Agreement”) is made and entered into and effective as of the 1st day of December, 2020, by and between the parties listed as Members on Exhibit A attached, who agree to the following provisions regarding the operations of ALLUVIAL MANAGEMENT CO. LLC. (the “LLC”), pursuant to the provisions of the California Limited Liability Company Act (the “Act”) § 17701.01-17701.17. The parties listed on Exhibit A are referred to each individually as a “Member” and collectively as the “Members.” ARTICLE 1 NAME, PURPOSE, PLACE OF BUSINESS AND FISCAL YEAR 1.1 LLC Name. The name of the LLC is ALLUVIAL MANAGEMENT CO. LLC . The business of the LLC shall be conducted under the LLC name or any “doing business as” name as is registered with the County of Fresno. 1.2 LLC Purpose. The purpose of the LLC shall be any business that may lawfully be conducted by a limited liability company formed under the Act. 1.3 Principal Place of Business. The street address of principal place of business of the LLC shall be 3399 Main St., Mammoth Lakes, CA 93546, or such other place as the Managers may from time to time designate. 1.4 Fiscal Year. The LLC’s fiscal year shall be the calendar year. 1.5 Registered Agent and Office. The name of the Registered Agent for service of process of the LLC is Paul Rudder, and the address of such registered agent is 3399 Main St, Suite L-1, Mammoth Lakes, CA 93546. The Managers of the LLC may, from time to time, designate another agent or office. ARTICLE 2 NAMES, ADMISSION AND TRANSFER OF MEMBERS 2.1 Members’ Names and Addresses. The name and address of each Member, the amount and nature of such Member’s Capital Contribution, and the number of such Member’s Membership Units is set forth on Exhibit A to this Agreement. The Members shall cause Exhibit A to be amended from time to time to reflect any change in the Members of the LLC (including any change in the Capital Contribution or Membership Units of any Member) made in accordance with the terms of this Agreement, or the receipt by the LLC of notice of the change of address of a Member. Each amended Exhibit A shall supersede all prior Exhibit As and become part of this Agreement and shall be kept on file at the office of the LLC. 2.2 Admission of New Members. Additional persons may be admitted to the LLC as Members only with the prior written consent of the existing Members holding 51 percent of the LLC voting rights, subject to the terms of Article 11, hereof. 2 2.3 Transfer. Except as provided in Article 11 below, no interest of a Member in the LLC may be transferred, in whole or in part, without prior written consent of Members holding at least fifty one percent (51%) of the LLC voting rights. ARTICLE 3 MEMBERS 3.1 Place of Meetings. All meetings of the Members of the LLC shall be held at the principal office of the LLC or at such other place as may be designated in the notice of meeting. 3.2 Annual Meeting. An annual meeting of the Members shall not be required, but if desired by a majority of the Members, shall be held pursuant to the Act and shall be scheduled at a time and place at the discretion of the Managers. 3.3 Special Meetings. Special meetings of Members may be called by any Manager or any Member(s) holding 20% or more of the LLC voting rights, as determined under Section 3.7(a). 3.4 Notice of Meetings. (a) Written notice stating the place, day and hour of the meeting of Members and the purpose or purposes for which the meeting is called shall, unless otherwise prescribed by statute, be delivered not less than ten (10) days before the date of the meeting, either personally, by mail, by email, or by facsimile, by or at the direction of any Manager, or the other persons calling the meeting, to each Member entitled to vote at such meeting. (b) No notice of a meeting need be given to any Member who shall in writing waive such notice, whether before, at, or after the stated time of any such meeting; and the attendance of a Member or its signing of the minutes, if any, of any meeting shall be deemed a waiver of, and equivalent to, formal notice of such meeting. (c) Any written notice required to be given by statute, the Articles of Organization, or this Operating Agreement, if mailed, shall be deemed given when deposited in the United States mail, with postage prepaid, addressed to the Member at its address. However, if three (3) successive letters mailed to the last-known address of any Member are returned as undeliverable, no further notices to such Member shall be required, until another address for such Member is made known to the LLC. 3.5 Quorum. A quorum, for purposes of a meeting of Members, will consist of the presence (in person or by proxy) of Members holding at least fifty-one percent (51%) of the LLC voting rights, as determined under Section 3.7, unless otherwise provided by law or the Articles of Organization. If a quorum is not represented at any meeting of the Members, such meeting may be adjourned for a period not to exceed sixty (60) days after any one adjournment. 3.6 Voting Requirements. If a quorum is present, the vote of Members holding at least fifty one percent (51%) of the LLC voting rights shall be the act of the Members, unless the vote of a greater proportion or number or voting by classes is otherwise required by statute or by the Articles of Organization or this Operating Agreement. 3.7 Voting Rights. Each Member shall be entitled to vote shall be entitled to a number of votes equal to the following percentages: Robert Calvert - fifty percent (50%), Paul Rudder – fifty percent (50%) upon each matter submitted to a vote at a meeting of Members. Only Members as listed on the then-current Exhibit A shall be entitled to be treated by the LLC as Members in fact of the LLC, and the LLC shall not be bound to recognize any equitable or 3 other claim to or interest in the LLC on the part of any other person, firm, corporation or other entity, whether or not the LLC shall have express or other notice thereof, except as expressly provided by the laws of the State of California. 3.7 Voting Rights. Unless otherwise provided by this Operating Agreement or the Articles of Organization, each Member entitled to vote shall be entitled to a number of votes equal to the number of Membership Units then held by such Member, upon each matter submitted to a vote at a meeting of Members. Only Members as listed on the then-current Exhibit A shall be entitled to be treated by the LLC as Members in fact of the LLC, and the LLC shall not be bound to recognize any equitable or other claim to or interest in the LLC on the part of any other person, firm, corporation or other entity, whether or not the LLC shall have express or other notice thereof, except as expressly provided by the laws of the State of California. 3.8 Proxies. Unless otherwise provided by resolution, a Member may vote either in person or by proxy executed in writing by the Member, or by its duly authorized attorney in fact. 3.9 Action by Members Without a Meeting. All day-to-day activities necessary to run the LLC shall be taken by the Managers without the need to hold any meeting of the Members. 3.10 Action by Electronic Means. The Members may participate in any meeting of the Members by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other at the same time. Notice of any such meeting to be conducted by conference telephone or similar equipment shall be given to a Member in person or by telephone at least one (1) day prior to the time fixed for such meeting. Such participation shall constitute presence in person at such meeting. 3.11 Indemnification. The LLC shall indemnify and hold harmless every Member for payments made and personal liabilities reasonably incurred in the ordinary and proper conduct of the LLC’s business, or in the preservation of the LLC’s business or property; provided, however, that this indemnity shall not extend to conduct not undertaken in good faith to promote the best interest of the LLC, nor to any reckless or willful misconduct; and, provided further, that this indemnification shall be limited to the total assets of the LLC (including unpaid Capital Contributions of the Members). 3.12 Contracts with Members. No Member of the LLC (nor any other corporation, firm, association or other entity in which one or more of the LLC’s members are members or have a material financial interest), shall be interested, directly or indirectly, in any contract or transaction with this company, unless: (a) the material facts regarding that Member’s financial interest in such contract or transaction or regarding such common directorship, officership or financial interest are fully disclosed in good faith and noted in the minutes, or are known to all Members prior to the Member’s consideration of such contract or transaction; (b) such contract or transaction is authorized in good faith by a majority of the Members by a vote sufficient for that purpose without counting the votes of the interested directors; (c) before authorizing or approving the transaction, the Members consider and in good faith decides after reasonable investigation that the LLC could not obtain a more advantageous arrangement with reasonable effort under the circumstances; and (d) the LLC for its own benefit enters into the transaction, which is fair and reasonable to the LLC at the time the transaction is entered into. The members acknowledge that the LLC will rent retail commercial space from Mammoth Outlets, LLC, a majority of which is owned by one of the members of this LLC. 4 ARTICLE 4 MANAGERS 4.1 Powers. The property and business of the LLC shall be managed by the Managers, who may be either natural persons or other legal entities. If the Managers are natural persons, they shall be twenty-one (21) years of age or older, but need not be Members of the LLC nor residents of the State of California. The Managers may exercise all such powers and do all such lawful acts and things as are not prohibited by the Act or by statute, or by the Articles of Organization, or by this Operating Agreement. 4.2 Day-to-Day Management. Subject to the limitations and restrictions set forth in this Agreement, and provided that such exercise is reasonable, Managers, and each of them, may exercise the following specific rights and powers without any further consent of the Members, provided that each individual exercise of such rights does not exceed ) or for purchase of inventory, in any one transaction or has the consent of the other Manager. (a) Acquire by purchase, lease, or otherwise any chattel property that may be necessary, convenient, or incidental to the accomplishment of the purposes of the LLC; (b) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with managing the affairs of the LLC; (c) Contract on behalf of the LLC for the employment and services of employees or independent contractors, including lawyers, accountants, and investment advisors, and delegate to such persons the duty to manage or supervise any of the assets or operations of the LLC; (d) Engage in any kind of activity and perform and carry out contracts of any kind necessary or incidental to, or in connection with, the accomplishment of the purposes of the LLC as may be lawfully carried on or performed under the laws of each state in which the LLC is then formed or qualified; (e) Take such other action and perform such other services as are necessary, customary, or appropriate for the operation of the LLC’s business; and 4.3 Decisions Requiring Unanimous Consent of all Members. The following decisions shall require unanimous approval of all the members and the Managers shall not have the authority to execute such decisions without formal approval of all the Members: Entering into any transaction in excess of for purchase of inventory; The purchase of any real property; and The sale of the business. 5 4.4 Number, Election, Tenure and Qualification. (a) The number of Managers authorized shall be fixed from time to time by resolution of the Managers. The Members agree that the Managers shall be comprised of two individuals who shall be Robert Calvert, and Paul Rudder. Robert Calvert titled to receive compensation in the form of a managerial salary as determined in a separate compensation agreement to be agreed upon by 100% of the Members. These Managers shall make decisions in their roles as Managers collectively based on the following voting rights: Robert Calvert - fifty percent (50%), Paul Rudder fifty percent (50%), and a majority vote based on these Managerial decision-making shares shall be required to take any action allowed by the Managers requiring a majority vote. The number of Managers may be increased or decreased at any time and from time to time by a unanimous vote of the Managers then in office. Managers shall serve until their successors have been duly elected and qualified or until their earlier death, resignation or removal. 4.5 Vacancies. Any vacancy occurring regarding the number of Managers (including a vacancy resulting from an enlargement of the Managers) may be filled by the vote of the majority of the remaining Managers, even though such remaining Managers constitute less than a quorum of the Managers. A Manager elected to fill a vacancy or to fill a position resulting from an increase in the number of Managers shall hold office until its successor is elected and qualified or until its earlier death, resignation or removal. 4.6 Resignation. Any Manager of the LLC may resign at any time by giving written notice to any other Manager or to the Members if there is no other Manager. The resignation of a Manager shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. If Robert Calvert were to resign, he will be required to forgo his managerial salary. 4.7 Removal. At a meeting called for the express purpose of removing a Manager and by the vote of Members holding at least 51 percent ( 51%) of the LLC voting rights, the Members may remove a Manager, with cause, meaning intentionally and knowingly engaging in any illegal action that could, in the opinion of an independent legal expert or regulator to be stipulated to by the parties, jeopardize the continued existence of the business or its state or local licensing. 4.8 Annual Meeting. Annual meetings of the Managers shall not be required, but if desired by the Manager(s), an annual meeting of the Managers shall be held in conjunction with the annual meeting of the Members, referenced in paragraph 3.2, hereof. Such meetings may be held within or outside of the State of California and may be held without previous notice if a Manager entitled to notice attends the meeting or upon execution of waiver of notice, in the minutes, if any, or otherwise, by Managers so waiving the notice. 4.9 Regular Meetings. The Managers may provide, by resolution, the time and place, either within or outside of the State of California, for the holding of additional regular meetings without other notice than such resolution. 4.10 Special Meetings. Special meetings of the Managers may be called at any time by any Manager upon three (3) day’s written notice, delivered by mail, email or facsimile. Such meetings may be held within or outside of the State of California and may be held without 6 previous notice if a Manager entitled to notice attends the meeting or upon execution of waiver of notice, in the minutes, if any, or otherwise, by Managers so waiving the notice, unless a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. 4.11 Action of Managers by Written Consent. Action required or permitted to be taken by the Managers or by a committee thereof at a meeting may be taken without a meeting if consent in writing, setting forth the action so taken, shall be signed by all of the Managers or all of the committee members entitled to vote with respect to the subject matter thereof. 4.12 Action by Electronic Means. The Managers may participate in any meeting of the Managers by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other at the same time. Notice of any such meeting to be conducted by conference telephone or similar equipment shall be given to a Manager in person or by telephone at least one (1) day prior to the time fixed for the meeting, provided that all Managers shall be in attendance. Such participation in the meeting shall constitute presence in person at the meeting. 4.13 Committees. The Managers may designate from among themselves, by resolution adopted by a majority of the Managers, an executive committee and one or more other committees each of which shall have and may exercise such authority in the management of the LLC as shall be provided in such resolution or in this Operating Agreement, subject to the limitations prescribed by the Act. 4.14 Non-Liability. Except as otherwise provided by the Act or other applicable law, no Manager shall be liable to any Member, or the LLC, or to third-parties for honest mistakes in judgment or for action or inaction, taken in good faith for a purpose that was reasonably believed to be in the best interests of the LLC, or for losses due to such mistakes, action or inaction, or due to the negligence, dishonesty or bad faith of any employee, broker or other agent of the LLC (other than the Manager), provided that such employee, broker or agent was selected, engaged or retained by the Manager and was supervised with reasonable care. 4.15 Indemnification. In the event of any loss, liability or claim against any Manager relating to the activities of the LLC, including any payments made or personal liabilities reasonably incurred by any Manager in the ordinary and proper conduct of the LLC business, or in the preservation of the LLC’s business or property, the LLC shall indemnify and hold harmless such Manager for any such loss, liability claim, or payment, including reasonable attorneys’ fees; provided, however, that this indemnity shall not extend to conduct not undertaken in good faith to promote the best interest of the LLC, nor to any recklessness or willful misconduct; and, provided further, that this indemnification shall be limited to the total assets of the LLC (including any unpaid Capital Contribution(s) of the Members). ARTICLE 5 CAPITAL CONTRIBUTIONS 5.1 Membership Units and Capital Accounts. The entire amount of Membership Units of the LLC shall be as set forth in Exhibit A. The Members, respectively, shall own Membership Units in Membership Unit Percentages as set forth in Exhibit A. An individual Capital Account shall be maintained for each Member. 7 5.2 Capital Contributions of the Members. Each Member shall contribute to the LLC capital as set forth opposite its name in Exhibit A hereto. The Members shall submit the matter to arbitration as required by section 12.7 below if they cannot agree on whether or not the LLC is profitable, or whether capital contributions are reasonable and necessary. 5.3 Additional Capital Contributions. No Member shall be required to contribute cash or capital to the LLC in excess of the amounts specified in paragraph 5.1, unless so authorized by the Members pursuant to the voting procedures and requirements set forth in Article 3. 5.4 Failure to Contribute. (a) If a Member does not timely contribute all or any portion of a Capital Contribution that such Member is required to make as provided in this Agreement, the LLC may exercise, on thirty (30) days’ written notice to such Member (the “Delinquent Member”), one or more of the following remedies: (i) Take such action (including, without limitation, court proceedings) as the Managers may deem appropriate to obtain payment by the Delinquent Member of the portion of the Delinquent Member’s Capital Contribution that is in default, together with interest on that amount at eighteen percent (18%) per annum or the maximum lawful rate, whichever is less (the “Default Interest Rate”), from the date that the Capital Contribution was due until the date that it is made, all at the cost and expense of the Delinquent Member; (ii) Request that the Members other than the Delinquent Member pay the unpaid amount of the Delinquent Member’s Capital Contribution (the “Unpaid Contribution”), either as an additional Capital Contribution or as a loan, or a combination thereof. To the extent the Unpaid Contribution is contributed as an additional Capital Contribution by any other Member, the Delinquent Member’s Membership Units and Membership Unit Percentages shall be reduced accordingly and the Membership Units and Membership Unit Percentages of each Member who makes up the Unpaid Contribution shall be increased accordingly, based upon the Value as determined under Section 11.9 herein. To the extent an Unpaid Contribution is loaned to the LLC, such loan or loans shall bear interest per annum at the rate of 5% plus the prime rate of interest as published in the Wall Street Journal as of the effective date of such note payable before any Distributions to Members are made. Payments on such loans shall be paid pari passu to the Members making the loans and shall be credited first to accrued interest, and the promissory note or other loan documentation evidencing the loan to the LLC shall contain such other terms and conditions as determined by the Managers in their reasonable discretion, including, but not limited to, a security interest in the Membership Interest of the defaulting Member; or (iii) Exercise any other rights and remedies available at law or in equity. (b) In addition, any other Member may “lend” the Delinquent Member the necessary funds to cover the capital call via the following process and with the approval of 8 Managers: (1) the Member wishing to lend the funds (the “Lending Member”) shall provide thirty (30) days’ notice to the Delinquent Member of Lending Member’s desire to cover the Delinquent Member’s portion of the capital call described herein; (2) Upon expiration of the thirty (30) days with Delinquent Member not curing such delinquency, Lending Member may deposit immediately available funds with the LLC on behalf of the Delinquent Member. Each Delinquent Member grants to the LLC, and to each Lending Member with respect to any loans made by the Lending Member to the Delinquent Member, as security, equally and ratably, for the payment of all Capital Contributions that Lending Member has agreed to make, and the payment of all loans and interest accrued on loans made by the Lending Member to Delinquent Member, a security interest in and a general lien on its Membership Interest in the LLC and the proceeds thereof, all under the Uniform Commercial Code of the State of California. (c) Each Member represents and warrants to the LLC and the other Members that such Member has good and marketable title to its interest in the LLC, and that such interest is free and clear of all liens, claims, and encumbrances whatsoever. On any default in the payment of an additional Capital Contribution or in the payment of such a loan or interest accrued thereon, the LLC or the Lending Member, as applicable, is entitled to all the rights and remedies of a secured party under the Uniform Commercial Code of the State of California with respect to the security interest granted in this Section. Each Member shall execute and deliver to the LLC and the other Members all financing statements and other instruments that the LLC or the Lending Member, as applicable, may request to effectuate and carry out the preceding provisions of this Section. At the option of the Managers or a Lending Member, this Agreement, or a photographic or other copy hereof, may serve as a security agreement, and Managers or a Lending Member shall be authorized to execute a separate financing statement on behalf of the Delinquent Member. ARTICLE 6 LLC ALLOCATIONS 6.1 Profits. Profits for any fiscal year shall be allocated to the Members based upon their respective Membership Units after giving effect to the special allocations set forth in Sections 6.4 and 6.5. 6.2 Losses. (a) After giving effect to the special allocations set forth in Sections 6.4 and 6.5 hereof, Losses for any fiscal year shall be allocated based on relative Membership Units, subject to the limitations in Section 6.2(b) below. (b) The Losses allocated pursuant to Section 6.2(a) hereof shall not exceed the maximum amount of Losses that can be so allocated without causing a Member to have an adjusted Capital Account deficit at the end of any fiscal year. In the event some but not all of the Members would have adjusted Capital Account deficits as a consequence of an allocation of Losses pursuant to Section 6.2(a) hereof, the limitation set forth in this Section 6.2(b) shall be applied on a Member by Member basis so as to allocate the maximum permissible Losses to each Member under Section 1.704-1(b)(2)(ii)(d) of the IRC Regulations. 9 6.3 Deficit Capital Account. If the Capital Account of a Member becomes impaired, his share of subsequent LLC profits shall be first credited to his Capital Account until that account has been restored. 6.4 Special Allocations. The following special allocations shall be made in the following order: (a) Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(f) of the IRC Regulations, notwithstanding any other provision of this Section 6, if there is a net decrease in LLC minimum gain during any fiscal year, each Member shall be specially allocated items of LLC income and gain for such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal to such Member’s share of the net decrease in LLC Minimum Gain, determined in accordance with IRC Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the IRC Regulations. This Section 6.4(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704- 2(f) of the IRC Regulations and shall be interpreted consistently therewith. (b) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704- 1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of the IRC Regulations, items of LLC income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the IRC Regulations, the adjusted Capital Account deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 6.4(b) shall be made if and only to the extent that such Member would have an adjusted Capital Account deficit after all other allocations provided for in this Article 6 have been tentatively made as if this Section 6.4(b) were not in the Agreement. (c) Gross Income Allocation. In the event any member has a deficit Capital Account at the end of any LLC fiscal year that is in excess of the sum of (i) the amount such Member is obligated to restore; (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Section 1.704-2(g)(1) and 1.704-2(i)(5) of the IRC Regulations; and (iii) the amount such Member would be deemed obligated to restore if Member loan non-recourse deductions were treated as non-recourse deductions, each such Member shall be specially allocated items of LLC income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 6.4(c) shall be made if and only to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article 6 have been tentatively made as if Section 6.4(b) hereof and this Section 6.4(c) were not in the Agreement. (d) Member Loan Non-Recourse Deductions. Any Member loan non- recourse deductions for any fiscal year or other period shall be allocated to the member who bears the risk of loss with respect to the loan to which such Member loan non-recourse deductions are attributable in accordance with Section 1.704-2(b)(1) of the IRC Regulations. (e) Section 754 Adjustment. To the extent an adjustment to the adjusted tax basis of any LLC asset pursuant to IRC Code Section 734(b) or IRC Code Section 743(b) is required, pursuant to Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the 10 adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the IRC Regulations. (f) Prior to any distributions being made to any member, documented formation and operational expenses advanced by a member shall be reimbursed by the LLC. The members acknowledge that there will be costs, including inventory, employee wages, rent, utilities, marketing, and other costs, not including infrastructure costs. Paul Rudder will contribute such “start-up” costs on an as-needed basis up to and including the first two months the business is open to the public, and will be re-imbursed subsequent to accounts payable and salary payments to Robert Calvert. In the event such sums are not reimbursable in the first year they are advanced, they will bear interest at the rate of 8% per annum after the expiration of twelve months since the inception of the business. Infrastructure costs shall be paid by Paul Rudder and shall not be reimbursed. Beginning on the second year of the business, Rudder will be reimbursed 8.5% of the total “start-up costs” advanced by Rudder, from the business each month until paid in full. 6.5 Curative Allocations. The allocations set forth in Sections 6.4(a), 6.4(b) and 6.4(c) hereof (the “Regulatory Allocations”) are intended to comply with certain requirements of the IRC Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of LLC income, gain, loss, or deduction pursuant to this Section 6.5. Therefore, notwithstanding any other provision of this Article 6 (other than the Regulatory Allocations), the LLC shall make such offsetting special allocations of LLC income, gain, loss, or deduction in whatever manner they determine appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of this Operating Agreement and all LLC items were allocated pursuant to Sections 6.1 and 6.2(a), hereof. 6.6 Other Allocation Rules. (a) For purposes of determining the profits, losses, or any other items allocable to any period, profits, losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Managers using any method permissible under IRC Code Section 706 and the Regulations thereunder. (b) Except as otherwise provided in this Operating Agreement, all items of LLC income, gain, loss, deduction, and any other allocations not otherwise provided for shall be divided among the Members in the same proportions as they share profits or losses, as the case may be, for the year. (c) The Members are aware of the income tax consequences of the allocations made by this Article 6 and hereby agree to be bound by the provisions of this Article 6 in reporting their shares of LLC income and loss for income tax purposes. 6.7 Section 704(c) Allocations. (a) In accordance with IRC Code Section 704(c) and the Regulations thereunder, income, gain, loss and deduction with respect to any asset contributed to the capital of the LLC shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the LLC for federal income tax purposes and its initial adjusted asset value. 11 (b) In the event the adjusted asset value of any LLC asset is adjusted pursuant to the terms of this Operating Agreement, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its adjusted asset value in the same manner as under IRC Code Section 704(c) and the Regulations thereunder. ARTICLE 7 EXPENSES All expenses incurred in connection with the formation, organization, and operation of the LLC shall be borne by the LLC (including, but not limited to, Managers’ fees, salaries, wages, and fees of lawyers, accountants and other professionals), and are subject to Section 6.4(f). ARTICLE 8 DISTRIBUTIONS TO AND WITHDRAWALS BY MEMBERS 8.1 Withdrawals by Members. Except as expressly provided herein, no Member may withdraw any amount from the LLC without the consent of the all Members. 8.2 Tax Distributions. After the end of each fiscal year, the LLC shall promptly (and in no event later than ninety (90) days after the end of each fiscal year) pay each Member be paid an amount in cash equal to the effective combined Federal and State income tax rate imposed on the taxable income allocated to such Member’s Capital Account during the fiscal year then ended, provided that such distributions are not in violation of the provisions of Federal and State law. 8.3 Other Distributions. In addition to the foregoing distributions, the LLC may distribute additional cash and other property to each of the Members (pro rata in accordance with Membership Units) on a quarterly basis as agreed to by the Managers, provided that such distributions are not in violation of the provisions of Federal and State law. ARTICLE 9 FINANCIAL ACCOUNTING AND REPORTS 9.1 Financial Records. The books and records of the LLC shall be kept in accordance with the terms of this Agreement and otherwise in accordance with the GAAP basis method of accounting, consistently applied (unless otherwise specifically provided in this Agreement). 9.2 Annual Reports. (a) The LLC shall transmit to each Member and to each person (or its legal representative) who was a Member during any part of the fiscal year in question, within one hundred and fifty (150) days after the end of each fiscal year barring unforeseen circumstances, but in no event later than September 15th of the year following the end of the current fiscal year: (i) a balance sheet for the LLC as of the end of the fiscal year and a profit and loss statement for the year then ended, all in reasonable detail, and (ii) a report setting forth the Capital Account of each Member as of the end of such fiscal year and a description of the manner of its calculation. (b) The LLC shall also transmit within such one hundred and fifty (150) day period, barring unforeseen circumstances, but in no event later than September 15th of the year 12 following the end of the current fiscal year, a Schedule K-1 for such fiscal year, to each Member then a member of the LLC and to each person (or its legal representative) who was a Member during any part of the fiscal year. Upon request from any Member, the LLC shall deliver a copy of the LLC’s federal income tax return for such fiscal year. 9.3 Limitation of Liability. (a) The liability of each Member for losses and debts of the LLC or for obligations or liabilities thereof of any kind or nature shall in no event exceed in the aggregate the amount of the Capital Contribution (including subscribed capital, if any) contributed by the Member to the LLC. (b) The Managers shall have no liability to the Members when acting in accordance with the terms of this Operating Agreement, unless otherwise provided by the Act or other applicable law. (c) The failure of the LLC to observe the formalities or requirements relating to the management of its business or affairs does not in itself render the Members liable for the liabilities of the LLC. (d) A Member is not liable to the LLC upon the rightful return of the Member’s Capital Contribution, notwithstanding any creditor’s extension of credit to the LLC during the period the contribution was held by the LLC. 9.4 Supervision; Inspection of Books. Proper and complete books of account of the activities of the LLC shall be kept under the supervision of the Managers at the principal place of business of the LLC. Such books shall, upon reasonable notice to the Managers, be open to inspection by any Member or its accredited representative, and to copying by such Member or representative at any reasonable time during normal business hours. ARTICLE 10 DISSOLUTION AND LIQUIDATION OF THE LLC 10.1 Dissolution. The LLC shall be dissolved upon the occurrence of any of the following events: (a) By the vote of Members holding at least fifty-one percent (51%) of the LLC voting rights; or (b) If the continued operation of the LLC becomes illegal under state or local law, or the members are prosecuted under Federal law; or (c) As is otherwise provided herein. 10.2 Dissolution Procedures. Upon dissolution of the LLC at the expiration of the LLC term, if any, or for any other cause set forth in Section 10.1: (a) The affairs of the LLC shall be wound up and terminated under the direction of the Managers. (b) Whether any assets of the LLC shall be liquidated through sale or shall be distributed to the interested Members in kind shall, in each case, be a matter for the discretion of a majority of Members. Distributions following dissolution made in kind shall be made ratably based on Membership Units (but in accordance with positive Capital Accounts), valued at the fair market value thereof in accordance with Section 9.3, hereof, and subject to such conditions and restrictions as the Managers determine are required or advisable to preserve the value of the assets so distributed or for legal reasons. 13 (c) The proceeds of liquidation shall be distributed by the LLC in payment of its liabilities in the following order: (i) To the creditors of the LLC, other than Members, in the order of priority established by law, either by payment or by establishment of reserves; (ii) To the setting up of any reserves that the Members may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the LLC or of the Members arising out of or in connection with the LLC; (iii) To the Members, in repayment of any loans made to, or other debts owed by, the LLC to such Members; (iv) To the Members in accordance with positive Capital Account balances (after giving effect to all contributions, distributions and allocations for all taxable years, including the year in which such liquidation occurs), in compliance with Section 1.704- 1(b)(2)(ii)(b)(2) of the IRC Regulations; and (v) To the Members ratably based upon Membership Units. (d) If any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions, and allocations for all taxable years, including the year during which such liquidation occurs), such Member shall have no obligation to make any contribution to the capital of the LLC with respect to such deficit, and such deficit shall not be considered a debt owed to the LLC or any other person for any purpose whatsoever. (e) The cash flow and items of taxable income, gain, loss, deduction or credit of the LLC during the period of liquidation shall be divided among or borne by the Members in accordance with the provisions of Article 6, hereof. 10.3 Effect of Termination of Member’s Membership in the LLC. (a) Upon the occurrence of an event giving rise to termination of a Member’s interest in the LLC (hereinafter “Terminating Event”), the Member whose membership was terminated thereby shall thereupon become a “Former Member” and shall cease to be a Member of the LLC, and shall thereafter cease to participate in the affairs and activities (voting or otherwise) of the LLC. During the period from the Terminating Event until purchase of a Former Member’s LLC interest pursuant to Article 11, hereof, such Former Member shall participate in the net profits and losses of the LLC (in accordance with the provisions of Article 6, hereof). The provisions of this Section 10.3 shall not apply to a Terminating Event that causes the LLC to dissolve pursuant to Section 10.1 or that occurs on or after the Date of Dissolution of the LLC. ARTICLE 11 RESTRICTIONS ON TRANSFER; BUY-SELL 11.1 Introduction. No interest in the LLC (including any portion of an LLC interest, whether legal or equitable) may be transferred voluntarily, involuntarily, by operation of law, or otherwise, except as provided by the provisions of this Article 11. 11.2 Notice Requirement. If any Member desires to transfer or sell its interest in the LLC (a “Withdrawing Member”), the Withdrawing Member shall first submit written notice to the LLC and the Remaining Members (“Remaining Members”) and shall negotiate in good faith for thirty (30) days with the LLC and/or the Remaining Members of the LLC before offering to sell or transfer its interest to any other party. 11.3 Third Party Offer. 14 (a) A Withdrawing Member desiring to accept a bona fide offer to purchase its LLC interest, or a portion thereof, from a third party shall deliver to the LLC and to all Remaining Members written notice of such bona fide offer, designating the name and address of the prospective purchaser, and the amount and terms offered for the Withdrawing Member’s LLC interest. (b) Within ten (10) days after receipt of such written notice, the Remaining Members shall convene a vote to determine whether the LLC and/or the Remaining Members desire to accept the proposed purchaser as a new Member of the LLC. The proposed purchaser shall be entitled to become a member of the LLC if Remaining Members holding at least fifty- one (51%) of the LLC voting rights (exclusive of that of the withdrawing Member) (as required by Section 2.2, hereof) approve of such purchaser’s admission as a Member of the LLC. (c) If the Remaining Members do not approve admission of the proposed purchaser as a Member of the LLC, then the LLC, in the first instance, and the Remaining Members, thereafter, shall have the right and option to purchase (within thirty (30) days after the final determination of value) all of the LLC interest of the Withdrawing Member, at a price equal to the value of such Withdrawing Member’s LLC interest determined in accordance with Section 11.9 herein, as of the date of the written notice. (d) If the Remaining Members do not timely approve admission of the proposed purchaser and if neither the Remaining Members nor the LLC timely exercise their purchase option, the Withdrawing Member may sell its interest to the third party pursuant to the terms of the bona fide offer. 11.4 No Third-Party Offer. If a Withdrawing Member has no prospective purchaser as contemplated in Section 11.3, hereof, the written notice to the LLC and to all Remaining Members shall set forth the Withdrawing Member’s desire to withdraw from the LLC. Upon delivery of such written notice, the Remaining Members (in the first instance) and the LLC shall have the right and option to purchase the interest of the Withdrawing Member at a price equal to the then value of such Withdrawing Member’s LLC interest (determined in accordance with Section 11.9, hereof). In the event that the offer by the Withdrawing Member is not accepted by any Remaining Member or the LLC within ten (10) days after being made, the offer shall lapse. 11.5 Death or Disability. Upon the death or disability of any Member and where the Personal Representative of the deceased Member’s estate (“Representative”) or Conservator of the disabled member’s estate (“Representative”) wish to retain ownership in the LLC, all surviving members shall vote to determine if either the estate may retain ownership in the LLC or determine if the LLC shall purchase the deceased or disabled Member’s LLC interest. The purchase price shall be for a price equal to the then value of such Membership interest, determined in accordance with Section 11.9 herein. The decision of the LLC shall be pursuant to a vote of those Members holding at least fifty-one percent (51%) of the remaining LLC voting rights, however, in the event that there are only two members of equal ownership, the remaining member shall make the final decision. Disability must be continuous for at least a six (6) month period and shall be further defined by the definition contained in the disability insurance policy of an insurance company generally recognized as providing insurance coverage for the business engaged in by the LLC. So as to exercise its option hereunder, the LLC must provide written notice of the LLC decision to the Representative within thirty (30) days of the event of death or disability. 15 11.6 Terms of Purchase. Twenty percent (20%) of the purchase price of a Member’s interest in the LLC purchased pursuant to Sections 11.3, 11.4, 11.5, 11.7, or 11.8 hereof shall be paid in cash at the closing of the purchase and sale, with the remainder payable in three (3) equal annual amortized installments of principal and interest, with interest at the prime rate of interest as quoted in the Wall Street Journal, plus two percent (2%). Any payment obligation shall be evidenced by a negotiable promissory note, and shall be unsecured. 11.7 Transfer Without Consent. The transferee of an interest in the LLC transferred without the consent of the Members (including, but not limited to, any involuntary transfers and any transfers pursuant to any bankruptcy proceedings) shall not be entitled to vote on matters brought before the Members of the LLC nor participate in the management of the LLC. The Members of the LLC (excluding the transferor and the transferee) shall have the right to purchase the interest from such transferee at a price equal to the then value of such interest, determined in accordance with Section 11.9 herein. The purchase price shall be paid on the terms set forth in Section 11.6, hereof. This Section 11.7 shall not apply to any third party admitted as a Member pursuant to Section 11.3(d). 11.8 Mandatory Disassociation. (a) A mandatory disassociation of a Member (“Disassociated Member”) shall occur upon any of the following events: (i) the vote of Members holding at least seventy five percent (75%) of the LLC voting rights; or (ii) a criminal conviction against the Disassociated Member that jeopardizes the loss of the Disassociated Member’s state or local business license, or the LLC’s business license, such as a felony conviction or other criminal conviction disqualifying the person from licensure under a “Good Moral Character” evaluation at the state or local level. (iii) by a unanimous vote of the non-Disassociated Members, if a Disassociated Member intentionally and knowingly engages in any illegal action that could, in the opinion of an independent legal expert or regulator to be stipulated to by the parties, jeopardize the continued existence of the business or its state or local licensing. (b) Upon disassociation of the Disassociated Member, the LLC in the first instance, and the Remaining Members thereafter, shall have the right and option to purchase (within thirty (30) days after the final determination of value) all of the LLC interest of the Disassociated Member, at a price equal to the value of such Disassociated Member’s LLC interest determined in accordance with Section 11.9, as of the date of the written notice of Disassociation. The terms of purchase shall be as set forth in Section 11.6. 11.9 Valuation of LLC and Interest Therein. (a) By a vote of Members holding fifty-one (51%) percent of the voting power of the LLC, the LLC shall be valued. (b) The “Value” for purposes of this section or any other in this agreement shall be determined as follows: Within ninety (90) days following the date of the Notice, the LLC shall 16 obtain, at its cost, from the accountant then engaged to audit, review or compile the LLC’s financial statements, a determination of the net book value of the LLC as determined from the books and records of the LLC for financial statement purposes in accordance with generally accepted accounting procedures consistently applied as of the date of the Dissociated Member’s disassociation. (c) The Value of the Dissociated Member’s interest on the date of the Notice shall be the net book value so determined multiplied by a fraction, the numerator of which shall be the Dissociated Member’s capital account on the effective date of the resignation and the denominator shall be the aggregate amount of the capital accounts of all of the Members on that date, and multiplied by 1.5. If a member is disassociated under section 11.8, then the value shall be determined by this same formula but without multiplying it by 1.5. (d) Following the determination of the Value in the foregoing manner, the Managers shall promptly notify the Members of the Value. If any of the Members disagree with the Value, the disagreeing Members shall notify the other Members within twenty (20) days after receipt of the Managing Member’s notice and may within ninety (90) days thereafter obtain (at the sole cost of the disagreeing Members) a second determination of the Value from an accountant in accordance with the above described procedure for the LLC, in which case the two Values shall be averaged and the result shall be the Value for purposes of this Agreement. 11.10. Buy-Sell. The purchase price for Other Members’ Units shall be payable in cash on the Original Closing Date or the Second Closing Date (or later closing date, if applicable), as the case may be, unless the purchasing Member shall elect prior to or on the respective closing date to purchase such Other Members’ Units as follows: a down payment of twenty percent (20%) of the purchase price, the remaining eighty percent (80%) to be amortized over two (2) years at eight percent (8%) simple interest, with equal quarterly payments throughout the term thereof. ARTICLE 12 MISCELLANEOUS 12.1 Documents. Each of the Members agrees to execute such certificates, counterparts, instruments, documents and amendments thereto as may from time to time be required under applicable law for the formation of the LLC. 12.2 Binding Agreement. This Operating Agreement shall be binding on the assignees and legal successors of the LLC Members and shall be governed by and construed in accordance with the internal laws, and not the law of conflicts, of the State of California. 12.3 Entire Agreement; Captions. This Operating Agreement constitutes the entire agreement of the parties and supersedes all prior written and verbal agreements among the Members with respect to the LLC. Descriptive titles are used for convenience only and shall not be considered in the interpretation of this Operating Agreement. In the event any provision of this Agreement shall be prohibited or unenforceable in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law, or if for any reason it is not deemed so modified, it shall be ineffective only to the extent of such 17 prohibition or unenforceability without affecting the remaining provisions hereof, and any such prohibition or unenforceability shall not invalidate or render unenforceable such provision in any other jurisdiction. 12.4 LLC Name. The LLC shall have the exclusive ownership and right to use the LLC name as long as the LLC continues, despite the withdrawal (for whatever reason) of any Member. 12.5 Investment Interest. Each Member, respectively, acknowledges that the issuance of the Membership Units has not been registered under the Securities Act of 1933, as amended, or any other securities laws, that all the Membership Units issued to each Member, respectively, under this Agreement shall be acquired for investment solely for the account of that member and with no view to making any distribution, of record or beneficially, of the Membership Units, and that the certificates representing the Membership Units when delivered, to each Member, respectively, may bear a restrictive legend, in form and substance satisfactory to the LLC, to the effect that the Membership Units may not be transferred without registration under applicable federal and state securities laws or a satisfactory opinion of counsel as to the availability of any exemption from such registration requirement. Each Member, respectively, received notice of the within transaction by private means and not by a public offering. 12.6 Amendment of Operating Agreement and Articles of Organization. Except as otherwise expressly provided herein, the provisions of this Operating Agreement and the Articles of Organization of the LLC may be amended by the unanimous vote of the Members 12.7 Arbitration. In the event of any dispute hereunder, the Members will submit the dispute to arbitration in accordance with California law to a mutually acceptable arbiter. Each Member may be represented by legal counsel. The decision of the arbitrators shall be final and conclusive, and the Members waive any right to appeal. Any substantially prevailing party in a final decision of an arbiter under this section shall be entitled to attorney’s fees and costs paid for by the non-substantially prevailing party. 12.8 Governmental Approval. The terms of this Operating Agreement may be subject to the approval of certain governmental authorities. Accordingly, the Members shall negotiate in good faith to conform with any guidance or requirements provided by such governmental authorities relating to this Operating Agreement. 12.9 Marijuana Provision. Notwithstanding any provision in this Agreement to the contrary, the Members acknowledge that the business of the LLC may violate Federal law. The Members waive any defenses with respect to this Operating Agreement based upon illegality. IN WITNESS WHEREOF, the parties hereto have executed this Operating Agreement effective as of the date first above written. 18 MEMBERS: _________________________________ Robert Calvert _________________________________ Paul Rudder ________________________________ Kathleen Rudder EXHIBIT A SCHEDULE OF MEMBERS NAME PERCENTAGE CONTRIBUTION MEMBERSHIP UNITS Robert Calvert 50% $0.00 no initial contribution 50,000 Paul Rudder & 50% Rudder’s initial contribution shall 50,000 Kathleen Rudder be to provide funds for infrastructure costs and “start-up” costs and expenses that may arise in the first two months of operation. Rudder shall be reimbursed for “start-up” costs as set forth hereinabove. . Mammoth Lakes, CA 19 Exhibit B- Members’ Responsibilities Robert Calvert Robert will be responsible for the day-to-day operations, purchasing, retail sales, and employee management. Robert shall develop a document detailing his specific responsibilities, work schedule, compensation, benefits and any other aspect of the position. Rudder Paul will be responsible for the landlord-tenant relations, governmental relations, and generally consult with Robert Calvert, on an as-needed basis for the efficient operation of the business. Kathleen will advise and consult. ________________ ________________ INITIALS INITIALS © 2019AIR CRE. AllRights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 1 of 17 1. BasicProvisions ("BasicProvisions"). 1.1 ParƟes.This Lease ("Lease"), dated forreference purposesonly 11/14/20 , is made byand between Christine A.Smith James ("Lessor") and Ascent Supply Company, LLC ("Lessee"),(collecƟvely the"ParƟes", orindividually a"Party"). 1.2(a)Premises:Thatcertain realproperty, including allimprovements thereinorto beprovided byLessorunder theterms ofthis Lease, commonlyknown as (street address, unit/suite, city,state):49-51 W. Alluvial Ave. Fresno, CA 93650 ("Premises"). The Premises arelocated in the Countyof Fresno ,and aregenerallydescribed as(describe briefly the nature of the Premises and the"Project"):2,500 Square Feet of retail space . In addiƟon to Lessee'srights to use and occupythePremises as hereinaŌer specified, Lessee shallhave non-exclusive rightsto any uƟlity raceways of thebuilding containingthePremises ("Building")and tothe Common Areas (as defined in Paragraph 2.7below), but shall not haveany rightsto theroof, orexterior walls of theBuildingor toany otherbuildings in theProject. The Premises,theBuilding, theCommon Areas,theland upon which they are located, along with all otherbuildings and improvements thereon, areherein collecƟvely referred toasthe "Project." (Seealso Paragraph 2) 1.2(b)Parking:21 unreserved vehicle parkingspaces. (Seealso Paragraph 2.6) 1.3 Term:Entitlement period + 10 years and months("Original Term")commencing November 1, 2020 ("CommencementDate") and ending 10 years from completion of Entitlement Period ("ExpiraƟon Date "). (See alsoParagraph 3) 1.4 Early Possession:Ifthe Premisesareavailable Lesseemay havenon-exclusivepossession ofthe Premisescommencing ("EarlyPossession Date"). (Seealso Paragraphs 3.2and 3.3) 1.5 Base Rent:per month ("BaseRent"), payableon the 1st dayof each month commencing See Paragraph 50 . (Seealso Paragraph 4) Ifthis box is checked, thereare provisions in thisLease fortheBase Rentto beadjusted. SeeParagraph . 1.6 Lessee's Shareof CommonArea OperaƟng Expenses:percent (%) ("Lessee's Share"). In theevent that thesize ofthe Premises and/or theProject are modified during theterm of this Lease,Lessorshall recalculateLessee's Shareto reflect such modificaƟon. 1.7 Base Rentand OtherMonies PaidUpon ExecuƟon: 1.8 Agreed Use:General office and retail use and all cannabis uses pursuant to valid city of Fresno and State of California Licenses. No Cannabis business activity shall be conducted on the premises until all such licenses have been obtained and proof thereof provided to lessor.. (See also Paragraph 6) 1.9 Insuring Party.Lessoris the"InsuringParty". (See also Paragraph 8) 1.10 Real EstateBrokers.(Seealso Paragraph 15and 25) agency relaƟonships in this Lease with the followingreal estate brokers ("Broker(s)") and/or their agents("Agent(s)"): Lessor’sBrokerage Firm Mark Saito Company License No.00701227 Isthe brokerof (check one): theLessor;or both the Lessee and Lessor(dual agent). Lessor’sAgent Patrick Monreal LicenseNo.02007579 is(check one): theLessor’sAgent (salesperson or brokerassociate);or both the Lessee’sAgent andtheLessor’s Agent(dual agent). Lessee’sBrokerage Firm License No.Isthe brokerof(check one): theLessee;or both theLessee and Lessor(dual agent). Lessee’sAgent License No.is (check one): theLessee’s Agent (salesperson orbrokerassociate); or both the Lessee’s Agentand theLessor’s Agent(dualagent). separate wriƩen agreement(or if thereis nosuch agreement,the sum of or % of thetotal Base Rent) forthe brokerage servicesrendered bythe Brokers. 1.11 Guarantor.The obligaƟons ofthe Lessee underthis Lease are tobeguaranteed by ("Guarantor"). (Seealso Paragraph 37) 1.12 AƩachments.AƩached hereto arethe following, allof which consƟtute apart of thisLease: an Addendum consisƟng of Paragraphs 50 through 56 ; asite plan depicƟng thePremises; asite plan depicƟng theProject; acurrent set of theRules and RegulaƟons for theProject; STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - NET (a)Base Rent:for theperiod . (b)Common Area OperaƟng Expenses:Thecurrent esƟmate for theperiod is . (c)SecurityDeposit:("SecurityDeposit"). (Seealso Paragraph 5) (d)Other:for reservation fee . (e)Total Due Upon ExecuƟon ofthis Lease:. (a)RepresentaƟon: Each Party acknowledges receiving aDisclosure RegardingReal EstateAgency RelaƟonship, confirms and consents tothe following (b)Paymentto Brokers.Upon execuƟon and delivery of thisLease by both ParƟes,Lessorshall paytothe Brokersthe brokeragefeeagreed toin a DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 2 of 17 a current set of the Rules and RegulaƟons adopted by the owners'associaƟon; a Work LeƩer; other (specify):Option to extend and Guaranty of Lease . 2.Premises. 2.1 Leƫng.Lessor hereby leases to Lessee,and Lessee hereby leases from Lessor,the Premises,for the term,at the rental,and upon all of the terms, covenants and condiƟons set forth in this Lease.While the approximate square footage of the Premises may have been used in the markeƟng of the Premises for purposes of comparison,the Base Rent stated herein is NOT Ɵed to square footage and is not subject to adjustment should the actual size be determined to be different.NOTE:Lessee is advised to verify the actual size prior to execuƟng this Lease. 2.2 CondiƟon.Lessor shall deliver that porƟon of the Premises contained within the Building ("Unit")to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date,whichever first occurs ("Start Date"),and,so long as the required service contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty days following the Start Date,warrants that the exisƟng electrical,plumbing,fire sprinkler,lighƟng,heaƟng, venƟlaƟng and air condiƟoning systems ("HVAC"),loading doors,sump pumps,if any,and all other such elements in the Unit,other than those constructed by Lessee, shall be in good operaƟng condiƟon on said date,that the structural elements of the roof,bearing walls and foundaƟon of the Unit shall be free of material defects, and that the Unit does not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law.If a non-compliance with such warranty exists as of the Start Date,or if one of such systems or elements should malfuncƟon or fail within the appropriate warranty period,Lessor shall,as Lessor's sole obligaƟon with respect to such maƩer,except as otherwise provided in this Lease,promptly aŌer receipt of wriƩen noƟce from Lessee seƫng forth with specificity the nature and extent of such non-compliance,malfuncƟon or failure,recƟfy same at Lessor's expense.The warranty periods shall be as follows:(i)6 months as to the HVAC systems,and (ii)30 days as to the remaining systems and other elements of the Unit.If Lessee does not give Lessor the required noƟce within the appropriate warranty period,correcƟon of any such non-compliance,malfuncƟon or failure sha ll be the obligaƟon of Lessee at Lessee's sole cost and expense (except for the repairs to the fire sprinkler systems,roof,foundaƟons,and/or bearing walls -see Paragraph 7).Lessor also warrants,that unless otherwise specified in wriƟng,Lessor is unaware of (i)any recorded NoƟces of Default affecƟng the Premise;(ii)any delinquent amounts due under any loan secured by the Premises;and (iii)any bankruptcy proceeding affecƟng the Premises. 2.3 Compliance.Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes,applicable laws, covenants or restricƟons of record,regulaƟons,and ordinances ("Applicable Requirements")that were in effect at the Ɵme that each improvement,or porƟon thereof,was constructed.Said warranty does not apply to the use to which Lessee will put the Premises,modificaƟons which may be required by the Americans with DisabiliƟes Act or any similar laws as a result of Lessee's use (see Paragraph 49),or to any AlteraƟons or UƟlity InstallaƟons (as defined in Paragraph 7.3(a))made or to be made by Lessee.NOTE:Lessee is responsible for determining whether or not the Applicable Requirements,and especially the zoning are appropriate for Lessee's intended use,and acknowledges that past uses of the Premises may no longer be allowed.If the Premises do not comply with said warranty,Lessor shall, except as otherwise provided,promptly aŌer receipt of wriƩen noƟce from Lessee seƫng forth with specificity the nature and extent of such non-compliance,recƟfy the same at Lessor's expense.If Lessee does not give Lessor wriƩen noƟce of a non-compliance with this warranty within 6 months following the Start Date, correcƟon of that non-compliance shall be the obligaƟon of Lessee at Lessee's sole cost and expense.If the Applicable Requirements are hereaŌer changed so as to require during the term of this Lease the construcƟon of an addiƟon to or an alteraƟon of the Unit,Premises and/or Building,the remediaƟon of any Hazardous Substance,or the reinforcement or other physical modificaƟon of the Unit,Premises and/or Building ("Capital Expenditure"),Lessor and Lessee shall allocate the cost of such work as follows: (a)Subject to Paragraph 2.3(c)below,if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in general,Lessee shall be fully responsible for the cost thereof,provided,however,that if such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months'Base Rent,Lessee may instead terminate this Lease unless Lessor noƟfies Lessee,in wriƟng, within 10 days aŌer receipt of Lessee's terminaƟon noƟce that Lessor has elected to pay the difference between the actual cost thereof and the amount equal to 6 months'Base Rent.If Lessee elects terminaƟon,Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor wriƩen noƟce specifying a terminaƟon date at least 90 days thereaŌer.Such terminaƟon date shall,however,in no event be earlier than the last day that Lessee could legally uƟlize the Premises without commencing such Capital Expenditure. (b)If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as,governmentally mandated seismic modificaƟons),then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay,each month during the remainder of the term of this Lease or any extension thereof,on the date that on which the Base Rent is due,an amount equal to 1/144th of the porƟon of such costs reasonably aƩributable to the Premises.Lessee shall pay Interest on the balance but may prepay its obligaƟon at any Ɵme.If,however,such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof,Lessor shall have the opƟon to terminate this Lease upon 90 days prior wriƩen noƟce to Lessee unless Lessee noƟfies Lessor,in wriƟng,within 10 days aŌer receipt of Lessor's terminaƟon noƟce that Lessee will pay for such Capital Expenditure.If Lessor does not elect to terminate,and fails to tender its share of any such Capital Expenditure,Lessee may advance such funds and deduct same,with Interest,from Rent unƟl Lessor's share of such costs have been fully paid.If Lessee is unable to finance Lessor's share,or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis,Lessee shall have the right to terminate this Lease upon 30 days wriƩen noƟce to Lessor. (c)Notwithstanding the above,the provisions concerning Capital Expenditures are intended to apply only to non-voluntary,unexpected,and new Applicable Requirements.If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use,change in intensity of use,or modificaƟon to the Premises then,and in that event,Lessee shall either:(i)immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure,or (ii)complete such Capital Expenditure at its own expense.Lessee shall not have any right to terminate this Lease. 2.4 Acknowledgements.Lessee acknowledges that:(a)it has been given an opportunity to inspect and measure the Premises,(b)it has been advised by Lessor and/or Brokers to saƟsfy itself with respect to the size and condiƟon of the Premises (including but not limited to the electrical,HVAC and fire sprinkler systems,security,environmental aspects,and compliance with Applicable Requirements and the Americans with DisabiliƟes Act),and their suitability for Lessee's intended use,(c)Lessee has made such invesƟgaƟon as it deems necessary with reference to such maƩers and assumes all responsibility therefor as the same relate to its occupancy of the Premises,(d)it is not relying on any representaƟon as to the size of the Premises made by Brokers or Lessor,(e)the square footage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein,and (f)neither Lessor,Lessor's agents,nor Brokers have made any oral or wriƩen representaƟons or warranƟes with respect to said maƩers other than as set forth in this Lease.In addiƟon,Lessor acknowledges that:(i)Brokers have made no representaƟons,promises or warranƟes concerning Lessee's ability to honor the Lease or suitability to occupy the Premises,and (ii)it is Lessor's sole responsibility to invesƟgate the financial capability and/or suitability of all proposed tenants. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 3 of 17 2.5 Lessee as Prior Owner/Occupant.The warranƟes made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start Date Lessee was the owner or occupant of the Premises.In such event,Lessee shall be responsible for any necessary correcƟve work. 2.6 Vehicle Parking.Lessee shall be enƟtled to use the number of Parking Spaces specified in Paragraph 1.2(b)on those porƟons of the Common Areas designated from Ɵme to Ɵme by Lessor for parking.Lessee shall not use more parking spaces than said number.Said parking spaces shall be used for parking by vehicles no larger than full-size passenger automobiles or pick-up trucks,herein called "PermiƩed Size Vehicles."Lessor may regulate the loading and unloading of vehicles by adopƟng Rules and RegulaƟons as provided in Paragraph 2.9.No vehicles other than PermiƩed Size Vehicles may be parked in the Common Area without the prior wriƩen permission of Lessor.In addiƟon: (a)Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee's employees,suppliers,shippers,customers, contractors or invitees to be loaded,unloaded,or parked in areas other than those designated by Lessor for such acƟviƟes. (b)Lessee shall not service or store any vehicles in the Common Areas. (c)If Lessee permits or allows any of the prohibited acƟviƟes described in this Paragraph 2.6,then Lessor shall have the right,without noƟce,in addiƟon to such other rights and remedies that it may have,to remove or tow away the vehicle involved and charge the cost to Lessee,which cost shall be immediately payable upon demand by Lessor. 2.7 Common Areas -DefiniƟon.The term "Common Areas"is defined as all areas and faciliƟes outside the Premises and within the exterior boundary line of the Project and interior uƟlity raceways and installaƟons within the Unit that are provided and designated by the Lessor from Ɵme to Ɵme for the general non-exclusive use of Lessor,Lessee and other tenants of the Project and their respecƟve employees,suppliers,shippers,customers,contractors and invitees,including parking areas,loading and unloading areas,trash areas,roofs,roadways,walkways,driveways and landscaped areas. 2.8 Common Areas -Lessee's Rights.Lessor grants to Lessee,for the benefit of Lessee and its employees,suppliers,shippers,contractors,customers and invitees,during the term of this Lease,the non-exclusive right to use,in common with others enƟtled to such use,the Common Areas as they exist from Ɵme to Ɵme, subject to any rights,powers,and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulaƟons or restricƟons governing the use of the Project.Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to store any property,temporarily or permanently,in the Common Areas.Any such storage shall be permiƩed only by the prior wriƩen consent of Lessor or Lessor's designated agent,which consent may be revoked at any Ɵme.In the event that any unauthorized storage shall occur,then Lessor shall have the right,without noƟce,in addiƟon to such other rights and remedies that it may have,to remove the property and charge the cost to Lessee,which cost shall be immediately payable upon demand by Lessor. 2.9 Common Areas -Rules and RegulaƟons.Lessor or such other person(s)as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the right,from Ɵme to Ɵme,to establish,modify,amend and enforce reasonable rules and regulaƟons ("Rules and RegulaƟons")for the management,safety,care,and cleanliness of the grounds,the parking and unloading of vehicles and the preservaƟon of good order,as well as for the convenience of other occupants or tenants of the Building and the Project and their invitees.Lessee agrees to abide by and conform to all such Rules and RegulaƟons,and shall use its best efforts to cause its employees,suppliers,shippers,customers,contractors and invitees to so abide and conform.Lessor shall not be responsible to Lessee for the non-compliance with said Rules and RegulaƟons by other tenants of the Project. 2.10 Common Areas -Changes.Lessor shall have the right,in Lessor's sole discreƟon,from Ɵme to Ɵme: (a)To make changes to the Common Areas,including,without limitaƟon,changes in the locaƟon,size,shape and number of driveways,entrances, parking spaces,parking areas,loading and unloading areas,ingress,egress,direcƟon of traffic,landscaped areas,walkways and uƟlity raceways; (b)To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available; (c)To designate other land outside the boundaries of the Project to be a part of the Common Areas; (d)To add addiƟonal buildings and improvements to the Common Areas; (e)To use the Common Areas while engaged in making addiƟonal improvements,repairs or alteraƟons to the Project,or any porƟon thereof;and (f)To do and perform such other acts and make such other changes in,to or with respect to the Common Areas and Project as Lessor may,in the exercise of sound business judgment,deem to be appropriate. 3.Term. 3.1 Term.The Commencement Date,ExpiraƟon Date and Original Term of this Lease are as specified in Paragraph 1.3. 3.2 Early Possession.Any provision herein granƟng Lessee Early Possession of the Premises is subject to and condiƟoned upon the Premises being available for such possession prior to the Commencement Date.Any grant of Early Possession only conveys a non-exclusive right to occupy the Premises.If Lessee totally or parƟally occupies the Premises prior to the Commencement Date,the obligaƟon to pay Base Rent shall be abated for the period of such Early Possession.All other terms of this Lease (including but not limited to the obligaƟons to pay Lessee's Share of Common Area OperaƟng Expenses,Real Property Taxes and insurance premiums and to maintain the Premises)shall be in effect during such period.Any such Early Possession shall not affect the ExpiraƟon Date. 3.3 Delay In Possession.Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date.If,despite said efforts,Lessor is unable to deliver possession by such date,Lessor shall not be subject to any liability therefor,nor shall such failure affect the validity of this Lease or change the ExpiraƟon Date.Lessee shall not,however,be obligated to pay Rent or perform its other obligaƟons unƟl Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and conƟnue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof,but minus any days of delay caused by the acts or omissions of Lessee.If possession is not delivered within 60 days aŌer the Commencement Date,as the same may be extended under the terms of any Work LeƩer executed by ParƟes,Lessee may,at its opƟon,by noƟce in wriƟng within 10 days aŌer the end of such 60 day period,cancel this Lease,in which event the ParƟes shall be discharged from all obligaƟons hereunder.If such wriƩen noƟce is not received by Lessor within said 10 day period,Lessee's right to cancel shall terminate.If possession of the Premises is not delivered within 120 days aŌer the Commencement Date,this Lease shall terminate unless other agreements are reached between Lessor and Lessee,in wriƟng. 3.4 Lessee Compliance.Lessor shall not be required to tender possession of the Premises to Lessee unƟl Lessee complies with its obligaƟon to provide evidence of insurance (Paragraph 8.5).Pending delivery of such evidence,Lessee shall be required to perform all of its obligaƟons under this Lease from and aŌer the Start Date,including the payment of Rent,notwithstanding Lessor's elecƟon to withhold possession pending receipt of such evidence of insurance.Further,if Lessee is required to perform any other condiƟons prior to or concurrent with the Start Date,the Start Date shall occur but Lessor may elect to withhold possession unƟl such condiƟons are saƟsfied. 4.Rent. 4.1.Rent Defined.All monetary obligaƟons of Lessee to Lessor under the terms of this Lease (except for the Security Deposit)are deemed to be rent ("Rent"). 4.2 Common Area OperaƟng Expenses.Lessee shall pay to Lessor during the term hereof,in addiƟon to the Base Rent,Lessee's Share (as specified in Paragraph 1.6)of all Common Area OperaƟng Expenses,as hereinaŌer defined,during each calendar year of the term of this Lease,in accordance with the following provisions: DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 4 of 17 (a)"Common Area OperaƟng Expenses"are defined,for purposes of this Lease,as all costs relaƟng to the ownership and operaƟon of the Project, including,but not limited to,the following: (i)The operaƟon,repair and maintenance,in neat,clean,good order and condiƟon ,and if necessary the replacement,of the following: (aa)The Common Areas and Common Area improvements,including parking areas,loading and unloading areas,trash areas,roadways, parkways,walkways,driveways,landscaped areas,bumpers,irrigaƟon systems,Common Area lighƟng faciliƟes,fences and gates,elevators,roofs,exterior walls of the buildings,building systems and roof drainage systems. (bb)Exterior signs and any tenant directories. (cc)Any fire sprinkler systems. (dd)All other areas and improvements that are within the exterior boundaries of the Project but outside of the Premises and/or any other space occupied by a tenant. (ii)The cost of water,gas,electricity and telephone to service the Common Areas and any uƟliƟes not separately metered. (iii)The cost of trash disposal,pest control services,property management,security services,owners'associaƟon dues and fees,the cost to repaint the exterior of any structures and the cost of any environmental inspecƟons. (iv)Reserves set aside for maintenance,repair and/or replacement of Common Area improvements and equipment. (v)Real Property Taxes (as defined in Paragraph 10). (vi)The cost of the premiums for the insurance maintained by Lessor pursuant to Paragraph 8. (vii)Any deducƟble porƟon of an insured loss concerning the Building or the Common Areas. (viii)Auditors',accountants'and aƩorneys'fees and costs related to the operaƟon,maintenance,repair and replacement of the Project. (ix)The cost of any capital improvement to the Building or the Project not covered under the provisions of Paragraph 2.3 provided;however,that Lessor shall allocate the cost of any such capital improvement over a 12 year period and Lessee shall not be required to pay more than Lessee's Share of 1/144th of the cost of such capital improvement in any given month.Lessee shall pay Interest on the unamorƟzed balance but may prepay its obligaƟon at any Ɵme. (x)The cost of any other services to be provided by Lessor that are stated elsewhere in this Lease to be a Common Area OperaƟng Expense. (b)Any Common Area OperaƟng Expenses and Real Property Taxes that are specifically aƩributable to the Unit,the Building or to any other building in the Project or to the operaƟon,repair and maintenance thereof,shall be allocated enƟrely to such Unit,Building,or other building.However,any Common Area OperaƟng Expenses and Real Property Taxes that are not specifically aƩributable to the Building or to any other building or to the operaƟon,repair and maintenance thereof,shall be equitably allocated by Lessor to all buildings in the Project. (c)The inclusion of the improvements,faciliƟes and services set forth in Subparagraph 4.2(a)shall not be deemed to impose an obligaƟon upon Lessor to either have said improvements or faciliƟes or to provide those services unless the Project already has the same,Lessor already provides the services,or Lessor has agreed elsewhere in this Lease to provide the same or some of them. (d)Lessee's Share of Common Area OperaƟng Expenses is payable monthly on the same day as the Base Rent is due hereunder.The amount of such payments shall be based on Lessor's esƟmate of the annual Common Area OperaƟng Expenses.Within 60 days aŌer wriƩen request (but not more than once each year)Lessor shall deliver to Lessee a reasonably detailed statement showing Lessee's Share of the actual Common Area OperaƟng Expenses for the preceding year.If Lessee's payments during such year exceed Lessee's Share,Lessor shall credit the amount of such over-payment against Lessee's future payments.If Lessee's payments during such year were less than Lessee's Share,Lessee shall pay to Lessor the amount of the deficiency within 10 days aŌer delivery by Lessor to Lessee of the statement. (e)Common Area OperaƟng Expenses shall not include any expenses paid by any tenant directly to third parƟes,or as to which Lessor is otherwise reimbursed by any third party,other tenant,or insurance proceeds. 4.3 Payment.Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States,without offset or deducƟon (except as specifically permiƩed in this Lease),on or before the day on which it is due.All monetary amounts shall be rounded to the nearest whole dollar.In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not consƟtute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease.Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month.Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from Ɵme to Ɵme designate in wriƟng.Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent,regardless of Lessor's endorsement of any check so staƟng.In the event that any check,draŌ,or other instrument of payment given by Lessee to Lessor is dishonored for any reason,Lessee agrees to pay to Lessor the sum of $25 in addiƟon to any Late Charge and Lessor,at its opƟon,may require all future Rent be paid by cashier's check.Payments will be applied first to accrued late charges and aƩorney's fees,second to accrued interest,then to Base Rent and Common Area OperaƟng Expenses,and any remaining amount to any other outstanding charges or costs. 5.Security Deposit.Lessee shall deposit with Lessor upon execuƟon hereof the Security Deposit as security for Lessee's faithful performance of its obligaƟons under this Lease.If Lessee fails to pay Rent,or otherwise Defaults under this Lease,Lessor may use,apply or retain all or any porƟon of said Security Deposit for the payment of any amount already due Lessor,for Rents which will be due in the future,and/or to reimburse or compensate Lessor for any liability,expense,loss or damage which Lessor may suffer or incur by reason thereof.If Lessor uses or applies all or any porƟon of the Security Deposit,Lessee shall within 10 days aŌer wriƩen request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease.If the Base Rent increases during the term of this Lease,Lessee shall,upon wriƩen request from Lessor,deposit addiƟonal monies with Lessor so that the total amount of the Security Deposit shall at all Ɵmes bear the same proporƟon to the increased Base Rent as the iniƟal Security Deposit bore to the iniƟal Base Rent.Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee,Lessor shall have the right to increase the Security Deposit to the extent necessary,in Lessor's reasonable judgment,to account for any increased wear and tear that the Premises may suffer as a result thereof.If a change in control of Lessee occurs during this Lease and following such change the financial condiƟon of Lessee is,in Lessor's reasonable judgment,significantly reduced,Lessee shall deposit such addiƟonal monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial condiƟon.Lessor shall not be required to keep the Security Deposit separate from its general accounts.Within 90 days aŌer the expiraƟon or terminaƟon of this Lease,Lessor shall return that porƟon of the Security Deposit not used or applied by Lessor.Lessor shall upon wriƩen request provide Lessee with an accounƟng showing how that porƟon of the Security Deposit that was not returned was applied.No part of the Security Deposit shall be considered to be held in trust,to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE IN LIEU OF PAYMENT OF THE LAST MONTH'S RENT. 6.Use. 6.1 Use.Lessee shall use and occupy the Premises only for the Agreed Use,or any other legal use which is reasonably comparable thereto,and for no other purpose.Lessee shall not use or permit the use of the Premises in a manner that is unlawful,creates damage,waste or a nuisance,or that disturbs occupants of or DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 5 of 17 causes damage to neighboring premises or properƟes.Other than guide,signal and seeing eye dogs,Lessee shall not keep or allow in the Premises any pets,animals, birds,fish,or repƟles.Lessor shall not unreasonably withhold or delay its consent to any wriƩen request for a modificaƟon of the Agreed Use,so long as the same will not impair the structural integrity of the Building or the mechanical or electrical systems therein,and/or is not significantly more burdensome to the Project.If Lessor elects to withhold consent,Lessor shall within 7 days aŌer such request give wriƩen noƟficaƟon of same,which noƟce shall include an explanaƟon of Lessor's objecƟons to the change in the Agreed Use. 6.2 Hazardous Substances. (a)Reportable Uses Require Consent.The term "Hazardous Substance"as used in this Lease shall mean any product,substance,or waste whose presence,use,manufacture,disposal,transportaƟon,or release,either by itself or in combinaƟon with other materials expected to be on the Premises,is either:(i) potenƟally injurious to the public health,safety or welfare,the environment or the Premises,(ii)regulated or monitored by any governmental authority,or (iii)a basis for potenƟal liability of Lessor to any governmental agency or third party under any applicable statute or common law theory.Hazardous Substances shall include,but not be limited to,hydrocarbons,petroleum,gasoline,and/or crude oil or any products,by-products or fracƟons thereof.Lessee shall not engage in any acƟvity in or on the Premises which consƟtutes a Reportable Use of Hazardous Substances without the express prior wriƩen consent of Lessor and Ɵmely compliance (at Lessee's expense)with all Applicable Requirements."Reportable Use"shall mean (i)the installaƟon or use of any above or below ground storage tank,(ii)the generaƟon, possession,storage,use,transportaƟon,or disposal of a Hazardous Substance that requires a permit from,or with respect to which a report,noƟce,registraƟon or business plan is required to be filed with,any governmental authority,and/or (iii)the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a noƟce be given to persons entering or occupying the Premises or neighboring properƟes.Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use,ordinary office supplies (copier toner, liquid paper,glue,etc.)and common household cleaning materials,so long as such use is in compliance with all Applicable Requirements,is not a Reportable Use,and does not expose the Premises or neighboring property to any meaningful risk of contaminaƟon or damage or expose Lessor to any liability therefor.In addiƟon, Lessor may condiƟon its consent to any Reportable Use upon receiving such addiƟonal assurances as Lessor reasonably deems necessary to protect itself,the public, the Premises and/or the environment against damage,contaminaƟon,injury and/or liability,including,but not limited to,the installaƟon (and removal on or before Lease expiraƟon or terminaƟon)of protecƟve modificaƟons (such as concrete encasements)and/or increasing the Security Deposit. (b)Duty to Inform Lessor.If Lessee knows,or has reasonable cause to believe,that a Hazardous Substance has come to be located in,on,under or about the Premises,other than as previously consented to by Lessor,Lessee shall immediately give wriƩen noƟce of such fact to Lessor,and provide Lessor with a copy of any report,noƟce,claim or other documentaƟon which it has concerning the presence of such Hazardous Substance. (c)Lessee RemediaƟon.Lessee shall not cause or permit any Hazardous Substance to be spilled or released in,on,under,or about the Premises (including through the plumbing or sanitary sewer system)and shall promptly,at Lessee's expense,comply with all Applicable Requirements and take all invesƟgatory and/or remedial acƟon reasonably recommended,whether or not formally ordered or required,for the cleanup of any contaminaƟon of,and for the maintenance, security and/or monitoring of the Premises or neighboring properƟes,that was caused or materially contributed to by Lessee,or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease,by or for Lessee,or any third party. (d)Lessee IndemnificaƟon.Lessee shall indemnify,defend and hold Lessor,its agents,employees,lenders and ground lessor,if any,harmless from and against any and all loss of rents and/or damages,liabiliƟes,judgments,claims,expenses,penalƟes,and aƩorneys'and consultants'fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee,or any third party (provided,however,that Lessee shall have no liability under this Lease with respect to underground migraƟon of any Hazardous Substance under the Premises from areas outside of the Project not caused or contributed to by Lessee).Lessee's obligaƟons shall include,but not be limited to,the effects of any contaminaƟon or injury to person,property or the environment created or suffered by Lessee,and the cost of invesƟgaƟon,removal,remediaƟon,restoraƟon and/or abatement,and shall survive the expiraƟon or terminaƟon of this Lease.No terminaƟon, cancellaƟon or release agreement entered into by Lessor and Lessee shall release Lessee from its obligaƟons under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in wriƟng at the Ɵme of such agreement. (e)Lessor IndemnificaƟon.Except as otherwise provided in paragraph 8.7,Lessor and its successors and assigns shall indemnify,defend,reimburse and hold Lessee,its employees and lenders,harmless from and against any and all environmental damages,including the cost of remediaƟon,which are suffered as a direct result of Hazardous Substances on the Premises prior to Lessee taking possession or which are caused by the gross negligence or willful misconduct of Lessor,its agents or employees.Lessor's obligaƟons,as and when required by the Applicable Requirements,shall include,but not be limited to,the cost of invesƟgaƟon, removal,remediaƟon,restoraƟon and/or abatement,and shall survive the expiraƟon or terminaƟon of this Lease. (f)InvesƟgaƟons and RemediaƟons.Lessor shall retain the responsibility and pay for any invesƟgaƟons or remediaƟon measures required by governmental enƟƟes having jurisdicƟon with respect to the existence of Hazardous Substances on the Premises prior to the Lessee taking possession,unless such remediaƟon measure is required as a result of Lessee's use (including "AlteraƟons",as defined in paragraph 7.3(a)below)of the Premises,in which event Lessee shall be responsible for such payment.Lessee shall cooperate fully in any such acƟviƟes at the request of Lessor,including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable Ɵmes in order to carry out Lessor's invesƟgaƟve and remedial responsibiliƟes. (g)Lessor TerminaƟon OpƟon.If a Hazardous Substance CondiƟon (see Paragraph 9.1(e))occurs during the term of this Lease,unless Lessee is legally responsible therefor (in which case Lessee shall make the invesƟgaƟon and remediaƟon thereof required by the Applicable Requirements and this Lease shall conƟnue in full force and effect,but subject to Lessor's rights under Paragraph 6.2(d)and Paragraph 13),Lessor may,at Lessor's opƟon,either (i)invesƟgate and remediate such Hazardous Substance CondiƟon,if required,as soon as reasonably possible at Lessor's expense,in which event this Lease shall conƟnue in full force and effect,or (ii)if the esƟmated cost to remediate such condiƟon exceeds 12 Ɵmes the then monthly Base Rent or $100,000,whichever is greater,give wriƩen noƟce to Lessee,within 30 days aŌer receipt by Lessor of knowledge of the occurrence of such Hazardous Substance CondiƟon,of Lessor's desire to terminate this Lease as of the date 60 days following the date of such noƟce.In the event Lessor elects to give a terminaƟon noƟce,Lessee may,within 10 days thereaŌer,give wriƩen noƟce to Lessor of Lessee's commitment to pay the amount by which the cost of the remediaƟon of such Hazardous Substance CondiƟon exceeds an amount equal to 12 Ɵmes the then monthly Base Rent or $100,000,whichever is greater.Lessee shall provide Lessor with said funds or saƟsfactory assurance thereof within 30 days following such commitment.In such event,this Lease shall conƟnue in full force and effect,and Lessor shall proceed to make such remediaƟon as soon as reasonably possible aŌer the required funds are available.If Lessee does not give such noƟce and provide the required funds or assurance thereof within the Ɵme provided,this Lease shall terminate as of the date specified in Lessor's noƟce of terminaƟon. 6.3 Lessee's Compliance with Applicable Requirements.Except as otherwise provided in this Lease,Lessee shall,at Lessee's sole expense,fully,diligently and in a Ɵmely manner,materially comply with all Applicable Requirements,the requirements of any applicable fire insurance underwriter or raƟng bureau,and the recommendaƟons of Lessor's engineers and/or consultants which relate in any manner to the Premises,without regard to whether said Applicable Requirements are now in effect or become effecƟve aŌer the Start Date.Lessee shall,within 10 days aŌer receipt of Lessor's wriƩen request,provide Lessor with copies of all permits and other documents,and other informaƟon evidencing Lessee's compliance with any Applicable Requirements specified by Lessor,and shall immediately upon receipt,noƟfy Lessor in wriƟng (with copies of any documents involved)of any threatened or actual claim,noƟce,citaƟon,warning,complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements.Likewise,Lessee shall immediately give wriƩen noƟce to Lessor of:(i) DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 6 of 17 any water damage to the Premises and any suspected seepage,pooling,dampness or other condiƟon conducive to the producƟon of mold;or (ii)any musƟness or other odors that might indicate the presence of mold in the Premises. 6.4 InspecƟon;Compliance.Lessor and Lessor's "Lender"(as defined in Paragraph 30)and consultants authorized by Lessor shall have the right to enter into Premises at any Ɵme,in the case of an emergency,and otherwise at reasonable Ɵmes aŌer reasonable noƟce,for the purpose of inspecƟng and/or tesƟng the condiƟon of the Premises and/or for verifying compliance by Lessee with this Lease.The cost of any such inspecƟons shall be paid by Lessor,unless a violaƟon of Applicable Requirements,or a Hazardous Substance CondiƟon (see Paragraph 9.1)is found to exist or be imminent,or the inspecƟon is requested or ordered by a governmental authority.In such case,Lessee shall upon request reimburse Lessor for the cost of such inspecƟon,so long as such inspecƟon is reasonably related to the violaƟon or contaminaƟon.In addiƟon,Lessee shall provide copies of all relevant material safety data sheets (MSDS)to Lessor within 10 days of the receipt of wriƩen request therefor.Lessee acknowledges that any failure on its part to allow such inspecƟons or tesƟng will expose Lessor to risks and potenƟally cause Lessor to incur costs not contemplated by this Lease,the extent of which will be extremely difficult to ascertain.Accordingly,should the Lessee fail to allow such inspecƟons and/or tesƟng in a Ɵmely fashion the Base Rent shall be automaƟcally increased,without any requirement for noƟce to Lessee,by an amount equal to 10%of the then exisƟng Base Rent or $100,whichever is greater for the remainder to the Lease.The ParƟes agree that such increase in Base Rent represents fair and reasonable compensaƟon for the addiƟonal risk/costs that Lessor will incur by reason of Lessee's failure to allow such inspecƟon and/or tesƟng.Such increase in Base Rent shall in no event consƟtute a waiver of Lessee's Default or Breach with respect to such failure nor preve nt the exercise of any of the other rights and remedies granted hereunder. 7.Maintenance;Repairs;UƟlity InstallaƟons;Trade Fixtures and AlteraƟons. 7.1 Lessee's ObligaƟons. (a)In General.Subject to the provisions of Paragraph 2.2 (CondiƟon),2.3 (Compliance),6.3 (Lessee's Compliance with Applicable Requirements),7.2 (Lessor's ObligaƟons),9 (Damage or DestrucƟon),and 14 (CondemnaƟon),Lessee shall,at Lessee's sole expense,keep the Premises,UƟlity InstallaƟons (intended for Lessee's exclusive use,no maƩer where located),and AlteraƟons in good order,condiƟon and repair (whether or not the porƟon of the Premises requiring repairs,or the means of repairing the same,are reasonably or readily accessible to Lessee,and whether or not the need for such repairs occurs as a result of Lessee's use,any prior use,the elements or the age of such porƟon of the Premises),including,but not limited to,all equipment or faciliƟes,such as plumbing,HVAC equipment, electrical,lighƟng faciliƟes,boilers,pressure vessels,fixtures,interior walls,interior surfaces of exterior walls,ceilings,floors,windows,doors,plate glass,and skylights but excluding any items which are the responsibility of Lessor pursuant to Paragraph 7.2.Lessee,in keeping the Premises in good order,condiƟon and repair, shall exercise and perform good maintenance pracƟces,specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below.Lessee's obligaƟons shall include restoraƟons,replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order,condiƟon and state of repair. (b)Service Contracts.Lessee shall,at Lessee's sole expense,procure and maintain contracts,with copies to Lessor,in customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements,if any,if and when installed on the Premises:(i) HVAC equipment,(ii)boiler and pressure vessels,and (iii)clarifiers.However,Lessor reserves the right,upon noƟce to Lessee,to procure and maintain any or all of such service contracts,and Lessee shall reimburse Lessor,upon demand,for the cost thereof. (c)Failure to Perform.If Lessee fails to perform Lessee's obligaƟons under this Paragraph 7.1,Lessor may enter upon the Premises aŌer 10 days'prior wriƩen noƟce to Lessee (except in the case of an emergency,in which case no noƟce shall be required),perform such obligaƟons on Lessee's behalf,and put the Premises in good order,condiƟon and repair,and Lessee shall promptly pay to Lessor a sum equal to 115%of the cost thereof. (d)Replacement.Subject to Lessee's indemnificaƟon of Lessor as set forth in Paragraph 8.7 below,and without relieving Lessee of liability resulƟng from Lessee's failure to exercise and perform good maintenance pracƟces,if an item described in Paragraph 7.1(b)cannot be repaired other than at a cost which is in excess of 50%of the cost of replacing such item,then such item shall be replaced by Lessor,and the cost thereof shall be prorated between the ParƟes and Lessee shall only be obligated to pay,each month during the remainder of the term of this Lease or any extension thereof,on the date on which Base Rent is due,an amount equal to the product of mulƟplying the cost of such replacement by a fracƟon,the numerator of which is one,and the denominator of which is 144 (ie.1/144th of the cost per month).Lessee shall pay Interest on the unamorƟzed balance but may prepay its obligaƟon at any Ɵme. 7.2 Lessor's ObligaƟons.Subject to the provisions of Paragraphs 2.2 (CondiƟon),2.3 (Compliance),4.2 (Common Area OperaƟng Expenses),6 (Use),7.1 (Lessee's ObligaƟons),9 (Damage or DestrucƟon)and 14 (CondemnaƟon),Lessor,subject to reimbursement pursuant to Paragraph 4.2,shall keep in good order, condiƟon and repair the foundaƟons,exterior walls,structural condiƟon of interior bearing walls,exterior roof,fire sprinkler system,Common Area fire alarm and/or smoke detecƟon systems,fire hydrants,parking lots,walkways,parkways,driveways,landscaping,fences,signs and uƟlity systems serving the Common Areas and all parts thereof,as well as providing the services for which there is a Common Area OperaƟng Expense pursuant to Paragraph 4.2.Lessor shall not be obligated to paint the exterior or interior surfaces of exterior walls nor shall Lessor be obligated to maintain,repair or replace windows,doors or plate glass of the Premises. 7.3 UƟlity InstallaƟons;Trade Fixtures;AlteraƟons. (a)DefiniƟons.The term "UƟlity InstallaƟons"refers to all floor and window coverings,air and/or vacuum lines,power panels,electrical distribuƟon, security and fire protecƟon systems,communicaƟon cabling,lighƟng fixtures,HVAC equipment,plumbing,and fencing in or on the Premises.The term "Trade Fixtures"shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises.The term "AlteraƟons"shall mean any modificaƟon of the improvements,other than UƟlity InstallaƟons or Trade Fixtures,whether by addiƟon or deleƟon."Lessee Owned AlteraƟons and/or UƟlity InstallaƟons"are defined as AlteraƟons and/or UƟlity InstallaƟons made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). (b)Consent.Lessee shall not make any AlteraƟons or UƟlity InstallaƟons to the Premises without Lessor's prior wriƩen consent.Lessee may,however, make non-structural AlteraƟons or UƟlity InstallaƟons to the interior of the Premises (excluding the roof)without such consent but upon noƟce to Lessor,as long as they are not visible from the outside,do not involve puncturing,relocaƟng or removing the roof or any exisƟng walls,will not affect the electrical,plumbing,HVAC, and/or life safety systems,do not trigger the requirement for addiƟonal modificaƟons and/or improvements to the Premises resulƟng from Applicable Requirements, such as compliance with Title 24,and/or life safety systems,and the cumulaƟve cost thereof during this Lease as extended does not exceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal to one month's Base Rent in any one year.Notwithstanding the foregoing,Lessee shall not make or permit any roof penetraƟons and/or install anything on the roof without the prior wriƩen approval of Lessor.Lessor may,as a precondiƟon to granƟng such approval,require Lessee to uƟlize a contractor chosen and/or approved by Lessor.Any AlteraƟons or UƟlity InstallaƟons that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in wriƩen form with detailed plans.Consent shall be deemed condiƟoned upon Lessee's:(i)acquiring all applicable governmental permits,(ii)furnishing Lessor with copies of both the permits and the plans and specificaƟons prior to commencement of the work,and (iii)compliance with all condiƟons of said permits and other Applicable Requirements in a prompt and expediƟous manner.Any AlteraƟons or UƟlity InstallaƟons shall be performed in a workmanlike manner with good and sufficient materials.Lessee shall promptly upon compleƟon furnish Lessor with as-built plans and specificaƟons.For work which costs an amount in excess of one month's Base Rent,Lessor may condiƟon its consent upon Lessee providing a lien and compleƟon bond in an amount equal to 150% of the esƟmated cost of such AlteraƟon or UƟlity InstallaƟon and/or upon Lessee's posƟng an addiƟonal Security Deposit with Lessor. (c)Liens;Bonds.Lessee shall pay,when due,all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 7 of 17 the Premises,which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or any interest therein.Lessee shall give Lessor not less than 10 days noƟce prior to the commencement of any work in,on or about the Premises,and Lessor shall have the right to post noƟces of non-responsibility.If Lessee shall contest the validity of any such lien,claim or demand,then Lessee shall,at its sole expense defend and protect itself,Lessor and the Premises against the same and shall pay and saƟsfy any such adverse judgment that may be rendered thereon before the enforcement thereof.If Lessor shall require,Lessee shall furnish a surety bond in an amount equal to 150%of the amount of such contested lien,claim or demand,indemnifying Lessor against liability for the same.If Lessor elects to parƟcipate in any such acƟon,Lessee shall pay Lessor's aƩorneys'fees and costs. 7.4 Ownership;Removal;Surrender;and RestoraƟon. (a)Ownership.Subject to Lessor's right to require removal or elect ownership as hereinaŌer provided,all AlteraƟons and UƟlity InstallaƟons made by Lessee shall be the property of Lessee,but considered a part of the Premises.Lessor may,at any Ɵme,elect in wriƟng to be the owner of all or any specified part of the Lessee Owned AlteraƟons and UƟlity InstallaƟons.Unless otherwise instructed per paragraph 7.4(b)hereof,all Lessee Owned AlteraƟons and UƟlity InstallaƟons shall,at the expiraƟon or terminaƟon of this Lease,become the property of Lessor and be surrendered by Lessee with the Premises. (b)Removal.By delivery to Lessee of wriƩen noƟce from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned AlteraƟons or UƟlity InstallaƟons be removed by the expiraƟon or terminaƟon of this Lease.Lessor may require the removal at any Ɵme of all or any part of any Lessee Owned AlteraƟons or UƟlity InstallaƟons made without the required consent. (c)Surrender;RestoraƟon.Lessee shall surrender the Premises by the ExpiraƟon Date or any earlier terminaƟon date,with all of the improvements, parts and surfaces thereof broom clean and free of debris,and in good operaƟng order,condiƟon and state of repair,ordinary wear and tear excepted."Ordinary wear and tear"shall not include any damage or deterioraƟon that would have been prevented by good maintenance pracƟce.Notwithstanding the foregoing and the provisions of Paragraph 7.1(a),if the Lessee occupies the Premises for 12 months or less,then Lessee shall surrender the Premises in the same condiƟon as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear.Lessee shall repair any damage occasioned by the installaƟon,maintenance or removal of Trade Fixtures,Lessee owned AlteraƟons and/or UƟlity InstallaƟons,furnishings,and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall also remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee,or any third party (except Hazardous Substances which were deposited via underground migraƟon from areas outside of the Project)to the level specified in Applicable Requirements.Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee.Any personal property of Lessee not removed on or before the ExpiraƟon Date or any earlier terminaƟon date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire.The failure by Lessee to Ɵmely vacate the Premises pursuant to this Paragraph 7.4(c)without the express wriƩen consent of Lessor shall consƟtute a holdover under the provisions of Paragraph 26 below. 8.Insurance;Indemnity. 8.1 Payment of Premiums.The cost of the premiums for the insurance policies required to be carried by Lessor,pursuant to Paragraphs 8.2(b),8.3(a)and 8.3(b),shall be a Common Area OperaƟng Expense.Premiums for policy periods commencing prior to,or extending beyond,the term of this Lease shall be prorated to coincide with the corresponding Start Date or ExpiraƟon Date. 8.2 Liability Insurance. (a)Carried by Lessee.Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecƟng Lessee and Lessor as an addiƟonal insured against claims for bodily injury,personal injury and property damage based upon or arising out of the ownership,use,occupancy or maintenance of the Premises and all areas appurtenant thereto.Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000.Lessee shall add Lessor as an addiƟonal insured by means of an endorsement at least as broad as the Insurance Service OrganizaƟon's "AddiƟonal Insured-Managers or Lessors of Premises"Endorsement.The policy shall not contain any intra-insured exclusions as between insured persons or organizaƟons,but shall include coverage for liability assumed under this Lease as an "insured contract"for the performance of Lessee's indemnity obligaƟons under this Lease.The limits of said insurance shall not,however,limit the liability of Lessee nor relieve Lessee of any obligaƟon hereunder. Lessee shall provide an endorsement on its liability policy(ies)which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor,whose insurance shall be considered excess insurance only. (b)Carried by Lessor.Lessor shall maintain liability insurance as described in Paragraph 8.2(a),in addiƟon to,and not in lieu of,the insurance required to be maintained by Lessee.Lessee shall not be named as an addiƟonal insured therein. 8.3 Property Insurance -Building,Improvements and Rental Value. (a)Building and Improvements.Lessor shall obtain and keep in force a policy or policies of insurance in the name of Lessor,with loss payable to Lessor, any ground-lessor,and to any Lender insuring loss or damage to the Premises.The amount of such insurance shall be equal to the full insurable replacement cost of the Premises,as the same shall exist from Ɵme to Ɵme,or the amount required by any Lender,but in no event more than the commercially reasonable and available insurable value thereof.Lessee Owned AlteraƟons and UƟlity InstallaƟons,Trade Fixtures,and Lessee's personal property shall be insured by Lessee not by Lessor.If the coverage is available and commercially appropriate,such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender),including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demoliƟon,reconstrucƟon or replacement of any porƟon of the Premises as the result of a covered loss.Said policy or policies shall also contain an agreed valuaƟon provision in lieu of any coinsurance clause,waiver of subrogaƟon,and inflaƟon guard protecƟon causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S.Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located.If such insurance coverage has a deducƟble clause,the deducƟble amount shall not exceed $5,000 per occurrence. (b)Rental Value.Lessor shall also obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender,insuring the loss of the full Rent for one year with an extended period of indemnity for an addiƟonal 180 days ("Rental Value insurance").Said insurance shall contain an agreed valuaƟon provision in lieu of any coinsurance clause,and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee,for the next 12 month period. (c)Adjacent Premises.Lessee shall pay for any increase in the premiums for the property insurance of the Building and for the Common Areas or other buildings in the Project if said increase is caused by Lessee's acts,omissions,use or occupancy of the Premises. (d)Lessee's Improvements.Since Lessor is the Insuring Party,Lessor shall not be required to insure Lessee Owned AlteraƟons and UƟlity InstallaƟons unless the item in quesƟon has become the property of Lessor under the terms of this Lease. 8.4 Lessee's Property;Business InterrupƟon Insurance;Worker's CompensaƟon Insurance. (a)Property Damage.Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property,Trade Fixtures,and Lessee Owned AlteraƟons and UƟlity InstallaƟons.Such insurance shall be full replacement cost coverage with a deducƟble of not to exceed $1,000 per occurrence.The proceeds from any such insurance shall be used by Lessee for the replacement of personal property,Trade Fixtures and Lessee Owned AlteraƟons and UƟlity InstallaƟons. (b)Business InterrupƟon.Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings aƩributable to all perils commonly insured against by prudent lessees in the business of Lessee or aƩributable to prevenƟon of access to the DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 8 of 17 Premises as a result of such perils. (c)Worker's CompensaƟon Insurance.Lessee shall obtain and maintain Worker's CompensaƟon Insurance in such amount as may be required by Applicable Requirements.Such policy shall include a 'Waiver of SubrogaƟon'endorsement.Lessee shall provide Lessor with a copy of such endorsement along with the cerƟficate of insurance or copy of the policy required by paragraph 8.5. (d)No RepresentaƟon of Adequate Coverage.Lessor makes no representaƟon that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property,business operaƟons or obligaƟons under this Lease. 8.5 Insurance Policies.Insurance required herein shall be by companies maintaining during the policy term a "General Policyholders RaƟng"of at least A-,VII, as set forth in the most current issue of "Best's Insurance Guide",or such other raƟng as may be required by a Lender.Lessee shall not do or permit to be done anything which invalidates the required insurance policies.Lessee shall,prior to the Start Date,deliver to Lessor cerƟfied copies of policies of such insurance or cerƟficates with copies of the required endorsements evidencing the existence and amounts of the required insurance.No such policy shall be cancelable or subject to modificaƟon except aŌer 30 days prior wriƩen noƟce to Lessor.Lessee shall,at least 10 days prior to the expiraƟon of such policies,furnish Lessor with evidence of renewals or "insurance binders"evidencing renewal thereof,or Lessor may increase his liability insurance coverage and charge the cost thereof to Lessee,which amount shall be payable by Lessee to Lessor upon demand.Such policies shall be for a term of at least one year,or the length of the remaining term of this Lease, whichever is less.If either Party shall fail to procure and maintain the insurance required to be carried by it,the other Party may,but shall not be required to,procure and maintain the same. 8.6 Waiver of SubrogaƟon.Without affecƟng any other rights or remedies,Lessee and Lessor each hereby release and relieve the other,and waive their enƟre right to recover damages against the other,for loss of or damage to its property arising out of or incident to the perils required to be insured against herein.The effect of such releases and waivers is not limited by the amount of insurance carried or required,or by any deducƟbles applicable hereto.The ParƟes agree to have their respecƟve property damage insurance carriers waive any right to subrogaƟon that such companies may have against Lessor or Lessee,as the case may be,so long as the insurance is not invalidated thereby. 8.7 Indemnity.Except for Lessor's gross negligence or willful misconduct,Lessee shall indemnify,protect,defend and hold harmless the Premises,Lessor and its agents,Lessor's master or ground lessor,partners and Lenders,from and against any and all claims,loss of rents and/or damages,liens,judgments,penalƟes, aƩorneys'and consultants'fees,expenses and/or liabiliƟes arising out of,involving,or in connecƟon with,a Breach of the Lease by Lessee and/or the use and/or occupancy of the Premises and/or Project by Lessee and/or by Lessee's employees,contractors or invitees .If any acƟon or proceeding is brought against Lessor by reason of any of the foregoing maƩers,Lessee shall upon noƟce defend the same at Lessee's expense by counsel reasonably saƟsfactory to Lessor and Lessor shall cooperate with Lessee in such defense.Lessor need not have first paid any such claim in order to be defended or indemnified. 8.8 ExempƟon of Lessor and its Agents from Liability.Notwithstanding the negligence or breach of this Lease by Lessor or its agents,neither Lessor nor its agents shall be liable under any circumstances for:(i)injury or damage to the person or goods,wares,merchandise or other property of Lessee,Lessee's employees, contractors,invitees,customers,or any other person in or about the Premises,whether such damage or injury is caused by or results from fire,steam,electricity,gas, water or rain,indoor air quality,the presence of mold or from the breakage,leakage,obstrucƟon or other defects of pipes,fire sprinklers,wires,appliances,plumbing, HVAC or lighƟng fixtures,or from any other cause,whether the said injury or damage results from condiƟons arising upon the Premises or upon other porƟons of the Building,or from other sources or places,(ii)any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project,or (iii)injury to Lessee's business or for any loss of income or profit therefrom.Instead,it is intended that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies)that Lessee is required to maintain pursuant to the provisions of paragraph 8. 8.9 Failure to Provide Insurance.Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potenƟally cause Lessor to incur costs not contemplated by this Lease,the extent of which will be extremely difficult to ascertain.Accordingly,for any month or porƟon thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or cerƟficates evidencing the existence of the required insurance,the Base Rent shall be automaƟcally increased,without any requirement for noƟce to Lessee,by an amount equal to 10%of the then exisƟng Base Rent or $100,whichever is greater.The parƟes agree that such increase in Base Rent represents fair and reasonable compensaƟon for the addiƟonal risk/costs that Lessor will incur by reason of Lessee's failure to maintain the required insurance.Such increase in Base Rent shall in no event consƟtute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance,prevent the exercise of any of the other rights and remedies granted hereunder,nor relieve Lessee of its obligaƟon to maintain the insurance specified in this Lease. 9.Damage or DestrucƟon. 9.1 DefiniƟons. (a)"Premises ParƟal Damage"shall mean damage or destrucƟon to the improvements on the Premises,other than Lessee Owned AlteraƟons and UƟlity InstallaƟons,which can reasonably be repaired in 3 months or less from the date of the damage or destrucƟon,and the cost thereof does not exceed a sum equal to 6 month's Base Rent.Lessor shall noƟfy Lessee in wriƟng within 30 days from the date of the damage or destrucƟon as to whether or not the damage is ParƟal or Total. (b)"Premises Total DestrucƟon"shall mean damage or destrucƟon to the improvements on the Premises,other than Lessee Owned AlteraƟons and UƟlity InstallaƟons and Trade Fixtures,which cannot reasonably be repaired in 3 months or less from the date of the damage or destrucƟon and/or the cost thereof exceeds a sum equal to 6 month's Base Rent.Lessor shall noƟfy Lessee in wriƟng within 30 days from the date of the damage or destrucƟon as to whether or not the damage is ParƟal or Total. (c)"Insured Loss"shall mean damage or destrucƟon to improvements on the Premises,other than Lessee Owned AlteraƟons and UƟlity InstallaƟons and Trade Fixtures,which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a),irrespecƟve of any deducƟble amounts or coverage limits involved. (d)"Replacement Cost"shall mean the cost to repair or rebuild the improvements owned by Lessor at the Ɵme of the occurrence to their condiƟon exisƟng immediately prior thereto,including demoliƟon,debris removal and upgrading required by the operaƟon of Applicable Requirements,and without deducƟon for depreciaƟon. (e)"Hazardous Substance CondiƟon"shall mean the occurrence or discovery of a condiƟon involving the presence of,or a contaminaƟon by,a Hazardous Substance,in,on,or under the Premises which requires restoraƟon. 9.2 ParƟal Damage -Insured Loss.If a Premises ParƟal Damage that is an Insured Loss occurs,then Lessor shall,at Lessor's expense,repair such damage (but not Lessee's Trade Fixtures or Lessee Owned AlteraƟons and UƟlity InstallaƟons)as soon as reasonably possible and this Lease shall conƟnue in full force and effect; provided,however,that Lessee shall,at Lessor's elecƟon,make the repair of any damage or destrucƟon the total cost to repair of which is $10,000 or less,and,in such event,Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose.Notwithstanding the foregoing,if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair,the Insuring Party shall promptly contribute the shortage in proceeds as and when required to complete said repairs.In the event,however,such shortage was due to the fact that,by reason of the unique nature of the improvements,full replacement cost insurance coverage was not commercially reasonable and available,Lessor shall have no obligaƟon to pay for the shortage in insurance proceeds or DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 9 of 17 to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same,or adequate assurance thereof,within 10 days following receipt of wriƩen noƟce of such shortage and request therefor.If Lessor receives said funds or adequate assurance thereof within said 10 day period,the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect.If such funds or assurance are not received,Lessor may nevertheless elect by wriƩen noƟce to Lessee within 10 days thereaŌer to:(i)make such restoraƟon and repair as is commercially reasonable with Lessor paying any shortage in proceeds,in which case this Lease shall remain in full force and effect,or (ii)have this Lease terminate 30 days thereaŌer.Lessee shall not be enƟtled to reimbursement of any funds contributed by Lessee to repair any such damage or destrucƟon.Premises ParƟal Damage due to flood or earthquake shall be subject to Paragraph 9.3,notwithstanding that there may be some insurance coverage,but the net proceeds of any such insurance shall be made available for the repairs if made by either Party. 9.3 ParƟal Damage -Uninsured Loss.If a Premises ParƟal Damage that is not an Insured Loss occurs,unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense),Lessor may either:(i)repair such damage as soon as reasonably possible at Lessor's expense (subject to reimbursement pursuant to Paragraph 4.2),in which event this Lease shall conƟnue in full force and effect,or (ii)terminate this Lease by giving wriƩen noƟce to Lessee within 30 days aŌer receipt by Lessor of knowledge of the occurrence of such damage.Such terminaƟon shall be effecƟve 60 days following the date of such noƟce.In the event Lessor elects to terminate this Lease,Lessee shall have the right within 10 days aŌer receipt of the terminaƟon noƟce to give wriƩen noƟce to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor.Lessee shall provide Lessor with said funds or saƟsfactory assurance thereof within 30 days aŌer making such commitment.In such event this Lease shall conƟnue in full force and effect,and Lessor shall proceed to make such repairs as soon as reasonably possible aŌer the required funds are available.If Lessee does not make the required commitment,this Lease shall terminate as of the date specified in the terminaƟon noƟce. 9.4 Total DestrucƟon.Notwithstanding any other provision hereof,if a Premises Total DestrucƟon occurs,this Lease shall terminate 60 days following such DestrucƟon.If the damage or destrucƟon was caused by the gross negligence or willful misconduct of Lessee,Lessor shall have the right to recover Lessor's damages from Lessee,except as provided in Paragraph 8.6. 9.5 Damage Near End of Term.If at any Ɵme during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month's Base Rent,whether or not an Insured Loss,Lessor may terminate this Lease effecƟve 60 days following the date of occurrence of such damage by giving a wriƩen terminaƟon noƟce to Lessee within 30 days aŌer the date of occurrence of such damage.Notwithstanding the foregoing,if Lessee at that Ɵme has an exercisable opƟon to extend this Lease or to purchase the Premises,then Lessee may preserve this Lease by,(a)exercising such opƟon and (b)providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof)needed to make the repairs on or before the earlier of (i)the date which is 10 days aŌer Lessee's receipt of Lessor's wriƩen noƟce purporƟng to terminate this Lease,or (ii)the day prior to the date upon which such opƟon expires.If Lessee duly exercises such opƟon during such period and provides Lessor with funds (or adequate assurance thereof)to cover any shortage in insurance proceeds,Lessor shall,at Lessor's commercially reasonable expense,repair such damage as soon as reasonably possible and this Lease shall conƟnue in full force and effect.If Lessee fails to exercise such opƟon and provide such funds or assurance during such period,then this Lease shall terminate on the date specified in the terminaƟon noƟce and Lessee's opƟon shall be exƟnguished. 9.6 Abatement of Rent;Lessee's Remedies. (a)Abatement.In the event of Premises ParƟal Damage or Premises Total DestrucƟon or a Hazardous Substance CondiƟon for which Lessee is not responsible under this Lease,the Rent payable by Lessee for the period required for the repair,remediaƟon or restoraƟon of such damage shall be abated in proporƟon to the degree to which Lessee's use of the Premises is impaired,but not to exceed the proceeds received from the Rental Value insurance.All other obligaƟons of Lessee hereunder shall be performed by Lessee,and Lessor shall have no liability for any such damage,destrucƟon,remediaƟon,repair or restoraƟon except as provided herein. (b)Remedies.If Lessor is obligated to repair or restore the Premises and does not commence,in a substanƟal and meaningful way,such repair or restoraƟon within 90 days aŌer such obligaƟon shall accrue,Lessee may,at any Ɵme prior to the commencement of such repair or restoraƟon,give wriƩen noƟce to Lessor and to any Lenders of which Lessee has actual noƟce,of Lessee's elecƟon to terminate this Lease on a date not less than 60 days following the giving of such noƟce.If Lessee gives such noƟce and such repair or restoraƟon is not commenced within 30 days thereaŌer,this Lease shall terminate as of the date specified in said noƟce.If the repair or restoraƟon is commenced within such 30 days,this Lease shall conƟnue in full force and effect."Commence"shall mean either the uncondiƟonal authorizaƟon of the preparaƟon of the required plans,or the beginning of the actual work on the Premises,whichever first occurs. 9.7 TerminaƟon;Advance Payments.Upon terminaƟon of this Lease pursuant to Paragraph 6.2(g)or Paragraph 9,an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor.Lessor shall,in addiƟon,return to Lessee so much of Lessee's Security Deposit as has not been,or is not then required to be,used by Lessor. 10.Real Property Taxes. 10.1 DefiniƟon.As used herein,the term "Real Property Taxes"shall include any form of assessment;real estate,general,special,ordinary or extraordinary,or rental levy or tax (other than inheritance,personal income or estate taxes);improvement bond;and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Project,Lessor's right to other income therefrom,and/or Lessor's business of leasing,by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Project address.The term "Real Property Taxes"shall also include any tax,fee,levy,assessment or charge,or any increase therein:(i)imposed by reason of events occurring during the term of this Lease,including but not limited to,a change in the ownership of the Project,(ii)a change in the improvements thereon,and/or (iii)levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease. In calculaƟng Real Property Taxes for any calendar year,the Real Property Taxes for any real estate tax year shall be included in the calculaƟon of Real Property Taxes for such calendar year based upon the number of days which such calendar year and tax year have in common. 10.2 Payment of Taxes.Except as otherwise provided in Paragraph 10.3,Lessor shall pay the Real Property Taxes applicable to the Project,and said payments shall be included in the calculaƟon of Common Area OperaƟng Expenses in accordance with the provisions of Paragraph 4.2. 10.3 AddiƟonal Improvements.Common Area OperaƟng Expenses shall not include Real Property Taxes specified in the tax assessor's records and work sheets as being caused by addiƟonal improvements placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such other lessees.Notwithstanding Paragraph 10.2 hereof,Lessee shall,however,pay to Lessor at the Ɵme Common Area OperaƟng Expenses are payable under Paragraph 4.2,the enƟrety of any increase in Real Property Taxes if assessed solely by reason of AlteraƟons,Trade Fixtures or UƟlity InstallaƟons placed upon the Premises by Lessee or at Lessee's request or by reason of any alteraƟons or improvements to the Premises made by Lessor subsequent to the execuƟon of this Lease by the ParƟes. 10.4 Joint Assessment.If the Building is not separately assessed,Real Property Taxes allocated to the Building shall be an equitable proporƟon of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed,such proporƟon to be determined by Lessor from the respecƟve valuaƟons assigned in the assessor's work sheets or such other informaƟon as may be reasonably available.Lessor's reasonable determinaƟon thereof,in good faith, shall be conclusive. 10.5 Personal Property Taxes.Lessee shall pay prior to delinquency all taxes assessed against and levied upon Lessee Owned AlteraƟons and UƟlity InstallaƟons,Trade Fixtures,furnishings,equipment and all personal property of Lessee contained in the Premises.When possible,Lessee shall cause its Lessee DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 10 of 17 Owned AlteraƟons and UƟlity InstallaƟons,Trade Fixtures,furnishings,equipment and all other personal property to be assessed and billed separately from the real property of Lessor.If any of Lessee's said property shall be assessed with Lessor's real property,Lessee shall pay Lessor the taxes aƩributable to Lessee's property within 10 days aŌer receipt of a wriƩen statement seƫng forth the taxes applicable to Lessee's property. 11.UƟliƟes and Services.Lessee shall pay for all water,gas,heat,light,power,telephone,trash disposal and other uƟliƟes and services supplied to the Premises, together with any taxes thereon.Notwithstanding the provisions of Paragraph 4.2,if at any Ɵme in Lessor's sole judgment,Lessor determines that Lessee is using a disproporƟonate amount of water,electricity or other commonly metered uƟliƟes,or that Lessee is generaƟng such a large volume of trash as to require an increase in the size of the trash receptacle and/or an increase in the number of Ɵmes per month that it is empƟed,then Lessor may increase Lessee's Base Rent by an amount equal to such increased costs.There shall be no abatement of Rent and Lessor shall not be liable in any respect whatsoever for the inadequacy,stoppage,interrupƟon or disconƟnuance of any uƟlity or service due to riot,strike,labor dispute,breakdown,accident,repair or other cause beyond Lessor's reasonable control or in cooperaƟon with governmental request or direcƟons. Within fiŌeen days of Lessor’s wriƩen request,Lessee agrees to deliver to Lessor such informaƟon,documents and/or authorizaƟon as Lessor needs in order for Lessor to comply with new or exisƟng Applicable Requirements relaƟng to commercial building energy usage,raƟngs,and/or the reporƟng thereof. 12.Assignment and Subleƫng. 12.1 Lessor's Consent Required. (a)Lessee shall not voluntarily or by operaƟon of law assign,transfer,mortgage or encumber (collecƟvely,"assign or assignment")or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior wriƩen consent,which shall not be unreasonably withheld. (b)Unless Lessee is a corporaƟon and its stock is publicly traded on a naƟonal stock exchange,a change in the control of Lessee shall consƟtute an assignment requiring consent.The transfer,on a cumulaƟve basis,of 25%or more of the voƟng control of Lessee shall consƟtute a change in control for this purpose. (c)The involvement of Lessee or its assets in any transacƟon,or series of transacƟons (by way of merger,sale,acquisiƟon,financing,transfer,leveraged buy-out or otherwise),whether or not a formal assignment or hypothecaƟon of this Lease or Lessee's assets occurs,which results or will result in a reducƟon of the Net Worth of Lessee by an amount greater than 25%of such Net Worth as it was represented at the Ɵme of the execuƟon of this Lease or at the Ɵme of the most recent assignment to which Lessor has consented,or as it exists immediately prior to said transacƟon or transacƟons consƟtuƟng such reducƟon,whichever was or is greater,shall be considered an assignment of this Lease to which Lessor may withhold its consent."Net Worth of Lessee"shall mean the net worth of Lessee (excluding any guarantors)established under generally accepted accounƟng principles. (d)An assignment or subleƫng without consent shall,at Lessor's opƟon,be a Default curable aŌer noƟce per Paragraph 13.1(d),or a noncurable Breach without the necessity of any noƟce and grace period.If Lessor elects to treat such unapproved assignment or subleƫng as a noncurable Breach,Lessor may either:(i) terminate this Lease,or (ii)upon 30 days wriƩen noƟce,increase the monthly Base Rent to 110%of the Base Rent then in effect.Further,in the event of such Breach and rental adjustment,(i)the purchase price of any opƟon to purchase the Premises held by Lessee shall be subject to similar adjustment to 110%of the price previously in effect,and (ii)all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 110%of the scheduled adjusted rent. (e)Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injuncƟve relief. (f)Lessor may reasonably withhold consent to a proposed assignment or subleƫng if Lessee is in Default at the Ɵme consent is requested. (g)Notwithstanding the foregoing,allowing a de minimis porƟon of the Premises,ie.20 square feet or less,to be used by a third party vendor in connecƟon with the installaƟon of a vending machine or payphone shall not consƟtute a subleƫng. 12.2 Terms and CondiƟons Applicable to Assignment and Subleƫng. (a)Regardless of Lessor's consent,no assignment or subleƫng shall :(i)be effecƟve without the express wriƩen assumpƟon by such assignee or sublessee of the obligaƟons of Lessee under this Lease,(ii)release Lessee of any obligaƟons hereunder,or (iii)alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligaƟons to be performed by Lessee. (b)Lessor may accept Rent or performance of Lessee's obligaƟons from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall consƟtute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach. (c)Lessor's consent to any assignment or subleƫng shall not consƟtute a consent to any subsequent assignment or subleƫng. (d)In the event of any Default or Breach by Lessee,Lessor may proceed directly against Lessee,any Guarantors or anyone else responsible for the performance of Lessee's obligaƟons under this Lease,including any assignee or sublessee,without first exhausƟng Lessor's remedies against any other person or enƟty responsible therefor to Lessor,or any security held by Lessor. (e)Each request for consent to an assignment or subleƫng shall be in wriƟng,accompanied by informaƟon relevant to Lessor's determinaƟon as to the financial and operaƟonal responsibility and appropriateness of the proposed assignee or sublessee,including but not limited to the intended use and/or required modificaƟon of the Premises,if any,together with a fee of $500 as consideraƟon for Lessor's considering and processing said request.Lessee agrees to provide Lessor with such other or addiƟonal informaƟon and/or documentaƟon as may be reasonably requested.(See also Paragraph 36) (f)Any assignee of,or sublessee under,this Lease shall,by reason of accepƟng such assignment,entering into such sublease,or entering into possession of the Premises or any porƟon thereof,be deemed to have assumed and agreed to conform and comply with each and every term,covenant,condiƟon and obligaƟon herein to be observed or performed by Lessee during the term of said assignment or sublease,other than such obligaƟons as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in wriƟng. (g)Lessor's consent to any assignment or subleƫng shall not transfer to the assignee or sublessee any OpƟon granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in wriƟng.(See Paragraph 39.2) 12.3 AddiƟonal Terms and CondiƟons Applicable to Subleƫng.The following terms and condiƟons shall apply to any subleƫng by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein: (a)Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease,and Lessor may collect such Rent and apply same toward Lessee's obligaƟons under this Lease;provided,however,that unƟl a Breach shall occur in the performance of Lessee's obligaƟons,Lessee may collect said Rent.In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligaƟons any such excess shall be refunded to Lessee.Lessor shall not,by reason of the foregoing or any assignment of such sublease,nor by reason of the collecƟon of Rent,be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligaƟons to such sublessee.Lessee hereby irrevocably authorizes and directs any such sublessee,upon receipt of a wriƩen noƟce from Lessor staƟng that a Breach exists in the performance of Lessee's obligaƟons under this Lease,to pay to Lessor all Rent due and to become due under the sublease.Sublessee shall rely upon any such noƟce from Lessor and shall pay all Rents to Lessor without any obligaƟon or right to inquire as to whether such Breach exists,notwithstanding any claim from Lessee to the contrary. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 11 of 17 (b)In the event of a Breach by Lessee,Lessor may,at its opƟon,require sublessee to aƩorn to Lessor,in which event Lessor shall undertake the obligaƟons of the sublessor under such sublease from the Ɵme of the exercise of said opƟon to the expiraƟon of such sublease;provided,however,Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. (c)Any maƩer requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d)No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior wriƩen consent. (e)Lessor shall deliver a copy of any noƟce of Default or Breach by Lessee to the sublessee,who shall have the right to cure the Default of Lessee within the grace period,if any,specified in such noƟce.The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 13.Default;Breach;Remedies. 13.1 Default;Breach.A "Default"is defined as a failure by the Lessee to comply with or perform any of the terms,covenants,condiƟons or Rules and RegulaƟons under this Lease.A "Breach"is defined as the occurrence of one or more of the following Defaults,and the failure of Lessee to cure such Default within any applicable grace period: (a)The abandonment of the Premises;or the vacaƟng of the Premises without providing a commercially reasonable level of security,or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof,or without providing reasonable assurances to minimize potenƟal vandalism. (b)The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder,whether to Lessor or to a third party,when due,to provide reasonable evidence of insurance or surety bond,or to fulfill any obligaƟon under this Lease which endangers or threatens life or property,where such failure conƟnues for a period of 3 business days following wriƩen noƟce to Lessee.THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS,INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (c)The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste,act or acts consƟtuƟng public or private nuisance,and/or an illegal acƟvity on the Premises by Lessee,where such acƟons conƟnue for a period of 3 business days following wriƩen noƟce to Lessee.In the event that Lessee commits waste,a nuisance or an illegal acƟvity a second Ɵme then,the Lessor may elect to treat such conduct as a non-curable Breach rather than a Default. (d)The failure by Lessee to provide (i)reasonable wriƩen evidence of compliance with Applicable Requirements,(ii)the service contracts,(iii)the rescission of an unauthorized assignment or subleƫng,(iv)an Estoppel CerƟficate or financial statements,(v)a requested subordinaƟon,(vi)evidence concerning any guaranty and/or Guarantor,(vii)any document requested under Paragraph 41,(viii)material safety data sheets (MSDS),or (ix)any other documentaƟon or informaƟon which Lessor may reasonably require of Lessee under the terms of this Lease,where any such failure conƟnues for a period of 10 days following wriƩen noƟce to Lessee. (e)A Default by Lessee as to the terms,covenants,condiƟons or provisions of this Lease,or of the rules adopted under Paragraph 2.9 hereof,other than those described in subparagraphs 13.1(a),(b),(c)or (d),above,where such Default conƟnues for a period of 30 days aŌer wriƩen noƟce;provided,however,that if the nature of Lessee's Default is such that more than 30 days are reasonably required for its cure,then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereaŌer diligently prosecutes such cure to compleƟon. (f)The occurrence of any of the following events:(i)the making of any general arrangement or assignment for the benefit of creditors;(ii)becoming a "debtor"as defined in 11 U.S.C.§101 or any successor statute thereto (unless,in the case of a peƟƟon filed against Lessee,the same is dismissed within 60 days);(iii) the appointment of a trustee or receiver to take possession of substanƟally all of Lessee's assets located at the Premises or of Lessee's interest in this Lease,where possession is not restored to Lessee within 30 days;or (iv)the aƩachment,execuƟon or other judicial seizure of substanƟally all of Lessee's assets located at the Premises or of Lessee's interest in this Lease,where such seizure is not discharged within 30 days;provided,however,in the event that any provision of this subparagraph is contrary to any applicable law,such provision shall be of no force or effect,and not affect the validity of the remaining provisions. (g)The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. (h)If the performance of Lessee's obligaƟons under this Lease is guaranteed:(i)the death of a Guarantor,(ii)the terminaƟon of a Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty,(iii)a Guarantor's becoming insolvent or the subject of a bankruptcy filing,(iv)a Guarantor's refusal to honor the guaranty,or (v)a Guarantor's breach of its guaranty obligaƟon on an anƟcipatory basis,and Lessee's failure,within 60 days following wriƩen noƟce of any such event,to provide wriƩen alternaƟve assurance or security,which,when coupled with the then exisƟng resources of Lessee,equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the Ɵme of execuƟon of this Lease. 13.2 Remedies.If Lessee fails to perform any of its affirmaƟve duƟes or obligaƟons,within 10 days aŌer wriƩen noƟce (or in case of an emergency,without noƟce),Lessor may,at its opƟon,perform such duty or obligaƟon on Lessee's behalf,including but not limited to the obtaining of reasonably required bonds, insurance policies,or governmental licenses,permits or approvals.Lessee shall pay to Lessor an amount equal to 115%of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor.In the event of a Breach,Lessor may,with or without further noƟce or demand,and without limiƟng Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: (a)Terminate Lessee's right to possession of the Premises by any lawful means,in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor.In such event Lessor shall be enƟtled to recover from Lessee:(i)the unpaid Rent which had been earned at the Ɵme of terminaƟon; (ii)the worth at the Ɵme of award of the amount by which the unpaid rent which would have been earned aŌer terminaƟon unƟl the Ɵme of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided;(iii)the worth at the Ɵme of award of the amount by which the unpaid rent for the balance of the term aŌer the Ɵme of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided;and (iv)any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligaƟons under this Lease or which in the ordinary course of things would be likely to result therefrom,including but not limited to the cost of recovering possession of the Premises,expenses of releƫng,including necessary renovaƟon and alteraƟon of the Premises,reasonable aƩorneys'fees,and that porƟon of any leasing commission paid by Lessor in connecƟon with this Lease applicable to the unexpired term of this Lease.The worth at the Ɵme of award of the amount referred to in provision (iii)of the immediately preceding sentence shall be computed by discounƟng such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the Ɵme of award plus one percent.Efforts by Lessor to miƟgate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover any damages to which Lessor is otherwise enƟtled.If terminaƟon of this Lease is obtained through the provisional remedy of unlawful detainer,Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein,or Lessor may reserve the right to recover all or any part thereof in a separate suit.If a noƟce and grace period required under Paragraph 13.1 was not previously given,a noƟce to pay rent or quit,or to perform or quit given to Lessee under the unlawful detainer statute shall also consƟtute the noƟce required by Paragraph 13.1.In such case,the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently,and the failure of Lessee to cure the Default within the greater of the two such grace periods shall consƟtute both an unlawful detainer and a Breach of this Lease enƟtling Lessor to the remedies provided for in this Lease and/or by said statute. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 12 of 17 (b)ConƟnue the Lease and Lessee's right to possession and recover the Rent as it becomes due,in which event Lessee may sublet or assign,subject only to reasonable limitaƟons.Acts of maintenance,efforts to relet,and/or the appointment of a receiver to protect the Lessor's interests,shall not consƟtute a terminaƟon of the Lessee's right to possession. (c)Pursue any other remedy now or hereaŌer available under the laws or judicial decisions of the state wherein the Premises are located.The expiraƟon or terminaƟon of this Lease and/or the terminaƟon of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to maƩers occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises. 13.3 Inducement Recapture.Any agreement for free or abated rent or other charges,the cost of tenant improvements for Lessee paid for or performed by Lessor,or for the giving or paying by Lessor to or for Lessee of any cash or other bonus,inducement or consideraƟon for Lessee's entering into this Lease,all of which concessions are hereinaŌer referred to as "Inducement Provisions,"shall be deemed condiƟoned upon Lessee's full and faithful performance of all of the terms, covenants and condiƟons of this Lease.Upon Breach of this Lease by Lessee,any such Inducement Provision shall automaƟcally be deemed deleted from this Lease and of no further force or effect,and any rent,other charge,bonus,inducement or consideraƟon theretofore abated,given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor,notwithstanding any subsequent cure of said Breach by Lessee.The acceptance by Lessor of rent or the cure of the Breach which iniƟated the operaƟon of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in wriƟng by Lessor at the Ɵme of such acceptance. 13.4 Late Charges.Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease,the exact amount of which will be extremely difficult to ascertain.Such costs include,but are not limited to,processing and accounƟng charges,and late charges which may be imposed upon Lessor by any Lender.Accordingly,if any Rent shall not be received by Lessor within 5 days aŌer such amount shall be due,then,without any requirement for noƟce to Lessee,Lessee shall immediately pay to Lessor a one-Ɵme late charge equal to 10%of each such overdue amount or $100,whichever is greater.The parƟes hereby agree that such late charge represents a fair and reasonable esƟmate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event consƟtute a waiver of Lessee's Default or Breach with respect to such overdue amount,nor prevent the exercise of any of the other rights and remedies granted hereunder.In the event that a late charge is payable hereunder,whether or not collected,for 3 consecuƟve installments of Base Rent,then notwithstanding any provision of this Lease to the contrary,Base Rent shall,at Lessor's opƟon,become due and payable quarterly in advance. 13.5 Interest.Any monetary payment due Lessor hereunder,other than late charges,not received by Lessor,when due shall bear interest from the 31st day aŌer it was due.The interest ("Interest")charged shall be computed at the rate of 10%per annum but shall not exceed the maximum rate allowed by law.Interest is payable in addiƟon to the potenƟal late charge provided for in Paragraph 13.4. 13.6 Breach by Lessor. (a)NoƟce of Breach.Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable Ɵme to perform an obligaƟon required to be performed by Lessor.For purposes of this Paragraph,a reasonable Ɵme shall in no event be less than 30 days aŌer receipt by Lessor,and any Lender whose name and address shall have been furnished to Lessee in wriƟng for such purpose,of wriƩen noƟce specifying wherein such obligaƟon of Lessor has not been performed; provided,however,that if the nature of Lessor's obligaƟon is such that more than 30 days are reasonably required for its performance,then Lessor shall not be in breach if performance is commenced within such 30 day period and thereaŌer diligently pursued to compleƟon. (b)Performance by Lessee on Behalf of Lessor.In the event that neither Lessor nor Lender cures said breach within 30 days aŌer receipt of said noƟce, or if having commenced said cure they do not diligently pursue it to compleƟon,then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure,provided however,that such offset shall not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit,reserving Lessee's right to reimbursement from Lessor for any such expense in excess of such offset.Lessee shall document the cost of said cure and supply said documentaƟon to Lessor. 14.CondemnaƟon.If the Premises or any porƟon thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collecƟvely "CondemnaƟon"),this Lease shall terminate as to the part taken as of the date the condemning authority takes Ɵtle or possession,whichever first occurs. If more than 10%of the floor area of the Unit,or more than 25%of the parking spaces is taken by CondemnaƟon,Lessee may,at Lessee's opƟon,to be exercised in wriƟng within 10 days aŌer Lessor shall have given Lessee wriƩen noƟce of such taking (or in the absence of such noƟce,within 10 days aŌer the condemning authority shall have taken possession)terminate this Lease as of the date the condemning authority takes such possession.If Lessee does not terminate this Lease in accordance with the foregoing,this Lease shall remain in full force and effect as to the porƟon of the Premises remaining,except that the Base Rent shall be reduced in proporƟon to the reducƟon in uƟlity of the Premises caused by such CondemnaƟon.CondemnaƟon awards and/or payments shall be the property of Lessor, whether such award shall be made as compensaƟon for diminuƟon in value of the leasehold,the value of the part taken,or for severance damages;provided, however,that Lessee shall be enƟtled to any compensaƟon paid by the condemnor for Lessee's relocaƟon expenses,loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph.All AlteraƟons and UƟlity InstallaƟons made to the Premises by Lessee,for purposes of CondemnaƟon only,shall be considered the property of the Lessee and Lessee shall be enƟtled to any and all compensaƟon which is payable therefor.In the event that this Lease is not terminated by reason of the CondemnaƟon,Lessor shall repair any damage to the Premises caused by such CondemnaƟon. 15.Brokerage Fees. 15.1 AddiƟonal Commission.In addiƟon to the payments owed pursuant to Paragraph 1.10 above,Lessor agrees that:(a)if Lessee exercises any OpƟon,(b)if Lessee or anyone affiliated with Lessee acquires from Lessor any rights to the Premises or other premises owned by Lessor and located within the Project,(c)if Lessee remains in possession of the Premises,with the consent of Lessor,aŌer the expiraƟon of this Lease,or (d)if Base Rent is increased,whether by agreement or operaƟon of an escalaƟon clause herein,then,Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers in effect at the Ɵme the Lease was executed.The provisions of this paragraph are intended to supersede the provisions of any earlier agreement to the contrary. 15.2 AssumpƟon of ObligaƟons.Any buyer or transferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obligaƟon hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.10,15,22 and 31.If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due,then such amounts shall accrue Interest.In addiƟon,if Lessor fails to pay any amounts to Lessee's Broker when due,Lessee's Broker may send wriƩen noƟce to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days aŌer said noƟce,Lessee shall pay said monies to its Broker and offset such amounts against Rent.In addiƟon,Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker for the limited purpose of collecƟng any brokerage fee owed. 15.3 RepresentaƟons and IndemniƟes of Broker RelaƟonships.Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person,firm,broker,agent or finder (other than the Brokers and Agents,if any)in connecƟon with this Lease,and that no one other than said named Brokers and Agents is enƟtled to any commission or finder's fee in connecƟon herewith.Lessee and Lessor do each hereby agree to indemnify,protect,defend and hold the other harmless from and against liability for compensaƟon or charges which may be claimed by any such unnamed broker,finder or other similar party by reason of any DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 13 of 17 dealings or acƟons of the indemnifying Party,including any costs,expenses,aƩorneys'fees reasonably incurred with respect thereto. 16.Estoppel CerƟficates. (a)Each Party (as "Responding Party")shall within 10 days aŌer wriƩen noƟce from the other Party (the "RequesƟng Party")execute,acknowledge and deliver to the RequesƟng Party a statement in wriƟng in form similar to the then most current "Estoppel CerƟficate"form published BY AIR CRE,plus such addiƟonal informaƟon,confirmaƟon and/or statements as may be reasonably requested by the RequesƟng Party. (b)If the Responding Party shall fail to execute or deliver the Estoppel CerƟficate within such 10 day period,the RequesƟng Party may execute an Estoppel CerƟficate staƟng that:(i)the Lease is in full force and effect without modificaƟon except as may be represented by the RequesƟng Party,(ii)there are no uncured defaults in the RequesƟng Party's performance,and (iii)if Lessor is the RequesƟng Party,not more than one month's rent has been paid in advance. ProspecƟve purchasers and encumbrancers may rely upon the RequesƟng Party's Estoppel CerƟficate,and the Responding Party shall be estopped from denying the truth of the facts contained in said CerƟficate.In addiƟon,Lessee acknowledges that any failure on its part to provide such an Estoppel CerƟficate will expose Lessor to risks and potenƟally cause Lessor to incur costs not contemplated by this Lease,the extent of which will be extremely difficult to ascertain.Accordingly,should the Lessee fail to execute and/or deliver a requested Estoppel CerƟficate in a Ɵmely fashion the monthly Base Rent shall be automaƟcally increased,without any requirement for noƟce to Lessee,by an amount equal to 10%of the then exisƟng Base Rent or $100,whichever is greater for remainder of the Lease.The ParƟes agree that such increase in Base Rent represents fair and reasonable compensaƟon for the addiƟonal risk/costs that Lessor will incur by reason of Lessee's failure to provide the Estoppel CerƟficate.Such increase in Base Rent shall in no event consƟtute a waiver of Lessee's Default or Breach with respect to the failure to provide the Estoppel CerƟficate nor prevent the exercise of any of the other rights and remedies granted hereunder. (c)If Lessor desires to finance,refinance,or sell the Premises,or any part thereof,Lessee and all Guarantors shall within 10 days aŌer wriƩen noƟce from Lessor deliver to any potenƟal lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years.All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. 17.DefiniƟon of Lessor.The term "Lessor"as used herein shall mean the owner or owners at the Ɵme in quesƟon of the fee Ɵtle to the Premises,or,if this is a sublease,of the Lessee's interest in the prior lease.In the event of a transfer of Lessor's Ɵtle or interest in the Premises or this Lease,Lessor shall deliver to the transferee or assignee (in cash or by credit)any unused Security Deposit held by Lessor.Upon such transfer or assignment and delivery of the Security Deposit,as aforesaid,the prior Lessor shall be relieved of all liability with respect to the obligaƟons and/or covenants under this Lease thereaŌer to be performed by the Lessor. Subject to the foregoing,the obligaƟons and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined. 18.Severability.The invalidity of any provision of this Lease,as determined by a court of competent jurisdicƟon,shall in no way affect the validity of any other provision hereof. 19.Days.Unless otherwise specifically indicated to the contrary,the word "days"as used in this Lease shall mean and refer to calendar days. 20.LimitaƟon on Liability.The obligaƟons of Lessor under this Lease shall not consƟtute personal obligaƟons of Lessor,or its partners,members,directors,officers or shareholders,and Lessee shall look to the Premises,and to no other assets of Lessor,for the saƟsfacƟon of any liability of Lessor with respect to this Lease,and shall not seek recourse against Lessor's partners,members,directors,officers or shareholders,or any of their personal assets for such saƟsfacƟon. 21.Time of Essence.Time is of the essence with respect to the performance of all obligaƟons to be performed or observed by the ParƟes under this Lease. 22.No Prior or Other Agreements;Broker Disclaimer.This Lease contains all agreements between the ParƟes with respect to any maƩer menƟoned herein,and no other prior or contemporaneous agreement or understanding shall be effecƟve.Lessor and Lessee each represents and warrants to the Brokers that it has made,and is relying solely upon,its own invesƟgaƟon as to the nature,quality,character and financial responsibility of the other Party to this Lease and as to the use,nature, quality and character of the Premises.Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. 23.NoƟces. 23.1 NoƟce Requirements.All noƟces required or permiƩed by this Lease or applicable law shall be in wriƟng and may be delivered in person (by hand or by courier)or may be sent by regular,cerƟfied or registered mail or U.S.Postal Service Express Mail,with postage prepaid,or by facsimile transmission,or by email,and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23.The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of noƟces.Either Party may by wriƩen noƟce to the other specify a different address for noƟce,except that upon Lessee's taking possession of the Premises,the Premises shall consƟtute Lessee's address for noƟce.A copy of all noƟces to Lessor shall be concurrently transmiƩed to such party or parƟes at such addresses as Lessor may from Ɵme to Ɵme hereaŌer designate in wriƟng. 23.2 Date of NoƟce.Any noƟce sent by registered or cerƟfied mail,return receipt requested,shall be deemed given on the date of delivery shown on the receipt card,or if no delivery date is shown,the postmark thereon.If sent by regular mail the noƟce shall be deemed given 72 hours aŌer the same is addressed as required herein and mailed with postage prepaid.NoƟces delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours aŌer delivery of the same to the Postal Service or courier.NoƟces delivered by hand,or transmiƩed by facsimile transmission or by email shall be deemed delivered upon actual receipt.If noƟce is received on a Saturday,Sunday or legal holiday,it shall be deemed received on the next business day. 23.3 OpƟons.Notwithstanding the foregoing,in order to exercise any OpƟons (see paragraph 39),the NoƟce must be sent by CerƟfied Mail (return receipt requested),Express Mail (signature required),courier (signature required)or some other methodology that provides a receipt establishing the date the noƟce was received by the Lessor. 24.Waivers. (a)No waiver by Lessor of the Default or Breach of any term,covenant or condiƟon hereof by Lessee,shall be deemed a waiver of any other term, covenant or condiƟon hereof,or of any subsequent Default or Breach by Lessee of the same or of any other term,covenant or condiƟon hereof.Lessor's consent to, or approval of,any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to,or approval of,any subsequent or similar act by Lessee,or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b)The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee.Any payment by Lessee may be accepted by Lessor on account of monies or damages due Lessor,notwithstanding any qualifying statements or condiƟons made by Lessee in connecƟon therewith,which such statements and/or condiƟons shall be of no force or effect whatsoever unless specifically agreed to in wriƟng by Lessor at or before the Ɵme of deposit of such payment. (c)THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 14 of 17 25.Disclosures Regarding The Nature of a Real Estate Agency RelaƟonship. (a)When entering into a discussion with a real estate agent regarding a real estate transacƟon,a Lessor or Lessee should from the outset understand what type of agency relaƟonship or representaƟon it has with the agent or agents in the transacƟon.Lessor and Lessee acknowledge being advised by the Brokers in this transacƟon,as follows: (i)Lessor's Agent.A Lessor's agent under a lisƟng agreement with the Lessor acts as the agent for the Lessor only.A Lessor's agent or subagent has the following affirmaƟve obligaƟons:To the Lessor:A fiduciary duty of utmost care,integrity,honesty,and loyalty in dealings with the Lessor.To the Lessee and the Lessor:(a)Diligent exercise of reasonable skills and care in performance of the agent's duƟes.(b)A duty of honest and fair dealing and good faith.(c)A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to,or within the diligent aƩenƟon and observaƟon of,the ParƟes.An agent is not obligated to reveal to either Party any confidenƟal informaƟon obtained from the other Party which does not involve the affirmaƟve duƟes set forth above. (ii)Lessee's Agent.An agent can agree to act as agent for the Lessee only.In these situaƟons,the agent is not the Lessor's agent,even if by agreement the agent may receive compensaƟon for services rendered,either in full or in part from the Lessor.An agent acƟng only for a Lessee has the following affirmaƟve obligaƟons.To the Lessee:A fiduciary duty of utmost care,integrity,honesty,and loyalty in dealings with the Lessee.To the Lessee and the Lessor:(a) Diligent exercise of reasonable skills and care in performance of the agent's duƟes.(b)A duty of honest and fair dealing and good faith.(c)A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to,or within the diligent aƩenƟon and observaƟon of,the ParƟes. An agent is not obligated to reveal to either Party any confidenƟal informaƟon obtained from the other Party which does not involve the affirmaƟve duƟes set forth above. (iii)Agent RepresenƟng Both Lessor and Lessee.A real estate agent,either acƟng directly or through one or more associate licenses,can legally be the agent of both the Lessor and the Lessee in a transacƟon,but only with the knowledge and consent of both the Lessor and the Lessee.In a dual agency situaƟon, the agent has the following affirmaƟve obligaƟons to both the Lessor and the Lessee:(a)A fiduciary duty of utmost care,integrity,honesty and loyalty in the dealings with either Lessor or the Lessee.(b)Other duƟes to the Lessor and the Lessee as stated above in subparagraphs (i)or (ii).In represenƟng both Lessor and Lessee,the agent may not,without the express permission of the respecƟve Party,disclose to the other Party confidenƟal informaƟon,including,but not limited to,facts relaƟng to either Lessee’s or Lessor’s financial posiƟon,moƟvaƟons,bargaining posiƟon,or other personal informaƟon that may impact rent,including Lessor’s willingness to accept a rent less than the lisƟng rent or Lessee’s willingness to pay rent greater than the rent offered.The above duƟes of the agent in a real estate transacƟon do not relieve a Lessor or Lessee from the responsibility to protect their own interests.Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transacƟon.A real estate agent is a person qualified to advise about real estate.If legal or tax advice is desired,consult a competent professional.Both Lessor and Lessee should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transacƟon can be complex and subject to change. (b)Brokers have no responsibility with respect to any default or breach hereof by either Party.The ParƟes agree that no lawsuit or other legal proceeding involving any breach of duty,error or omission relaƟng to this Lease may be brought against Broker more than one year aŌer the Start Date and that the liability (including court costs and aƩorneys'fees),of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease;provided,however,that the foregoing limitaƟon on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. (c)Lessor and Lessee agree to idenƟfy to Brokers as "ConfidenƟal"any communicaƟon or informaƟon given Brokers that is considered by such Party to be confidenƟal. 26.No Right To Holdover.Lessee has no right to retain possession of the Premises or any part thereof beyond the expiraƟon or terminaƟon of this Lease.In the event that Lessee holds over,then the Base Rent shall be increased to 150%of the Base Rent applicable immediately preceding the expiraƟon or terminaƟon. Holdover Base Rent shall be calculated on monthly basis.Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. 27.CumulaƟve Remedies.No remedy or elecƟon hereunder shall be deemed exclusive but shall,wherever possible,be cumulaƟve with all other remedies at law or in equity. 28.Covenants and CondiƟons;ConstrucƟon of Agreement.All provisions of this Lease to be observed or performed by Lessee are both covenants and condiƟons. In construing this Lease,all headings and Ɵtles are for the convenience of the ParƟes only and shall not be considered a part of this Lease.Whenever required by the context,the singular shall include the plural and vice versa.This Lease shall not be construed as if prepared by one of the ParƟes,but rather according to its fair meaning as a whole,as if both ParƟes had prepared it. 29.Binding Effect;Choice of Law.This Lease shall be binding upon the ParƟes,their personal representaƟves,successors and assigns and be governed by the laws of the State in which the Premises are located.Any liƟgaƟon between the ParƟes hereto concerning this Lease shall be iniƟated in the county in which the Premises are located.Signatures to this Lease accomplished by means of electronic signature or similar technology shall be legal and binding. 30.SubordinaƟon;AƩornment;Non-Disturbance. 30.1 SubordinaƟon.This Lease and any OpƟon granted hereby shall be subject and subordinate to any ground lease,mortgage,deed of trust,or other hypothecaƟon or security device (collecƟvely,"Security Device"),now or hereaŌer placed upon the Premises,to any and all advances made on the security thereof, and to all renewals,modificaƟons,and extensions thereof.Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lender") shall have no liability or obligaƟon to perform any of the obligaƟons of Lessor under this Lease.Any Lender may elect to have this Lease and/or any OpƟon granted hereby superior to the lien of its Security Device by giving wriƩen noƟce thereof to Lessee,whereupon this Lease and such OpƟons shall be deemed prior to such Security Device,notwithstanding the relaƟve dates of the documentaƟon or recordaƟon thereof. 30.2 AƩornment.In the event that Lessor transfers Ɵtle to the Premises,or the Premises are acquired by another upon the foreclosure or terminaƟon of a Security Device to which this Lease is subordinated (i)Lessee shall,subject to the non-disturbance provisions of Paragraph 30.3,aƩorn to such new owner,and upon request,enter into a new lease,containing all of the terms and provisions of this Lease,with such new owner for the remainder of the term hereof,or,at the elecƟon of the new owner,this Lease will automaƟcally become a new lease between Lessee and such new owner,and (ii)Lessor shall thereaŌer be relieved of any further obligaƟons hereunder and such new owner shall assume all of Lessor's obligaƟons,except that such new owner shall not:(a)be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisiƟon of ownership;(b)be subject to any offsets or defenses which Lessee might have against any prior lessor,(c)be bound by prepayment of more than one month's rent,or (d)be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner. 30.3 Non-Disturbance.With respect to Security Devices entered into by Lessor aŌer the execuƟon of this Lease,Lessee's subordinaƟon of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a "Non-Disturbance Agreement")from the Lender which Non-Disturbance Agreement DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 15 of 17 provides that Lessee's possession of the Premises,and this Lease,including any opƟons to extend the term hereof,will not be disturbed so long as Lessee is not in Breach hereof and aƩorns to the record owner of the Premises.Further,within 60 days aŌer the execuƟon of this Lease,Lessor shall,if requested by Lessee,use its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-exisƟng Security Device which is secured by the Premises.In the event that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days,then Lessee may,at Lessee's opƟon,directly contact Lender and aƩempt to negoƟate for the execuƟon and delivery of a Non-Disturbance Agreement. 30.4 Self-ExecuƟng.The agreements contained in this Paragraph 30 shall be effecƟve without the execuƟon of any further documents;provided,however,that, upon wriƩen request from Lessor or a Lender in connecƟon with a sale,financing or refinancing of the Premises,Lessee and Lessor shall execute such further wriƟngs as may be reasonably required to separately document any subordinaƟon,aƩornment and/or Non-Disturbance Agreement provided for herein. 31.AƩorneys'Fees.If any Party or Broker brings an acƟon or proceeding involving the Premises whether founded in tort,contract or equity,or to declare rights hereunder,the Prevailing Party (as hereaŌer defined)in any such proceeding,acƟon,or appeal thereon,shall be enƟtled to reasonable aƩorneys'fees.Such fees may be awarded in the same suit or recovered in a separate suit,whether or not such acƟon or proceeding is pursued to decision or judgment.The term,"Prevailing Party"shall include,without limitaƟon,a Party or Broker who substanƟally obtains or defeats the relief sought,as the case may be,whether by compromise, seƩlement,judgment,or the abandonment by the other Party or Broker of its claim or defense.The aƩorneys'fees award shall not be computed in accordance with any court fee schedule,but shall be such as to fully reimburse all aƩorneys'fees reasonably incurred.In addiƟon,Lessor shall be enƟtled to aƩorneys'fees,costs and expenses incurred in the preparaƟon and service of noƟces of Default and consultaƟons in connecƟon therewith,whether or not a legal acƟon is subsequently commenced in connecƟon with such Default or resulƟng Breach ($200 is a reasonable minimum per occurrence for such services and consultaƟon). 32.Lessor's Access;Showing Premises;Repairs.Lessor and Lessor's agents shall have the right to enter the Premises at any Ɵme,in the case of an emergency,and otherwise at reasonable Ɵmes aŌer reasonable prior noƟce for the purpose of showing the same to prospecƟve purchasers,lenders,or tenants,and making such alteraƟons,repairs,improvements or addiƟons to the Premises as Lessor may deem necessary or desirable and the erecƟng,using and maintaining of uƟliƟes, services,pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect on Lessee's use of the Premises.All such acƟviƟes shall be without abatement of rent or liability to Lessee. 33.AucƟons.Lessee shall not conduct,nor permit to be conducted,any aucƟon upon the Premises without Lessor's prior wriƩen consent.Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an aucƟon. 34.Signs.Lessor may place on the Premises ordinary "For Sale"signs at any Ɵme and ordinary "For Lease"signs during the last 6 months of the term hereof.Except for ordinary "For Sublease"signs which may be placed only on the Premises,Lessee shall not place any sign upon the Project without Lessor's prior wriƩen consent. All signs must comply with all Applicable Requirements. 35.TerminaƟon;Merger.Unless specifically stated otherwise in wriƟng by Lessor,the voluntary or other surrender of this Lease by Lessee,the mutual terminaƟon or cancellaƟon hereof,or a terminaƟon hereof by Lessor for Breach by Lessee,shall automaƟcally terminate any sublease or lesser estate in the Premises;provided, however,that Lessor may elect to conƟnue any one or all exisƟng subtenancies.Lessor's failure within 10 days following any such event to elect to the contrary by wriƩen noƟce to the holder of any such lesser interest,shall consƟtute Lessor's elecƟon to have such event consƟtute the terminaƟon of such interest. 36.Consents.All requests for consent shall be in wriƟng.Except as otherwise provided herein,wherever in this Lease the consent of a Party is required to an act by or for the other Party,such consent shall not be unreasonably withheld or delayed.Lessor's actual reasonable costs and expenses (including but not limited to architects',aƩorneys',engineers'and other consultants'fees)incurred in the consideraƟon of,or response to,a request by Lessee for any Lessor consent,including but not limited to consents to an assignment,a subleƫng or the presence or use of a Hazardous Substance,shall be paid by Lessee upon receipt of an invoice and supporƟng documentaƟon therefor.Lessor's consent to any act,assignment or subleƫng shall not consƟtute an acknowledgment that no Default or Breach by Lessee of this Lease exists,nor shall such consent be deemed a waiver of any then exisƟng Default or Breach,except as may be otherwise specifically stated in wriƟng by Lessor at the Ɵme of such consent.The failure to specify herein any parƟcular condiƟon to Lessor's consent shall not preclude the imposiƟon by Lessor at the Ɵme of consent of such further or other condiƟons as are then reasonable with reference to the parƟcular maƩer for which consent is being given.In the event that either Party disagrees with any determinaƟon made by the other hereunder and reasonably requests the reasons for such determinaƟon,the determining party shall furnish its reasons in wriƟng and in reasonable detail within 10 business days following such request. 37.Guarantor. 37.1 ExecuƟon.The Guarantors,if any,shall each execute a guaranty in the form most recently published BY AIR CRE. 37.2 Default.It shall consƟtute a Default of the Lessee if any Guarantor fails or refuses,upon request to provide:(a)evidence of the execuƟon of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor,and in the case of a corporate Guarantor,a cerƟfied copy of a resoluƟon of its board of directors authorizing the making of such guaranty,(b)current financial statements,(c)an Estoppel CerƟficate,or (d)wriƩen confirmaƟon that the guaranty is sƟll in effect. 38.Quiet Possession.Subject to payment by Lessee of the Rent and performance of all of the covenants,condiƟons and provisions on Lessee's part to be observed and performed under this Lease,Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 39.OpƟons.If Lessee is granted any opƟon,as defined below,then the following provisions shall apply. 39.1 DefiniƟon."OpƟon"shall mean:(a)the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease that Lessee has on other property of Lessor;(b)the right of first refusal or first offer to lease either the Premises or other property of Lessor;(c)the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 39.2 OpƟons Personal To Original Lessee.Any OpƟon granted to Lessee in this Lease is personal to the original Lessee,and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and,if requested by Lessor,with Lessee cerƟfying that Lessee has no intenƟon of thereaŌer assigning or subleƫng. 39.3 MulƟple OpƟons.In the event that Lessee has any mulƟple OpƟons to extend or renew this Lease,a later OpƟon cannot be exercised unless the prior OpƟons have been validly exercised. 39.4 Effect of Default on OpƟons. (a)Lessee shall have no right to exercise an OpƟon:(i)during the period commencing with the giving of any noƟce of Default and conƟnuing unƟl said Default is cured,(ii)during the period of Ɵme any Rent is unpaid (without regard to whether noƟce thereof is given Lessee),(iii)during the Ɵme Lessee is in Breach of this Lease,or (iv)in the event that Lessee has been given 3 or more noƟces of separate Default,whether or not the Defaults are cured,during the 12 month period immediately preceding the exercise of the OpƟon. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 16 of 17 (b)The period of Ɵme within which an OpƟon may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an OpƟon because of the provisions of Paragraph 39.4(a). (c)An OpƟon shall terminate and be of no further force or effect,notwithstanding Lessee's due and Ɵmely exercise of the OpƟon,if,aŌer such exercise and prior to the commencement of the extended term or compleƟon of the purchase,(i)Lessee fails to pay Rent for a period of 30 days aŌer such Rent becomes due (without any necessity of Lessor to give noƟce thereof),or (ii)if Lessee commits a Breach of this Lease. 40.Security Measures.Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures,and that Lessor shall have no obligaƟon whatsoever to provide same.Lessee assumes all responsibility for the protecƟon of the Premises,Lessee,its agents and invitees and their property from the acts of third parƟes. 41.ReservaƟons.Lessor reserves the right:(i)to grant,without the consent or joinder of Lessee,such easements,rights and dedicaƟons that Lessor deems necessary,(ii)to cause the recordaƟon of parcel maps and restricƟons,and (iii)to create and/or install new uƟlity raceways,so long as such easements,rights, dedicaƟons,maps,restricƟons,and uƟlity raceways do not unreasonably interfere with the use of the Premises by Lessee.Lessee agrees to sign any documents reasonably requested by Lessor to effectuate such rights. 42.Performance Under Protest.If at any Ɵme a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof,the Party against whom the obligaƟon to pay the money is asserted shall have the right to make payment "under protest"and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to insƟtute suit for recovery of such sum.If it shall be adjudged that there was no legal obligaƟon on the part of said Party to pay such sum or any part thereof,said Party shall be enƟtled to recover such sum or so much thereof as it was not legally required to pay.A Party who does not iniƟate suit for the recovery of sums paid "under protest"within 6 months shall be deemed to have waived its right to protest such payment. 43.Authority;MulƟple ParƟes;ExecuƟon. (a)If either Party hereto is a corporaƟon,trust,limited liability company,partnership,or similar enƟty,each individual execuƟng this Lease on behalf of such enƟty represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf.Each Party shall,within 30 days aŌer request, deliver to the other Party saƟsfactory evidence of such authority. (b)If this Lease is executed by more than one person or enƟty as "Lessee",each such person or enƟty shall be jointly and severally liable hereunder.It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease,or other document ancillary thereto and bind all of the named Lessees,and Lessor may rely on the same as if all of the named Lessees had executed such document. (c)This Lease may be executed by the ParƟes in counterparts,each of which shall be deemed an original and all of which together shall consƟtute one and the same instrument. 44.Conflict.Any conflict between the printed provisions of this Lease and the typewriƩen or handwriƩen provisions shall be controlled by the typewriƩen or handwriƩen provisions. 45.Offer.PreparaƟon of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party.This Lease is not intended to be binding unƟl executed and delivered by all ParƟes hereto. 46.Amendments.This Lease may be modified only in wriƟng,signed by the ParƟes in interest at the Ɵme of the modificaƟon.As long as they do not materially change Lessee's obligaƟons hereunder,Lessee agrees to make such reasonable non-monetary modificaƟons to this Lease as may be reasonably required by a Lender in connecƟon with the obtaining of normal financing or refinancing of the Premises. 47.Waiver of Jury Trial.THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 48.ArbitraƟon of Disputes.An Addendum requiring the ArbitraƟon of all disputes between the ParƟes and/or Brokers arising out of this Lease is is not aƩached to this Lease. 49.Accessibility;Americans with DisabiliƟes Act. (a)The Premises: have not undergone an inspecƟon by a CerƟfied Access Specialist (CASp).Note:A CerƟfied Access Specialist (CASp)can inspect the subject premises and determine whether the subject premises comply with all of the applicable construcƟon-related accessibility standards under state law.Although state law does not require a CASp inspecƟon of the subject premises,the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspecƟon of the subject premises for the occupancy or potenƟal occupancy of the lessee or tenant,if requested by the lessee or tenant.The parƟes shall mutually agree on the arrangements for the Ɵme and manner of the CASp inspecƟon,the payment of the fee for the CASp inspecƟon,and the cost of making any repairs necessary to correct violaƟons of construcƟon-related accessibility standards within the premises. have undergone an inspecƟon by a CerƟfied Access Specialist (CASp)and it was determined that the Premises met all applicable construcƟon-related accessibility standards pursuant to California Civil Code §55.51 et seq.Lessee acknowledges that it received a copy of the inspecƟon report at least 48 hours prior to execuƟng this Lease and agrees to keep such report confidenƟal. have undergone an inspecƟon by a CerƟfied Access Specialist (CASp)and it was determined that the Premises did not meet all applicable construcƟon-related accessibility standards pursuant to California Civil Code §55.51 et seq.Lessee acknowledges that it received a copy of the inspecƟon report at least 48 hours prior to execuƟng this Lease and agrees to keep such report confidenƟal except as necessary to complete repairs and correcƟons of violaƟons of construcƟon related accessibility standards. In the event that the Premises have been issued an inspecƟon report by a CASp the Lessor shall provide a copy of the disability access inspecƟon cerƟficate to Lessee within 7 days of the execuƟon of this Lease. (b)Since compliance with the Americans with DisabiliƟes Act (ADA)and other state and local accessibility statutes are dependent upon Lessee's specific use of the Premises,Lessor makes no warranty or representaƟon as to whether or not the Premises comply with ADA or any similar legislaƟon.In the event that Lessee's use of the Premises requires modificaƟons or addiƟons to the Premises in order to be in compliance with ADA or other accessibility statutes,Lessee agrees to DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM MTN-26.30,Revised 11-25-2019 Page 17 of 17 make any such necessary modificaƟons and/or addiƟons at Lessee's expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN,AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO.THE PARTIES HEREBY AGREE THAT,AT THE TIME THIS LEASE IS EXECUTED,THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. ATTENTION:NO REPRESENTATION OR RECOMMENDATION IS MADE BY AIR CRE OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES.THE PARTIES ARE URGED TO: 1.SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 2.RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES.SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PREMISES,THE STRUCTURAL INTEGRITY,THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. WARNING:IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED. The parƟes hereto have executed this Lease at the place and on the dates specified above their respecƟve signatures. Executed at: On: By LESSOR: Christine A.Smith James By: Name Printed: Title: Phone: Fax: Email: By: Name Printed: Title: Phone: Fax: Email: Address: Federal ID No.: Executed at: On: By LESSEE: Ascent Supply Company,LLC By: Name Printed: Title: Phone: Fax: Email: By: Name Printed: Title: Phone: Fax: Email: Address: Federal ID No.: BROKER Mark Saito Company AƩn:Patrick Monreal Title: Address:7511 N Remington St.103 Fresno,CA Phone: Fax: Email: Federal ID No.: Broker DRE License #:00701227 Agent DRE License #:02007579 BROKER AƩn: Title: Address: Phone: Fax: Email: Federal ID No.: Broker DRE License #: Agent DRE License #: AIR CRE *hƩps://www.aircre.com *213-687-8777 *contracts@aircre.com NOTICE:No part of these works may be reproduced in any form without permission in wriƟng. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 Paul Rudder Managing Member Robert Calvert 11/20/2020 CHRISTINE JAMES Owner-Trustee 11/20/2020 ________________ ________________ INITIALS INITIALS © 2017AIR CRE. AllRights Reserved.Last Edited:11/20/2020 2:34 PM ADD-1.03,Revised 06-10-2019 Page 1 of 2 ADDENDUM TO LEASE Date:11/14/20 By and Between Lessor:Christine A. Smith James Lessee:Ascent Supply Company, LLC Property Address:49-51 W. Alluvial Ave. Fresno, CA 93650 (streetaddress, city, state, zip) Paragraph:50-56 In the event of any conflict between theprovisions of this Addendum and the printedprovisions of theLease, this Addendum shallcontrol. If any provisions in this Addendum (Paragraphs 50-56)conflict with other terms in the prior paragraphs of this lease,these paragraphs (Paragraphs 50-56) Supersede those terms andshall control. 50.Reservation Fee: Lesseeagree topay per month asa "Reservation Fee"starting November 1,2020 toreserve thepremises 49, 51 W. AlluvialFresno, CAduring entitlement period. Lessee and Lessor hereby agree that the current tenant in suite 49 is on a month to month lease that expires November 30,2020. 51. Entitlements: At Lessee's sole cost and expense,Lessee shall be permitted to apply for and obtain permits,determinations,and approvals from governmental entities in furtherance of Lessee's intended use of the Property,which may include cannabis dispensary, cultivation, distribution, manufacturing orany other legal use (collectively,the "Entitlements");provided,however that lessee shall not have the right to,nor shall it,apply for any entitlements which impose any liability, cost, orexpense ofany kind uponLessor, orthe Property.Lessor herby agreesto reasonablycooperate with Lessee's efforts tosecure the Entitlements,so long as such cooperation is without any material out-of-pocket cost to Lessor.Such cooperation shall include the execution by Lessor,as owner, ofapplication, petitions,permits, approvals and similar documents. This period of time shall be referred to as "Entitlement Period."The Entitlement Period shall begin November 1,2020 and end October 31,2021 and Lessee shallhave the right toextend the Entitlement Period forup to 12 periods of1 calendarmonth each,in exchange fora Monthly Entitlement Fee of /month. During theEntitlement Period, Lessee shallhave the rightto terminate the lease with no furtherobligation givingthe Lessora 60 day written notice, in Lessee's sole and absolute discretion,if Lessee has not obtained,or determines in Lessee's sole and absolute discretion that Lessee likely cannot obtain the necessary Entitlements. Inthe event of Termination , Lessee shallreturn the premises in an"as is"condition inwhich the Lesseereceived the premises. Lessee shallbegin paying the monthly rent of $8,750 plus triple,security deposit,only after Lesseehas received all state and city licensesand conditional use permit s for the operation of a medical and adult-use retail cannabis storefront. 52. Governmental Action: If there is a credible threat of seizure by any government authority seeking forfeiture of the premises or the building housing the Premises,whether or not acourt proceedingor actionhas been commenced,Lessor shallhave the right in Lessor's sole discretion and electionto terminate this lease upon30 days written notice to Lessee. If any California state or local governmental entity or agency having jurisdiction disallows Lessees's then-current use of the premises,(e.g.,by changing applicable zoningor otherland use classifications, by prohibitingLessee's then- current use of the premises, orby revokingany conditional use permit) or any state or federal governmental authority brings or threatens criminal prosecution against Lessor or Lessee or any of the principals of either or brings orthreatens civilaction (Including forfeiture of property, including thePremises orany portion thereof or interest therein) againstLessor or Lessee or any of the principles of either),then either party may terminate the Lease immediately by delivering written notice to the other party. It is the intent of theparties that the termination rights set forth in this Paragraph are only exercisable with respect to amaterial change in laws, regulations or government enforcement policies relating to the Agreed Use occurring after the date as of which both Lessee and Lessor have executed the Lease. AsSuch, neitherLessee norLessor shall havethe right to exercisetermination rights underthis paragraph if the issue giving rise to the applicable California State or local law or regulation by the party wishing to terminate,which law or regulation is either in effect as of the Commencement Date,is DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM ADD-1.03,Revised 06-10-2019 Page 2 of 2 possible for such party to comply with using commercially reasonable efforts. 53.Acknowledgement: The Parties herby acknowledge that they are aware of and fully understand commercial cannabis activity is technically unlawful under federal law.In the event arrest,seizure,or a prosecution action pursuant to federal law associated with the Parties'described herein,the Lessee herby agrees to indemnify Lessor from any attorney's fees associated with defending such actions.The Parties also herby agree to waive illegality as a defense to any contract enforcement action. 54.Renewal Terms: Lessee shall have two (2)options to renew the lease and each such renewal period shall be 5 years.Each renewal must be exercised no later than 90 days prior to the expiration of the then-current Lease term.The rent shall increase 3%on an annual basis,commencing year 11. 55.Contingencies: The lease contemplated herein shall become effective and in force upon the granting of all necessary permits and governmental approvals required for the legal operation of a retail cannabis store under the laws of the State of California and the ordinances of the City of Fresno.If either the State of California or the City of Fresno or any other governmental agency having the power and authority to grant or deny such permits,licenses,or other form of governmental approval as is necessary for the operation of said retail store,should deny or refuse to grant such permits,etc.to the lessees herein,then the lease described herein shall be of no force or effect and the parties hereto shall have no further obligation to each other.Any money paid by lessees to lessor shall be fully earned and non-refundable,however lessees shall have no further financial obligation to lessor from this point.All parties acknowledge that lessor reserves the right to allow more than one "contingent"lease on the subject property. 56.If at any point during this lease lessor decides to sell building lessor shall in writing provide lessee with selling price of building and give lessee 30 days to respond in writing with a offer. AIR CRE *hƩps://www.aircre.com *213-687-8777 *contracts@aircre.com NOTICE:No part of these works may be reproduced in any form without permission in wriƟng. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM OE-6.02,Revised 06-10-2019 Page 1 of 2 OPTION(S)TO EXTEND STANDARD LEASE ADDENDUM Dated:11/14/20 By and Between Lessor:Christine A.Smith James Lessee:Ascent Supply Company,LLC Property Address:49-51 W.Alluvial Ave.Fresno,CA 93650 (street address,city,state,zip) Paragraph:57 A.OPTION(S)TO EXTEND: Lessor hereby grants to Lessee the opƟon to extend the term of this Lease for Two (2)addiƟonal 60 month period(s)commencing when the prior term expires upon each and all of the following terms and condiƟons: (i)In order to exercise an opƟon to extend,Lessee must give wriƩen noƟce of such elecƟon to Lessor and Lessor must receive the same at least but not more than months prior to the date that the opƟon period would commence,Ɵme being of the essence.If proper noƟficaƟon of the exercise of an opƟon is not given and/or received,such opƟon shall automaƟcally expire.OpƟons (if there are more than one)may only be exercised consecuƟvely. (ii)The provisions of paragraph 39,including those relaƟng to Lessee's Default set forth in paragraph 39.4 of this Lease,are condiƟons of this OpƟon. (iii)Except for the provisions of this Lease granƟng an opƟon or opƟons to extend the term,all of the terms and condiƟons of this Lease except where specifically modified by this opƟon shall apply. (iv)This OpƟon is personal to the original Lessee,and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and without the intenƟon of thereaŌer assigning or subleƫng. (v)The monthly rent for each month of the opƟon period shall be calculated as follows,using the method(s)indicated below: (Check Method(s)to be Used and Fill in Appropriately) I.Cost of Living Adjustment(s)(COLA) a.On (Fill in COLA Dates):the Base Rent shall be adjusted by the change,if any,from the Base Month specified below,in the Consumer Price Index of the Bureau of Labor StaƟsƟcs of the U.S.Department of Labor for (select one):CPI W (Urban Wage Earners and Clerical Workers)or CPI U (All Urban Consumers),for (Fill in Urban Area):.All Items (1982-1984 =100),herein referred to as "CPI". b.The monthly Base Rent payable in accordance with paragraph A.I.a.of this Addendum shall be calculated as follows:the Base Rent set forth in paragraph 1.5 of the aƩached Lease,shall be mulƟplied by a fracƟon the numerator of which shall be the CPI of the calendar month 2 months prior to the month(s)specified in paragraph A.I.a.above during which the adjustment is to take effect,and the denominator of which shall be the CPI of the calendar month which is 2 months prior to (select one):the first month of the term of this Lease as set forth in paragraph 1.3 ("Base Month")or (Fill in Other "Base Month"):.The sum so calculated shall consƟtute the new monthly Base Rent hereunder,but in no event,shall any such new monthly Base Rent be less than the Base Rent payable for the month immediately preceding the rent adjustment. c.In the event the compilaƟon and/or publicaƟon of the CPI shall be transferred to any other governmental department or bureau or agency or shall be disconƟnued,then the index most nearly the same as the CPI shall be used to make such calculaƟon.In the event that the ParƟes cannot agree on such alternaƟve index,then the maƩer shall be submiƩed for decision to the American ArbitraƟon AssociaƟon in accordance with the then rules of said AssociaƟon and the decision of the arbitrators shall be binding upon the parƟes.The cost of said ArbitraƟon shall be paid equally by the ParƟes. II.Market Rental Value Adjustment(s)(MRV) a.On (Fill in MRV Adjustment Date(s))the Base Rent shall be adjusted to the "Market Rental Value"of the property as follows: 1)Four months prior to each Market Rental Value Adjustment Date described above,the ParƟes shall aƩempt to agree upon what the new MRV will be on the adjustment date.If agreement cannot be reached,within thirty days,then: (a)Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establish the new MRV within the next 30 days.Any associated costs will be split equally between the ParƟes,or (b)Both Lessor and Lessee shall each immediately make a reasonable determinaƟon of the MRV and submit such determinaƟon,in wriƟng,to arbitraƟon in accordance with the following provisions: (i)Within 15 days thereaŌer,Lessor and Lessee shall each select an independent third party appraiser or broker ("Consultant"- DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS © 2017AIR CRE. AllRights Reserved.Last Edited:11/20/2020 2:34 PM OE-6.02,Revised 06-10-2019 Page 2 of 2 checkone) oftheir choicetoact as an arbitrator(Note: the parƟes may notselect eitherofthe Brokersthat wasinvolved in negoƟaƟng the Lease). Thetwo arbitrators so appointed shall immediatelyselect a third mutually acceptable Consultant toactas athird arbitrator. (ii) The3arbitrators shallwithin 30 days of theappointment of the third arbitratorreach adecision as towhat theactual MRVfor the Premises is, and whether Lessor'sorLessee's submiƩed MRV is the closestthereto. Thedecision ofa majority of the arbitratorsshall be bindingon the ParƟes.The submiƩed MRV which is determined tobe theclosest tothe actualMRVshall thereaŌer be used bythe ParƟes. (iii) If eitherofthe ParƟes fails toappoint an arbitratorwithin the specified 15days, the arbitrator Ɵmely appointed byone of them shallreach adecision on his orherown, and said decision shall bebinding on the ParƟes. (iv) The enƟre costof such arbitraƟon shallbe paid bythe party whose submiƩed MRVis not selected, ie.theone that is NOT the closest to theactual MRV. 2) When determining MRV, theLessor, Lessee and Consultants shallconsider the termsof comparablemarket transacƟons whichshall include, but not limited to, rent,rental adjustments, abated rent, lease term and financial condiƟon oftenants. 3) Notwithstanding theforegoing, thenewBase Rentshall not beless than the rentpayable forthemonth immediatelypreceding the rent adjustment. b. Upon the establishmentofeach NewMarket RentalValue: 1) the newMRV willbecomethe new"Base Rent" forthe purpose of calculaƟng any furtherAdjustments,and 2) the first month ofeach Market RentalValue term shallbecome thenew "Base Month" forthepurpose of calculaƟng any furtherAdjustments. III. FixedRentalAdjustment(s) (FRA) TheBase Rent shall beincreased to thefollowing amountson thedatesset forth below: On(Fill inFRA Adjustment Date(s)):TheNew Base Rent shallbe: Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 IV.IniƟal Term Adjustments Theformula used to calculate adjustments tothe Base Rate duringtheoriginal Term of theLease shall conƟnue to beused during theextended term. B. NOTICE: Unless specified otherwiseherein,noƟce ofany rentaladjustments, otherthan FixedRentalAdjustments, shallbe madeas specified in paragraph 23ofthe Lease. C. BROKER'SFEE: TheBrokers shallbe paida Brokerage Feefor each adjustment specified abovein accordance with paragraph 15of theLease orif applicable, paragraph 9 of the Sublease. AIRCRE *hƩps://www.aircre.com * 213-687-8777 * contracts@aircre.com NOTICE: Nopart oftheseworks maybe reproduced in anyformwithout permissionin wriƟng. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM GR-3.22,Revised 06-10-2019 Page 1 of 2 GUARANTY OF LEASE WHEREAS,Christine A.Smith James ,hereinaŌer "Lessor",and Ascent Supply Company,LLC ,hereinaŌer "Lessee",are about to execute a document enƟtled "Lease"dated 11/14/20 concerning the premises commonly known as (street address,city,state,zip) 49-51 W.Alluvial Ave.Fresno,CA 93650 wherein Lessor will lease the premises to Lessee,and WHEREAS,Robert Calvert and Paul Rudder hereinaŌer "Guarantors"have a financial interest in Lessee,and WHEREAS,Lessor would not execute the Lease if Guarantors did not execute and deliver to Lessor this Guaranty of Lease. NOW THEREFORE,in consideraƟon of the execuƟon of said Lease by Lessor and as a material inducement to Lessor to execute said Lease,Guarantors hereby jointly,severally,uncondiƟonally and irrevocably guarantee the prompt payment by Lessee of all rents and all other sums payable by Lessee under said Lease and the faithful and prompt performance by Lessee of each and every one of the terms,condiƟons and covenants of said Lease to be kept and performed by Lessee. It is specifically agreed by Lessor and Guarantors that:(i)the terms of the foregoing Lease may be modified by agreement between Lessor and Lessee,or by a course of conduct,and (ii)said Lease may be assigned by Lessor or any assignee of Lessor without the consent of or noƟce to Guarantors and that this Guaranty shall guarantee the performance of said Lease as so modified. This Guaranty shall not be released,modified or affected by the failure or delay on the part of Lessor to enforce any of the rights or remedies of the Lessor under said Lease. No noƟce of default by Lessee under the Lease need be given by Lessor to Guarantors,it being specifically agreed that the guarantee of the undersigned is a conƟnuing guarantee under which Lessor may proceed immediately against Lessee and/or against Guarantors following any breach or default by Lessee or for the enforcement of any rights which Lessor may have as against Lessee under the terms of the Lease or at law or in equity. Lessor shall have the right to proceed against Guarantors following any breach or default by Lessee under the Lease without first proceeding against Lessee and without previous noƟce to or demand upon either Lessee or Guarantors. Guarantors hereby waive (a)noƟce of acceptance of this Guaranty.(b)demand of payment,presentaƟon and protest,(c)all right to assert or plead any statute of limitaƟons relaƟng to this Guaranty or the Lease,(d)any right to require the Lessor to proceed against the Lessee or any other Guarantor or any other person or enƟty liable to Lessor,(e)any right to require Lessor to apply to any default any security deposit or other security it may hold under the Lease,(f)any right to require Lessor to proceed under any other remedy Lessor may have before proceeding against Guarantors,(g)any right of subrogaƟon that Guarantors may have against Lessee. Guarantors do hereby subordinate all exisƟng or future indebtedness of Lessee to Guarantors to the obligaƟons owed to Lessor under the Lease and this Guaranty. If a Guarantor is married,such Guarantor expressly agrees that recourse may be had against his or her separate property for all of the obligaƟons hereunder. The obligaƟons of Lessee under the Lease to execute and deliver estoppel statements and financial statements,as therein provided,shall be deemed to also require the Guarantors to provide estoppel statements and financial statements to Lessor.The failure of the Guarantors to provide the same to Lessor shall consƟtute a default under the Lease. The term "Lessor"refers to and means the Lessor named in the Lease and also Lessor's successors and assigns.So long as Lessor's interest in the Lease,the leased premises or the rents,issues and profits therefrom,are subject to any mortgage or deed of trust or assignment for security,no acquisiƟon by Guarantors of the Lessor's interest shall affect the conƟnuing obligaƟon of Guarantors under this Guaranty which shall nevertheless conƟnue in full force and effect for the benefit of the mortgagee,beneficiary,trustee or assignee under such mortgage,deed of trust or assignment and their successors and assigns. The term "Lessee"refers to and means the Lessee named in the Lease and also Lessee's successors and assigns. Any recovery by Lessor from any other guarantor or insurer shall first be credited to the porƟon of Lessee's indebtedness to Lessor which exceeds the maximum liability of Guarantors under this Guaranty. No provision of this Guaranty or right of the Lessor can be waived,nor can the Guarantors be released from their obligaƟons except in wriƟng signed by the Lessor. Any liƟgaƟon concerning this Guaranty shall be iniƟated in a state court of competent jurisdicƟon in the county in which the leased premises are located and the Guarantors consent to the jurisdicƟon of such court.This Guaranty shall be governed by the laws of the State in which the leased premises are located and for the purposes of any rules regarding conflicts of law the parƟes shall be treated as if they were all residents or domiciles of such State. In the event any acƟon be brought by said Lessor against Guarantors hereunder to enforce the obligaƟon of Guarantors hereunder,the unsuccessful party in such acƟon shall pay to the prevailing party therein a reasonable aƩorney's fee.The aƩorney's fee award shall not be computed in accordance with any court fee schedule,but shall be such as to full reimburse all aƩorneys'fees reasonably incurred. If any Guarantor is a corporaƟon,partnership,or limited liability company,each individual execuƟng this Guaranty on said enƟty's behalf represents and warrants that he or she is duly authorized to execute this Guaranty on behalf of such enƟty.Signatures to this Guaranty accomplished by means of electronic signature or similar technology shall be legal and binding. If this Form has been filled in,it has been prepared for submission to your aƩorney for his approval.No representaƟon or recommendaƟon is made BY AIR CRE, DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/20/2020 2:34 PM GR-3.22,Revised 06-10-2019 Page 2 of 2 the real estate broker or its agents or employees as to the legal sufficiency,legal effect,or tax consequences of this Form or the transacƟon relaƟng thereto. GUARANTORS Robert Calvert and Paul Rudder Executed At: On: By: Name Printed:Robert Calvert Title: Address: By: Name Printed:Paul Rudder Title: Address: AIR CRE *hƩps://www.aircre.com *213-687-8777 *contracts@aircre.com NOTICE:No part of these works may be reproduced in any form without permission in wriƟng. DocuSign Envelope ID: C2A14A42-CA41-4E56-9B81-E6C36FD29821 11/20/2020 PLANNING AND DEVELOPMENT DEPARTMENT 2600 Fresno Street • Third Floor Jennifer K. Clark, AICP, Director Fresno, California 93721-3604 (559) 621-8277 FAX (559) 498-1026 November 25, 2020 Please reply to: Marisela Martínez (559) 621-8038 Robert Calvert jane@cultcollective.com Dear Applicant: SUBJECT: ZONING INQUIRY NUMBER P20-04309 REQUESTING INFORMATION REGARDING CANNABIS RETAIL FOR PROPERTY LOCATED AT 51 WEST ALLUVIAL AVENUE (APN 303-053-19) Thank you for your inquiry regarding the allowance of new cannabis retail uses. The requested information about cannabis retail uses was analyzed using Article 27, Chapter 15 of the Fresno Municipal Code (FMC) of the City of Fresno. Please note, all research for this inquiry is based on existing land development of the subject property. If there are multiple buildings on the subject property, this research was based on the address provided in the request. This research does not take into effect of future development unless provided in your application request. With that, research of a proposed cannabis retail business on the subject property conveys the following: 1. All cannabis retail businesses must be located on property zoned DTN (Downtown Neighborhood), DTG (Downtown General), CMS (Commercial Main Street), CC (Commercial Community), CR (Commercial Regional), CG (Commercial General), CH (Commercial Highway), NMX (Neighborhood Mixed- Use), CMX (Corridor/Center Mixed-Use), RMX (Regional Mixed-Use), and must meet all of the requirements for development in these zones, including, but not limited to, parking, lighting, building materials, etc. The subject property is zoned CMX, which is one of the allowable zone districts for cannabis retail businesses. Development standards of the CMX zone district are available in Sections 15-1103, 15-1104, and 15-1105 of the FMC. The subject location meets the zone district requirement, per Section 15- 2739.B.1.a of the FMC, for a cannabis retail business. 2. All building(s) in which a cannabis retail business is located shall be no closer than 800 feet from any property boundary containing the following: (1) A cannabis retail business; (2) A school providing instruction for any grades pre- school through 12 (whether public, private, or charter, including pre-school, Zoning Inquiry P20-04309 51 West Alluvial Avenue Page 2 November 25, 2020 transitional kindergarten, and K-12); (3) A day care center licensed by the state Department of Social Services that is in existence at the time a complete commercial cannabis business permit application is submitted; and, (4) A youth center that is in existence at the time a complete commercial cannabis business permit is submitted. The subject property is not located within 800 feet of the property boundary of any of the above-mentioned uses. The subject building meets the separation requirements, per Section 15-2739.B.1.b of the FMC, for a cannabis retail business. 3. Prior to commencing operations, a cannabis retail business must obtain a Cannabis Conditional Use Permit from the Planning and Development Department per Section 15-2739.N of the FMC. 4. No more than two cannabis retail businesses may be located in any one Council District. If more than 14 are ever authorized by Council (more than two per Council District), they shall be dispersed evenly by Council District. The subject property is in Council District 2. There are currently no cannabis retail businesses located in Council District 2. This location requirement is satisfied for a cannabis retail business. Please review the entirety of Article 33, Chapter 9 (Cannabis Retail Business and Commercial Cannabis), and Section 15-2739 (Adult Use and Medicinal Cannabis Retail Business and Commercial Cannabis Business) of the FMC to understand other requirements of cannabis retail businesses, including but not limited to, application requirements, signage, etc. This information was researched by the undersigned per the zoning request. The undersigned certifies that the above information contained herein is believed to be accurate and is based upon, or relates to, the information supplied by the requestor. The City of Fresno assumes no liability for errors and omissions. All information was obtained from public records held by the Planning and Development Department. A copy of the Fresno Municipal Code may be obtained by contacting the City Clerk’s office at 559-621-7650. The Fresno Municipal Code may also be searched on the Internet, free of charge, by going to www.fresno.gov. If you have questions regarding this matter, please contact me by telephone at 559-621-8038 or at Marisela.Martinez@fresno.gov. Cordially, Marisela Martínez, Planner I Development Services Division Planning and Development Department 1048.0G 501842.3 1 2. SOCIAL POLICY AND LOCAL ENTERPRISE PLAN 2.1 Describe whether Commercial Cannabis Business is committed to offering employees a Living Wage. Ascent is a Commercial Cannabis Business committed to offering employees a Living Wage. We believe that paying employees an above-market living wage and investing their education and training will increase their productivity and personal career satisfaction. To this end, Ascent will compensate for an hourly wage of dollars per employee with a 3% increase of salary per year. Assistant Management positions will be paid an annual salary of with a 3% increase per year and upper Management will be paid an annual salary of with a 3% increase per year. Employees will log into and carry tablets or other mobile devices to facilitate customer sales. Beyond sales, these tablet devices will also alert employees and their managers of all state and locally mandated breaks, lunches, etc. and will track employee work periods, including overtime so that every employee receives their correct salaries & wages. 2.2. Briefly describe benefits provided to employees such as health care, vacation, and medical leave, to the degree they are offered as part of employment Ascent's budget calls for an hourly wage of dollars per employee with a 3% increase in salary per year. Assistant Management positions will be paid an annual salary of with a 3% increase per year and upper Management will be paid an annual salary of with a 3% increase per year. This does not include the additional dollars per month Ascent has budgeted for each employee's healthcare and wellness perks. As a consequence, every Ascent employee will enroll in 100% health insurance coverage of the HMO plan, this plan will cover health, dental, vision, etc. that the company's benefits coordinator. Ascent vacation policy grants its employees a fixed two paid vacation periods set by management. Ascent employees will cooperate to apportion vacation time to suit their commitments and to maximize their hiatus from work. Paid time off for Personal Care (5 days) per year., Paid time off for sick days (8 days) per year., and Paid time off for childcare (5 days) per year. Ascent founding team is a firm believer in workplace efficiency and working smart, not endlessly. 2.3. Describe compensation and opportunities for continuing education and employee training. Ascent will compensate all of its employees starting at an hourly rate of and upper Management’s annual salary at all with an annual 3% salary increase with full 100% paid health, vision, dental benefits, and HMO Healthcare Plan. Employee training programs shall be implemented and designed to educate new and existing employees with the option of 2 weeks of reimbursement tuition annually at community and local colleges. Time off for Higher Education - We encourage employees to continue their education and will help facilitate th eir hours if they are taking courses. Commitment to offer apprenticeships and/or compensation for continuing education in the field of business, legal, cannabis, financial and personal growth, etc. 1048.0G 501842.3 2 2.4. Describe the Commercial Cannabis Business plan to recruit individuals who meet the criteria listed in the Social Policy Section 9-3316 (b) (1) of the Fresno Municipal Code (FMC) and the percentage of local employees it hires. Ascent believes that a diverse company is vital to facilitating innovation and promoting a safe and embracing workplace. Ascent has developed a comprehensive plan to ensure that individuals from various backgrounds are afforded an equal opportunity to join our team in a meaningful way and have adopted a hiring and staffing policy that prioritizes diversity and that aims to assemble, and to retain, a workforce that mirrors California’s robust pluralism. To achieve this goal, Ascent will embark upon a community engagement and outreach program designed to solicit and hire candidates from diverse racial, gender, religious, and ethnic backgrounds and to attract the handicapped and disabled, military veterans, and HIV and AIDS sufferers. Ascent hopes to include everyone, especially those who have been wrongly harmed by cannabis criminalization and those with low socioeconomic status, non-conformist political views, and foreign national origins. At this very moment, we have both Management positions filled by two local Fresno residents and we plan on hiring all other employees locally. 2.5. Describe the extent to which the Commercial Cannabis Business will be a locally managed enterprise whose owners and /or managers reside within or own a commercial business within the City of Fresno, for at least one year before March 2, 2020. Anthony Telesco will be our head Manager and his son Mike Telesco a lifelong resident of the City of Fresno as our local Assistant Manager. We are very lucky to have a father-son in management to join our team. They will be in charge of hiring the other employees that will be Fresno -based. We are thrilled to have them on our team and looking forward to being more involved in the local community and building a better Fresno. 2.6. Describe the number of employees, title/position, and their respective responsibilities. Ascent will have four (4) employees: 1. FRESNO LOCAL HIRE: Anthony Telesco, titled Operations Manager, and their responsibilities will be to oversee day- to-operations See Section: 1.5 1) Audit the secured vault/safe 2) Managers conduct a pre-check list store opening procedure. 3) Check cameras every 5 minutes to ensure nothing looks suspicious. 4) Prepare drawers handle the day-to- financials 5) Oversea Security and Employees 6) Handle Inventory 7) Daily Specials 8) Divvy up opening/closing tasks. 9) Schedule lunches and breaks. We will use FlowHub to determine lunch breaks and other breaks so that we can plan ahead for busy times. 10) Have a team huddle to start the day and a safety discussion. 1048.0G 501842.3 3 13) Monitor security camera, secure building with security 14) Develop charitable and local initiatives for Ascent 2. FRESNO LOCAL HIRE: Matt Telesco, title: Assistant Manager, their responsibilities are to open and close and run the counter during hours of operations See Section: 1.5 1) Managers conduct a pre-check list store opening procedure. 2) Check cameras every 5 minutes to ensure nothing looks suspicious. 3) Prepare drawers handle the day-to- financials 4) Help Oversea Security and Employees 5) Handle Inventory 6) Daily Specials 7) Divvy up opening/closing tasks. 8) Schedule lunches and breaks. We will use Flow hub to determine lunch breaks and other breaks so that we can plan for busy times. 9) Have a team huddle to start the day and a safety discussion. 10) Monitor security camera, secure building with security 11) Develop charitable and local initiatives for Ascent 3. FRESNO LOCAL HIRE: TBD: title: Front Desk Check-Customer Check-In, their responsibilities are to open and close and run the counter during hours of operations See Section: 1.5 This process outlines reception/front desk staff responsibilities at the opening, during operations, with a focus on the waiting room. 1) Visually inspect the front desk 2) Turn on the front desk computer. Log into Flow hub. 3) Make sure all tech is charged and ready for daily use. 4) Check trash cans, water stations, coffee stations, and refill as necessary 5) Clean interior and exterior 6) Check-in customers 7) Clean etc. per COVID protocols. 8) Closeout all computers, plug in anything that needs to be charged. 4. FRESNO LOCAL HIRE: TBD title: Budtender, their responsibilities are to open and close and run the counter during hours of operations See Section: 1.5 This process outlines budtender responsibilities at the opening, with a focus on the bud room. 1) Turn on all computers and printers. 2) Turn on any other tech sound system, and welcome screens. 3) Go to the manager and get your drawer. a) Count your drawer to ensure the correct starting denomination. 1048.0G 501842.3 4 b) If you need any change, inform the manager. c) Put your drawer into your till. d) Assign the drawer to yourself in the POS system. e) Log in to the POS system on your computer. 4) Bring products out to the bud room. 5) Ensure all products are stocked based on expected sales for that day. 6) Refresh bud pods. 7) Budtenders will assist the inventory manager with auditing/counting inventory, including a checklist from the night before as well as METRC records. 8) Ensure the check-out area is clean, tidy, 9) Cannabis waste SOP is in this operating procedure below. 10) Ensure the bud room is clean and tidy. 11) Throughout the day: a) Package up cash into appropriate bundles to make it easier to count at the end of the shift or at closing (1’s = $25; 5’s = $50; 10’s = $100). b) Sanitize regularly as outlined by your regional and business’s COVID protocols. c) Clean and tidy the bud room and check out the area as time allows to make the closing cleaning process smoother. 2.7. Describe whether the CCB has five (5) or more employees and whether it has signed a labor peace agreement allowing employees to unionize without interference. Ascent’s core in-house team will be 4 local hires and will have a labor agreement ready if we exceed this, then we are prepared to provide a Labor Peace Agreement. Labor Peace Agreements. This has not been signed since we currently do not have 5 employees. See our agreement MEMORANDUM OF AGREEMENT THIS AGREEMENT is made and entered into by and between Blackstone Management Co, LLC and any DBA under which it operates a cannabis business currently located at 444 North Blackstone Avenue, Fresno CA 93701 and at any address where this entity may relocate pursuant to a license under State or Local law, (hereinafter referred to as the “Employer”) and United Food and Commercial Workers International Union, and its designated Local, UFCW Local 770 (the "Union") or any other designated Locals. 1. This Agreement shall apply to all regular full and part-time employees (“employees”) of the Employer who work in the job classifications set forth in Exhibit "A". 2. The parties hereby establish the following procedure for the purpose of ensuring an 1048.0G 501842.3 5 orderly environment for the exercise by the Employees, in the classifications set forth in Exhibit A, of their rights under Section 7 of the National Labor Relations Act and to ensure compliance with California Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA). 3. The parties mutually recognize that Federal labor law guarantees employees the right to form or select any labor organization to act as their exclusive representative for the purpose of collective bargaining with their employer, or to refrain from such activity.1 4. The Employer will take a neutral approach to unionization of Employees. The Employer will not undertake any action nor make any statement that will directly or indirectly state or imply any opposition by the Employer to the selection by such Employees of a collective bargaining agent, or preference for or opposition to any particular union as a bargaining agent. 5. The Union shall have reasonable access to the Employer’s worksite during regular business hours or when employees are required to work for the purpose of meeting with Employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. In so doing, the Union shall not disrupt the Employer's business and will act consistently with the California Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA) and Local Cannabis Ordinances. The Employer will cooperate with the Union in making arrangement to permit Union representatives to meet with employees in areas where the Employees will be able to speak to the Union representative without monitoring by the Employer, at time when the employee is not regularly obligated to perform work duties. 6. Within ten days following receipt of written notice of intent to organize Employees, the Employer will furnish the Union with a complete list of Employees, including both full and part-time employees, showing their job classifications, departments, home addresses, and, if known, cell phone numbers and email addresses. Thereafter, the Employer will provide updated complete lists monthly, unless there is no change to the list. The Union will keep all Employee information provided by the Employer confidential and not use them for any purpose other than the purposes of this Agreement or as required by law. Within ten days of 1 If the unit of employees to be covered by this Agreement is one in the exclusive jurisdiction of the California Agricultural Labor Relations Act, the parties will meet within ten days of such knowledge and modify the Agreement to comply with that law as mandated by its terms. 1048.0G 501842.3 6 a request by the Union to the Employer, the Employer will also distribute to each Employee the letter attached as Exhibit B. 7. At the Union’s request, the Employer will arrange a meeting(s) on a mutually agreeable date(s) and time(s) with all of its Employees. At the meeting, the Employer will tell the Employees that it is neutral, does not object to their talking to and supporting the Union, and will negotiate a collective bargaining agreement (CBA) with the Union if a majority the covered employees wish to be represented by the Union by designating the Union as their exclusive collective bargaining representative. Union representatives will attend the meeting and, after the Employer has introduced them and left the meeting, talk with the Employees about the Union. To accomplish this end, the parties will determine if the meeting will be on paid or unpaid time. 8. The Union may request recognition as the exclusive collective bargaining agent for the Employees of Employer. Upon such request, a person mutually agreed to by the Employer and Union, or if no agreement is reached then the Arbitrator identified in Paragraph 13, will conduct a review of Employees' authorization cards and membership information submitted by the Union in support of its claim to represent a majority of such Employees. The review shall involve a comparison of the authorization card signatures of the Employees to W-4 or 1-9 forms for such Employees provided to the Arbitrator (as defined in Paragraph 13) by the Employer. The identity of all card signers shall be kept confidential from the Employer. Subject to the availability of a person mutually agreed upon or an Arbitrator identified in Paragraph 13 such review shall take place no more than fourteen (14) days after the Union's request absent mutual agreement to extend time for review. The size of the unit to determine recognition will be determined by the size of the unit ten days prior to the time the request for recognition is made. If the review establishes that a majority of eligible Employees has designated the Union as its exclusive collective bargaining representative or joined the Union, the Employer will recognize the Union as the exclusive representative of such Employees. 9. The Employer will not file a petition with the National Labor Relations Board for any election in connection with any demands for recognition provided for in this agreement. The Union and the Employer will not file any Unfair Labor Practice charges with the National Labor Relations Board or any other type of legal claim in connection with any act or omission occurring within the context of this agreement; arbitration under Paragraph 13 shall be the exclusive remedy. The Union and the Employer agree that if any other person or entity petitions the National Labor Relations Board for any election as a result of or despite recognition of the Union pursuant to this Paragraph, (a) the Employer and the Union will each request that the NLRB dismiss the petition on grounds of recognition bar or, if they have agreed to a collective bargaining agreement covering Employees at the time the petition is filed, on grounds of contract bar, (b) if the petition is not dismissed, the Employer and the Union shall agree to a full consent election agreement under Section 102.62(c) of the NLRB’s Rules and Regulations, and (c) the Employer and the Union shall at all times abide by the provisions of this Agreement. 10. If the Union is recognized as the exclusive collective bargaining representative as provided in Paragraph 8, negotiations for a collective bargaining agreement shall commence no later than 120 days from the date of recognition or 45 days from a request by the Union to bargain a successor 1048.0G 501842.3 7 contract for a contract that has an impending expiration date. To ensure labor peace throughout the collective bargaining process, if the parties are unable to reach agreement on a collective bargaining agreement within 9 months after recognition pursuant to 1048.0G 501842.3 8 Paragraph 8, or upon 4 months after commencement of bargaining for a successor agreement, either party shall have the right to submit any unresolved issues for resolution to final and binding arbitration pursuant to Paragraph 13. The arbitrator identified in Paragraph 13 below shall be the Arbitrator, unless another Arbitrator is mutually agreed to by the parties. The Arbitrator shall be guided by the following considerations: a. Proposals by the parties during bargaining leading up to arbitration; b. Size and type of the Employer's operations; c. Ability of the employees, through the combination of wages, hours and benefits, to earn a living wage to sustain themselves and their families; and d. Employees' productivity; e. Employment standards and conditions at comparable retail cannabis operations; f. Customer focused concerns; g. Responsible customer service in a clean and secure environment that assures customer and worker safety; h. A procedure that allows workers to raise and expeditiously resolve work place disputes; i. Full compliance with Local and State laws regulating cannabis businesses; j. Compliance with all labor and employment standards under Federal, State and Local laws covering the employees of the Employer; k. Any other relevant economic or non-economic factors which the parties have entered into evidence at the hearing. 11. During the term of this Agreement in consideration of the covenants made herein, the Union will not engage in any work stoppages, picketing, or boycott or other economic activity at the Employer's Operation which will interfere with the Employer’s business (including but not limited to strikes, sympathy strikes, “slowdowns”, public hand billing, public display of banners, demonstrations directed at the employer, or refusals to handle merchandise - except as may be permitted by applicable provisions of Cal/OSHA) and the Employer will not engage in a lockout of the Employees. If the Employer recognizes any union besides the Union as the exclusive collective bargaining representative of Employees, this Paragraph shall terminate immediately and without notice. 12. Employer shall ensure that if the Employer intends to subcontract any work performed by bargaining unit employees, in so doing the Employer will comply with all State and Local laws and will require the subcontractor to comply, in writing, with this Agreement. 13. The parties agree that any disputes over the interpretation or application of this Agreement shall be submitted to expedited and binding arbitration, with an Arbitrator mutually agreed to by the parties If the parties are not able to agree upon an arbitrator within 1048.0G 501842.3 9 7 days they shall request from the Federal Mediation and Conciliation Service a list of five arbitrators who are members of the National Academy of Arbitrators and who have their principal residence in Southern California. The parties shall, within 14 days of 1048.0G 501842.3 10 receiving the list, select a permanent Arbitrator (“Arbitrator”) under this Agreement by alternately striking names from the list. The party to strike first shall be determined by coin toss. The last name stricken from the list shall be the Alternate Arbitrator (“Alternate Arbitrator”). The Arbitrator shall hear and decide all disputes submitted to arbitration unless the Arbitrator is unavailable for a hearing within 30 days from the date of submission but the Alternate Arbitrator is available during such 30-day period, in which case the dispute shall be submitted to the Alternate Arbitrator for hearing and decision. The Arbitrator (or Alternate Arbitrator) shall conduct the arbitration according to the procedures established by the American Arbitration Association. The Arbitrator (or Alternate Arbitrator) shall also have the authority to order the noncompliant party to comply with this Agreement, including both remedies in equity and law. The parties hereto agree to comply with any order of the Arbitrator (or Alternate Arbitrator), which shall be final and binding. The United States District Court for the Central District of California shall have exclusive jurisdiction over any action concerning arbitration under this Agreement. The parties consent to the entry of any order of the Arbitrator (or Alternate Arbitrator) as the order or judgment of the Court, which includes the entry of findings of fact and conclusions of law. 14. This Agreement shall be in full force and effect from the date it is fully executed on behalf of the Employer and the Union until five years from the date the Employer has opened all of the Operations covered by this Agreement, or if sooner upon execution of a collective bargaining agreement or issuance of an interest arbitration award which concludes the collective bargaining agreement negotiations, either of which explicitly supersedes this document. The Employer shall notify the Union in writing when it has hired its first three employees. This Agreement may be extended by mutual agreement of the parties. 15. If any provision of this Agreement is deemed invalid or found to be contrary to law by a court of competent jurisdiction, such provision shall be of no force or effect; but the remainder of this Agreement shall continue in full force and effect. The parties shall meet and negotiate in good faith with respect to any provision found to be in contravention of the law, not later than fourteen (14) days after a written request to do so by either party with the goal of addressing the issue raised. 16. In the event of the sale of the licensed medical cannabis and/or adult use cannabis business, operations covered by this Agreement, and/or in the event of a merger of the Employer, the Employer will require as a term of the sale or merger that the new owner assume all the terms of the Employer herein and execute a copy of the instant Agreement with the Union, in which event the Employer assignor shall be relieved of its obligations hereunder to the extent that the assignor has fully transferred its right, title, or interest to the Operation and the Employer has satisfied all outstanding obligations to the Union that arose prior to the sale. This Agreement will bind all successors to the Employer herein. The Employer will notify the Union of all applications it submits to the State of California or local entities within 10 days of filing, the notice will include the name the application is submitted under and the type of license sought. 1048.0G 501842.3 11 FOR THE EMPLOYER: By: FOR THE UNION: By: UFCW Local 770 Title: Title: Date: Date: EXHIBIT A Description of the bargaining unit The job classifications will include all regular full time and part time employees of the Employer for location(s) covered under this Agreement. It shall exclude managerial, supervisory, casual and confidential employees employed by the Employer at the facility covered by this Agreement. These terms are as defined by the National Labor Relations Act. Once a full complement of workers is hired, the Employer will notify the Union within fourteen days of all job titles to be employed. 1048.0G 501842.3 14 EXHIBIT B Dear Employees: Blackstone Management Co. LLC has been approached by United Food and Commercial Workers International Union and its Local UFCW 770. The UFCW is a labor union that represents cannabis workers throughout California. The Union has expressed an interest in organizing our employees. We believe that it is in the best interest of our employees, guests, and clients to resolve the issue of union representation as quickly as possible, and with minimum disruption. To avoid a lengthy and disruptive campaign, we have signed a "card check neutrality agreement" with the Union. This letter will explain some basic terms of this card check neutrality agreement ("the Agreement"). The Agreement gives the Union an opportunity to attempt to organize our employees. We will provide the Union with a list of employees' names, phone numbers, email addresses and home addresses where they can contact you. The card check neutrality agreement guarantees employees the right to form or select a labor organization to act as their exclusive representative for the purpose of collective bargaining with their employer, or to refrain from such activity. The decision for you to join or not join the Union is yours to make. All managers and supervisors will be affirmatively instructed in their obligations under this agreement. Union representatives will contact Employees in the near future. The union representative will explain union representation by the UFCW and will ask each employee if he or she wants to join the Union. If an employee wants to join the Union they will be asked to sign a card that states that they want the Union to represent them. By signing this authorization card, the employee is voting for the Union. If an outside, neutral third party confirms that the Union has obtained signed cards from a majority of the employees at this location, we will recognize the Union as the employees' exclusive collective bargaining representative and will meet with the Union to negotiate in good faith over a collective bargaining agreement. I have written this letter to maintain our tradition of open, forthright communication. Again, the decision of whether or not to join the union is your decision alone. Sincerely, 15 1048.0G 501842.3 2.8. Provide a workforce plan that includes at a minimum the following provisions: 2.8.1. Commitment for 30% of employees to be local hires; the business must show that it has either hired or made a good faith effort to hire bona fide residents of Fresno who have not established residency after the submission of an application for employment with the applicant/permittee. Ascent is 100% percent in favor of hiring Fresno locals, also willing to train its personnel on how to thrive in a diverse workplace. Among its measures, Ascent (i) will advertise open positions on Indeed, Glassdoor, Ziprecruiter, and Monster’s websites and (ii) will participate in local job fairs like Fresno’s Annual Job Fair that occurs each November. To disseminate notice of job openings outside of the company's immediate network, Ascent will partner with local Fresno organizations and support their any Social Equity Job Fair programs uniting people who have been impacted by the War on Cannabis with companies like Ascent who wish to welcome them in, regardless of cannabis conviction or economic background. Ascent will have OVER 30% of employees of local hire at our establishment. We plan on hiring all local. 2.8.2. Commitment to offer apprenticeships and/or compensation for continuing education in the field; and Employee training programs shall be implemented and designed to educate new and existing employees with the option of 2 weeks of reimbursement tuition annually at community and local colleges. Time off for Higher Education - We encourage employees to continue their education and will help facilitate their hours if they are taking courses. Commitment to offer apprenticeships 16 and/or compensation for continuing education in the field of business, legal, cannabis, financial and personal growth, etc. 2.8.3. Commitment to pay a living wage to its employees. Ascent is a Commercial Cannabis Business committed to offering employees a Living Wage. We believe that paying employees an above-market living wage and investing their education and training will increase their productivity and personal career satisfaction. To this end, Ascent will compensate for an hourly wage of dollars per employee with a 3% increase of salary per year. Assistant Management positions will be paid an annual salary of with a 3% increase per year and upper Management will be paid an annual salary of with a 3% increase per year. Employees will log into and carry tablets or other mobile devices to facilitate customer sales. Beyond sales, these tablet devices will also alert employees and their managers of all state and locally mandated breaks, lunches, etc. and will track employee work periods, including overtime so that every employee receives their correct salaries & wages. 2.9. Describe whether the business is willing to serve as a Social Equity Business Incubator by offering support to local cannabis social equity businesses in the form of mentorship, training, equipment donation, a percentage of shelf space dedicated to Fresno equity business products, legal assistance, financial services assistance, or other technical assistance support. Ascent is willing to serve as a Social Equity Business Incubator and prides itself on the depth and diversity of both its team and its advisory board, a group combining seasoned veterans of the cannabis industry with a collection of emerging leaders. With this team, Ascent can offer great experiences and knowledge in the form of education and mentorship. In addition to modernizing cannabis retail, Ascent differs from its competition because it regards itself as a socially conscious business and a conscientious stakeholder in the surrounding community—nurturing its customers, re-investing in its employees, boosting neighboring businesses, and above all, creating a bond with local citizens. Indeed, Ascent’s mission propels it: to eliminate the taboos surrounding cannabis and to build a socially conscious entity that will include, inspire, and will act locally as a force for the common good. With Robert Calvert as the co-founder and CEO of Ascent and his donations for the last 10 years to the local Highschool Scholarship Fund. Robert is not just giving back to the community he is part of the community. These types of commitment will be continued in the work of Ascent for the City of Fresno Mentorship programs Ascent will offer a mentorship program for local cannabis businesses to share knowledge of the cannabis industry. The Ascent mentorship program is a 6-month program for local cannabis businesses. The mentorship program will include monthly follow-ups and advice when 17 needed. The mentoring program is for helping cannabis businesses to be more successful in their overall business and get a better knowledge of the industry. Mentorship The board of Ascent will anticipate the mentor programs for local cannabis businesses to share their knowledge of the industry and offer 6 months dedicated to the mentoring program for businesses. The knowledge from the previous dispensary business and startup will be applied and serves as general assistance in medicinal cannabis issues and serve the purpose of developing a further understanding for medicinal use and handling of medicinal cannabis patients. Training Ascent will provide practical training in different programs and create awareness about the cannabis business. In the mentorship programs, there will also be training that the business can attend to in areas such as legal, business development, business financial counseling, and more. Equipment donation In the mentorship program, the companies that are participants will be given business equipment as a donation from Ascent. Annually donations will be given out in the form of excess equipment. Legal assistance and financial services assistance The companies can access Ascent Financial and Legal assistance when they have any need in their business and use the company knowledge. 1 7. COMMUNITY BENEFITS AND INVESTMENTS PLAN Criteria required in Phase III 7.1. The CCB Application should describe the social responsibility plan. Ascent views its business as a ripe opportunity to lead through service. Service to our employees, service to our community, service to our suppliers, and service to the planet. While it is important that our business does well, it is equally important that we also do good and realize o ur brand’s promise to provide cannabis with a conscience. Ascent’s core values naturally align with Fresno’s esteem for excellence, tradition, and integrity. The founding team members at Ascent, Robert Calvert and Paul Rudder prize kindred values. At Ascent, we regard the Cannabis business as the next step in the evolution of the retail cannabis market. We view Fresno’s long-awaited decision to adopt a legal cannabis program as evidence that it believes in the power of cannabis as a healing plant and is looking for innovative, values- driven companies, like Ascent, to bring the program to life. 1. The Ascent Ability Initiative: Many physically disabled people who live life in a wheelchair or who use a walker experience chronic muscle and joint pain that cannabis can alleviate. Ascent will partner with Fresno’s Accessibility & Disability division to create an awareness program to instruct disabled residents on the value of cannabis in relieving pain and related symptoms. Ascent’s founding team, donating their personal resources and time to educate disabled participants. 2. The Ascent Senior Health Initiative: Senior citizens are the fastest-growing consumer demographic for cannabis and CBD products in the United States, and a key demographic of the Fresno Community. Along with overcoming cannabis' stigma, Ascent will patiently answer their questions and address their concerns. To do so, Ascent will collaborate with the Fresno Senior Centers such as Care Source Seniors & Clovis Senior Activity Center to author best practices for engaging the Fresno senior community and for offering access to safe, tested cannabis and CBD products. Ascent will reward all Seniors with loyalty points, so they can enjoy the tax incentive discount. After the visit, staff will give a tour of the Ascent retail store and demonstrate the best products for various senior health goals while showing new senior customers how they can activate their Ascent Senior Discount Card. 3. Ascent Youth Initiative. Ascent’s founding team believes in the Native American philosophy of considering our actions for the next seven generations. Ascent chooses to start with the generation of young people in the Fresno community in a two-fold initiative. The first aspect of the initiative addresses children in food-insecure households. Many people don't realize that 1 in 6 children in Fresno, goes to bed hungry at least three times per week. To this end, Ascent Fresno will partner with the Fresno Regional Food Banks Programs. This program helps to close the gap for children who get most of their nutrition from free and reduced-price school lunch programs. Giving a pack of food to each child in the program that contains simple nonperishable, kid-friendly food that equals six meals of simple nutritious food. Ascent will measure the impact of the number of meals given per month. 2 The second aspect of the Initiative is a youth diversion cannabis education campaign for high school and college-aged youth in the Fresno community. As legal cannabis becomes normalized in more states, a confusing message is sent to youth. They see billboards and social media ads describing cannabis as a medicine. However, recent research suggests that young adults under the age of 24 should not consume THC regularly. To address this, Ascent Fresno will partner with a non-profit with a history of providing effective public health education, drug intervention advocacy, and policy development. Ascent's founder will help to create a Fresno Cannabis Youth Diversion campaign that will consist of presentations & discussion circles at local high schools and community colleges and an infographic driven social media campaign to educate Fresno's youth on waiting to consume cannabis until their mid-20s. 4. The Ascent Homeless Initiative. Homelessness is a complex, difficult, and vexing problem faced by Fresno and many other cities. While California and its cities are becoming famous in the cannabis industry as being the "world's largest market", Fresno also has one of the largest homeless populations per capita than many metropolitan cities in the US. As homelessness is a key issue that the city of Fresno is addressing with a compendium of non-profit organizations, Ascent is joining the effort and partnering with The Poverello House, Fresno First Steps Home, and HandsOn Central California, a community organization focused on rehabilitating families experiencing homelessness and keeping them off the streets. It uses a unique combination of life skills development, job training, and assistance & family counseling to help the parents graduate from its program. Ascent Fresno will contribute time, help raise money through our community, and collect donations. for these 3 amazing organizations. 5. The Ascent Social Equity Initiative. As mentioned, Ascent's founders have actively shaped Mammoth’s cannabis social equity policy and care deeply about integrating those disenfranchised and stigmatized by the War on Cannabis into the legal industry. To this end, Ascent will seek to hire social equity candidates. Ascent will also select one female social equity qualified individual per year for a living wage paid internship/mentorship program that will offer her the business skills and social network to start her own cannabis business. This individual will spend significant time shadowing Ascent's CEO, Robert Calvert, and learning the ropes of cannabis entrepreneurship and leadership. Finally, Ascent will host quarterly expungement clinics in its off-site Education Center and offer free legal services to have cannabis records expunged in accordance with the provisions of Proposition 64. 7.1.1 Providing funding for or hosting expungement clinics or outreach services. To be of service to the Fresno community, Ascent intends to launch community social impact initiatives to serve five of the city's most vulnerable populations: (i) physically disabled (ii) senior citizens (iii) youth related to drugs and drug addiction (iv) the homeless, and (v) victims of the cannabis prohibition era and its racially selective enforcement measures. Ascent’s founder and legal advisor, Robert Calvert will work to bring individuals affected by the war on cannabis into the newly regulated market by offering them job opportunities & training and by hosting a quarterly cannabis conviction expungement clinic at the Ascent Fresno education center. The primary service of the Expungement Clinic is to expedite the clearance of criminal 3 records that are creating barriers to services, employment, and housing, and Ascent aims to help decrease those cases. The business or cannabis retail business will develop a city-approved public outreach and education program for youth organizations and educational institutions that outlines the risks of youth use of cannabis, and that identifies resources available to youth-related to drugs and drug addiction. 7.1.2 Incorporating an environmentally sustainable business model including energy- efficient buildings and vehicles. The facility will be a closed system with high technology environmental controls employing negative air pressurization to eliminate the exchange of air. Exhausted air will be filtered, with any odors neutralized. We apply cleanroom standards to all areas of the facility. This is especially important in the dispensing process, which all require a clean, sterile environment to provide the utmost assurance that our products are of top quality. Clean rooms ensure minimal and controlled levels of contaminants and are governed by a set of procedures managed through specific cleaning methods and air filtration devices. These measures ensure we have the cleanest and safest environment to dispense cannabis. All ventilation equipment and all safety equipment within the facility must be routinely inspected and tested to ensure they are in good working order at all times. The buildings continually maintain the premises and its infrastructure so that it is visually attractive and not dangerous to the health, safety, and general welfare of employees, patrons, surrounding properties, and the general public. The premises shall not be maintained in a manner that causes a public or private nuisance. Litter will be removed daily from the premises, including adjacent public sidewalks and all parking lots under the control of the cannabis retail business or commercial cannabis business; these areas must be swept or cleaned, either mechanically or manually, on a weekly basis to control debris; upkeep and operating characteristics must be compatible with abutting properties and the surrounding neighborhood. Also, as we have done in our affiliate facility, Ascent will maintain the cleanliness of its buil ding and all equipment used to transport, store, or display cannabis or cannabis products. To ensure this, we will require all agents and employees to be thoroughly trained on the standard operating procedures, which have been adopted, and modified accordingly, from our affiliates and have been operating without incident for years in full compliance with all regulations and environment. The building will be supported with energy sufficient material and interior such as energy-saving light bulbs and censored lighting for less usage of electricity, which will be regularly maintained by the employee on a daily basis. To ensure the maintenance for energy sufficiency, a follow up will be done by the Owner(s) every 6 months. 7.1.3 Utilizing vacant buildings, brownfields land, or blighted areas of the the city for the business. **NOT APPLICABLE** 4 7.2. Describe the Commercial Cannabis Business plan to develop a public health outreach and educational program that outlines the and that identifies resources availab le to youth-related to drugs and drug addiction. To be of service to the Fresno community, Ascent intends to launch community social impact initiatives to serve five of the city's most vulnerable populations: (i) physically disabled (ii) senior citizens (iii) youth related to drugs and drug addiction (iv) the homeless, and (v) victims of the cannabis prohibition era and its racially selective enforcement measures. Our Initiative is a youth diversion cannabis education campaign for high school and coll ege-aged youth in the Fresno community. As legal cannabis becomes normalized in more states, a confusing message is sent to youth. They see billboards and social media ads describing cannabis as a medicine. However, recent research suggests that young adults under the age of 24 should not consume THC on a regular basis. To address this, Ascent Fresno will partner with a non -profit with a history of providing effective public health education, drug intervention advocacy, and policy development. Ascent's founder will help to create a Fresno Cannabis Youth Diversion campaign that will consist of presentations & discussion circles at local high schools and community colleges and an infographic driven social media campaign to educate Fresno's youth on waiting to consume cannabis until their mid-20s. 7.3. Describe whether the Business plans to contribute to the Fresno Community Reinvestment Fund established to support local cannabis equity businesses. Ascent plans on offering legal services and business administration, and technical assistance to Fresno Community Reinvestment Fund. Ascent's team believes in the power of businesses working together to support each other's economic growth and to affect community change. Ascent will actualize this belief via the following strategies: Upon award of licensure, Ascents Fresno will join the Fresno Chamber of Commerce and start a Cannabis Business Unit with the other newly licensed businesses to work together as one voice in the City of Fresno. With the help of licensed distributors, Ascent Fresno will exhibit a purchase preference for cannabis products grown by licensed Fresno cultivators. Ascent Fresno also will endeavor to select local Fresno suppliers for building materials and service vendors during the build-out of its Fresno store. The purpose of this Development Code is to implement the General Plan and, if applicable, operative plans, to protect and promote the public health, safety, peace, comfort, convenience, prosperity, and general welfare of the City of Fresno. More specifically, the Development Code is adopted to achieve the following, consistent with the goals, objectives, and policies of the General Plan and any other operative plan: A. To provide a precise guide for the physical development of the city in a manner as to progressively achieve the arrangement of land uses depicted in the General Plan. B. To foster a harmonious and workable relationship among land uses and ensure compatible infill development. 5 C. To support economic development and job creation. D. To provide for the housing needs of all economic segments of the community. E. To promote high-quality architecture and sustainable design. Sustainable Design is a philosophy that seeks to maximize the quality of the built environment while minimizing or eliminating negative impacts on the natural environment. F. To promote the stability of existing land uses that conform to the General Plan, protecting them from inharmonious influences and harmful intrusions. G. To promote a safe and efficient traffic circulation system, including bicycle facilities and pedestrian amenities, and to support a multi-modal transportation system. H. To facilitate the appropriate location of community facilities, institutions, parks, and recreational areas. I. To protect and enhance real property values. J. To safeguard and enhance the appearance of the city. K. To define the duties and powers of governing bodies and officials responsible for the implementation of this Code. CONFIDENTIAL 1 BUSINESS PLAN Business Overview (This additional section was approved via email by Jennifer Ruiz) My name is Robert Calvert, myself and my partner Paul Rudder own a small dispensary in Mammoth Lakes, CA. Our experience running a small dispensary has been filled with lots of great experiences and memories with the community coming together. We both have been involved in the community for decades long before we started our dispensary. Giving back and being involved in the community has always been part of our values, as well as education and giving back to Mammoth Lakes; it’s been an overall fulfilling experience. We will bring a little small town warm and friendly experience into the City of Fresno and its vibrant and diverse community. We have been looking for a new location and found that Fresno would be a great location for us to join. We will be adding Anthony Telesco, a lifelong resident of the city of Fresno as our local manager and are very lucky to have him join our team. We would be honored to hopefully open our next location in the City of Fresno and to integrate our experience and community inclusions that we have provided for Mammoth Lakes for so many years. We are looking forward to finding new friends, ways to help build the community and to continue our local neighborhood dispensary experience to benefit the city of Fresno. We humbly submit our Ascent proposal for a cannabis retail license. Thank you for your thoughtful consideration. Warmly, Robert, Paul & Anthony Ascent prides itself on the depth and diversity of both its ownership team and its advisory board, a group combining seasoned veterans of the cannabis industry with a collection if its emerging leaders. Each one of our team members and our future team members will form an integral part in our DNA as a whole. Ascent channels talents, skills and experiences drawn from various industries and professionals. Ascent aspires accordingly to blend the visionary diversity, creativity and inclusion of California and with the operational strength that California is so knows for around the world. CONFIDENTIAL 2 As the enclosed architectural renderings and narrative illustrate, Ascent’s business model originates in a traditional re-conception of a typical dispensary. The modern Cannabis wellness experience that Ascent envisions, by contrast from the traditional dispensaries, by contrast, belongs to the new cannabis normalization. Strictly speaking, the Ascent cannabis wellness experience does not purvey cannabis. Cannabis just happens to rank in a broader, holistic formula. More importantly, the Ascent experience introduces educational and wellness experiences, to create inclusion and fostering the Fresno community. Ascent will staff its dispensary with a majority of local residents, make sure we have a diverse representation of Fresno’s community to make sure that everyone feels welcome. We are here to continuously educate the staff and community as well as learning from the community of what they are looking for us to be part of. Uniting Business, Community and Purpose In addition to modernizing cannabis retail, Ascent differs from its competition because it regards itself as a socially conscious business and a conscientious stakeholder in the surrounding community—nurturing its customers, re-investing in its employees, boosting neighboring businesses, and above all, creating a bond with local citizens. Indeed, Ascent’s mission propels it: to eliminate the taboos surrounding cannabis and to build a socially conscious entity that will include, inspire and will act locally as a force for the common good. BUSINESS PLAN 1.1 Owner Qualifications Robert Calvert Cannabis Experience and Industry Knowledge Robert Calvert is the co-founder and CEO of Ascent. He is a seasoned cannabis dispensary operator, a pilot, a visionary social entrepreneur and family man that has a track record of coaching the local little league, supports the Youth Arts & Sports. Robert has been having been a donor to the local Highschool Scholarship Fund for the last 10 years. Robert is not just giving back to the community he is part of the community. Robert is so well liked in his community that the local Police chief wrote an amazing recommendation of Robert’s character and his years of giving back to the community when CONFIDENTIAL 3 Robert applied for his and his business partner Paul’s cannabis dispensary application in Mammoth Lakes. Robert is looking to pay this forward and be part of the City of Fresno’s diverse community. Over the last 20 years Robert has successfully ran a marketing company and been a realtor. Robert then transitioned into cannabis in 2010 and has been working and operating cannabis dispensaries, cultivation and extraction locations ever since. These last 10 years of cannabis operational experience gave Robert and his current business partner Paul the opportunity to open their currently dispensary in Mammoth Lakes which they have had since 2019. Roberts greatest skill is attracting superior talent to complement his skills and to assist him in realizing Ascent’s vision for inspiring people to prioritize health, wellness and community. Robert will serve as the day-to-day operator of the city of Fresno’s dispensary. Robert has a bachelor’s degree in Environmental Conservation and Geography from University of Colorado, Boulder. 1.1 Owner Qualifications Paul S. Rudder Paul is the co-founder of Ascent. Together with Robert he has been an essential part of creating the best neighborhood dispensary in Mammoth Lakes. A respected and well-liked member of the Mammoth Lakes community he brings almost 50 years of operational experience on the legal, compliance and operational side. Paul’s cannabis experience lies on the compliance and the back-end portion of the cannabis operations. He takes care of the operations compliance, making sure that all legal documents are done and up to standards, and makes sure that all documents, certifications and training are up to date. He is excited to making a positive change in the world and to bring Ascent to the City of Fresno. Paul’s valuable cannabis experience brings tremendous value and a unique combination of cannabis, business, education and community philanthropy. Born in Norwalk, CT in 1946, Paul Rudder graduated from high school in 1964, received a B.A. degree from Franklin and Marshall College in Lancaster, PA. in 1968 and was awarded a Juris Doctor in 1972 from U.C. Hastings College of the Law in San Francisco, CA. CONFIDENTIAL 4 Mr. Rudder began his career in law with a private firm in Marysville, CA in 1973, worked for two years for Calif. Indian Legal Services in Bishop, CA after that, and then established a private practice in Bishop and Mammoth Lakes, CA, where he practiced for over thirty years. Mr. Rudder’s real estate career began locally in 1984 owning and operating apartment properties. In 1990, he purchased his first commercial property, Sherwin Plaza 4, an 18,000 sq. ft. mixed use building with retail on the first floor and professional offices on the second floor. During this time, he built his law firm up to be the largest law practice in Mono and Inyo Counties, but, in 1996, he left the firm to spend more time pursuing real estate opportunities, while continuing to practice law with only one associate. In 1997, he bought the largest commercial building in Mammoth Lakes, the Sierra Center, a 100,000 mixed use property. This was followed up by the acquisition of the Mammoth Luxury Outlets in 2001, Mammoth’s then only outlet mall. In 1997, Mr. Rudder married Kathleen Miller in Positano, Italy. Mr. and Mrs. Rudder live in a house he has owned in Mammoth Lakes since 1992, with their English cocker spaniels, Wyatt and Nash. He has served on the Board of the Mammoth Lakes Water District, including the position of Board Chairman, and was also a member of the Board of Mammoth Lakes Tourism. He and his wife served on the Board of the Mammoth Lakes Repertory Theatre and the Rudders sponsored most of the plays put on by that organization. Previous to that, while residing in North Bend, OR, the Rudders were designated by the City Council as Citizens of the Year for 2007 due to Mrs. Rudder’s substantial charitable activities. Mrs. Rudder now sponsors numerous local charities in Mammoth Lakes. Also, she was a founder of and still operates the Mammoth Lakes farmers market, known as Skip’s Market. In 2020, the Rudders celebrated Mr. Rudder’s 35th consecutive year of donating college scholarships to graduating Mammoth High School seniors. In addition, the Rudders have been active in supporting numerous other civic and charitable activities in the local area. CONFIDENTIAL 5 1.2 A Budget for construction, operation, and maintenance, compensation of employees, equipment costs, utility cost, and other operation costs. CONFIDENTIAL 17 1.5 Fully Describe hours of operations 9 a.m. to 10 p.m. Please describe opening and closing procedures. Opening Procedure Standard Operating Procedure ROLE 1) Front Desk Staff/Receptionist 2) Budtenders/Sales Associates 3) Opening Manager MANAGER: OPENING PROCESS This process outlines manager responsibilities at opening, with a focus on back of house. 1) Go to the manager’s office and audit the secured vault/safe to ensure the amounts match what was recorded during the prior evening’s audit. Ascent will use 2 employees to count cash, all cash will be stored in the vault during non-business hours. The money will be counted twice using a designated state approved and counterfeit certified money counter. The machine will be run times (2 times by each individual) Money will be counted and recorded as per our Cash Handling SOP below. We will also record per state and local regulations. 2) Managers arrives 30 minutes early and conducts a pre-check list store opening procedure. 3) Check cameras every 5 minutes to ensure nothing looks suspicious. 4) Prepare drawers with in varying denominations. Make sure every drawer has enough change. The funds from the night before will have already set aside a pre-counted labeled funds. These funds will be counted again twice. 5) As other employees arrive, go let them in using the “Entering the Building Process” below. Our security team will arrive and start to let employees in. All employees will arrive at the same time in the morning 6) Budtenders will come grab their drawers. Have budtenders count their drawers to ensure the correct starting amount. 7) If you have any nearly-expired products to discount, bring them out onto the sales floor and notify budtenders. 8) If there are any code-based or new specials for the day, print out a cheat-sheet for budtenders with the code and details of the special. 9) Divvy up opening tasks. Pre-opening checklist will be started. Bud tenders add inventory to the sales floor from our secured vault once funds have been counted in their drawers CONFIDENTIAL 18 twice by 2 people. Once all pre-opening tasks are completed by all staff, dispensary will open. 10) Schedule lunches and breaks. We will use Flow hub to determine lunch breaks and other breaks so that we can plan ahead for busy times. 11) Have a team huddle to start the day. This is a 15-minute recap of anything important that happened the previous day, the current days goals and any relevant news. 12) 5-minutes before opening, ensure Receptionist, Budtenders, and all customer-facing spaces are clean, stocked, and ready for the day. Also ensure every employee has their badge visible. 13) At opening time, we await to see new clients. Our front doors are locked per Fresno Ordnance and customers will be buzzed in and out to our secured access lobby and check in area. BUDTENDER: OPENING PROCESS This process outlines budtender responsibilities at opening, with a focus on the bud room. 1) Turn on all computers and printers. 2) Turn on any other tech sound system, and welcoming screens. 3) Go to the manager and get your drawer. Manager and bud tender count the cash together twice, and both sign a cash sheet and date it. This will all be done under the camera located by the bud tenders POS systems. a) Count your drawer to ensure the correct starting denomination. b) If you need any change, inform the manager. c) Put your drawer into your till. d) Assign the drawer to yourself in the POS system. e) Log into POS system on your computer. 4) Bring products out to the bud room. Manager will supply products that are locked in the secured vault. We will only carry enough product for each day only. All product will be brought out and stored in the counters or in the drawers behind the counters. They are not stored on the floor overnight. 5) Ensure all products are stocked based on expected sales for that day. Aim to have enough product stocked to get you through at least mid-day 6) Budtenders will assist the inventory manager with auditing/counting inventory, including a check list from the night before as well as METRC records. Everyone will include inventory item count and on what day. 7) Ensure the check-out area is clean, tidy, and well-stocked if extra stock is needed please speak to the manager on duty and fill out a supply form on what is needed and what quantity. Once product has been received this will be checked and counted by both budtender and manager to make sure there is an accurate account with 2 people present. CONFIDENTIAL 19 This will also happen in front of the secured cameras either in the management office, in the secured vault area. 8) If paper goods are needed for POS system printers, these items will be located in the paper goods supply storage are (non-cannabis items) and will also have 2 backup rolls underneath the counter space that they use. 9) We do not take out trash from any supplies until manager has searched through trash to make sure no money or cannabis products are in the trash. 10) We also do not throw out trash unless a manager is present, and it is approved. 11) Cannabis waste SOP is in this operating procedure below. 12) Ensure the bud room is clean and tidy. Spot clean any areas missed by closing staff. On down time each staff member has a designated area that they are responsible to keep clean, and organized and secure together with manager and security. 13) 15 minutes before opening, you must be done with opening tasks and ready to start helping customers. Ensure your badge is visible. 14) Throughout the day: a) Package up cash into appropriate bundles to make it easier to count at the end of the shift or at closing b) Sanitize regularly as outlined by your regional and business’s COVID protocols. c) Clean and tidy the bud room and check out area as time allows to make the closing cleaning process smoother. RECEPTIONIST: OPENING PROCESS This process outlines reception/front desk staff responsibilities at opening, with a focus on the waiting room. 1) Visually inspect the front desk/waiting room area and note immediate tasks to complete before customers start arriving. 2) Turn on the front desk computer. Log into Flow hub. 3) Make sure all tech is charged and ready for use. If not, plug it in immediately 4) Check trash cans, water stations, coffee stations, and refill as necessary 5) Check chairs, furniture, and magazines/educational materials. Spot clean and straighten as necessary. 6) 15 minutes before opening, you must be done with opening tasks and seated at the front desk. Ensure your badge is visible. CONFIDENTIAL 20 PROCESS FOR ENTERING THE BUILDING - ALL STAFF 1) Opening manager and security arrives. Drive around the building to make sure nothing looks suspicious. 2) If the exterior of the dispensary looks ok, park in the designated employee area and enter though the back secured entrance. If you spot something suspicious, the security guard will follow security protocol and secure the area. If we see something suspicious, we call 911 and follow the security protocols given by the City of Fresno Police as well as the State of California protocols. BCC etc. 3) Manager unlocks the door and enters the building, there will always be 1 security guard and 1 manager opening the store. We use the buddy system to make sure that premises as well as staff are safe. Both manager and security will have to enter together. The security may also watch outside the premises as manager enters the building. This is up to the discretion of the manager and the guard as a joint decision. 4) Manager immediately locks the door after entering. 5) Manager disarms the alarm. The alarm will have a licensed alarm company that is directly linked to the police. It has a keypad alarm system with a personalized code for each person who has the access code. 6) Next to the keypad upon entry is also a panic button in case of danger or intrusion. This panic button is connected directly to the Fresno police. 7) Manager turns on the lights and does a visual inspection of the interior of the store, including whether the closing staff completed their procedures adequately, and looking for any water or rodent issues from overnight. Manager and security will inspect all areas to make sure that they are all intact and secured. 8) If any issues are noticed such as rodent or water leak issue. A report will be filed, and proper maintenance will be arranging as soon as possible. As other staff arrive, first check the cameras to make sure no one else is waiting outside. If clear, let them in the front door. Immediately lock the door behind them. Manager and security will use a visual “all clear” sign once all is secured. They will check both sides of each door in the retail store. 9) Clock in, securely store personal belongings, and get started on opening procedures by job type. Employees will store all their items in secured lockers in the employee breakroom area. EQUIPMENT ● Computer ● Cash drawers ● Safe and access to the safe CONFIDENTIAL 21 ● Cleaning equipment ● Keys to all exterior doors ● METRC access and login information 1.5 Continued Dispensary Closing Procedures Closing Standard Operating Procedure ROLE 1) Front Desk Staff/Receptionist 2) Budtenders/Sales Associates 3) Closing Manager TIMING Every day - during the last hour of business and after the store closes to customers/patients. PURPOSE The closing process starts around an hour before closing time and concludes after the last employee leaves the store for the night. Closing is one of the times of greatest risk for dispensaries, so it’s important to have thoughtful processes. Failing to properly conduct closing tasks is a compliance and safety issue for your store and employees. This SOP details every step in the closing process, including managing products, counting drawers, cleaning, and locking the door/leaving the building. A closing and opening checklist will be provided for each day so that we have a signed version that we then store for review and compliance if needed. BUDTENDER: CLOSING PROCESS This process outlines budtender responsibilities at closing, with a focus on the bud room. CONFIDENTIAL 22 1) If it’s not busy, begin closing drawers one at a time. We do not close any drawers until 1 hour before closing. The manager will determine when to start closing drawers and which drawers to close first. If the store is still open, we will close the drawers in the managers secured access office. a) Budtenders on closed drawers will count their drawer, then begin closing duties, focusing on back of house duties so as to not disturb customers. b) Budtenders still serving customers are expected to provide great service, but aim to get all customers out by closing time. We will not admit any new customers 30 minutes before closing. No customers will be allowed after closing. All customer needs to leave the dispensary 5 minutes before closing at the latest. 2) Count drawers and submit for review: a) Within Flow hub, select “Drawers” > “Details” > Submit for Review. b) Manually count your drawer’s final cash totals down to zero. Enter each coin and dollar denomination. c) Add relevant notes. d) Select “Submit Drawer for Review.” e) The closing manager will verify and close the drawer. Insert daily totals and where the drawer is brought. Please see our cash management section for how cash is managed throughout the store. 3) Divide up closing duties. All staff has a designated closing area. They will restock non - cannabis items and keep the area tidy, clean and organized. There is a checklist for each POS station and each designated area provided to each budtender. a) Lock up every product for the evening. All product will be store in our secured access area, and secured vault located in the back of the store. See security diagram. b) Ensure the check-out area is clean, tidy, and well-stocked. Printer receipts and other paper good supplies are located in the back where non-cannabis products are stored, employees can also find some items under their POS stations. i) We do not take out trash and managers will be responsible for checking trash for possible cash or cannabis drops. Manager is also responsible to dispose of all non-cannabis trash during closing and opening procedures. 2 people will always do this together. A manager and an employee. c) Ensure the bud room is clean and tidy. The evening staff cleans the store (opening staff will tidy and spot clean where necessary). All floor spaces get vacuumed, door rugs, mopping the floors, sanitizing all surfaces per COVID procedures and the front door as well. All doors are sanitized inside and out. d) Do multiple walk-throughs of the store to make sure no messes remain, and that no products are hidden somewhere. CONFIDENTIAL 23 4) Log out of FlowHub and turn off all computers. Plug in any devices that need to be charged. 5) Turn off any other technology, music and television screens. RECEPTIONIST: CLOSING PROCESS This process outlines reception/front desk staff responsibilities at closing, with a focus on the waiting room. 1) If it’s not busy, begin closing cleaning/tidying tasks as appropriate. There is a checklist on what needs to be done and each check list is new for each day. 2) At closing time, the manager will come lock the front door. 3) After all customers have been served, check FlowHub and make sure no customers are left waiting in the queue. 4) Tidy chairs, furniture, and magazines/educational materials. Sweep/vacuum floors, with special focus on entryway rugs. Wipe down any customer-facing surfaces such as countertops, pens, door handles etc. per COVID protocols. Trash will be inspected together with a manager and then taken out by a manager to be disposed of. 5) Close out of all computers, plug in anything that needs to be charged. MANAGER: CLOSING PROCESS This process outlines manager responsibilities at closing, with a focus on back of house. 1) Prior to closing, start doing closing tasks. a) Exchange tips. Count small bills or change and swap out for larger bills from a drawer. b) Divvy up tips. Make sure that all tips are counted for. We make sure that employees get taxed for these according to state and federal tax schedules and are also reported on their payroll statements. c) All tips are split equally amongst all staff members. d) Assign closing duties. Manager will have a designated closing procedure checklist for the entire store. Manager will also create checklists for all other staff for both closing and operating procedures that are updated weekly and monthly if needed. Manager is responsible to check that all other checklist tasks have been completed before any staff can go home. e) At closing time, lock the front door. No customers are allowed into the store 30 minutes before closing and no clients can stay in the store 5 minutes to closing. All customer must exit 5 minutes prior to closing. No exceptions. 2) Security will make sure customers are out 5 minutes before closing. CONFIDENTIAL 24 3) Security will check cameras once all customers leave to make sure that no customers are still in the store or in the parking lot. 4) After the last customer leaves the store, perform manager and security guard will conduct a store security check, making sure no customers remain anywhere in the store. This includes the restroom, the offices, the back areas, that customers are restricted from. 5) Go to Managers office and watch the cameras every 5 minutes to look for anything suspicious. 6) Reconcile all drawers. Note: Some drawers may be closed and reconciled prior to closing if it’s slow. a) Budtender informs the closing manager that their drawer is ready for review. Manager will verify all drawer in the manager’s office. Manager is the only one who is able to transport cash in the store. Review the counts and notes submitted by the budtender into FlowHub. Compare the expected cash with the actual cash and look for over/under for debit or cash. i) If totals match, close the drawer. ii) If totals don’t match, recount and update totals and reconcile the difference see cash management SOP below. b) Count out your daily starting amount for each drawer for the morning shift. Put in secure bags in the safe. c) Put empty drawers back in the till, and leave the till open 7) Verify that all drawers are closed in FlowHub. Note: If you don’t close all drawers, you won’t be able to run the End of Day PDF Report. 8) Run your End of Day sales report in FlowHub to help verify drawer totals and find discrepancies. 9) Upload daily sales into METRC. 10) Count the safe and record totals. Keep the safe open for as short a time as possible. We only open the safe once at closing and once at opening. As other employees complete their duties, go let them out using the “Leaving the Building Process” below. Send a closing note to the opening manager at the end of day the closing manager will send an email about what happened the previous day and at night closing. This includes sales numbers, problem customers and any issued that occurred, changes to orders and if a customer has a quality issue that needs to be addressed. PROCESS FOR LEAVING THE BUILDING - ALL STAFF 1) Clock out and grab personal belongings. 2) Closing manager lets employees out. First check cameras to make sure no one is outside. Immediately lock the door behind them. Manager or security can open the door to let staff CONFIDENTIAL 25 in and out of the building. No employees will enter or exit alone and if needed security will escort staff to their cars. We recommend staff leaving as a group. 3) Closing manager and last employee leave together. Manager and security will escort last employee out together as they lock up for the night. 4) Closing manager and last employee to leave: a) Does a final visual inspection of the interior of the store, confirming all products are put away and all areas are clean. Turn off all lights, leaving one set of lights on until it’s time to exit the building. Safety lights are on as directed by the planning department and Fresno Police. Please see security diagram for more details. b) Check the camera to make sure no one is outside. c) Before we leave, we activate our instore security alarm. d) If all clear, activate the alarm e) Turn off the remaining lights, lock the door, and step outside. f) Confirm that the door is locked. g) Closing manager and final employee walk quickly and directly to cars. h) Closing manager drives around the building to confirm nothing suspicious and both employees drive away together. EQUIPMENT ● Computer ● Flow hub account and login information ● Cash drawers ● Safe and access to the safe ● Cleaning equipment ● Keys to all exterior doors ● Metrc access and login information 1.6 Fully Describe the day-to-day operations if you are applying for a retail permit: CONFIDENTIAL 26 (i)Describe customer check-in procedures: Customer Check In Standard Operating Procedure SOP ROLE 1) Front Desk Staff/Receptionist and or security guard. TIMING Ongoing - Anytime a customer enters the dispensary. Hours of operation 9 a.m. - 10 p.m. Delivery Hours 6 a.m. - 8.30 a.m. Monday to Sunday PURPOSE The moment the front desk staff sees (blinking) or hears the doorbell on the outside being activated (buzzing sound), he or she will buzz the customer or patient in. They are greeted at the front desk and asked to show a form of State or Federal Approved ID to be checked and by front desk staff/or security. Overflow of people will be directed to stand towards the wall by the front desk, not to obstruct anyone entering or exiting the dispensary. An employee of the applicant will verify the identity and age of adult use customers to verify that an Adult Use customer is at least 21 years of age. Age is verified using a device which takes a scan of the Government Issued Photo Identification into a scanner that uses software that verifies the validity of the identification. Age verification takes place in a reception area inside the retail premises which is separate and apart from the retail area of the business premises where the cannabis goods displayed for retail sale are kept. The door from the reception, is where age verification to the retail area and where cannabis goods are sold, will remain closed and locked at all times. No customers are allowed past the closed door CONFIDENTIAL 27 from the reception area into the retail sales area unless and until they have been identified and age verified for entry. Applicant only sell medicinal cannabis goods to individuals who are at least 18 years of age and possesses a valid physician’s recommendation. Entry into the retail area is only after confirmation of the customer’s age, identity, and the physician’s recommendation for medicinal use of cannabis. Applicant's Employee before sale of any medicinal cannabis goods to individuals who are at least 18 years of age will confirm the customer’s age and identity by again inspecting a valid form of government identification provided by the customer and scanning the identification into age verification software which is located at the point of sale register location. Acceptable forms of government identification to prove identification and age verification include the following: (1) A document issued by a federal, state, county, or municipal government, or a political subdivision or agency thereof, including, but not limited to, a valid motor vehicle operator's license, that contains the name, date of birth, height, gender, and photo of the person; (2) A valid identification card issued to a member of the Armed Forces that includes the person’s name, date of birth, and photo; or (3) A valid passport issued by the United States or by a foreign government. PROCESS FOR GREETING CUSTOMERS/PATIENTS This process starts the moment a customer or patient enters your dispensary. 1) Customer enters the dispensary. 2) Receptionist/security verbally greets the customer within 3 seconds. a) If there is a line to check in, say “Welcome, I will be right with you. Please step in line and I will be with you momentarily.” b) If there is no line, the customer steps up to the front desk for check in. c) If there are COVID restrictions we will adhere to all CDC, and all other health and safety measures as directed by City, State and Federal Governments. All protocols will be followed according to directions given by authorities. d) The dispensary has a secured main entrance and exit that needs to be buzzed in and out for each person to enter or exit. Front desk staff will help clients accordingly to enter and exit. CONFIDENTIAL 28 e) Once they have been checked in and processed, they will wait in the main secured entry lobby area, where they will be cleared and buzzed in to the retail space. f) There will be physical barriers such as ropes, and visual cues such as signage to aid customers. Our goal is never to have a customer standing at the door confused about what they do next. CHECK IN PROCEDURE 1) Customer steps up to check in counter. 2) Receptionist verbally greets the customer within 3 seconds and says: Welcome to Ascent. May I see your ID and or med card please? g) Recreational/Adult Use Customer hands receptionist their state-specific approved identification, like ID or passport. h) Medical Patient hands receptionist their ID and medical card 3) Receptionist/security looks at the ID/med card to verify age and authenticity, then checks the customer in using one of three methods: a) Scan the ID barcode using the scanner i) Hold the scanner 6-8 inches away from the barcode on the bottom of the back of the ID (look for the 2d/complex barcode). ii) Click one of the side buttons on the scanner and scan the light over the barcode. iii) Listen for a beep and look to see that the customer’s information loads on the screen. iv) You will either see “Welcome Back” if they are a returning customer, or “New Customer” if they are new. We use Flow hub software to verify ID’s, medical cards and history. (1) Recreational Customer name, date of birth, and Rec will automatically populate a new customer profile. (2) Medical Patient full name, date of birth, state of residence, Med ID, and Med ID expiration are required when creating new Med profiles. b) Use “Look up customer profile” within Greeting to search for an existing customer profile. i) Tap “Look up customer profile.” Select “REC” or “MED.” Type in at least 3 characters to search for an existing customer. ii) Cross reference the DOB on the customer’s ID to verify it’s the right profile. CONFIDENTIAL 29 iii) Once verified, tap into the customer profile, and select “Check in as REC Customer” or “Check in as a MED Customer” to add them to the queue. c) Create a new customer profile manually. i) Tap the plus sign in the lower right corner of the screen. ii) Tap “Create New Profile Manually.” (1) Recreational Make sure “REC” is selected. Enter the customer’s full legal name, state, and date of birth. (2) Medical Tap “MED,” enter the patient’s full legal name, state of residence, date of birth, Med ID, and Med ID expiration. iii) Select “Save & Check In.” 4) If the customer has been flagged as a potential risk to your dispensary in the past, you will be notified on the app. 5) If the customer is new, or information has changed for a returning customer, edit their profile, and tap “Save.” a) Add them to your loyalty program by adding the customer’s phone number. b) Add the customer to your pre-set customer groups (if applicable). c) Add “Customer Sources” information (if applicable). d) We will add consent forms as directed by the City of Fresno, State of California BCC and any other agencies. 6) Check them in and add them to the queue. a) Recreational Tap “Check in as Rec Customer.” b) Medical Tap “Check in as Med Customer.” 7) Receptionist tells the customer to take a seat in the waiting room until they are called by a sales associate. CUSTOMER MOVEMENT PROCESS This process outlines how customers/patients go from check in to transaction, including where they wait. 1) After completing check in, the receptionist tells the customer/patient where to wait and gives an estimated wait time if available. 2) The customer/patient must stay within the secured lobby waiting area. 3) The customer/patient is only able to access the secured sales floor after being checked in. 4) The customer/patient must wait to be called back before entering. CONFIDENTIAL 30 ORDER AHEAD PROCESS This process outlines how to check in customers/patients who are picking up and paying for orders made ahead of time. 1) Make sure that the order is in the “Ready” column within Flow hub Cashier. You will not be able to pair a customer with an order that isn’t ready. 2) Follow the typical greeting, new customer set up, and ID/med card verification steps as customers/patients arrive. 3) Instead of checking in the customer/patient as you normally would, select “Order Pick Up.” 4) Find the customer/patient’s name in the list of orders, select their name, and select “Check in Order.” 5) You’ll be directed back to the main queue and will see the name at the top that reads “Order Pick Up.” The order is now paired. This will be done in the same exact check in procedures as above. 6) Secured access is still required. 7) The next available budtender will meet the customer/patient, take them back to the terminal, and process the transaction as usual, including adding specials. MANAGING THE QUEUE PROCESS This process is for maintaining and updating the queue of checked in customers/patients. This is important for accurate reporting of average wait time. 1) Once a customer/patient is checked in, their name automatically appears in the list of checked in customers, called the queue, on the main screen of Greet. Note: Order ahead customers/patients always go to the top of the queue. 2) All active customers/patients in the queue have an associated wait time. 3) To edit a customer/patient, select their name. This directs you to their profile. Update the applicable information, or add customer notes or flags, and “Save.” 4) To remove a customer/patient from the queue: a) Select their name. This directs you to their profile. Choose “Remove from Queue.” To remove the customer from the queue view, slide your finger across a customer’s name in the queue to the left. This gives two options: “Left Store” and “Flag.” Select “Left Store” to indicate that the customer/patient has left and should no longer be in the queue. CONFIDENTIAL 31 b) Select a reason why the customer/patient left the store. If “Other” is selected, a text box will appear. Describe the reason. Tap “Remove.” 5) Customers/patients will be automatically removed from the queue once they start building their cart with a budtender. 1.6.1. ii Identify location and procedures for receiving deliveries during business hours. Deliveries are located in the back of the building marked “deliveries” on our security diagram. Delivery during business hours. See below. Delivery Procedures The operating protocol for the receipt of new inventory of cannabis goods is as follows. The CONFIDENTIAL 32 Licensed Distributor is escorted into the Limited Access Area by Security or a Manager. The identity, date, time of entry, and time of exit of the licensed Distributor employee is logged into the Limited Access Area Entry Log. Items of cannabis goods are received in a designated secure area within the limited access room. The Shipping Manifest is then reviewed by the Inventory Manager for regulatory compliance of required manifest items as to the number of boxes of cannabis goods, type of cannabis goods, weight and or units of cannabis goods, and that the label on the boxes containing the cannabis goods match the goods received. The Inventory Manager will then review the Certificate of Analysis to ensure that the cannabis goods received have been tested and cleared for retail sale. The Inventory Manager will review the Shipping Manifest to ensure that the manifest is complete, and the items received match the manifest. SALES INVOICE/ SHIPPING MANIFEST PLEASE USE PERMANENT INK FOR ALL ITEMS INVOICE/MANIFEST NUMBER: ACTUAL DATE AND TIME OF DEPARTURE: / / AM PM ATTACHED PAGE(S)? YES NO # OF ATTACHED PAGES: ESTIMATED DATE AND TIME OF ARRIVAL: / / AM PM SHIPPER INFORMATION RECEIVER INFORMATION STATE LICENSE # STATE LICENSE # TYPE OF LICENSE TYPE OF LICENSE BUSINESS NAME BUSINESS NAME BUSINESS ADDRESS DELIVERY ADDRESS CITY, STATE, ZIP CODE CITY, STATE, ZIP CODE PHONE NUMBER PHONE NUMBER CONTACT NAME CONTACT NAME DISTRIBUTOR INFORMATION STATE LICENSE # DRIVER’S NAME BUSINESS NAME CA DRIVER’S LICENSE# STREET ADDRESS VEHICLE MAKE CITY, STATE, ZIP VEHICLE MODEL PHONE NUMBER VEHICLE LIC. PLATE # CONTACT NAME ACTUAL DATE AND TIME OF ARRIVAL / / AM PM PRODUCT SHIPPED DETAILS SHIPPER COMPLETES ALL THE UNSHADED COLUMNS BELOW. RECEIVER COMPLETES ONLY THE SHADED COLUMNS BELOW (Please attach additional pages, if needed) UID TAG NUMBER (IF APPLICABLE) ITEM NAME AND PRODUCT DESCRIPTION (INCLUDE WEIGHT OR COUNT) QTY ORDERED QTY REC’D UNIT COST TOTAL COST RETAIL ONLY UNIT RETAIL VALUE TOTAL RETAIL VALUE PRODUCT REJECTION IF PRODUCTS ARE REJECTED, PLEASE CIRCLE THE ITEMS BEING REJECTED IN THE PRODUCT SHIPPED DETAILS SECTION ABOVE REASON FOR REJECTION: PRODUCT RECEIPT CONFIRMATION I CONFIRM THAT THE CONTENTS OF THIS SHIPMENT MATCH IN WEIGHT AND COUNT AS INDICATED ABOVE. I AGREE TO TAKE CUSTODY OF ALL ITEMS AS INDICATED RECEIVED ABOVE – AND WHICH ARE NOT CIRCLED. THE PRODUCTS CIRCLED ABOVE ARE REJECTED FOR DELIVERY AND REMAIN IN THE CUSTODY OF THE DISTRIBUTOR FOR RETURN TO THE SHIPPER AS INDICATED ON THIS FORM AND ALL ATTACHED PRODUCT DETAILS SHEET(S). NAME OF PERSON RECEIVING AND/OR REJECTING PRODUCT: PHONE NUMBER: SIGNATURE OF PERSON RECEIVING AND/OR REJECTING PRODUCT: DATE SIGNED: CONFIDENTIAL 33 The following procedures are performed for verifying labeling contents for cannabis goods for retail sale including final form of verification, primary panel labeling, and informational panel labeling. The Inventory Manager will follow the following step by step procedure verifying labeling contents of cannabis goods received for retail sale. Step 1. - Overall Requirements. Manager will review the label for basic overall requirements as follows: (a) All the information required to be listed on the label is written in English. (b) The label is unobstructed and conspicuous so that it can be read by the consumer. (c) All label information is located on the outside container or wrapper of the finished product to be sold at retail sale. If the product container is separable from the outer-most packaging (e.g., a container placed inside of a box), the product container shall also include the following: The Inventory Manager will then review the label for requirements based upon the type of cannabis good as follows: Step 2. - Labeling Requirements: Pre-Rolls and Packaged Flower. a. Primary Panel Label - Pre-Rolls and Packaged Flower. (a) The label for a package of pre-rolls or packaged flower includes on the primary panel, which the part of the cannabis product that is most likely to be displayed, presented, shown, or examined under customary conditions of display for retail sale, that includes the following information in a type size no less than 6-point font and in relation to the size of the primary panel and container: (1) Identity of the product; (2) The net weight of cannabis in the package, listed in both metric and U.S. customary units; and (3) Universal symbol b. Informational Label - Pre-Rolls and Packaged Flower. CONFIDENTIAL 34 (b) The label for a package of pre-rolls or packaged flower shall include an informational label, which is the part of the cannabis product label that is not the primary panel, that includes the following information in a type size no less than 6-point font and in relation to the size of the informational panel and container: (1) The Unique Identifier for use in the Track-and-Trace system (UID); (2) The licensed cultivator or licensee packaging the product (either the legal business name or the registered name under which the business will operate listed on the license certificate), and its contact number or website address; (3) The date of packaging for retail sale; (4) The following statement in bold print: “GOVERNMENT WARNING: THIS PACKAGE CONTAINS CANNABIS, A SCHEDULE I CONTROLLED SUBSTANCE. KEEP OUT OF REACH OF CHILDREN AND ANIMALS. CANNABIS MAY ONLY BE POSSESSED OR CONSUMED BY PERSONS 21 YEARS OF AGE OR OLDER UNLESS THE PERSON IS A QUALIFIED PATIENT. CANNABIS USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF CANNABIS IMPAIRS YOUR ABILITY TO DRIVE AND OPERATE MACHINERY. PLEASE USE EXTREME CAUTION.” (5) For the cannabinoid content for a package of pre-rolls or packaged flower. Packages of infused pre-rolls labeled with either: (a) The cannabinoid content in milligrams; or (b) The cannabinoid content of the dried flower expressed as a percentage and the added cannabinoid content in milligrams. Step 3. - Labeling Requirements: Manufactured Products. a. Primary Panel - Manufactured Products (a) That the label for a manufactured cannabis product includes a primary panel that includes the following information in a type size no less than 6-point font and in relation to the size of the primary panel and container: (1) The identity of the product in a text size reasonably related to the most prominent printed matter on the panel; (2) The universal symbol and CONFIDENTIAL 35 (3) The net weight or volume of the contents of the package, listed in both metric and U.S. customary units. (b) Cannabinoid content for manufactured cannabis products which may be included on the primary panel labeled as follows: (1) For an edible product or a cannabis concentrate for which the manufacturer has established serving designations, THC and CBD content, expressed in milligrams per serving and milligrams per package. (2) For a topical cannabis product or a cannabis concentrate without serving designations, THC and CBD content, expressed in milligrams per package. For THC or CBD concentration that is less than two (2) milligrams per serving or per package, the THC or CBD may be labeled as “<2.0 mg per serving” or “<2.0 mg per package.” Additional Primary Panel Labeling Requirements: Edible Products. That the primary panel of an edible cannabis product includes the words “cannabis-infused” immediately above the identity of the product in bold type and a text size larger than the text size used for the identity of the product. b. Informational Panel Labeling Requirements for Manufactured Products. That the label for a manufactured cannabis product includes an informational panel, the text which is in a size of no less than 6-point font in relation to the size of the primary panel and container includes the following: (1) The name of the licensed manufacturer (either the legal business name or the registered name under which the business will operate listed on the license certificate) that manufactured the cannabis product and its contact number or website address; (2) The date of the cannabis product’s manufacture and packaging; (3) The following statement in bold print: “GOVERNMENT WARNING: THIS PRODUCT CONTAINS CANNABIS, A SCHEDULE I CONTROLLED SUBSTANCE. KEEP OUT OF REACH OF CHILDREN AND ANIMALS. CANNABIS PRODUCTS MAY ONLY BE POSSESSED OR CONSUMED BY PERSONS 21 YEARS OF AGE OR OLDER UNLESS THE PERSON IS A QUALIFIED PATIENT. THE INTOXICATING EFFECTS OF CONFIDENTIAL 36 CANNABIS PRODUCTS MAY BE DELAYED UP TO TWO HOURS. CANNABIS USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF CANNABIS PRODUCTS IMPAIRS YOUR ABILITY TO DRIVE AND OPERATE MACHINERY. PLEASE USE EXTREME CAUTION.” (4) The statement “FOR MEDICAL USE ONLY,” if: (A) The cannabis product is intended by the manufacturer only for sale to medicinal- use customers; (B) The product is an orally-dissolving edible product containing more than 100 milligrams THC per package; or (C) The product is a topical cannabis product or concentrate containing more than 1,000 milligrams THC per package. (5) A list of all product ingredients in descending order of predominance by weight or volume; If any product ingredient contains sub-ingredients, the list includes either: (A) The common name of the ingredient followed by a parenthetical listing of all ingredients in descending order by weight or volume; or (B) A list of all sub ingredients as individual ingredients in descending order of predominance. (6) If the cannabis product contains an ingredient, flavoring, coloring, or an incidental additive that bears or contains a major food allergen, the word “contains,” followed by a list of the applicable major food allergens; (7) The names of any artificial colorings contained in the product; (8) If an edible cannabis product, the amount, in grams or milligrams, of sodium, sugar, carbohydrates, and total fat per serving; (9) Instructions for use, such as the method of consumption or application, and any preparation necessary prior to use; (10) The product expiration date, “use by” date, or “best by” date, if any; (11) The UID and the batch or lot number; and CONFIDENTIAL 37 (12) If the cannabis product is perishable or is perishable after opening, the statement, “KEEP REFRIGERATED” or “REFRIGERATE AFTER OPENING,” as applicable. Manager will review the information panel label with the understanding that with the exception of the UID and the batch or lot number the information label requirements may be fulfilled through the use of supplemental labeling, which may include, but is not limited to, a package insert, fold- out or booklet label, or a hanging tag. Cannabinoid content for manufactured cannabis products which may be included on the informational panel is labeled as follows: (1) For an edible product or a cannabis concentrate for which the manufacturer has established serving designations, THC and CBD content, expressed in milligrams per serving and milligrams per package. (2) For a topical cannabis product or a cannabis concentrate without serving designations, THC and CBD content, expressed in milligrams per package. Step 4. - Labeling Restrictions. Inventory Manager will inspect Cannabis product labeling to ensure that it does not contain any of the following labeling restrictions: (a) The name of a California county, including any similar name that is likely to mislead consumers as to the origin of the product, unless one hundred percent of the cannabis contained in the product was grown in that county. Manager will review the shipping manifest and Track-and-Trace system to validate the cannabis represented to be grown in a certain county was in fact 100% grown in the county indicated on the label. (b) That the label content is not, or is designed to be, attractive to individuals under the age of 21, including but not limited to: (1) Cartoons; (2) Any likeness to images, characters, or phrases that are popularly used to advertise to children; (3) Any imitation of candy packaging or labeling; or (4) The terms “candy” or “candies” or variants in spelling such as “Kandy” or “kandeez.” CONFIDENTIAL 38 (c) Any information that is false or misleading. False or misleading information includes any indication that the cannabis or cannabis product is organic, unless the National Organic Program (Section §6517 of the federal Organic Foods Production Act of 1990 (7 U.S.C. Section §6501 et seq.)) authorizes organic designation and certification for cannabis and the cannabis or cannabis product meets the requirements for such designation and certification. This includes use of the word “organic” on the labeling or variants in spelling such as “organix.” (d) Any health-related statement that is untrue or misleading. Any health-related statement must be supported by the Cultivator or Manufacturer with the source of publicly available scientific evidence (including evidence from well-designed studies conducted in a manner which is consistent with generally recognized scientific procedures and principles), and for which there is significant scientific agreement among experts qualified by scientific training and experience to evaluate such claims. (e) If the product is an edible cannabis product, a picture of the product contained therein. (g) Any labeling in violation of Code of Regulation Section §5040.1 which prohibits the marketing cannabis goods as Alcoholic Products. Licensees shall not sell or transport cannabis goods that are labeled as beer, wine, liquor, spirits, or any other term that may create a misleading impression that the product is an alcoholic beverage Step 5. - Statement of Characteristic Anticipated Effects. The Inventory Manager will inspect Cannabis product labeling to ensure that it does not contain any statement of characteristic anticipated effects. If a cannabis product includes information on the characteristic anticipated effects of the cannabis product the Manufacturer must submit documentation which substantiates that the information is truthful and not misleading. Such information may be located on the informational panel of the label or as an insert included in the cannabis product package. For purposes of this step, “characteristic anticipated effect” includes any physiological effect (a temporary effect on the body related to the consumption of cannabis) that is common to or expected from the particular cannabis strain, but excludes any claim of health benefits (i.e. claims of therapeutic action as a result of the consumption of cannabis). Step 6. Universal Symbol Placement. The Inventory Manager will inspect Cannabis products for the universal symbol placement as follows: CONFIDENTIAL 39 (a) The primary panel of a cannabis product is marked, stamped, or otherwise imprinted with the universal symbol. (b) The symbol replicates the following in form: (c) The symbol is black in color. For packaging that is dark in color, the symbol may be made conspicuous by printing the symbol on, or outlining the symbol with, a contrasting color. (d) That the universal symbol is no smaller in size than one half (.5) inch by one half (.5) inch and is printed legibly and conspicuously. (e) That the universal symbol has not been altered or cropped in any way other than to adjust the sizing for placement on the primary panel. After the items of cannabis goods physically received are cross-checked and reconciled against items identified on Shipping Manifest. they are then placed in our Inventory Control system by the Inventory Manager which is part of the point-of-sale software system. Once this process is complete the cannabis goods are then moved by the Inventory Manager into the storage area of our limited access area where cannabis goods are stored and held. (iii) Identify the name of the Point-of-Sale system to be used and the number of Point-of-Sale Locations. Name: Flow Grow and 5 POS Systems. (iv) i. The estimated number of customers to be served per hour/day. We estimate that 100-200 Customers per day will be served. We estimate between 15 to 25 customers per hour depending on time of day, day of week, or holiday. ii. Describe the proposed product line to be sold and estimate the percentage of sales of flower and manufactured product. Based on our current sales of our CONFIDENTIAL 40 other dispensary we believe that we will sell 60% Manufactured product and 40% flower product. We carry everything from creams to smokable flower in various packages and brands. The store will carry an assortment of over 800 product sku’s to bring variety to the Fresno Community. iii. We will not be proposing a delivery service at this time. 1 6. LOCATION 6.1 In addition to the location-related details provided in the Commercial Cannabis Business (CCB) Application pages 1-7 the application shall include a thorough description of the proposed location, including but not limited to the overall property, building, and the floor plan. 444 N. Blackstone Ave. - This 3500 Square foot building is situated in a prime location at 444 North Blackstone Ave., just 1 block south of CA-180 and a 1/2 mile to the west of CA- 41. Located on the boarder of the Lowell and Jefferson Districts, just north of Downtown, we’re excited to have this opportunity to be contributing member to the community. This building location has street frontage of almost 60’. With plenty of parking out front and a secure, well-lit parking lot in the rear, there will be plenty of options for our customers to access our location. Inside our building you will find a secure and well-lit experience with 10’ ceilings and a state-of- the-art retail environment offering over 800 different products for our customers. With plenty of room in our building, the customer experience will be a welcoming experience and non-threatening where everyone can shop at their leisure. Customers will enter our secured lobby and find a welcoming check in area. From there, they will enter into our retail store for an unreal experience that is superior in our industry. Knowledgeable staff can provide assistance to those that request it. When the customers have completed their transaction, they can depart with confidence and the level of comfort because of the safe environment the is provided by our team. 5 6.2 Include at least 1 photograph 6 1 3. NEIGHBORHOOD COMPATIBILITY PLAN 3.1 Describe how CCB will proactively address and respond to complaints related to noise, light, odor, litter, vehicles and pedestrian walk. 3.2 Describe how the CCB will be managed to avoid becoming a nuisance or having impacts on its neighbors and the surrounding community. 3.3 Describe odor mitigation practices Having a number of affiliates located in densely populated areas, we understand the need to control odors and to provide clean and sanitary airflow throughout the facility and the surrounding areas of our facility. To ensure this, our facility will be equipped with HEPA air filters, other air filtration devices, and bioconversion systems, that are designed with Photocatalytic reactors. These preventive systems are designed to oxidize all VOCs (volatile organic compounds) such as fungal and microbial diseases from the air, as well as removing undesirable organic odors, while not visible in the design, Ascent will install at least eight 12" carbon filter air scrubbing units from the company Mountain Air Filters, which have been demonstrated by the team's past experience to work extremely well in controlling odor. These filters are specifically designed to eliminate cannabis odor and are whisper quiet so they won't obtrude on the customer's experience. The facility will be a closed system with high technology environmental controls employing negative air pressurization to eliminate the exchange of air. Exhausted air will be filtered, with any odors neutralized, We apply cleanroom standards to all areas of the facility. This is especially important in the dispensing process, which all require a clean, sterile environment to provide the utmost assurance that our products are of top quality Clean rooms ensure minimal and controlled levels of contaminants and are governed by a set of procedures managed through specific cleaning methods and air filtration devices. These measures ensure we have the cleanest and safest environment to dispense cannabis. All ventilation equipment and all safety equipment within the facility must be routinely inspected and tested to ensure they are in good working order at all times. In addition, as we have done in our affiliate facility, Ascent will maintain the cleanliness of its building and all equipment used to transport, store, or display cannabis. To ensure this, we will require all agents and employees to be thoroughly trained on the standard operating procedures, which have been adopted, and modified accordingly, from our affiliates and have been operating without incident for years in full compliance with all regulations. Standard operating procedures include daily, weekly, and monthly cleaning requirements of the facility and all fixtures with the goal of maintaining a dean, sanitary, and professional-looking facility reminiscent of a high-end pharmacy or medical office. According to the protocol, the facility supervisor will oversee all 2 cleaning and sterilization activities and will inspect the work of employees to ensure our goals are met. 3.4 Identify potential sources of odor We have identified that the secured vault area where we store cannabis product as well as the retail areas will be potential sources of odor. However with the above mentioned mitigation practices we anticipate little to no odor in the surrounding community. 3.5 Describe odor control devices and techniques to ensure odors from cannabis are not detectable beyond the permitted premises. Having a number of affiliates located in densely populated areas, we understand the need to control odors and to provide clean and sanitary airflow throughout the facility and the surrounding areas of our facility. Air scrubbers will be used as well as the items below. To ensure this, our facility will be equipped with HEPA air filters, other air filtration devices, and bioconversion systems, that are designed with Photocatalytic reactors. These preventive systems are designed to oxidizeall VOCs (volatile organic compounds) such as fungal and microbial diseases from the air, as well as removing undesirable organic odors, While not visible in the design, Ascent will install at least eight 12" carbon filter air scrubbing units from the company Mountain Air Fil ters, which have been demonstrated by the team's past experience to work extremely well in controlling odor. These filters are specifically designed to eliminate cannabis odor and are whisper quiet so they won't obtrude on the customer's experience. The facility will be a closed system with high technology environmental controls employing negative air pressurization to eliminate the exchange of air. Exhausted air will be filtered, with any odors neutralized, We apply cleanroom standards to all areas of th e facility. This is especially important in the dispensing process, which all require a clean, sterile environment to provide the utmost assurance that our products are of top quality Clean rooms ensure minimal and controlled levels of contaminants and are governed by a set of procedures managed through specific cleaning methods and air filtration devices. These measures we have the cleanest and safest environment to dispense cannabis. All ventilation equipment and all safety equipment within the facility m ust be routinely inspected and tested to ensure they are in good working order at all times. 3.6 Describe all proposed staff odor training and system maintenance. We will bring in a facilities management contractor who will come in and train all staff members 1 time per quarter to make sure that they understand how to use and understand system maintenance systems. We will also train them in full on odor training to make sure all doors are closed and that security keeps the front door and back door open short time as possible to eliminate odors from the front and back entrances. 3 3.7 Waste Management Plan 1. Waste Management. Applicant will dispose of all waste, including cannabis waste, in accordance with the Public Resources Code and any other applicable state and local laws, including laws regulating “organic waste” as defined in Public Resources Code section 42649.8(c). Applicant will be responsible to properly evaluate waste to determine if it should be designated and handled as a hazardous waste, as defined in section 40141 of the Public Resources Code. 2. Cannabis Waste Tracking. Standardized cannabis waste management procedure is for the Applicant to use the Track-and-Trace system to record in the Track and Trace system all commercial cannabis activity involving the destruction and disposal of cannabis waste by designated Employees, under the supervision of Management and under the observation of the video surveillance system. ”Cannabis waste” is waste that contains cannabis or cannabis products. 3. Track-and-Trace Data Entry. Applicant will report all cannabis waste activities, up to and including disposal, into the track and trace system, as required by the Code of Regulations, including: Name and type of the cannabis goods. Unique identifier of the cannabis goods. Amount of the cannabis goods, by weight or count, and total wholesale cost of the cannabis goods, as applicable. Date and time of the activity or transaction. The name of the employee performing the destruction or disposal. The reason for destruction and disposal. The entity disposing of the cannabis waste. 4. All cannabis goods intended for disposal as cannabis waste will have all of the cannabis products removed from any packaging and made unrecognizable and unusable as cannabis or a cannabis product at the time of disposal. With exception, that any waste vape cartridges may not be emptied of cannabis oil prior to disposal provided that the vape cartridge is itself unrecognizable and unusable at the time of disposal as authorized by Code of Regulations Section 40290. 5. Security Monitoring. All cannabis waste activity is performed under a video surveillance camera which records the cannabis waste transfer process onto the video surveillance data recorder maintained by the Applicant. 6. Weight of Cannabis Waste. Cannabis waste will be weighed on an approved scale before transport and documented in the statewide track and trace program. 7. Process. The Applicant’s employees will obtain from the cannabis waste disposal company, a certified weight ticket/receipt documenting the removal of the cannabis waste from Applicant’s premises to the delivery of the cannabis waste to licensed solid waste facilit y. The weigh ticket will indicate the amount of cannabis waste received and will be entered into the Track- and-Trace system to ensure that the amount waste removed from the Applicant’s premises is the same amount of cannabis waste that enters into the landfill. The certified weight ticket/receipt will be maintained as a record of the Applicant at the premises for a period of seven years. 8. No composting is done at the Premises. 4 9. Removal of Packaging. All cannabis waste is removed from its packaging prior to being transported for disposal. All cannabis waste is made unrecognizable and unusable by the Waste Hauler. 10. Limited Access. Applicant stored the cannabis waste destined for disposal in a secured locked waste receptacle which is in a secured area in the premises. Physical access to the secured waste receptacle and secured area is restricted to the Applicant and authorized Emplo yees who enter by key card access, and the Waste Hauler. Applicant employees provide the licensed waste hauler access to the secure area and the secured container which contains the cannabis waste during its regularly scheduled pickup day. Public access to the designated secured waste receptacle or the secured area is prohibited. 11. Waste Hauler. The Applicant will utilize a waste hauler permitted by a local agency, to collect and process cannabis waste. We will hire a local Fresno management company as soon as one becomes available. Waste Hauler: EcoWaste Service, Inc. Address: 2025 N. Glenoaks Blvd., Suite 204, Burbank, CA 91504. Telephone: (747) 216-2777 Contact: Arman Zeytounyan 12. Documentation. Applicant will obtain and maintain a record of documentation from the entity hauling the waste that indicates the date and time of each collection of cannabis waste at the licensed premises; and obtain a copy of the certified weight ticket or other documentation prepared by the entity hauling the waste confirming receipt of the cannabis waste at one, or more, of the following solid waste facilities: (A) A manned, fully permitted solid waste landfill or transformation facility; (B) A manned, fully permitted composting facility or manned composting operation; (C) A manned, fully permitted in-vessel digestion facility or manned in-vessel digestion operation; (D) A manned, fully permitted transfer/processing facility or manned transfer/processing operation; or (E) A manned, fully permitted chip and grind operation. 1 3. NEIGHBORHOOD COMPATIBILITY PLAN 3.1 Describe how CCB will proactively address and respond to complaints related to noise, light, odor, litter, vehicles and pedestrian walk. 3.2 Describe how the CCB will be managed to avoid becoming a nuisance or having impacts on its neighbors and the surrounding community. 3.3 Describe odor mitigation practices Having a number of affiliates located in densely populated areas, we understand the need to control odors and to provide clean and sanitary airflow throughout the facility and the surrounding areas of our facility. To ensure this, our facility will be equipped with HEPA air filters, other air filtration devices, and bioconversion systems, that are designed with Photocatalytic reactors. These preventive systems are designed to oxidize all VOCs (volatile organic compounds) such as fungal and microbial diseases from the air, as well as removing undesirable organic odors, while not visible in the design, Ascent will install at least eight 12" carbon filter air scrubbing units from the company Mountain Air Filters, which have been demonstrated by the team's past experience to work extremely well in controlling odor. These filters are specifically designed to eliminate cannabis odor and are whisper quiet so they won't obtrude on the customer's experience. The facility will be a closed system with high technology environmental controls employing negative air pressurization to eliminate the exchange of air. Exhausted air will be filtered, with any odors neutralized, We apply cleanroom standards to all areas of the facility. This is especially important in the dispensing process, which all require a clean, sterile environment to provide the utmost assurance that our products are of top quality Clean rooms ensure minimal and controlled levels of contaminants and are governed by a set of procedures managed through specific cleaning methods and air filtration devices. These measures ensure we have the cleanest and safest environment to dispense cannabis. All ventilation equipment and all safety equipment within the facility must be routinely inspected and tested to ensure they are in good working order at all times. In addition, as we have done in our affiliate facility, Ascent will maintain the cleanliness of its building and all equipment used to transport, store, or display cannabis. To ensure this, we will require all agents and employees to be thoroughly trained on the standard operating procedures, which have been adopted, and modified accordingly, from our affiliates and have been operating without incident for years in full compliance with all regulations. Standard operating procedures include daily, weekly, and monthly cleaning requirements of the facility and all fixtures with the goal of maintaining a dean, sanitary, and professional-looking facility reminiscent of a high-end pharmacy or medical office. According to the protocol, the facility supervisor will oversee all 2 cleaning and sterilization activities and will inspect the work of employees to ensure our goals are met. 3.4 Identify potential sources of odor We have identified that the secured vault area where we store cannabis product as well as the retail areas will be potential sources of odor. However with the above mentioned mitigation practices we anticipate little to no odor in the surrounding community. 3.5 Describe odor control devices and techniques to ensure odors from cannabis are not detectable beyond the permitted premises. Having a number of affiliates located in densely populated areas, we understand the need to control odors and to provide clean and sanitary airflow throughout the facility and the surrounding areas of our facility. Air scrubbers will be used as well as the items below. To ensure this, our facility will be equipped with HEPA air filters, other air filtration devices, and bioconversion systems, that are designed with Photocatalytic reactors. These preventive systems are designed to oxidizeall VOCs (volatile organic compounds) such as fungal and microbial diseases from the air, as well as removing undesirable organic odors, While not visible in the design, Ascent will install at least eight 12" carbon filter air scrubbing units from the company Mountain Air Fil ters, which have been demonstrated by the team's past experience to work extremely well in controlling odor. These filters are specifically designed to eliminate cannabis odor and are whisper quiet so they won't obtrude on the customer's experience. The facility will be a closed system with high technology environmental controls employing negative air pressurization to eliminate the exchange of air. Exhausted air will be filtered, with any odors neutralized, We apply cleanroom standards to all areas of th e facility. This is especially important in the dispensing process, which all require a clean, sterile environment to provide the utmost assurance that our products are of top quality Clean rooms ensure minimal and controlled levels of contaminants and are governed by a set of procedures managed through specific cleaning methods and air filtration devices. These measures we have the cleanest and safest environment to dispense cannabis. All ventilation equipment and all safety equipment within the facility m ust be routinely inspected and tested to ensure they are in good working order at all times. 3.6 Describe all proposed staff odor training and system maintenance. We will bring in a facilities management contractor who will come in and train all staff members 1 time per quarter to make sure that they understand how to use and understand system maintenance systems. We will also train them in full on odor training to make sure all doors are closed and that security keeps the front door and back door open short time as possible to eliminate odors from the front and back entrances. 3 3.7 Waste Management Plan 1. Waste Management. Applicant will dispose of all waste, including cannabis waste, in accordance with the Public Resources Code and any other applicable state and local laws, including laws regulating “organic waste” as defined in Public Resources Code section 42649.8(c). Applicant will be responsible to properly evaluate waste to determine if it should be designated and handled as a hazardous waste, as defined in section 40141 of the Public Resources Code. 2. Cannabis Waste Tracking. Standardized cannabis waste management procedure is for the Applicant to use the Track-and-Trace system to record in the Track and Trace system all commercial cannabis activity involving the destruction and disposal of cannabis waste by designated Employees, under the supervision of Management and under the observation of the video surveillance system. ”Cannabis waste” is waste that contains cannabis or cannabis products. 3. Track-and-Trace Data Entry. Applicant will report all cannabis waste activities, up to and including disposal, into the track and trace system, as required by the Code of Regulations, including: Name and type of the cannabis goods. Unique identifier of the cannabis goods. Amount of the cannabis goods, by weight or count, and total wholesale cost of the cannabis goods, as applicable. Date and time of the activity or transaction. The name of the employee performing the destruction or disposal. The reason for destruction and disposal. The entity disposing of the cannabis waste. 4. All cannabis goods intended for disposal as cannabis waste will have all of the cannabis products removed from any packaging and made unrecognizable and unusable as cannabis or a cannabis product at the time of disposal. With exception, that any waste vape cartridges may not be emptied of cannabis oil prior to disposal provided that the vape cartridge is itself unrecognizable and unusable at the time of disposal as authorized by Code of Regulations Section 40290. 5. Security Monitoring. All cannabis waste activity is performed under a video surveillance camera which records the cannabis waste transfer process onto the video surveillance data recorder maintained by the Applicant. 6. Weight of Cannabis Waste. Cannabis waste will be weighed on an approved scale before transport and documented in the statewide track and trace program. 7. Process. The Applicant’s employees will obtain from the cannabis waste disposal company, a certified weight ticket/receipt documenting the removal of the cannabis waste from Applicant’s premises to the delivery of the cannabis waste to licensed solid waste facilit y. The weigh ticket will indicate the amount of cannabis waste received and will be entered into the Track- and-Trace system to ensure that the amount waste removed from the Applicant’s premises is the same amount of cannabis waste that enters into the landfill. The certified weight ticket/receipt will be maintained as a record of the Applicant at the premises for a period of seven years. 8. No composting is done at the Premises. 4 9. Removal of Packaging. All cannabis waste is removed from its packaging prior to being transported for disposal. All cannabis waste is made unrecognizable and unusable by the Waste Hauler. 10. Limited Access. Applicant stored the cannabis waste destined for disposal in a secured locked waste receptacle which is in a secured area in the premises. Physical access to the secured waste receptacle and secured area is restricted to the Applicant and authorized Emplo yees who enter by key card access, and the Waste Hauler. Applicant employees provide the licensed waste hauler access to the secure area and the secured container which contains the cannabis waste during its regularly scheduled pickup day. Public access to the designated secured waste receptacle or the secured area is prohibited. 11. Waste Hauler. The Applicant will utilize a waste hauler permitted by a local agency, to collect and process cannabis waste. We will hire a local Fresno management company as soon as one becomes available. Waste Hauler: EcoWaste Service, Inc. Address: 2025 N. Glenoaks Blvd., Suite 204, Burbank, CA 91504. Telephone: (747) 216-2777 Contact: Arman Zeytounyan 12. Documentation. Applicant will obtain and maintain a record of documentation from the entity hauling the waste that indicates the date and time of each collection of cannabis waste at the licensed premises; and obtain a copy of the certified weight ticket or other documentation prepared by the entity hauling the waste confirming receipt of the cannabis waste at one, or more, of the following solid waste facilities: (A) A manned, fully permitted solid waste landfill or transformation facility; (B) A manned, fully permitted composting facility or manned composting operation; (C) A manned, fully permitted in-vessel digestion facility or manned in-vessel digestion operation; (D) A manned, fully permitted transfer/processing facility or manned transfer/processing operation; or (E) A manned, fully permitted chip and grind operation. 1 5. SECURITY PLAN