EXHIBIT 10.2.1
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SUBLEASE AGREEMENT
This sublease agreement ("Sublease Agreement"), entered into this 1st day
of January, 2015 is made between 5110 RACE, LLC a Colorado limited liability
company ("Lessor" or "Sublandlord") and Monarch America, Inc. a Colorado
corporation ("Subtenant") for the period beginning January 1, 2015 and ending
March 31, 2019 (the "Sublease Term") for the premises located at 0000 X Xxxxxx
Xxxxx, Xxxxxx, Xxxxxxxx 00000 (the "Premises").
The parties agree:
Term and Rent. Subtenant shall take full lawful possession of the
Premises for the Sublease Term and shall pay as rent for the Sublease
Term to Lessor the total sum of One Million, Eight Hundred, Fifteen
Thousand, Six Hundred Dollars and no cents ($1,815,600.00) for the
term of the lease, monthly payments as defined below. The Premises is
approximately 26,700 Square feet. The calculation average results in a
cost of Sixteen Dollars ($16.00) per square foot, 26,700 square feet.
Sublease Term to Lessor the total sum of Twenty Thousand Dollars and
no cents ($20,000.00) per month rent abated, as monthly rent for the
Term, due directly to the Sublandlord on or before the first day of
each month, commencing January 1, 2015 and terminating on June 30,
2015.
Subtenant shall pay as rent for the Sublease Term to Lessor the total
sum of Fifty One Thousand, Two Hundred Dollars and no cents
($51,200.00) per month as monthly rent for the remainder of the
Sublease Term, due directly to the Sublandlord on or before the first
day of each month, commencing July 1, 2015 and terminating on December
31, 2015.
Subtenant shall pay as rent for the Sublease Term to Lessor the total
sum of Thirty Five Thousand, Six Hundred, and no cents ($35,600.00)
per month as monthly rent for the remainder of the Sublease Term, due
directly to the Sublandlord on or before the first day of each month,
commencing January 1, 2016 and terminating on March 31, 2019.
2. Contingencies. Landlord and Sublandlord, as tenant, entered into a Lease
Agreement dated as of January 1, 2015 (the "Master Lease"), concerning the real
property legally described located as 0000 X Xxxxxx Xxxxx, Xxxxxx Xxxxxxxx
00000, County of Denver (the "Demised Premises"). This Sublease Agreement shall
be contingent on the written consent of the Landlord and the full execution of
the attached Consent to Sublease Agreement.
3. Deposit. Subtenant shall be required to pay a security deposit of Sixty
Thousand Dollars and no cents ($60,000.00) on or before November 1, 2015.
4. Original Lease. This Sublease Agreement incorporates and is subject to the
Master Lease, a copy of which has been provided to the Subtenant, and which is
incorporated as if it were set out in this Sublease Agreement. Subtenant further
agrees that Subtenant shall be bound by all of the terms and conditions of the
Master Lease, except for the rent and deposit provided in the Sublease
Agreement.
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5. Additional Agreements-Triple Net Lease. ($2,500.00 Est.)
a. Utilities. Subtenant shall be responsible for paying all utilities for
the Premise. Utilities, for purposes of this Sublease Agreement
include, but are not limited to: power; electricity; water; trash;
sewage; property insurance as required in the Master Lease; business
insurance; telephone; and alarm expenses.
b. Taxes. Subtenant shall be responsible for paying all taxes incurred by
Sublandlord due to the terms of the Lease.
c. Regulatory Approval. Subtenant shall be responsible for obtaining and
maintaining all applicable state and local licenses and permits and
shall be responsible for all costs associated with complying with the
Colorado Medical Marijuana Code or the Colorado Retail Marijuana Code
and any rules promulgated pursuant thereto (collectively the "Code").
6. Marijuana Use: Notwithstanding anything contained in the Master Lease or
Sublease Agreement to the contrary, the Sublandlord acknowledges, agrees and
understands that the Subtenant is licensed applicant to operate a marijuana
business pursuant to the Code and is currently permitted to operate, entitled to
possess, use, cultivate, distribute, transport, sell, and/or acquire marijuana
under the Code. Subtenant shall maintain appropriate licensing as required by
applicable Colorado law in good standing and at all times remain within the
limits allowed by applicable law with regard to the possession, cultivation,
distribution, acquisition, transportation, sale or use of marijuana. Any
violation of any statute or rule under any applicable Colorado law regarding
marijuana by the Subtenant may be considered a material breach of the Sublease
Agreement and may subject the Subtenant to all rights and remedies of the
Sublandlord in the event of breach.
7. Duration of the Sublease: This Sublease Agreement shall be binding on the
parties for the Sublease Term unless early terminated pursuant to this Sublease
Agreement. If at any point the Master Lease converts to a month to month lease,
this Sublease Agreement shall continue in effect for that extended period of
time until such time as the parties end their relationship.
8. Events of Default. Each of the following events shall be an event of default
("Event of Default") by Subtenant under this Sublease Agreement:
a. Subtenant shall fail to abide by any of the terms of this Sublease
Agreement and/or Master Lease.
b. Subtenant loses its licenses to operate a marijuana business at the
premise due to no fault of Sublandlord.
c. The Subtenant fails to pay the Rent to the Sublandlord or any amount
of it when due or within any grace period, if any.
d. The Subtenant becomes insolvent, commits an act of bankruptcy, becomes
bankrupt, takes the benefit of any legislation that may be in force
for bankrupt or insolvent debtors, becomes involved in a voluntary or
involuntary winding up, dissolution or liquidation proceeding, or if a
receiver will be appointed for the affairs of the Subtenant.
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e. The Subtenant abandons the Premises or any part of the Premises.
f. The Subtenant uses the Subleased Premises for any unpermitted or
illegal purposes.
g. The Premises, or any part of the Premises is completely or partially
damaged by fire or other casualty that is due to the Subtenant's
negligence, willful act, or that of the Subtenant's employee, family,
agent, or guest.
h. Any other event of default provided in the Master Lease.
9. Sublandlord's Remedies.
a. Upon each occurrence of an Event of Default and so long as such Event
of Default is not cured within seven (7) days written notice,
Sublandlord may at any time thereafter at its election: terminate this
Sublease Agreement or Subtenant's right of possession, (but Subtenant
shall remain liable as hereinafter provided) and/or pursue any other
remedies at law or in equity. Upon the termination of this Sublease
Agreement or termination of Subtenant's right of possession, it shall
be lawful for Sublandlord, without formal demand or notice of any
kind, to re-enter the Premises by summary dispossession proceedings or
any other action or proceeding authorized by law and to remove
Subtenant and all persons and property therefrom. If Sublandlord
re-enters the Premises, Sublandlord shall have the right to keep in
place and use, or remove and store, all of the furniture, fixtures and
equipment at the Premises.
b. If Sublandlord terminates this Sublease Agreement, Sublandlord may
recover from Subtenant the sum of: all rent and all other amounts
accrued hereunder to the date of such termination; the cost of
reletting the whole or any part of the Premises, including without
limitation costs of removing and storing Subtenant's or any other
occupant's property, repairing or otherwise putting the Premises into
the condition in which the Premises was received by Subtenant,
ordinary wear and tear excepted, as acceptable to a new Subtenant or
Subtenants of the same type or for the same use as Subtenant, and all
reasonable expenses incurred by Sublandlord in pursuing its remedies,
including reasonable attorneys' fees and court costs; and the excess
of the then present value of the rent and other amounts payable by
Subtenant under this Sublease Agreement as would otherwise have been
required to be paid Subtenant to Sublandlord during the period
following the termination of this Sublease Agreement measured from the
date of such termination to the expiration date stated in this
Sublease Agreement, over the present value of any net amounts which
Subtenant establishes Sublandlord can reasonably expect to recover by
reletting the Premises for such period, taking into consideration the
availability of acceptable subtenants and other market conditions
affecting leasing. Such present values shall be calculated at a
discount rate equal to the ninety (90) day U.S. Treasury xxxx rate at
the date of such termination.
c. If Sublandlord terminates Subtenant's right of possession (but not
this Sublease Agreement), Sublandlord shall use its best
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efforts to relet the Premises for the account of Subtenant for such
rent and upon such terms as shall be satisfactory to Sublandlord
without thereby releasing Subtenant from any liability hereunder and
without demand or notice of any kind to Subtenant.
d. Exercise by Sublandlord of any one or more remedies hereunder granted
or otherwise available shall not be deemed to be an acceptance of
surrender of the Premises and/or a termination of this Sublease
Agreement by Sublandlord, whether by agreement or by operation of law,
it being understood that such surrender and/or termination can be
effected only by the written agreement of Sublandlord and Subtenant.
10. Subtenant's Remedies/Limitation of Liability. Subtenant shall not be in
default hereunder and Subtenant shall not have any remedy or cause of action
unless Sublandlord fails to perform any of its obligations hereunder within ten
(10) days after written notice from Subtenant specifying such failure (unless
such performance will, due to the nature of the obligation, require a period of
time in excess of ten (10) days, then after such period of time as is reasonably
necessary). All obligations of Sublandlord hereunder shall be construed as
covenants, not conditions; and, except as may be otherwise expressly provided in
this Sublease Agreement, Subtenant may not terminate this Sublease Agreement for
breach of Sublandlord's obligations hereunder. All obligations of Sublandlord
under this Sublease Agreement will be binding upon Sublandlord only during the
period of its ownership or leasehold of the Premises and not thereafter.
11. Indemnity and Hold Harmless. Notwithstanding anything contained in the
Master Lease or Sublease Agreement to the contrary, Subtenant, for themselves,
their personal representatives, heirs, successors, legal representatives,
assigns, invitees and guests, hereby agree to indemnify and hold harmless
Sublandlord from any loss or liability, damage, or costs, and discharge
Sublandlord for any and all loss or damage and any claims or demands therefore
including, but not limited to, attorneys' fees, that Sublandlord may incur in
any suit, demand, legal action, or claim of any nature made by any government
agency.
12. Sole Agreement: Notwithstanding anything contained in the Master Lease or
Sublease Agreement to the contrary, the parties agree that this Sublease
Agreement contain the entire agreement between the parties related to the
leasing of the Premise. This Sublease Agreement cannot be modified or amended in
any way except through a written amendment signed by the parties hereto. No oral
agreements are binding unless reduced to writing.
13. Governing Law/Prevailing Party: This Sublease Agreement shall be governed by
the laws of the state of Colorado. The prevailing party in any litigation
arising from this agreement shall be awarded attorneys' fees paid by the
non-prevailing party.
14. Successors and Assigns. The rights and obligations of either party shall not
be transferable without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed. All obligations of the
parties herein shall be binding upon their respective successors or assigns.
Notwithstanding, this Sublease Agreement may be assigned, in whole or in part,
to a wholly owned subsidiary of Sublandlord.
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15. Joint and Several Liability: To the extent that there is more than one
Subtenant or this Sublease Agreement assigned, all Subtenants agree that each is
jointly and severally liable for the other Subtenant's responsibilities under
this Sublease Agreement.
16. Waiver. No waiver or breach of any term or condition of this Sublease
Agreement shall operate as a waiver of any other breach of such term or
condition, or of any other term or condition, nor shall any failure to enforce
any provisions hereunder operate as a waiver of such provision or any other
provision hereunder.
17. Severability. In case any one or more of the provisions contained in this
Sublease Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, except in those instances where removal or
elimination of such invalid, illegal, or unenforceable provision or provisions
would result in a failure of consideration under this Sublease Agreement, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Sublease Agreement shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained herein.
18. Notices. All notices hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally, one day after delivery to a
nationally recognized overnight delivery service, charges prepaid, three days
after being sent by registered or certified mail, postage prepaid, to the
parties at their respective addresses set forth above or to such other address
as any party shall have specified by notice to the other in accordance with this
Section.
19. Attorney's Fees. Should either party employ an attorney to enforce any
provision of this Sublease Agreement or seek damages for breach of this Sublease
Agreement, the losing party shall pay all reasonable attorney's fees and
expenses and court costs incurred by the other.
IN WITNESS WHEREOF, the parties hereto set their hands the day and year as
hereinafter set forth by their duty authorized representatives.
Sublandlord:;
5110 Race, LLC
/s/ Xxxxx Xxxxxxxx
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By: Xxxxx Xxxxxxxx
Its: Manager
Subtenant:
Monarch America, Inc.
/s/ Xxxx Xxxxx
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By: Xxxx Xxxxx
Its: Chief Executive Officer
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