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HomeMy WebLinkAboutC-20-4 Authentic Fresno RedactedApplicant (Entity) Information Application Type Proposed Location Commercial Cannabis Business Permit Application C-20-4 Submitted On: Dec 02, 2020 Applicant Ellen Wysocki ellen.wysocki@shrynegroup.com Applicant (Entity) Name: Authentic Fresno Willow LLC DBA: Authentic Fresno Physical Address: 6929 N Willow Ave, Ste 103-104 City: Fresno State: CA Zip Code: 93710 Primary Contact Same as Above? No Primary Contact Name: Brian Mitchell Primary Contact Title: Co-Owner / Co-CEO Primary Contact Address: 728 E Commercial St. Primary Contact City: Los Angeles Primary Contact State: CA Primary Contact Zip Code: 90012 Primary Contact Phone: (415)336-0374 Primary Contact Email: brian.mitchell@shrynegroup.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: Ranjeet Singh Proposed Location Address: 6929 N Willow Ave, Ste 103-104 City: Fresno State: CA Zip Code:Property Owner Phone: Supporting Information Application Certification 93710 (209) 261-6164 Property Owner Email:Assessor's Parcel Number (APN): 410-031-01 Proposed Location Square Footage: 2600 List all fictitious business names the applicant is operating under including the address where each business is located: The applicant was formed for the purpose of applying for a cannabis permit in Fresno and does not have any operations yet. 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? Yes If so, please list and explain: El Cerrito, Fairfield, Tracy, El Centro, Union City, Stanton, and Concord. These are all for storefront retail applications. 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 Retail Expansion Analyst 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. 1. BUSINESS PLAN 1.1. Owner Qualifications The applicant Authentic Fresno Willow LLC (“Authentic Fresno”) is owned by Shryne Group Inc. (“Shryne”). Shryne is the parent entity and owner of various other cannabis retail, manufacturing, cultivation, distribution, real estate and IP assets. Leadership Authentic Fresno’s extraordinary track record of success can be attributed to its leadership. The co- owners of Authentic Fresno, Brian Mitchell, James Kim, Tony Huang, and Jon Avidor together have over 30 years of experience in different aspects of the cannabis business which are essential to the success of the business. Together they have also built an invaluable team around them from within the cannabis industry and other industries such as finance, legal, compliance, and consumer packaged goods to build the number one cannabis retail company in California. Authentic Fresno’s ownership and qualifications are set forth below. Brian Mitchell Co-Owner and CEO Brian Mitchell has dedicated the last 10 years to cultivating, manufacturing and selling the purest, safest and highest quality products for medical patients, sufferers of physical ailments and recreational cannabis users. Brian is frequently featured as a cannabis industry expert on various news outlets and has been a vocal proponent of social capitalism, whereby big business makes a positive impact on the community in which it operates. Brian is regularly featured as an industry expert. Prior to becoming the CEO of Authentic Fresno, Brian founded and operated numerous companies, including Northstar Equities, a capital investment firm which focused on early stage investments with companies in the aerospace, construction, cannabis and technology sectors. Brian also founded a construction company, Signature Painting and Construction, Inc.1, which employs 100 individuals across three states. Spurred by his experience with medical cannabis when Brian had cancer, Brian has also founded and operates companies in each of the cannabis verticals, including a 160 acre cannabis cultivation farm in Humboldt County, Palmas, a high end cannabis brand for cannabis connoisseurs and La Corona Wellness Center, one of the first licensed adult use cannabis dispensaries in San Francisco2. His 15 years of experience founding and operating companies and his 10 years founding, operating and overseeing the growth of cannabis companies in the cultivation, manufacturing and retail verticals puts Brian in the optimal position to lead Authentic Fresno’s retail operations. James Kim Co-Owner and Managing Director A disabled army veteran, James discovered the benefits of cannabis 8 years ago after serving a 13-month tour in Iraq with the 101st Airborne Division. Having witnessed other fellow veterans becoming addicted to alcohol and opioids while battling PTSD from their deployment, James was determined to overcome his PTSD without becoming addicted to drugs or alcohol and to introduce others suffering from physical or mental trauma to the healing effects of marijuana. James devoted 6 months of his life to researching the benefits of cannabis after his tour ended and cannabis helped him safely overcome his PTSD. James went on to found Stiiizy – a cannabis vape pen, Liiit – flower and pre-rolls, Biiit – cannabis-infused gummies, and other cannabis brands in 2016. Since then, these brands have developed an avid following in California and are sold in 90% of cannabis retail stores across the state. At Shryne, James continues to build brand recognition and a loyal customer base with loyal fans lining up at our dispensary grand openings. No other cannabis retail store has its own product line which comes close to driving product loyalists to their retail stores quite like ours. James has also managed numerous dispensaries including Ironworks Collective, 1212 Broadway Medical Center Inc., and 10 Spot Collective in Santa Ana and learned every aspect of the cannabis retail business. James’s unique 1 https://www.signatureservices.us/ 2 These assets are now owned by the Shryne Group. La Corona Wellness was rebranded to Stiiizy Mission in 2019. knowledge of retail operations and product development puts him in a prime situation to understand how to maximize sales through curating products geared towards each store and its community. At Authentic Fresno, James will oversee and be responsible for implementing every aspect of the business from curating in-house products and third-party products, supervising the implementation of Standard Operating Procedures, staffing levels, and more. James is frequently featured on Forbes, Hollywood Reporter, and Green Market Report as an expert in cannabis retail branding and for his work with the veteran community. Tony Huang Co-Owner and Head of Operations Tony exemplifies the American dream of learning a craft from the ground up to eventually becoming a business owner. Tony’s journey in the cannabis industry began in 2007 when a neighbor hired him as a cashier/janitor/manager of a small medical dispensary in Marina Del Rey. Over the next 5 years, Tony learned every aspect of operating a cannabis dispensary business, from inventory management to after-hours clean-up of the store, and the owner eventually sold the business to Tony in 2012. Since becoming the owner of his first dispensary in 2012, Tony has owned, managed and built from the ground up numerous successful cannabis dispensaries and cultivation operations throughout California. Tony brings to Authentic Fresno his 12 years of hands on cannabis retail experience and has created the most effective and practical Standard Operating Procedures which exceed state and local requirements. Our stores’ extraordinary average revenue and cult-like following is a testament to Tony’s commitment to providing a luxurious and safe yet inclusive shopping experience. Jon Avidor Co-Owner and Executive Chairman Jon Avidor brings extensive experience in corporate governance and cannabis law. He has counseled both businesses and government agencies on cannabis regulations, and is a seasoned veteran in incorporating appropriate corporate governance and controls into a cannabis business. At Masur Griffitts Avidor LLP, Jon advised numerous cannabis companies on corporate governance, compliance and complex business transactions. Jon is considered a leading expert in corporate governance and capital markets in the cannabis industry and has been a featured speaker at Institutional Capital and Cannabis, Cannabis Investor Forum, and CannaInsider. Brian’s, James’s, Tony’s, and Jon’s resumes are below. Experience In addition to the extraordinary experience of our individual owners, Shryne Group, the parent entity of the applicant, is one of the most experienced cannabis operators in the country with over 2,500,000 cannabis transactions since its inception through its 3 cultivation, 3 manufacturing, 3 distribution and 9 retail operations in California with 21 additional cannabis operations currently under construction. Alameda Davis Jurupa Valley Los Angeles Modesto Palm Desert San Francisco(2) San Bernardino Benicia Lompoc Los Angeles (3) Marina Moreno Valley Oakland Pacheco Riverside County (2) San Bernardino San Francisco (3) Santa Rosa Suisun City Humboldt CountyLos Angeles OneOaklandLos Angeles two Humboldt CountyLos Angeles Oakland Concord Humboldt CountyLos Angeles Oakland Lompoc CULTIVATION OUR PROPERTIES DISTRIBUTION MANUFACTURING RETAIL OPEN IN DEVELOPMENT OUTDOOR INDOOR PALM DESERTLOS ANGELES SAN FRANCISO OAKLAND MODESTO CONCORD ALAMEDA DAVIS BENICIA SUISUN CITY PACHECO LOMPOC MORENO VALLEY MARINA SAN BERNARDINO RIVERSIDE COUNTYJURUPA VALLEY HUMBOLDT COUNTY Every sale to a customer gives us a chance to improve our Standard Operating Procedures, compliance protocols, security plan and customer service, and we continue to strive towards perfecting our operations with more transactions and more store openings every month. A summary of Shryne Group’s California state licenses is below: License No.Business Name Premises License Type C10-0000053-LIC BCOK Inc. dba Stiiizy Mission 3326 Mission St San Francisco, CA 94110 Storefront Retail C10-0000713-LIC United 415, Inc. dba Stiiizy Union Square 180 O’Farrell St San Francisco, CA 94102 Storefront Retail C10-0000448-LIC CV Wellness, LLC dba Authentic 209 426 McHenry Ave Modesto, CA 95350 Storefront Retail C10-0000346-LIC Ironworks Collective, Inc. dba Stiiizy DTLA 718 Commercial St Los Angeles, CA 90012 Storefront Retail C10-0000623-LIC Main Street Supply LLC 1528 Webster Street Alameda, CA 94501 Storefront Retail C10-0000112-LIC Olive Drive Enterpris- es, LLC dba Stiiizy Davis 965 Olive Drive, Suite G1 Davis, CA 95616 Storefront Retail C10-0000275-LIC Strategic Green Part- ners LLC dba Authen- tic 760 72180 Highway 111 Palm Desert, CA 92260 Storefront Retail C10-0000661-LIC Screaming Eagle dba Authentic 951 5434 Mission Blvd Jurupa Valley, CA 92509 Storefront Retail C10-0000720-LIC*Colay Health Center dba Stiiizy 14070 Perris Blvd Moreno Valley, CA 92553 Storefront Retail C12-0000189-LIC Nibble This LLC 1181 S E St. San Bernardino, CA 92408 Micro Business: Storefront Retail Delivery Distributor Manufacturing C11-0000009-LIC Evergreen Develop- ment Services, LLC 5131 Ericson Way Arcata, CA 95521 Distributor C11-0000620-LIC Ironworks Collective, Inc. 718 E Commercial St Los Angeles, CA 90012 Distributor C11-0000586-LIC JBTB Holdings, Inc.1031 98th Ave Oakland, CA 94603 Distributor C11-0001071-LIC*KDM Holdings, LLC 300 S Mission Rd Los Angeles, CA 90033 Distributor CDPH-10003608 Evergreen Develop- ment Services, LLC 5131 Ericson Way Arcata, CA 95521 Volatile Manufacturing CDPH-10003198 JBTB Holdings, Inc.1031 98th Ave Oakland, CA 94603 Volatile Manufacturing CDPH-10003246 Ironworks Collective, Inc. 718 E Commercial St Los Angeles, CA 90012 Non-Volatile Manufac- turing CDPH-10003908*KDM Holdings LLC 300 S Mission Rd Los Angeles, CA 90033 Type N: Infusion CCL18-0000577 Farm87 1550 Old Summerville Creek Rd Unincorporated, CA 95542 Medium Mixed Light Tier 1 Cultivation CCL19-0000599 Ironworks Collective, Inc. 718 E Commercial St Los Angeles, CA 90012 Small Indoor Cultivation CCL19-0005631 JBTB Holdings, Inc.1031 98th Ave Oakland, CA 94603 Specialty Indoor Culti- vation CCL19-0005368 SGI Ducommon LLC 706 E Ducommun Street Los Angeles, CA 90012 Medium Indoor Cultiva- tion CCL19-0005367 SGI Jackson LLC 701 Jackson Street Los Angeles, CA 90012 Small Indoor Cultivation *State License has been secured but the location is still under construction. Copies of the above licenses can be provided upon request and are also available at https://online.bcc.ca.gov/ bcc/customization/bcc/cap/licenseSearch.aspx. Additionally, Shryne Group has received city approval for 21 more retail and cultivation licenses which are pending state approval and issuance of state licenses. Vertical Integration Advantage In addition to our leadership and experience operating numerous retail, cultivation, manufacturing and distribution operations, Shryne is one of the only truly vertically integrated cannabis companies in California. While other cannabis retailers may also claim to be vertically integrated, to our knowledge, Shryne is the only California retailer which carries a majority of products which are cultivated and manufactured in-house. This vertical integration qualifies us as a top cannabis retail store for the following reasons. 1. Industry Best Testing Standards Shryne’s three cultivation facilities, three manufacturing facilities and three distribution centers are each equipped with the most rigorous testing, inspection and compliance standards to ensure that the products which are eventually delivered and sold at Authentic Fresno are the safest and purest cannabis products in the world. For example, while the State of California only requires products to undergo one stage of regulatory compliance testing prior to being sold to consumers pursuant to 16 CCR § 5715, all of Authentic Fresno’s products will undergo two additional layers of testing to ensure the safety of our products as follows: 1. All of the flower and trim cultivated at our cutting-edge cultivation facilities and any third-party flower we purchase for use in our manufactured products are initially sent to our third-party testing provider CannaSafe, one of the most trusted names in cannabis testing. The flower and trim are tested for: i. cannabinoid potency (e.g., THC and CBD levels) ii. pesticide levels of more than 70 different types of pesticides iii. microbial pathogens (e.g., fungi, E. coli, salmonella) iv. mycotoxins (e.g., Aflatoxin B1, Ochratoxin A, etc.) v. heavy metals (lead, mercury, cadmium, arsenic, etc.) vi. moisture levels (to determine whether products are ready for long term storage) vii. foreign materials (e.g., molds, sand, dirt, hairs, cinders, etc.) viii. terpene identification and quantification (e.g., β-Myrcene, α-Pinene, β-Caryophyllene, etc.) Any flower or trim which do not pass every aspect of this initial test is destroyed. 2. Next, any flower or trim which has been extracted into an oil, wax or other concentrates will undergo a second round of testing with CannaSafe for three reasons. One, while the initial testing when the concentrate was in a flower or trim form should have picked up all impurities, the levels of potency, metals or foreign materials oftentimes increase when the flower or trim is distilled into concentrate form. Two, double checking for contaminants prior to any concentrate being used and touching our manufacturing equipment is essential to prevent cross contamination of other products which will be used by our manufacturing equipment. Finally, particularly for concentrates purchased from third parties, testing at this stage involves testing for residual solvents such as acetone, benzene, ethanol, methanol and other solvents which producers sometimes use in the distillation process. 3. Lastly, when the product is in its final delivery form (e.g., gummies, tinctures, etc.), the product is tested once again by CannaSafe to ensure that the product has not been contaminated in the manufacturing process and to act as a final safeguard against any contaminated products making it into the hands of consumers. At this stage, CannaSafe also provides a Certificate of Analysis (COA) that our customers can access at our stores. COAs provide all of the information regarding potency, terpenes and lack of contamination described above. The concentrate is combined with its delivery method, such as gummies, at our manufacturing facility The product in its final form is tested a third and final time for composition and safety and receives a Certificate of Analysis. Shryne’s State of the Art Cultivation Facility in Humboldt Initial safety testing conducted Flower is extracted into concentrate form at Shryne manufacturing facility The concentrate undergoes a sec-ond safety test with CannaSafe Final products sold to our customers have been in Shryne’s control from seed to sale and have been tested on three separate occasions. In contrast, cannabis dispensaries that are not vertically integrated cannot guarantee the safety and quality of the products they are selling because they do not control the cultivation and manufacturing processes. 2. Product Quality In addition to the purity and safety of the products which Shryne’s vertical integration can assure, this integration permits us to offer the highest quality and most effective products in the market today. The two extra layers of testing at the cultivation and extraction levels allow us to inspect cannabinoid composition and potency levels, terpene levels (which can affect taste) and moisture levels (which can affect shelf life and texture), all of which need to meet Shryne’s proprietary formulation standards. Such attention to detail and commitment to producing the highest quality flower, edibles, oils and other products have led to our products having a cult like following at our stores and at over 90% of stores in California. In fact, our Honeyleaf, Efex, Palmas, Stiiizy, Biiit, and Liiit brands which come in flower, oil, edible, tincture, pure-CBD and other delivery systems are some of the most popular products in California as evidenced by the fact that we were named the most popular marijuana brand in the United States as of December 2019 according to Pioneer Intelligence and Brand of the Year by California Cannabis Awards3. Many of the customers at our retail stores cite our vast selection of these in-house brands as one of the main reasons they continue to return to our stores. Much like other popular brands such as Burberry or Nike which also have their own dedicated retail stores, the loyal following of our in- house brands equates to an instant customer base upon opening of our retail stores. 3 https://www.greenstate.com/cannabis-awards/california-cannabis-awards-hand-out-top-honors-to-industry-leaders-in-2019/ 3. Competitive Pricing In addition to the safety and quality of the products sold at our stores, our vertical integration provides all our retail stores the competitive advantage of being able to sell our products at prices which are on average 27% less than the average licensed California dispensary. In California, illicit market sales of marijuana currently dwarf the sale of marijuana at legally licensed dispensaries on a 3:1 basis due to the cheaper prices these illicit market sellers are able to charge.4 Illicit market stores and delivery services are unaffected by the state and city taxes, restrictions on hours of operation, sale volume limits, product testing requirements and other regulations which increase the prices of legally sold products. As a result, legal dispensaries are struggling to meet their estimated tax promises to cities and the State or even stay open because illegal stores are able to sell products at 25% less than legal stores.5 Authentic Fresno, on the other hand, will be able to leverage its parent company’s “in-house” cultivation, manufacturing and distribution operations so that the end product sold to our consumers will be on average 27% cheaper than our competitors. 4 https://www.sacbee.com/news/politics-government/capitol-alert/article234150842.html 5 https://www.cnbc.com/2019/07/11/las-black-market-for-weed-threatens-the-growth-of-its-legal-business.html https://bdsanalytics.com/new-report-californias-legal-cannabis-market-on-track-to-reach-3-1-billion-in-2019-sales-7-2-billion-in-2024/ Own flower transferred to own manufacturing facility at 20% discount to third party cultivator Final products sold to customer at prices which are 20-30% less than competitors due to vertical integration Flower processed at own manufacturing facility and distributed by our own distribution network to retail stores at 13-17% discount Unmatched Success The experience of our individual owners, the experience our entire firm has gained through our 18 current operations and our vertical integration has resulted in our rise as the preeminent cannabis retail operator in California. In some of the most highly competitive and highly regulated jurisdictions, Shryne Group’s retail stores are on pace in 2020 to have annual revenues in excess of per store, which is more than 7 times the annual revenue of the average dispensary in California according to data from the California Department of Tax and Fee Administration. See below revenue numbers and taxes paid for the month of September 2020 (Stiiizy Union Square and Stiiizy Jurupa Valley opened in October and November, respectively, and are not included). City Gross Sales Sales Tax Local Cannabis Tax Alameda* Davis Palm Desert Los Angeles Mission San Francisco* Modesto San Bernardino** September 2020 *Alameda and San Francisco do not impose a cannabis tax based on sales. **San Bernardino opened in late August 2020 and is ramping up. While most cannabis companies continue to lose money and go out of business6, Shryne’s profitable retail and wholesale business is on track to generate in 2020. 6 https://www.cnbc.com/2019/03/28/medmens-financial-troubles-are-a-warning-for-the-marijuana-industry.html https://mjbizdaily.com/profits-are-a-rarity-californias-new-regulated-marijuana-market-six-months-in/ 1.2. Budget the state. This experience allows it to provide accurate estimates and allocate sufficient capital to ensure the timely completion of the project. 1.3. Proof of Capitalization 1.4. 3 Year Pro Forma 1.5. Hours of Operation and Opening and Closing Procedures Hours of Operation Pursuant to Fresno Municipal Code (“FMC”) Article 33 § 9-3310(a)(1), and in compliance with 16 California Code of Regulations (“CCR”) § 5403, Authentic Fresno’s hours of operation will be from 9:00 a.m. to 10:00 p.m. daily. Authentic Fresno will not open the dispensary to the public or deliver any cannabis goods outside of its regular retail hours. To ensure compliance with this policy, management will instruct all employees not to allow the sale of any cannabis goods outside of Authentic Fresno’s regular retail hours, and Authentic Fresno’s point-of-sale system will be programmed so that sales cannot be processed before 9:00 a.m. or after 10:00 p.m. To communicate scheduled opening and closing times to customers, Authentic Fresno will post the hours of operation in a conspicuous location in the dispensary lobby and on its front entrance. Authentic Fresno’s security guards will ensure that all customers have exited the premises by conducting a sweep of the premises at closing time and politely escorting any remaining customers off of the premises. Opening and Closing Procedures Authentic Fresno appreciates the importance of uniform opening and closing procedures in order to ensure the dispensary is ready for customers in the morning and secure at the end of the day. Authentic Fresno has developed checklists to ensure that employees adhere to opening and closing procedures. Authentic Fresno employees will do the following daily pursuant to the checklist: Opening Procedures 1. Overnight security will permit the cleaning team to perform their daily deep cleaning of the entire store. 2. Manager will unlock the door and turn off the alarm. 3. Manager will turn on the lights in the lobby, retail sales area, and back office areas. Store is deep cleaned daily prior to opening 4. Employees arrive at the retail storefront location and proceed to the employee parking area to park their vehicle. 5. Employees exit vehicle and perform a brief visual inspection of the outer perimeter of the facility for loitering, tampering, unlawful entry, or any other security or safety issue. 6. Employees ensure air conditioning/heat is set and turned on as appropriate. 7. Employees verify that carbon filters/HVAC are in working order and cannabis odor is not present inside or outside the facility. 8. Employees check to ensure line up area inside and outside have markers for customers to stand at least 6 feet apart. 9. Employees turn on and start computer and verify IndicaOnline is working. 10. Employees ensure all city and state cannabis and business licenses are properly displayed. 11. Employees ensure all educational handouts and other materials for customers are visible and available for the day’s customers. 12. Employees ensure all no-loitering signs, no consumption on-site signs and age requirement signs are properly displayed. 13. Employees turn on equipment at point-of-sale locations. 14. Employees check store email and respond to emails as necessary. Review other notes from prior night’s closing team. 15. Manager will access the safes to withdraw appropriate amounts of cash for point-of-sale locations and provide to Sales Associates. 16. Security and Employees verify that security cameras are working. 17. All employees verify that limited-access room key card works and that cannabis and safes are secure. 18. Employees check that waste bins were emptied the night before and any empty boxes or containers are cleared away. 19. Employees check if the soap dispensers and first-aid box need replenishing. 20. Employees report any equipment failures to manager on site. 21. Employees sweep sidewalk and parking lot and pick up litter on sidewalk outside premises. 22. Manager and Employees check all areas for cleanliness. 23. Employees check reception desk for any messages from the closing employee. 24. Verify locked counters have adequate amounts of cannabis and that inventory is properly sealed, packaging is intact and not damaged, and all products are not otherwise defective, leaking, or damaged. 25. Manager meets with employees to review daily goals, duties, and objectives. 26. Manager checks off opening procedures checklist. 27. Employees unlock front door for customers. Closing Procedures 1. 15 minutes prior to closing, store will announce to customers that the store is closing. 2. Employees will verify that all customers have left the store. 3. After all customers have left, employees will lock the doors. 4. Employees will transfer all cannabis from sales floor into inventory room. 5. General Manager will transfer all money from the point of sales to the vault. 6. General Manager will perform daily cash reconciliation. 7. A Co-manager will generate log of all sales and transmit log to Track-and-Trace. 8. Employees ensure retail counters, safes, and inventory control room is locked. 9. Empty all waste bins and clear away any boxes or containers. 10. Clean all working and computer surfaces, using company-approved cleaning materials and methods. 11. Set cooling or heating system for after-hours setting. 12. Leave any necessary messages for the morning shift the following day. 13. Enable all alarms. 14. Manager reviews and signs the closing procedures checklist. 15. Exit and lock doors. 16. Verify no loitering around the premises pursuant to FMC Article 33 § 9-3310(b)(2)(vi). 17. Check in with the overnight security guard. 1.6. Additional Criteria for Retail Applications 1.6.1. Day-to-Day Operations for a Retail License i. Describe Customer Check-In Procedures. After the store opening procedures are completed, Authentic Fresno will be ready for customers to be checked in starting at 9:00 a.m. daily. Upon entering the store through the front entrance, every customer’s temperature will be taken as a sign for COVID-19 symptoms. After the temperature check, each customer and medical patient will be required to check in and show their IDs at the reception desk placed at the front of the secure lobby prior to entering the sales floor pursuant to FMC Article 33 § 9-3310(b)(1)(i). This lobby/waiting area will have markers for customers to stand in line at least 6 feet apart as they wait to be checked in at the reception desk. The markers will extend out into the parking lot area of the property so that customers are required to stand at least 6 feet apart while they wait in the designated line outside. The lobby and sales floor will be separated by an electronic “buzz-in” door and persons without proper identification will not be permitted to cross this door into the retail floor pursuant to FMC Article 33 § 9-3310(a)(4). All employees will be trained on acceptable forms of identification according to 16 CCR § 5404(c), a summary of which is included below: A. If the customer is 21+ years of age and entering the dispensary area, the customer must provide: i. A document issued by federal, state, county, or municipal government, or a political subdivision or agency thereof, including a valid motor vehicle operator’s license, that contains the name, date of birth, height, gender, and a photograph of the person; ii. A valid identification card issued to a member of the Armed Forces that includes the person’s name, date of birth, and photograph; or iii. A valid passport issued by the United States or by a foreign government. B. If the customer is 18-20 years of age, the customer must provide one of the previously mentioned forms of identification and possess a valid physician’s recommendation or a Medical Marijuana Card. Under no circumstances will doctor recommendations be provided at the dispensary. C. Only customers verified to be over the age of 21 and medical patients verified to be over the age of 18 will be allowed to remain on the premises in accordance with FMC Article 33 § 9-3309(i)(1). D. Check-In Associates will not accept any form of identification that is physically adulterated in any way that impedes the employee from verifying the individual’s identity to include the photograph, physical attribute descriptions, and physical address location. Check-In Associates will not accept identification that is expired. Check-In Associates will be trained by security personnel to recognize false and adulterated forms of identification, and any individual caught presenting false information will be banned from the facility. Pursuant to FMC Article 33 § 9-3309(i)(2), Authentic Fresno will also prominently post notices at the entrance to the dispensary clearly and legibly stating that no person under the age of 21 (except a medical patient over the age of 18) is permitted on the premises. Pursuant to FMC Article 33 § 9-3309(k), Authentic Fresno will also conspicuously post in the lobby the original copy of the commercial cannabis permit issued by the city, the original of the California State Cannabis License and all other permits and licenses required to operate our store. These licenses will let the customers know that we are fully licensed and authorized to sell cannabis at this location. Once the Check-In Associate has verified the guest is legally of age to enter the dispensary, the Check-In Associate will register the guest within the point-of-sale system, IndicaOnline,7 by taking a photograph of the front and back of the guest’s valid identification, all with the IndicaOnline tablet. A profile has now been created. With this profile, sales associates can digitally confirm doctor’s recommendations for medical patients, ensure that a customer does not exceed daily purchase limits, and confidentially maintain customers’ contact information and purchase history in case a product recall is ever required. Additionally, check-in for returning customers will only require scanning of the acceptable form of identification after Check-In Associates have examined the authenticity of the identification, which will speed up the check-in process for repeat customers. Once the identification has been verified and the customer has been checked in at the front, the customer will be permitted to enter the sales floor through the buzzer-controlled door. After entering the dispensary from the waiting area, the customer will be welcomed into a wide-open floor space made of marble-esque epoxy flooring, with retail counters along the walls as soon as you walk onto the retail floor. Customers ready to shop will wait in the line which will form in the open floor area in the middle of the retail floor. A sales associate will stand at the front of the line to let customers know that a sales associate behind the shopping counter is ready to serve them and also to ensure that all customers stand 6 feet apart while they wait in line. Similar to the check-in area queues, markers will be placed on the floor of this designated line area for the customers to stand at least 6 feet apart while they wait. 7 https://indicaonline.com/dispensaries/ All of our retail stores contain art from local artists and are constructed with the help of local subcontractors and vendors as part of its mission to support the local communities and to embrace the local patrons, businesses, and organizations that it hopes to foster long-term relationships with. We look forward to engaging local Fresno artists to provide art for this store which reflects the culture and values of Fresno. Painting by Los Angeles native Mister Cartoon at our LA Store Other than t-shirts and other merchandise not containing any cannabis, the dispensary will not have any products on the sales floor accessible to any customers. All flower and products containing cannabis will only be accessible to employees through the secure glass display of the retail counters and in the secure inventory room. Diversion of cannabis products is an epidemic in the industry, especially at retail stores that permit “grab-and-go.”8 However, due to the fact that all of Shryne Group’s products are secured behind locked glass cabinets and Shryne Group’s comprehensive security system, its nine operating retail stores have had zero incidents of theft to date. 8 https://sacramento.cbslocal.com/2019/09/03/sacramento-police-marijuana-dispensary-breakins/ Behind Glass Grab and Go The customer will be able to approach any of the retail counters to more closely peruse the product offerings and consult with highly trained sales associates on the different strains and product types available for purchase. Authentic Fresno’s expert sales associates will warmly greet the customer and will offer to every customer its educational materials on the science of cannabis, safe dosing, delivery methods, and the different strains of cannabis and their effects, which will be updated on a bi-weekly basis. Employees will all wear conspicuous badges, in accordance with 16 CCR § 5043, identifying themselves as employees so that customers can readily ascertain who they can approach for questions. Once the customer decides what they will purchase, the sales associate will request the customer’s identification a second time for additional security measures and, if applicable, doctor’s recommendation as a second line of defense against underage purchases of cannabis and to pull up the customer’s profile that has been created in the IndicaOnline point-of-sales system in accordance with FMC Article 33 § 9-3309(e). After verifying the identification and customer’s profile and confirming that the customer has not already exceeded the daily limit of cannabis purchase set forth in 16 CCR § 5409, the sales associate will unlock the back of the glass case and examine the selected products to ensure that the packaging is in good condition, warnings are legible, the product is not expired, and the tamper-evident seal is still intact. After ensuring the product is permitted to be sold, the sales associate will scan the products into IndicaOnline, seal the products in an opaque exit package compliant with 16 CCR § 5413(c), and complete the sale with a credit card or cash from the customer. All cash handling will be in full view of a surveillance camera, and at no point during cash handling will the cash be obscured from the camera. ii. Identify Location and Procedures for Receiving Deliveries During Business Hours. All cannabis products will be received through the non-public delivery entrance on the north side of the building (circled in the image below). Opaque, child-proof exit packaging As part of Shryne Group’s mission to be accountable for all inventory, Shryne Group will mandate the following product intake procedures to ensure the accountability and safe receipt of all products delivered to this store: • Before an order is placed with a vendor, the General Manager or Co-manager will confirm that the distributor scheduled to deliver the products has a valid and active cannabis distribution license in compliance with FMC Article 33 § 9-3309(f). Once verified, management will execute a purchase order. Authentic Fresno and the distributor will then agree to a time window when the delivery will be made (preferably between the hours of 9:00 a.m. and 5:00 p.m. when there are sufficient employees and security to support the delivery (but never outside of 9:00 a.m. and 9:00 p.m.)). • Upon a distributor’s arrival to the premises, a security guard or an operations employee will check the identification of the driver to ensure the delivery has been scheduled for that time and day. Upon confirming the identity of the vehicle and driver, the vehicle will be directed towards the right side of the building towards the loading area. The employee who checked the identity of the driver will then communicate to the security guard standing inside the loading/unloading area to unlock and open the back door. • The driver will park the vehicle and exit the vehicle and unlock the double doors of the vehicle. At least two employees will unload the products and move them into the vestibule with the armed security guard present during the entire process. The employees will check each batch being offloaded against the purchase order to ensure the correct batches of orders are being delivered. A more thorough check of the products are conducted in the inventory room as described below. Once the cannabis products have been offloaded, the driver will depart and the manager will place the delivered items into the secure inventory room while still in the presence of a security guard. • Delivery schedules will be staggered so that criminals cannot time or schedule a robbery. • Once the products are in the inventory room, an inventory manager will count each individual item in the delivery and compare it to the shipping manifest, confirming: • Distributor’s name and license; • Driver’s name; • Delivery date and time; • Invoice number; • Product name; • Product description; • Product weight; • Unit of measure; • Number of units; • Price per unit; and • Total price. • Each item will also be inspected to confirm that the products have not been adulterated with all packaging intact. • The inventory manager will then verify that the Certificate of Analysis (COA) received from the distributor is: • The COA that corresponds to the goods; • Identical to the corresponding COA recorded in Track-and-Trace; and • Less than 12 months old. • The inventory manager will then confirm that each product is labeled with the batch number that matches the batch number on the corresponding COA and that the label on each product is consistent with the COA regarding cannabinoid content and contaminants required to be listed by law. • Once the contents and amount of the products are confirmed, they will immediately be entered into Authentic Fresno’s inventory platform IndicaOnline and METRC’s track and trace system. • No cash will ever be exchanged at the drop off to further reduce the risk of a robbery. • Finally, one surveillance camera will track the vehicle’s entrance into the loading area and the entire off-loading process. iii. Identify the Name of the Point-of-Sale System to be Used and the Number of Point-of-Sale Locations. Authentic Fresno will utilize the point of sale system IndicaOnline9, which Shryne Group uses at all of its other retail locations. Every new customer will be required to register with IndicaOnline after verifying that they are at least 21 years old. IndicaOnline will register the following information onto the system which is integrated with METRC and the other retail stores which Shryne operates: • Name • Address • Date of Birth • Photo ID • Height and Weight • Past Purchase Records to inform the customer of potential recalls • Email and Phone Number • Whether the customer has a Medical Card All of this information permits Authentic Fresno to contact customers in case of an emergency like a recall or defective product. IndicaOnline also keeps track of past purchases so a customer does not exceed the legally permissible amount and permits our sales team to send direct messages regarding store sales if the customer has opted in to receive such information. Additionally, the IndicaOnline Point of Sale system is integrated into the METRC track and trace system so that all sales, returns and movement of inventory in and out of the store is sent via METRC to the State of California. 9 https://indicaonline.com/dispensaries/ There will be 8 Point of Sale systems along the counters to assist our customers. Once it is a customer’s turn to purchase a product, the sales associate will first check the customer’s ID a second time as a second line of defense against underage purchasing. If the customer is eligible to make a purchase, the sales associate will pull up the customer ’s profile on IndicaOnline, confirm that the customer’s purchase does not exceed his or her daily limit and scan the product for sale on the IndicaOnline system, which will update the inventory count in the store. Every purchase will also be automatically sent to the State of California through the system’s integration with METRC. iv. Estimate the Number of Customers to be Served per Hour/Day. Shryne Group estimates that this Fresno dispensary will serve on average 52 customers per hour and an average of 679 customers per day. The store will serve the most customers in between 12pm to 2pm and between 6pm to 8pm during the weekdays and from 2pm to 7pm on the weekends. The store will also likely serve the most customers Friday through Sunday. The table below shows the estimated number of customers on each day. v. Describe the Proposed Product Line to be Sold and Estimate the Percentage of Sales of Flower and Manufactured Products. Customers at Authentic Fresno will be able to choose from over 330 SKUs and 12 different types of products, including flowers, oils, vapes, pre-rolls, topicals, and edibles from the over 70 California vendors Shryne Group is currently engaged with and 15 of Shryne Group’s own in-house brands, including Stiiizy, Honeyleaf, Efex, Palmas, Biiit, and Liiit. In fact, our in-house brands are the most popular brands in California as evidenced by the fact that we were named the most popular marijuana brand in the United States as of December 2019 according to Pioneer Intelligence10 and named 2019 Brand of the Year by California Cannabis Awards11. Shryne’s products are currently carried at 90% of cannabis retail stores in California and many of our customers at our retail stores cite our vast selection of these in-house brands as one of the main reasons they continue to return to our stores. 10 https://www.benzinga.com/markets/cannabis/19/10/14621437/report-cannabis-brands-stiiizy-lowell-and-dosist-dominate-marketing-while-mattio-pr-moves-the-ne 11 http://www.californiacannabisawards.com/ Whether the customer is looking for physical pain relief, assistance sleeping or is simply looking to unwind, Authentic Fresno’s wide array of products from Shryne Group’s own in-house brands and offerings from only the most reputable vendors will ensure there is something for every customer. Because of Shryne Group’s vertical integration, approximately 60% of products sold at our stores will have been within our chain of custody and tested multiple times from seed to sale. All third-party products will also be strictly tested and their manufacturing and cultivation sites will be inspected to ensure that such third-party products also meet Authentic Fresno’s safety, testing and purity standards. See below the initial list of 330 SKUs we plan to carry at Authentic Fresno. An additional 50 – 100 SKUs will be added once the store is operational to account for products from Fresno-based cultivators and manufacturers. Authentic Fresno anticipates that 50.3% of retail sales will be cannabis flower, of which 6.8% is pre- rolls, and 49.7% will be manufactured cannabis products. Manufactured cannabis goods include pens, batteries, and cartridges (23%), edibles (13%), concentrates (8.9%), and infused non-edible products (4.8%). Authentic Fresno’s proposed product line is listed below: Flower Authentic Fresno will carry a wide variety of cannabis strains from across Cali- fornia. Authentic Fresno’s curated cannabis inventory will feature high-quality, laboratory-tested cannabis at all price points. THC content on cannabis will range from 10% to 35%. Cannabis flower varieties will include indica, sativa, and hy- brid. Brands we will carry include our own popular Stiiizy and Liiit brands as well as Alien Labs, Glass House Farms, Riverview Farms and many other reputable brands. Pre-Rolls (Flower) A pre-roll is exactly what it sounds like—a pre-rolled cannabis joint. Authentic Fresno will carry pre-roll joints from a variety of licensed cultivators. THC content will range from 10% to 35%. Cannabis varieties will include indica, sativa, and hybrid. Brands include Stiiizy, Liiit, Nug, Elyon Cannabis and Connected Canna- bis. Concentrates Authentic Fresno plans to carry live resin, budder, sauce, sugar leaf, and crumble. Brands include Stiiizy, Bear Labs, 710 Labs and Blue River. Vapes Vaporizers—also known as vape pens—are devices used to heat cannabis for inhalation. Vaping devices heat dry cannabis flower or oil concentrate to a tem- perature below combustion, usually in the range of 180–200°C (356–392°F). The heat releases active compounds from the cannabis and turns them into a vapor that can be inhaled. THC content of vapes will range from 35% to 90%. Brands include Stiiizy, Raw Garden, Alien Labs and Blue River. Oil Cartridges or Pods An oil cartridges or pod is a pre-filled container of cannabis oil or concentrate designed for use with an e-cigarette or vape rig. Cartridges and pods come in multiple formats, from 510-threaded cartridges that twist onto a battery to pods that magnetically snap into place. THC content of oil cartridges ranges from 35% to 90%. Brands include Stiiizy, Raw Garden, Sherbinskis and Connected Cannabis. Edibles Edibles are food infused with cannabinoids. Cannabis edibles come in many forms, including brownies, cookies, gummies, and mints. Any recipe that calls for butter or oil can be readily infused with cannabis. The body processes edible can- nabis differently than inhaled cannabinoids. When cannabis is ingested, cannabi- noids enter the bloodstream through the stomach and liver, which increases potency and delays the onset of effects. Cannabis edibles typically contain 5–10 milligrams of THC per serving, with a maximum of 100 milligrams of THC per edible canna- bis good. Brands include Enjoyables, Biiit, Korova, Kiva and Smokies. Beverages Cannabis-infused beverages are ingested like edibles. Cannabis-infused beverages include seltzers, sodas, non-alcoholic “hoppy water,” and other drinks. Canna- bis-infused beverages contain 5–10 milligrams of THC. Brands include Lagunitas and Recess (Note that we will not sell cannabis infused alcoholic beverages). Topicals Topicals are cannabis-infused lotions, balms, and oils that are absorbed through the skin for localized relief of pain, soreness, and inflammation. Because they are non-intoxicating, topicals are often chosen by patients who want the therapeutic benefits of cannabis without the cerebral euphoria associated with other delivery methods. Brands include Papa & Barkley, Apothecanna and C.A.D. Tinctures Tinctures contain a range of cannabinoids and are administered orally, sublingually, or in tandem with a beverage. Tinctures are often packaged in small glass bot- tles with droppers as caps for convenient dosing. They offer patients a method of consumption that does not require combustion or inhalation. Tinctures typically contain 100 milligrams of THC. Brands include Papa & Barkley, Proof, Mary’s Medicinal and Tikun. Capsules Capsules are cannabis in pill form, typically used as a vehicle to administer medi- cation through ingestion. Capsules can contain any form of cannabis and specific ratios of cannabinoids. Capsules often function as safer alternatives to vaping or smoking cannabis. Capsules typically range from 5 to 10 milligrams of THC. Brands include Papa & Barkley, Mary’s Medicinal, Breez and ABX. In line with Shryne Group’s vision of offering a luxurious yet inclusive environment, Authentic Fresno will offer high-end artisanal products such as Alien Labs Area 41 at $80 per one-eighth ounce but also affordable products for cost-sensitive customers such as Shryne Group’s in-house Honeyleaf Chocolate Hashberry at $16 per one-eighth ounce, which is 60% less expensive than the average price of cannabis at other legal dispensaries in California. To assist customers in taking in and discerning the various products for sale, Authentic Fresno will also permit third-party brands it carries to advertise their products free of charge through empty “vendor boxes,” which will line the shelves along the walls behind the counters. The products will also be separated by delivery type (e.g., flower, gummies) and by strain (e.g., sativa, indica, hybrid) to assist the customer in identifying what they are looking for. In accordance with 16 CCR § 5025(d), Authentic Fresno will not sell alcohol or tobacco products at its dispensary. vi. Describe Delivery Service Procedures, Number of Vehicles and Product Security During Transportation. Our experience in other cities has shown us that a well operated delivery business can provide an extra 30% in sales to the storefront retailer. The fact that our store is located within 1.5 miles of Highway 168 will allow us to deliver to areas as far as 60 miles away from the retail store. This expansive reach will be necessary to cater to all of the customers who are unable to travel to Authentic Fresno’s retail premises to still obtain the high-quality cannabis products they desire. Delivery Service Procedures Receiving Delivery Orders Authentic Fresno customers will be able to make delivery orders through our proprietary online delivery platform called Blaze. Customers are required to create an online profile with valid ID and a recent photograph of the customer holding their ID. ID is checked again at the time of delivery. See below our easy to use interface which permits online shoppers to filter by product type, price and weight. Once a new delivery order is received, a sales associate will first confirm that the order complies with daily sales limits and can be legally processed. The sales associate will then check that all of the desired products are in stock and that the order can be fulfilled in accordance with the customer ’s expectations. If all of the requested goods are available, then the sales associate will process the order as requested by first documenting the customer’s identifying information and checking the delivery address online to ensure that it is: (i) a physical address in California; (ii) not on publicly owned land or on land or in a building leased by a public agency; and (iii) not a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center in accordance with 16 CCR § 5416. Delivery Order Processing As part of order fulfillment, a sales associate will prepare a Delivery Request Receipt that contains the following information in accordance with 16 CCR § 5420(a): i. Authentic Fresno’s name and address; ii. The first name and employee number of the employee who will deliver the order; iii. The first name and employee number of the employee who will have prepared the order for delivery; iv. The first name and Authentic Fresno-assigned customer number for the customer who placed the delivery order; v. The date and time of the delivery order; vi. The delivery address provided by the ordering customer; vii. A detailed description of all of the requested cannabis goods, including their weight, volume, or another accurate measure of the amount; and viii. The total amount paid for the delivery, including any taxes, fees, the cost of the cannabis goods, and any other charges related to the delivery. The same Delivery Request Receipt will later be updated by the Delivery Employee to include the date and time the order was delivered, as well as the ordering customer’s signature confirming their receipt of the order. The sales associate will also record this information in the customer’s profile in the point-of-sale system, so that cannabis goods sold by Authentic Fresno can be tracked in the event of a product recall. All ordered cannabis goods will be gathered from inventory storage by the Inventory Manager and he or she will visually inspect each product to ensure that it is not expired, that the packaging is intact and unopened, and that the product labeling is intact and legible. The Inventory Manager will then provide the items to the sales associate. The sales associate will either scan or manually document each item into the POS system. The following information will also be entered directly into Track-and Trace in accordance with 16 CCR § 5049(b): i. Name and type of cannabis goods; ii. Unique Identifiers (UID) of cannabis goods; iii. Amount of cannabis goods, by weight or count; iv. Date and time of sale; and v. Any other information required by licensing authorities. Delivery orders will only be fulfilled if Authentic Fresno has connectivity to Track-and-Trace. To conclude order documentation, the sales associate will then add the ordered products to the delivery driver’s Delivery Inventory Ledger, which will include for each good the: (i) type; (ii) brand; (iii) retail value; (iv) UID; and (v) weight or volume. Based on then-current retail prices, the sales associate will verify that the Delivery Inventory Ledger contains less than $5,000 of cannabis goods as pursuant to 16 CCR § 5418(a). All delivery orders will then be placed into opaque exit packages, the same as previously mentioned, and will be provided to the Delivery Employee with copies of the corresponding Delivery Request Receipts and the Delivery Inventory Ledger in accordance with 16 CCR § 5418(e) & (g). Delivery Vehicle Loading When delivery vehicles are loaded for delivery, it will take place in Authentic Fresno’s loading area. Pursuant to 16 CCR § 5044(d)(1), the delivery area will be under 24-hour video surveillance. Cannabis goods will be loaded into the enclosed delivery vehicle by delivery employees, who will ensure that all cannabis goods are locked in a fully-enclosed box, container, or cage that is secured on the inside of the vehicle (but is not comprised of any part of the body of the vehicle) that is not visible to the public in accordance with 16 CCR § 5417(b). Authentic Fresno’s Pre-Dispatch Checklist will be used by delivery employees to ensure that all of the following items are in their possession and functioning properly prior to departure: • Delivery Inventory Ledger • Delivery Request Receipt • Delivery Stop Log • Copy of Business license • Copy of State license • Driver’s license • Employee identification badge • Age verification device • Mobile telephone • GPS device • Sufficient fuel • Alarm system • Inventory containers and locks • Vehicle operator’s manual • Spare tire and jack GPS Tracking12 To facilitate identifying the geographic location of each delivery vehicle and creating a record of all travel, each delivery vehicle will be outfitted with a dedicated GPS device that will be owned by Authentic Fresno and used only for delivery. Each GPS device will be permanently or temporarily affixed to the inside of a delivery vehicle, and devices will remain active throughout all deliveries to enable Authentic Fresno to identify and document each vehicle’s location at all times during the delivery process. Authentic Fresno will maintain for at least 90 days a record of all of the locations traveled to by Delivery Employees during deliveries, and Authentic Fresno will provide these records to the City and the Bureau of Cannabis Control immediately upon request. Delivery Stop Log In accordance with 16 CCR § 5418(f), a Delivery Stop Log will be maintained by Delivery Employees. This is a log of any stops from the time the delivery employee leaves the dispensary to the time he or she returns, including the reasons for each stop. After deliveries are completed, the Delivery Driver will provide the Log to management, who will ensure that the log is retained and available for inspection for at least seven years in compliance with 16 CCR § 5418(f). In accordance with 16 CCR § 5418(h) (3), Delivery Employees will provide the log to the City, the Bureau of Cannabis Control, or any law enforcement officer immediately upon request while out on deliveries. Delivery Employee Communication Communication between management and Delivery Employees will occur through the use of hands-free telephones. Before departing from the dispensary for a delivery, a Delivery Employee will place and receive a test call to management to confirm that the telephones are properly functioning. In addition to general communications, Delivery Employees will utilize the hands-free telephones to report all adverse delivery events to management, who will record all adverse events in a dedicated incident log. Completing a Delivery Five minutes prior to a driver’s arrival at the customer’s delivery address, the customer will be notified that the delivery is 5 minutes away. When a Delivery Employee arrives at a customer’s delivery address, he or she will first attempt to contact the ordering customer by knocking on his or her door or ringing the doorbell. If the ordering customer does not respond after a reasonable time, the Delivery Employee will return to the delivery vehicle and will attempt to call the customer using the telephone number 12 In accordance with 16 CCR § 5417(d). the customer provided with the order. If there is still no response within 10 minutes of the Delivery Employee’s first attempt to contact the ordering customer, he or she will return to the dispensary with the customer’s entire order. If there is a response, the Delivery Employee will ensure that he or she is communicating with the customer who placed the order by checking the customer’s appropriate identification and will scan the identification with an age verification device to confirm that the identification is valid and that the customer is of legal age to purchase cannabis in compliance with 16 CCR § 5415(f). After the customer’s identity and age have been verified, the Delivery Employee will process payment and will physically transfer the cannabis goods to the customer. The customer will then sign the Delivery Request Receipt provided by the Delivery Employee and will be provided with a copy of the receipt as required in 16 CCR § 5420(b). The Delivery Employee will also retain a copy of the signed Delivery Request Receipt to provide to management, who will maintain the receipt in accordance with Authentic Fresno’s record retention policy and applicable rules and regulations as stated in 16 CCR § 5420(b). Number of Delivery Vehicles Authentic Fresno intends to utilize 6 vehicles, which will be electric or hybrid vehicles, to provide delivery services for its customers. Product Security during Transportation Product security during transportation is a priority to Authentic Fresno, as it reduces the likelihood of product diversion and underage access. As such, Authentic Fresno will enforce the following policies, among others, to ensure that products remain secure throughout the delivery process in compliance with 16 CCR § 5418 (a-d): • All Delivery Employees will be at least 21 years old. • All deliveries will be made by Authentic Fresno’s Delivery Employees (as opposed to third party contractors). • We will only employ Delivery Employees with a good driving history (e.g., no DUIs, driving with suspended license, etc.) • Deliveries will only be made during store hours. • Cannabis products will not be visible from the outside. • Delivery Employees will not be permitted to perform a large number of deliveries on each route to limit the amount of cash and products in the vehicle. Delivery Employees will not carry cannabis goods worth more than $5,000 at any time. • Only authorized employees will be allowed in the delivery vehicle during a cannabis goods delivery. • Delivery Employees will not leave the store with cannabis goods without at least one delivery order that has already been received and processed by the store (e.g., no roaming with cannabis goods). • While carrying cannabis goods for delivery, Delivery Employees will only travel in an enclosed delivery vehicle and will ensure the cannabis goods are not visible to the public. • While making deliveries, the Delivery Employee shall only travel from the store to the delivery address, to the delivery address to another delivery address or back to the store. The Delivery Employee shall not deviate from the delivery path except for necessary rest, fuel, vehicle repair stops or due to unsafe road conditions. • Delivery vehicles will not have any marking on the exterior of the vehicle that may indicate the presence of cannabis inside the vehicle. • Delivery Employees will not leave cannabis goods unattended in the delivery vehicle unless the vehicle is locked and the alarm system is active. • A dedicated GPS device will be affixed to the inside of each delivery vehicle, enabling Authentic Fresno to identify each vehicle’s location during delivery. Additionally, as mentioned previously, Delivery Employees will be in constant communication with the store’s inventory and delivery team via hands-free telephones. Delivery Employees are instructed to dial 9-1-1 if they feel threatened or they believe a crime is about to be committed. The inventory and delivery team at the store will also keep track of the delivery vehicle’s whereabouts and will call the Delivery Employee if there are unscheduled stops or other unusual activities. If they are not able to connect with the Delivery Employee, the inventory manager will contact the police if he or she reasonably believes there is a crime being committed or that the Delivery Employee is otherwise in danger. 2. SOCIAL POLICY AND LOCAL ENTERPRISE PLAN 2.1. Living Wages Authentic Fresno is committed to paying a living wage. We have a “universal” Collective Bargaining Agreement with the United Food and Commercial Workers International Union (UFCW) Local 8, which covers Fresno’s jurisdiction, and have agreed in our CBA to pay living wages in all the cities in which we operate. Pursuant to the CBA, Authentic Fresno’s minimum base pay will be per hour for our most junior employees and will go all the way up to an hour for more senior hourly employees. The compensation floor is per hour more than the minimum wage in Fresno of per hour for companies with more than 25 employees and more than the living wage of Fresno according to M.I.T.’s living wage calculator.13 Employees are also entitled to wage increases every 6 months. The General Manager and Co-Managers will be salaried and will receive per year. As the cost of living and the minimum wages increase, Authentic Fresno is committed to increasing its minimum wage to match these costs of living increases so that all employees continue to receive living wages. 2.2. Employee Benefits In addition to living wages, Authentic Fresno will offer a comprehensive benefits package governed by our CBA, which is one of the best in the industry. Insurance Benefits. Authentic Fresno will offer Medical, Dental, and Vision Insurance benefits to its retail employees through Anthem. Employees can choose from the Gold, Silver, Bronze PPO Plans or the HMO Plan. The company will cover 70% of all insurance premiums of its employees. Holidays. Full-Time Employees receive 10 paid-holidays per year and receive double wages if they work on such holidays. Paid Time Off. Employees will receive 72 hours of paid time off per year. Sick/ Personal Leave. Employees receive 6 work days (48 hours) of paid sick leave per year. 13 https://livingwage.mit.edu/counties/06019 Maternity/Paternity Leave. Authentic Fresno provides up to six (6) weeks of maternity and paternity leave. Retirement Benefits. Under the CBA with the UFCW, all Authentic Fresno employees will benefit from an employer funded pension plan administered by the UFCW. We are one of the only cannabis companies in the state to offer an employer funded pension plan. 401(k). In addition to our pension plan, we are in the middle of instituting a 401(k) plan for our employees. Jury Duty. For time served on jury duty, Authentic Fresno will pay employees the difference between his or her salary and any amount paid by the government, unless prohibited by law, up to a maximum of ten days. If an employee is required to serve more than ten days of jury duty, Authentic Fresno will provide the employee with unpaid leave. Election Day Poll Workers. Authentic Fresno will pay employees the difference between his or her salary and any amount paid by the government or any other source unless prohibited by law for serving as an Election Day worker at the polls on official election days (not to exceed two elections in one given calendar year). While performing their official nonpartisan duties at the polls, Election Day workers may not engage in political activity or campaign for or against any candidate or ballot measure. Voting. Employees receive 3 hours of paid time off to vote. Volunteer. Authentic Fresno provides its employees 24 hours paid time off per year to volunteer. Employees may carry over unused Volunteer time but may not accrue more than 24 hours in any single year period. 2.3. Compensation, Continuing Education and Training Compensation Authentic Fresno’s employees will be paid as follows: General Manager Co-Manager Retail and Operations Associates Customer Check-in Associates Employees will be eligible for pay increases every 6 months. The pay scales above will also be increased as the cost of living increases. Continuing Education and Compensation for Education Authentic Fresno and Shryne Group are committed to working with employees to develop each individual’s talents, skills and abilities. As detailed below, Authentic Fresno will provide its employees with a world class cannabis education. In addition, through the Shryne Group, Authentic Fresno will provide training and continuing education beyond cannabis. The aim of this program is to provide employees with a foundation to thrive at Authentic Fresno and in their future endeavors. Workforce Development In addition to providing competitive wages and the most comprehensive benefits in the industry, Authentic Fresno will provide workforce development for its Fresno employees at no cost to them and will pay for our employees to receive college credits from these courses. Shryne’s goal is to develop well-trained, skilled workers. Shryne and Los Angeles Trade Tech College have an agreement for instructors from Los Angeles Trade Tech College to teach classes at all of Shryne’s retail, manufacturing, distribution and cultivation facilities in California. The classes will be held every two to three weeks at the Fresno store or via Zoom and will be free of charge to the employees. Employees who were initially scheduled to work during the classes will be paid to attend the class. Classes include: • Microsoft Word • Microsoft Excel • Creating PowerPoint Presentations • Accounting • Supply Chain Logistics • Leadership • Effective Communication Classes are 2-3 hours long and upon completion, the employees will receive 1-3 college units which can be transferred to any 2 or 4 year college. Shryne Group will pay for these college units so that our employees will receive these college units at no cost to them. Employees also receive career development counseling throughout the process and are considered for promotions or pay raises upon completion. Curriculums are typically 8 – 10 classes each and are grouped by subject matter and seniority. For example, the Microsoft Package curriculum are geared more towards junior employees while the Leadership curriculum are for managers and up. This program launched in March 2020 and has been a huge success with over 200 employees having completed one of the curriculums. LA Employees Attending a Class on Microsoft Excel This Workforce Development Program aligns with our core belief that we can always strive to learn and to improve regardless of our position at the company or our past successes as a company. The program has been a win-win for the company and the employees have learned new skills through the program and have been empowered to strive for more responsibilities and different positions at the company. The company has also benefitted from new skills our employees now bring to work as well as extra motivation and confidence that our employees who have completed the courses display. Because we compensate employees who attended the classes who were scheduled to work during the time of the classes and because we sponsor the college units attached to the classes, our Fresno employees will have every reason to attend. Fresno City College – Apprentice and Scholarship Program We have an Apprentice and Scholarship Program in every city in which we operate and Fresno will be no different. As part of this program, we have agreed with Fresno City College to grant up to 3 scholarships to Fresno residents who would qualify as a Social Equity Applicant under FMC Article 33 § 9-3316(b)(6). The scholarships will pay for at least 2 years of coursework in business, entrepreneurship or retail management and will also involve mentoring from certain executives of Shryne Group. The scholarship recipients will also have the option to become a part-time employee at our retail, cultivation, manufacturing or distribution operations across California. These apprenticeship participants will be fully compensated for their part-time jobs at our facilities. This companywide scholarship and apprenticeship program kicked off in December 2019 and 3 Los Angeles residents are currently taking courses towards a Retail Management Certificate of Achievement at LA Trade Tech College. These scholarship recipients are also working part time at our cultivation and manufacturing facilities in Los Angeles to learn about the cannabis industry. One of the participants of this program, Julian Domingo, has become Head of Cultivation at our Los Angeles facility and is 3 months away from obtaining his Certificate of Retail Management. Authentic Fresno hopes to replicate this program’s success in Fresno. Our Letter of Intent with Fresno City College is attached at the end of Section 7.1 below. Employee Training Authentic Fresno’s employment practices begin with hiring diverse, quality staff. In that regard, Authentic Fresno will hold a local job fair at its store prior to opening to attract local residents to apply in conjunction with the UFCW. A background check will be conducted on every potential employee Authentic Fresno is considering hiring. Once hired, every retail employee, will undergo 6 paid days of training prior to working at the store to ensure that employees are knowledgeable, friendly, and professional. The 6 days are broken up as follows: Day 1 – State and City Laws and Regulations Governing Cannabis Day 2 – Understanding All Rules and Related SOPs of the Authentic Retail Store Day 3 – Sexual Harassment, Anti Diversion and Safety at the Workplace Training Day 4 – Educating Against Abuse of Cannabis, Science of Cannabis, and Safe Dosing Day 5 – Record Management, Inventory Management, and Cash Management Day 6 – Interacting with and Educating the Customer Additionally, each new retail employee who has completed the 6-day training program will initially be paired with a more experienced retail employee behind the retail counter for the first 30-days of their employment. The manager and the other retail employees are tasked with supervising the new employee during the first 30-day period to ensure compliance with all laws, regulations and store SOPs. Given the ever-changing nature of the cannabis industry, our training program also emphasizes continuous improvement, and the Fresno retail team will be updated and retrained on a continual basis as state and local laws and rules change. Managers are required to provide monthly reviews of each retail employee for the first 90 days of employment so that any deficiencies can be addressed and remediated immediately. Additionally, the General Manager will hold monthly store meetings to touch on the following: • Customer feedback and areas for improvement • New product launches • Recognition of instances of exceptional customer service • Changes in laws or regulations • Concerns or questions from retail employees This extensive and proprietary training program will allow Authentic Fresno to instill our employees with the values of our founders which Shryne was built upon. Our retail employees are our ambassadors to our customers and the communities in which we operate and we take great pride in ensuring that our pillars of safety, inclusion, and education of the public are portrayed by our employees. Customers at our retail stores frequently comment that one of the reasons they come back to our stores is the level of knowledge and professionalism of our employees. As a reflection of our highly trained employees, we were proud to learn that one of our Los Angeles store employees, Valerie Davalos, was recently named one of the top 25 cannabis retail employees in the United States by Green Entrepreneur14. Valerie was recognized for her expert knowledge in all of the products we offer and her ability to educate customers on safe and effective use and dosage. Shryne is extremely proud of Valerie and the other 800 employees who have completed our rigorous training program and strive to provide the best customer service at all our stores. 14 https://www.greenentrepreneur.com/slideshow/343079 2.4. Plans to Recruit Individuals Who meet Social Policy Section 9-3316(B)(1) We plan to hire at least 50% of our employees from people who meet the criteria listed in FMC Article 33 § 9-3316(b)(1) (the Employment Social Policy section). We will recruit and hire individuals who meet those criteria as follows: • Fresno Economic Development Corporation15: We have entered into a partnership with the Fresno Economic Development Corporation (FEDC) whereby we will donate annually towards their job and business development efforts in Fresno. As part of this partnership, we are working with the FEDC to recruit individuals who have annual family income below 80% AMI, lived in foster care as a minor, are unemployed or are receiving public assistance. The FEDC has agreed to help us recruit individuals who meet the criteria in FMC Article 33 § 9-3316(b)(1) through the following: 15 https://www.fresnoedc.com/ • The FEDC will act as a liaison with the Fresno Department of Social Services who assists Fresno residents who require social services and are looking for jobs; • The FEDC has a “job matching” website whereby employers and individuals seeking employment are matched based on skill set and interests of the employee candidate; • The FEDC will assist us in holding job fairs and targeting job fairs towards individuals who meet certain criteria. Our agreement with the FEDC is included in Section 7.1 below. • JVS16 and Vet Hunters17: We currently work with JVS (Jobs.Vision.Success.) and Vet Hunters to place veterans at our various facilities across California. If selected to open a store in Fresno, we will work with these organizations to find veterans for positions at our store. Our Co-Founder, James Kim, is a disabled army veteran who served a 13-month tour in Iraq with the 101st Airborne Division, and he is committed to hiring as many veterans at our operations as possible. • Fresno City College: We have entered into a partnership with Fresno City College to provide scholarships for Fresno residents who have annual family income below 80% AMI or who live in low to moderate income tracts in the city to attend Fresno City College. As part of our partnership, Fresno City College will help us identify low income residents who would be interested in working at our facility. Our agreement with Fresno City College is included in Section 7.1 below. • UFCW: Our union partner, the UFCW, will host expungement clinics at our store as we have done at our other locations which is more fully described in Section 7.1 below. We have been able to meet very qualified candidates at our past expungement clinics and we hope to be able to recruit and hire individuals who were convicted of a cannabis related crime which could have been misdemeanors or citations under current law. Additionally, we plan to hire 70% of our employees from within the City of Fresno. Prior to our opening, we will hold job fairs targeted towards local residents in conjunction with the UFCW so that we can identify local residents. The Fresno Economic Development Corps. has also agreed to help us identify local residents so that we can meet our goal of hiring at least 70% Fresno residents. 2.5. Local Ownership and Management To ensure that our store is managed by Fresno residents, we have interviewed and identified the following City of Fresno residents who have all lived in Fresno since at least 2015 for General Manager 16 https://www.jvs-socal.org/veteran-services/ 17 https://vethunters.org/ or Co-Manager positions: • Daniel Rodriguez: Daniel currently works as a supply chain supervisor at Kaiser Permanente and is used to managing in a union environment. • Alonso Morales: Alonso is a boxing promoter for up and coming youth in Fresno. Alonso is a Purple Heart Veteran and is an optimal leader for younger retail associates. • Kalan Martin: Kalan was recently laid off from Full Circle brewery after 3 years as service manager. Kalan has substantial experience in managing in retail and customer service industries. Additionally, we intend to hire at least 70% of our employees from within the City of Fresno. We will host a job fair with the UFCW prior to our opening and work with the Fresno Economic Development Corporation and Chamber of Commerce to advertise this job fair and to recruit additional qualified local residents for positions at our store. 2.6. Staffing Plan We robustly staff all of our retail stores and we anticipate hiring between 40 – 50 employees for this large location. Our aim is to provide an unparalleled shopping experience. This means providing ample opportunity for customer education. It also means having short wait times for shoppers. Our staffing plan promotes both for the customer. To reduce wait time for our customers, we will have a total of 8 to 12 sales associates behind the counter at any given time. The check-in lobby will have 2-3 check-in associates at any given time. One General Manager will supervise the entire operation and 3 co-managers will assist the GM in supervising all of the operations at the store. 6-8 operations associates will support sales floor operations and delivery operations. They will refill inventory and accept inventory deliveries, accept phone and online delivery orders and prepare delivery packages for the delivery drivers, properly dispose of garbage and provide other operational support. Based on the proposed store size and customer volume, Authentic Fresno intends to hire the following positions for the first year of operations. Some of the following roles overlap with the same employee. General Manager 1 Developing, executing, and evaluating short- and long-term strategies; Acting as the face of the company along with senior management of Shryne Group, i.e., communicating with the public, government entities, and stakeholders on behalf of Authentic Fresno; Creating and implement- ing Authentic Fresno’s vision, mission, culture, and values. Retail Co-Managers 3 Overseeing day-to-day administration, operations, resources, and em- ployees; Overseeing an infrastructure that aligns with Authentic Fresno’s vision, mission, cultures, and values and surpasses company goals; Eval- uating organization performance; Building relationships with customers and vendors; Handling internal affairs. Inventory Co- Manager 1 Ensuring inventory is accurately reflected in the statewide electronic cannabis inventory verification system; Assisting the Agents-in-Charge in inventory management responsibilities; Inventory reconciliation. Chief Security Officer 1 Developing and implementing standardized procedures to ensure Au- thentic Fresno’s facility remains safe and secure; Monitoring security personnel and security systems (e.g., video surveillance system, alarm system); Training Authentic Fresno’s personnel on security and emergen- cy preparedness policies and procedures; Serving as point-of-contact for Authentic Fresno’s contracted security company and personnel. Community Benefits Direc- tor 1 Serving as Authentic Fresno’s 24-hour Community Liaison; Interfacing with the community on issues and concerns they may have about our operations. Building relationships with the residents, city officials and our non-profit partners in Fresno. Sales Associates 18-22 Assisting customers with product selection; Performing quality checks prior to releasing products to customers; Offering customer service, including customer education and complaints handling; Operating the point-of-sale system to process sales and record customer info; Maintain- ing and monitoring the retail sales floor. Operations Associates 4-8 Receiving deliveries from distribution vehicles; Updating all inventory whenever received, moved, returned or sold and ensuring integration with METRC; Preparing packages for delivery customers for delivery drivers; Assisting delivery drivers during their deliveries. Delivery Drivers 5-7 Delivering customer orders to customers; Checking customer IDs when making deliveries; Ensuring all proper manifests and delivery logs are kept and maintained in the delivery vehicle; Checking delivery vehicle for adequate electricity. Receptionist 5-6 Performing clerical duties; Verifying customer age and identity; Maintain- ing Authentic Fresno’s Visitor Log; Registering new customers into point of sale system. Security Guards18 10 Greeting visitors and agents to assure them that Authentic Fresno is taking all necessary safety precautions; Ensuring security systems (e.g., video surveillance system, alarm system) remain operational; Monitoring and patrolling Authentic Fresno’s premises to identify and respond to security risks 24 hours per day. Authentic Fresno forecasts its revenue increasing 15% in the first year and 10% in years 2 through 5 and additional retail, operations and check in staff will be hired in proportion to our revenue growth. As noted previously, all of our full time and part time employees will enjoy the protections of the Collective Bargaining Agreement with the UFCW, subsidized health and dental insurance, and sick leave and paid time off. 2.7. Labor Peace Agreement and Collective Bargaining Agreement Authentic Fresno will have more than 5 employees. Shryne Group, Authentic Fresno’s parent entity, entered into a Labor Peace Agreement with the UFCW Local 8, which covers the Fresno area. The Labor Peace Agreement applies to all of Shryne Group’s subsidiaries, including Authentic Fresno. We also entered into a Collective Bargaining Agreement with the UFCW Local 8 on March 25, 2020 and our Authentic Fresno store will be unionized under the terms of this CBA if the employees so desire. A letter of support from the local UFCW 8 is set forth below. 18 Security guards will be a third party contractor’s employees and not direct employees of Authentic Fresno. October 15, 2020 City of Fresno Office of Cannabis Oversight 2600 Fresno Street Fresno, CA 93721 Dear City of Fresno, On behalf of more than 30,000 members of the United Food and Commercial Workers (UFCW) Local 8, we wish to express our strong support for the Shryne Group/Authentic Fresno’s application for a cannabis retail permit with the City of Fresno. We are highlighting our support for the Shryne Group because of the company’s commitment to the safety of its employees and customers, the highes t standards of regulatory compliance, the professionalism and experience of the organization’s leaders and, most of all, the compassion and care it has shown for communities in which they operate. The Shryne Group shares our vision of empowering and protecting employees and sharing in the success of its business with its employees. They have executed Collective Bargaining Agreements with the UFCW Local 8 and Local 5 and are committed to hiring locally and providing stable unionized jobs with wages and benefits significantly above the industry average in Fresno. They are also one of the few cannabis companies with an employer funded pension plan, which the UFCW helps to administrate. UFCW’s partnership with the Shryne Group raises standards for cannabis workers across California, and we are proud to represent the workers at the forefront of the legal cannabis industry. Shryne Group will be a tremendous asset to the employees, customers and other stakeholders of Fresno by prioritizing compassion, education, safety, social equity and contributions to the City of Fresno. We strongly encourage the City of Fresno to select the Shryne Group/Authentic Fresno. Thank you for your time and consideration. Regards, JACQUES LOVEALL 2.8. Workforce Plan 2.8.1. Local Hires We are committed to hiring at least 70% of our employees from the City of Fresno. As mentioned previously, we are already in talks with Fresno locals Daniel Rodriquez, Alonso Morales, and Kalan Martin for management positions at our store. As we have done at all are other stores, we will host a job fair 4-6 weeks prior to our grand opening and target local residents to apply for jobs with Authentic Fresno. We will host the event with our union partner, the UFCW, and work with the UFCW, the Chamber of Commerce, Fresno City College, and the Fresno Economic Development Corp to get the word out to local residents. All our other stores employ between 50 – 80% of employees from the city in which they operate and we are confident that we will be able to meet our goal of hiring 70% from within Fresno. Job Fair Prior to Our San Bernardino Opening 2.8.2. Apprenticeships and Continuing Education As noted above, we offer both apprenticeships and compensation for continuing education in the industry through our Apprentice and Scholarship Program. 3 Fresno residents who would qualify as a Social Equity Applicant under FMC Article 33 § 9-3316(b)(6) will be eligible to participate in this program. The participant will receive a scholarship for at least 2 years at Fresno City College towards obtaining a Certificate of Retail Management or other certificates, if they so desire. The scholarship recipient will also have the option (it is not a requirement) to work part-time at any of our retail, cultivation, manufacturing or distribution facilities in Central California so that he or she can obtain hands-on experience and education regarding the cannabis industry. The apprenticeship participants will be fully compensated for their part-time work at our facilities. The goal is that these Apprentice and Scholarship Program participants will either start their own cannabis business or achieve high level positions within our company upon completion of the program. As mentioned above, we are very proud of the fact that one of our earlier participants of this program, Julian Domingo, has become Head of Cultivation at our Los Angeles facility and is 3 months away from obtaining his Certificate of Retail Management from Los Angeles Trade Tech College. Additionally, as mentioned above, all of our employees will have the opportunity for continuing education through our Workforce Development Program. The curriculum includes the Microsoft Software Package, Leadership, Communication, Team Building and Logistics and usually consists of 8-10 classes per curriculum. If the classes coincide with an employee’s regular shift, the employee will still be paid during the time of attending the class. Participants who complete a curriculum also receive 1-3 college credits which are transferable to any 2 or 4 year college. We will pay for these college credits so that the employees can get closer to a 2 or 4 year college degree at no expense to them. See below a recent flyer sent out to supervisors and managers of all of our facilities on our Leadership and Team Building Curriculums. Julian Domingo rose through our apprenticeship program to become Head of Cultivation. Leadership & Communication (24 weeks) Improve your communication skills, and learn new skills that will help you engage others at work and in your personal life. Deal with real issues and receive real-time coaching from experts. Come prepared with three real-world outcomes you would like to achieve from this course. Students that complete the full course will earn a certificate from Los Angeles Trade Tech College. This course examines: Essentials Of Listening, Communication Barriers, Discipline...What It Is & How To Harness It, Behavioral Feedback, Accountability & Ownership, Change Management, Leading Vs Managing, Delegation & Team Development, Visionary Planning & Smart Strategies And More. Team Building (12 weeks) Learn team-building skills, strategic goal setting, and how to take purposeful and focused action to drive results. Improve skills and learn techniques on how to better evaluate expectations, staying motivated to achieve excellence, and more. Students that complete the full course earn a certificate from Los Angeles Trade Tech College. This course examines: Targeted Team Outcomes, Components of Team Success, and Stages of Team Growth. This course develops: Team Purpose, Team Ground Rules, Smart Team Goals, and Clarity of authority to make decisions & take action. To register for classes please contact Matthew Nathaniel (Matthew@ShryneGroup.com) FREE CLASSES LEARN NEW SKILLS Advance your skills with these free workforce development classes. Engage directly with live Los Angeles Trade Tech College instructors. Sign up today! Classes start: Wednesday, October 14, 2020 Time: 7:00 pm - 9:00 pm Where: Online - Zoom Open lab 15 minutes before and after each class. Zoom class links will be emailed to registered students. via Classes Available Only for Shryne Group Employees Leadership & Communication (24 weeks) Improve your communication skills, and learn new skills that will help you engage others at work and in your personal life. Deal with real issues and receive real-time coaching from experts. Come prepared with three real-world outcomes you would like to achieve from this course. Students that complete the full course will earn a certificate from Los Angeles Trade Tech College. This course examines: Essentials Of Listening, Communication Barriers, Discipline...What It Is & How To Harness It, Behavioral Feedback, Accountability & Ownership, Change Management, Leading Vs Managing, Delegation & Team Development, Visionary Planning & Smart Strategies And More. Team Building (12 weeks) Learn team-building skills, strategic goal setting, and how to take purposeful and focused action to drive results. Improve skills and learn techniques on how to better evaluate expectations, staying motivated to achieve excellence, and more. Students that complete the full course earn a certificate from Los Angeles Trade Tech College. This course examines: Targeted Team Outcomes, Components of Team Success, and Stages of Team Growth. This course develops: Team Purpose, Team Ground Rules, Smart Team Goals, and Clarity of authority to make decisions & take action. To register for classes please contact Matthew Nathaniel (Matthew@ShryneGroup.com) FREE CLASSES LEARN NEW SKILLS Advance your skills with these free workforce development classes. Engage directly with live Los Angeles Trade Tech College instructors. Sign up today! Classes start: Wednesday, October 14, 2020 Time: 7:00 pm - 9:00 pm Where: Online - Zoom Open lab 15 minutes before and after each class. Zoom class links will be emailed to registered students. via Classes Available Only for Shryne Group Employees Leadership & Communication (24 weeks) Improve your communication skills, and learn new skills that will help you engage others at work and in your personal life. Deal with real issues and receive real-time coaching from experts. Come prepared with three real-world outcomes you would like to achieve from this course. Students that complete the full course will earn a certificate from Los Angeles Trade Tech College. This course examines: Essentials Of Listening, Communication Barriers, Discipline...What It Is & How To Harness It, Behavioral Feedback, Accountability & Ownership, Change Management, Leading Vs Managing, Delegation & Team Development, Visionary Planning & Smart Strategies And More. Team Building (12 weeks) Learn team-building skills, strategic goal setting, and how to take purposeful and focused action to drive results. Improve skills and learn techniques on how to better evaluate expectations, staying motivated to achieve excellence, and more. Students that complete the full course earn a certificate from Los Angeles Trade Tech College. This course examines: Targeted Team Outcomes, Components of Team Success, and Stages of Team Growth. This course develops: Team Purpose, Team Ground Rules, Smart Team Goals, and Clarity of authority to make decisions & take action. To register for classes please contact Matthew Nathaniel (Matthew@ShryneGroup.com) FREE CLASSES LEARN NEW SKILLS Advance your skills with these free workforce development classes. Engage directly with live Los Angeles Trade Tech College instructors. Sign up today! Classes start: Wednesday, October 14, 2020 Time: 7:00 pm - 9:00 pm Where: Online - Zoom Open lab 15 minutes before and after each class. Zoom class links will be emailed to registered students. via Classes Available Only for Shryne Group Employees Leadership & Communication (24 weeks) Improve your communication skills, and learn new skills that will help you engage others at work and in your personal life. Deal with real issues and receive real-time coaching from experts. Come prepared with three real-world outcomes you would like to achieve from this course. Students that complete the full course will earn a certificate from Los Angeles Trade Tech College. This course examines: Essentials Of Listening, Communication Barriers, Discipline...What It Is & How To Harness It, Behavioral Feedback, Accountability & Ownership, Change Management, Leading Vs Managing, Delegation & Team Development, Visionary Planning & Smart Strategies And More. Team Building (12 weeks) Learn team-building skills, strategic goal setting, and how to take purposeful and focused action to drive results. Improve skills and learn techniques on how to better evaluate expectations, staying motivated to achieve excellence, and more. Students that complete the full course earn a certificate from Los Angeles Trade Tech College. This course examines: Targeted Team Outcomes, Components of Team Success, and Stages of Team Growth. This course develops: Team Purpose, Team Ground Rules, Smart Team Goals, and Clarity of authority to make decisions & take action. To register for classes please contact Matthew Nathaniel (Matthew@ShryneGroup.com) FREE CLASSES LEARN NEW SKILLS Advance your skills with these free workforce development classes. Engage directly with live Los Angeles Trade Tech College instructors. Sign up today! Classes start: Wednesday, October 14, 2020 Time: 7:00 pm - 9:00 pm Where: Online - Zoom Open lab 15 minutes before and after each class. Zoom class links will be emailed to registered students. via Classes Available Only for Shryne Group Employees Leadership & Communication (24 weeks) Improve your communication skills, and learn new skills that will help you engage others at work and in your personal life. Deal with real issues and receive real-time coaching from experts. Come prepared with three real-world outcomes you would like to achieve from this course. Students that complete the full course will earn a certificate from Los Angeles Trade Tech College. This course examines: Essentials Of Listening, Communication Barriers, Discipline...What It Is & How To Harness It, Behavioral Feedback, Accountability & Ownership, Change Management, Leading Vs Managing, Delegation & Team Development, Visionary Planning & Smart Strategies And More. Team Building (12 weeks) Learn team-building skills, strategic goal setting, and how to take purposeful and focused action to drive results. Improve skills and learn techniques on how to better evaluate expectations, staying motivated to achieve excellence, and more. Students that complete the full course earn a certificate from Los Angeles Trade Tech College. This course examines: Targeted Team Outcomes, Components of Team Success, and Stages of Team Growth. This course develops: Team Purpose, Team Ground Rules, Smart Team Goals, and Clarity of authority to make decisions & take action. To register for classes please contact Matthew Nathaniel (Matthew@ShryneGroup.com) FREE CLASSES LEARN NEW SKILLS Advance your skills with these free workforce development classes. Engage directly with live Los Angeles Trade Tech College instructors. Sign up today! Classes start: Wednesday, October 14, 2020 Time: 7:00 pm - 9:00 pm Where: Online - Zoom Open lab 15 minutes before and after each class. Zoom class links will be emailed to registered students. via Classes Available Only for Shryne Group Employees These programs reflect our company’s mission to provide as many people as possible the opportunity to make a career in cannabis and to own or operate a cannabis business. By combining structured educational classes through Fresno City College or our Workforce Development Program with hands-on experience working at our facilities, we hope our programs create successful owners and operators of cannabis businesses. 2.8.3. Living Wages Pursuant to our Collective Bargaining Agreement with the UFCW Local 8, we will pay living wages of for our associates, for our Co-Managers and to our General Manager. These wages are well in excess of Fresno’s living wage of . Our associates are also eligible for raises every 6 months. As the cost of living increases in Fresno, we will increase our minimum wages so that we are always paying our employees well over the living wage in Fresno. 2.9. Social Equity Incubation Shryne Group currently supports 13 individuals in San Francisco, Oakland and Los Angeles who qualify as social equity cannabis owners in these respective cities. These social equity applicants were all required to have a household income below 80% of the average median income in the respective cities in which they live (i.e. Los Angeles, San Francisco, and Oakland). In these cities, Shryne Group has provided 10 social equity individuals between 25 – 50% of the ownership of the stores currently in operation and of the stores which will open in the fourth quarter of 2020 at NO costs to these social equity partners. Shryne Group pays for the startup and buildout costs of these stores and is providing all of the legal, accounting and business support (including our wide distribution network) necessary to operate the business. Many of these social equity partners also work at the stores which they own so that they can learn about the cannabis industry which they have an ownership interest in. In Oakland, Shryne Group is also incubating 3 social equity individuals by providing them with free rent on spaces for them to operate their manufacturing and distribution businesses and also by providing them with legal, accounting and business assistance for their businesses. We have also committed to providing social equity owner Marquin Chandler of Oakland shelf space for his cannabis brands. Most recently, our social equity partner Cindy De La Vega became the first Latina to own a cannabis dispensary in San Francisco. We paid for 100% of the buildout of this San Francisco store, all of the legal and accounting fees and all other fees and expenses which were required to obtain the cannabis license and get the store up and running. Cindy owns 50% of this store as our social equity partner. As we have done in San Francisco, Oakland and Los Angeles, we are committed to serving as a Social Equity Business Incubator in Fresno. We are committed to providing at least a year to the Fresno Community Reinvestment Fund to assist Social Equity cannabis operators. Additionally, we are committed to providing the following to the Social Equity Applicants in Fresno: • Providing legal, accounting and compliance advice; • Providing assistance so that Social Equity Applicants can properly fill out all city and state cannabis license forms (we have held seminars to assist Los Angeles Social Equity Applicants fill out their city and state cannabis license forms); • Providing shelf space to Fresno Social Equity manufacturers, cultivators and distributors; • Providing Social Equity Applicants with equipment for their businesses; • Providing mentorship and assisting Social Equity Applicants to develop their business plan; and • Connecting Social Equity Applicants with our large distribution network so that manufacturers, distributors and cultivators have a place to sell or distribute their products and so that retailers have access to a stable and reputable supply chain of products. Our doors will always be open to the Social Equity Applicants of Fresno and we hope to be able to provide the support to help them succeed in Fresno as we have done in other cities in which we operate. 3. NEIGHBORHOOD COMPATIBILITY PLAN 3.1. Complaint Management Related to Noise, Light, Odor, Litter and Traffic As a first step to building a relationship with our neighbors, Authentic Fresno held a virtual open house on September 3, 2020 and invited all neighbors within 1000 feet of our location to attend. Invitations were sent in English and Spanish to ensure that all of our neighbors had the opportunity to participate. At this virtual open house, we were able to introduce ourselves to the neighbors and able to answer questions regarding our operations. If we are awarded a license, we will host another open house approximately 4 weeks prior to opening to listen to any concerns from the neighboring residents and businesses. At this open house, we will introduce our Community Benefits Director DeRon Waller and provide his contact information so that the neighbors can contact us with any questions or concerns. DeRon’s contact information will also be posted on the front door of the facility so that the community has a point of contact to address any concerns. Additionally, as explained in more detail below, Authentic Fresno will implement proactive measures to manage noise, light, odor, litter and traffic. Noise Authentic Fresno will proactively manage noise at its premises. Authentic Fresno will ensure that sound is not detectable outside its premises. In accordance with FMC Chapter 10 § 10-105 (Fresno’s noise ordinance), Authentic Fresno’s operations will not exceed 65 decibels when measured outside to ensure we do not make any noise which causes discomfort or annoyance to any persons living or working in the area. Authentic Fresno has adopted the following techniques to reduce sound. First, Authentic Fresno will not utilize exterior speakers to broadcast music or to make announcements. Second, Authentic Fresno will not play music inside in excess of 50 decibels at any time. Third, windows and doors will not be left open during operating hours. Fourth, Authentic Fresno will build out its stores with physical soundproofing as a courtesy to neighbors. Fifth, Authentic Fresno will not host events at its location that result in large crowds gathering. Finally, security will patrol to verify noise is not detectable outside the premises. Light Authentic Fresno will incorporate light into all aspects of its operation to provide literal transparency to its business, allowing customers and staff to see clearly exactly what goes on in and around the sales area. A well-lit space is also vital for customer security. At the same time, light can bother neighbors, especially at night. Authentic Fresno has taken great care to utilize lighting that will facilitate safety without imposing such a burden. Authentic Fresno will ensure its lighting is not excessive, obtrusive, or misdirected. Authentic Fresno will proactively manage light in the following ways. First, Authentic Fresno will not illuminate its interior premises when it is closed for business. Lighting necessary for security operations will be the only exception. Second, Authentic Fresno will utilize shielded lighting on the exterior of its premises. Shielded lighting will ensure that light only travels downward on the premises, not upward and outward towards neighbors. In addition, the outdoor lighting’s intensity will be only what is reasonably necessary for security purposes. These light-control measures and the fact that we do not have any immediate neighbors within 100 feet will ensure that light from Authentic Fresno’s premises does not intrude onto its neighbors’ properties. Odor Authentic Fresno will utilize one of the most comprehensive odor control programs in the industry, which is more fully described in Section 3.3. For example, Authentic Fresno will install carbon filters on its premises to purify the air and employees will regularly monitor the lifespan of and replace carbon filters as necessary to ensure the system is working properly. Authentic Fresno will also utilize a negative air pressure system so that air is only disbursed out of the building after it has been cleaned by our carbon filtration system. Moreover, Authentic Fresno will retain an environmental engineer to maintain its carbon filter system. In addition, Authentic Fresno will only accept and sell pre-packaged cannabis goods. It will neither package cannabis goods on-site nor allow any consumption of cannabis goods on-site. The lack of raw packaging and consumption will substantially reduce odor-causing activities. Security will monitor exterior odors while on patrol and employees will document any instances of odor or odor complaints with the Odor Documentation Forms described in Section 3.3. Any neighbor complaints or instances of odor detected by security or employees will be immediately documented and remediated within 24 hours. If the odor cannot be remediated internally, engineers will be engaged within 24 hours to remediate the issue. In short, Authentic Fresno’s state of the art odor control system, its proactive protocols which requires employees to be vigilant about detecting odor and our commitment to remediate any odor will ensure that odor does not negatively affect the neighborhood. To date, Shryne Group has not received a single complaint regarding odor associated with its stores. Litter As part of our daily store opening standard operating procedures and in compliance with FMC Article 33 § 9-3309(n), operations and retail employees will be tasked with sweeping the exterior prior to the opening of the store. Employees will also conduct cleanup of the exterior throughout the day and are trained to be on the lookout for any litter in the exterior. During the shift change, typically at 2pm, incoming and outgoing employees are required to ensure that there is no litter in the exterior of the facility. Any litter spotted by any of the employees will either be swept or picked up by the employees and disposed of. Vehicle Traffic The proposed location will have 97 parking spots designated to it and the 7 businesses located on the northwestern portion of the larger shopping center. Additionally, the property has three points of ingress and egress from Willow Avenue and Magill Avenue. Thus, any dispensary-related increase in traffic will be negligible in comparison to the overall traffic flow. Second, the abundant parking means that customers will have ample access to parking and will not need to park on any of the streets nearby or look for parking (which is a common cause of traffic). If parking becomes problematic (which is very unlikely), Authentic Fresno will work to engage parking attendants as it has at its Downtown Los Angeles store. This will ensure order and efficiency in the parking lot and reduce the chance of congestion or overfill from the parking lot. Finally, Authentic Fresno may offer discounts to customers during non-peak hours and discounts to customers who pre- order their products for pickup. This will encourage customers to access the store when it is less busy. Pedestrian Traffic 6929 N Willow does not have heavy pedestrian traffic due to the fact that the location is tucked behind the Walgreen’s and away from the pedestrian traffic on N Willow Avenue. However, if customers wish to walk to our store, the sidewalks on N Willow will ensure safe and orderly pedestrian access to the property. In order to ensure pedestrians and customers do not become a nuisance to neighbors, customers will not be permitted to loiter around the store. Authentic Fresno’s security team will monitor pedestrian activities at the location and will conduct perimeter walks around the vicinity of our location to ensure there is no loitering, illegal activity or consumption of cannabis products near our store. Any lines that form due to the store’s popularity will be formed in an orderly fashion so that lines do not negatively affect the businesses nearby. Due to the large parking lots which are dedicated to our location and our proactive measures against loitering, we do not foresee having any negative effect on pedestrian traffic. Responding to Complaints Authentic Fresno takes complaints seriously. While we plan to take every measure to prevent any sources of complaints, if there are ever any complaints against Authentic Fresno, we will promptly and proactively resolve the matter. Authentic Fresno has adopted a comprehensive complaint resolution procedure. Authentic Fresno’s complaint-resolution procedure will be as follows: (i) receive and record the complaint; (ii) investigate the complaint; (iii) record the result of the investigation and any resulting actions; (iv) follow up with and respond to the individual who made the complaint; and (v) use the information to improve existing procedures. Shryne has incorporated this model across all its locations with great success. i. Receiving the Complaint Authentic Fresno will provide multiple channels for receiving complaints, including a telephone number, a Community Liaison (DeRon Waller), an email address, physical mail, personal visits, and social media platforms. Such contact information will be posted on the front door of the facility so that people can easily contact us with any issues. Authentic Fresno will train employees in active listening. Employees will respond to complaints in a professional and compassionate demeanor. They will communicate to the person registering the complaint that Authentic Fresno takes all complaints seriously. As soon as Authentic Fresno receives a complaint, it will promptly enter the complaint into the complaint log which is maintained for at least 7 years and also emailed to the General Manager and Co-Managers. An investigation will also commence immediately. ii. Investigating the Complaint The General Manager will be responsible for investigating all complaints. If the General Manager is unavailable, a Co-Manager will be equipped to obtain the appropriate information. Authentic Fresno will investigate complaints in a systematic fashion. Authentic Fresno has developed complaint investigation worksheets for investigating complaints. Specific complaint investigation forms include noise, light, odor, litter, and traffic and require the General Manager or Co-Manager to request and record the following information during the complaint intake: Noise Details include: Date, type, and intensity of the noise; where the complainant was located when they heard the noise; and where on the premises the complainant believed the noise was coming from. Light Details include: Time the light was observed; which fixture produced the nuisance light; and where the complainant was located when the light was observed. Odor Details include: Time, defining characteristics, intensity, and frequency of the perceived odor event. Shryne will also record the direction of the wind, if relevant, at the time of the complaint. Litter Details include: Date, location and type of litter discovered. Traffic Details include: Date and location of the traffic/parking issue; direction traffic was moving; nature of the traffic complaint (speeding, not observing stop signs, illegal parking, pedestri- ans crossing unsafely, customers blocking sidewalk). After receiving the basic information, the General Manager will investigate at the premises as soon as possible. The most important tools for investigating nuisance complaints involving light, litter, odor, noise, or traffic are the General Manager’s eyes, nose, and ears and listening very closely to the complainant. The General Manager will record their own perception of the intensity and character of the noise, light, odor, litter, or traffic. The General Manager will also interview relevant employees about their perceptions. If necessary, the General Manager will review security footage relating to the incident to gather more information. While each complaint will require different investigation methods, the below methods are generally required to be followed during the investigation and corrective measures phase: Noise The General Manager will verify that noise levels are below 65 decibels; noise from the premises cannot be heard outside; doors and windows remain closed; and crowds are not loitering outside the dispensary premises. Light The General Manager will investigate light sources to ensure bulbs are the proper wattage; verify light shields are facing downward and working properly; and follow up with property management if the complaint relates to lights maintained by the property owner. Odor The General Manager will investigate whether carbon filters are working properly and need to be changed; verify all windows and doors are appropriately sealed and maintenance logs are up to date; inspect the HVAC system to ensure it is expelling air correctly; and, if neces- sary, call an environmental engineer for support. Litter The General Manager will investigate how long the litter had been allowed to stay on the property and why an employee did not discover and remove the litter. Traffic The General Manager will check the parking lot for the existence of the specific complaint; verify all signage in the parking lot is in working order; and check security cameras of the parking lot to verify any traffic-related complaints. Once the cause of the complaint is identified, Authentic Fresno will take immediate action to rectify the situation and halt the condition relating to the complaint. Recording the Results The General Manager will document the conclusion of their investigation and recommendations of corrective actions. In addition, Authentic Fresno will record any corrective action taken in response to the complaint in its complaint log. Authentic Fresno will maintain a file of all complaints and outcomes in the course of its recordkeeping. The documentation will be clear enough that anybody reviewing the records can determine that a clear, well-reasoned, and diligent effort to resolve the complaint was undertaken. Records relating to complaints will be maintained for at least seven years. iii. Following Up with Complainant The General Manager will notify the complainant of the outcome of the investigation. If the complaint cannot be corroborated, the General Manager will notify the complainant the complaint was investigated and that no definite source was found. The General Manager will encourage the complainant to notify Authentic Fresno in the future if they observe unacceptable light, noise, odor, litter or traffic. The General Manger will also emphasize that notification should be made as soon as possible to enable Authentic Fresno to investigate and resolve the problem. At no point will any employee of Authentic Fresno downplay or trivialize the complaint even if the source of the complaint cannot be verified. Every employee will be taught during its training course to be empathetic to every person making a complaint and to take every complaint very seriously. iv. Taking Corrective Action If a complaint is substantiated, Shryne will implement a corrective action plan to ensure the conduct does not occur again. Corrective action may include, but is not limited to, revising policies and procedures, fixing lighting, HVAC or other equipment, training and retraining staff, and utilizing third-party experts. 3.2. Nuisance Management Outreach and Feedback Authentic Fresno’s neighborhood compatibility starts with neighborhood outreach. As mentioned previously, Authentic Fresno hosted a virtual open house in September and will host another open house and job fair prior to its opening to provide the community an opportunity to express any concerns they have about our business and its impact on the surrounding community. We will hand out educational materials about our company and stress our commitment to being a thoughtful and giving member of the community. To mitigate nuisances on an ongoing basis, Authentic Fresno will provide multiple channels for giving feedback. Authentic Fresno will maintain a Community Liaison (DeRon Waller), a telephone number, on-site customer service employees, social media platforms, and a website for receiving community feedback. All of this information will be posted on the front door entrance. Authentic Fresno’s aim is to make neighbors feel comfortable enough to approach us with any feedback or concerns. Authentic Fresno will expeditiously attend to complaints as detailed in its complaint procedure. Authentic Fresno’s intention is to avoid, address, and resolve complaints without any city intervention. Authentic Fresno will also mitigate nuisances through its relationship with police. Prior to our opening, the Fresno Police will be invited to tour the facility and provide any feedback on our security systems. We will maintain open lines of communication with law enforcement and city officials. Authentic Fresno hopes to earn the city’s trust that it will properly respond to neighborhood concerns so that complaints do not escalate into investigations. As we have at our other locations, Authentic Fresno will proactively cooperate with the Fresno Police if they are investigating a crime which occurred near our facility which we may have video recordings or other pertinent information about. Authentic Fresno will provide all video footage as requested by the Fresno Police regardless of whether the incident directly involves Authentic Fresno or its customers or employees. Finally, Authentic Fresno will continue to host annual local stakeholder meetings to address community concerns and to receive stakeholder feedback. Stakeholders will include residential neighbors, neighboring businesses, law enforcement, city officials, non-profits, addiction treatment professionals, religious institutions, and other interested parties. The stakeholder meetings will present opportunities for collaboration and to adjust operations to meet community expectations. Good Neighbor Policy See below, a DRAFT Authentic Fresno Good Neighbor Policy which will be posted at our store and be available to our customers. This is a working draft that is being developed through the input we received during our open house and our past experiences at our other retail locations. As we continue to hold more open houses and have discussions with the community, this Good Neighbor Policy will be further revised to reflect continuous feedback from the community. Residents living and working in the neighborhood have the right to enjoy a reasonable level of peace and quiet and our Good Neighbor Policy and complaint response procedures outlined above evidence our commitment to this belief. The Good Neighbor Policy prohibits consumption of drugs or alcohol on the premise, loitering, littering, double-parking and requires that all employees take extra care to prevent noise, odor and lighting which may negatively impact the neighbors around us. Our Good Neighbor Policy will dictate how customers should act on and around the premises. Displaying a courteous and respectful attitude always makes for better neighbor relations and a more positive experience for all community members. Disorderly conduct, public consumption of cannabis, rowdiness, loud music, or loitering is not consistent with our values. Those customers found in violation will not be permitted to return to the dispensary. Our security and management will make sure customers adhere to the Good Neighbor Policy. We will respond to complaints from neighbors when behavior occurs around the premises that is inconsistent with Good Neighbor Policy. Good Neighbor Policy 1. Appoint a Community Outreach Director, whose name and phone number will be posted at the entryway of the facility and mailed or hand-delivered to businesses within a two-block radius. The Community Outreach Director, or an employee designated by the Community Outreach Director, will make reasonable efforts to proactively establish relationships with law enforcement and all neighbors so that they will have a point of contact within the organization they can reach at any time should questions, comments, concerns or problems arise. The Community Outreach Director will maintain a log of all complaints and suggestions from neighbors, and all complaints will be addressed in a timely manner. 2. At no time shall any of the following items be allowed on the Facility premise: (i) any controlled substance, other than cannabis; (ii) any paraphernalia used for the ingestion of any type of controlled substance, except for cannabis accessories for incidental retail sale to customers; (iii) alcoholic beverages; or (iv) firearms, except in strict compliance with federal, State, and County laws. 3. Ensure that all cannabis goods sold by Authentic Fresno are produced and transported by State licensed facilities in full conformance with the State and local regulations. 4. Not sell alcoholic beverages or tobacco at the Facility. 5. Prohibit the smoking, vaporization, ingestion, or consumption of alcohol, tobacco, or cannabis in any form at or within Facility. No employee shall be under the influence of alcohol or drugs (including cannabis) while on the premises. 6. Not distribute any form of advertising for physician recommendations for cannabis. 7. Provide outside lighting in a manner that illuminates the outside street and sidewalk areas and adjacent parking as appropriate, in accordance with Fresno regulations. 8. In accordance with the Air Quality and Odor Control Plan detailed within our proposal, provide adequate and appropriate ventilation to prevent any significant noxious or offensive odors from escaping the premises. 9. Patrol the surrounding area to identify and immediately address any problems, including, but not limited to, noise, odor, cannabis consumption, and litter as well as maintain the premises, adjacent sidewalk and/or alley in a good, clean condition at all times. Any and all graffiti will be identified and promptly removed from the property and parking lots. 10. Prohibit patrons from double-parking around the premises. 11. Prohibit loitering in or around the premises. 12. Prohibit littering in or around the premises. 13. Prohibit the consumption of cannabis products in and around the premises. 14. Post notices on the premises that: a. Direct patrons to leave the establishment and neighborhood peaceful and in an orderly fashion. b. Direct patrons to not litter or block driveways. c. Advise individuals of the prohibition on loitering. d. Advise individuals that smoking of cannabis is prohibited in public places. 15. Ensure notices are clear, well-lit, prominently displayed and maintained at all public entrances to and exits from the establishment. 16. Secure the premises within 50 feet of any public entrance and exit. 17. Ensure the Facility shall be continuously maintained in a safe, clean, and orderly condition with twice daily litter pick-up within 100 feet of the premises. Such litter pick-up shall include inspections for graffiti, which shall be removed within 24 hours of detection. Premises Management Authentic Fresno’s policies and procedures will provide for the restoration of any area defaced by graffiti either by painting over the area with a color matching the original design scheme or by removing the graffiti within 48 hours of the occurrence pursuant to FMC Article 27 § 15-2739(M). Security guards and employees will routinely check for graffiti and report any instances discovered to management, who will arrange for prompt repainting or removal. The security guards will take primary responsibility for on-site patrol, including all areas of the premises and the parking lot. In addition, staff members will be trained to report any incidents or circumstances that conflict with company best practices. We will display prominent, visible signage to deter visitors from loitering or consuming intoxicating substances, such as alcohol and cannabis, on or near its premises. Specifically, Authentic Fresno will post “No Loitering, Public Drinking, or Public Smoking/ Consumption of Cannabis” signs both inside and outside of the premises. Moreover, Authentic Fresno will prohibit individuals from remaining on its premises if they are not engaging in an activity expressly related to its retail operations. All Authentic Fresno staff will be responsible for the internal and external appearance of its business, both in terms of physical presentation and brand image. As noted in Section 3.1, staff will ensure that litter around the premises is picked up at the beginning and end of each day. Authentic Fresno employees will also sweep the area immediately in front of the storefront. Authentic Fresno will also utilize property management to ensure the interior and exterior is cleaned daily. Authentic Fresno takes pride in its professional reputation and in retaining the enduring goodwill of neighboring tenants and property owners. 3.3. Odor Mitigation Practices Because no packaging or other manufacturing of cannabis will be conducted at this site, odor will not affect the surrounding area as long as all of our odor mitigation practices are followed. Standard Operating Procedures to Prevent Odor Authentic Fresno’s employees are required to check all inventory of cannabis products to ensure that all packages are properly sealed and packaged so that they do not emanate any odors. Because oils, edibles and other manufactured goods do not emanate any cannabis odor, employees will be trained to pay special attention to the packaging of raw flower and pre-roll flower to ensure they do not have any damage or openings and no odor is emanating from them. Additionally, employees will be required to check that all windows and doors (other than the front door which remains unlocked during operations) are properly locked, closed and sealed. The HVAC system, negative air pressure, and the carbon filtration system, which are described in Section 3.5 below, will ensure that all air passes through the carbon filtration system and only through the roof outlets. Security guards and our employees will also make sure that people are not consuming any cannabis products within the store or within the general area of our store. Signs will be posted throughout our store that consumption of cannabis on our property is prohibited and against the law. Our security guards will also conduct perimeter walks to prevent loiterers from consuming cannabis on our parking lot or in the area around our parking lot. By preventing loiterers and customers from consuming cannabis on or around our facility, we will prevent a common source of cannabis odor which plagues other cannabis dispensaries. Employee Odor Detection System In addition to the preventative practices described previously, Authentic Fresno will train employees on how to detect, prevent, and remediate odor outside its facility. Employees will also be aware of all corrective options available. Employees who detect any odors or are made aware of any odors are trained to do the following: • Investigate the likely source of the odor. • Utilize on site management practices to resolve the odor event. • Take steps to reduce the source of objectionable odors. • Determine if the odor traveled offsite by surveying the perimeter and making observations of existing wind patterns. • Document the event for further operational review. An Odor Detection Form (ODF) shall be provided to those who suspect objectionable odors emanating from inside the facility. ODFs are available per request, on-site. We shall maintain records of all odor detection notifications and/or complaints that will include the remediation measures employed. The records shall be made available to the BCC, City, or the general public on request. The form is below: In addition to odor mitigation practices, our odor control devices and techniques described in Section 3.5 and the fact that our location is a standalone property with our own parking lots surrounding the premises without any residences or businesses nearby should reduce the risk of any odor affecting the community. 3.4. Potential Sources of Odor Cannabis flower and cannabis flower in pre-rolls are the only products which we will carry at our facilities which will have the potential to have any odor since the edibles, oils, tinctures and other products do not emanate any smell. The potential sources for odor from these products include the inventory room, sales room, and any safe in which cannabis goods are stored. As mentioned in Section 3.3, packages will be checked daily to ensure that they are properly sealed and packaged so that they are not emanating any smell. Authentic Fresno will not allow raw flower to be packaged on-site which will substantially reduce the risk of any odors emanating in the area. Loiterers and customers will also be prevented from smoking or otherwise consuming any cannabis products on or around the facility, which will also reduce the likelihood of any odors. Any customers who are caught consuming cannabis on or near the facility will be prevented from shopping at our store again. Our security guards will also surveil the parking lot area to prevent customers from consuming any cannabis products in their cars or otherwise on or near the facility. When inventory shipments are received and are being taken into the inventory room or storage room, Authentic Fresno will utilize odor-neutralizing materials such as enzymatic catalysts which can degrade odorous compounds. These materials will be applied to surface areas throughout the store to reduce the risk of any odors. In summary, the raw flower and the pre-rolls we sell on the sales floor and which we store in our inventory rooms are the main potential sources of cannabis odor. The odor mitigation practices described in Section 3.3 and the devices and techniques described in Section 3.5, shall prevent any such potential sources of odor from causing odors inside or outside of the store. 3.5. Odor Control Devices and Techniques Authentic Fresno’s odor control plan ensures odors from cannabis are not detectable beyond the licensed premises. The first step of Authentic Fresno’s air quality management and odor mitigation plan will be to employ adequate heating, ventilation, and air conditioning (“HVAC”) systems as required by FMC Article 33 § 9-3309(j). Authentic Fresno will work with licensed engineers to assess and improve any existing HVAC system at the proposed location to ensure superior air quality and mitigate any odors that result from the proposed retail space. Authentic Fresno will replace and maintain the highest quality carbon filters to provide clean air for all employees and consumers. In addition to the HVAC system, Authentic Fresno will engage with a local mechanical engineering firm to assess the facility, identify opportunities for improvement, and increase air quality and odor capture. Improvements may include but will not be limited to: (i) air handler selection so outside air can be conditioned and brought into the space without recirculation of smell into the occupied environment; (ii) dedicated systems for each area of the facility that engages in a different retail practice; (iii) air filtration and purification so exhaust and supply air does not negatively impact neighbors or customers; and (iv) the use of carbon air filters or scrubbers. Air Pressure Authentic Fresno’s facility will be kept under negative pressure by means of an exhaust system with carbon filters for odor mitigation so that the odors generated inside the business will not be detectable on the outside of the business or at any of the properties in the immediate surrounding area. The exhaust discharge shall be designed with a high velocity outlet to eject the exhaust up and away from any neighbors or pedestrian traffic. Carbon Filters We believe that the best filtration system for cannabis facilities is carbon filtration. The various inventory, retail and storage areas will all be separated from other areas, allowing for odor control methods to be specific to the activity being performed. The carbon-filtered ventilation will utilize the Koch Filter DuraPure, which is used in cigar lounges, airport facilities, chemical plants and other businesses which require a high-powered air filtration system. The DuraPURE utilizes premium grade granular 60% activated carbon and its unique V-shaped frame holds up to 26 pounds of activated carbon. Portable, carbon-filtered recirculating Can-Lite 14” x 40” (SKU: 358598) fans will further minimize or eliminate odors in the cultivation, storage and vault rooms and retail area, and will be placed near access points such as doors. The combination of carbon exhaust air filtration and building pressure control represent the current best available technology. Air Design Technique The facility shall have no operable windows and will be kept locked and sealed at all times. All doors shall be sealed with proper weather stripping, keeping circulating and filtered air inside the facility. As mentioned previously, our employees will be trained to confirm that all doors and windows are properly closed, locked, and sealed. Additionally, our Standard Operating Procedures require that employees check our products on a daily basis to ensure they are properly sealed and not emanating any odors. Our security guards and employees also vigilantly check for any consumption in the parking lot or near the vicinity of our store. Our employees are also trained to detect any odors outside of the facility and to track the source of any odors which are detectable outside. Our professional HVAC specialists are engaged if we are not able to get rid of the odor within 24 hours. These techniques and our comprehensive odor mitigation system have successfully kept all our other retail locations free of cannabis odor. 3.6. Staff Odor Training and System Maintenance Staff Odor Training As mentioned previously, Authentic Fresno’s employees are trained as follows to minimize the likelihood that any odor is detectable outside of our store: • Employees are required to check every piece of inventory of cannabis products on a daily basis to ensure that all packages are properly sealed and packaged so that they do not emanate any odors. Employees are trained to pay special attention to the packaging of raw flower and pre-roll flower to ensure they do not have any damage or openings and no odor is emanating from them. • Employees are required to check that all windows and doors (other than the front door which remains unlocked during operations) are properly locked, closed and sealed. The HVAC system, negative air pressure, and the carbon filtration system, which were described in Section 3.5 previously, will ensure that all air passes through the carbon filtration system and only through the roof outlets. • Employees will also work with our security guards to make sure that people are not consuming any cannabis products within the store or within the general area of our store. • Employees will be trained on how to detect, prevent, and remediate odor outside its facility. Employees who detect any odors or are made aware of any odors are trained to do the following: • Investigate the likely source of the odor. • Utilize on site management practices to resolve the odor event. • Take steps to reduce the source of objectionable odors. • Determine if the odor traveled offsite by surveying the perimeter and making observations of existing wind patterns. • Document the event for further operational review. An Odor Detection Form (ODF) shall be provided to those who suspect objectionable odors emanating from inside the facility. ODFs are available per request, on-site. We shall maintain records of all odor detection notifications and/or complaints that will include the remediation measures employed. The records shall be made available to the BCC, City, or the general public on request. Odor System Maintenance Authentic Fresno will perform monthly inspections of its odor control system to ensure optimal performance and regular maintenance. Detailed service logs will be kept with respect to all HVAC and carbon filters so staff will be aware of how long a filter has been in use. Filters will be assessed monthly and changed every six months, or more frequently if staff becomes aware of any odor permeating the facility. Testing will be done in accordance with Standardized Odor Measurement Practices for Air Quality Testing or any other state-established testing standards for cannabis businesses. Management will perform a daily walkabout near the exhaust system to verify there are no odors. Data will be compared using a five-point Odor Intensity Reference Scale (“OIRS”) for daily readings. When values reach three on the five-point scale, the carbon-filtration exhaust system will be evaluated and repaired as required. Evaluations will include fan operation, distribution system integrity, and carbon filter effectiveness. The HVAC and ventilation system will be professionally monitored and maintained with quarterly service appointments. Any system failures will be immediately reported to management staff, and any problems that cannot be dealt with internally will result in the immediate contacting of a professional service technician prior to any scheduled quarterly service appointments from the professional service technician. Recordkeeping Staff will keep meticulous records with respect to the HVAC system and carbon filters to ensure maintenance and quality control checks are performed regularly. All the following must be documented in our company database: (i) records of purchases of replacement carbon filters; (ii) performed maintenance Odor Intensity Reference Scale 0 None 1 Slight 2 Noticeable 3 Very Noticeable 4 Strong 5 Very Strong tracking; (iii) documentation and notification of malfunctions; (iv) scheduled and performed training sessions; and (v) monitoring of administrative and engineering controls. Odor mitigation records will be made available to the City of Fresno and the Bureau of Cannabis Control upon request. 3.7. Waste Management Plan Non-Cannabis Waste Authentic Fresno will engage Fresno’s Department of Public Utilities – Trash Disposal & Recycling Division for its non-cannabis trash and recycling needs. Authentic Fresno strives to recycle 70-75% of all of its waste produced. Packaging materials for cannabis products which are delivered to our store from distribution vehicles is our largest source of waste, and we will recycle all such cardboard boxes and packaging materials at this store as we have at our other stores. Shoppers will also receive $0.50 off their next purchase for bringing in their shopping bags which we also recycle. Non-cannabis waste will be disposed of in the trash bin on the west side of the property, near the southwestern edge of the building. Cannabis Waste Authentic Fresno will dispose of cannabis waste in a manner that ensures it is unusable and not diverted. Authentic Fresno strives to prevent introduction of defective and/or unsafe cannabis in the marketplace. Thus, safe and secure cannabis waste disposal will be a high priority. Cannabis Disposal Locations The cannabis waste will be kept inside a sealed and locked 20-gallon secure polyethylene container in the limited access section of the inventory room which will be locked until the container is picked up by our third party vendor Cannabis Waste Solutions19 19 https://cannabis-waste.com/about/ Cannabis Goods Subject to Disposal The destruction of cannabis goods prior to disposal will be done in accordance with 16 CCR § 5054 and recorded on video. Cannabis and cannabis products will be disposed of in accordance with all applicable waste management laws, including but not limited to, Division 30 of California’s Public Resources Code. In order to properly dispose of cannabis and cannabis products, the processes laid out in 16 CCR § 5054(d) will be followed. Those actions include, at a minimum, removing or separating the cannabis goods from any packaging, or container, and rending it unrecognizable and unusable. Vape cartridges will also be made unusable in accordance with 16 CCR § 5054. The following cannabis products will be disposed of according to our Standard Operating Procedures: • Any returned type of cannabis flower or cannabis product including but not limited to edibles, pre- rolls, vape cartridges and topicals by a customer. • Any empty or damaged packaging that is used to contain cannabis goods. • Recycled vape cartridges. • Cannabis goods that have passed their expiration date. • Cannabis goods that fell onto the floor or have been otherwise contaminated. • Any cannabis good abandoned on the premises (left behind by a customer) may not be re-sold and must be disposed of as cannabis waste. Methods of Destroying Cannabis Waste Cannabis goods intended for disposal will be destroyed, at a minimum, by removing the goods from any packaging or container and rending them unrecognizable and unusable. Whenever practicable, Authentic Fresno will use a destruction method that is environmentally friendly and will result in compostable cannabis waste. For example, cannabis flower will be rendered unusable by grinding the flower and incorporating it with yard waste so that the resulting mixture is at least 50% non-cannabis waste by volume. At the time of pickup Cannabis Waste Solutions will spray a proprietary solution on the cannabis waste to further rend the cannabis unusable. The non-toxic rending fluid is added to saturate the biomass material. This fluid changes the color, taste, and texture of the biomass. It alters the chemical composition of the biomass. The active ingredients are both water and solvent soluble making any re-extraction impossible. Waste Records Authentic Fresno will account for destroyed cannabis goods in METRC and IndicaOnline. Authentic Fresno will record the following within 24 hours of each cannabis waste destruction or disposal: (i) name and type of cannabis goods; (ii) UID of cannabis goods; (iii) amount of cannabis goods, by weight or count; (iv) date and time of destruction or disposal; (v) name of employee performing destruction or disposal; (vi) reason for destruction and disposal; and (vii) entity disposing of the cannabis waste. Authentic Fresno will maintain cannabis waste destruction and disposal records for at least seven years per Authentic Fresno’s recordkeeping procedures as pursuant to 16 CCR § 5037(a)(7). Authentic Fresno’s waste management vendor, Cannabis Waste Solutions, will pick up the secure containers every week from Authentic Fresno’s secure inventory room and will transport it into its facilities, where waste will be either recycled into energy for California’s power grid or made into various “new-gen” materials for the construction industry. Authentic Fresno will obtain documentation from the waste facility evidencing the date and time of the facility’s receipt of the cannabis waste and will maintain this documentation for at least seven years in compliance with 16 CCR § 5037(a)(7). See below Cannabis Waste Solutions Recycle Back Program which all of Shryne’s stores are a part of. Waste Security Authentic Fresno’s Director of Compliance will be responsible for waste management and will record on digital video all instances when cannabis product is being destroyed. All cannabis waste will be disposed of in the secure waste receptacle located in the limited-access area of the inventory room. Before disposing of the cannabis, the batch number and product information from which the cannabis waste came from must be noted in the Retail Cannabis Disposal Log along with other pertinent information. A co-manager or General Manager must review and initial the Retail Cannabis Disposal Log prior to disposition. After rendering the cannabis unusable as described below, the Director of Compliance and another employee will lock the cannabis waste into a 20-gallon secure polyethylene container provided by Cannabis Waste Solutions which will be further locked in the limited access section of the inventory room. The Director of Compliance and the General Manager will be the only employees with keys to the waste container. Only authorized employees can access the limited-access room with an electronic card. Cannabis waste will not be disposed of in the dumpster located on the property. Instead, Authentic Fresno will utilize Cannabis Waste Solutions, a licensed cannabis waste removal service. 4. SAFETY PLAN 1777 N. California Blvd, Suite 200 ph: (925) 979.9993 internet: Walnut Creek, CA 94596 fax: (925) 979.9994 www.thefireconsultants.com FIRE SAFETY PLAN 6929 N WILLOW AVE, SUITE 103 – 104 CANNABIS RETAIL STORE FRESNO, CA Prepared for: Authentic Fresno Willow LLC 6929 N Willow Ave, Suite 103 – 104 Fresno, CA 93612 20-2314 November 18, 2020 PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 1 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 INTRODUCTION Authentic Fresno Willow LLC is planning to develop a retail store commercial cannabis business in Fresno, CA and they have retained The Fire Consultants, Inc. (TFC) to evaluate the project and develop a fire safety plan to identify applicable fire protection criteria for the facility. This report will identify the major applicable fire protection requirements pertaining to the facility and will serve as the basis of discussion between design team members and the appropriate authorities (Fresno Police Department, Fresno Fire Department, Fresno City Manager, etc.) regarding these elements. The major design objectives are to protect the occupants and inventory from a potential fire and achieve and maintain compliance with the applicable codes. This report does not provide requirements from the insurer but incorporates these where they have been provided to us by the operator. APPLICABLE CODES The project will be subject to the requirements of the 2019 California Building Code (CBC) and California Fire Code (CFC) with City of Fresno amendments, and City of Fresno Administrative Regulations for Commercial Cannabis Business. BUILDING DESCRIPTION The Authentic Fresno Willow LLC retail store will be approximately 2,600 square feet, will occupy an existing building built in 2006 and will have a layout as shown in Section 4.3. The City-approved floor plan and building to be occupied will be determined later, after City approval of the proposed project. The building will include approximately 1,700 SF front-of house (public access) and the rest will be back-of-house (employee only). OVERVIEW The Authentic Fresno Willow LLC retail store is classified as Mercantile Group M per the Building Code and will include both front-of-house areas and back-of-house areas. The front-of-house areas will include an entry check-in lobby and retail sales and display area. The back of house area will include the secured inventory room, break area, vault, office, restroom, and Loading/Unloading area. The retail store will sell a variety of cannabis products, including flower, pre-rolls, vapor products, edibles, capsules, topicals, tinctures, concentrates and other accessories. The products will come pre- packaged from distributors; the retail store will not undertake any packaging in the store. The retail store will not include any operations related to cannabis growing, processing, or extraction. PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 2 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 SAFETY PLAN The City of Fresno requires a Safety Plan for cannabis retail stores. This document is provided to address City requirements for a Safety Plan for the Authentic Fresno Willow LLC cannabis retail store at 6929 N Willow Ave, Suite 103 – 104. 4.1 SAFETY PLAN PREPARED BY A PROFESSIONAL FIRE PREVENTION AND SUPPRESSION CONSULTANT The Safety Plan and this summary of the Safety Plan were both prepared by The Fire Consultants, Inc. The Fire Consultants, Inc. is a fire protection engineering and consulting firm with widespread experience conducting fire protection and life safety assessments, developing fire protection reports and code compliance assessments, as well as, designing fire alarm, sprinkler and special suppression systems and reviewing those designs by others. Our firm has consulted on thousands of projects in multiple states, including California, Oregon and Washington. The main author of the Safety Plan and this summary of the Safety Plan is Mr. John Stauder, P.E., who is a licensed professional engineer, holding both Mechanical Engineering (M 33333) and Fire Protection Engineering (FP 1668) licenses in California. Mr. Stauder is also licensed in the states of Arizona, Oregon and Washington. 4.2 ACCIDENT AND INCIDENT REPORTING PROCEDURES According to Authentic Fresno Willow LLC’s Employee Manual, an accident or incident is an unplanned occurrence that resulted or could have resulted in injury to people or damage to property, equipment or the environment. Even minor injuries such as cuts or sprains are considered accidents and “near misses” of even these “minor” accidents are also considered incidents. Upon any accident or incident, an employee who experiences or witnesses an accident or who is initially told of the incident or accident by a customer must immediately report the accident or incident to one of the Co-Managers or the General Manager. The Co- Manager or General Manager will immediately assess whether the police, paramedics, fire department or any other authority should be contacted. The Co-Manager or General Manager will also determine whether medical treatment is required for any employee, customer or independent contractor. If appropriate, the Co-Manager or General Manager will also secure the scene to ensure the source of the accident or incident does not cause another accident or incident before the source is remediated. Once the proper authorities have been contacted, medical treatment applied and the area of the incident or accident is secured, the employee who witnessed the accident or incident will assist a Co-Manager or the General Manager in filling out the accident/incident report below. The form will have the “employee” section and the “Manager” section so that a record of the incident/accident’s firsthand account is documented. The “Manager” section ensures that management follows up with this PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 3 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 incident to ensure that all proper authorities and employees within the company (e.g., HR, Legal) are notified and to ensure that measures are taken to reduce the likelihood that the incident/accident repeats itself. The Manager will also interview other employees who were present at the store during the time of the incident/accident to ensure that all pertinent facts are reported in the accident/incident report. Accident and Incident Reporting Form PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 4 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 After the form is completed, copies of the form will be distributed internally to the Human Resources Department, Legal Department, District Manager and Head of Retail. These various departments will review the incident/accident report to assess whether further action should be taken to reduce the likelihood of a repeat incident and whether city or state authorities need to be notified (if they haven’t been notified yet). These departments will also assess whether a systemic issue such as insufficient training or a failure to keep the premises free of hazards was the cause or exacerbated the incident or accident. If that is the case, the best way to fix this systemic issue will be investigated by Legal and HR. If Legal or HR determines that the accident is an OSHA recordable accident, the OSHA Form 300 will be filled out and submitted. Similarly, if the accident or incident results in an employee requiring medical attention or work time loss, OSHA, the union representatives and other proper authorities will be contacted. Finally, the General Manager or a Co-Manager will replace any equipment which was damaged or used during the accident or incident (e.g., a fire extinguisher). Fire Alarm and Monitoring System The Authentic Fresno Willow LLC retail store will be protected by a fire alarm system as required by Code and local ordinance. Since an existing building is utilized and it contains a fire alarm system, it is possible that the existing fire alarm system can be redesigned to serve the new use. Stanley Convergent Security Solutions, Inc., a licensed C-10 fire alarm contractor will be retained to provide any required shop drawings and permit submittals for revisions to the existing fire alarm system. Stanley Convergent Security Solutions, Inc. will also be utilized for the required inspection, testing and maintenance (IT&M) and monitoring of the fire alarm system. Stanley Convergent Security Solutions, Inc. https://www.stanleysecuritysolutions.com (877) 476-4968 Dan Roberts (747) 263-5814 PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 5 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 4.3 DESCRIBE EVACUATION ROUTES Figure 1- Egress travel path, common path of travel and exit separation for Authentic Fresno Willow LLC. The proposed retail site building includes two evacuation routes as shown above; one through the main entry lobby for public access areas including retail area and lobby and one through the employee only back of house space. The rear exit permits only employees’ access to an exit while maintaining security and separation between public and employee areas but may be used as an additional exit as permitted for intervening rooms by CBC Section 1016. The blue dimensional arrows in Figure 1 show the adequate exit separation, as required by Code. As can be seen in the Figure 1 evacuation diagram: 34 persons in the Lobby and Retail will exit out of the South exit (from Lobby). 24 persons in all other back of house areas will exit out of the North exit (from loading/unloading room). The occupant load for the uses of the spaces in the retail store is tabulated below per CBC Table 1004.5. PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 6 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 Use of Space Occupant Load Factor (sq ft/person) Space Approx. Area (sq ft) Occupant Load (persons) Check-in Lobby 298 20Unconcentrated Assembly 15 net Break Room 241 17 Mercantile 60 gross Retail Area 783 14 Secured Inventory Room 400 2 Retail Counters 352 2Storage, Stock, Shipping Areas 300 gross Loading/Unloading 27 1 Office 78 1Business Areas 150 gross Restroom 65 1 Total 58 The retail store is separated into front-of-house areas and back-of-house areas. The retail store layout provides separate exiting from each area without passing through the other area. The occupant load for the public-accessed front-of-house area is 34 (including lobby and Retail area), and the occupant load for the back-of-house area is 24. The occupant load for both front of the house and back of the house areas are less than 50 occupants, requiring one exit from each space. The egress path of travel limitations (feet) for the occupancy within the retail store is provided below per CBC Chapter 10 for sprinkler protected buildings, as the existing building is sprinkler protected. This is required to be measured along the natural path of travel. The proposed layout is within these travel distances for sprinklered buildings, as shown in Figure 1. Occupancy Common Path of Travel Exit Access Travel Dead End Length Group M (Sprinklered)75 250 50 Where the occupant load will exceed 49, or where the common path limitation is exceeded, a minimum of two exits are required per CBC Table 1006.2.1. These exits are required to be separated by a minimum of one-third the area longest diagonal of the area served for sprinkler protected buildings. The overall retail store facility will contain two separate exits, to meet the required separation; one at the front entry, and one at the rear, back-of-house area as shown in Figure 1. Authentic Fresno Willow LLC will install listed panic hardware on the exterior exit doors to meet CBC 1010.1.10 and UL 305. PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 7 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 CBC 1010.1.9 requires all egress doors to be readily openable from the egress side at all times, requiring only one operation to open the door, without the use of a key or special knowledge or effort, except in specific situations. The Ordinance Article 33 of the Fresno City Code for Commercial Cannabis Business requires the retail area access door be locked at all times with buzz-in access through the electronic/mechanical door from lobby. This door shall be unlocked and readily openable from egress side (retail side), all times. The main door is allowed to be provided with a locking device on the egress side, provided the following requirements are met: a. The locking device is readily distinguishable as locked, and b. A readily visible durable sign is posted on the egress side of the door (inside) on or adjacent to the door, stating “THIS DOOR TO REMAIN UNLOCKED WHEN THIS SPACE IS OCCUPIED” in 1-inch black letters on a contrasting background. Certain egress doors in the retail store will be provided with card readers to control access into the retail store, back-of-house area, and cannabis goods storage and inventory rooms, as noted on the sketch in Figure 2. This is to meet Article 33 of the Fresno City Code for Commercial Cannabis Business. These doors will be arranged to meet the following provisions per CBC Section 1010.1.9.10 to allow for free egress: a. The door hardware that is affixed to the door leaf has an obvious method of operation that is readily operated under all lighting conditions b. The door hardware is capable of being operated with one hand and does not require more than one operation for unlatching c. Operation of the door hardware directly interrupts the power to the electric lock and unlocks the door immediately d. Loss of power to the electric locking system automatically unlocks the door e. Operation of the panic hardware releases the lock f. The locking system units are listed in accordance with UL 294 The exit path from the occupied spaces in the rooms or through corridors will need to be a minimum unobstructed width of 36 inches where serving less than 50 occupants; the width increases to 44 inches if serving 50 or more occupants per CBC Table 1020.2. The aisles are required to meet these widths, and the aisle accessways (if not required to be accessible) are required to be at least 30 inches wide per CBC Section 1018.3 and 1018.4. As discussed above, the retail store is separated into a front-of-house area and a back-of-house area. Since the public areas has less than 50 occupants, one exit should be provided. The exit from public areas will be provided directly from front of house areas through the main lobby and separate exit will be provided for back of house area. The exit path is allowed to pass through intervening rooms that are accessory to one another, provided that the required width is met, and a discernable path of egress travel is provided per CBC 1016.2. Exit signs are required for rooms where two exits are required, per CBC Section 1013. The facility will be provided with illuminated exit signs to facilitate egress. Emergency lighting will be provided for the means of egress in the facility to meet CBC Section 1008. The facility will be provided with emergency access and emergency evacuation plans to meet state and local fire standards. PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 8 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 The facility will not employ any devices that emit any medium such as smoke or fog that could obscure the means of egress in the building as prohibited per CFC Section 316.5. 4.4 FIRE EXTINGUISHERS AND OTHER FIRE SUPPRESSION EQUIPMENT LOCATION Sprinklers The existing building includes automatic sprinkler system. The retail store facility shall maintain the existing automatic sprinkler system, as this greatly enhances life safety, enables code compliance more easily and provides property protection and can reduce business interruption in case of a fire. The secured cannabis goods storage and inventories will include storage of the products on racks or shelves in cardboard packaging. The retail display area will contain products in display cases. The inventory is anticipated to include up to a Class IV commodity per the CFC and NFPA 13, Standard for the Installation of Sprinkler Systems, containing primarily the cannabis products in cardboard and plastic packaging. This is not considered a high-hazard commodity such as flammable liquids or rubber tires or Group A plastics. The product stacking on the display shelving and storage shelving will need to be maintained where the top of storage is no higher than 12 feet above the floor or at least 18 inches below the ceiling sprinklers (subject to NFPA 13 requirements). The inventory is not considered a high-hazard commodity and therefore should not be classified as high-piled combustible storage per the CFC if the top of the storage is maintained under 12 feet. Subject to the capability of the existing water supply, fire main and existing sprinkler system design, the existing automatic sprinkler system can be utilized to protect the new use and occupancy of the retail store. The display and storage areas may be up to 10 feet in height or at least 18 inches below the ceiling sprinklers (subject to NFPA 13 requirements) and will require protection as Ordinary Hazard Group II (OH2) per NFPA 13 Table 13.2.1. The storage may contain up to 15% unexpanded plastic by weight or 25% by volume. If the existing sprinkler system can’t meet OH2 design criteria, the storage arrangement will require modification to meet the available sprinkler system limitations and NFPA 13 requirements. Storage of any plastics or foams such as shipping supplies will need to be maintained under 6 feet to avoid classification as high-piled combustible storage and be maintained under 5 feet in order to be protected as Ordinary Hazard Group 2 per NFPA 13 Table 13.2.1. As the design progresses, the existing sprinkler system design will need to be evaluated with a licensed sprinkler contractor (C-16 Contractor). The sprinkler system design shall be in accordance with NFPA 13, Standard for the Installation of Sprinkler Systems and California Building and Fire Code and City of Fresno amendments. The sprinkler system will need to be inspected, tested, and maintained in accordance with the California amended version of NFPA 25, Standard for the Inspection, Testing, and Maintenance of Water-Based Fire Protection Systems. PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 9 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 Fire Alarm Based on discussion with the Owner/operator, we understand that the existing retail store location is provided with a fire alarm system. The existing fire alarm including initiation devices and occupant notification shall be maintained once the project is awarded to Authentic Fresno Willow LLC. Typically, the fire alarm will consist of combination smoke / carbon monoxide / heat detection and sprinkler waterflow connected to a fire alarm control panel, and that initiation of such devices will automatically notify emergency responders and employees and public customers. Since an automatic sprinkler system is provided, the facility shall include at least one exterior approved audible device, activated by sprinkler water flow as required by CBC Section 903.4.2. Upon actuation of the automatic sprinkler system, the fire alarm notification appliances throughout the facility will activate. The fire alarm system will also be required to monitor the sprinkler system. The fire alarm system will need to be installed, inspected, tested, and maintained in accordance with NFPA 72, National Fire Alarm and Signaling Code and California Fire Code and Title 19. Fire Extinguishers The retail store is anticipated to contain Class A fire hazards, which are ordinary combustibles such as paper and wood, and Class C fire hazards, which are electrical fires. The primary hazard in the facility is anticipated to be Class A fire hazards. The fire extinguishers in the facility are required to be rated at a minimum 2A:10B:C for the hazards in the building and spaced up to 75 feet travel distance per CBC Table 906.3(1). The fire extinguishers are required to be located in conspicuous locations per CFC Section 906, either mounted on brackets or inside fire extinguisher cabinets, where they will be readily accessible and immediately available for use, with the top no more than 5 feet above the floor. See diagram below for the proposed locations of fire extinguishers in the retail store. The fire extinguishers will need to be installed and maintained in accordance with CFC Section 906.2 and California Code of Regulations, Title 19, Division 1, Chapter 3. Exact fire extinguisher locations will be provided to meet 2019 California Building and Fire Code Section 906 as part of the tenant improvement permit submittal. The possible location of devices for fire alarm system and fire alarm control panel is provided below. The location of manual pull station shall be confirmed with AHJ. The possible location of devices for fire alarm system and fire alarm control panel is provided in the diagram below, and contemplates approximately: PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 10 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 [2] Fire extinguishers being located at Retail and Break Area [12] Smoke and Carbon Dioxide Detectors being placed in all rooms [10] Horn and Strobe being placed in all rooms [1] Knox Box being located at main entrance Figure 2- Possible location of fire alarm devices including smoke detectors and CO detectors, fire alarm control panel and fire extinguishers. The fire alarm contractor shall provide the final drawings and verify it meets requirements of NFPA 72. CO detectors are required due to a gas water heater in property. No other hazardous gas will be utilized or stored in the property. 4.5 PROCEDURE AND TRAINING FOR ALL FIRE AND MEDICAL EMEGENCIES Fire Emergency Procedures Authentic Fresno Willow LLC’s Fire Emergency Procedure summary, which is posted at all stores, is set forth below. This form and local emergency contact phone numbers will be conspicuously displayed in the employee break room and at the reception desk in case of fire or medical emergency. Authentic Fresno Willow LLC’s Fire Emergency Procedure requires an employee to immediately activate the fire alarm and then call the fire department from a safe area. The Procedure also requires each employee to memorize the evacuation routes as part of an employee’s onboarding process. Employees are trained to leave any items in their lockers. If the evacuating employee comes into contact with another employee or a customer, the employee should direct such employee or customer to also evacuate PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 11 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 immediately. If the evacuating employee comes into contact with a disabled or injured person or any other person having difficulty evacuating, the employee is trained to assist such person evacuate so long as such assistance does not endanger the assisting employee or the assisted employee or customer. If there is smoke, employees are trained to stay low and cover mouth with wet cloth if possible. Employees are also trained on how to operate a fire extinguisher using the P.A.S.S. method of 1) Pulling the pin, 2) Aim at the base of the fire, 3) Squeeze discharge handle and 4) Sweep from side to side. However, employees are trained to not attempt to put out the fire and just evacuate the premises in the case of larger fires. Upon evacuating the premises, employees are trained to assemble in an area designated prior to the opening of the store. At this assembly point, the General Manager will conduct a roll call and determine if any employees are missing. The General Manager will communicate with the fire department on whether any employees are not accounted for and any other pertinent information which may assist the fire department. During emergency situations when an employee requires medical treatment for an occupational injury or illness, the local emergency ambulance shall be used to provide transportation for that employee unless other arrangements have been made. In all other cases a representative of Authentic Fresno Willow LLC will transport personnel to clinics and medical facilities. PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 12 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 Medical Emergency Procedures Authentic Fresno Willow LLC’s Medical Emergency Procedure summary, which is posted at all stores, is set forth below. Employees are trained to immediately call 9-1-1 if an injury is sustained by any customer, employee or other occupant of the premises. Employees are trained to call 9-1-1 with the injured person nearby so that he or she can provide any information requested by the 9-1-1 dispatch. At a minimum, the employee should describe the nature of the incident, the age, name and gender of the patient, the location of the patient, whether or not the patient is conscious and breathing, any known medical history of the patient. Employees are also trained to not move the patient unless the person is in imminent danger because of their current location. Upon arrival of the ambulance, the employee shall provide as much specific information about the patient and the incident and shall remain at the premises until notified that he or she is permitted to leave. After the patient has been attended to by first responders, the employee who called 9-1- 1 shall contact the General Manager and Human Resources to communicate the incident and shall fill out the Medical Emergency Incident Form. PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 13 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 In addition to the Fire and Medical Emergency Policies and Training mentioned above, Authentic Fresno Willow LLC has the following policies and procedures to maintain a safe working environment. First Aid Log Any injury or illness that is reported to a first-aid facility or medical facility must be recorded on a First-Aid Log form. This includes non-occupational cases and injuries, or illnesses treated that involve vendors, suppliers, Contractors/Subcontractors, client personnel, and any other third party. First-Aid Logs or any portion of a log are not for general distribution. Requests for such information shall be processed by the human resource manager/supervisor. First Aid Kits First aid supplies shall be easily accessible when required. First-aid kits and required contents shall be maintained in a serviceable condition. Unit-type kits shall have all items in the first-aid kit individually wrapped, sealed, and packaged in comparable sized packages. The commercial or cabinet-type kits do not require all items to be individually wrapped and sealed, but only those which must be kept sterile. Items such as scissors, tweezers, tubes of ointments with caps, or rolls of adhesive tape, need not be individually wrapped, sealed, or disposed of after a single use or application. A roster, denoting the telephone numbers and addresses of doctors, hospitals and ambulance services available to the Authentic Fresno Willow LLC retail store, shall be posted at or near each first-aid station. Safety Rules for All Employees It is the policy of Authentic Fresno Willow LLC that everything possible will be done to protect employees from accidents, injuries and/or occupational disease while on the job. Safety is a cooperative undertaking requiring an ever-present safety consciousness on the part of every employee. If an employee is injured, positive action must be taken promptly to see that the employee receives adequate treatment. No one likes to see a fellow employee injured by an accident. Therefore, all operations must be planned to prevent accidents. To carry out this policy, the following rules will apply: 1. All employees shall follow the safe practices and rules contained in this manual and such other rules and practices communicated on the job. All employees shall report all unsafe conditions or practices to the proper authority, including the human resources manager/supervisor. 2. The human resources supervisor/manager shall be responsible for implementing PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 14 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 these policies by insisting that employees observe and obey all rules and regulations necessary to maintain a safe workplace and safe work habits and practices. 3. Good housekeeping must be practiced at all times in the work area. Clean up all waste and eliminate any dangers in the work area. 4. Suitable clothing and footwear must be worn at all times, shoes with thin or torn soles are not permitted. 5. All employees will participate in safety meetings conducted by their supervisor on a regular basis to continuously provide a safe workplace for all. This is an essential part of Authentic Fresno Willow LLC’s program for protecting our employees from accidents and illness. 6. Anyone under the influence of intoxicating liquor or drugs, including prescription drugs which might impair motor skills and judgment, shall not be allowed on the job. 7. Horseplay, scuffling, and other acts which tend to have an adverse influence on safety or well-being of other employees are prohibited. 8. Work shall be well planned and supervised to avoid injuries in the handling of heavy materials and while using equipment. 9. No one shall be permitted to work while the employee's ability or alertness is so impaired by fatigue, illness, or other causes that it might expose the employee or others to injury. 10. There will be no consumption of alcohol or cannabis on the job. 11. All injuries should be reported to the Supervisor, or 911 so that arrangements can be made for medical or first aid treatment. 12. When lifting heavy objects, use the large muscles of the leg instead of the smaller muscles of the back. 13. Do not throw things, especially material and equipment. Dispose of all waste properly and carefully. CONCLUSION This report presents the fire safety plan for the proposed retail store under consideration by Authentic Fresno Willow LLC in Fresno, CA. If a protection approach as described in these sections is employed and the facility, inventory, and arrangement is as described herein, our opinion is that the design will meet the applicable requirements and provide adequate protection in accordance with the CBC, CFC, and City of Fresno amendments. We recommend that the information in this report be discussed with the appropriate authorities to confirm the approach. PROPOSED CANNABIS RETAIL STORE – FRESNO, CA 20-2314 – Page 15 6929 N WILLOW AVE, SUITE 103 – 104 FIRE SAFETY PLAN November 18, 2020 Prepared by:Reviewed by: THE FIRE CONSULTANTS, INC.THE FIRE CONSULTANTS, INC. 11/18/2020 11/18/2020 Hamed Salehi, E.I.T.Date John R. Stauder, PE Date HS/JRS 20-2314/ RPHS 6929 N Willow Suite 103 – 104 – Fresno Cannabis Retail – Fire Safety Plan Hamed Salehi Digitally signed by Hamed SalehiDN: C=US, E=hsalehi@thefireconsultants.com,O="The Fire Consultants, Inc.", CN=Hamed SalehiDate: 2020.11.18 14:21:32-08'00'John Stauder Digitally signed by John StauderDN: C=US, E=jstauder@thefireconsultants.com,O=The Fire Consultants, CN=John StauderDate: 2020.11.18 21:12:22-08'00' 5. SECURITY PLAN 6. LOCATION 6.1. Description of Proposed Location Overall Property Our proposed location is 6929 N Willow Avenue, Suite 103/104. The assessor’s parcel number is APN 410-031-01 and is zoned CC. As verified by the Zoning Inquiry Letter submitted with this application, there are no schools, daycares or youth centers within 800 feet from this location. The proposed location is in the same shopping center as Walgreen’s and Walmart on the corner of N Willow Avenue and Herndon Avenue. The location shares a large parking lot with 97 spaces shared with the 7 small retail stores on the northwestern section of the larger shopping center. The location sits on the northwestern portion of the shopping center to the west of and behind Walgreen’s and to the north of Walmart. There are two points of ingress and egress off of N. Willow Avenue and one point of ingress and egress from Magill Avenue. The proposed location is on the corner of one of the busiest intersections in Fresno and is less than 500 feet away from the Clovis border. The popular Clovis Commons Shopping Center is diagonally across the street. The Clovis Commons Shopping Center includes Best Buy, Target, Pet Smart and TJ Maxx. The fact that these national brands as well as Walmart and Walgreen’s are next to our proposed location should increase the number of visitors to our store. Building The suite space is a one story 2,400 square foot area with businesses to the west and east side of it. Authentic Fresno will institute major renovations to the building’s interior through painting, new flooring, new partitions and walls, and HVAC so that the suite has an inviting interior, while still keeping it within the character of the surrounding area. As can be seen in the exterior rendering below and pursuant to FMC Article 33 § 9-3309(d), the store will not have any cannabis signs, cannabis products or other logos or words which identify that cannabis is sold at the location. Products will also not be visible from the exterior. Sensitive Uses FMC Article 33 § 9-3307(c) requires that all cannabis locations be at least 800 feet away from: 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, 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. 4. A youth center that is in existence at the time a complete commercial cannabis business permit application is submitted. We have reviewed the area and there are no sensitive uses within 800 feet of our proposed location. The closest sensitive uses nearby are as follows: Type Name Address Distance Cannabis Retail Business N/A N/A N/A School California Christian Academy, PSSP 6497 N Chestnut Ave. Fresno, CA 93710-4857 2,867 ft. Day Care Reading and Beyond Preschool Two 2672 E Alluvial Ave Fresno, CA 93720 3,183 ft Youth Center Been Park Corner of N Helm Ave and W Magill Ave 2,278 ft Public Transport Access Our proposed location is accessible to public transportation. A 5 minute walk northwest, next to the Clovis Commons is the N Willow Ave – Clovis Commons stop along the Route 10 Bus Line run by Fresno Area Express (FAX). Route 10 to the north, connects to Route 80. To the south it connects to Route 50, 9, and 38. See the red star in the middle for our property in relation to the other bus routes. Compatibility with Designated Zone Our property is zoned Commercial – Community (CC) along with the properties to the north and south of us. To the east is the city of Clovis, to the west is Residential Medium Density (RS-5) zoning, and to the northwest it is zoned Residential Multi-Family, Medium High Density (RM-1). The surrounding residences are already near existing popular commercial businesses so our business will not impact traffic in a significant way as compared to what they are already used to. Our business will only assist the surrounding businesses to bring in more foot traffic to their stores. Being located next to other retailers and restaurants elicits a sense of convenience where residents won’t have to go too far out of their way to obtain the items they enjoy. At the Herndon and Willow intersection there is the Clovis Commons which contains retailers such as Target, Office Depot, and Best Buy, along with a large variety of restaurants like Round Table, El Pollo Loco, and Mah’s Teriyaki Express. Not to mention Walmart which is in the same center us. Proximity to Police and Fire Our location is less than 4 miles away from police and fire stations. While we hope that they are never called upon in an emergency situation, their proximity to our store means that they can quickly arrive at our store to assist. Northeast Policing District 1450 E Teague Ave, Fresno, CA 93720 6-7 minute drive Less than 3 miles away Fresno City Fire Station No.13 3074 W Shaw Ave, Fresno, CA 93711 6 minute drive 3.1 miles away Site Improvements From entry to exit, every surface and facet of our store reflects quality through attention to detail and clean design. It is our goal to express the quality of our products through stark lines and colors, well-lit interiors, and cutting-edge technology. Building Exterior Improvements With a sound structure already in place for our two units within the existing strip mall, Authentic Fresno will incorporate exterior signage that is modern yet assuming and will blend with the surrounding businesses. The main entrance/exit door will be located in the front and centered between the 2 suites. This is to ensure one entrance to be used by the members of the public to enter/exit the premises in accordance with FMC Article 33 § 9-3310(b)(1)(ii). Having the main entrance centered allows for pedestrian traffic flow and additional space for customers to line up depending on the amount of customers and the time of day to ensure 6 foot distancing because of COVID. This will keep customers out of harm’s way by leaving the parking lot completely open to vehicles. Please see the render below of the Exterior. Site Security Improvements As further discussed in the Security Plan, security cameras will blanket the interior and exterior of the property in addition to shatter-resistant window film which will be darkened as to ensure general public cannot see into the interior in compliance with state regulations. Floor Plan Improvements Design Team Authentic Fresno has contracted with the Temeka Group25 of Corona, CA, to work with us in creating the vision for both our interior and exterior space. With a world-class team of professionals, Temeka has provided architectural designs, elevations, millwork, and signage to fully develop the concept. After creating a layout for the interior space, the skilled fabricators at Temeka will then design, build, and install custom fixtures for a finished look that contributes to the overall customer experience. The highest standards of craftsmanship go into the millwork and cabinetry which are made in-house at the Temeka facility. 25 https://www.temekagroup.com The Temeka Group means excellence, as is evidenced by their impressive list of clientele, which includes multiple dispensary stores, The George Jones Museum, Reef Stores, Vans, Amazon, Uber, The Glen Campbell Museum, Guess, and Quicksilver, as well as designing the gift shops for professional sports teams including the LA Lakers, Dodgers, Galaxy, Anaheim Ducks, and Toronto Maple Leaves. It is our privilege at Authentic Fresno to work with the Temeka Group and believe their experience and high standards will be representative of the quality that Authentic Fresno seeks to convey. Lobby A glass wall will be installed to separate the lobby from the retail area providing customers a further glimpse in to their future experience while keeping in mind FMC Article 33 § 9-3310(a)(4)’s requirement for a separated lobby with buzz-in entry system for added security. The lobby will feature rotating work from local artists. The door to the right of the reception desk in the entry to the retail floor. The door to the left of the desk is a one way door for customers exiting the retail floor. Retail Floor The existing tile flooring will be replaced with black-and-white marble-esque epoxy flooring. As a customer’s eyes take in the unique flooring and travel up the length of the walls they will see the lit up glass casing counters which house our products for immediate sale and defines our modern design concept which is the hallmark of our stores. Allowing maximum visibility while keeping the product pristine and secured. The walls will be adorned with vendor shelving to display empty product packages which highlight the products of the vendors we sell at the store. The HD TVs on the walls will also showcase the products we sell to add to the visual experience at our store. Authentic stores are renowned for their modern and luxurious interior and Hollywood Reporter recognized our store as an “art gallery cannabis emporium” in their August 21, 2019 feature on our downtown Los Angeles store.26 The recessed lighting will include LED light fixtures throughout to keep the sales floor properly illumi- nated for staff and customers. 26 https://www.hollywoodreporter.com/news/la-brand-stiiizy-opens-flagship-art-gallery-cannabis-emporium-1233500 Accessibility The location is on the corner of Herndon Avenue and N Willow Avenue. This intersection is one of the busiest intersections in Fresno at over 60,000 cars a day. This location is also less than 500 feet away from the Fresno/Clovis border and will permit us to cater to Clovis residents who are seeking safe and high quality cannabis products at affordable prices. The fact that this location is off of the six lane Herndon Avenue expressway will permit Clovis residents to quickly access our store and will also permit our delivery drivers to cover long distances in a short amount of time. The proposed location is also less than 1.5 miles away from Highway 168 and approximately 2.75 miles away from Highway 41 which will also allow us to maximize our delivery capabilities. Floor Plan As can be seen in the floor plan below, a customer will enter the store from the public entrance on the south side of the building. The entrance leads directly into a 298 square foot lobby area with a reception area where customers are required to check-in and show their IDs. Once customers’ IDs are checked and their profiles have been registered in our Point of Sale system, the check-in associate will buzz open the door on the east side of the lobby onto the retail floor. The 1,390 square foot retail floor is in the middle of the building and will have an open floor space in the center with shopping counters on the west, north and east side of the retail floor. The employee only areas are only accessible by retail employees through the locked door which separates the customer area and the employees’ only area of the retail floor. The 400 square foot secured inventory room, break area, office and loading/unloading area are all located north of the employee only retail area and is also only accessible through a locked door. 6.2. Photograph of Building Frontage See below photographs of the front of the building from the parking lot and from the frontage along Herndon Avenue. 6.3. Premise Diagram See below a premise diagram that shows the overall parcel and neighboring parcels and buildings. As can be seen in the diagram below, there are 97 parking spaces reserved for the businesses located on the northwestern section of the large shopping center. The Walmart to the south and Walgreen’s to the east each have their own designated parking spaces reducing the risk that we negatively affect the parking situation in this large shopping center. Customers will be able to reach our store through the 2 driveways off of N Willow Avenue, east of our business or through the 1 driveway off of W Magill Avenue which is south of our business. Maui Hawaiian BBQ Restaurant is our direct neighbor to the east and lingerie shop Feel Like a Woman Boutique is our direct neighbor to the west. 7. COMMUNITY BENEFITS AND INVESTMENTS PLAN Shryne Group has a track record of providing community benefits in all of the cities where we operate. In the past year alone, we’ve donated over $500,000 to various non-profits such as the Boys and Girls Club, Food Share, Imperial Valley Food Bank, United Playaz, and veterans’ organizations such as Battle Brothers and Vet Hunters. Our employees also utilize their 24 hours of paid time off for volunteerism by volunteering at local homeless shelters, clean-up projects such as Battle for the Bay and local food drives. In addition to the commitments we have already made set forth in Section 7.1 below, we will provide monetary support, food and supplies and volunteer time on a monthly basis to homeless shelters, veteran organizations and other organizations which assist Fresno citizens of need. See below examples of volunteerism by our employees just within the past 3 months. 7.1 Social Responsibility Plan In continuing our history of social responsibility in every city where we operate, we have made the following contributions and commitments in Fresno. • Fresno County Economic Development Corporation27: The Fresno County Economic Development Corporation is the premier non-profit organization in Fresno committed to job and business development in Fresno. During the height of the COVID-19 pandemic when thousands were experiencing job loss, we made an initial contribution of $5000 to the Fresno County Economic Development Corporation to support their job training and job creation efforts. We have also committed to provide an annual contribution of $25,000 a year if we have the honor of opening a business in Fresno. In our discussions with this organization, we are hoping to help fund the Central Valley Training Center, which is partnered with the California High Speed Rail Authority, to provide a 16 week apprenticeship training that will then provide job placement to program participants on the high speed rail system. We will also partner with the Fresno County Economic Development Corporation to recruit low-income Fresno residents, unemployed Fresno residents, former foster home youths and Fresno residents living in low income census tracts for positions at our company. We look forward to discussing various partnerships with the Fresno County Economic Development Corporation to create more job opportunities for Fresno residents. See the end of this section for our LOI with the Fresno County Economic Development Corporation. • Shryne Foundation: Authentic Fresno will utilize the Shryne Group’s own charitable giving group, the Shryne Foundation for continued support in the community. The Shryne Foundation has an advisory board consisting of Shryne Group management, which will work with selected local community representatives to guide the charitable priorities as needed in the city of Fresno. Areas of focus for the Foundation include drug education and youth related prevention, economic development, education, environment, homelessness, and drug abuse. Under these areas of focus we will be able to address community needs such as new technology, job training, or a healthy lifestyle/ nutrition campaign. Additional organizations we are committed to supporting through the Foundation include the Boys & Girls Clubs of Fresno County, Central California Food Bank, Marjaree Mason Center, Pinedale Community Group, and the United Way of Fresno among others. We are committed to providing $20,000 a year to this Foundation annually. 27 https://www.fresnoedc.com/ • Fresno City College: Authentic Fresno has partnered with Fresno City College to implement and execute our Scholarship and Apprenticeship Program. We will sponsor 3 Fresno residents who would qualify as a Social Equity Applicant under FMC Article 33 § 9-3316(b)(6) to attend classes at Fresno City College towards their Certificate of Retail Management Certificate (or another certificate if they so desire). Books and other similar expenses will also be paid for. These scholarship recipients will also have the opportunity (but are not obligated) to work part-time at one of our retail, cultivation, manufacturing or distribution facilities in Central California. Our goal with this program, which has been a great success in Los Angeles, is to provide low income individuals, individuals who have been convicted of a cannabis crime and other Fresno citizens who would qualify as a Social Equity Applicant the educational foundation and hands on experience in cannabis to be able to own or operate his or her own cannabis business. See the end of this section for our LOI with the Fresno City College. • Local, Unionized Jobs for Veterans, Formerly Incarcerated and Low Income Residents: As mentioned previously, we will hire at least 70% Fresno residents and provide unionized, living wage jobs. We have a partnership with JVS28 for them to place veterans at our organization and hope to recruit Fresno veterans for our store. We will also work directly with the Fresno County Economic Development Corps to identify low income residents who have annual family income below 80% AMI, are unemployed or receiving public assistance. As mentioned below, we will also look to hire local residents who were convicted of cannabis related offenses who we will have the opportunity to meet at our expungement clinics. • Assisting Fresno Social Equity Applicants: As mentioned previously, we currently support 13 individuals in San Francisco, Oakland and Los Angeles who qualify as social equity cannabis owners in these respective cities. In Oakland, we are also incubating 3 social equity individuals by providing them with free rent on spaces for them to operate their manufacturing and distribution businesses and also by providing them with legal, accounting and business assistance for their businesses. We have also committed to providing various social equity business owners shelf space for their cannabis brands. We are committed to providing the following to the Social Equity Applicants in Fresno: 28 https://www.jvs.org/ • Providing legal, accounting and compliance advice; • Providing assistance so that Social Equity Applicants can properly fill out all city and state cannabis license forms (we have held seminars to assist Los Angeles Social Equity Applicants fill out their city and state cannabis license forms); • Providing shelf space to Fresno Social Equity manufacturers, cultivators and distributors; • Providing mentorship and assisting Social Equity Applicants come up with a business plan; and • Connecting Social Equity Applicants with our large distribution chain so that manufacturers, distributors and cultivators have a place to sell or distribute their products and so that retailers have access to a stable and reputable supply chain of products. See below some Letters of Support from some of our Social Equity partners in other cities. August 22, 2020 Cindy De La Vega San Francisco, CA To whom it may concern, My experience with Shryne/Stiiiy has been an overall welcoming experience, I cannot complain. They showed they were genuinely interested in getting to know me, about my past and what made me qualified as an equity applicant. After getting to know me and what I've been through, they immediately welcomed me with heartwarming open arms. The entire diverse and multi color staff made me feel like I fit in. Shryne/Stiiizy was open to training me hands on and letting me see first hand what it is going to be like to own and run my own dispensary. The hands-on training continues and their outpouring love and support to uplift me in an empowering way to become a successful business owner has helped me learn so much and because of that I feel confident in running my own store. I am honored to be in a marriage with Shryne/Stiiizy knowing that after all my training, they will always be there to help guide and support me. Sincerely yours, Cindy De La Vega FROM THE DESK OF Cindy De La Vega CINCIN415@GMAIL.COM | (415) 889-3322 August 23, 2020 Karim Mayfield San Francisco, CA To whom it may concern, My experience with the Shryne Group has been very positive. From the beginning of this 3 year journey, the team has welcomed me and made me feel comfortable, they've always kept me informed and updated with everything. I appreciate all the transparency in the partnership. Early on they’ve given me the support to nurture my growth in the Cannabis industry. Shryne Group has provided me with a great team to navigate through all the procedures and permitting for the Office of Cannabis. What's really been exciting and very informative is being able to shadow some of the managers in one of the company's retail stores. As a future owner, this gives me the opportunity to get hands on experience before opening my own store. What I appreciate most is how genuine Shryne Group has been, assisting me with some of the work I do in the community I was raised in, sponsoring my nonprofit program; “SoulChamp”, a fitness and mentoring program for boys and young adults in the inner city of San Francisco. All in all, I look forward to what's to come with this partnership and I am confident that with a team like Shryne Group on my side, the best is yet to come! Sincerely yours, Karim Mayfield FROM THE DESK OF Karim Mayfield KARIMMAYFIELD@GMAIL.COM | (415) 235-1914 DocuSign Envelope ID: C872BE21-F01D-4F10-AD2C-1DFD4FB5AF12 • Fresno Santa’s Village/Fresno Police Department: We also supported the Fresno Police Department with monetary contributions in each of 2019 and in 2020 towards their annual Santa’s Village event. We will continue to support this cause every year. The Shryne Group looks forward to identifying additional organizations and individuals who we can assist as part of our community benefits pledge. At the very least, we are committed to having all of our employees volunteer at least 24 hours a year at the expungement clinics described below, the Valley Children Medical Center, Marjaree Mason Center and veteran and homeless organizations within Fresno. Each of our stores average around 300 volunteer hours per year and we believe we will surpass 300 hours at this location because of the local ties we have already established. Our employees will be able to take advantage of the monthly volunteer events organized through our Community Benefits Director DeRon Waller and they will be permitted to find volunteer events on their own to take full advantage of the volunteerism encouraged by our organization. 7.1.1. Expungement Clinics Pursuant to Proposition 47, which permits Californians to reclassify or expunge certain criminal records, we have hosted expungement clinics in conjunction with our union partner, the UFCW. We strongly believe that it is inequitable for certain crimes, including simple drug possession, to prevent people from future job opportunities and are committed to holding expungement clinics in Fresno at least twice a year. Below is our a flyer for a recent expungement clinic we held at our store in San Bernardino. 7.1.2. Environmentally Sustainable Business Model Authentic Fresno will be governed by Shryne Group’s Climate Action Plan, which is a commitment to ensure climate neutrality by 2025. The plan requires Authentic Fresno to use sustainability sourced materials such as lumber from the Timber Products Company, which is environmentally certified and adheres to the Sustainable Forestry Initiative and the California Forest Protection Act. All the timber we use will also come from environmentally responsible tree farms, will contain no added formaldehyde and will use finishing which will not result in release of any VOCs (volatile organic compounds). Authentic Fresno will also utilize solar power through solar panels placed on the exterior and the roof. Our solar inverter will convert direct current electricity into usable alternating current electricity. Because the inverter will be connected to the power grid, any excess power generated by the solar system will be fed into the grid for others in the community to use. Additionally, we will use LED lighting and automatic sensors to limit unnecessary electrical use. To further minimize power consumption, we will install natural lighting solutions such as Solatubes which captures natural light from the outside and generates light in exponential amounts through the use of reflective materials which bounce off of each other. Our goal at every store is to recycle 75% of all materials. Our retail stores receive large amounts of cardboard and other packaging materials, and we will reuse all of this packaging materials for our own deliveries. We also provide customers with $0.50 off their purchase if they bring their previous Authentic or Stiiizy (our 2 retail brands) shopping bag into the store. Our cannabis waste management company, Cannabis Waste Solutions, also recycles our cannabis waste to be used for asphalt or construction materials, and this commitment to recycling is one of the reasons we engage them at all our facilities. All of our delivery vehicles to be used out of Fresno will be electric or hybrid vehicles to further reduce our carbon footprint. We will also install Electric Vehicle Charging Stations and install bike racks to encourage customers and employees to reduce greenhouse gas emissions. 7.1.3. Using Vacant Brownfield Land Authentic Fresno will not be utilizing vacant brownfield land. 7.2 Public Health Outreach and Educational Program All of our stores have educational materials on safe marijuana usage available at our shopping counters. The materials cover the science of cannabis, safe dosing and the different consumption methods and are intended to ensure that our customers safely consume our products. See below a few examples of our educational materials on safe dosing. Take a Tolerance Break Moderation is important with any substance, and everyone should use cannabis in a safe manner.  After prolonged cannabis use, you may find yourself not feeling the same level of effects. Using cannabis safely can often include taking a "tolerance break". A tolerance break is when a person abstains from cannabis use to clear one's body of cannabinoids like THC and establish good habits and boundaries with using cannabis in a safe and healthy manner. Taking a break may allow for the reverse of tolerance buildup and allow for a consistently positive experience when using cannabis in moderation. Not taking a break can lead to negative effects of overconsumption due to having a higher tolerance level.  If you choose to take a tolerance break, stay healthy with these simple ideas while you learn the right dose to help create balance for your mind and body: Stay hydrated - Eat healthy  Pick up a hobby - Stay active (workout, pick up a sport, go on a hike, etc.) What’s Your M.E.D.? A person’s response to cannabis can vary due to things like their age, genetics, food intake, and prior exposure. A person’s minimum effective dose (M.E.D.) may be a couple puffs from a cannabis flower pre-roll or several long inhalations from a vaporizer pen. To discover what your M.E.D is, consider these steps: •Start with a small dose: For example, half of a low dose gummy or 1-2 quick puffs from a cannabis pre-roll or vaporizer. •Give your body some time to react: The effect of cannabis smoke or vapor can be felt almost immediately upon proper inhalation, while edibles (cannabis that is ingested as food) can take up to 30 minutes or even longer to feel. •Repeat incremental dose or note final dose: After some time, if you find yourself not feeling any effect, continue to adjust your microdose level. If you feel just right, just chill and enjoy. If you feel overwhelmed or "too high", the following ideas have shown to help with tolerating the effect: Stay hydrated, avoid alcohol - Move yourself to a relaxing location where you can decompress and relax - Lay down but don’t close your eyes if you feel dizzy - Ask someone to keep you company to take your mind off the high - Perform breathing exercises - Get some sleep If you are experiencing a medical emergency, please call 911 or seek immediate medical assistance.  Science of Cannabis 101 Smoking • Cannabinoids inhaled into lungs and Alveoli (small air sacks in your lungs) enter the bloodstream then cross the blood-brain barrier • Effects occur within 90 seconds • Smoking allows user to enjoy benefits of all cannabinoids and terpenes of the flower together • The various strains allow users to experiment and find one that works best for their needs Vapes • Smokeless delivery which uses warm air or heat rather than a flame • Similar effect to smoked cannabis, but you are typically heating extract instead of flower • Early onset - effects appear within 90 seconds • Some pens are disposable while others are cartridges Edibles • Food products that have been infused with cannabis • Companies use different methods to extract the cannabinoids and then add them to their products • Edibles hit people harder because THC turns into 11 -hydroxy-THC by liver cells before entering the bloodstream • Effects occur between 15 minutes to 2 hours after ingestion We also have educational materials on our website geared towards parents who want to teach their kids about the dangers of underage cannabis use. The content contains recommended links such as to the CDC’s website on teen drug use to provide scientific information regarding teen drug prevention and abuse. See below an example of the type of information we share on our website. Additionally, we have created a foundation called the Shryne Foundation which is a fund dedicated to youth drug prevention and education, economic development, education and homelessness. The Foundation would be co-managed by Shryne Group executives and members of the Fresno community and would provide monetary contributions to fund drug education programs and drug prevention programs in coordination with the City of Fresno. We are committed to providing a year to this Foundation annually. We have also recently partnered with the leading Spanish language magazine in California, Para Todos (http://paratodos.com/pt/), for us to provide monthly educational articles on cannabis for their Spanish language readers. The topics covered in our monthly articles include preventing youth access, health and science of cannabis, dosing and other topics which can educate the Spanish speaking community in Fresno and other cities in California on the risks of youth use of cannabis and drug addiction. Additionally, Authentic Fresno will host monthly education seminars on cannabis products and related safety issues. Interactive presentations by an Authentic Fresno employee or other cannabis expert will be followed by Q&A sessions. Past presentations include optimal and safe dosing amounts, the dangers of driving under the influence, and different consumption methods and their effects. Shryne Group has also engaged former Ultimate Fighting Championship veteran Tyson Griffin to participate in our cannabis education seminars at all its retail locations29. Tyson is an advocate of the safe consumption of cannabis and CBD, as well as stretching exercises, to reduce joint pain, anxiety, and depression. Once the proposed store is open, Tyson will hold regular educational seminars at the store to educate citizens on safe cannabis use along with cannabis and holistic well-being. We are committed to educating our customers and youth on drug abuse prevention. All cannabis products should only be consumed by persons who are at least 21 years old and in a safe and responsible fashion. The success of our industry depends on this. 7.3 Commitment to Fresno Community Reinvestment Fund In addition to providing assistance to local cannabis equity businesses by providing them with legal, accounting and compliance services, providing shelf space and advising them on their business, Shryne Group is committed to providing at least a year to the Fresno Community Reinvestment Fund to further assist local cannabis equity businesses. 29 https://www.tysongriffin.com/ ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:10/5/2020 10:22 AM AACL-1.02,Revised 06-10-2019 Page 1 of 2 ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT OF LESSOR 1.ASSIGNMENT OF LEASE For valuable consideraƟon͕the receipt and adequacy of which are hereby acknowledged,Ale Yarok,LLC ("ASSIGNOR")hereby assigns and transfers to Authentic Fresno Willow LLC ("ASSIGNEE")all of ASSIGNOR's right,Ɵƚle and interest in and to that certain Lease dated October 31,2019 ,by and between ASSIGNOR and R.S.LLC ,as Lessor,covering those certain Premises located at (street address,city,state,zip)6929 N Willow Ave Suite 103 Fresno,CA 93710 and as is more parƟcƵlarlLJ described in such Lease. This Assignment shall be effecƟǀe͗October 1,2020 .Signatures to this Assignment accomplished by means of electronic signature or similar technology shall be legal and binding. In addiƟon͕ASSIGNOR hereby transfers to ASSIGNEE all of ASSIGNOR's interest in and to any security or other deposits paid to Lessor under the terms of such Lease. Dated:Ale Yarok,LLC By: Name Printed:Aaron Herzberg Title:Mananger By: Name Printed: Title: Assignor 2.ASSUMPTION OF LEASE Assignee acknowledges that it has inspected the Premises and reviewed the Lease and Assignee hereby accepts the foregoing Assignment and assumes and agrees to be bound by and perform all obligaƟons of the Lessee pursuant to the Lease arising on or aŌer the date of this Assignment and to abide by all of the terms,provisions, covenants and condiƟons of the Lease. Dated:Authentic Fresno Willow LLC By: Name Printed:Brian Mitchell Title:CEO By: Name Printed: Title: Assignee 3.CONSENT TO ASSIGNMENT Lessor hereby consents to the foregoing Assignment and AssƵmpƟon of the Lease.It is understood and agreed,however,that the foregoing consent is not a waiver of Lessor's right to consent to or impose resƚricƟons upon any future assignment or sƵbleƫng͘In addiƟon͕this assignment does not releases Assignor from liability for any of the obligaƟons of the Lessee under the Lease. Dated:R.S.LLC By: Name Printed: Title: By: Name Printed: DocuSign Envelope ID: B292011D-0F02-498C-A5D1-4516CDEE7FEE 10/6/2020 10/6/2020 Ranjeet Singh 10/6/2020 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:10/5/2020 10:22 AM AACL-1.02,Revised 06-10-2019 Page 2 of 2 Title: Lessor ATTENTION:NO REPRESENTATION OR RECOMMENDATION IS MADE BY AIR CRE OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS ASSIGNMENT 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 ASSIGNMENT. 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 PROPERTY,THE STRUCT URAL INTEGRITY,THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,AND THE SUITABILITY OF THE PREMISES FOR ASSIGNEE'S INTENDED USE. WARNING:IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THE ASSIGNMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. AIR CRE *hƩps͗//www.aircre.com *213-687-8777 *contracts@aircre.com NOTICE:No part of these works may be reproduced in any form without permission in wriƟng͘ DocuSign Envelope ID: B292011D-0F02-498C-A5D1-4516CDEE7FEE ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:10/5/2020 10:22 AM ATL -1.02,Revised 06-10-2019 Page 1 of 2 #1 AMENDMENT TO LEASE THIS AMENDMENT TO LEASE is made and entered into as of October 1,2020 ,by and between R.S.LLC ("Lessor")and Ale Yarok &/Or Assignee ("Lessee"). WHEREAS,on or about October 31,2019 a Lease was entered into by and between Lessor and Lessee relaƟng to certain real property commonly known as (street address,city,state,zip):6929 N Willow Ave Suite 103 Fresno,CA 93710 (the "Premises"),and WHEREAS,Lessor and Lessee have have not previously amended said Lease,and WHEREAS,the Lessor and Lessee now desire to amend said Lease, NOW,THEREFORE,for payment of TEN DOLLARS and other good and valuable conƐideraƟon to Lessor,the receipt and ƐƵfficiencLJ of which is hereby acknowledged, the parƟeƐ mutually agree to make the following addiƟonƐ and modificaƟonƐ to the Lease: TERM:The EdžpiraƟon Date is hereby advanced extended to . AGREED USE:The Agreed Use is hereby modified to:. BASE RENT ADJUSTMENT:Monthly Base Rent shall be as follows:. OTHER:1.2(a)Premises:Lessor and Lessee hereby agree that the Premises is amended to include Suite 104 for an additional 1,200 square feet for a total of 2,400 square feet (Suites 103 and 104).The rent during the Entitlement Period specified in Paragraph 51 of the Addendum shall be per month.Base rent increases to per month after expiration of Entitlement Period or upon opening of business (see Paragraph 51). Entitlement Period:Lessor and Lessee hereby agree that the Entitlement Period specified in Paragraph 51 of the Lease shall be extended for another 12 months until November 1, 2021 Guarantor:Due to Assignee's superior financial condition,Lessor hereby agrees to release Ale Yarok,LLC from liability for any obligations of the Lessee under the Lease. Additionally,Lessor hereby agrees to release Aaron Herzberg as Guarantor for the Lease and from all obligations of the Lessee under the Lease.SGI Retail LLC shall replace Aaron Herzberg as Guarantor of the Lease.See Exhibit "A"attached.. This Amendment shall not be construed against the party preparing it,but shall be construed as if all parƟeƐ jointly prepared this Amendment and any uncertainty and ambiguity shall not be interpreted against any one party.Signatures to this Amendment accomplished by means of electronic signature or similar technology shall be legal and binding. All other terms and condiƟonƐ of this Lease shall remain unchanged and shall conƟnƵe in full force and effecƚ except as ƐpecificallLJ amended herein. EXECUTED as of the day and year firƐƚ above ǁriƩen͘ By Lessor: R.S.LLC By: Name Printed: Title: Phone: Fax: Email: By: By Lessee: Ale Yarok &/Or Assignee By: Name Printed:Aaron Herzberg Title: Phone: Fax: Email: By: Name Printed: Title: Phone: DocuSign Envelope ID: B292011D-0F02-498C-A5D1-4516CDEE7FEE Ranjeet Singh ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:10/5/2020 10:22 AM ATL -1.02,Revised 06-10-2019 Page 2 of 2 Name Printed: Title: Phone: Fax: Email: Address: Federal ID No.: Fax: Email: Address: Federal ID No.: AIR CRE *hƩps͗//www.aircre.com *213-687-8777 *contracts@aircre.com NOTICE:No part of these works may be reproduced in any form without permission in wriƟng͘ DocuSign Envelope ID: B292011D-0F02-498C-A5D1-4516CDEE7FEE ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 1 of 17 1.Basic Provisions ("Basic Provisions"). 1.1 ParƟes.This Lease ("Lease"),dated for reference purposes only October 31,2019 ,is made by and between R.S.LLC ("Lessor") and Ale Yarok &/Or Assignee ("Lessee"),(collecƟvely the "ParƟes",or individually a "Party"). 1.2(a)Premises:That certain real property,including all improvements therein or to be provided by Lessor under the terms of this Lease,commonly known as (street address,unit/suite,city,state):6929 N Willow Ave Suite 103 Fresno,CA 93710 ("Premises").The Premises are located in the County of Fresno ,and are generally described as (describe briefly the nature of the Premises and the "Project"):1,200 Square Feet of Retail Space .In addiƟon to Lessee's rights to use and occupy the Premises as hereinaŌer specified,Lessee shall have non-exclusive rights to any uƟlity raceways of the building containing the Premises ("Building")and to the Common Areas (as defined in Paragraph 2.7 below),but shall not have any rights to the roof,or exterior walls of the Building or to any other buildings in the Project.The Premises,the Building,the Common Areas,the land upon which they are located,along with all other buildings and improvements thereon,are herein collecƟvely referred to as the "Project."(See also Paragraph 2) 1.2(b)Parking:34 unreserved vehicle parking spaces.(See also Paragraph 2.6) 1.3 Term:Entitlement Period +5 years and months ("Original Term")commencing November 1,2019. See Paragraphs 50 and 51 ("Commencement Date")and ending 5 Years from completion of Entitlement Period ("ExpiraƟon Date").(See also Paragraph 3) 1.4 Early Possession:If the Premises are available Lessee may have non-exclusive possession of the Premises commencing ("Early Possession Date").(See also Paragraphs 3.2 and 3.3) 1.5 Base Rent:per month ("Base Rent"),payable on the 1st day of each month commencing See Paragraph 50 .(See also Paragraph 4)Base rent increases to $6,000 per month after expiration of Entitlement Period or upon opening of business.See Paragraph 51. If this box is checked,there are provisions in this Lease for the Base Rent to be adjusted.See Paragraph 58 . 1.6 Lessee's Share of Common Area OperaƟng Expenses:percent (%)("Lessee's Share").In the event that the size of the Premises and/or the Project are modified during the term of this Lease,Lessor shall recalculate Lessee's Share to reflect such modificaƟon. 1.7 Base Rent and Other Monies Paid Upon 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.Lessor is the "Insuring Party".(See also Paragraph 8) 1.10 Real Estate Brokers.(See also Paragraph 15 and 25) agency relaƟonships in this Lease with the following real estate brokers ("Broker(s)")and/or their agents ("Agent(s)"): Lessor’s Brokerage Firm Mark Saito Company License No.Is the broker of (check one):the Lessor;or both the Lessee STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE -NET (a)Base Rent:for the period . (b)Common Area OperaƟng Expenses:for the period . (c)Security Deposit:("Security Deposit").(See also Paragraph 5) (d)Other:for Reservation Fee . (e)Total Due Upon ExecuƟon of this Lease:. (a)RepresentaƟon:Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency RelaƟonship,confirms and consents to the following and Lessor (dual agent). Lessor’s Agent Patrick Monreal License No.02007579 is (check one):the Lessor’s Agent (salesperson or broker associate);or both the Lessee’s Agent and the Lessor’s Agent (dual agent). Lessee’s Brokerage Firm License No.Is the broker of (check one):the Lessee;or both the Lessee and Lessor (dual agent). Lessee’s Agent License No.is (check one):the Lessee’s Agent (salesperson or broker associate);or both the Lessee’s Agent and the Lessor’s Agent (dual agent). (b)Payment to Brokers.Upon execuƟon and delivery of this Lease by both ParƟes,Lessor shall pay to the Brokers the brokerage fee agreed to in a separate wriƩen agreement (or if there is no such agreement,the sum of or %of the total Base Rent)for the brokerage services rendered by the Brokers. 1.11 Guarantor.The obligaƟons of the Lessee under this Lease are to be guaranteed by Aaron Herzberg and Second Guarantor TBD ("Guarantor").(See also Paragraph 37) 1.12 AƩachments.AƩached hereto are the following,all of which consƟtute a part of this Lease: an Addendum consisƟng of Paragraphs 50 through 57 ; a site plan depicƟng the Premises; DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 2 of 17 a site plan depicƟng the Project; a current set of the Rules and RegulaƟons for the Project; a current set of the Rules and RegulaƟons adopted by the owners'associaƟon; a Work LeƩer; other (specify):Option to Extend;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 shall 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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 3 of 17 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. 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. DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 4 of 17 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: (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. DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 5 of 17 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 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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 6 of 17 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) 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 prevent 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,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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 7 of 17 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 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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 8 of 17 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 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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 9 of 17 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 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, DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 10 of 17 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 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. (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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 11 of 17 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. (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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 12 of 17 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. (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. 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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 13 of 17 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 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. DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 14 of 17 (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. 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. DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 15 of 17 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 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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 16 of 17 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. (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 DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2019 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM MTN-26.22,Revised 06-10-2019 Page 17 of 17 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 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: R.S.LLC By: Name Printed: Title: Phone: Fax: Email: By: Name Printed: Title: Phone: Fax: Email: Address: Federal ID No.: Executed at: On: By LESSEE: Ale Yarok &/Or Assignee By: Name Printed:Aaron Herzberg Title: Phone: Fax: Email: By: Name Printed: Title: Phone: Fax: Email: Address: Federal ID No.: BROKER AƩn:Patrick Monreal Title: Address: Phone: Fax: Email: Federal ID No.: Broker DRE License #: 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: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 aaron@puzzlegrouplaw.com 11/20/2019 Ranjeet Singh ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM ADD-1.03,Revised 06-10-2019 Page 1 of 4 ADDENDUM TO LEASE Date:October 31,2019 By and Between Lessor:R.S.LLC Lessee:Ale Yarok &/Or Assignee Property Address:6929 N Willow Ave Suite 103 Fresno,CA 93710 (street address,city,state,zip) Paragraph:50-57 If any of the provisions in this Addendum (Paragraphs 50-57)conflict with other terms in the prior paragraphs of this Lease,these paragraphs (Paragraphs 50-57)supersede those terms and shall control. 50.Reservation Fee: Lessee and Lessor acknowledge that the Premises is currently occupied and Lessor is proceeding with an eviction of the current tenant.Lessee agrees to pay per month as a "Reservation Fee" starting November 1,2019 to reserve the Premises during the eviction process of current tenant. Lessee and Lessor hereby agree that the eviction of current tenant shall be completed no later than January 31,2020 and Lessee shall be given full access to Premises no later than January 31,2020. In the event that the eviction of the current tenant is not completed by January 31,2020,then Lessee shall have the option to either a)suspend payment of the Reservation Fee of until Lessee receives full access to the Premises or;b)Lessee shall have the option to take possession of Unit 107 (which Lessor guarantees is the same exact size as the Premises -1,200 Square Feet)and execute a separate lease for Unit 107 under the same terms as this Lease and that will supersede this Lease. Upon the completion of the eviction of current tenant and Lessee receiving full access of the Premises or Lessee taking possession of Unit 107 ,the Lessee shall begin paying the base rent of which is stated in the Lease. 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 or any 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,or expense of any kind upon Lessor,or the Property.Lessor hereby agrees to reasonably cooperate with Lessee’s efforts to secure 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,of application,petitions, DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM ADD-1.03,Revised 06-10-2019 Page 2 of 4 permits,approvals and similar documents. This period of time shall be referred to as "Entitlement Period."The Entitlement Period shall begin on November 1,2019 and shall be extended for up to 12 (twelve)months. During the Entitlement Period,Lessee shall have the right to terminate the Lease with no further obligation giving the Lessor a 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.In the event of Termination,Lessor shall return Lease security deposit to Lessee and Lessee shall return the premises in an "as-is"condition in which Lessee received the premises. On the date the Entitlements are fully and completely obtained by the Lessee,the Entitlement Period thereafter immediately terminates (Entitlement Period Termination Date)and the Lease terms become fully effective and binding on the Parties.The first Lease payment due from Lessee in the amount of $6,000 shall be due and payable on the first day of the month following the Entitlement Period Termination Date. 52.Exclusivity: As Lessee will be spending considerable time and resources towards negotiating and finalizing the Entitlements for the Property,at all times during the term of this agreement ,neither Lessor nor any of its affiliates or their respective shareholders,members,partners,directors,officers,employees, agents or representatives shall,directly or indirectly solicit or entertain any offers from,exchange information with or furnish information to,or in any manner initiate,encourage,discuss,consider, negotiate,accept,agree to or consummate any proposal by any other person,in each case relating to Entitlements for the Property and any other units located at 6929 N Willow Ave Fresno,CA 93710 for any party other Lessee;provided,however,that in the event that Lessee no longer wishes to pursue the Entitlements,Lessee shall be notify Lessor thereof in writing,in which event the Exclusivity Period shall thereupon end. 53.Governmental Action: Lessor shall have the right,upon Lessor’s sole election,upon the earlier of (a)ten (10)business days prior written notice to Lessee,or (b)the effective date of any court order,to terminate this Lease in the event of the seizure by any governmental authority seeking forfeiture of the Premises or the building housing the Premises,whether or not the court proceeding has actually commenced. If any California state or local governmental entity or agency having jurisdiction disallows Lessee's then-current use of the Premises (e.g.,by changing applicable zoning or other land use classifications, by prohibiting Lessee's then-current use of the Premises,or by revoking any 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 or threatens civil action (including forfeiture of property,including the Premises or any portion thereof or interest therein)against Lessor or Lessee or any of the principals of either),then either party may terminate the Lease immediately by delivering written notice to the other party. DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM ADD-1.03,Revised 06-10-2019 Page 3 of 4 In the event that Lessor exercises its termination right under this paragraph prior to the time there has been a final,not appealable order entered against Lessor or adversely effecting the Premises with respect to the matter giving right to such termination right,Lessee shall have the option to undertake, at Lessee’s sole expense,the defense of the threatened or pending legal or administrative action against Lessor or the Premises that gave rise to Lessor’s exercise of its termination rights.So long as Lessee is maintaining such defense,the Lease shall remain in force until Lessee either ceases to maintain such defense or the matter is finally resolved by a court order or binding settlement.If Lessee is successful in resolving the matter in favor of Lessor and/or the Premises,then no termination shall occur.If Lessee is unsuccessful and a final non-appealable order is entered against Lessor,Lessor may effect such termination at that time.Lessor shall reasonably cooperate,at Lessee’s expense,in any defense maintained by Lessee under this paragraph.In no event shall Lessee have the right to settle any such matter without Lessor’s written consent,unless such settlement imposes no obligations on Lessor or the Premises other than the payment of money,all of which shall be paid by Lessee. It is the intent of the parties that the termination rights set forth in this Paragraph are only exercisable with respect to a material 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.As such,neither Lessee nor Lessor shall have the right to exercise termination rights under this paragraph if the issue giving rise to the applicable termination right was caused by the willful and knowing violation of any 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 or,if enacted after the commencement date,is possible for such party to comply with using commercially reasonable efforts. 54.Acknowledgement: The Parties hereby acknowledge that they are aware of and fully understand commercial cannabis activity is technically unlawful under federal law.In the event of arrest,seizure,or a prosecution action pursuant to federal law associated with the Parties'described herein,the Lessee hereby agrees to indemnify Lessor from any attorney's fees associated with defending such actions.The Parties also hereby agree to waive illegality as a defense to any contract enforcement action. 55.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 5%on an annual basis,commencing year 6.Option rent for second term of five (5)years shall be re-set at market rent for a shell space Cannabis Dispensary at this location (not considering tenant improvements paid for by Lessee),not to be less than the rate paid by Lessee in Year 10 of the Lease .See Paragraph 58. 56.Assignment and Subletting: Lessor understands and acknowledges that soon after execution of the Lease,Lessee will form an entity,likely in the form of a limited liability company (the “Operating Entity”),to apply for the Entitlements and to operate the cannabis dispensary if the Entitlements are obtained.Lessor agrees that Lessee shall have the unrestricted right to transfer the Lease to the Operating Entity,provided DocuSign Envelope ID: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM ADD-1.03,Revised 06-10-2019 Page 4 of 4 the Operating Entity is owned and controlled by Lessee and the Guarantors.No approval of the Lease transfer to the Operating Entity is otherwise required by Lessor.Proof of such ownership and control by Lessee and the Guarantors must be provided to Lessor prior to assignment of Lease to the Operating Entity. Paragraph 12.1.is hereby amended to include the following as subparagraph (h): "(h)Notwithstanding the foregoing or anything to the contrary in this Lease,and provided Lessee is not in default beyond any applicable grace or cure periods under this Lease,it is agreed that Lessee shall have the unrestricted right,without Lessor’s consent,to transfer or assign this Lease or to sublet all or any portion of the Premises,if such transfer is one of the following transfers (each,a "Permitted Transfer"):(i)transfer to an entity which purchases or otherwise acquires all or substantially all of the operating assets or stock of Lessee;(ii)transfer in connection with the non-bankruptcy reorganization or merger of the corporate entity constituting the Lessee under this Lease;(iii)transfer to an entity directly or indirectly having a controlling interest in Lessee,including transfers through merger,consolidation or reincorporation;(iv)transfer of shares among the shareholders of Lessee on the effective date of this Lease,or their family members;(v)transfer in connection with any venture capital provided to Lessee in the form of a private placement in compliance with all state and federal securities laws,or an initial public offering of shares of Lessee;or (vi)Lessee may assign its entire interest in the Lease and any remaining renewal options to a tenant with comparable financial strength and credit worthiness with the consent of Lessor,not to be unreasonably withheld,delayed or conditioned.In the event of such assignment,Lessee will be released from all further obligations under the Lease. Any assignment or subletting pursuant to the above shall be subject to the following conditions:(i) Any such assignment or sublease shall be subject to all of the terms,covenants and conditions of this Lease and shall be documented on a form reasonably acceptable to Lessor;(ii)Lessee shall provide Lessor with written notice of any such Permitted Transfer within ten (10)days after the effective date thereof,which will include supporting documentation. 57.Insurance: Lessee agrees to indemnify for any increase in insurance premium due to the Lessee's use as a Cannabis Dispensary.Such indemnity shall be calculated based upon the difference in price between the current premises liability insurance policy and the cost of a comparable policy that covers the Cannabis Use. In the event of any conflict between the provisions of this Addendum and the printed provisions of the Lease,this Addendum shall control. 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: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM OE-6.02,Revised 06-10-2019 Page 1 of 2 OPTION(S)TO EXTEND STANDARD LEASE ADDENDUM Dated:October 31,2019 By and Between Lessor:R.S.LLC Lessee:Ale Yarok &/Or Assignee Property Address:6929 N Willow Ave Suite 103 Fresno,CA 93710 (street address,city,state,zip) Paragraph:58 A.OPTION(S)TO EXTEND: Lessor hereby grants to Lessee the opƟon to extend the term of this Lease for Two (2)addiƟonal Sixty (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: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM OE-6.02,Revised 06-10-2019 Page 2 of 2 check one)of their choice to act as an arbitrator (Note:the parƟes may not select either of the Brokers that was involved in negoƟaƟng the Lease).The two arbitrators so appointed shall immediately select a third mutually acceptable Consultant to act as a third arbitrator. (ii)The 3 arbitrators shall within 30 days of the appointment of the third arbitrator reach a decision as to what the actual MRV for the Premises is,and whether Lessor's or Lessee's submiƩed MRV is the closest thereto.The decision of a majority of the arbitrators shall be binding on the ParƟes.The submiƩed MRV which is determined to be the closest to the actual MRV shall thereaŌer be used by the ParƟes. (iii)If either of the ParƟes fails to appoint an arbitrator within the specified 15 days,the arbitrator Ɵmely appointed by one of them shall reach a decision on his or her own,and said decision shall be binding on the ParƟes. (iv)The enƟre cost of such arbitraƟon shall be paid by the party whose submiƩed MRV is not selected,ie.the one that is NOT the closest to the actual MRV. 2)When determining MRV,the Lessor,Lessee and Consultants shall consider the terms of comparable market transacƟons which shall include,but not limited to,rent,rental adjustments,abated rent,lease term and financial condiƟon of tenants. 3)Notwithstanding the foregoing,the new Base Rent shall not be less than the rent payable for the month immediately preceding the rent adjustment. b.Upon the establishment of each New Market Rental Value: 1)the new MRV will become the new "Base Rent"for the purpose of calculaƟng any further Adjustments,and 2)the first month of each Market Rental Value term shall become the new "Base Month"for the purpose of calculaƟng any further Adjustments. III.Fixed Rental Adjustment(s)(FRA) The Base Rent shall be increased to the following amounts on the dates set forth below: On (Fill in FRA Adjustment Date(s)):The New Base Rent shall be: Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 TBD (No Less Than Year 12 TBD (No Less Than Year 13 TBD (No Less Than Year 14 TBD (No Less Than Year 15 TBD (No Less Than IV.IniƟal Term Adjustments The formula used to calculate adjustments to the Base Rate during the original Term of the Lease shall conƟnue to be used during the extended term. B.NOTICE: Unless specified otherwise herein,noƟce of any rental adjustments,other than Fixed Rental Adjustments,shall be made as specified in paragraph 23 of the Lease. C.BROKER'S FEE: The Brokers shall be paid a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 of the Lease or if applicable,paragraph 9 of the Sublease. 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: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM GR-3.22,Revised 06-10-2019 Page 1 of 2 GUARANTY OF LEASE WHEREAS,R.S.LLC ,hereinaŌer "Lessor",and Ale Yarok &/Or Assignee ,hereinaŌer "Lessee",are about to execute a document enƟtled "Lease"dated October 31,2019 concerning the premises commonly known as (street address,city,state,zip)6929 N Willow Ave Suite 103 Fresno,CA 93710 wherein Lessor will lease the premises to Lessee,and WHEREAS,Aaron Herzberg and Second Guarantor TBD 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: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:11/18/2019 11:04 AM 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 Aaron Herzberg and Second Guarantor TBD Executed At: On: By: Name Printed: Title: Address: By: Name Printed: 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: 35E9A9C4-2EAD-4F20-A17E-D69D459D0A71 Aaron Herzberg ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:10/5/2020 10:22 AM GR-3.22,Revised 06-10-2019 Page 1 of 2 Exhibit "A" GUARANTY OF LEASE WHEREAS,R.S.LLC ,heƌeinaŌeƌ "Lessor",and Ale Yarok &/Or Assignee ,heƌeinaŌeƌ "Lessee",are about to execute a document enƟƚled "Lease"dated October 31,2019 concerning the premises commonly known as (street address,city,state,zip)6929 N Willow Ave Suite 103 Fresno,CA 93710 wherein Lessor will lease the premises to Lessee,and WHEREAS,SGI Retail,LLC heƌeinaŌeƌ "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 conƐideƌaƟon of the edžecƵƟon of said Lease by Lessor and as a material inducement to Lessor to execute said Lease,Guarantors hereby jointly,severally,ƵncondiƟonallLJ 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,condiƟonƐ and covenants of said Lease to be kept and performed by Lessee. It is ƐƉecificallLJ 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 modified͘ This Guaranty shall not be released,modified or affecƚed 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 specificallLJ agreed that the guarantee of the undersigned is a conƟnƵing 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 fiƌƐƚ 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,presenƚaƟon and protest,(c)all right to assert or plead any statute of limiƚaƟonƐ ƌelaƟng 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 enƟƚLJ 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 ƐƵbƌogaƟon that Guarantors may have against Lessee. Guarantors do hereby subordinate all edžiƐƟng or future indebtedness of Lessee to Guarantors to the obligaƟonƐ 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 obligaƟonƐ hereunder. The obligaƟonƐ 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 conƐƟƚƵƚe 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 ƉƌofiƚƐ therefrom,are subject to any mortgage or deed of trust or assignment for security,no acƋƵiƐiƟon by Guarantors of the Lessor's interest shall affecƚ the conƟnƵing obligaƟon of Guarantors under this Guaranty which shall nevertheless conƟnƵe in full force and effecƚ for the benefiƚ of the mortgagee,beneficiaƌLJ͕trustee 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 fiƌƐƚ be credited to the ƉoƌƟon 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 obligaƟonƐ except in ǁƌiƟng signed by the Lessor. Any liƟgaƟon concerning this Guaranty shall be iniƟaƚed in a state court of competent jƵƌiƐdicƟon in the county in which the leased premises are located and the Guarantors consent to the jƵƌiƐdicƟon 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 conflicƚƐ of law the ƉaƌƟeƐ 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 aƩoƌneLJΖƐ fee.The aƩoƌneLJΖƐ fee award shall not be computed in accordance with any court fee schedule,but shall be such as to full reimburse all aƩoƌneLJƐΖ fees reasonably incurred. If any Guarantor is a coƌƉoƌaƟon͕partnership,or limited liability company,each individual execƵƟng this Guaranty on said enƟƚLJΖƐ behalf represents and warrants that he or she is duly authorized to execute this Guaranty on behalf of such enƟƚLJ͘Signatures to this Guaranty accomplished by means of electronic DocuSign Envelope ID: B292011D-0F02-498C-A5D1-4516CDEE7FEE ________________ ________________ INITIALS INITIALS ©2017 AIR CRE.All Rights Reserved.Last Edited:10/5/2020 10:22 AM GR-3.22,Revised 06-10-2019 Page 2 of 2 signature or similar technology shall be legal and binding. If this Form has been filled in,it has been prepared for submission to your aƩorneLJ for his approval.No repreƐenƚaƟon or recommendaƟon is made BY AIR CRE, the real estate broker or its agents or employees as to the legal ƐƵfficiencLJ͕legal effecƚ͕or tax consequences of this Form or the ƚranƐacƟon relaƟng thereto. GUARANTORS SGI Retail,LLC Executed At: On: By: Name Printed: Title: Address: By: Name Printed: Title: Address: AIR CRE *hƩpƐ͗//www.aircre.com *213-687-8777 *contracts@aircre.com NOTICE:No part of these works may be reproduced in any form without permission in ǁriƟng͘ DocuSign Envelope ID: B292011D-0F02-498C-A5D1-4516CDEE7FEE Brian Mitchell Vivid Salon, Inc. P. O. Box 323 Prather, CA 93651 Page 1 of 4 23 September 2020 RE: Proposed Amended Lease 6929 N. Willow Suite 104 Fresno, CA 93710 To whom it may concern, Per telephone conference with Patrick Monreal, a “private party” is interested in the above-mentioned location. The following is a list of proposed amended lease terms: • Monthly base rent for the term of four (4) months shall be paid by the interested party commencing on 01 October 2020 and concluding on 31 January 2 021. • Monthly Common Area Maintenance fees for the term of four (4) months shall be paid by the interested party commencing on 01 October 2020 and concluding on 31 January 2021. • Vivid Salon, Inc. will not be held responsible if the monthly rent is late and or if returned check fees are incurred, in addition, all fees will not be the responsibility of Vivid Salon. • Vivid Salon, Inc. will not be held responsible if the monthly Common Area Maintenance fees are late and or returned check fees are incurred, in addition, all fees will not be the responsibility of Vivid Salon. • Vivid Salon, Inc. shall vacate the location on or before 31 January 2021. R. S. LLC mutually agrees to terminate the lease with Vivid Salon on said date. Full deposit shall be returned to Vivid Salon, Inc. • The current tenant (Vivid Salon) shall be allowed to conduct regular day to day business operations at the above-mentioned location during the four (4) month period without any interference by or from the party. • All regular utilities shall be paid by current tenant (Vivid Salon) during the four (4) month period. Vivid Salon, Inc. P. O. Box 323 Prather, CA 93651 Page 2 of 4 • Vivid Salon shall be allowed to remove all equipment, furniture, cabinets, shampoo bowls, light fixtures (installed by Vivid Salon), mirrors, washing machine, dryer, personal items, and any additional items used to conduct normal day to day business operations. • The party shall in good faith/good will compensate Vivid Salon, Inc. an amount of exit fee (the equivalent of monthly rent for 2 months). • In the event, the party is unable to occupy the above-mentioned location on or by 31 January 2021, Vivid Salon shall be allowed to: A. Modify the current lease agreement with the following terms: 1. R. S., LLC shall in good faith and mutual agreement, terminate the lease with Vivid Salon, Inc. on 31 January 2021 without any legal recourse. Full deposit shall be returned to Vivid Salon, or 2. Vivid Salon to remain in the location, the monthly base lease amount will remain for the remaining term of the amended lease, and the lease will terminate on 30 September 2021. Full deposit shall be returned to Vivid Salon. Vivid Salon, Inc. P. O. Box 323 Prather, CA 93651 Page 3 of 4 • Monthly base rent for the term of six (6) months shall be paid by the interested party commencing on 01 October 2020 and concluding on 31 March 202 1. The term shall be extended if the party needs additional time with a 30 – day notice • Vivid Salon, Inc. will not be held responsible if the monthly rent is late and or if returned check fees are incurred, in addition, all fees will not be the responsibility of Vivid Salon. • Monthly Common Area Maintenance fees for the term of six (6) months shall be paid by the interested party commencing on 01 October 2020 and concluding on 31 March 2021. The term shall be extended if the party needs additional time with a 30 – day notice. • Vivid Salon, Inc. will not be held responsible if the monthly Common Area Maintenance fees are late and or returned check fees are incurred , in addition, all fees will not be the responsibility of Vivid Salon • The current tenant (Vivid Salon) shall be allowed to conduct regular day to day business operations at the above-mentioned location during the six (6) month period without any interference by or from the party. • All regular utilities shall be paid by current tenant (Vivid Salon) during this six (6) month period. • During the six (6) month period, t he interested party must give a 60-day written notice of intent to occupy the above-mentioned location. • Vivid Salon shall be allowed to remove all equipment, furniture, cabinets, shampoo bowls, light fixtures (installed by Vivid Salon), mirrors, washing machine, dryer, personal items, and any additional items used to conduct normal day to day business operations. • In the event, the party intends to occupy the above-mentioned location; the current tenant’s (Vivid Salon, Inc.) lease agreement with R. S., LLC will be null and void, full deposit shall be returned to Vivid Salon, Inc. • The party shall in good faith/good will compensate Vivid Salon, Inc. an amount of exit fee (the equivalent of monthly rent for 2 months). Vivid Salon, Inc. P. O. Box 323 Prather, CA 93651 Page 4 of 4 • In the event, the party is unable to occupy the above-mentioned location, Vivid Salon shall be allowed to: A. Modify the current lease agreement with the following terms : 1. R. S., LLC shall in good faith and mutual agreement, terminate the lease with Vivid Salon, Inc. on 31 March 2021 without any legal recourse. Full deposit shall be returned to Vivid Salon, or 2. Vivid Salon to remain in the location, the monthly base lease amount will remain for the remaining term of the lease, and the lease will terminate on 30 September 2021. Full deposit shall be returned to Vivid Salon. California Secretary of State Electronic Certified Copy I, ALEX PADILLA, Secretary of State of the State of California, hereby certify that the attached transcript of 1 page is a full, true and correct copy of the original record in the custody of the California Secretary of State’s office. IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California on this day of ALEX PADILLA Secretary of State Verification Number: Entity (File) Number: To verify the issuance of this Certificate, use the Verification Number above with the Secretary of State Electronic Verification Search available at bizfile.sos.ca.gov 8STBVC 202025510586 September 11, 2020 California Secretary of State Electronic Filing LLC Registration – Articles of Organization Entity Name: Entity (File) Number: File Date: Entity Type: Domestic LLC Jurisdiction: California Detailed Filing Information 1.Entity Name: 2.Business Addresses: a.Initial Street Address of Designated Office in California: b.Initial Mailing Address: 3.Agent for Service of Process: 4.Management Structure: 5.Purpose Statement:The purpose of the limited liability company is to engage in any lawful act or activity for which a limited liability company may be organized under the California Revised Uniform Limited Liability Company Act. Electronic Signature: The organizer affirms the information contained herein is true and correct. Organizer: Certificate Verification Number:Use bizfile.sos.ca.gov to verify the certified copy.Use bizfile.sos.ca.gov for online filings, searches, business records, and resources. Authentic Fresno Willow LLC Authentic Fresno Willow LLC 8STBVC202025510586 09/09/2020 728 E Commercial St, 2nd Floor Los Angeles, California 90012 United States 728 E Commercial St, 2nd Floor Los Angeles, California 90012 United States LEGALINC REGISTERED AGENTS, INC. (C4249296) One Manager Eric Lightman INDEMNIFICATION AND HOLD HARMLESS AGREEMENT FOR COMMERCIAL CANNABIS BUSINESS PERMIT APPLICATION To the fullest extent permitted by law, the City of Fresno (City) sha ll not assume any li abil ity whatsoever with respect to having issued a commerc ial cannabis business permit pursuant to Fresno Municipal Code Section . 9-3333 or otherwise approv ing the operation of any commercial cannabis business or cannabis retail business. In consideration for the subm itta l of an app lic ation for a commercial cannabis business permit app lic ation and/or issuance of a cannabis business permit, and to the furthest extent allowed by law, Applicant does hereby agree to indemnify, hold harmless and defend the City and each of its officers, officials, employees, agents and volunteers from any and all lo ss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or strict li abi lity , inclu d ing but not limi ted to personal injury, death at any time and property damage) in curred by C ity , Applicant or any other person, and from any and all claims, demands and actions in law or equity (including reasonable attorney's fees and litigation expenses), arising or all eged to have arisen directly or indirectly out of the issuance of a cannabis business permit. Applicant's obligations under the preceding sentence sha ll not apply to any loss, liability, fines, penalt ies, forfeitures, costs or damages caused sole ly by the gross negligence, or caused by the willful m isconduct, of City or any of its officers, officials, employees, agents or volunteers. Applicant must, at the time of permit issuance, maintain insurance at co verage limi ts and with conditions thereon determined necessary and appropriate from time to time by the City Manager. Applicant sha ll conduct all defense at his/her/its sole cost. The fact that in surance is obtained by Applicant shall not be deemed to release or diminish the li ability of Applicant, including, without limitation, li abi lity assumed under this Agreement. The duty to ind emn ify sha ll app ly to a ll claims regardless of whether any in surance policies are app li cab le. The duty to defend hereunder is wholly independent of and separate from the duty to indemnify and such duty to defend exists regardless of any ultimate liability of Applicant. The policy limits do not act as a limitation upon the amount of defense and/or indemnification to be provided by Applicant. Approval or purchase of any insurance contracts or policies sha ll in no way relieve from li abi lity nor limit the li ab ili ty of Applicant, its officials, officers, employees, agents, volunteers or invitees . City sha ll be reimbursed for all costs and expenses, including but not limited to legal fees and costs and court costs, which the city may be required to pay as a result of any lega l challenge related to the city's approval of the applicant's commercial cannabis business permit. The City may, at its so le discretion, participate at its own expense in the defense of any such action, but such participation sha ll not relieve any of the obligations imposed hereunder. This Ind emnification and Hold Harmless Agreement sha ll survive the expiration or termination of the Application and/or Permit. The undersigned acknowledges that he/she (i) has read and fully understands the content of this Indemnification and Hold Harmless Agreement; (ii) is aware that this is a contract between the City and Applicant; (iii) has had the opportunity to consult with his/her attorney, in his/her discretion; (iv) is fully aware of the legal consequences of signing this document; and (v) is the Applicant or his/her/its authorized signatory. Signed on this / 2. day of No"rm 'b-er 2020 . Applicant Signature Brian Mitchell, Authentic Fresno Willow LLC Print Name and Company Name 728 E. Commercial Street LA, CA 90012 Address 415-336-037 4 Telephone Number City Emp loyee S ignature Print Name Title Telephone Number ~ SHRYNE GROUP I NC . Dear City of Fresno, As the parent entity of Authentic Fresno Willow LLC, Sluyne Group Inc. and Authentic Fresno Willow LLC will employ w ithin one year of receiving a commercial cannabis business permit, one supervisor and one employee who have completed a Cal-OSHA industly outreach course offered by a duly authorized training provider. Shryne Group Inc . on behalf of itself and Authentic Fresno Wi llo w LLC states under penalty of perjury that all infmmation contained in the application submitted by Authentic Fresno Willow LLC to the City of Fresno is true and correct. Sluyne Group Inc. By:)?---- Name: Brian Mitchell Its: CEO Authentic Fresno Willow LLC By: ;2Jr-- Name: Brian Mitchell Its: Co-CEO Page 1 of 1 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 19, 2020 Please reply to: Rob Holt (559) 621-8056 Brian Mitchell Shryne Group 728 E Commercial St Los Angeles, CA 90012 Dear Applicant: SUBJECT: ZONING INQUIRY NUMBER P20-04071 REQUESTING INFORMATION REGARDING CANNABIS RETAIL FOR PROPERTY LOCATED AT 6929 NORTH WILLOW AVENUE, SUITES 103 & 104 (APN 410-031-01) 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 CC, which is one of the allowable zone districts for cannabis retail businesses. Development standards of the CC zone district are available in Sections 15-1203, 15-1204, and 15-1205 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, 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. Zoning Inquiry P20-04071 6929 North Willow Avenue #103 & 104 Page 2 November 19, 2020 Although the subject property is located within 800 feet of a youth center, the existing multi-tenant retail building, located at 6929 North Willow Avenue, Suites 103 and 104 (located towards the center of the existing building at the northwest corner of the property) on 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 2 cannabis retail businesses may be located in any one Council District. If more than 14 are ever authorized by Council (more than 2 per Council District), they shall be dispersed evenly by Council District. The subject property is in Council District 6. There are currently no cannabis retail businesses located in Council District 6. 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 559-621-8056 or at Robert.Holt@fresno.gov. Cordially, Rob Holt, Planner III Development Services Division Planning and Development Department