Form 1-A Issuer Information UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 1-A
REGULATION A OFFERING STATEMENT
UNDER THE SECURITIES ACT OF 1933
OMB APPROVAL

FORM 1-A

OMB Number: 3235-0286


Estimated average burden hours per response: 608.0

1-A: Filer Information

Issuer CIK
0001778651
Issuer CCC
XXXXXXXX
DOS File Number
Offering File Number
Is this a LIVE or TEST Filing? LIVE TEST
Would you like a Return Copy?
Notify via Filing Website only?
Since Last Filing?

Submission Contact Information

Name
Phone
E-Mail Address

1-A: Item 1. Issuer Information

Issuer Infomation

Exact name of issuer as specified in the issuer's charter
JUVA LIFE INC./Canada
Jurisdiction of Incorporation / Organization
BRITISH COLUMBIA, CANADA
Year of Incorporation
2019
CIK
0001778651
Primary Standard Industrial Classification Code
MEDICINAL CHEMICALS & BOTANICAL PRODUCTS
I.R.S. Employer Identification Number
00-0000000
Total number of full-time employees
8
Total number of part-time employees
0

Contact Infomation

Address of Principal Executive Offices

Address 1
1500 - 885 West Georgia Street
Address 2
City
Vancouver
State/Country
BRITISH COLUMBIA, CANADA
Mailing Zip/ Postal Code
V6C 3E8
Phone
833-333-5882

Provide the following information for the person the Securities and Exchange Commission's staff should call in connection with any pre-qualification review of the offering statement.

Name
Rebecca DiStefano
Address 1
Address 2
City
State/Country
Mailing Zip/ Postal Code
Phone

Provide up to two e-mail addresses to which the Securities and Exchange Commission's staff may send any comment letters relating to the offering statement. After qualification of the offering statement, such e-mail addresses are not required to remain active.

Financial Statements

Industry Group (select one) Banking Insurance Other

Use the financial statements for the most recent period contained in this offering statement to provide the following information about the issuer. The following table does not include all of the line items from the financial statements. Long Term Debt would include notes payable, bonds, mortgages, and similar obligations. To determine "Total Revenues" for all companies selecting "Other" for their industry group, refer to Article 5-03(b)(1) of Regulation S-X. For companies selecting "Insurance", refer to Article 7-04 of Regulation S-X for calculation of "Total Revenues" and paragraphs 5 and 7 of Article 7-04 for "Costs and Expenses Applicable to Revenues".

Balance Sheet Information

Cash and Cash Equivalents
$ 1.00
Investment Securities
$ 0.00
Total Investments
$
Accounts and Notes Receivable
$ 0.00
Loans
$
Property, Plant and Equipment (PP&E):
$ 0.00
Property and Equipment
$
Total Assets
$ 1.00
Accounts Payable and Accrued Liabilities
$ 0.00
Policy Liabilities and Accruals
$
Deposits
$
Long Term Debt
$ 0.00
Total Liabilities
$ 0.00
Total Stockholders' Equity
$ 1.00
Total Liabilities and Equity
$ 1.00

Statement of Comprehensive Income Information

Total Revenues
$ 0.00
Total Interest Income
$
Costs and Expenses Applicable to Revenues
$ 0.00
Total Interest Expenses
$
Depreciation and Amortization
$ 0.00
Net Income
$ 0.00
Earnings Per Share - Basic
$ 0.00
Earnings Per Share - Diluted
$ 0.00
Name of Auditor (if any)
Davidson & Company LLP

Outstanding Securities

Common Equity

Name of Class (if any) Common Equity
Common
Common Equity Units Outstanding
86046843
Common Equity CUSIP (if any):
n/a
Common Equity Units Name of Trading Center or Quotation Medium (if any)
n/a

Preferred Equity

Preferred Equity Name of Class (if any)
n/a
Preferred Equity Units Outstanding
0
Preferred Equity CUSIP (if any)
n/a
Preferred Equity Name of Trading Center or Quotation Medium (if any)
n/a

Debt Securities

Debt Securities Name of Class (if any)
n/a
Debt Securities Units Outstanding
0
Debt Securities CUSIP (if any):
n/a
Debt Securities Name of Trading Center or Quotation Medium (if any)
n/a

1-A: Item 2. Issuer Eligibility

Issuer Eligibility

Check this box to certify that all of the following statements are true for the issuer(s)

1-A: Item 3. Application of Rule 262

Application Rule 262

Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.

Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.

1-A: Item 4. Summary Information Regarding the Offering and Other Current or Proposed Offerings

Summary Infomation

Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering Tier1 Tier2
Check the appropriate box to indicate whether the financial statements have been audited Unaudited Audited
Types of Securities Offered in this Offering Statement (select all that apply)
Equity (common or preferred stock)
Option, warrant or other right to acquire another security
Security to be acquired upon exercise of option, warrant or other right to acquire security
Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)? Yes No
Does the issuer intend this offering to last more than one year? Yes No
Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)? Yes No
Will the issuer be conducting a best efforts offering? Yes No
Has the issuer used solicitation of interest communications in connection with the proposed offering? Yes No
Does the proposed offering involve the resale of securities by affiliates of the issuer? Yes No
Number of securities offered
40000000
Number of securities of that class outstanding
86046843

The information called for by this item below may be omitted if undetermined at the time of filing or submission, except that if a price range has been included in the offering statement, the midpoint of that range must be used to respond. Please refer to Rule 251(a) for the definition of "aggregate offering price" or "aggregate sales" as used in this item. Please leave the field blank if undetermined at this time and include a zero if a particular item is not applicable to the offering.

Price per security
$ 0.5000
The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer
$ 20000000.00
The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders
$ 0.00
The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement
$ 0.00
The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement
$ 0.00
Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs)
$ 20000000.00

Anticipated fees in connection with this offering and names of service providers

Underwriters - Name of Service Provider
none
Underwriters - Fees
$ 0.00
Sales Commissions - Name of Service Provider
none
Sales Commissions - Fee
$ 0.00
Finders' Fees - Name of Service Provider
none
Finders' Fees - Fees
$ 0.00
Audit - Name of Service Provider
Davidson & Company LLP
Audit - Fees
$ 25000.00
Legal - Name of Service Provider
Greenburg Traurig and McMillan
Legal - Fees
$ 150000.00
Promoters - Name of Service Provider
none
Promoters - Fees
$ 0.00
Blue Sky Compliance - Name of Service Provider
Various states
Blue Sky Compliance - Fees
$ 25000.00
CRD Number of any broker or dealer listed:
Estimated net proceeds to the issuer
$ 19700000.00
Clarification of responses (if necessary)
Additional expenses not outlined above are estimated at $100,000

1-A: Item 5. Jurisdictions in Which Securities are to be Offered

Jurisdictions in Which Securities are to be Offered

Using the list below, select the jurisdictions in which the issuer intends to offer the securities

Selected States and Jurisdictions
ALABAMA
ALASKA
ARIZONA
ARKANSAS
CALIFORNIA
COLORADO
CONNECTICUT
DELAWARE
DISTRICT OF COLUMBIA
FLORIDA
GEORGIA
HAWAII
IDAHO
ILLINOIS
INDIANA
IOWA
KANSAS
KENTUCKY
LOUISIANA
MAINE
MARYLAND
MASSACHUSETTS
MICHIGAN
MINNESOTA
MISSISSIPPI
MISSOURI
MONTANA
NEBRASKA
NEVADA
NEW HAMPSHIRE
NEW JERSEY
NEW MEXICO
NEW YORK
NORTH CAROLINA
NORTH DAKOTA
OHIO
OKLAHOMA
OREGON
PENNSYLVANIA
PUERTO RICO
RHODE ISLAND
SOUTH CAROLINA
SOUTH DAKOTA
TENNESSEE
TEXAS
UTAH
VERMONT
VIRGINIA
WASHINGTON
WEST VIRGINIA
WISCONSIN
WYOMING
ALBERTA, CANADA
BRITISH COLUMBIA, CANADA
MANITOBA, CANADA
NEW BRUNSWICK, CANADA
NEWFOUNDLAND, CANADA
NOVA SCOTIA, CANADA
ONTARIO, CANADA
PRINCE EDWARD ISLAND, CANADA
QUEBEC, CANADA
SASKATCHEWAN, CANADA
YUKON, CANADA
CANADA (FEDERAL LEVEL)

Using the list below, select the jurisdictions in which the securities are to be offered by underwriters, dealers or sales persons or check the appropriate box

None
Same as the jurisdictions in which the issuer intends to offer the securities
Selected States and Jurisdictions

1-A: Item 6. Unregistered Securities Issued or Sold Within One Year

Unregistered Securities Issued or Sold Within One Year

None

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Juva Life, Inc. (California, USA)
(b)(1) Title of securities issued
Common Shares
(2) Total Amount of such securities issued
86046843
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
$5,142,294 USD
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Juva Life, Inc. (California, USA)
(b)(1) Title of securities issued
Common Share Purchase Warrants
(2) Total Amount of such securities issued
14281735
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
Included in consideration for common shares above
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Act

(e) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption
The Issuer relied on the exemptions from registration provided under Section 4(a)(2) and Regulation, Rule 506(b) for sales not involving any general solicitations and Regulation S for sales made to non-US persons.


PART II – INFORMATION REQUIRED IN OFFERING CIRCULAR
 
An Offering Statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission (the "SEC"). Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the Offering Statement filed with the SEC is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the Offering Statement in which such Final Offering Circular was filed may be obtained.
 
 
REGULATION A OFFERING CIRCULAR UNDER THE SECURITIES ACT OF 1933
 
PRELIMINARY OFFERING CIRCULAR JUNE 11, 2019, SUBJECT TO COMPLETION
 
 
 
JUVA LIFE INC.
 
40,000,000 Units
 

885 West Georgia Street, Suite 1500
Vancouver, BC V6C 3E8
833-333-5882
www.juvalife.com
 
 
Juva Life Inc., a corporation formed under the laws of the Province of British Columbia (the "Company", "we," or "our"), is offering up to 40,000,000 (the "Maximum Offering") units (the "Units") of the Company to be sold in this offering (the "Offering"). Each Unit is comprised of one common share in the capital of the Company, with no par value per share (a "Common Share"), and one-half of one Common Share purchase warrant (each whole warrant, a "Warrant") to purchase one additional Common Share (a "Warrant Share") at an exercise price of $0.75 USD per Warrant Share, subject to certain adjustments, over an 18-month exercise period following the date of issuance of the Warrant. The Units are being offered at a purchase price of $0.50 USD per Unit on a "best efforts" basis. The Common Shares and Warrants will be separately transferable following the termination of any transfer hold periods under applicable law. See "Securities Being Offered" beginning on page 54 for a discussion of certain items required by Item 14 of Part II of Form 1-A. We are selling our Units through a Tier 2 offering pursuant to Regulation A (Regulation A+) under the Securities Act of 1933, as amended (the "Securities Act"), and we intend to sell the Units either directly to investors or through registered broker-dealers who are paid commissions. This Offering will terminate on the earlier of (i) ________ __, 2021, (ii) the date on which the Maximum Offering is sold, or (iii) when the Board of Directors of the Company elects to terminate the offering (in each such case, the "Termination Date"). There is no aggregate minimum requirement for the Offering to become effective; therefore, we reserve the right, subject to applicable securities laws, to begin applying "dollar one" of the proceeds from the Offering towards our business strategy, including, without limitation, facility expenses, research and development expenses, offering expenses, working capital and general corporate purposes, and other uses, as more specifically set forth in the "Use of Proceeds" section of this Offering Circular. The minimum investment amount for an investor is $2,000 USD; however, we reserve the right to waive this minimum in the sole discretion of our management. There is no escrow established for this Offering. We will hold closings upon the receipt of investors' subscriptions and acceptance of such subscriptions by the Company. If, on the initial closing date, we have sold less than the Maximum Offering, then we may hold one or more additional closings for additional sales, until the earlier of: (i) the sale of the Maximum Offering, or (ii) the Termination Date. We expect to commence the sale of the Units as of the date on which the Offering Statement of which this Offering Circular (the "Offering Circular") is a part (the "Offering Statement") is qualified by the SEC.


Investing in our Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares involve a high degree of risk. These are speculative securities. You should purchase these securities only if you can afford a complete loss of your investment. See "Risk Factors" starting on page 9 for a discussion of certain risks that you should consider in connection with an investment in our securities.

THE SEC DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SEC; HOWEVER, THE SEC HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

Title of Each Class of Securities to be Qualified  
Amount to be Qualified
 
 
Price to Public
 
 
Underwriting Discount and Commissions
 
Proceeds to
the
Company (2)
 
Units, each consisting of:
40,000,000
 
 
$
0.50
 
 
(1)
 
$
0.50
 
One Common Share
40,000,000
     
-
             
One-half of one Warrant
40,000,000
     
-
             
Common Shares underlying Warrants
20,000,000
   
$
0.75
   
(1)
 
$
0.75
 
Total Maximum Offering (3)
   
 
$
20,000,000
 
 
(1)
 
$
20,000,000
 
 
(1)
The minimum investment amount for each subscription is 4,000 Units or $2,000 USD. The Offering is being made directly to investors by the management of the Company on a "best efforts" basis.  We reserve the right to offer the Units through broker-dealers who are registered with the Financial Industry Regulatory Authority ("FINRA").
   
(2)
The amounts shown are before deducting organization and offering costs to us, which include legal, accounting, printing, due diligence, marketing, selling and other costs incurred in the Offering of the Units (See "Use of Proceeds to Issuer" and "Plan of Distribution and Selling Securityholders").
   
 (3)
The Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares are being offered pursuant to Regulation A of Section 3(b) of the Securities Act for Tier 2 offerings. The Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares are only issued to purchasers who satisfy the requirements set forth in Regulation A. We have the option in our sole discretion to accept less than the minimum investment. The Total Maximum Offering amounts exclude the aggregate price and future aggregate potential proceeds of $15,000,000 with respect to the Warrant Shares if all 40,000,000 Units are sold and all 20,000,000 Warrant Shares are sold upon exercise of the Warrants issued in the Offering.
 
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN TEN PERCENT (10%) OF THE GREATER OF YOUR ANNUAL INCOME OR YOUR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A+. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

This Offering Circular contains all of the representations by us concerning this Offering, and no person shall make different or broader statements than those contained herein. Investors are cautioned not to rely upon any information not expressly set forth in this Offering Circular.
 
Sale of our Units will commence on approximately ________ __, 2019. 

The Company is following the "Offering Circular" format of disclosure under Regulation A+.
  
The date of this Offering Circular is June 11, 2019

2

 
 
TABLE OF CONTENTS
 
 
 
 
Page
 
 
 
 
  4
 
  4
 
  5
 
  9
 
32
 
33
 
34
 
35
 
42
 
44
 
48
 
51
 
52
 
53
 
54
 
56
Part F/S
 
 
 
F-1
Part III – Exhibits
 
 
 
57


3


IMPORTANT INFORMATION ABOUT THIS OFFERING CIRCULAR

We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where such offers and sales are permitted. Please carefully read the information in this offering circular and any accompanying offering circular supplements, which we refer to collectively as the "Offering Circular." You should rely only on the information contained in this Offering Circular. We have not authorized anyone to provide you with any information other than the information contained in this Offering Circular. The information contained in this Offering Circular is accurate only as of its date or as of the respective dates of any documents or other information incorporated herein by reference, regardless of the time of its delivery or of any sale or delivery of our securities. Neither the delivery of this Offering Circular nor any sale or delivery of our securities shall, under any circumstances, imply that there has been no change in our affairs since the date of this Offering Circular. This Offering Circular will be updated and made available for delivery to the extent required by the federal securities laws.

This Offering Circular is part of an offering statement (the "Offering Statement") that we filed with the Securities and Exchange Commission (the "SEC") using a continuous offering process.  Periodically, we may provide an offering circular supplement that would add, update or change information contained in this Offering Circular.  Any statement that we make in this Offering Circular will be modified or superseded by any inconsistent statement made by us in a subsequent offering circular supplement.  The Offering Statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this Offering Circular.  You should read this Offering Circular and the related exhibits filed with the SEC and any offering circular supplement, together with additional information contained in our annual reports, semi-annual reports and other reports and information statements that we will file periodically with the SEC.  The Offering Statement and all supplements and reports that we have filed or will file in the future can be read at the SEC website, www.sec.gov.

Unless otherwise indicated, data contained in this Offering Circular concerning the business of the Company are based on information from various public sources. Although we believe that these data are generally reliable, such information is inherently imprecise, and our estimates and expectations based on these data involve a number of assumptions and limitations. As a result, you are cautioned not to give undue weight to such data, estimates or expectations.
 
In this Offering Circular, unless the context indicates otherwise, references to the "Company," "we," "our," and "us" refer to the activities of and the assets and liabilities of the business and operations of Juva Life Inc., a Canadian corporation formed under the laws of the Province of British Columbia, and its wholly-owned subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
Some of the statements under "Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of Business" and elsewhere in this Offering Circular constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "should," "will" and "would" or the negatives of these terms, or other comparable terminology.
 
You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Offering Circular, including in "Risk Factors" and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:
 
 
The success of our products and product candidates will require significant capital resources and years of development efforts;
 
 
The results of product testing and investigation activities;
 
 
Our ability to obtain regulatory approval and market acceptance of, and reimbursement for our products;
 
 
Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand;
 
4

 
Our ability to compete and succeed in a highly competitive and evolving industry;
 
 
Our lack of operating history on which to judge our business prospects and management;
 
 
Our ability to raise capital and the availability of future financing; and
 
 
Our ability to manage our research, development, expansion, growth and operating expenses.
 

Although the forward-looking statements in this Offering Circular are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as may be required by law, to re-issue this Offering Circular or otherwise make public statements updating our forward-looking statements.


SUMMARY
 
This summary highlights selected information contained elsewhere in this Offering Circular. This summary is not complete and does not contain all the information that you should consider before deciding whether to invest in our securities. You should carefully read the entire Offering Circular, including the risks associated with an investment in the Company discussed in the "Risk Factors" section of this Offering Circular, before making an investment decision. Some of the statements in this Offering Circular are forward-looking statements. See the section entitled "Cautionary Statement Regarding Forward-Looking Statements" above.
 
Company Information
 
Juva Life Inc. (the "Company," "Juva", "we," "our," and "us") was formed on April 3, 2019 under the laws of the Province of British Columbia, and is headquartered in Vancouver, British Columbia. The Company was formed to establish a vertically-integrated corporation to engage in all areas of the medical and recreational cannabis industry, including production, manufacturing, research and development, distribution and retail. The principal planned business of the Company is to acquire, own and operate cannabis businesses in the State of California.

Juva Life, Inc., a California corporation and wholly-owned subsidiary of the Company ("Juva CA"), is a California-based cannabis company that was incorporated in June 2018 to acquire, own, and operate various cannabis businesses in the State of California. Juva CA became a wholly-owned subsidiary of the Company effective May 30, 2019, pursuant to an Agreement and Plan of Merger dated May 15, 2019, by and among the Company, Juva CA, and Juva Holdings (California) Ltd., a California corporation and wholly-owned subsidiary of the Company.
  
Our mailing address is Juva Life Inc., 885 West Georgia Street, Suite 1500, Vancouver, BC V6C 3E8, and our telephone number is 833-333-5882. Our principal California-based executive offices are located at 177 Park Ave., Suite 200, San Jose, California 95113. Our website address is www.juvalife.com. The information contained therein or accessible thereby shall not be deemed to be incorporated into this Offering Circular.
 
Our Business

Juva is a cannabis company that is working to establish itself as an emerging leader in all areas of medical and recreational cannabis production, manufacturing, distribution, and research and development, through three distinct cannabis operations: Juva Cultivation, Juva Retail and Juva Labs.  The strategic plan for Juva is to be a fully autonomous, vertically-integrated cannabis business.

Juva Cultivation is Juva's production operation which will focus on the production of high-quality cannabis for all Juva product lines.
5


Juva Retail is a network of cannabis dispensaries and delivery/distribution operations that will serve the San Francisco Bay Area and beyond.

Juva Labs is Juva's medical division which, when operational, will be involved in drug research, manufacturing and distribution. The Company does not at this time have plans to seek United States federal regulatory approval for the products to be developed by Juva Labs, but it may do so at a future date. If the Company decides to seek federal drug approval, it will need to comply with the drug research and approval requirements of the United States Food and Drug Administration (the "FDA"), and there is no guarantee that the Company would be successful in obtaining such approval.

Juva is capitalizing on the rapidly growing regulated cannabis market in the United States. To date, the Company has focused on obtaining permits and licenses in all verticals of the California cannabis market. Juva will also seek opportunities to expand its brand in recreational and medicinal markets through its existing facilities or through acquisitions of additional licenses or processing and wholesaling operators. Juva will look to leverage its branding, marketing, operational, and manufacturing expertise to create opportunities to license its brand in other states, as well as internationally potentially. Juva Labs, Juva Cultivation and Juva Retail will continue business as distinct brands of an effective vertical operation, sharing knowledge and expertise. See the "Description of Business" section of this Offering Circular for more information regarding our planned business operations.

Description of Property

Leased Real Property

Juva has five properties under lease in the State of California, which are in various stages of build-out. The leased properties are summarized below.

(1)
San Juan Property in Stockton, California.  The San Juan property is being designed to produce high quality flower and pre-rolls for the Juva brands and white label production. This location will deliver direct to consumers in the north San Joaquin Valley as well as operate as Juva's Central Valley distribution hub.
(2)
Navy Drive Property in Stockton, California.  Juva intends to use the Navy Drive property for its bulk cannabis storage, grinding, and ethanol extraction.  It will also serve as a small testing cultivation site for new strains before they go into full production at the San Juan facility.
(3)
Clawiter Road Property in Hayward, California.  The Clawiter Road property is being designed as Juva's main operational hub, and is being built to encompass the following: house the Company's flagship retail store; act as the delivery hub for the East San Francisco Bay Area; perform post process extraction of oil from the Navy Drive location; CO2 extraction, formulation, isolation and contract product development; and medical cannabis research and development, and manufacturing of related medical products.
(4)
Enterprise Property in Hayward, California.  The Enterprise property is the building adjacent to the Clawiter Road property, and is being designed to house the equipment for manufacturing capsules, edibles, transdermal, inhaler & suppository products.
(5)
Convention Way Property in Redwood City, California.  The Convention Way property will be used for non-storefront retail cannabis delivery.  Service will be available throughout the Bay Area Peninsula from San Francisco down to San Jose, with access to 1.67 million potential customers.

Intellectual Property

Juva has invested significant resources towards developing a recognizable and unique brand consistent with premium, high-end products in other industries.  To date, Juva has one registered federal trademark with the United States Patent and Trademark Office and six pending trademark applications.

As of the date hereof, Juva has registered the following state trademarks in the State of California:

·
Frosted Flowers
·
www.frostedflowers.com

6

As of the date hereof, Juva has the following pending applications for federal trademarks in the United States:
 

  
Competition
 
Our industry is subject to rapid and intense technological and regulatory changes. We face, and will continue to face, competition in the development and marketing of our products and services from other cannabis cultivation, manufacturing, retail and distribution companies, pharmaceutical and biotechnology companies, research institutions and academic institutions engaged in cannabis production, manufacturing, research and development, distribution and retail.

The Company will face intense competition from other companies, some of which can be expected to have longer operating histories and more financial resources and experience than the Company. Increased competition by larger and better-financed competitors could materially and adversely affect the business, financial condition, results of operations or prospects of the Company. Because of the early stage of the industry in which the Company operates, the Company expects to face additional competition from new entrants. To become and remain competitive, the Company will require research and development, marketing, sales and support. The Company may not have sufficient resources to maintain research and development, marketing, sales and support efforts on a competitive basis, which could materially and adversely affect the business, financial condition, results of operations or prospects of the Company.

Our ability to become and remain competitive in the market will depend upon, among other things:
 
·
The level of competition in the cannabis industry;
·
Our ability to identify, acquire and integrate strategic acquisitions and partnerships;
·
Our ability to obtain new licenses as cannabis is legalized at the state level;
·
Our ability to achieve brand loyalty;
·
Our ability to offer new products and to extend existing brands and products into new markets;
·
Our ability to remain competitive in our product pricing; and
·
Our ability to leverage our vertically-integrated business model to increase profitability.

Developments by others in our industry may render our products or technologies obsolete or noncompetitive.
 
Risks Related to Our Business
 
Our business and our ability to execute our business strategy are subject to a number of risks, which are more fully described in the section titled "Risk Factors" beginning on page 9. These risks include, among others:
 
·
Our ability to raise sufficient capital and the availability of future financing;
·
Our ability to develop and protect our intellectual property and to develop, maintain and enhance a strong brand;
·
Our ability to compete and succeed in a highly competitive and evolving industry;
·
Our ability to manage our research, development, expansion, growth and operating expenses;
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·
Regulatory risks and changes in applicable laws, regulations and guidelines;
·
Our limited operating history, which makes it difficult to evaluate our business prospects;
·
Risks inherent in agricultural business and unknown environmental risks;
·
Unfavorable publicity or consumer perception;
·
Dependence on suppliers, skilled labor and certain key inputs;
·
Changing consumer preferences and customer retention;
·
Difficulty in forecasting sales;
·
Dependence on licenses and regulatory approvals;
·
Restricted access to banking;
·
Constraints on the marketing of our products;
·
The risks of engaging in business in a newly established and constantly changing legal regime;
·
Price fluctuation of our Common Shares; and
·
Unpredictable operational or investment results.
Our financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Since inception, we have funded operations exclusively with proceeds from the sale and issuance of equity to investors. Our future viability is largely dependent upon our ability to raise additional capital to finance our operations. Our management expects that future sources of funding may include sales of equity, obtaining loans, or other strategic transactions. Although our management continues to pursue these plans, there is no assurance that we will be successful with this Offering or in obtaining sufficient financing on terms acceptable to us to continue to finance our operations, if at all. These circumstances raise substantial doubt on our ability to continue as a going concern, and our financial statements do not include any adjustments that might result from the outcome of these uncertainties.

REGULATION A+
 
We are offering the Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares pursuant to rules of the SEC mandated under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). These offering rules are often referred to as "Regulation A+." We are relying upon "Tier 2" of Regulation A+, which allows us to offer securities of up to $50 million in a 12-month period.
 
In accordance with the requirements of Tier 2 of Regulation A+, we are required to publicly file annual, semiannual, and current event reports with the SEC.
 
THE OFFERING
 
Issuer:
 
Juva Life Inc., a Canadian corporation.
 
 
 
Units Offered:
 
A maximum of 40,000,000 units (the "Units") at an offering price of $0.50 USD per Unit, each Unit being comprised of:
· one common share in the capital of the Company, with no par value per share (a "Common Share"); and
· one-half of one Common Share purchase warrant (each whole warrant, a "Warrant") to purchase one additional Common Share (a "Warrant Share") at an exercise price of $0.75 USD per share, subject to customary adjustments, over an 18-month exercise period following the date of issuance of the Warrant.
     
Warrant Shares Offered:
 
A maximum of 20,000,000 Warrant Shares at an exercise price of $0.75 USD per Warrant Share, subject to customary adjustments, over an 18-month exercise period following the date of issuance.
 
 
 
Common Shares Outstanding before the Offering (1):
 
86,046,843 Common Shares.
 
 
 
 
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Common Shares to be Outstanding after the Offering (1):
 
126,046,843 Common Shares if the maximum Units are sold.
 
 
 
Price per Unit:
 
$0.50 USD
     
Price per Warrant Share
 
$0.75 USD, subject to customary adjustments as described in the form of Warrant included as Exhibit 4.2 hereto.
 
 
 
Maximum Offering:
 
40,000,000 Units, at an offering price of $0.50 USD per Unit, for total gross proceeds of up to $20,000,000 USD (excluding the exercise of the Warrants to purchase 20,000,000 Warrant Shares with an exercise price of $0.75 USD per Warrant Share, subject to customary adjustments).  
 
 
 
Use of Proceeds:
 
If we sell all of the 40,000,000 Units being offered, our net proceeds (after estimated Offering expenses) will be approximately $19,700,000 USD. We will use these net proceeds for research and development expenses, offering expenses, working capital and general corporate purposes, and such other purposes described in the "Use of Proceeds to Issuer" section of this Offering Circular.  
 
 
 
Resale Restrictions:
 
See "Securities Being Offered – Resale Restrictions" on page 54.
     
Risk Factors:
 
Investing in our Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares involve a high degree of risk. See "Risk Factors" starting on page 9.
 
(1)
In addition, as of the date of this Offering Circular, we also have 5,200,000 Common Share purchase warrants outstanding which are exercisable at a price of $0.05 CAD per share, and 9,081,735 Common Share purchase warrants outstanding which are exercisable at a price of $0.60 CAD per share.
 
RISK FACTORS
 
An investment in our securities involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this Offering Circular, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the price of our Common Shares could decline and you may lose all or part of your investment. See "Cautionary Statement Regarding Forward Looking Statements" above for a discussion of forward-looking statements and the significance of such statements in the context of this Offering Circular.
 
Risks Related to our Business and Industry

Risks Related to the Cannabis Industry and the Business of Juva Cultivation and Juva Retail

Our planned business is dependent on legislation pertaining to the cannabis industry. 
 
Continued development of the cannabis industry is dependent upon continued legislative authorization of cannabis at the state level. Any number of factors could slow or halt progress in this area, and continued progress for the industry cannot be assured. While there may be ample public support for legislative action, numerous factors impact the legislative process. Any one of these factors could slow or halt use of cannabis, which would negatively impact our business. Investors are cautioned that in the United States, cannabis is largely regulated at the state level. To date, a total of 33 states, plus the District of Columbia, have legalized cannabis in some form. The recreational use of cannabis has been legalized in 10 states, including Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington.
 
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State laws allowing citizens to use medical and recreational cannabis are in conflict with the federal Controlled Substances Act (the "CSA"), which makes cannabis use and possession illegal on a national level. Cannabis is a Schedule I controlled substance and is illegal under the CSA. Even in those states in which the use of cannabis has been legalized, its use remains a violation of federal law in the United States. Since federal law criminalizing the use of cannabis may preempt state laws legalizing its use, strict enforcement of federal law regarding cannabis would harm our business, prospects, results of operation, and financial condition.

While the Company's management believes that legalization trends are favorable and create a compelling business opportunity for early movers, there is no assurance that those trends will continue and be realized, that existing limited markets will continue to be available or that any new markets for cannabis will emerge. The Company's business plan is based on the premise that cannabis legalization will expand, that consumer demand for cannabis will continue to exceed supply for the foreseeable future, and that consumer demand for cannabis for medical and recreational use will grow as it becomes legal to possess and consume cannabis on a more widespread basis. There is no assurance that this premise will prove to be correct. Moreover, if cannabis legalization is scaled back or reversed at the state level, or if the United States federal government increases regulation and prosecution of cannabis-related activities, it could have a material adverse effect on the Company's business, financial condition and results of operations.

The Obama administration effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state laws and regulations allowing the use and distribution of cannabis. However, the Trump administration has indicated the potential for stricter enforcement of the cannabis industry at the federal level, but to date there has been little in terms of action. There is no guarantee that the Trump administration or future administrations will maintain the low-priority enforcement of federal laws in the cannabis industry that was adopted by the Obama administration. The Trump administration or any future administration could change this policy and decide to implement stricter enforcement of these federal laws. Any such change in the federal government's policy on enforcement of the CSA could have a material adverse effect on our business, financial condition and results of operations and cause significant financial damage to our business and our shareholders.

Although the Company believes its business activities and those of its subsidiaries are compliant with the laws and regulations of the states in which the Company and its subsidiaries operate or plan to operate, strict compliance with state and local laws with respect to cannabis neither absolves the Company of liability under United States federal law, nor provide a defense to any proceeding that may be brought against the Company under federal law. Any proceeding that may be brought against the Company could have a material adverse effect on the Company's business, financial condition and results of operations.

Federal law in the United States prohibits the use of cannabis for the purposes in which the Company plans to engage.
 
Under the CSA, cannabis is deemed to be a Schedule I drug that has no accepted medical use or benefit and a high potential for abuse. Therefore, a range of activities, including cultivation and the personal use of cannabis, is prohibited and remains a criminal offense under federal law in the United States. Unless and until the United States Congress amends the CSA with respect to cannabis, there is a risk that federal authorities may enforce current federal law. The risk of strict enforcement of the CSA in light of congressional activity, judicial holdings, and stated federal policy remains uncertain.
 
The current policy and regulations of the federal government and its agencies, including the United States Drug Enforcement Agency (the "DEA") and FDA, are that cannabis has no medical benefit and a range of activities including cultivation and use of cannabis for personal use is prohibited on the basis of federal law. Although 33 states and District of Columbia have passed legislation permitting the cultivation and dispensing of medical cannabis, these laws are, in many jurisdictions, subject to strict regulation and limitations and are still being developed. Active enforcement of the current federal regulatory position on cannabis on a regional or national basis may directly and adversely affect the ability of our Company to develop our business plan even though it is allowed by state regulation in the various states in which the Company intends to operate. Although research and development in the growing and processing of cannabis products for medicinal purposes and in seeking to obtain state permits for the cultivation and sale of cannabis products are not in violation of federal law, our business plan, even if conducted within the parameters of any state licenses or permits we obtain, will violate the CSA, as currently in effect. The Company's business activities, and the business activities of its subsidiaries, while believed to be compliant with applicable state and local laws in the United States, are currently illegal under United States federal law. If existing federal laws are enforced by the United States Department of Justice (the "DOJ") or the FDA, it is likely that our proposed business will be materially and adversely affected.
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The potential re-classification of cannabis in the United States could create additional regulatory burdens on our operations and negatively affect our results of operations.
 
If cannabis is re-categorized as a Schedule II or lower controlled substance, the ability to conduct research on the medical benefits of cannabis would most likely be improved; however, rescheduling cannabis may materially alter enforcement policies across many federal agencies, primarily the FDA. The FDA is responsible for ensuring public health and safety through regulation of food, drugs, supplements, cosmetics and other similar products, pursuant to its enforcement authority set forth in the United States Federal Food Drug and Cosmetic Act (the "FDCA"). The FDA's responsibilities include regulating the ingredients, as well as the marketing and labeling, of drugs sold in interstate commerce. Because cannabis is federally illegal to produce and sell, and because it has no federally recognized medical uses, the FDA has historically deferred enforcement related to cannabis to the DEA; however, the FDA has enforced the FDCA with regard to hemp-derived products, especially CBD, sold outside of state-regulated cannabis businesses. If cannabis were to be rescheduled to a federally controlled, yet legal, substance, the FDA would likely play a more active regulatory role. In the event that cannabis becomes subject to FDA regulation, the pharmaceutical industry may directly compete with state-regulated cannabis businesses for market share, and the pharmaceutical industry may urge the DEA, the FDA, and others to enforce the CSA and FDCA against businesses that comply with state but not federal law. The potential for multi-agency enforcement could threaten or have a materially adverse effect on existing cannabis businesses whose operations are compliant with applicable state laws, including the Company.
 
Variations in state and local regulation, and enforcement in states that have legalized cannabis, that may restrict cannabis-related activities may negatively impact our business operations and potential for revenues and profits.
 
Individual state laws do not always conform to the federal standard in the United States, or to other states' laws regarding the cultivation and use of cannabis. Certain states have decriminalized cannabis to varying degrees, while others have created exemptions only for medical use of cannabis, and several have passed both decriminalization and medical use legislation. There are a number of variations in laws and regulations among the states that have legalized, decriminalized, or created medical cannabis exemptions across the United States. In most states, the cultivation of cannabis for personal use continues to be prohibited, except for those states that allow small-scale cultivation by an individual in possession of medical cannabis needing care. Active enforcement of state laws that prohibit personal cultivation of cannabis may indirectly and adversely affect our business and our potential for revenue and profits.

We may become subject to federal and state forfeiture laws which could negatively impact our business operations.
 
Violations of any federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, seizure of assets, disgorgement of profits, cessation of business activities or divestiture. As an entity that conducts business in the cannabis industry, we are potentially subject to criminal and civil federal and state forfeiture laws that permit the government to seize the proceeds of criminal activity. Civil forfeiture laws could provide an alternative for the federal government or any state or local police force that wants to discourage residents from conducting transactions with cannabis related businesses but believes criminal liability is too difficult to prove beyond a reasonable doubt. An individual can also be required to forfeit property considered to be the proceeds of a crime even if the individual is not convicted of the crime, and the standard of proof in a civil forfeiture matter is lower than the standard in a criminal matter.
 
Investors located in states where cannabis remains illegal may be at risk of prosecution under federal and/or state conspiracy, aiding and abetting, and money laundering statutes, and be at further risk of losing their investments or proceeds under forfeiture statutes. Many states remain fully able to take action to prevent the proceeds of cannabis businesses from entering their state. Because state legalization in this area is relatively new, it remains to be seen whether these states would take such action and whether a court would approve such action. Investors and prospective investors of the Company should be aware of these potentially relevant federal and state laws in considering whether to invest in the Company.
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Laws and regulations affecting the cannabis industry are constantly changing, which could detrimentally affect our planned operations. 
 
Local, state and federal cannabis laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial compliance costs or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our operations. Additional regulations may be enacted in the future that may be directly applicable to certain aspects of the Company's cultivation, production and dispensary businesses and the Company's ability to sell cannabis. We cannot predict the nature of any future laws, regulations, interpretations or applications, especially in the United States, nor can we determine what effect additional governmental regulations or administrative policies and procedures, if and when promulgated, may have on our business.

The approach to enforcement of cannabis laws is subject to change, which creates uncertainty for our business.
 
As a result of the conflicting views between state legislatures and the federal government regarding cannabis in the United States, investments in, and the operations of, cannabis businesses in the United States are subject to inconsistent laws and regulations. The "Cole Memorandum" issued by the DOJ from former Deputy Attorney General James Cole in August 2013, and other cannabis policy guidance from the Obama administration, provided the framework for managing the tension between federal and state cannabis laws. In January 2018, former Attorney General Jeff Sessions rescinded the Cole Memorandum and related policy guidance. Although no longer in effect, these policies, and the enforcement priorities established therein, appear to continue to be followed during the Trump administration and remain critical factors that inform the past and future trend of state-based legalization.
 
The Cole Memorandum directed United States Attorneys not to prioritize the enforcement of federal cannabis laws against individuals and businesses that comply with state medical or adult-use cannabis regulatory programs, provided certain enumerated enforcement priorities were not implicated (such as, among others, prevention of cannabis distribution to minors, prevention of diverting cannabis from states where it is legal under state law to states where it is not legal, and prevention of drugged driving and the exacerbation of other adverse public health consequences associated with cannabis use). In addition to general prosecutorial guidance issued by the DOJ, the United States Treasury Department's Financial Crimes Enforcement Network ("FinCEN") issued a FinCEN Memorandum in February 2014, outlining pathways for financial institutions to service state-sanctioned cannabis businesses in compliance with the Bank Secrecy Act, which echoed the enforcement priorities outlined in the Cole Memorandum. On the same day the FinCEN Memorandum was published, the DOJ issued complimentary policy guidance directing prosecutors to apply the enforcement priorities of the Cole Memorandum when determining whether to prosecute individuals or institutions with crimes related to financial transactions involving the proceeds of cannabis-related activities.
 
In January 2018, former Attorney General Jeff Sessions rescinded the Cole Memorandum and the related DOJ cannabis enforcement guidance from the Obama administration. While the rescission did not change federal law, the rescission removed the DOJ's formal policy that state-regulated cannabis businesses in compliance with the guidelines set forth in the Cole Memorandum should not be a prosecutorial priority, adding to the uncertainty around federal enforcement of the CSA in states where cannabis is legalized and regulated. In addition to his rescission of the Cole Memorandum, former Attorney General Sessions issued a memorandum known as the "Sessions Memorandum." The Sessions Memorandum explains the DOJ's rationale for rescinding all past DOJ cannabis enforcement guidance, claiming such policies are "unnecessary" due to existing general enforcement guidance adopted in the 1980s in the United States Attorney's Manual (the "USAM"). The USAM enforcement priorities, like those of the Cole Memorandum, are based on the use of the federal government's limited resources and include law enforcement priorities set by the Attorney General, consideration of the seriousness of the alleged crimes, the deterrent effect of criminal prosecution, and the cumulative impact of particular crimes on the community. Although the Sessions Memorandum emphasizes that cannabis is a federally illegal Schedule I controlled substance, it does not otherwise instruct United States Attorneys to consider the prosecution of cannabis-related offenses a DOJ priority, and in practice, most United States Attorneys have not changed their prosecutorial approach to date. However, due to the lack of specific direction in the Sessions Memorandum as to the priority federal prosecutors should ascribe to such cannabis activities, and the lack of additional guidance since the resignation of former Attorney General Sessions, there can be no assurance that the United States federal government will not seek to prosecute cases involving cannabis businesses that are otherwise compliant with applicable state law.
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The United States House of Representatives passed an amendment (currently known as the "Joyce Amendment") to the Commerce, Justice, Science, and Related Agencies Appropriations Bill, which funds the DOJ. Under the Joyce Amendment, the DOJ is prohibited from using federal funds to prevent states from implementing their own state laws that authorize the use, distribution, possession, or cultivation of medical marijuana. Notably, this amendment only prohibits the use of federal funds to prosecute individuals and businesses operating cannabis companies in compliance with state laws regulating the medical use of cannabis, and does not apply to adult use cannabis operations. The Joyce Amendment must be renewed each federal fiscal year and has been renewed by the United States Congress through September 30, 2019. There can be no assurance that the United States Congress will further renew the Joyce Amendment for the 2020 fiscal year. If the Joyce Amendment is not renewed in the future, the DOJ and other federal agencies in the United States may utilize federal funds to enforce the CSA in states with a medical cannabis program, including states in which the Company's subsidiaries operate, which could have a material adverse effect on the Company's expansion strategy, business, financial condition and results of operations.
 
Any potential enforcement proceedings could involve significant restrictions being imposed upon us or third parties, and could have a material adverse effect on our business, revenues, results of operations and financial condition, as well as our reputation and prospects, even if such proceedings are concluded in our favor. In the extreme case, such proceedings could ultimately involve the criminal prosecution of key executives of the Company, the seizure of corporate assets, and consequently, the inability of the Company to continue its business operations. Strict compliance with state and local laws with respect to cannabis does not absolve the Company of potential liability under federal law in the United States, nor provide a defense to any federal proceeding which may be brought against us. Any such proceedings may adversely affect our operations and financial performance.

Our business in the cannabis industry is subject to heightened scrutiny by regulatory authorities.
 
Our existing and future operations in the United States may become the subject of heightened scrutiny by regulators, stock exchanges and other regulatory authorities in Canada. There can be no assurance that this heightened scrutiny will not in turn lead to the imposition of certain restrictions on our ability to operate or invest in the United States or any other jurisdiction, in addition to those described herein.
 
It has been reported by certain publications in Canada that the Canadian Depository for Securities Limited is considering a policy shift that would have its subsidiary, CDS Clearing and Depository Services Inc. ("CDS"), refuse to settle trades for cannabis issuers that have investments in the United States. CDS is Canada's central securities depository, clearing and settlement hub. If CDS were to proceed in the manner suggested by these publications, such action would have a material adverse effect on the ability of holders of our Common Shares to make trades in Canada, and our Common Shares would become illiquid in Canada as investors would have no ability to effect a trade of our Common Shares through the facilities of a stock exchange.

In the United States, many clearing houses for major broker-dealer firms have refused to handle securities or settle transactions of companies engaged in the cannabis industry. This means certain broker-dealers cannot accept for deposit or settle transactions in the securities of companies like ours, which may inhibit the ability of investors to trade in our securities in the United States, and could negatively affect the liquidity of our securities in the United States as well.
 
In November 2017, TMX Group provided an update regarding Canadian issuers with cannabis-related activities in the United States, confirming that TMX Group will rely on the Canadian Securities Administrators' recommendation to defer to individual exchanges' rules for companies with cannabis-related business activities in the United States, and to determine the eligibility of individual issuers to list based on those exchanges' listing requirements. In February 2018, CDS signed a memorandum of understanding with Aequitas NEO Exchange Inc., CNSX Markets Inc., TSX Inc., and TSX Venture Exchange Inc. (collectively, the "Exchanges"), which outlines the parties' understanding of Canada's regulatory framework applicable to the rules and procedures and regulatory oversight of the Exchanges and CDS. The memorandum of understanding confirms that CDS relies on the Exchanges to review the conduct of listed issuers. As a result, there currently is no CDS ban on the clearing of securities of issuers with cannabis-related business activities in the United States.
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Any future restrictions imposed by the Canadian Stock Exchange (the "CSE") or other applicable exchange on the Company's business or securities would have a material adverse effect on the Company and on the ability of holders of the Company's securities to make trades in Canada.

We may not be able to obtain the permits and authorizations necessary to operate our planned medical and recreational cannabis businesses.
 
We may not be able to obtain or maintain the necessary state and local licenses, permits, authorizations, or accreditations to operate our planned medical and recreational cannabis businesses, or may only be able to do so at great cost. In addition, we may not be able to comply fully with the various laws and regulations applicable to our businesses in the medical and recreational cannabis industries. Failure to comply with or to obtain the licenses, permits, authorizations, or accreditations necessary to carry out our business plan, or any delay in obtaining these items, could result in restrictions on our ability to operate our planned businesses, which would have a material adverse effect on our business, financial condition and results of operations.

Our cannabis cultivation operations are subject to risks inherent in an agricultural business.

The business of Juva Cultivation involves the growing of cannabis, which is an agricultural product. As such, the Juva Cultivation business is subject to the risks inherent in the agricultural business, such as insects, plant diseases and other agricultural risks that may create crop failures and supply interruptions. Although the majority of the Company's cultivators grow products indoors under climate-controlled conditions and carefully monitor the growing conditions with trained personnel, there can be no assurance that such agricultural risks will not have a material adverse effect on the production of the Company's products.

Our cannabis cultivation operations are vulnerable to rising energy costs and dependent upon key inputs.

Our cannabis cultivation operations consume considerable amounts of energy, making the Company vulnerable to rising energy costs. Rising or volatile energy costs could have a material adverse effect on the Company's business, financial condition and results of operations.

In addition, the Company's business is dependent on a number of key inputs and their related costs, including raw materials and supplies related to the Company's growing operations, as well as electricity, water and other utilities. Some of these inputs may only be available from a single supplier or a limited group of suppliers. If a sole source supplier were to go out of business, the Company might be unable to find a replacement for such source in a timely manner or at all. If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to the Company or its subsidiaries in the future. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs, or the Company's inability to secure required supplies and services or to do so on appropriate terms, could have a material adverse effect on the Company's business, financial condition and results of operations.

Many of our competitors have greater resources that may enable them to compete more effectively than us in the cannabis industry.
 
The industry in which we operate is subject to intense and increasing competition. Some of our competitors have a longer operating history and greater capital resources, facilities and product line diversity, which may enable them to compete more effectively in this market. Our competitors may devote their resources to developing and marketing products that will directly compete with our planned product lines. The Company expects to face additional competition from existing licensees and new market entrants who are granted licenses within a particular state in which the Company's subsidiaries operate, who are not yet active in the industry. If a significant number of new licenses are granted in the near term, the Company may experience increased competition for market share and may experience downward pricing pressure on the Company's products as new entrants increase production. Such competition may cause us to encounter difficulties in generating revenues and market share, and in positioning our products in the market. If we are unable to successfully compete with existing companies and new entrants to the market, our lack of competitive advantage will have a negative impact on our business and financial condition.
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Certain tax risks and treatments could negatively impact our results of operations.
 
Section 280E of the Internal Revenue Code prohibits businesses from deducting certain expenses associated with trafficking controlled substances (within the meaning of Schedule I and II of the CSA). The United States Internal Revenue Service (the "IRS") has invoked Section 280E in tax audits against cannabis businesses in the United States, prohibiting them from deducting expenses directly associated with the sale of cannabis. Although the IRS issued a clarification allowing the deduction of certain expenses, the scope of such items is interpreted very narrowly and the bulk of operating costs and general administrative costs are not permitted to be deducted. While there are currently several pending cases before various administrative and federal courts challenging these restrictions, there is no guarantee that the courts will issue an interpretation of Section 280E favorable to cannabis businesses. Section 280E has a significant impact on the retail cannabis business, but a lesser impact on cannabis cultivation and manufacturing operations. A result of Section 280E is that an otherwise profitable business may operate at a loss after taking into account its United States income tax expenses.

We may have difficulty accessing banking services in the United States, which may make it difficult for us to operate our businesses.
 
Because the use, cultivation, manufacturing and distribution of cannabis is illegal under federal law in the United States, there is an argument that banks should not accept for deposit any funds from businesses involved with the cannabis industry. Consequently, such businesses often have difficulty finding a bank willing to accept their business.

Banks and other financial institutions providing services to companies with cannabis-related businesses risk violation of federal anti-money laundering statutes, the unlicensed money-remitter statute, and the United States Bank Secrecy Act. These statutes can impose criminal liability for engaging in certain financial and monetary transactions with the proceeds of a "specified unlawful activity," such as distributing controlled substances which are illegal under federal law (including cannabis), and for failing to identify or report financial transactions that involve the proceeds of cannabis-related violations of the CSA. As previously noted, in February 2014, FinCEN issued guidance with respect to financial institutions providing banking services to cannabis business. This guidance indicates that it is possible for financial institutions to provide financial services to state-licensed cannabis businesses in compliance with applicable federal anti-money laundering laws, but does not provide any safe harbors or legal defenses from examination or enforcement actions by the DOJ, FinCEN or other federal regulators. Thus, most banks and other financial institutions in the United States do not appear to be comfortable providing banking services to cannabis-related businesses or relying on this guidance.

Notwithstanding the above federal guidelines and in addition to potential federal sanctions, regulators in the states in which we are able to conduct business may make it difficult for local banks to do business with companies considered to be engaged in cultivating and dispensing cannabis. Failure to establish a permanent banking relationship in the United States could have a material and adverse effect on our future business operations and our ability to conduct our business as planned.

We are subject to anti-money laundering laws and regulations which could impact our ability to obtain banking services or result in the forfeiture or seizure of our assets.
 
We are subject to a variety of laws and regulations in Canada and in the United States that involve money laundering, financial recordkeeping and proceeds of crime, including the United States Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA PATRIOT Act"), the Canada Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the Canada Criminal Code, and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States and Canada. As discussed above, because the cultivation, manufacturing, distribution and sale of cannabis remains illegal under the CSA, banks and other financial institutions providing services to cannabis-related businesses risk violation of such statutes. Banks or other financial institutions that provide cannabis businesses with financial services, such as a checking account or credit card, in violation of the Bank Secrecy Act could be criminally prosecuted for willful violations of money laundering statutes, in addition to being subject to other criminal, civil, and regulatory enforcement actions. Banks often refuse to provide banking services to businesses involved in the cannabis industry due to the present state of the laws and regulations governing financial institutions in the United States. The lack of readily available banking and financial services presents unique and significant challenges to businesses in the cannabis industry. The potential lack of a secure place in which to deposit and store cash, the inability to pay creditors through the issuance of checks and the inability to secure traditional forms of operational financing, such as lines of credit, are some of the many challenges presented by the unavailability of traditional banking and financial services.
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Although the FinCEN Memorandum issued in February 2014 remains in effect today, it is unclear whether the current administration or future administrations will follow the guidelines of the FinCEN Memorandum in the United States. The DOJ continues to have the right and power to prosecute crimes committed by banks and financial institutions, such as money laundering and violations of the Bank Secrecy Act, that occur in any state, and the DOJ's current enforcement priorities could change for any number of reasons. A change in the DOJ's enforcement priorities could result in the DOJ prosecuting banks and financial institutions for crimes that previously were not prosecuted. If we do not have access to banking and financial services in the United States, our business and operations could be adversely affected.
 
In the event that any of our operations, any proceeds thereof, any dividends or distributions therefrom, or any profits or revenues accruing from such operations in the United States are found to be in violation of federal anti-money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more of the statutes noted above or any other applicable legislation. This could restrict or otherwise jeopardize our ability to declare or pay dividends or effect other distributions, and could subject us to civil and/or criminal penalties. Although we have no current intentions to declare or pay dividends on our Common Shares for the foreseeable future, in the event that a determination is made that our proceeds from operations could reasonably be shown to constitute proceeds of crime, we may decide or be required to suspend declaring or paying any dividends without advance notice and for an indefinite period of time.

United States border officers could deny entry into the United States to non-United States citizens who are employees of or investors in companies with cannabis operations in the United States or Canada.

As cannabis remains illegal under United States federal law, non-United States citizens who are employed by or investing in legal and licensed cannabis companies could face detention, denial of entry or lifetime bans from the United States for their business associations with United States or Canadian cannabis businesses. Entry happens at the sole discretion of the United States Customs and Border Protection (the "USCBP") officers on duty, and such officers have wide latitude to ask questions in determining the admissibility of a foreign national.

As a result, the Canadian government has started warning travelers on its website that previous use of cannabis, or any substance prohibited by United States federal laws, could mean denial of entry to the United States. In addition, business or financial involvement in the legal cannabis industry in Canada or in the United States could also be reason enough for USCBP officers to deny entry in the United States. In reaction to the then-impending legalization of cannabis in Canada, the USCBP released a statement outlining its current position with respect to enforcement of United States federal laws. The statement specified that Canada's legalization of cannabis would not change the USCBP's enforcement of United States federal laws regarding controlled substances and, because cannabis continues to be a controlled substance under the CSA, working in or facilitating the proliferation of the cannabis industry in states in the United States or Canada where cannabis is legal may affect admissibility to the United States.

Certain of the Company's directors, officers and employees are Canadian citizens, and may be subject to denials or bans from entry into the United States by USCBP officers due to their service or employment with the Company. In the event that any such directors, officers or employees are hindered or otherwise prevented from entering the United States, either in one instance or permanently, their ability to provides services to the Company could be materially hindered, which could have a material adverse effect on the Company's business. In addition, the Company's ability to attract qualified candidates for positions with the Company may be diminished by the prospect of a denial or ban from entry into the United States, which could have a material adverse effect on the Company's business.

If we incur substantial liability from litigation, complaints, or enforcement actions, our financial condition could suffer.
 
Our participation in the medical and recreational cannabis industries may lead to litigation, formal or informal complaints, enforcement actions, and inquiries or investigations by various federal, state, or local governmental authorities against our Company and/or our subsidiaries. Any such litigation, complaints, enforcement actions or other proceedings could consume considerable amounts of financial and other corporate resources and divert our key executives' attention away from carrying out our business plan, which could have a material adverse impact on our business, financial condition, results of operations and growth prospects.
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Our business is dependent on the popularity of consumer acceptance of cannabis.

The medical and recreational cannabis industries are highly dependent upon consumer perception regarding the safety, efficacy and quality of their products. Consumer perception can be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of cannabis products. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the cannabis market or any particular product. Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity could have a material adverse effect on the demand for medical and recreational cannabis products and on the Company's business, financial condition and results of operations. Such adverse publicity reports or other media attention could hinder market growth and state legalization due to inconsistent public opinion and perception of the medical and recreational cannabis industries.

We currently have insurance coverage; however, because we operate within the cannabis industry, there are additional difficulties and complexities associated with such insurance coverage.

We believe that the Company and its subsidiaries currently have insurance coverage with respect to workers' compensation, general liability, fire and other similar policies customarily obtained for businesses to the extent commercially appropriate; however, because we are engaged in and operate within the cannabis industry, there are exclusions and additional difficulties and complexities associated with such insurance coverage that could cause us to suffer uninsured losses, which could adversely affect our business, financial condition and results of operations. There is no assurance that we will be able to fully utilize such insurance coverage, if necessary.

We will be reliant on information technology systems and may be subject to damaging cyberattacks.

We have entered into agreements with third parties for hardware, software, telecommunications and other information technology ("IT") services in connection with our operations. Our operations depend, in part, on how well we and our suppliers protect networks, equipment, IT systems and software against damage from a number of threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, intentional damage and destruction, fire, power loss, hacking, computer viruses, vandalism and theft. Our operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact our reputation and results of operations.

We have not experienced any material losses to date relating to cyber-attacks or other information security breaches, but there can be no assurance that we will not incur such losses in the future. Our risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access is a priority. As cyber threats continue to evolve, we may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

The cannabis industry is highly regulated, and the Company may not always succeed in complying fully with applicable regulatory requirements in the jurisdictions where the Company operates.

Our cannabis-related business operations are subject to various laws, regulations and guidelines, both in the United States and Canada, relating to, among other things, the manufacture, marketing and sale of cannabis, as well as laws and regulations relating to health and safety, insurance coverage, the conduct of operations and the protection of the environment. Laws and regulations, applied generally, grant government agencies and self-regulatory bodies broad administrative discretion over the Company's activities, including the power to limit or restrict business activities as well as impose additional disclosure requirements on the Company's products.
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Achievement of the Company's business objectives is contingent, in part, upon compliance with regulatory requirements and our ability to obtain and maintain all necessary licenses, permits, authorizations and accreditations for the Company's cultivation, production and dispensary businesses. The Company may not be able to obtain and maintain such approvals, or may be able to do so only at a significant expense. The commercial cannabis industry is still a new industry in Canada and is an emerging industry in the United States. The effect of relevant governmental authorities' administration, application and enforcement of their respective regulatory regimes and delays in obtaining, or the Company's failure to obtain, the necessary licenses, permits, authorizations, or accreditations to conduct the Company's business may significantly delay or impact the development of markets, products and sales initiatives and could have a material adverse effect on the Company's business, financial condition and results of operations.

While the Company endeavours to comply with all relevant laws, regulations and guidelines with respect to the Company's cannabis-related business and, to the Company's knowledge, the Company is in compliance or is in the process of being assessed for compliance with all such laws, regulations and guidelines, any failure to comply with the regulatory requirements applicable to the Company's operations may lead to possible sanctions. In addition, changes in regulations, more vigorous enforcement thereof or other unanticipated events could require extensive changes to the Company's operations, increase compliance costs or give rise to material liabilities or a revocation of the Company's licenses and other permits, which could have a material adverse effect on the Company's business, financial condition and results of operations.

Failure to comply with applicable laws and regulations could subject the Company to regulatory or agency proceedings, investigations or audits. The outcome of any such proceedings, investigations or audits could harm the Company's reputation and operations, and could require the Company to pay substantial amounts of money, harming the Company's financial condition. There can be no assurance that any pending or future regulatory or agency proceedings, investigations and audits will not result in substantial costs or a diversion of management's attention and resources or have a material adverse impact on the Company's business, financial condition and results of operations.

Risks Related to Drug Development and the Business of Juva Labs

Our products may be subject to United States federal drug approval requirements and processes in the future.

At this time, the Company does not have plans to seek United States federal regulatory approval for the products to be developed by Juva Labs, although we may do so in the future. The Company currently intends to develop and market nutraceutical products under applicable state laws and regulations in states where cannabis has been legalized, starting with the State of California. If any of our products and development activities become subject to federal drug approval processes and the Company decides to seek federal approval, we will need to comply with the drug research, approval and registration processes and requirements of the DEA and/or FDA for drugs developed and marketed on a national scale in the United States, which are described in the following risk factors under "Risks Related to Drug Development and the Business of Juva Labs." There is no guarantee that we would be successful in obtaining such approvals and registrations.

We have limited experience in drug development and may not be able to successfully develop any drugs, which would cause us to cease operations.
 
The Company has not successfully developed a new drug and brought it to market. Our management and clinical teams have experience in drug development but they may not be able to successfully develop any drugs. Our ability to achieve revenues and profitability in our business will depend on, among other things, our ability to develop products internally or to obtain rights to them from others on favorable terms, complete laboratory testing and human investigations, obtain and maintain necessary intellectual property rights to our products, successfully complete regulatory review to obtain requisite governmental agency approvals, and, if necessary, enter into arrangements with third parties to manufacture our products and provide sales and marketing functions. If we are unable to achieve these objectives, we may be forced to cease operations, and you could lose all of your investment.
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FDA regulation of cannabis and the possible registration of facilities where medical cannabis is grown could negatively affect the cannabis industry, which would directly affect our financial condition.
 
Should the federal government legalize cannabis for medical use, it is possible that the FDA would seek to regulate it under the FDCA. Additionally, the FDA may issue rules and regulations including current good manufacturing practices related to the growth, cultivation, harvesting and processing of medical cannabis. Clinical trials may be needed to verify efficacy and safety. It is also possible that the FDA would require that facilities where medical cannabis is grown be registered with the FDA and comply with certain federally prescribed regulations. In the event that some or all of these regulations are imposed, we do not know what additional regulatory costs, requirements and possible prohibitions may be enforced.

Our ability to research, develop and commercialize drug product candidates is dependent on our ability to obtain and maintain the necessary controlled substance registrations from the DEA.

In the United States, the DEA currently regulates activities relating to the cultivation, possession and supply of cannabis for medical research and/or commercial development, including the requirement to obtain annual registrations to manufacture or distribute pharmaceutical products derived from cannabis extracts. The National Institute on Drug Abuse also plays a role in oversight of the cultivation of cannabis for medicinal research. Accordingly, we may be required to obtain and maintain the necessary DEA registrations for our medical cannabis business, and may be subject to other regulatory requirements. Commercialization of synthetically derived products may also require that we obtain and maintain the necessary DEA registrations, and be subject to other regulatory requirements.

We will be largely dependent on the success of our planned products, which will require the effective execution of our business plan, significant capital resources and years of development effort.
 
We are very early in our development efforts, and currently have no products on the market. Our business plan depends almost entirely on the successful development, regulatory approval and commercialization of our planned products, and substantial development and regulatory approval efforts will be required before we are permitted to commence commercialization. The manufacturing and marketing of our products will be subject to extensive and rigorous review and regulation by numerous government authorities in the United States, Canada, and any other jurisdictions where we intend to market our products. Before obtaining regulatory approvals for the commercial sale of any product, we must demonstrate that the product is safe and effective for use in each target indication, and potentially in specific patient populations. This process can take many years and may include post-marketing studies and surveillance, which would require the expenditure of substantial resources beyond our existing funds. Of the large number of drugs in development for approval in the United States, only a small percentage successfully complete the FDA regulatory approval process and are commercialized. Accordingly, even if we are able to obtain the requisite financing to continue to fund our research, development and clinical programs, we cannot assure you that any of our product candidates will be successfully developed or commercialized.

Development of pharmaceutical products is a time-consuming process, subject to a number of factors, many of which are outside of our control. Consequently, if we are unsuccessful or fail to timely develop new drugs, we could be forced to discontinue our operations.
 
Complex development and extensive testing will be required to determine the technical feasibility and commercial viability of the Company's proposed drug product(s). Our success will depend on our ability to achieve scientific and technological advances and to translate such advances into reliable, commercially competitive drugs on a timely basis. Drugs that we may develop are not likely to be commercially available, at a minimum, for a few years, if ever. The proposed development schedules for our product candidates may be affected by a variety of factors, including technological difficulties, proprietary technology of others, and changes in government regulation, many of which will not be within our control. Any delay in the development, introduction or marketing of our product candidates could result either in such drugs being marketed at a time when their cost and performance characteristics would not be competitive in the marketplace or in the shortening of their commercial lives. In light of the long-term nature of our projects and other risk factors described elsewhere in this document, we may not be able to successfully complete the development or marketing of any drugs which could cause us to cease operations. 
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We may fail to successfully develop and commercialize our product candidate(s) if any such product candidate is found to be unsafe or ineffective in clinical trials, does not receive necessary approval from the FDA or foreign regulatory agencies, fails to conform to a changing standard of care for the disease it seeks to treat, or is less effective or more expensive than current or alternative treatment methods.
 
Drug development failure can occur at any stage of clinical investigations and as a result of many factors, there can be no assurance that we or our collaborators will reach our anticipated clinical targets. Even if we or our collaborators complete our clinical investigations, we do not know what the long-term effects of exposure to our product candidates will be. Furthermore, our product candidates may be used in combination with other treatments and there can be no assurance that such use will not lead to unique safety issues. Failure to complete clinical investigations or to prove that our product candidates are safe and effective would have a material adverse effect on our ability to generate revenue and could require us to reduce the scope of or discontinue our operations, which could cause you to lose all of your investment.
     
If the FDA or comparable foreign regulatory authorities approve generic versions of any of our products that receive marketing approval, or such authorities do not grant our products appropriate periods of exclusivity before approving generic versions of our products, the sales of our products could be adversely affected.

Once a new drug application ("NDA") is approved by the FDA, the product covered thereby becomes a "reference listed drug" in the FDA's publication, "Approved Drug Products with Therapeutic Equivalence Evaluations," commonly known as the Orange Book. Manufacturers may seek approval of generic versions of reference listed drugs through submission of abbreviated new drug applications ("ANDAs") in the United States. In support of an ANDA, a generic manufacturer need not conduct clinical trials. Rather, the applicant generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference listed drug and that the generic version is bioequivalent to the reference listed drug, meaning it is absorbed in the body at the same rate and to the same extent. Generic products may be significantly less costly to bring to market than the reference listed drug and companies that produce generic products are generally able to offer them at lower prices. Thus, following the introduction of a generic drug, a significant percentage of the sales of any branded product or reference listed drug is typically lost to the generic product.

The FDA may not approve an ANDA for a generic product until any applicable period of non-patent exclusivity for the reference listed drug has expired. The FDCA provides a period of five years of non-patent exclusivity for a new drug containing a new chemical entity ("NCE"). Specifically, in cases where such exclusivity has been granted, an ANDA may not be submitted to the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification that a patent covering the reference listed drug is either invalid or will not be infringed by the generic product, in which case the applicant may submit its application four years following approval of the reference listed drug.
 
As we develop drug products, the Company intends to ensure that the formulation would contain active ingredients that would be treated as NCEs by the FDA and, therefore, if approved, should be afforded five years of data exclusivity, although the FDA may disagree with that conclusion and may approve generic products after a period that is less than five years. If the FDA were to award NCE exclusivity to someone other than us, we believe that we would still be awarded three year "Other" exclusivity protection from generic competition, which is awarded when an application or supplement contains reports of new clinical investigations (not bioavailability studies) conducted or sponsored by an applicant and essential for approval. Manufacturers may seek to launch these generic products following the expiration of the applicable marketing exclusivity period, even if we still have patent protection for our product. If we do not maintain patent protection and data exclusivity for our product candidates, our business may be materially harmed.
 
Competition that our products may face from generic versions of our products could materially and adversely impact our future revenue, profitability and cash flows and substantially limit our ability to obtain a return on the investments we have made in those product candidates.
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Even if we were to successfully develop approvable drugs, we will not be able to sell these drugs if we fail to comply with manufacturing regulations, which could have a materially adverse effect on our business.
 
If we were to successfully develop approvable drugs, before we can begin selling these drugs, we must obtain regulatory approval of our manufacturing facility and process or the manufacturing facility and process of the third party or parties with whom we may outsource our manufacturing activities. In addition, the manufacture of our products must comply with the FDA's current Good Manufacturing Practices regulations, commonly known as GMP regulations. The GMP regulations govern quality control and documentation policies and procedures. Our manufacturing facilities, and the manufacturing facilities of any third-party manufacturers we engage, will be continually subject to inspection by the FDA and other state, local and foreign regulatory authorities, before and after product approval. We cannot guarantee that we, or any potential third-party manufacturer of our products, will be able to comply with the GMP regulations or other applicable manufacturing regulations. The failure to comply with all necessary regulations would have a materially adverse effect on our business and could force us to cease operations.
 
We must comply with significant and complex government regulations, compliance with which may delay or prevent the commercialization of our product candidates, which could have a materially adverse effect on our business.
 
The research and development, manufacture and marketing of product candidates for pharmaceutical drugs and biological products are subject to regulation, primarily by the FDA in the United States and by comparable authorities in other countries. These national agencies and other federal, state, local and foreign entities regulate, among other things, research and development activities (including testing in animals and in humans) and the testing, manufacturing, handling, labeling, storage, record keeping, approval, advertising and promotion of the product that we are developing. Noncompliance with applicable requirements can result in various adverse consequences, including approval delays or refusals to approve drug licenses or other applications, suspension or termination of clinical investigations, revocation of approvals previously granted, fines, criminal prosecution, recalls or seizures of products, injunctions against shipping drugs and total or partial suspension of production and/or refusal to allow a company to enter into governmental supply contracts. 
 
The process of obtaining FDA approval has historically been costly and time consuming. Current FDA requirements for a new human drug or biological product to be marketed in the United States include: (a) the successful conclusion of pre-clinical laboratory and animal tests, if appropriate, to gain preliminary information on the product's safety; (b) filing with the FDA of an IND application to conduct human clinical trials for drugs or biologics; (c) the successful completion of adequate and well-controlled human clinical investigations to establish the safety and efficacy of the product for its recommended use; and (d) filing by a company and acceptance and approval by the FDA of a NDA for a drug product or a biological license application for a biological product to allow commercial distribution of the drug or biologic. A delay in one or more of the procedural steps outlined above could be harmful to us in terms of getting our product candidates through clinical testing and to market, which could have a materially adverse effect on our business.
 
The FDA reviews the results of the clinical trials and may order the temporary or permanent discontinuation of clinical trials at any time if it believes the product candidate exposes clinical subjects to an unacceptable health risk. Investigational drugs used in clinical studies must be produced in compliance with current GMP rules pursuant to FDA regulations. 
  
If we experience delays or discontinuations of our clinical trials by the FDA or comparable authorities in other countries, or if we fail to obtain registration or other approvals of our products or devices, then we could be forced to cease our operations and you could lose all of your investment.
  
Even if we are successful in developing drug product(s), we have limited experience in conducting or supervising clinical trials that must be performed to obtain data to submit in concert with applications for approval by the FDA. The regulatory process to obtain approval for drugs for commercial sale involves numerous steps. Drugs are subjected to clinical trials that allow development of case studies to examine safety, efficacy, and other issues to ensure that sale of drugs meets the requirements set forth by various governmental agencies, including the FDA. In the event that our protocols do not meet standards set forth by the FDA, or that our data is not sufficient to allow such trials to validate our drugs in the face of such examination, we might not be able to meet the requirements that allow our drugs to be approved for sale which could have a materially adverse effect on our business.
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We can provide no assurance that any future product candidates will obtain regulatory approval or that the results of any clinical trials will be favorable.
 
The research and development plan for any product candidate will require completion of the Phases 1 and 2 clinical development program, commencement of a pivotal Phase 3 trial required for new drug approval, and other key milestones such as additional patent issuances and United States Orphan Drug designations. Due to our financial constraints, we may not have the resources necessary to complete our application. If the results of any initial Phases 1 and 2a clinical trials are satisfactory to the FDA, we may proceed to larger Phase 2b clinical trials in the United States. There is no guarantee the FDA will approve a Phase 2b trial, and even if they do, our financial constraints may prevent us from undertaking clinical trials.
 
The biopharmaceutical industry is characterized by rapid technological developments and a high degree of competition. We may be unable to compete with enterprises equipped with more substantial resources than us, which could cause us to curtail or cease operations.
 
The successful development of biopharmaceuticals is highly uncertain. A variety of factors, including pre-clinical investigation results or regulatory approvals, could cause us to abandon the development of our product candidates.

The biopharmaceutical industry is characterized by rapid technological developments and a high degree of competition based primarily on scientific and technological factors. These factors include the availability of patent and other protection for technology and products, the ability to commercialize technological developments and the ability to obtain government approval for testing, manufacturing and marketing.
 
We will compete with biopharmaceutical firms in the United States and elsewhere, as well as a growing number of large pharmaceutical companies that are applying biotechnology to their operations. Many biopharmaceutical companies have focused their development efforts in the human therapeutics area. Many major pharmaceutical companies have developed or acquired internal biotechnology capabilities or made commercial arrangements with other biopharmaceutical companies. These companies, as well as academic institutions, government agencies and private research organizations, also compete with us in recruiting and retaining highly qualified scientific personnel and consultants. Our ability to compete successfully with other companies in the pharmaceutical field will also depend to a considerable degree on the continuing availability of capital to us. 
  
The Company faces significant competitive and market risk. These competitive and market risks could have a material adverse effect on our business, prospects, financial condition and results of operations, which may cause you to lose all of your investment.
 
Our competition will be determined in part by the potential indications for which drugs are developed and ultimately approved by regulatory authorities. Additionally, the timing of the market introduction of some of our potential product candidates or of competitors' products may be an important competitive factor. Accordingly, the relative speed with which we can develop drugs, complete pre-clinical testing, clinical investigations, approval processes and supply commercial quantities to market are important competitive factors. We expect that competition among drugs approved for sale will be based on various factors, including product efficacy, safety, reliability, availability, price and patent protection. 
  
Successful development of biopharmaceuticals is highly uncertain and is dependent on numerous factors, many of which are beyond our control.
 
Products that appear promising in the early phases of development may fail to reach the market for several reasons. Pre-clinical investigation results may show the product to be less effective than desired (e.g., the investigation failed to meet its primary objectives) or to have harmful or problematic side effects. Products may fail to receive the necessary regulatory approvals or may be delayed in receiving such approvals. Among other things, such delays may be caused by slow enrollment in clinical investigations, length of time to achieve investigation endpoints, additional time requirements for data analysis or a IND and later NDA, preparation, discussions with the FDA, an FDA request for additional pre-clinical or clinical data or unexpected safety or manufacturing issues, manufacturing costs, pricing or reimbursement issues, or other factors that make the product not economical. Proprietary rights of others and their competing products and technologies may also prevent the product from being commercialized.
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Success in pre-clinical and early clinical investigations does not ensure that large-scale investigations will be successful. Clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals. The length of time necessary to complete clinical investigations and to submit an application for marketing approval for a final decision by a regulatory authority varies significantly from one product to the next, and may be difficult to predict. There can be no assurance that any of our products will develop successfully, and the failure to develop our products will have a materially adverse effect on our business, financial condition and results of operations.

Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could subject us to significant liability and harm our reputation.
 
We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with DEA or FDA regulations or similar regulations of other foreign regulatory authorities or state regulatory authorities, or failure to provide accurate information to regulatory authorities. In addition, misconduct by employees could include intentional failures to comply with certain manufacturing standards, to comply with United States federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, to report financial information or data accurately or to disclose unauthorized activities to us. Employee misconduct could also involve the improper use of information obtained in the course of clinical investigations, which could result in regulatory sanctions and serious harm to our reputation. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions.
 
If we are unable to develop sales, marketing and distribution capabilities or enter into agreements with third parties to perform these functions on acceptable terms, we may be unable to generate revenue.
 
If any of our product candidates is approved, we will need to develop internal sales, marketing and distribution capabilities to commercialize such products, which would be expensive and time-consuming, or enter into collaborations with third parties to perform these services. If we decide to market our products directly, we will need to commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and supporting distribution, administration and compliance capabilities. If we rely on third parties with such capabilities to market our products or decide to co-promote products with collaborators, we will need to establish and maintain marketing and distribution arrangements with third parties, and there can be no assurance that we will be able to enter into such arrangements on acceptable terms, or at all. In entering into third-party marketing or distribution arrangements, any revenue we receive will depend upon the efforts of the third parties and there can be no assurance that such third parties will establish adequate sales and distribution capabilities or be successful in gaining market acceptance of any approved product. If we are not successful in commercializing any product approved in the future, either on our own or through third parties, our business, financial condition and results of operations could be materially and adversely affected. 
 
Product liability lawsuits against us could cause us to incur substantial liabilities.
 
Our use of our product candidates in clinical investigations and the sale of our products, if approved, exposes us to the risk of product liability claims. Product liability claims might be brought against us by patients, customers, healthcare providers or others selling or otherwise coming into contact with our products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, including as a result of interactions with alcohol or other drugs, negligence, strict liability, and a breach of warranties. Claims could also be asserted under state consumer protection acts. If we become subject to product liability claims and cannot successfully defend ourselves against them, we could incur substantial liabilities. In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things:
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withdrawal of patients from our expected clinical investigations;
 
 
substantial monetary awards to claimants;
 
 
decreased demand for our product candidates following marketing approval, if obtained;
 
 
damage to our reputation and exposure to adverse publicity;
 
 
increased FDA warnings on product labels;
 
 
litigation costs;
 
 
distraction of management's attention from our primary business;
 
 
loss of revenue; and
 
 
the inability to successfully commercialize our product candidates, if approved.

We may be subject to product recalls for product defects that are self-imposed or imposed by regulators.

Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. If any of our products are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin or at all. In addition, a product recall may require significant management attention. Although we will have detailed procedures in place for testing our products, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. A recall for any of the foregoing reasons could lead to decreased demand for the our products and could have a material adverse effect on the results of operations and our financial condition. Additionally, product recalls may lead to increased scrutiny of our operations by regulatory agencies, requiring further management attention and potential legal fees and other expenses.

We expect to face intense competition, often from companies with greater resources and experience than we have.
 
The cannabis industry and the biopharmaceutical industry are highly competitive and subject to rapid change. These industries continue to expand and evolve as an increasing number of competitors and potential competitors enter the market. Many of our competitors and potential competitors have substantially greater financial, technological, managerial and research and development resources and experience than we have. Some of these competitors and potential competitors have more experience than we have in the development of products and product candidates, including validation procedures and regulatory matters. In addition, our products, if successfully developed, will compete with product offerings from large and well-established companies that have greater marketing and sales experience and capabilities than we have. If we are unable to compete successfully, we may be unable to grow and sustain our revenue.
 
Risks Related to Our Company

We may be subject to additional regulatory burden resulting from any public listing on the CSE.

We intend to seek a listing on the CSE, although to date we have not been subject to the continuous and timely disclosure requirements of Canadian securities laws or other rules, regulations and policies of the CSE. We are working with our legal, accounting and financial advisors to identify those areas in which changes should be made to our financial management control systems to manage our obligations as a public company listed on the CSE. These areas include corporate governance, corporate controls, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas, including our internal controls over financial reporting. However, we cannot assure holders of our shares that these and other measures that we might take will be sufficient to allow us to satisfy our obligations as a public company listed on the CSE on a timely basis. In addition, compliance with reporting and other requirements applicable to public companies listed on the CSE will create additional costs for us and will require the time and attention of management. We cannot predict the amount of the additional costs that we might incur, the timing of such costs or the impact that management's attention to these matters will have on our business.
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Our limited operating history makes it difficult for potential investors to evaluate our business prospects and management.
 
We have a very limited operating history upon which to base an evaluation of our business and prospects. Our short operating history may hinder our ability to successfully meet our objectives and makes it difficult for potential investors to evaluate our business or prospective operations. We have not generated any revenues since inception and we are not currently profitable and may never become profitable.

Operating results for future periods are subject to numerous uncertainties, and we cannot assure you that the Company will achieve or sustain profitability. As an early stage company, we are subject to all the risks inherent in the financing, expenditures, operations, complications and delays inherent in a new business. Future operating results will depend upon many factors, including our success in attracting and retaining motivated and qualified personnel, our ability to establish short term credit lines or obtain financing from other sources, such as the contemplated Offering, our ability to develop and market new products, control costs, and general economic conditions. Additionally, our ability to become profitable will depend upon: our ability to develop drugs, to obtain approval for such drugs, and if approved, to successfully commercialize our drugs; our research and development efforts, including the timing and cost of clinical investigations; and our ability to enter into favorable alliances with third-parties who can provide substantial capabilities in clinical development, regulatory affairs, sales, marketing and distribution. Even if we successfully develop and market our drug product(s), we may not generate sufficient or sustainable revenue to achieve or sustain profitability, which could cause us to cease operations and cause you to lose all of your investment.

The Company's prospects must be considered in light of the risks encountered by companies in the early stage of development, particularly companies in new and rapidly evolving markets. We cannot assure you that the Company will successfully address any of these risks. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.
 
We need substantial additional funding to continue our operations. We may not be able to raise capital when needed, if at all, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts and could cause our business to fail.
 
We require additional capital for the development of our business operations and commercialization of our planned products and product candidates. We may also encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may increase our capital needs and/or cause us to spend our cash resources faster than we expect. Accordingly, we will need to obtain substantial additional funding in order to continue our operations. The uncertainties surrounding our ability to fund our operations raise substantial doubt about our ability to continue as a going concern.
 
To date, we have financed our operations entirely through investments by founders and other investors.  We may seek additional funds through public or private equity or debt financing, via strategic transactions or collaborative arrangements. Additional funding from those or other sources may not be available when or in the amounts needed, on acceptable terms, or at all. If we raise capital through the sale of equity, or securities convertible into equity, it would result in dilution to our existing shareholders, which could be significant depending on the price at which we may be able to sell our securities. If we raise additional capital through the incurrence of indebtedness, we would likely become subject to covenants restricting our business activities, and holders of debt instruments may have rights and privileges senior to those of our equity investors. In addition, servicing the interest and principal repayment obligations under debt facilities could divert funds that would otherwise be available to support research and development, clinical or commercialization activities. If we obtain capital through collaborative arrangements, these arrangements could require us to relinquish rights to our technology or product candidates and could result in our receipt of only a portion of the revenues associated with the partnered product.
25

 
There are no assurances that future funding will be available on favorable terms, or at all. If additional funding is not obtained, we may need to reduce, defer or cancel research and development efforts, preclinical and lab work, planned clinical investigations, our cultivation operations, or overhead expenditures to the extent necessary. The failure to fund our operating and capital requirements could have a material adverse effect on our business, financial condition and results of operations.
 
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. Any of these events could significantly harm our business, financial condition and prospects.

Failure to successfully integrate acquired businesses and their products and other assets into our Company, or if integrated, failure to further our business strategy, may result in our inability to realize any benefit from such acquisition.

We expect to grow by acquiring businesses. The consummation and integration of any acquired business, product or other assets into our Company may be complex and time consuming and, if such businesses and assets are not successfully integrated, we may not achieve the anticipated benefits, cost-savings or growth opportunities. Furthermore, these acquisitions and other arrangements, even if successfully integrated, may fail to further our business strategy as anticipated, expose our Company to increased competition or other challenges with respect to our products or geographic markets, and expose us to additional liabilities associated with an acquired business, technology or other asset or arrangement.

When we acquire cannabis businesses, we may obtain the rights to applications for licenses as well as licenses; however, the procurement of such applications for licenses and licenses generally will be subject to governmental and regulatory approval. There are no guarantees that we will successfully consummate such acquisitions, and even if we consummate such acquisitions, the procurement of applications for licenses may never result in the grant of a license by any state or local governmental or regulatory agency, and the transfer of any rights to licenses may not be approved by the applicable state and/or local governmental or regulatory agency.

Any inability to attract and retain qualified key management and technical personnel would impair our ability to implement our business plan.
 
Our success largely depends on the continued service of key management and other specialized personnel. The loss of one or more members of our management team or other key employees or consultants could materially harm our business, financial condition, results of operations and prospects. Because our management team is not obligated to provide us with continued service, they could terminate their employment or services with us at any time without penalty, subject to providing any required advance notice. Our future success and growth will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel and consultants, as well as personnel and consultants with expertise in clinical testing, manufacturing, governmental regulation and commercialization. We face competition for personnel and consultants from other companies, universities, public and private research institutions, government entities and other organizations. 

We will need to grow the size of our organization, and we may experience difficulties in managing any growth we may achieve.
 
As of the date of this Offering Circular, we have eight full-time employees. As our development and commercialization plans and strategies develop, we expect to need additional research, development, managerial, operational, sales, marketing, financial, accounting, legal and other resources. Future growth would impose significant added responsibilities on members of management. Our management may not be able to accommodate those added responsibilities, and our failure to do so could prevent us from effectively managing future growth and successfully growing our company.

We expect to incur significant ongoing costs and obligations related to our investment in infrastructure, growth, regulatory compliance and operations.

We expect to incur significant ongoing costs and obligations related to our investment in infrastructure and growth and regulatory compliance, which could have a material adverse impact on our results of operations, financial condition and cash flows. In addition, future changes in regulations, more vigorous enforcement thereof or other unanticipated events could require extensive changes to our operations, increased compliance costs or give rise to material liabilities, which could have a material adverse effect on our business, results of operations and financial condition. Our efforts to grow our business may be costlier than we expect, and we may not be able to generate sufficient revenue to offset such higher operating expenses. We may incur significant losses in the future for a number of reasons, including unforeseen expenses, difficulties, complications and delays, and other unknown events.
26

 
If we are unable to protect our intellectual property rights, our competitive position could be harmed.
 
Our commercial success will depend in part on our ability to obtain and maintain intellectual property protection in the United States and Canada with respect to our proprietary technology and products. Our ability to successfully implement our business plan depends on our ability to build and maintain brand recognition using trademarks, service marks, trade dress and other intellectual property. We may rely on trade secret, trademark, patent and copyright laws, and confidentiality and other agreements with employees and third parties, all of which offer only limited protection. The steps we have taken and the steps we will take to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietary information or infringement of our intellectual property rights. If our efforts to protect our intellectual property are unsuccessful or inadequate, or if any third party misappropriates or infringes on our intellectual property, the value of our brands may be harmed, which could have a material adverse effect on the Company's business and prevent our brands from achieving or maintaining market acceptance.

If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is not sufficient, our competitors could develop and commercialize technology and products similar or superior to ours, and our ability to successfully commercialize our technology and products may be adversely affected. It is also possible that we will fail to identify patentable aspects of inventions made in the course of our development and commercialization activities before it is too late to obtain patent protection on them.
 
Protecting against the unauthorized use of our trademarks, patented technology and other intellectual property rights is expensive, difficult and may in some cases not be possible. In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property rights, and proving any such infringement may be even more difficult.
 
We may become subject to claims by third parties asserting that we or our employees have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
 
Our commercial success depends upon our ability to develop, manufacture, market and sell our products, and to use our related proprietary technologies without violating the intellectual property rights of others. We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products. Third parties may assert infringement claims against us, and if we are found to infringe a third party's intellectual property rights, we could be required to obtain a license from such third party to continue commercializing our products. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Under certain circumstances, we could be forced, including by court order, to cease commercializing the applicable product. In addition, in any such proceeding or litigation, we could be found liable for monetary damages. A finding of infringement could prevent us from commercializing our products or force us to cease some of our business operations, which could materially harm our business. Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar negative impact on our business. We attempt to ensure that our products and the methods we employ to manufacture them, as well as the methods for their uses we intend to promote, do not infringe other parties' proprietary rights. There can be no assurance they do not, however, and competitors or other parties may assert that we infringe their proprietary rights in any event.
    
Our financial situation creates doubt whether we will continue as a going concern.
 
We have not generated revenues since inception, and we expect to incur a net loss for the fiscal year ending December 31, 2019 and thereafter, primarily as a result of increased operating expenses. There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain funding from this Offering or additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available, we may be forced to discontinue operations, which would cause investors to lose their entire investment. Our auditors have indicated that these conditions raise substantial doubt about the Company's ability to continue as a going concern.
27

  
We will need but may be unable to obtain additional funding on satisfactory terms, which could dilute our shareholders or impose burdensome financial restrictions on our business.

In the future, we hope to rely on revenues generated from operations to fund all of the cash requirements of our activities. However, there can be no assurance that we will be able to generate any significant cash from our operating activities in the future. Future financings may not be available on a timely basis, in sufficient amounts or on terms acceptable to us, if at all. Any debt financing or other financing of securities senior to the Common Shares will likely include financial and other covenants that will restrict our flexibility. Any failure to comply with these covenants would have a material adverse effect on our business, prospects, financial condition and results of operations because we could lose our existing sources of funding and impair our ability to secure new sources of funding. There can be no assurance that the Company will be able to generate any investor interest in its securities. If we do not obtain additional financing, our business may never commence, in which case you would likely lose the entirety of your investment in the Company.
 
We will incur increased costs as a result of our public reporting obligations, and our management team will be required to devote substantial time to new compliance initiatives.
 
We may become subject to the periodic reporting requirements for public reporting companies in the United States and Canada in the near future. Particularly after we are no longer an "emerging growth company," we will continue to incur significant legal, accounting and other expenses that we have not incurred as a private company. Our management and other personnel would need to devote a substantial amount of time to comply with our reporting obligations. Moreover, these reporting obligations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.
 
Failure to develop our internal controls over financial reporting as we grow could have an adverse impact on us.
 
As our Company matures we will need to continue to develop and improve our current internal control systems and procedures to manage our growth. We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish appropriate controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. In addition, management's assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management's assessment of our internal controls over financial reporting or disclosure of our public accounting firm's attestation to or report on management's assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Shares.
  
Even if this Offering is successful, we will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
 
The proceeds from this Offering, excluding potential proceeds from the sale of Warrant Shares upon exercise of all the Warrants, will be up to $20,000,000 before deducting offering expenses payable by us. We expect that if the maximum sale of Units and Warrant Shares is achieved, the net proceeds from this Offering will be sufficient to fund our current operations for at least the next twenty-four months. However, we may not achieve the maximum sale of Units and Warrant Shares, and/or our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances or a combination of these approaches. Raising funds in the current economic environment may present additional challenges. It is not certain that we have accounted for all costs and expenses of future development and regulatory compliance. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.
28

 
Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our products. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our shareholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities may dilute our existing shareholders. The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
 
If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product, or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.
 
If you purchase our Units in this Offering, you will incur immediate and substantial dilution in the book value of your Units.
 
You will suffer immediate and substantial dilution in the net tangible book value of the Units you purchase in this Offering. Assuming an offering price of $0.50 per Unit, and assuming all 40,000,000 Units are sold for gross proceeds of $19,700,000 (after deducting estimated Offering expenses), purchasers of Units in this Offering will experience dilution of approximately $0.34 per Unit in net tangible book value of the Units. In addition, investors purchasing Units in this Offering will contribute up to 80% of the total amount invested by shareholders since inception, but will only own approximately 32% of the Common Shares outstanding.

We have no minimum capitalization.

We do not have a minimum capitalization, and we may use the proceeds from this Offering immediately following our acceptance of the corresponding subscription agreements. We do not have any track record for self-underwritten Regulation A+ offerings and there can be no assurance we will sell the Maximum Amount in this Offering or any other amount. There is no assurance that we will raise sufficient capital solely from this Offering to implement our business plan, potentially resulting in greater operating losses unless we are able to raise the required capital from alternative sources. There is no assurance that alternative capital, if needed, would be available on terms acceptable to us, or at all.
  
Risks Related to Our Securities
  
We engage in transactions with related parties and such transactions present possible conflicts of interest that could have an adverse effect on us.
 
We have entered into transactions with related parties. The details of certain of these transactions are set forth in "Interest of Management and Others in Certain Transactions."
 
Related party transactions create the possibility of conflicts of interest with regard to our management, including that:
 
we may enter into contracts between us, on the one hand, and related parties, on the other, that are not the result of arm's-length transactions;
 
29

 
 
our executive officers and directors that hold positions of responsibility with related parties may be aware of certain business opportunities that are appropriate for presentation to us as well as to such other related parties and may present such business opportunities to such other parties; and
 
 
our executive officers and directors that hold positions of responsibility with related parties may have significant duties with, and spend significant time serving, other entities and may have conflicts of interest in allocating time.
 
Such conflicts could cause an individual in our management to seek to advance his or her economic interests or the economic interests of certain related parties above ours. Further, the appearance of conflicts of interest created by related party transactions could impair the confidence of our investors. Notwithstanding this, it is possible that a conflict of interest could have a material adverse effect on our liquidity, results of operations and financial condition. 
 
Our executive officers and directors and their respective affiliates may continue to exercise significant control over our Company after this Offering, which will limit your ability to influence corporate matters and could delay or prevent a change in corporate control.
 
Our executive officers and directors currently represent beneficial ownership, in the aggregate, of approximately 53% of our outstanding Common Shares. Immediately following the completion of this Offering, and disregarding any Units that they purchase in this Offering, if any, the existing holdings of our executive officers and directors and their affiliates will represent beneficial ownership, in the aggregate, of approximately 36% of our outstanding Common Shares, assuming we sell all the Units and issue 40,000,000 Common Shares to the subscribers in the Offering. Please see "Security Ownership of Management & Certain Security Holders" on page 52 for more information. As a result, these shareholders may be able to influence our management and affairs and control the outcome of matters submitted to our shareholders for approval, including the election of directors and any sale, merger, consolidation, or sale of all or substantially all of our assets. These shareholders acquired their Common Shares for substantially less than the price of the Units being acquired in this Offering, and these shareholders may have interests, with respect to their Common Shares, that are different from those of investors in this Offering, and the concentration of voting power among one or more of these shareholders may have an adverse effect on the price of our Common Shares. In addition, this concentration of ownership might adversely affect the market price of our Common Shares by:
 
 
delaying, deferring or preventing a change of control of the Company;
 
 
impeding a merger, consolidation, takeover or other business combination involving the Company; or
 
 
discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company.
 
Conflicts of Interest
 
The Company may be subject to various potential conflicts of interest because of the fact that some of its officers and directors may be engaged in a range of business activities. In addition, the Company's executive officers and directors may devote time to their outside business interests, so long as such activities do not materially or adversely interfere with their duties to the Company. In some cases, the Company's executive officers and directors may have fiduciary obligations associated with these business interests that interfere with their ability to devote time to the Company's business and affairs and that could adversely affect the Company's operations. These business interests could require significant time and attention of the Company's executive officers and directors.
 
We have broad discretion in how we use the proceeds of this Offering and may not use these proceeds effectively, which could affect our results of operations and cause the price of our Common Shares to decline.
 
We will have considerable discretion in the application of the net proceeds of this Offering. We intend to use the net proceeds from this Offering to fund our business strategy, including without limitation, new and ongoing research and development, cultivation and commercialization operations, offering expenses, working capital and other general corporate purposes, which may include funding for the hiring of additional personnel. As a result, investors will be relying upon management's judgment with only limited information about our specific intentions for the use of the balance of the net proceeds of this Offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all for our shareholders. In addition, pending their use, we may invest the net proceeds from this Offering in a manner that does not produce income or that loses value.
30

 
There is no existing market for our Common Shares, and you cannot be certain that an active trading market or a specific share price will be established.
 
Prior to this Offering, there has been no public market for shares of our Common Shares. We cannot predict the extent to which investor interest in our Company will lead to the development of a trading market or how liquid that market might become. The Offering price for the Units has been arbitrarily determined by the Company and may not be indicative of the price that will prevail in any trading market following this Offering, if any. The market price for our Common Shares may decline below the Offering price, and our stock price is likely to be volatile.
 
We will use our best efforts to list our Common Shares for trading on a securities exchange; however, it is uncertain when our Common Shares will be listed on an exchange for trading, if ever.
 
There is currently no public market for our Common Shares and there can be no assurance that one will ever develop. Our Board of Directors, in its sole discretion, may choose to take actions necessary to list our Common Shares on a national securities exchange, but is not obligated to do so. As a result, our Common Shares sold in this Offering may not be listed on a securities exchange for an extended period of time, if at all. If our Common Shares are not listed on an exchange, it may be difficult to sell or trade in our Common Shares.
 
We may lose our status as a foreign private issuer in the United States, which would result in increased costs related to regulatory compliance under United States securities laws.

The Company will cease to qualify as a "foreign private issuer," as defined in Rule 405 under the Securities Act and Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), if, as of the last business day of our second fiscal quarter, more than 50 percent of our outstanding Common Shares are directly or indirectly owned by residents of the United States. If we determine that we fail to qualify as a foreign private issuer, the Company will cease to be eligible to avail itself of the forms and rules designated for foreign private issuers beginning on the first day of the fiscal year following such determination. Among other things, this will result in loss of the exemption from registration under the Exchange Act provided by Rule 12g3-2(b) thereunder, and, if the Company is required to register our Common Shares under section 12(g) of the Exchange Act, we will have to do so as a domestic issuer.  Further, any securities that we issue in unregistered or unqualified offerings both within and outside the United States will be "restricted securities" (as defined in Rule 144(a)(3) under the Securities Act), and will continue to be subject to United States resale restrictions notwithstanding their resale in "offshore transactions" pursuant to Regulation S under the Securities Act.  As a practical matter, this will likely require us to register more offerings of our securities under the Securities Act on either a primary offering or resale basis, even if they take place entirely outside the United States.  The resulting legal and administrative costs of complying with the resulting regulatory requirements are anticipated to be substantial, and to subject the Company to additional exposure to liability for which we may not be able to obtain insurance coverage on favorable terms or at all. 

If our stock price fluctuates after the Offering, you could lose a significant part of your investment.
 
The market price of our Common Shares could be subject to wide fluctuations in response to, among other things, the risk factors described in this section of this Offering Circular, and other factors beyond our control, such as fluctuations in the valuation of companies perceived by investors to be comparable to us. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes or international currency fluctuations, may negatively affect the market price of our Common Shares. In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management's attention from other business concerns, which could seriously harm our business.
31

  
After the completion of this Offering, we may be at an increased risk of securities class action litigation.
 
Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. If our stock price decreases and we were to be sued, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.
 
We do not intend to pay dividends on our Common Shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our Common Shares.
 
We have never declared or paid any cash dividend on our Common Shares and do not currently intend to do so in the foreseeable future. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future. Therefore, the success of an investment in the Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares will depend upon any future appreciation in their value. There is no guarantee that the Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares will appreciate in value or even maintain the price at which you purchased them.
 
We may terminate this Offering at any time during the Offering Period.
 
We reserve the right to terminate this Offering at any time, regardless of the number of Units sold. In the event that we terminate this Offering at any time prior to the sale of all of the Units offered hereby, whatever amount of capital that we have raised at that time will have already been utilized by the Company and no funds will be returned to subscribers. 

DILUTION
 
As at date of this Offering Circular, an aggregate of 86,046,843 Common Shares are issued and outstanding, and an aggregate of 14,281,735 Common Share purchase warrants are issued and outstanding.
 
If you purchase Units in this Offering, your ownership interest in our Common Shares will be diluted immediately, to the extent of the difference between the price to the public charged for each Unit in this Offering and the net tangible book value per share of our Common Shares after this Offering.
  
Our net tangible book value as of May 15, 2019 was $1, or $0.00 per share, based on 86,046,843 outstanding Common Shares as of the date of this Offering Circular. Net tangible book value per share equals the amount of our total tangible assets less total liabilities, divided by the total number of Common Shares outstanding, all as of the date specified.

If the Maximum Offering, at an offering price of $0.50 per Unit, is sold in this Offering, after deducting approximately $300,000 in offering expenses payable by us, our pro forma as adjusted net tangible book value at May 15, 2019 would be approximately $19,700,000, or $0.16 per share. This amount represents an immediate increase in pro forma net tangible book value of $0.16 per share to our existing shareholders as of the date of this Offering Circular, and an immediate dilution in pro forma net tangible book value of approximately $0.34 per share to new investors purchasing Units in this Offering at a price of $0.50 per Unit.
 
The following table illustrates the approximate per share dilution to new investors discussed above, assuming the sale of, respectively, 100%, 75%, 50% and 25% of the Units offered for sale in this Offering (after deducting our estimated offering expenses of $300,000):
 
Funding Level
 
$
19,700,000
   
$
14,700,000
   
$
9,700,000
   
$
4,700,000
 
Offering Price
 
$
0.50
   
$
0.50
   
$
0.50
   
$
0.50
 
Pro forma net tangible book value per Common Share before the Offering
 
$
0.00
   
$
0.00
   
$
0.00
   
$
0.00
 
Increase per Common Share attributable to investors in this Offering
 
$
0.16
   
$
0.13
   
$
0.09
   
$
0.05
 
Pro forma net tangible book value per Common Share after the Offering
 
$
0.16
   
$
0.13
   
$
0.09
   
$
0.05
 
Dilution to investors after the Offering
 
$
0.34
   
$
0.37
   
$
0.41
   
$
0.45
 
 
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The following tables set forth, assuming the sale of, respectively, 100%, 75%, 50% and 25% of the Units offered for sale in this Offering, the total number of shares previously sold to existing shareholders as of June 11, 2019, the total consideration paid for the foregoing (based on cash actually received), and the respective percentages applicable to such purchased shares and consideration paid based on an average price of $0.08 per share paid by our existing shareholders and $0.50 per Unit paid by investors in this Offering.
 
 
Units Purchased
 
Total Consideration
 
 
Number
 
Percentage
 
Amount
 
Percentage
 
Assuming 100% of Units Sold:
               
Existing Shareholders
   
86,046,843
     
68
%
 
$
5,142,294
     
20
%
New Investors
   
40,000,000
     
32
%
 
$
20,000,000
     
80
%
Total
   
126,046,843
     
100
%
 
$
25,142,294
     
100
%
 
 
Units Purchased
 
Total Consideration
 
 
Number
 
Percentage
 
Amount
 
Percentage
 
Assuming 75% of Units Sold:
               
Existing Shareholders
   
86,046,843
     
74
%
 
$
5,142,294
     
26
%
New Investors
   
30,000,000
     
26
%
 
$
15,000,000
     
74
%
Total
   
116,046,843
     
100
%
 
$
20,142,294
     
100
%
 
 
Units Purchased
 
Total Consideration
 
 
Number
 
Percentage
 
Amount
 
Percentage
 
Assuming 50% of Units Sold:
               
Existing Shareholders
   
86,046,843
     
81
%
 
$
5,142,294
     
34
%
New Investors
   
20,000,000
     
19
%
 
$
10,000,000
     
66
%
Total
   
106,046,843
     
100
%
 
$
15,142,294
     
100
%
 
 
Units Purchased
 
Total Consideration
 
 
Number
 
Percentage
 
Amount
 
Percentage
 
Assuming 25% of Units Sold:
               
Existing Shareholders
   
86,046,843
     
90
%
 
$
5,142,294
     
51
%
New Investors
   
10,000,000
     
10
%
 
$
5,000,000
     
49
%
Total
   
96,046,843
     
100
%
 
$
10,142,294
     
100
%

 
PLAN OF DISTRIBUTION AND SELLING SECURITYHOLDERS

The Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares are being offered pursuant to Regulation A of Section 3(b) of the Securities Act of 1933, as amended (the "Securities Act"), for Tier 2 offerings, by the management of the Company on a "best-efforts" basis directly to purchasers who satisfy the requirements set forth in Regulation A. We have the option in our sole discretion to accept less than the minimum investment. We no minimum capitalization, and we may use the proceeds from this Offering immediately following our acceptance of the corresponding subscription agreements towards our business strategy, facility expenses, research and development expenses, offering expenses (which include legal, accounting, printing, due diligence, marketing, selling and other costs incurred in the Offering), working capital, general corporate purposes, and other uses, as more specifically set forth in the "Use of Proceeds to Issuer" starting on page 34. There is no arrangement for the return of funds to investors if all of the Units offered are not sold in the Offering.
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Our Offering will expire on the first to occur of (a) the sale of all 40,000,000 Units offered hereby, (b) ________ __, 2021 or (c) when our Board of Directors elects to terminate the Offering.
 
There is no arrangement to address the possible effect of the Offering on the price of our Common Shares.
 
We reserve the right to offer the Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares through broker-dealers who are registered with FINRA.

Generally speaking, Rule 3a4-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer's securities. None of our officers or directors are subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. None of our officers or directors will be compensated in connection with their participation in the Offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. None of our officers or directors are, or have been within the past 12 months, a broker or dealer, and none of them are, or have been within the past 12 months, an associated person of a broker or dealer. At the end of the Offering, our officers and directors will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Our officers and directors will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii), except that for securities issued pursuant to Rule 415 under the Securities Act, the 12 months shall begin with the last sale of any security included within one Rule 415 registration.

We may be required to retain a broker-dealer or register as an issuer-dealer and/or agent under the blue sky laws of certain states in order to make offers to sell our Units in those states. There can be no guarantee that we will be approved as an issuer-dealer and/or agent in any or all of the states which we determine require such registration.
 
Selling Security Holders
 
No securities are being sold for the account of security holders; all net proceeds of this offering will go to the Company.
 
USE OF PROCEEDS TO ISSUER
 
The maximum gross proceeds from the sale of our Units in this Offering is $20,000,000 (excluding any proceeds from the sale of all the Warrant Shares upon exercise of all the Warrants). The net proceeds from the total maximum offering are expected to be approximately $19,700,000, after the payment of offering costs (including legal, accounting, printing, due diligence, marketing, selling and other costs incurred in the Offering). The estimate of the budget for offering costs is an estimate only and the actual offering costs may differ. We expect from time to time to evaluate the acquisition of businesses, intellectual property, products and technologies for which a portion of the net proceeds may be used, although we currently are not planning or negotiating any such transactions. The following table represents management's best estimate of the uses of the net proceeds received from the sale of Units, assuming the sale of, respectively, 100%, 75%, 50% and 25% of the Units offered for sale in this Offering.
 
             
Percentage of Offering Sold
     
         
 
   
100
%
   
75
%
   
50
%
   
25
%
Facility construction and equipment
 
$
10,000,000
   
$
9,300,000
   
$
6,000,000
   
$
2,350,000
 
Complete licensing and permitting at new facilities
 
$
1,000,000
   
$
850,000
   
$
500,000
   
$
200,000
 
Recruit and implement sales team
 
$
500,000
   
$
350,000
   
$
200,000
   
$
0
 
Execute marketing and branding campaigns
 
$
2,000,000
   
$
1,200,000
   
$
500,000
   
$
150,000
 
Acquire pipeline projects and related capital expenditures
 
$
2,700,000
   
$
0
   
$
0
   
$
0
 
General and Administrative
 
$
3,500,000
   
$
3,000,000
   
$
2,500,000
   
$
2,000,000
 
TOTAL
 
$
19,700,000
   
$
14,700,000
   
$
9,700,000
   
$
4,700,000
 
 
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The Company's operating subsidiary Juva CA began operations in June 2018, and our consolidated Company has a very limited operating history. Our plan of operations for the next few years includes: building out operations at our leased facilities with a focus on vertical integration, development and optimized production of our planned products; securing expansion financing in order to complete construction at the Company's leased facilities and to acquire businesses currently in the Company's pipeline that will allow for vertical integration; completing applications for cannabis permits in the California market to secure the licenses necessary to carry out our business plan; identifying other cannabis markets to enter and applying for or acquiring the licenses necessary to enter such markets; seeking strategic acquisitions; and developing, executing and monitoring sales and marketing campaigns. The amounts set forth above are our current estimates for such development activities, and we cannot be certain that actual costs will not vary from these estimates. Our management has significant flexibility and broad discretion in applying the net proceeds received in this Offering and making short-term interest-bearing investments of the proceeds for capital preservation purposes. We cannot assure you that our assumptions, expected costs and expenses and estimates will prove to be accurate or that unforeseen events, problems or delays will not occur that would require us to seek additional debt and/or equity funding, which may not be available on favorable terms, or at all. See "Risk Factors" starting on page 9 for more information regarding the risks associated with an investment in our securities.

The Company intends to use a portion of the proceeds raised in this Offering to fund the compensation payable to its officers, as described under "Compensation of Directors and Executive Officers" below. The Company may, in its discretion, pay its directors cash compensation and compensate them with the proceeds of the Offering.
 
This expected use of the net proceeds from this Offering represents our intentions based upon our current financial condition, results of operations, business plans and conditions. As of the date of this Offering Circular, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the closing of this Offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this Offering, and reserves the right to change the estimated allocation of net proceeds set forth above.
 
Although our business does not presently generate any cash, we believe that if we raise the maximum amount in this Offering, that we will have sufficient capital to finance our operations for at least the next 24 months. However, if we do not sell the maximum number of Units offered in this Offering, or if our operating and development costs are higher than expected, we will need to obtain additional financing prior to that time. Further, we expect that during or after such 24-month period, we will be required to raise additional funds to finance our operations until such time that we can conduct profitable revenue-generating activities.
 
Pending our use of the net proceeds from this Offering, we may invest the net proceeds in a variety of capital preservation investments, including without limitation short-term, investment grade, interest bearing instruments and United States government securities and including investments in related parties. We may also use a portion of the net proceeds for the investment in strategic partnerships and possibly the acquisition of complementary businesses, products or technologies, although we have no present commitments or agreements for any specific acquisitions or investments.
 
DESCRIPTION OF BUSINESS
 
Overview

Juva Life Inc. (the "Company," "Juva", "we," "our," and "us") was incorporated on April 3, 2019 in the Province of British Columbia. The Company was formed to establish a vertically-integrated corporation to engage in all areas of the medical and recreational cannabis industry, including production, manufacturing, research and development, distribution and retail.
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Juva Life, Inc., a California corporation and wholly-owned subsidiary of the Company ("Juva CA"), is a California-based cannabis company that was incorporated in June 2018 to acquire, own, and operate various cannabis businesses in the State of California. Juva CA became a wholly-owned subsidiary of the Company effective May 30, 2019, pursuant to an Agreement and Plan of Merger dated May 15, 2019, by and among the Company, Juva CA, and Juva Holdings (California) Ltd., a California corporation and wholly-owned subsidiary of the Company formed for the purpose of the merger.

On July 31, 2018, Juva CA acquired all of the equity interests in Precision Apothecary, Inc., a California corporation ("Precision"), and VG Enterprises, LLC, a California limited liability company ("VG"), through a Contribution and Equity Exchange Agreement among Juva CA, Precision, VG and the holders of all the outstanding equity interests of Precision and VG, in exchange for the issuance of shares of common stock of Juva CA. VG has a local Conditional Use Permit ("CUP") from the city of Stockton, California that allows it to cultivate cannabis in the State of California for the medical and recreational markets. Precision is in the process of obtaining a similar Microbusiness Permit from the City of Hayward, California that will allow it to cultivate, manufacture and distribute cannabis and operate a retail cannabis storefront. Juva CA has a second CUP for cultivation under another leased property in Stockton, California, and has also applied for a local delivery permit under its leased location in Redwood City, California.

Juva CA also incorporated 1177988 B.C. Ltd. ("B.C. Ltd.") in August 2018 under the laws of British Columbia, Canada, as a wholly-owned subsidiary of Juva CA.

Juva's wholly-owned subsidiaries are listed below:

Entity
Registered
Holding
Juva Life, Inc.
California, USA
100% owned
Precision Apothecary, Inc.
California, USA
100% owned through Juva CA
VG Enterprises, LLC
California, USA
100% owned through Juva CA
1177988 B.C. Ltd.
British Columbia, Canada
100% owned through Juva CA

The business of the Company will effectively be the business of Juva CA. Juva CA is a cannabis company that is working to establish itself as an emerging leader in all areas of medical and recreational cannabis production, manufacturing, distribution, retail, research and development, through three distinct cannabis operations: Juva Cultivation, Juva Retail and Juva Labs.

The strategic plan for the Company is to be a fully autonomous, vertically-integrated cannabis business that will operate with two main missions: (1) to achieve the lowest cost of production by owning at least one or more licenses available in every category, and use each license to assist the supply chain with a few key brick and mortar storefronts and multiple delivery businesses throughout the State of California; and (2) to develop "precision cannabis" products that deliver the right medicine to the right patient at the right time. The Company plans to develop intellectual property and secure patent protection on each of its custom medical formulations. Juva Labs will develop the related intellectual property, research registries and patent formulations in areas of oncology, neurology, pain management and opiate reduction.

There are currently 33 states in the United States that have legalized medical cannabis use, and there are 10 states, plus the District of Columbia, in which the recreational sale and use of cannabis has been approved, including Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington. In these markets, we believe recreational and medical sales will continue to grow as new population groups realize the magnitude of cannabis applications and cannabis is accepted by more demographics. Juva plans to capitalize on the significant increase in cannabis consumption in the medical and recreational markets through an expansion of its distribution and product lines in key markets such as California. Juva will also seek opportunities to expand its brand in recreational and medical markets through its existing facilities or through acquisitions of additional licenses or processing and wholesaling operators. Juva plans to make strategic acquisitions to expand its brand as well as its supply chain, and will look to leverage its branding, marketing, operational, and manufacturing expertise to create opportunities to license its brand in other states as well as internationally potentially.
36


Juva has built an executive team with decades of experience in business management, consumable goods, brand development, sales and marketing, and risk management. The experience of the Juva management team has allowed Juva to develop best practices, quality control standards, and global scale within the organization. To date, Juva has focused on obtaining permits and licenses in all verticals of the California cannabis market, with the aim of becoming a fully-integrated cannabis company.

Pursuant to our articles of incorporation (our "Articles"), we are authorized to issue an unlimited number of Common Shares. As of June 11, 2019, we had 86,046,843 Common Shares issued and outstanding.
 
Our Products and Services

The Company seeks to establish itself as an emerging leader in all areas of medical and recreational cannabis production, manufacturing, retail, distribution, research and development through three primary cannabis operations: Juva Labs, Juva Cultivation and Juva Retail. Through Juva Cultivation and Juva Retail, the Company will cultivate, manufacture and distribute, through retail dispensaries and delivery service operations, high quality cannabis and cannabis products to medical and recreational cannabis users in the State of California. Through Juva Labs, the Company will research and develop custom formulations and medical cannabis products to potentially treat intramuscular pain, neuropathic pain, cancer, post-traumatic stress disorder, multiple sclerosis, epilepsy, muscle spasticity, autism, Parkinson's disease, and sleep disorders utilizing various drug delivery mechanisms. The Company intends to leverage its brand development and marketing expertise to select products that will expand its shelf space and customer reach.

Juva Labs

Juva Labs, the Company's medical division, when operational, will research and develop "precision cannabis" products to deliver the right medicine to the right patient at the right time. The Company plans to develop intellectual property and secure patent protection for each of its proprietary formulations for medical cannabis products.

Through Juva Labs, the Company plans to: develop intellectual property, research registries and patent formulations in areas of oncology, neurology, pain management and opiate reduction; conduct human interactive investigations for intramuscular pain, neuropathic pain, cancer, post-traumatic stress disorder, multiple sclerosis, epilepsy, muscle spasticity, autism, Parkinson's disease, and sleeping disorders; develop medical cannabis products utilizing five drug delivery mechanisms, including gel capsule, transdermal patch, inhaler, oral tongue strip and suppository; conduct Institutional Review Board ("IRB") approved patient research investigations; and test and verify product integrity through a network of doctors, clinics and at its newly developed Class 5 clean room.

The Company's Hayward facility (see "Description of Property") will house Juva Labs and will offer white-labeling opportunities that can provide the means for new and existing out-of-state brands to introduce products in California. The site will include a commercial kitchen to produce edibles and other ingestible products.

Juva Cultivation

Juva Cultivation will focus on cultivating and distributing high quality cannabis to medical and recreational cannabis users in the State of California. Through its subsidiary, Precision, Juva has acquired the rights to the Frosted Flowers cannabis brand. Prior to the acquisition, Frosted Flowers grew 430 pounds of cannabis in 2018, and is expected to increase production to 9,445 pounds per year once all permits are in place and facilities are operational. Frosted Flowers has an extensive catalogue of proprietary bred genetics, and is most well-known for its three signature cannabis strains: Silver Haze, Maple Wreck and Sumatra Kush.

Juva Retail

Juva Retail will operate as a combination of non-storefront retail delivery businesses, pending receipt of necessary delivery licenses, and a few strategic brick and mortar cannabis dispensaries. The Company currently has one delivery permit application being processed by the city of Redwood City, California. In Hayward, California, the Company has a micro business permit application in process. Once approved, Juva will have a retail storefront in addition to the cultivation, manufacturing, distribution and delivery license in Hayward.
37


Competition

The Company faces, and expects to continue to face, competition from other companies in the medical and recreational cannabis industry, some of which may have longer operating histories, more financial resources and more experience than the Company. Increased competition by larger and well-financed competitors, and/or competitors that have longer operating histories and more manufacturing and marketing experience than the Company, could have a material adverse effect on the Company's business, financial condition and results of operations. As the Company and its subsidiaries operate in an early stage industry, the Company expects to face additional competition from new entrants. To remain competitive, the Company will require research and development, marketing, sales and other support.

The Company expects to face additional competition from new market entrants which are not yet active in the industry. If a significant number of new licenses are granted to new market entrants in the near term, the Company may experience increased competition for market share and may experience downward price pressure on the Company's products as new entrants increase production, which could have a material adverse effect on the Company's business.

In addition, if the number of users of cannabis increases, the demand for products will increase and the Company expects that competition will become more intense, as current and future competitors begin to offer an increasing number of diversified products. To remain competitive, the Company will require a continued high level of investment in its facilities, licenses, branding, products and technologies, distribution, research and development, marketing, sales and client support. The Company may not have sufficient resources to complete the construction of its facilities, obtain the licenses needed to carry out our its business plan, and develop a marketing, sales and client support program on a competitive basis, which could materially and adversely affect the business, financial condition, and results of operations of the Company.

The Company's ability to become and remain competitive in the market will depend upon, among other things:

·
The level of competition in the cannabis industry;
·
The Company's ability to identify, acquire and integrate strategic acquisitions and partnerships;
·
The Company's ability to obtain new licenses as cannabis is legalized at the state level;
·
The Company's ability to achieve brand loyalty;
·
The Company's ability to offer new products and to extend existing brands and products into new markets;
·
The Company's ability to remain competitive in its product pricing; and
·
The Company's ability to leverage its vertically-integrated business model to increase profitability.

Government Regulation

Government authorities in the United States, at the federal, state and local level, and in other countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we plan to develop. In the United States, the cultivation, manufacturing, distribution, sale and use of cannabis is subject to regulation at the state and local level, and pharmaceutical product candidates are subject to FDA regulation and approval.

In California, the Medicinal and Adult-Use Cannabis Regulation and Safety Act provides the general framework for the regulation of commercial medicinal and recreational cannabis. California's three state cannabis licensing authorities include the Bureau of Cannabis Control, the Manufactured Cannabis Safety Branch (a division of the California Department of Public Health), and CalCannabis Cultivation Licensing (a division of the California Department of Food and Agriculture).

Currently, the Company is in the process of obtaining cannabis licenses in California that will allow it to cultivate, manufacture, process, distribute wholesale, and deliver cannabis products to medicinal and recreational cannabis users. If the Company obtains the necessary licenses to carry out its business plan, management anticipates increased manufacturing and sales capacity as well as efficiencies and cost reductions in the Company's supply chains. Please see "Production Facilities and Permits" in the "Description of Property" section for a description of licenses and permits the Company has obtained or is in the process of obtaining.
38


The Company's California licenses must be renewed every year. Each year, licensees are required to submit a renewal application per state cannabis regulatory guidelines. Provided renewal applications are submitted in a timely manner, the Company can expect the renewals to be granted in the ordinary course of business.

The following is an overview of laws and regulations in the United States which pertain to the Company and its planned operations.

Regulation of Cannabis in the United States

Unlike Canada, which has federal legislation uniformly governing the cultivation, distribution, sale and possession of medical cannabis under the Access to Cannabis for Medical Purposes Regulations (Canada) and the regulation of recreational cannabis under the Cannabis Act (Canada), investors are cautioned that in the United States, cannabis is largely regulated at the state level and remains illegal under United States federal law. To date, a total of 33 states, and the District of Columbia, have legalized cannabis in some form. The recreational use of cannabis has been legalized in the District of Columbia and 10 states, including Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington.

Notwithstanding the permissive regulatory environment of cannabis at the state level, cannabis continues to be categorized as a Schedule I controlled substance under the CSA in the United States and as such, remains illegal under United States federal law. Accordingly, the Company's business activities, while believed to be compliant with applicable state and local laws, are currently illegal under United States federal law. Unless and until the United States Congress amends the CSA with respect to cannabis, there is a risk that federal authorities may enforce current federal law. The risk of strict enforcement of the CSA in light of congressional activity, judicial holdings, and stated federal policy remains uncertain. Since federal law criminalizing the use of cannabis may preempt state laws legalizing its use, strict enforcement of federal law regarding cannabis would harm our business, prospects, results of operation, and financial condition. There is no guarantee that the Trump administration or future administrations will maintain the low-priority enforcement of federal laws in the cannabis industry that was adopted by the Obama administration. Any change in the federal government's policy on enforcement of the CSA implementing stricter enforcement could have a material adverse effect on the Company's business, financial condition and results of operations and cause significant financial damage to our business and our shareholders.

Violations of any United States federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements, arising from either civil or criminal proceedings brought by either the United States federal government or private citizens, including, but not limited to, property or product seizures, disgorgement of profits, cessation of business activities or divestiture. Such fines, penalties, administrative sanctions, convictions or settlements could have a material adverse effect on the Company, including, but not limited to, the Company's reputation, the Company's ability to conduct business, the Company's ability to obtain and/or maintain cannabis licenses, whether directly or indirectly, in the United States, the listing of the Company's securities on various stock exchanges, the Company's financial position, operating results, profitability or liquidity, and the market price of the Company's Common Shares.

State and local cannabis laws and regulations in the United States are complex, broad in scope, and subject to evolving interpretations and changes. Compliance with such laws and regulations could require the Company to incur substantial costs or alter certain aspects of the Company's business. A compliance program is essential to manage regulatory risk. All operating policies and procedures implemented in the operation will be compliance-based and derived from the state regulatory structure governing ancillary cannabis businesses and their relationships to state-licensed or permitted cannabis operators, if any. Notwithstanding the Company's efforts, regulatory compliance and the process of obtaining regulatory approvals can be costly and time-consuming, and no assurance can be given that the Company will receive the requisite licenses, permits or cards to operate its planned businesses.
 
39


Violations of applicable state and local cannabis laws and regulations, or allegations of such violations, could disrupt certain aspects of the Company's business plan and result in a material adverse effect on certain aspects of the Company's planned operations. Additional regulations may be enacted in the future that will be directly applicable to certain aspects of the Company's cultivation, production and dispensary businesses, and the Company's ability to sell cannabis. The Company cannot predict the nature of any future laws, regulations, interpretations or applications, especially in the United States, nor can it be determined what effect additional governmental regulations or administrative policies and procedures, if and when promulgated, could have on the Company's business.

The Company will be required to obtain and maintain certain permits, licenses and approvals in the jurisdictions where its operations are based and where its products are sold. There can be no assurance that the Company will be able to obtain or maintain the necessary licenses, permits or approvals to operate its planned medical and recreational cannabis businesses. Failure to comply with or to obtain the necessary licenses, permits and approvals, or any material delay in obtaining these items, is likely to delay and/or inhibit the Company's ability to conduct its business.

While the Company's management believes that legalization trends are favorable and create a compelling business opportunity for early movers, there is no assurance that those trends will continue and be realized, that existing limited markets will continue to be available, or that any new markets for cannabis will emerge. The Company's business plan is based on the premise that cannabis legalization will continue to expand, that consumer demand for cannabis will continue to exceed supply for the foreseeable future, and that consumer demand for cannabis for medical and recreational use will grow as legalization expands. If cannabis legalization is scaled back or reversed at the state level, or if the United States federal government increases regulation and prosecution of cannabis-related activities, it could have a material adverse effect on the Company's business, financial condition and results of operations.

FDA Approval Process for Pharmaceutical Drugs in the United States

Because cannabis is federally illegal to produce and sell in the United States, and because it currently has no federally recognized medical uses, the FDA has historically deferred enforcement related to cannabis to the DEA; however, the FDA has enforced the FDCA with regard to hemp-derived products, especially CBD, sold outside of state-regulated cannabis businesses. If cannabis were to be rescheduled to a federally controlled, yet legal, substance, the FDA would likely play a more active regulatory role with respect to cannabis and cannabis products. In the event that cannabis or any other cannabis products that the Company develops become subject to FDA regulation, the Company's future products may become subject to FDA approval processes for drugs marketed in the United States.

In the United States, the FDA regulates drugs under the FDCA and implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations. Biological products are subject to regulation by the FDA under the FDCA, the Public Health Service Act (the "PHSA"), and related regulations, and other federal, state and local statutes and regulations. Biological products include, among other things, viruses, therapeutic serums, vaccines and most protein products. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable United States requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on our business, financial condition and results of operations.

The process required by the FDA before a drug or biological product may be marketed in the United States generally involves the following:
·
Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices or other applicable regulations;
·
Submission to the FDA of an Investigational New Drug Application (and "IND"), which must become effective before human clinical trials may begin;
·
Performance of adequate and well-controlled human clinical trials according to the FDA's current good clinical practices ("GCPs") to establish the safety and efficacy of the proposed drug or biologic for its intended use;
·
Submission to the FDA of a New Drug Application (an "NDA") for a new drug product, or a Biologics License Application (a "BLA") for a new biological product;
40

·
Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug or biologic is to be produced to assess compliance with the FDA's current good manufacturing practice standards, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the drug's or biologic's identity, strength, quality and purity;
·
Potential FDA audit of the nonclinical and clinical investigation sites that generated the data in support of the NDA or BLA; and
·
FDA review and approval of the NDA or BLA.

The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources. There can be no certainty that approvals will be granted. If a product receives regulatory approval, the approval may be limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling.

Any drug or biological products that receive FDA approval are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information on an annual basis or as required more frequently for specific events, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, prohibitions against promoting drugs and biologics for uses or in patient populations that are not described in the drug's or biologic's approved labeling (known as "off-label use"), rules for conducting industry-sponsored scientific and educational activities, and promotional activities involving the internet. Failure to comply with FDA requirements can have negative consequences, including the immediate discontinuation of noncomplying materials, adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties. The FDA also may require post-marketing testing, known as Phase 4 testing, risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions on an approval that could otherwise restrict the distribution or use of the product.

Environmental, Health and Safety Laws

The Company is subject to environmental, health and safety laws and regulations in each jurisdiction in which the Company operates. Such regulations govern, among other things, emissions of pollutants into the air, wastewater discharges, waste disposal, the investigation and remediation of soil and groundwater contamination, and the health and safety of the Company's employees. The Company may be required to obtain environmental permits from governmental authorities for certain of its current or proposed operations. If the Company violates or fails to comply with these laws, regulations or permits, the Company could be fined or otherwise sanctioned by regulators. As with other companies engaged in similar activities or that own or operate real property, the Company faces inherent risks of environmental liability at its current and historical production sites. Certain environmental laws impose strict and, in certain circumstances, joint and several liability on current or previous owners or operators of real property for the cost of the investigation, removal or remediation of hazardous substances as well as liability for related damages to natural resources. The costs of complying with current and future environmental and health and safety laws, and any liabilities arising from past or future releases of, or exposure to, regulated materials, may have a material adverse effect on the Company's business, financial condition and results of operations.

Legal Proceedings

In October 2018, Juva CA and Kindrub/Kind Medicine, Inc. ("Kind"), a cannabis manufacturer, executed a Letter of Intent to memorialize the parties' mutual intent for Juva CA to acquire Kind (the "Transaction"). The Letter of Intent set forth various binding and non-binding terms that would govern the parties' conduct until the Transaction was complete or the pursuit of the Transaction was terminated. Pursuant to the Letter of Intent, Juva CA paid $150,000 to Kind as a deposit to be credited towards the purchase price. Shortly after executing the Letter of Intent, the parties entered into a Cannabis Business Management Agreement (the "Management Agreement") whereby Juva CA took over all management of Kind's business while continuing its due diligence in connection with the Transaction. Per the terms of the Management Agreement, Juva CA incurred substantial out of pocket costs associated with the business management and operation. In December 2018, after Juva CA had made the $150,000 deposit payment to Kind and incurred multiple expenses and made loans under the Management Agreement, Kind notified Juva CA of its intent to terminate the Letter of Intent. Juva CA demanded the return of the deposit and expenses under the governing agreements. Kind refused to return the monies owed to Juva CA. Pursuant to the arbitration clause set forth in the Letter of Intent, Juva CA filed an arbitration demand with the American Arbitration Association for costs and damages against Kind on June 3, 2019.
41

Employees
 
We have eight full-time employees, including our Chief Executive Officer, Douglas Chloupek, who devotes substantially all of his time to our Company. We currently have health, dental & vison insurance plans in place. We do not currently have any pension, annuity, profit sharing, or similar employee benefit plans, although we may choose to adopt such plans in the future.
 
We plan to engage contractors from time to time on an as-needed basis to consult with us on specific corporate affairs, or to perform specific tasks in connection with our business development activities. We have contracted our Chief Financial Officer, Mathew Lee, who devotes approximately 50% of his time to the Company's business, pursuant to a consulting agreement.  We also have various lobbyists, marketing and IT support under contract.

Corporate Information
 
Our principal California-based executive offices are located at 177 Park Ave., Suite 200, San Jose, California 95113, and our telephone number is 833-333-5882. Our website address is www.juvalife.com. The information contained therein or accessible thereby shall not be deemed to be incorporated into this Offering Circular.
 
DESCRIPTION OF PROPERTY

Production Facilities & Permits

Juva is currently developing two permitted cannabis production facilities in Stockton, California, totaling approximately 42,500 square feet, including: (1) an approximate 31,000 square foot production facility located on San Juan Drive in Stockton, California (the "San Juan Facility"); and (2) an approximate 11,500 square foot facility located on Navy Drive in Stockton, California, (the "Navy Drive Facility"). The San Juan Facility and Navy Drive Facility will support cultivation, manufacturing, delivery and wholesale distribution.

Juva has a total of five properties under lease, which are in various stages of construction. The leased properties are summarized below.

San Juan Facility in Stockton, California. The San Juan Facility is being designed as a production facility that will produce high quality flower and pre-rolls for both Juva branded and white label products. This location will deliver direct to consumers in the north San Joaquin Valley as well as operate as Juva's Central Valley distribution hub. Demolition at the San Juan facility is complete, and the fire system is being installed. A security system has been installed. The construction and architectural plans for this facility are near completion, and will include fully closed and sealed rooms, climate control sensors, special wall treatments, holding safe to store 500-600 pounds of cannabis and a packaging room. The facility totals approximately 31,000 square feet, with 15,750 square feet of flowering canopy. Juva CA holds the San Juan Facility under a 5-year sublease, commencing August 1, 2018, and pays $13,200 per month in rent. The Company expects construction to be completed and the San Juan Facility to be operational by April 2020.

Navy Drive Facility in Stockton, California. Juva intends to use the Navy Drive Facility for its bulk cannabis storage, grinding, and ethanol extraction operations. The Navy Drive Facility will also serve as a small testing cultivation site for new strains before they go into full production at the San Juan Facility. Interior demolition has been completed at this facility, and a new roof, gutters and sprinkler system have been installed. The facility totals approximately 11,500 square feet. Juva CA holds the Navy Drive Facility under a 5-year lease, commencing August 1, 2018, and pays $11,500 per month in rent. The Company expects construction to be completed and the Navy Drive Facility to be operational by January 2020.
42


Clawiter Road and Enterprise Properties in Hayward, California. The Clawiter Road property is being designed as Juva's main corporate and operational campus, which will provide storefront and delivery access to retail customers. The Enterprise building, located adjacent to the Clawiter Road property, is being designed to house the equipment needed for manufacturing. The Hayward facilities include two buildings with an existing Class 5 clean room and 11,000 square feet of greenhouses for cultivation. The Hayward campus' other activities will include: cultivation of high-quality greenhouse material for extraction, a flagship retail store, a delivery hub for the entire East San Francisco Bay area, post-process extraction of oil from the Navy Drive Facility, CO2 extraction, formulation, isolation and contract product development. There will also be on-site patient evaluation and intake, new drug research and development, and the manufacturing of capsules, edibles, transdermal patches, topical products, inhalers, and suppository products. The Hayward campus includes a total of approximately 35,000 square feet. Juva CA holds the Clawiter Road property under a sublease with a term of 4 years and 5 months, commencing August 1, 2018, and pays $22,000 per month in rent. Juva CA holds the Enterprise property under a sublease with a term of 4 years and 5 months, commencing August 1, 2018, and pays $8,593.75 per month in rent. The Company expects construction of the manufacturing area of the Hayward facilities to be completed and operational by December 2019, with cultivation and distribution following in early 2020.

Convention Way Property in Redwood City, California. The Convention Way property will be used for non-storefront retail cannabis delivery. Delivery service will be available throughout the Bay Area Peninsula from San Francisco down to San Jose. The Company believes this delivery business will have access to approximately 1.67 million potential customers. The Convention Way property is approximately 1,345 square feet of office space. Juva CA holds the property under a 5-year lease, commencing December 1, 2018, and pays $6,052 per month in rent.

The Company's facilities will be in compliance with applicable local and state laws and will have adequate controls in place against any diversion, theft, and loss of cannabis products. The facilities will have security alarm systems, continuous 24-hour video surveillance, proper lighting, commercial grade locked doors, cannabis products and money secured in an on-site vault, and other protective security and safety requirements required by applicable law and industry standards.

Permits

The Company currently has nine local permits approved and issued and two local permits in the application process, including:

·
Three approved A-Type 9 (Non-storefront retailer) delivery permits for operations – two in Stockton, California and one in Redwood City, California;
·
Two approved A-Type 6 (Manufacturer 1) permits for operations in Stockton, California;
·
One approved A-Type 3A (Cultivation; Indoor; Medium) permit for operations in Stockton, California;
·
One approved A-Type 2A (Cultivation; Indoor; Small) permit for operations in Stockton, California;
·
Two approved A-Type 11 (Distributor) permits for operations in Stockton, California; and
·
Two pending A-Type 12 (Microbusiness) permits for operations in Hayward, California.

43

Intellectual Property
 
We believe it is important to our success that we:
 
 
Obtain and maintain patent, trademark and other legal protections for the proprietary formulations, research, technology, inventions, improvements and other intellectual property we consider important to our business;
 
prosecute our patent applications and defend our issued patents;
 
protect and enforce our trademark rights and preserve the confidentiality of our trade secrets; and
 
operate without infringing the patents, trademarks and proprietary rights of third parties.
 
We intend to seek appropriate patent protection and intellectual property protection for our business, as well as other proprietary technologies and their uses, by filing applications in the United States and selected other countries.

Juva has invested significant resources towards developing a recognizable and unique brand consistent with premium, high-end products in other industries.  To date, Juva has one registered federal trademark with the United States Patent and Trademark Office and six pending applications.

As of the date hereof, Juva has registered the following state trademarks in the State of California:

·
Frosted Flowers
·
www.frostedflowers.com

As of the date hereof, Juva has the following pending applications for federal trademarks in the United States:
 

 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of our operations together with our consolidated financial statements and the notes thereto appearing elsewhere in this Offering Circular. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled "Risk Factors" starting on page 9, "Cautionary Statement Regarding Forward-Looking Statements" starting on page 4, and elsewhere in this Offering Circular. Please see the notes to our Consolidated Financial Statements for information about our significant accounting policies.

Overview

The Company was incorporated under the laws of the Province of British Columbia on April 3, 2019. Juva CA was incorporated under the laws of the State of California on June 29, 2018.  Juva CA became a wholly-owned subsidiary of the Company effective May 30, 2019, pursuant to an Agreement and Plan of Merger dated May 15, 2019, by and among the Company, Juva CA, and Juva Holdings (California) Ltd., a California corporation and wholly-owned subsidiary of the Company. Juva CA has three wholly-owned subsidiaries: Precision, VG and 1177988 B.C. Ltd. On July 31, 2018, Juva CA entered into a Contribution and Equity Exchange Agreement with the shareholders of Precision and VG, whereby Juva CA acquired all of the issued and outstanding shares of Precision and VG for the issuance of 35,000,000 shares of common stock of Juva CA.

The business of the Company will effectively be the business of Juva CA, which is the business of acquiring, owning and operating various cannabis businesses in the State of California. Juva is working to establish itself as an emerging leader in all areas of medicinal and recreational cannabis production, manufacturing, distribution, retail, research and development. We currently have three planned cannabis operations: Juva Labs, Juva Cultivation and Juva Retail. Juva Labs is Juva's medical division which, when operational, will be involved in drug research, manufacturing and distribution. Juva Cultivation is Juva's production operation which will focus on the production of high-quality cannabis for all Juva product lines. Juva Retail is a network of cannabis dispensaries and delivery/distribution operations that will serve the San Francisco Bay Area and beyond.
44


We are a pre-revenue company with a very limited operating history upon which to base an evaluation of our business and prospects. Our short operating history may hinder our ability to successfully meet our objectives and makes it difficult for potential investors to evaluate our business or prospective operations. We have not generated any revenues since inception and we are not currently profitable and may never become profitable.
 
Financial Condition and Results of Operations for Juva CA

Results of Operations

To date, Juva CA has not generated any revenues from its planned operations.  Juva CA incurred a net loss of $3,369,485 during the period from June 29, 2018 (inception) to December 31, 2018, primarily consisting of a change in fair value of warrant liability of $1,023,586, professional fees of $407,529, consulting fees of $173,149 and salary expense of $236,015 rent expense of $286,826, marketing and promotion of $186,771, and an impairment of intangible assets of $690,041. The Company anticipates that operating expenses will continue to rise in connection with the Company's continued development of its business operations in California.

Liquidity and Capital Resources

To date, we have generated no cash from operations and negative cash flows from operating activities. Juva CA has financed its activities to date by raising capital from private placements. Our future expenditures and capital requirements will depend on numerous factors, including the success of this Offering and the ability to execute our business plan. We may encounter difficulty sourcing future financing.

Juva CA had cash in the amount of $2,358,086 as of December 31, 2018, and working capital of $2,269,428 as of December 31, 2018 (not including warrant liability of $1,771,393).

Juva CA has contractual obligations for capital expenditures in the amount of $200,000 and projected capital expenditures of $10,000,000 to complete the construction of its facilities in California, and we expect to use the proceeds from this Offering and past and future private placements to fulfill such commitments.

Juva CA does not pay dividends and has no long-term debt or bank credit facility.

Off-Balance Sheet Arrangements

Juva CA does not have any off-balance sheet arrangements.

Going Concern

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is contingent upon its ability to raise additional capital as required. During the period from June 29, 2018 (inception) through December 31, 2018, Juva CA incurred net losses of $3,369,485. Juva CA does not currently generate any cash on its own. We have funded operations exclusively in the form of capital raised from the issuance of our equity securities.

Financial Condition and Results of Operations for Juva Life Inc. (Canada)
 
Results of Operations

To date, the Company has had no discernible operations. The Company has not completed one fiscal quarter, nor has it had any operations since inception, other than the merger transaction to acquire Juva CA.
45


Liquidity and Capital Resources

The Company has not begun commercial operations and, accordingly, does not generate cash from operations. We believe that if we raise $20,000,000 (the Maximum Amount) in this Offering, we will have sufficient capital to finance our operations for at least the next 24 months; however, if we do not sell the Maximum Amount or if our operating and development costs are higher than expected, we will need to obtain additional financing. We do not have any track record for self-underwritten Regulation A+ offerings, and there can be no assurance we will raise the Maximum Amount or any other amount. Further, we expect that after such 24-month period, we will be required to raise additional funds to finance our operations until such time that we can conduct profitable revenue-generating activities. No assurances can be made that we will be successful in obtaining additional equity or debt financing, or that ultimately, we will achieve profitable operations and positive cash flow.

The Company does not pay dividends and has no long-term debt or bank credit facility. The Company is not subject to any externally imposed capital requirements.

The Company plans to raise capital through this Offering and, if additional funds are required, the Company plans to raise additional capital primarily through the private placement of its equity securities.  Under such circumstances, there is no assurance that the Company will be able to obtain further funds required for the Company's continued working capital requirements. 

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.
 
Going Concern
 
Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's ability to continue as a going concern is contingent upon its ability to raise additional capital as required. Initially, we intend to finance our operations through this Offering and, if needed, future equity financings. The Company does not generate any cash on its own at this time. We have funded operations exclusively in the form of capital raised from the sale and issuance of our equity securities.
   
Relaxed Ongoing Reporting Requirements
 
Regulation A+ provides that a filer can take advantage of an extended transition period for complying with new or revised accounting standards. We have elected to avail ourselves of this exemption and, therefore, we will not be subject to the same adoption period for new or revised accounting standards as public companies.
 
Upon the completion of this Offering, we may elect to become a public reporting company under the Exchange Act. If we elect to do so, we will be required to publicly report on an ongoing basis as an "emerging growth company" (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act. As defined in the JOBS Act, an emerging growth company is defined as a company with less than $1 Billion in revenue during its last fiscal year. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies.
 
For so long as we remain an "emerging growth company," we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not "emerging growth companies," including but not limited to:
 
 
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
 
 
 
 
taking advantage of extensions of time to comply with certain new or revised financial accounting standards;
 
 
 
 
being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
 
 
 
 
being exempt from the requirement to hold a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
 
46

If we are required to publicly report under the Exchange Act as an "emerging growth company", we expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an "emerging growth company" for up to five years, though if the market value of our Common Shares held by non-affiliates exceeds $700 Million, we would cease to be an "emerging growth company."
 
If we elect not to become a public reporting company under the Exchange Act, we will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A+ for Tier 2 issuers. The ongoing reporting requirements under Regulation A+ are more relaxed than for "emerging growth companies" under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semi-annual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer's fiscal year, and semi-annual reports are due within 90 calendar days after the end of the first six months of the issuer's fiscal year.

Plan of Operations
 
As noted above, the continuation of our current plan of operations requires us to raise significant additional capital. If we are successful in raising capital through the sale of Units offered for sale in this Offering, we believe that the Company will have sufficient cash resources to fund its plan of operations for the next 24 months. If we are unable to do so, we may have to curtail and possibly cease some operations.
 
We are a pre-revenue development stage company. We began operations in June 2018 through our wholly-owned subsidiary Juva CA and have a very limited operating history. Our plan of operations for the next few years includes: building out operations at our leased facilities with a focus on vertical integration, development and optimized production of our planned products; securing expansion financing in order to complete construction at the Company's leased facilities and to acquire businesses currently in the Company's pipeline that will allow for vertical integration; completing applications for cannabis permits in the California market to secure the licenses necessary to carry out our business plan; identifying other cannabis markets to enter and applying for or acquiring the licenses necessary to enter such markets; seeking strategic acquisitions; and developing, executing and monitoring sales and marketing campaigns. Over the next 12 months, we plan to complete licensing and permitting at our facilities and commence production, implement a sales team, execute marketing and branding campaigns, and acquire pipeline projects related to capital expenditures.
 
We continually evaluate our plan of operations to determine the manner in which we can most effectively utilize our limited cash resources. The timing of completion of any aspect of our plan of operations is highly dependent upon the availability of cash to implement that aspect of the plan and other factors beyond our control. There is no assurance that we will successfully obtain the required capital or revenues, or, if obtained, that the amounts will be sufficient to fund our ongoing operations.
 
These circumstances raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
 
Trend Information
 
Because we are still in the startup phase and have only recently commenced operations, we are unable to identify any recent trends in revenue or expenses. Thus, we are unable to identify any known trends, uncertainties, demands, commitments or events involving our business that are reasonably likely to have a material effect on our revenues, income from operations, profitability, liquidity or capital resources, or that would cause the reported financial information in this Offering to not be indicative of future operating results or financial condition.
 
47

 
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
 
Name
 
Position
 
Age
 
 
Term of Office
 
 
Approximate hours per week
for part-time employees
Executive Officers:
 
 
 
 
 
 
 
 
 
 
Douglas Chloupek
 
President and Chief Executive Officer
   
41
     
June 2018 – Present
   
N/A
Neil Ruditsky
 
Chief Operating Officer
   
48
     
August 2018 – Present
   
N/A
Mathew Lee
 
Chief Financial Officer, Treasurer and Secretary
   
35
     
September 2018 – Present
   
20
Kari Gothie
 
VP Finance
   
54
     
June 2018 – Present
   
N/A
                         
Directors:
 
                     
Douglas Chloupek
 
Director
   
41
     
June 2018 – Present
   
N/A
Dr. Rakesh Patel
 
Director
   
46
     
August 2018 – Present
   
N/A
Norton Singhavon   Director     35       August 2018 – Present    
N/A
Kari Gothie   Director     54       June 2019 – Present    
N/A
 
There is no arrangement or understanding between the persons described above and any other person pursuant to which the person was selected to his or her office or position.

Certain Relationships

Except as set forth above and in our discussion below in "Interest of Management and Others in Certain Transactions," none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
 
Business Experience
 
Douglas Chloupek, President, Chief Executive Officer and Director: Douglas Chloupek has founded and run numerous cannabis companies, including Valley Grown Enterprises Inc. (where he has served as Chief Executive Officer since April 2017), Lux Wellness (where he served as Chief Operating Officer from October 2015 to February 2018), Medmar Healing Center (where he served as Chief Executive Officer from March 2010 to October 2015), and Frosted Flowers (where he has served as Chief Executive Officer since 2013). Mr. Chloupek also founded and served as Chief Operating Officer from January 2015 to June 2016 of BAS Research Center, California's first licensed medical cannabis manufacturing and research group, dedicated to developing pharmaceutical grade marijuana products. Additionally, Mr. Chloupek is the co-founder and President of Day-to-Day Ingredients, which supplies molecularly-infused sugar, salt and non-dairy powder creamer to the California market and CBD products globally. Mr. Chloupek also has helped build and support California's cannabis industry, as a founding member of both the California Cannabis Industry Association and the Citizens Coalition for Patient Care.

Neil Ruditsky, Chief Operating Officer: Mr. Ruditsky has spent more than two decades in senior leadership positions in the hospitality and cannabis industries, including with Coastal Americare (dba Elemental Wellness) where he served as VP of Business Development from July 2012 to February 2018, and the Pyramid Hotel Group where he served as General Manager from May 2006 to July 2012. Mr. Ruditsky also founded NSR Enterprises, a company that consulted with cannabis businesses on various operational issues.  Mr. Ruditsky holds a Bachelor of Science degree in Hospitality from Johnson & Wales University.

Mathew Lee, Chief Financial Officer, Treasurer and Secretary: Mr. Lee has extensive knowledge of both public and private company operations.  He has worked for various industries including the financial services, mineral resources, and real estate industries. Recently, Mr. Lee has focused on the cannabis sector and he held a position at Cannabis Compliance Inc., a leading cannabis industry consulting firm in Canada. Prior to Cannabis Compliance Inc., Mr. Lee was a Financial Controller at AP Capital Management from November 2016 to November 2017, an Operations Manager at Raymond James, a leading independent investment dealer in Canada, from December 2014 to October 2016, and a public company manager at Smythe LLP, a British Columbia-based accounting firm, from September 2007 to December 2014. Mr. Lee holds a Chartered Accountant designation with a Bachelor of Commerce Degree from the University of British Columbia.
48


Rakesh R. Patel, MD, Director: Dr. Patel is a world-renowned oncologist and clinical researcher with over 250 worldwide lectures and 100 publications. Since 2016, Dr. Patel has been a partner at Precision Cancer Specialists, an oncology services medical group.  Dr. Patel is a seasoned entrepreneur who has participated in multiple healthcare start-ups.  Dr. Patel received an M.D. from Indiana University and has been in practice for approximately 20 years.

Norton Singhavon, Director: Mr. Singhavon has served as the Founder and Executive Chairman of Doventi Capital Inc., a cannabis investment company, since April 2015, and has served as a director and Chief Executive Officer of GTEC Holdings Ltd., a cannabis growing, testing, distribution and retail company, since June 2018. Mr. Singhavon has extensive experience at the senior management level of capital investments and has been involved in several large acquisitions, consolidations, and start-ups in Canada's legal cannabis sector, both private and public. As an investor and advisor to numerous companies in Canada's cannabis industry, he has been responsible for internally deploying over $45 million into the legal cannabis sector and has been involved in another $65 million of public M&A transactions. Mr. Singhavon was also an advisor to, and early-stage investor in, Invictus MD. As an experienced corporate leader, he has facilitated in regulatory matters, corporate matters, raising capital privately and publicly, as well as strategic corporate development within the public markets.

Kari Gothie, VP of Finance and Director: Ms. Gothie has over 25 years of experience as a CFO and Public Accountant, specializing in rapidly growing start-up operations. She has been a key executive in the sale of four privately held companies, participating in all aspects of the sale process, including research and identification of potential acquirers, due diligence, and negotiation of final deal structure. Ms. Gothie has extensive experience in entrepreneurial environments, providing guidance in business areas such as business plan development, strategic planning, human resources, legal compliance, sales compensation, corporate structure, accounting and finance, including in international and foreign currency transactions. Additionally, Ms. Gothie has experience in establishing pro-active internal controls, policies & procedures, budget planning, forecasting, detailed performance modeling and financial analysis.  Ms. Gothie is a Certified Public Accountant (inactive) with a Master in Business Administration degree from University of California, Berkeley and a Bachelor of Science degree in Commerce from the University of Virginia.

Involvement in Certain Legal Proceedings
 
To our knowledge, none of our current directors or executive officers has, during the past ten years:
 
   
· Been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
 
 
 
   
· had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he or she was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
 
 
 
   
· been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
 
 
 
   
· been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
 
 
 
 
49

   
· been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
 
 
 
   
· been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934, as amended (the Exchange Act)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
 
We are not currently a party to any legal proceedings, the adverse outcome of which, individually or in the aggregate, we believe will have a material adverse effect on our business, financial condition or operating results.

Board Leadership Structure and Risk Oversight
 
The Board oversees our business and considers the risks associated with our business strategy and decisions. The Board currently implements its risk oversight function as a whole. Each of the Board committees, when established, will also provide risk oversight in respect of its areas of concentration and reports material risks to the Board for further consideration.
 
Term of Office
 
Each of our officers holds office until his or her successor is elected and qualified. Directors are appointed to serve for one year until the meeting of the Board following the annual meeting of shareholders and until their successors have been elected and qualified. 
 
Director Independence
 
We use the definition of "independence" of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an "independent director" is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company's Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
 
 
the director is, or at any time during the past three years was, an employee of the company;
 
 
 
the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the independence determination (subject to certain exemptions, including, among other things, compensation for board or board committee service);
 
 
 
 
the director or a family member of the director is a partner in, controlling shareholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient's consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exemptions);
 
 
 
 
the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
 
50

 
 
 
 
the director or a family member of the director is a current partner of the company's outside auditor, or at any time during the past three years was a partner or employee of the company's outside auditor, and who worked on the company's audit.
 
Under such definitions, Dr. Patel and Mr. Singhavon are independent directors. However, our Common Shares are not currently quoted or listed on any national exchange or interdealer quotation system with a requirement that a majority of our Board be independent and, therefore, the Company is not subject to any director independence requirements.

Family Relationships
 
There are no familial relationships among any of our directors or officers.

Significant Employees
 
We do not have any significant employees other than our current directors and executive officers named herein.
 
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
 
The following table represents information regarding the total compensation for the directors and the executive officers of the Company as of December 31, 2018:
 
Name and Capacity in which Compensation was Received
 
Cash Compensation
   
Other Compensation
   
Total Compensation
 
 
           
(1) 
     
Douglas Chloupek (CEO/President/Director)
 
$
68,750
   
$
2,350
   
$
71,100
 
Neil Ruditsky (COO)
 
$
68,750
   
$
14,100
   
$
82,850
 
Mathew Lee (CFO)
 
$
15,200
   
$
1,958
   
$
17,158
 
Kari Gothie (VP Finance/Director)
 
$
68,750
   
$
14,100
   
$
82,850
 
Dr. Rakesh Patel (Director)
 
$
0
   
$
2,350
   
$
2,350
 
Norton Singhavon (Director)
 
$
0
   
$
2,350
   
$
2,350
 
 
 
 
(1)
Any values reported in the "Other Compensation" column, if applicable, represents the aggregate grant date fair value, computed in accordance with Accounting Standards Codification (ASC) 718 Share Based Payments, of grants of stock options to each of our named executive officers and directors.
 
Director Compensation
 
We have four directors. We currently do not pay our directors any cash compensation for their services as board members. In August 2018, three of our directors acting at that time were each granted 300,000 options to purchase common stock of Juva CA at CAD $0.05 per share.
 
Employment Agreements, Arrangements or Plans
 
Mr. Lee has entered into a consulting agreement with Juva CA dated August 24, 2018 for a term of 12 months, unless earlier terminated by either party or extended by mutual written agreement. Pursuant to the consulting agreement, Mr. Lee has agreed to perform certain services as Chief Financial Officer of Juva CA. The consulting agreement provides that Mr. Lee shall receive a monthly fee of CAD $5,000, which may be increased based on the achievement by the Company of certain objectives in our business plan. The consulting agreement may be terminated by the Company for any reason upon 60 days' written notice or payment of two months' fees in lieu thereof, or without notice upon a material breach or in the event Mr. Lee is unable to provide the services for a period of thirty (30) consecutive days.

Mr. Ruditsky has entered into a verbal employment agreement with Juva CA. Pursuant to the verbal employment agreement, Mr. Ruditsky has agreed to perform certain services as Chief Operating Officer of Juva CA and the Company. The verbal employment agreement provides that Mr. Ruditsky will receive an initial base salary of $165,000 (subject to review and adjustment by the Board).
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Ms. Gothie has entered into a verbal employment agreement with Juva CA. Pursuant to the verbal employment agreement, Ms. Gothie has agreed to perform certain services as Vice President of Finance of Juva CA and the Company. The verbal employment agreement provides that Ms. Gothie will receive an initial base salary of $165,000 (subject to review and adjustment by the Board).

Mr. Chloupek has entered into a verbal employment agreement with Juva CA. Pursuant to the verbal employment agreement, Mr. Chloupek has agreed to perform certain services as Chief Executive Officer of Juva CA and the Company. The verbal employment agreement provides that Mr. Chloupek will receive an initial base salary of $165,000 (subject to review and adjustment by the Board) and will be eligible for an annual management incentive bonus based upon the Company's financial results.  The Company intends to enter into a formal written employment agreement with Mr. Chloupek. Pursuant to the formal employment agreement, Mr. Chloupek will agree to continue to perform certain services as Chief Executive Officer of the Company. The formal employment agreement will provide that Mr. Chloupek will receive an initial base salary (subject to review and adjustment by the Board) and will be eligible for an annual management incentive bonus based upon the Company's financial results.

Pursuant to agreements with the Company and Juva CA, Mr. Chloupek was granted 300,000 options to purchase common stock of Juva CA at fair market value in August 2018 and an additional 2,225,000 options to purchase common stock of Juva CA at fair market value in May 2019.  He will be eligible for additional annual grants of options to purchase Common Shares of the Company pursuant to his ongoing employment arrangements with the Company.

Pursuant to an agreement with the Company and Juva CA, Mr. Chloupek and Dr. Patel are entitled to, subject to certain performance milestones and pro rata in proportion to their respective holdings of Juva CA as of July 31, 2018, up to an aggregate total amount of (i) 5,000,000 warrants to purchase Common Shares of the Company exercisable at a price of $0.35 per share and (ii) $500,000 in cash. As of the date of this Offering Circular, no warrants have been exercised and no cash has been disbursed under this agreement.

We do not currently have any other written employment agreements, arrangements or plans with any of our directors, officers or significant employees.
 
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
 
The following table shows the beneficial ownership of our Common Shares as of the date of this Offering Circular held by (i) each person known to us to be the beneficial owner of more than 10% of any class of our voting securities; (ii) each director who is the beneficial owner of more than 10% of any class of our voting securities; (iii) each executive officer who is the beneficial owner of more than 10% of any class of our voting securities; and (iv) all directors and executive officers as a group. As of June 11, 2019, there were 86,046,843 Common Shares issued and outstanding.
 
Beneficial ownership is determined in accordance with the rules of the SEC, and generally includes voting power and/or investment power with respect to the securities held. Common Shares subject to options and warrants currently exercisable or which may become exercisable within 60 days of the date of this Offering Circular, are deemed outstanding and beneficially owned by the person holding such options or warrants for purposes of computing the number of shares and percentage beneficially owned by such person, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated in the footnotes to this table, the persons or entities named have sole voting and investment power with respect to all Common Shares shown as beneficially owned by them.
 
 
52


Name and Address of Beneficial Owner
 
Amount and Nature of
Beneficial Ownership
 
Percent
of Class (1)
 
           
 
Directors and Officers:
 
   
 
   
           
 
Douglas Chloupek(2)
 
28,296,584 shares
   
32.89
%
           
 
All executive officers and directors as a group
 
 45,322,510 shares
   
52.52
%
             
Greater than 10% Securityholders:
           
None
           
             
________ 
 
(1)
This Offering Statement does not contemplate that any of our current listed shareholders will acquire any additional Common Shares as part of this Offering.
(2)
This business address of this individual is c/o Juva Life Inc., 885 West Georgia Street, Suite 1500, Vancouver, BC V6C 3E8.
 
 
 
 

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
 
Transactions with Related Persons
 
Except as described below and except for employment arrangements which are described under "executive compensation," since the inception of Juva CA and the Company, there has not been, nor is there currently proposed, any transaction in which the Company or any of its subsidiaries are or were a participant and the amount involved exceeds the lesser of $120,000 or 1% of the total assets as of May 15, 2019, and in which any of our directors, executive officers, holders of more than 5% of our Common Shares or any immediate family member of any of the foregoing had or will have a direct or indirect material interest.

During the period from inception of Juva CA to May 15, 2019, the Company had the following related party transactions:
·
Juva CA paid an aggregate of $562,964 in lease payments and $56,211 in security deposits to Best Leasing Services, Inc., a company owned by Douglas Chloupek, the Chief Executive Officer and a director and shareholder of the Company. Juva CA leases the San Juan facility, the Clawiter Road facility and the Enterprise Avenue facility from Best Leasing Services, Inc. pursuant to sublease agreements with Best Leasing Services, Inc. Approximately 90% of the payments under the sublease agreements are passed directly to the landlord of each property pursuant to the master lease agreements between such landlord and Best Leasing Services, Inc.
·
In connection with the acquisition of Precision and VG, Juva CA assumed a total of $160,233 in amounts owed to Douglas Chloupek, the Chief Executive Officer and a director and shareholder of the Company, and $35,000 in amounts owed to our director, Rakesh Patel's father, which amounts were repaid in December 2018.
 
Review, Approval and Ratification of Related Party Transactions
 
Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officer(s), director(s) and significant shareholders. We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. On a moving forward basis, our directors will continue to approve any related party transaction.
 
53

 
SECURITIES BEING OFFERED
 
The following is a summary of the rights of our capital stock as provided in our Articles and Notice of Articles. For more detailed information, please see our Articles and Notice of Articles which have been filed as exhibits to the Offering Statement of which this Offering Circular is a part. 
 
General

The Company's Notice of Articles provide that our authorized capital consists of an unlimited number of Common Shares, without par value, which do not have any special rights or restrictions.

As of the date of this Offering Circular, the Company has 86,046,843 Common Shares issued and outstanding.

Rights, Preferences and Restrictions Attaching to Our Common Shares

The Business Corporations Act (British Columbia) provides the following rights, privileges, restrictions and conditions attaching to our Common Shares:
 
 
·
to vote at meetings of shareholders, except meetings at which only holders of a specified class of shares are entitled to vote;
 
·
subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of our company, to share equally in the remaining property of our company on liquidation, dissolution or winding-up of our company; and
 
·
the Common Shares are entitled to receive dividends if, as, and when declared by the Board of Directors.

The provisions in our Articles attaching to our Common Shares may be altered, amended, repealed, suspended or changed by the affirmative vote of the holders of not less than two-thirds of the outstanding Common Shares.

With the exception of special resolutions (i.e. resolutions in respect of fundamental changes to our company, including: the sale of all or substantially all of our assets, a merger or other arrangement or an alteration to our authorized capital that is not allowed by resolution of the directors) that require the approval of holders of two-thirds of the outstanding Common Shares entitled to vote at a meeting, either in person or by proxy, resolutions to approve matters brought before a meeting of our shareholders require approval by a simple majority of the votes cast by shareholders entitled to vote at a meeting, either in person or by proxy.

Shareholder Meetings

The Business Corporations Act (British Columbia) provides that: (i) a general meetings of shareholders must be held in British Columbia, or may be held at a location outside British Columbia since our Articles do not restrict our company from approving a location outside of British Columbia for the holding of the general meeting and the location for the meeting is approved by ordinary resolution, or the location for the meeting is approved in writing by the British Columbia Registrar of Companies before the meeting is held; (ii) directors must call an annual meeting of shareholders not later than 18 months after the date of incorporation and no later than 15 months after the last preceding annual meeting; (iii) for the purpose of determining shareholders entitled to receive notice of or vote at meetings of shareholders, the directors may fix in advance a date as the record date for that determination, provided that such date shall not precede by more than two months or by less than 21 days, if we are a public company, otherwise 10 days, the date on which the meeting is to be held; (iv) the holders of not less than 5% of the issued shares entitled to vote at a meeting may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition; (v) only shareholders entitled to vote at the meeting, our directors and our auditor are entitled to be present at a meeting of shareholders; and (vi) upon the application of a director or shareholder entitled to vote at the meeting, the British Columbia Supreme Court may order a meeting to be called, held and conducted in a manner that the Court directs.

Pursuant to our Articles, the quorum for the transaction of business at a meeting of our shareholders is at least one person who is, or who represents by proxy, one or more shareholders who, in the aggregate, hold at least five percent of the issued shares entitled to be voted at the meeting.
54


Warrants

As of the date of this Offering Circular, the Company has a total of 14,281,735 Common Share purchase warrants issued and outstanding, including (i) 5,200,000 Common Share purchase warrants which are exercisable at a price of $0.05 CAD per share, subject to customary adjustments, over a 12-month exercise period following the date of issuance, and (ii) 9,081,735 Common Share purchase warrants outstanding which are exercisable at a price of $0.60 CAD per share, subject to customary adjustments, over an 18-month exercise period following the date of issuance.

In this Offering, each Unit includes one Common Share and one-half of one Common Share Warrant. Each whole Warrant entitles the holder to purchase one Common Share at an exercise price of $0.75 USD per share, subject to customary adjustments, over an 18-month exercise period following the date of issuance.

Fully Paid and Non-assessable

All outstanding Common Shares are, and the Common Shares to be outstanding upon completion of this Offering will be, duly authorized, validly issued, fully paid and non-assessable.

Resale Restrictions

The Common Shares and Warrants will be separately transferable following the termination of any transfer hold periods under applicable law.

The securities to be issued in connection with the Offering will be subject to a statutory hold period in Canada in accordance with Section 2.5(2)(3)(ii) of National Instrument 45-102 – Resale of Securities, as follows: "Unless permitted under securities legislation, the holder of this security must not trade the security before the date that is 4 months, and a day after the later of (i) [insert the distribution date], and (ii) the date the issuer became a reporting issuer in any province or territory."

Purchasers under this Offering should consult with their own professional advisers with respect to restrictions on the transferability of the securities offered hereunder.

Penny Stock Regulation

The SEC has adopted regulations which generally define "penny stock" to be any equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As our Common Shares immediately following this Offering may be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Common Shares in the secondary market.

Absence of Public Market

The Company, which currently has 132 shareholders, is an alternative reporting company under Regulation A+, Tier 2 of the Securities Act. There is no public trading market for the Common Shares of the Company. The Company currently expects, as an alternative reporting company, to qualify its Common Shares for quotation or listing on the CSE, NASDAQ or OTCQB (the Over the Counter Marketplace) or other secondary market for which the Company's Common Shares may then qualify in the discretion of the Board of Directors. (See Risk Factors starting on page 9).
55

 
WHERE YOU CAN FIND MORE INFORMATION
 
We have filed with the SEC a Regulation A+ Offering Statement on Form 1-A under the Securities Act with respect to the Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares offered hereby. This Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about us and the Units, the Common Shares and Warrants of which the Units consist and the underlying Warrant Shares offered hereby, we refer you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. We are required to file periodic reports, proxy statements, and other information with the SEC pursuant to the Securities Exchange Act of 1934. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, including us, that file electronically with the SEC. The address of this site is www.sec.gov
56


PART F/S
 
INDEX TO FINANCIAL STATEMENTS
 
JUVA LIFE INC.
 
Page
F-2
 
 
F-3
   
F-5
 
 
F-6
 
 
F-7
 
 
F-8
   
F-9
   
F-18
   
F-19
   
F-21
   
F-22
   
F-23
   
F-24
   
F-25
   
F-45
   
F-46
   
F-47
   
F-48
 

F-1

 




Juva Life Inc.


Financial Statements

For the period from incorporation on April 3, 2019 to May 15, 2019

(Expressed in Canadian Dollars)




F-2

 
INDEPENDENT AUDITORS' REPORT

 

To the Director of Juva Life Inc.


Report on the Financial Statements

We have audited the accompanying financial statements of Juva Life Inc. (the "Company"), which comprise the statement of financial position as of May 15, 2019, and the statements of loss and comprehensive loss, cash flows and changes in shareholders' equity for the period from incorporation on April 3, 2019 to May 15, 2019 and the related notes to the financial statements. 
 
Management's Responsibility for the Financial Statements
 
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 
 
Auditors' Responsibility
 
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
 
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
 
Opinion
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the period from incorporation on April 3, 2019 to May 15, 2019 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
 
F-3




Emphasis of Matter Regarding Going Concern 
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has no sources of funding and its business and arrangement are dependent on approvals by the shareholders and applicable regulatory authorities and has stated that substantial doubt exists about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter. 


"DAVIDSON & COMPANY LLP"

 
Vancouver, Canada
Chartered Professional Accountants

June 7, 2019

 


F-4

Juva Life Inc.
Statement of Financial Position
As at May 15, 2019
(Expressed in Canadian dollars)
         
 
Note
 
May 15, 2019
 
         
ASSETS
       
         
Current assets
       
Cash
     
$
1
 
Total assets
       
1
 
             
SHAREHOLDERS' EQUITY
           
Share capital
   
5
     
1
 
Total shareholders' equity
         
$
1
 
                 
Subsequent events (Note 8)
               


These financial statements were authorized for issue by the Board of Director on June 7, 2019.

Approved by the Board of Directors:


"Mathew Lee" 
 Director



The accompanying notes are an integral part of these financial statements
F-5

Juva Life Inc.
Statement of Loss and Comprehensive Loss
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)
 
   
For the period from incorporation on April 3, 2019 to May 15, 2019
 
       
       
Loss and comprehensive loss for the period
 
$
-
 
         
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these financial statements
F-6

Juva Life Inc.
Statement of Cash Flows
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canada dollars)
 
       
   
For the period from incorporation on April 3, 2019 to May 15, 2019
 
       
FINANCING ACTIVITY
     
Proceeds received from incorporator shares
 
$
1
 
Cash provided by financing activities
   
1
 
         
Increase in cash
   
1
 
Cash, beginning of period
   
-
 
Cash, end of period
 
$
1
 
         
 
 
 
 
 
 
 
The accompanying notes are an integral part of these financial statements
 
F-7

Juva Life Inc.
Statement of Changes in Shareholders' Equity
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)
 
             
   
Share Capital
       
   
     Number
   
Amount
   
Total
Shareholders' Equity
 
         
$
     
$
   
April 3, 2019
   
-
     
-
     
-
 
Issuance of founders share
   
2
     
1
     
1
 
May 15, 2019
   
2
     
1
     
1
 
                         
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these financial statements
F-8

Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)
 
1.
NATURE OF OPERATIONS

Juva Life Inc. (the "Company") was incorporated under the laws of British Columbia on April 3, 2019.  The principal business of the Company is to acquire, own, and operate various cannabis businesses in the state of California. The Company's registered office is 1055 West Georgia Street, 1500 Royal Centre, P.O. Box 11117, Vancouver, BC V6E 4N.

The Company is planning to operate in the medical and recreational cannabis sectors in California, USA.  While some states in the United States have authorized the use and sale of marijuana, it remains illegal under federal law and the approach to enforcement of U.S. federal laws against marijuana is subject to change.  Because the Company will be engaging in the marijuana-related activities in the US, it assumes certain risks due to conflicting state and federal laws.  The federal law relating to marijuana could be enforced at any time and this would put the Company at risk of being prosecuted and having its assets seized when the Company starts operations in the cannabis sector.

On May 15, 2019, the Company entered into a Merger Agreement (the "Agreement") with its wholly owned subsidiary, Juva Holdings (California) Ltd. ("Subco"), a company incorporated under the laws of the State of California, USA and Juva Life, Inc. ("Juva USA"), a company incorporated under the laws of the State of California, USA.  Under the terms of the Agreement, Subco will merge with Juva USA and the legal existence of Subco will cease and Juva USA will be the surviving entity.  After the transaction, the Company will apply for a listing on the Canadian Securities Exchange ("CSE").


F-9

Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)


2.
GOING CONCERN

While these financial statements have been prepared on a going concern basis which assumes the realization of assets and liquidation of liabilities in the normal course of business, management assessed that substantial doubt exists about the Company's ability to continue as a going concern. The Company has no sources of funding and its business and arrangement disclosed in Note 1 are dependent on approvals by the shareholders and applicable regulatory authorities.

3.
BASIS OF PRESENTATION

These financial statements have been prepared on a historical cost basis. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The accounting policies below are based on International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and Interpretations of the International Financial Reporting Interpretation Committee ("IFRIC").

The policies applied in these financial statements are based on IFRS issued and effective as of May 15, 2019.

3.1.
Basis of measurement

These financial statements have been prepared using the measurement basis specified by IFRS for each type of asset, liability, revenue and expense.

3.2.
Significant judgments, estimates and assumptions

The preparation of the Company's financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

Critical adjustments exercised in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as follows:

Determination of functional currency

The Company determines the functional currency through an analysis of several indicators such as expenses and cash flow, financing activities, retention of operating cash flows, and frequency of transactions within the reporting entity.
F-10


Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)

Going concern

The preparation of the financial statements requires management to make judgments regarding the going concern of the Company as previously discussed in note 2.

Estimation Uncertainty

There were no areas of estimation uncertainty that would result in a significant risk of material adjustment to the carrying amount of assets and liabilities within the next financial year.

4.
SIGNIFICANT ACCOUNTING POLICIES

4.1
       Impairment of Non-Financial Assets

At the end of each reporting period, the carrying amounts of the Company's assets are reviewed to determine whether there is any indication that those assets are impaired.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.  The recoverable amount is the higher of fair value less costs to sell and value in use.  Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties.  In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.  For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

For assets that generate largely independent cash inflows, which is comprised of intangible assets of the Company, the recoverable amount is determined for the cash generating unit ('CGU') to which the asset belongs. Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

4.2
      Provisions

Liabilities are recognized when the Company has a present obligation (legal or constructive) that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. A provision is a liability of uncertain timing or amount.
F-11

Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)


Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects the current market assessments of the time value of money and the risk specific to the obligation.  The increase in the provision due to the passage of time is recognized as a finance expense.

4.3
      Income Taxes

Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity.

Current tax assets and liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit which differs from profit or loss in the financial statements.  Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects taxable profit or accounting profit. Deferred tax liabilities on temporary differences associated with shares in subsidiaries and joint ventures is not provided for if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are likely to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in profit or loss in the period that includes the substantive enactment date. Deferred tax assets are recognized for all temporary differences, carry-forward of unused tax credits and unused tax losses to the extent that it is probable that future taxable profits will be available against which they can be utilized.

Deferred tax assets and liabilities are offset only when the Company has a right and intention to offset current tax assets and liabilities from the same taxation authority and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same entity or different entities which intend to settle current tax assets and liabilities on a net basis or simultaneously in each future period in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Changes in deferred tax assets or liabilities are recognized as a component of income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.


F-12

Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)


4.4                Share capital

The Company records proceeds from share issuances net of issue costs and any tax effects in shareholders' equity.  Common shares issued for consideration other than cash are valued based on their market value at the date the shares were granted.  Common shares held by the Company are classified as treasury stock and recorded as a reduction to shareholders' equity.

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units.  The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component.  The Company considers the fair value of common shares issued in private placements to be the more easily measurable component of unit offerings and the common shares are valued at their fair value, as determined by the closing quoted bid price on the announcement date.  The balance, if any, is allocated to any attached warrants or other features.  Any fair value attributed to warrants is recorded as reserves.

4.5                Share-based Payments

Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled transactions and, when determinable, are recorded at the value of the goods and services received. If the value of the goods and services received is not determinable, then the fair value of the share-based payment is used.

The Company uses a fair value-based method (Black-Scholes Option Pricing Model) for all share options granted to directors, employees and non-employees. For directors and employees, the fair value of the share options is measured at the date of grant. For grants to non-employees where the fair value of the goods or services is not determinable, the fair value of the share options is measured on the date the services are received.

The fair value of share-based payments is charged to profit or loss, with the offsetting credit to contributed surplus. For directors, employees and consultants, the share options are recognized over the vesting period based on the best available estimate of the number of share options expected to vest.  If options vest immediately, the expense is recognized when the options are issued.  Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period.  No adjustment is made to any expense recognized in prior periods where vested. For non-employees, the share options are recognized over the related service period. When share options are exercised, the amounts previously recognized in reserves are transferred to share capital.

In the event share options are forfeited prior to vesting, the associated fair value recorded to date is reversed. The fair value of any vested share options that expire remain in reserves.


F-13

Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)


4.6      Related Party Transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.  Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
 
4.7         Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) (the numerator) by the weighted average number of outstanding common shares for the period (denominator). In computing diluted earnings per share, an adjustment is made for the dilutive effect of outstanding share options, warrants and other convertible instruments.

In the periods when the Company reports a net loss, the effect of potential issuances of shares under share options and other convertible instruments is anti-dilutive. Therefore, basic and diluted loss per share are the same. When diluted earnings per share is calculated, only those share options and other convertible instruments with exercise prices below the average trading price of the Company's common shares for the period will be dilutive.
 
4.8         Financial Instruments
 
On initial recognition, financial assets are recognized at fair value and are subsequently classified and measured at: (i) amortized cost; (ii) fair value through other comprehensive income ("FVOCI"); or (iii) fair value through profit or loss ("FVTPL"). The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial asset is measured at fair value net of transaction costs that are directly attributable to its acquisition except for financial assets at FVTPL where transaction costs are expensed. All financial assets not classified and measured at amortized cost or FVOCI are measured at FVTPL. On initial recognition of an equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in other comprehensive income.

The classification determines the method by which the financial assets are carried on the statement of financial position subsequent to inception and how changes in value are recorded. Cash is measured at amortized cost.

Impairment
An 'expected credit loss' impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.


F-14

Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)

In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

Financial liabilities
Financial liabilities are designated as either: (i) fair value through profit or loss; or (ii) other financial liabilities. All financial liabilities are classified and subsequently measured at amortized cost except for financial liabilities at FVTPL. The classification determines the method by which the financial liabilities are carried on the statement of financial position subsequent to inception and how changes in value are recorded. Accounts payable and accrued liabilities are classified as other financial liabilities and carried on the statement of financial position at amortized cost.

4.9
Share Issuance Costs

Share issuance costs, which include commissions, facilitation payments, professional fees and regulatory fees, are charged directly to share capital.

4.10
Comprehensive Income (Loss)

Total comprehensive income (loss) comprises all components of profit or loss and other comprehensive income.  Other comprehensive income (loss) includes items such as gains and losses on re-measuring FVOCI financial assets and the effective portion of gains and losses on hedging instruments in a cash flow hedge.

4.11
Foreign Currency Translation

The functional currency is the currency of the primary economic environment in which the entity operates.  The functional currency for the Company is the Canadian dollar.  The functional currency determination was conducted through an analysis of the consideration factors identified in IAS 21, the Effects of Changes in Foreign Exchange Rates.

Transactions in currencies other than the Canadian dollar are recorded at exchange rates prevailing on the date of the transaction.  At the end of each reporting period, monetary assets and liabilities of the Company that are denominated in a foreign currency are translated at the rate of exchange prevailing at the statement of financial position date, while non-monetary assets and liabilities are translated at the exchange rate prevailing on the transaction date.  Revenues and expenses are translated at the exchange rates approximating those in effect on the date of the transaction. Exchange gains and losses arising on translation are included in the statement of loss and comprehensive loss.



F-15

Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)
 
5.
EQUITY

5.1         Authorized Share Capital

Unlimited number of common shares with no par value.

5.2      Shares Issued

Shares issued and outstanding as at May 15, 2019 are two common shares

During the period ended May 15, 2019, the Company issued two founder common shares at a value of $1.

6.
MANAGEMENT OF CAPITAL

The Company defines the capital that it manages as its shareholders' equity.

The Company's objective when managing capital is to maintain corporate and administrative functions necessary to support the Company's operations and corporate functions; and to seek out and acquire new projects of merit.

The Company manages its capital structure in a manner that provides sufficient funding for operational and capital expenditure activities.  Funds are secured, when necessary, through debt funding or equity capital raised by means of private placements.  There can be no assurances that the Company will be able to obtain debt or equity capital in the case of working capital deficits.
The Company does not pay dividends and has no long-term debt or bank credit facility. The Company is not subject to any externally imposed capital requirements.

7.
RISK MANAGEMENT

7.1           Financial Risk Management

The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The main objectives of the Company's risk management processes are to ensure that risks are properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the Company is exposed are described below.

a.
       Capital Risk
The Company manages its capital to ensure that there are adequate capital resources for the Company to maintain operations. The capital structure of the Company consists of items in shareholders' equity.

b.
       Credit Risk
Credit risk is the risk that a counter party will be unable to pay any amounts owed to the Company. Management's assessment of the Company's exposure to credit risk is low.

F-16

Juva Life Inc.
Notes to the Financial Statements
For the period from incorporation on April 3, 2019 to May 15, 2019
(Expressed in Canadian dollars)


c.
       Liquidity Risk
Liquidity risk is the risk that the Company is not able to meet its financial obligations as they fall due. As at May 15, 2019, the Company has no working capital, and it does not have any long-term monetary liabilities. The Company may seek additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will result in dilution to the ownership interests of the Company's shareholders and may result in dilution to the value of such interests. The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at May 15, 2019, the Company had cash of $1 and no liabilities.

d.
      Market Risk
Market risk incorporates a range of risks. Movements in risk factors, such as market price risk and currency risk, affect the fair values of financial assets and liabilities. The Company is not exposed to these risks.

7.2        Fair Values

The carrying values of cash approximate its fair values due to their short-term to maturity.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Quoted prices in markets that are not active, or inputs that are not observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

8.
SUBSEQUENT EVENTS

a)
Subsequent to December 31, 2018, concurrent with the merger with Juva USA as outlined in Note 1, the Company intends to complete a non-brokered private placement of 40,000,000 Units (each a "Concurrent Offering Unit") at a price of US$0.50 per Concurrent Offering Unit for gross proceeds of US$20,000,000 (the "Concurrent Offering").  Each Unit is comprised of one share of Common Stock of the Company, and one-half of a Warrant.  Each whole Warrant enables the holder to purchase one additional share of Warrant Share at an exercise price of $0.75 per share, subject to certain adjustments, over a one-year exercise period following the date of issuance of the Warrant.

b)
 The Company completed the merger with Juva USA as outlined in Note 1 on May 30, 2019.

F-17

Juva Life, Inc.


Consolidated Financial Statements

For the period from incorporation on June 29, 2018 to December 31, 2018

(Expressed in US Dollars)
 
 
 
F-18

INDEPENDENT AUDITORS' REPORT

 

To the Board of Directors of Juva Life, Inc.


Report on the Consolidated Financial Statements

 
We have audited the accompanying consolidated financial statements of Juva Life, Inc. ("the Company"), which comprise the consolidated statement of financial position as of December 31, 2018, and the consolidated statements of loss and comprehensive loss, cash flows and changes in shareholders' equity for the period from incorporation on June 29, 2018 to December 31, 2018 and the related notes to the consolidated financial statements. 
 
Management's Responsibility for the Consolidated Financial Statements
 
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. 
 
Auditors' Responsibility
 
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
 
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
 
Opinion
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the period from incorporation on June 29, 2018 to December 31, 2018 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
 
F-19




Emphasis of Matter Regarding Going Concern 
 
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company incurred a net loss of $3,369,485 during the period from incorporation on June 29, 2018 to December 31, 2018 and has stated that substantial doubt exists about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter. 
 

"DAVIDSON & COMPANY LLP"

 
Vancouver, Canada
Chartered Professional Accountants

June 7, 2019

 

F-20

Juva Life, Inc.
Consolidated Statement of Financial Position
As at December 31, 2018
(Expressed in US dollars)
             
   
Note
   
December 31, 2018
 
             
ASSETS
           
             
Current assets
           
Cash
       
$
2,358,086
 
Prepaid expenses
         
68,246
 
Total current assets
         
2,426,332
 
               
Non-current assets
             
Deposits
   
6, 7
     
260,645
 
Property and equipment
   
8
     
328,129
 
  Intangible assets
   
6, 9
     
83,541
 
Total non-current assets
           
672,315
 
Total assets
           
3,098,647
 
                 
LIABILITIES
               
Accounts payable and accrued liabilities
           
156,904
 
     Warrant liability
   
11
     
1,771,393
 
             
1,928,297
 
SHAREHOLDERS' EQUITY
               
Share capital
   
5
     
4,490,107
 
Reserves
   
5
     
75,509
 
Other comprehensive loss
           
(25,781
)
Deficit
           
(3,369,485
)
Total shareholders' equity
           
1,170,350
 
Total liabilities and shareholders' equity
         
$
3,098,647
 
                 
Going concern
   
2
         
Subsequent events
   
16
         
                 


These consolidated financial statements were authorized for issue by the Board of Directors on June 7, 2019.

Approved by the Board of Directors:


         
"Doug Chloupek"
   
"Dr. Rakesh Patel"
 
Director
   
Director
 
 
   
 
 
"Norton Singhavon"        
Director        
 


The accompanying notes are an integral part of these consolidated financial statements

F-21

Juva Life, Inc.
Consolidated Statement of Loss and Comprehensive Loss
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)
             
   
Note
   
For the period from incorporation on June 29, 2018 to December 31, 2018
 
             
             
Expenses
           
Consulting fees
   
10
   
$
173,149
 
Share-based payments
   
5, 10
     
52,681
 
Rent
   
10
     
286,826
 
Professional fees
           
407,529
 
Salaries and benefits
           
236,015
 
Marketing and promotion
           
186,771
 
Permits
           
49,970
 
Office and administration
           
90,653
 
Operating expenses
           
1,483,594
 
                 
Other Items
               
Change in fair value of warrant liability
   
11
     
1,023,586
 
Impairment of intangible assets
   
6
     
690,041
 
Foreign exchange loss
           
172,264
 
             
1,885,891
 
                 
Loss for the period
         
$
(3,369,485
)
                 
Other comprehensive loss
               
Foreign currency translation adjustment
           
(25,781
)
                 
Total comprehensive loss for the period
         
$
(3,395,266
)
                 
Basic and diluted loss per common share
         
$
(0.07
)
                 
Weighted average number of common shares outstanding
           
51,582,107
 
 
The accompanying notes are an integral part of these consolidated financial statements
F-22

Juva Life, Inc.
Consolidated Statement of Cash Flows
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)
      
   
For the period from incorporation on June 29, 2018 to December 31, 2018
 
       
OPERATING ACTIVITIES
     
Loss for the period
 
$
(3,369,485
)
Items not involving cash:
 
 
       
      Share-based payments
   
52,681
 
Impairment of intangible assets
   
690,041
 
Change in warrant liability
   
1,023,586
 
Unrealized foreign exchange
   
50,115
 
Changes in non-cash working capital items:
       
     Prepaid expenses
   
(68,246
)
Accounts payable and accrued liabilities
   
84,905
 
Cash used in operating activities
   
(1,536,403
)
         
INVESTING ACTIVITIES
       
     Purchase of property and equipment
   
(224,718
)
     Purchase of intangible assets
   
(16,528
)
  Deposits
   
(39,344
)
     Repayment of shareholder loans
   
(282,793
)
     Deposit on acquisition
   
(189,090
)
Cash used in investing activities
   
(752,473
)
         
FINANCING ACTIVITY
       
Proceeds received from private placement
   
4,834,029
 
Share issue costs
   
(111,172
)
Cash provided by financing activities
   
4,722,857
 
         
Effect of foreign exchange on cash
   
(75,895
)
         
Increase in cash
   
2,358,086
 
Cash, beginning of period
   
-
 
Cash, end of period
 
$
2,358,086
 
         


Non-cash investing activities:
     
Property and equipment included in accounts payable and accrued liabilities
 
$
21,075
 
 
 
The accompanying notes are an integral part of these consolidated financial statements

F-23

Juva Life, Inc.
Consolidated Statement of Changes in Shareholders' Equity
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)
                               
   
Share Capital
                         
   
Number
   
Amount
   
Reserves
   
Other Comprehensive Loss
   
Deficit
   
Total
Shareholders' Equity
 
         
$
     
$
     
$
     
$
     
$
   
June 29, 2018
   
-
     
-
     
-
     
-
     
-
     
-
 
Issuance of founders shares
   
10
     
-
     
-
     
-
     
-
     
-
 
Shares issued for acquisition
   
35,000,000
     
537,885
     
-
     
-
     
-
     
537,885
 
Private placements
   
41,103,967
     
4,834,029
     
-
     
-
     
-
     
4,834,029
 
Share issuance costs
   
-
     
(134,000
)
   
22,828
     
-
     
-
     
(111,172
)
Warrant liability (note 11)
   
-
     
(747,807
)
   
-
     
-
     
-
     
(747,807
)
Share-based payments
   
-
     
-
     
52,681
     
-
     
-
     
52,681
 
Foreign currency translation adjustment
   
-
     
-
     
-
     
(25,781
)
   
-
     
(25,781
)
Loss and comprehensive loss for the period
   
-
     
-
     
-
     
-
     
(3,369,485
)
   
(3,369,485
)
December 31, 2018
   
76,103,977
     
4,490,107
     
75,509
     
(25,781
)
   
(3,369,485
)
   
1,170,350
 
 
The accompanying notes are an integral part of these consolidated financial statements
F-24

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)
 
1.
NATURE OF OPERATIONS

Juva Life, Inc. (the "Company") was incorporated under the laws of California on June 29, 2018.  The principal business of the Company is to acquire, own, and operate various cannabis businesses in the state of California. The Company's registered office is 177 Park Avenue, Suite 200, San Jose, California 95113.

On July 31, 2018, the Company acquired Precision Apothecary Inc ("Precision") and VG Enterprises LLC ("VG"), both of which were incorporated in the state of California.  VG has a license that allows it to cultivate cannabis in the state of California for the medical and recreational markets.  Precision is in the process of obtaining such a license.

The Company is planning to operate in the medical and recreational cannabis sectors in California, USA.  While some states in the United States have authorized the use and sale of marijuana, it remains illegal under federal law and the approach to enforcement of U.S. federal laws against marijuana is subject to change.  Because the Company will be engaging in the marijuana-related activities in the US, it assumes certain risks due to conflicting state and federal laws.  The federal law relating to marijuana could be enforced at any time and this would put the Company at risk of being prosecuted and having its assets seized when the Company starts operations in the cannabis sector.

On February 7, 2019, the Company entered into a Merger Agreement (the "Agreement") with East West Petroleum Corp. ("East West").  Under the terms of the Agreement, East West was to acquire from the shareholders of the Company all of the common shares of the Company which are issued and outstanding as of the closing and East West was to apply to voluntarily delist from the TSX-Venture Exchange and apply for a listing on the Canadian Securities Exchange ("CSE").

Subsequent to December 31, 2018, the Company was notified by East West that East West will not be able to secure enough shareholder votes to approve the Merger Agreement.

On May 15, 2019, the Company entered into a Merger Agreement (the "Agreement") with Juva Holdings (California) Ltd. ("Holdco"), a company incorporated under the laws of the State of California and Juva Life Inc. ("Juva Canada"), a company incorporated under the laws of British Columbia, Canada.  Under the terms of the Agreement, Holdco will merge with the Company and the legal existence of Holdco will cease and the Company will be the surviving entity.  After the transaction, Juva Canada will apply for a listing on the Canadian Securities Exchange ("CSE").
 


F-25

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


2.
 GOING CONCERN

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period.  The Company incurred a net loss of $3,369,485 during the period ended December 31, 2018.  Management assessed that substantial doubt exists about the Company's ability to continue as a going concern.

3.
 BASIS OF PRESENTATION

These consolidated financial statements have been prepared on a historical cost basis. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The accounting policies below have been applied to all periods presented in these consolidated financial statements and are based on International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and Interpretations of the International Financial Reporting Interpretation Committee ("IFRIC").

The policies applied in these consolidated financial statements are based on IFRS issued and effective as of December 31, 2018.

3.1.
Basis of measurement

These consolidated financial statements have been prepared using the measurement basis specified by IFRS for each type of asset, liability, revenue and expense.

3.2.
Significant judgments, estimates and assumptions

The preparation of the Company's consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

Critical adjustments exercised in applying accounting polices that have the most significant effect on the amounts recognized in the consolidated statements are as follows:

Determination of functional currency

The Company determines the functional currency through an analysis of several indicators such as expenses and cash flow, financing activities, retention of operating cash flows, and frequency of transactions within the reporting entity.
F-26

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


Assets acquisition

The Company acquired two private companies on July 31, 2018 (Note 6). The process for determining whether the acquisition was an asset purchase versus a business acquisition was performed and primary consideration was given to the stage of operations, among other items. Shares issued for the acquisition were valued on the issue date and the excess of overall acquisition costs over net assets acquired was attributed to the intangible assets acquired.

Going concern

The preparation of the consolidated financial statements requires management to make judgments regarding the going concern of the Company as previously discussed in note 2.

Impairment of long-lived assets

The Company performs impairment testing annually for long-lived assets as well as when circumstances indicate that there may be impairment for these assets. Management judgement is involved in determining if there are circumstances indicating that testing for impairment is required, and in identifying cash generating unit ("CGU") for the purpose of impairment testing.

The Company assesses impairment by comparing the recoverable amount of a long-lived asset, CGU, or CGU group to its carrying value. The recoverable amount is defined as the higher of: (i) value in use; or (ii) fair value less cost to sell. The determination of the recoverable amount involves management judgement and estimation. These estimates and assumptions could affect the Company's future results if the current estimates of future performance and fair values change.

Estimation Uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year:

Depreciation and amortization

The Company's equipment and finite-life intangible assets are depreciated and amortized using straight-line method, taking into account the estimated useful lives of the assets and residual values. Changes to these estimates may affect the carrying value of these assets, net earnings, and comprehensive income (loss) in future periods.

Income taxes

Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax-related matters is different from the amounts that were originally recorded, such differences will affect the tax provisions in the period in which such determination is made.
F-27

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


3.3
  Basis of consolidation

These consolidated financial statements incorporate the financial statements of the Company and its wholly controlled subsidiaries, Precision and VG, both of which were incorporated in the state of California and 1177988 B.C. Ltd., a company incorporated in British Columbia, Canada.  Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidated financial statements include the accounts of the Company and its direct wholly-owned subsidiaries.  All significant intercompany transactions and balances have been eliminated.

Where the Company's interest is less than 100%, the interest attributable to outside shareholders is reflected in non-controlling interest. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Company's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling interests' share of changes in equity since the date of the combination.

4.
 SIGNIFICANT ACCOUNTING POLICIES

4.1
Impairment of Non-Financial Assets

At the end of each reporting period, the carrying amounts of the Company's assets are reviewed to determine whether there is any indication that those assets are impaired.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.  The recoverable amount is the higher of fair value less costs to sell and value in use.  Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties.  In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.  For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

For assets that generate largely independent cash inflows, which is comprised of intangible assets of the Company, the recoverable amount is determined for the cash generating unit ('CGU') to which the asset belongs. Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

4.2
Provisions

Liabilities are recognized when the Company has a present obligation (legal or constructive) that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. A provision is a liability of uncertain timing or amount.
F-28


Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects the current market assessments of the time value of money and the risk specific to the obligation.  The increase in the provision due to the passage of time is recognized as a finance expense.

4.3
Income Taxes

Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity.

Current tax assets and liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit which differs from profit or loss in the consolidated financial statements.  Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects taxable profit or accounting profit. Deferred tax liabilities on temporary differences associated with shares in subsidiaries and joint ventures is not provided for if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are likely to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in profit or loss in the period that includes the substantive enactment date. Deferred tax assets are recognized for all temporary differences, carry-forward of unused tax credits and unused tax losses to the extent that it is probable that future taxable profits will be available against which they can be utilized.

Deferred tax assets and liabilities are offset only when the Company has a right and intention to offset current tax assets and liabilities from the same taxation authority and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same entity or different entities which intend to settle current tax assets and liabilities on a net basis or simultaneously in each future period in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Changes in deferred tax assets or liabilities are recognized as a component of income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.


F-29

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


4.4   Share capital

The Company records proceeds from share issuances net of issue costs and any tax effects in shareholders' equity.  Common shares issued for consideration other than cash are valued based on their market value at the date the shares were granted.  Common shares held by the Company are classified as treasury stock and recorded as a reduction to shareholders' equity.

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units.  The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component.  The Company considers the fair value of common shares issued in private placements to be the more easily measurable component of unit offerings and the common shares are valued at their fair value, as determined by the closing quoted bid price on the announcement date.  The balance, if any, is allocated to any attached warrants or other features.  Any fair value attributed to warrants is recorded as reserves.

4.5   Share-based Payments

Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled transactions and, when determinable, are recorded at the value of the goods and services received. If the value of the goods and services received is not determinable, then the fair value of the share-based payment is used.

The Company uses a fair value-based method (Black-Scholes Option Pricing Model) for all share options granted to directors, employees and non-employees. For directors and employees, the fair value of the share options is measured at the date of grant. For grants to non-employees where the fair value of the goods or services is not determinable, the fair value of the share options is measured on the date the services are received.

The fair value of share-based payments is charged to profit or loss, with the offsetting credit to contributed surplus. For directors, employees and consultants, the share options are recognized over the vesting period based on the best available estimate of the number of share options expected to vest.  If options vest immediately, the expense is recognized when the options are issued.  Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period.  No adjustment is made to any expense recognized in prior periods where vested. For non-employees, the share options are recognized over the related service period. When share options are exercised, the amounts previously recognized in reserves are transferred to share capital.

In the event share options are forfeited prior to vesting, the associated fair value recorded to date is reversed. The fair value of any vested share options that expire remain in reserves.


F-30


Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)

4.6   Related Party Transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.  Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

4.7   Property and Equipment

Equipment and leasehold improvement items are carried at cost less accumulated depreciation and accumulated impairment losses. In the year of acquisition, depreciation is recorded at one-half the normal rate.  Depreciation is recognized using the straight-line method at the following annual rates:

Equipment          Straight-Line  10%
Leasehold Improvements      Straight-Line       over lease term

Equipment that is withdrawn from use, or has no reasonable prospect of being recovered through use or sale, are regularly identified and written off.

The assets' residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

Subsequent expenditure relating to an item of property and equipment is capitalized when it is probable that future economic benefits from the use of the assets will be increased. All other subsequent expenditures are recognized as repairs and maintenance expense.

4.8
Intangible assets

Intangible assets are recognized and measured at cost. Intangible assets with finite useful lives are amortized using the straight-line method over the useful life of the asset. The Company conducts an annual assessment of the residual balances, useful lives and amortization methods being used for intangible assets and any changes arising from the assessment are applied by the Company prospectively.  Intangible assets with indefinite useful lives are not amortized.  An impairment test on intangible assets is performed annually or whenever there is indication that the intangible asset is impaired.

4.9
Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) (the numerator) by the weighted average number of outstanding common shares for the period (denominator). In computing diluted earnings per share, an adjustment is made for the dilutive effect of outstanding share options, warrants and other convertible instruments.



F-31


Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)

In the periods when the Company reports a net loss, the effect of potential issuances of shares under share options and other convertible instruments is anti-dilutive. Therefore, basic and diluted loss per share are the same. When diluted earnings per share is calculated, only those share options and other convertible instruments with exercise prices below the average trading price of the Company's common shares for the period will be dilutive.

4.10
Financial Instruments
Financial assets
On initial recognition, financial assets are recognized at fair value and are subsequently classified and measured at: (i) amortized cost; (ii) fair value through other comprehensive income ("FVOCI"); or (iii) fair value through profit or loss ("FVTPL"). The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial asset is measured at fair value net of transaction costs that are directly attributable to its acquisition except for financial assets at FVTPL where transaction costs are expensed. All financial assets not classified and measured at amortized cost or FVOCI are measured at FVTPL. On initial recognition of an equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in other comprehensive income.

The classification determines the method by which the financial assets are carried on the statement of financial position subsequent to inception and how changes in value are recorded. Cash is measured at amortized cost.

Impairment
An 'expected credit loss' impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.

In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

Financial liabilities
Financial liabilities are designated as either: (i) fair value through profit or loss; or (ii) other financial liabilities. All financial liabilities are classified and subsequently measured at amortized cost except for financial liabilities at FVTPL. The classification determines the method by which the financial liabilities are carried on the statement of financial position subsequent to inception and how changes in value are recorded. Accounts payable and accrued liabilities are classified as other financial liabilities and carried on the statement of financial position at amortized cost.

F-32

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


Derivative financial instruments
The Company issues warrants exercisable in a currency other than the Company's functional currency and as a result, the warrants are derivative financial instruments.

Derivative financial instruments are initially recognized at fair value and subsequently measured at fair value with changes in fair value recognized in profit or loss. Transaction costs are recognized in profit or loss as incurred.

4.11
Share Issuance Costs

Share issuance costs, which include commissions, facilitation payments, professional fees and regulatory fees, are charged directly to share capital.

4.12
Comprehensive Income (Loss)

Total comprehensive income (loss) comprises all components of profit or loss and other comprehensive income.  Other comprehensive income (loss) includes items such as gains and losses on re-measuring FVOCI financial assets and the effective portion of gains and losses on hedging instruments in a cash flow hedge.

4.13
Foreign Currency Translation

The functional currency is the currency of the primary economic environment in which the entity operates.  The functional currency for the Company and all of its US subsidiaries is the US dollar.  The functional currency of its Canadian subsidiary is the Canadian dollar.  The functional currency determination was conducted through an analysis of the consideration factors identified in IAS 21, the Effects of Changes in Foreign Exchange Rates.

Transactions in currencies other than the US dollar are recorded at exchange rates prevailing on the date of the transaction.  At the end of each reporting period, monetary assets and liabilities of the Company that are denominated in a foreign currency are translated at the rate of exchange prevailing at the statement of financial position date, while non-monetary assets and liabilities are translated at the exchange rate prevailing on the transaction date.  Revenues and expenses are translated at the exchange rates approximating those in effect on the date of the transaction. Exchange gains and losses arising on translation are included in the consolidated statement of loss and comprehensive loss.

The results and financial position of all the consolidated entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (i) assets and liabilities for each statement of financial position presented are translated at the rate of exchange in effect as at the date of statement of financial position; (ii) income and expense items for each statement of loss and comprehensive loss are translated at the average rates of exchange in effect during the reporting period; and (iii) all resulting exchange differences are recognized in accumulated other comprehensive income (loss).

F-33


Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)

4.14
New Accounting Standards and Interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for the December 31, 2018 reporting period. The Company has not early adopted the following new and revised standards, amendments and interpretations that have been issued but are not yet effective:

·
IFRS 16 – Leases: On January 13, 2016, the IASB issued the final version of IFRS 16 Leases. The new standard will replace IAS 17 Leases and is effective for annual periods beginning on or after January 1, 2019. IFRS 16 eliminates the classification of leases as either operating leases or finance leases for a lessee. Instead, all leases are treated in a similar way to finance leases applying IAS 17. IFRS 16 does not require a lessee to recognize assets and liabilities for short-term leases (i.e. leases of 12 months or less) and leases of low-value assets.
The Company plans to apply IFRS 16 effective January 1, 2019 using the modified retrospective method. Under this method, financial information will not be restated and will continue to be reported under the accounting standards in effect for those periods. The Company will recognize lease obligations related to its lease commitment. It will be measured at the present value of the remaining lease payments, discounted using the Company's incremental borrowing rate as at January 1, 2019. The associated right of use asset will be measured at the lease obligation amount, less prepaid lease payments, resulting in no adjustment to the opening balance of deficit. The Company intends to apply the following practical expedients permitted under the new standard:

·
leases of low dollar value will continue to be expensed as incurred; and
·
the Company will not apply any grandfathering practical expedients.

As at January 1, 2019 the Company expects to recognize approximately $2,606,828 in right-of-use assets and $2,606,828 of incremental lease obligations.

5.
 EQUITY

5.1   Authorized Share Capital

150,000,000 common shares with no par value.

5.2   Shares Issued

Shares issued and outstanding as at December 31, 2018 are 76,103,977 Class A common shares

During the period ended December 31, 2018, the Company issued:

a)
10 founder common shares at a value of $0.01;

b)
35,000,000 common shares with a value of $537,885 pursuant to the acquisition of Precision and VG (Note 6).

F-34

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


c)
On August 8, 2018, the Company issued 15,000,000 common shares at a price of CDN $0.02 per common share for gross proceeds of CDN $300,000 (USD $233,295).

d)
On August 31, 2018, the Company issued 10,400,000 units at a price of CDN $0.05 per unit for gross proceeds of CDN $520,000 (USD $404,375).  The units are comprised of one common share and one-half common share purchase warrant.  Each warrant is exercisable at CDN $0.05 for a period of one year.  See Note 11.

e)
On October 23, 2018, the Company issued 3,631,643 units at a price of CDN $0.35 per unit for gross proceeds of CDN $1,271,075 (USD $970,434).  The units are comprised of one common share and one-half common share purchase warrant.  Each warrant is exercisable at CDN $0.60 for a period of 18 months (see Note 11).  In connection with this financing, the Company paid finders' fees of 7% on a portion of the gross proceeds and issued 158,620 finders' warrants, with each warrant entitling the holder to purchase one common share of the Company at a price of CDN $0.60 for a period of 18 months after issuance; and

f)
On November 16, 2018, the Company issued 12,072,324 units at a price of CDN $0.35 per unit for gross proceeds of CDN $4,225,313 (USD $3,225,925).  The units are comprised of one common share and one-half common share purchase warrant.  Each warrant is exercisable at CDN $0.60 for a period of 18 months (see Note 11).  In connection with this financing, the Company paid finders' fees of 7% on a portion of the gross proceeds and issued 117,985 finders' warrants, with each warrant entitling the holder to purchase one common share of the Company at a price of CDN $0.60 for a period of 18 months after issuance.

5.2  Stock Options

During the period ended December 31, 2018 the Company adopted a Stock Option Plan (the "Plan") whereby the maximum number of shares reserved for issue under the plan shall not exceed 9,100,000 shares. Under the Plan, the Board of Directors may from time to time authorize the grant of options to directors, employees, and consultants of the Company. Under the terms of the Plan, options will be exercisable for periods up to ten years and must have an exercise price not less than the fair market value of a share on the grant date. The term of the options granted to a 10% shareholder shall not exceed five years. Vesting provision is determined by the Board of Directors at the grant date.

During the period ended December 31, 2018, the Company granted:

a)
5,125,000 stock options to directors, officers, and consultants of the Company. Each option is exercisable at CDN$0.02 for a period of 10 years; and

b)
1,650,000 stock options to directors, officers, and consultants of the Company. Each option is exercisable at prices ranging from CDN$0.05 to CDN$0.055 for a period of 10 years.
F-35

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


A summary of the changes in stock options is presented below:

         
Weighted average
 
   
Number of
   
exercise price
 
   
options
   
CDN$
 
Balance, June 29, 2018
   
-
     
-
 
Granted
   
6,775,000
     
0.03
 
Balance, December 31, 2018
   
6,775,000
     
0.03
 
 
      The following stock options were outstanding as at December 31, 2018:

Outstanding
 
Exercisable
Exercise
Price
CDN$
 
 
 
Expiry date
Weighted average remaining life (in years
5,125,000
1,003,667
0.02
August 7, 2028
9.61
1,350,000
337,500
0.05
August 30, 2028
9.67
   300,000
75,000
0.055
August 30, 2028
9.92
6,775,000
1,416,167
0.03
   
 
5.3
   Share purchase warrants

A summary of the changes in warrants is presented below:
 
         
Weighted average
 
   
Number of warrants
   
exercise price (CDN$)
 
         
$
   
Balance, June 29, 2018
   
-
     
-
 
Issued
   
13,505,719
     
0.39
 
                 
Balance, December 31, 2018
   
13,505,719
     
0.39
 
                 
 
F-36

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)
 
The following share purchase warrants were outstanding as at December 31, 2018:
 
Outstanding
 
Exercisable
 
Exercise Price
 
Expiry Date
       
CDN $
   
   5,200,000
 
5,200,000
 
        0.05
 
31-Aug-19
1,974,442
 
   1,974,442
 
              0.60
 
23-Apr-20
6,331,277
 
    6,331,277
 
              0.60
 
16-May-20
             
 13,505,719
 
 13,505,719
       
             

5.4     Share-based payment expense and reserves
Pursuant to vesting schedules, the share-based payment expense for the stock options that were granted during the period ended December 31, 2018, was $52,681 and was recorded in the consolidated statement of loss and comprehensive loss.

The fair value of the stock options that were granted during the period ended December 31, 2018 was calculated using the Black-Scholes option pricing model with the following weighted average assumptions:
 
Risk-free interest rate
2.49%
Expected stock price volatility
100%
Expected dividend yield
0.0%
Expected option life in years
                 10.0

      The fair value of stock option granted was $0.02 per option.

Pursuant to the financing on October 23, 2018, the share-based payment expense for the 158,600 finder's warrants that were granted was $13,090. The fair value of the finder's warrants was calculated using the Black-Scholes option pricing model with the following weighted average assumptions:
 
Risk-free interest rate
2.14%
 
Expected stock price volatility
92%
 
Dividend payment during life of warrant
Nil
 
Expected forfeiture rate
Nil
 
Expected dividend yield
0.0%
 
Expected warrant life in years
                   1.5
 
Weighted average exercise price
 $              0.43
(CDN $0.60)
Weighted average share price
 $              0.27
(CDN $0.35)

 
F-37


Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)

The fair value of the warrants granted was $0.08 per warrant.

Pursuant to the financing on November 16, 2018, the share-based payment expense for the 117,985 finder's warrants that were granted was $9,738. The fair value of the finder's warrants was calculated using the Black-Scholes option pricing model with the following weighted average assumptions:
 
Risk-free interest rate
2.14%
 
Expected stock price volatility
92%
 
Dividend payment during life of warrant
Nil
 
Expected forfeiture rate
Nil
 
Expected dividend yield
0.0%
 
Expected warrant life in years
                   1.5
 
Weighted average exercise price
 $              0.43
(CDN $0.60)
Weighted average share price
 $              0.27
(CDN $0.35)
 
   The fair value of the warrants granted was $0.08 per warrant.

6.
         ACQUISITIONS

On July 31, 2018, the Company entered into a Contribution and Equity Exchange Agreement with the shareholders of Precision and VG whereby the Company acquired all of the issued and outstanding shares of Precision and VG for the issuance of 35,000,000 common shares of the Company.  The fair value of the common shares issued was $537,885 and was based on the private placement share price completed at the time of the acquisition.  The Company has accounted for the acquisitions as purchase of assets and assumption of liabilities.  The transaction did not qualify as a business combination under IFRS 3, Business Combination.  The acquisition of Precision and VG was treated as asset acquisitions.

The fair value of the assets acquired, and liabilities assumed from Precision as at date of acquisition were as follows:
 

Consideration
     
Value of 32,425,000 common shares issued
 
$
498,312
 
Total consideration value:
 
$
498,312
 

Net assets acquired
       
Security deposit
 
$
32,211
 
Intangible assets
   
690,041
 
Accounts payable and accrued liabilities
   
(50,924
)
Due to shareholders
   
(173,016
)
Net assets acquired:
 
$
498,312
 

F-38

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)
 
Precision holds a trademark and associated copyrights and customer lists, branding and other promotional materials used under this trade mark.  The excess of consideration over net assets has been allocated to the intangible assets related to the trade name and customer lists.  The Company has classified the trade mark and customer lists as intangible assets with infinite life.  Precision and the Company are related by way of the common director and the acquisition is considered to be a related party transaction.  During the period, the Company performed an impairment assessment on these assets and determined that an impairment existed; accordingly, the Company recorded an impairment charge of $690,041.

The fair value of the assets acquired, and liabilities assumed from VG as at date of acquisition were as follows:

Consideration
     
Value of 2,575,000 common shares issued
 
$
39,573
 
Total consideration value:
 
$
39,573
 

Net assets acquired
       
Property and equipment
 
$
82,336
 
Intangible assets
   
67,014
 
Due to shareholders
   
(109,777
)
Net assets acquired:
 
$
39,573
 

During the period, VG entered into one lease agreement and the Company entered into one lease agreement to facilities for cannabis cultivation, manufacturing and processing.  Amortization on the permits will commence once the facilities are ready for use.  The excess of consideration over net assets has been allocated to the intangible assets related to the future lease rights.  During the period, the Company performed an impairment assessment on these assets and determined that no impairment existed at the reporting date.

7.
        DEPOSITS

a)
During the period ended December 31, 2018, the Company entered into a letter of intent (the "LOI") to acquire KindRub Collective ("Kind").  As part of the LOI, the Company paid $150,000 on deposit and loaned Kind $39,090 as part of a separate management agreement.  Subsequent to December 31, 2018, the LOI was terminated.  The Company is expecting to recover the deposit and loaned funds.

b)
In connection with the acquisition of Precision, the Company assumed security deposits on certain leases totalling $32,211.  In addition, the Company paid a total of $39,344 on additional leases that it entered into during the period ended December 31, 2018.
F-39


Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)

8.
 EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Cost
 
Equipment
   
Leasehold Improvements
   
Total
 
Balance, opening
 
$
-
   
$
-
   
$
-
 
Additions
   
74,436
     
253,693
     
328,129
 
Balance, December 31, 2018
 
$
74,436
   
$
253,693
   
$
328,129
 
                         
No amortization was taken during the period because the assets were not ready for use.

9.
 INTANGIBLE ASSETS

The Company's intangible assets include future lease rights acquired from VG in the amount of $67,014 and a domain name acquired for $16,527 for a total of $83,541.

Cost
 
Trademark
   
Future lease rights
   
Domain name
   
Total
 
Balance, opening
 
$
-
   
$
-
   
$
-
   
$
-
 
Additions
   
690,041
     
67,014
     
16,527
     
773,582
 
Impairment
   
(690,041
)
   
-
     
-
     
(690,041
)
Balance, December 31, 2018
 
$
-
   
$
67,014
   
$
16,527
   
$
83,541
 
                                 
 
10.
  RELATED PARTY TRANSACTIONS AND BALANCES

Relationships
Nature of the relationship
   
Key management
 
 
 
Key management are those personnel having the authority and responsibility for planning, directing and controlling the Company and include the President and Chief Executive Officer, and Chief Financial Officer.
During the period ended December 31, 2018, the Company had the following related party transactions:
 
a)
The Company paid $276,469 in lease payments and a $56,211 security deposit to Best Leasing Services, Inc., a company 100% owned by the CEO and a shareholder of the Company;
b)
The Company paid $83,116 in consulting fees to the CEO and CFO of the Company; and
c)
In connection with the acquisition of Precision and VG, the Company assumed a total of $284,778 in amounts owed to the CEO and director of the Company.

Included in accounts payable and accrued liabilities is $53,592 owed to the CEO and CFO of the Company.

Amounts owed to shareholders are non-interest bearing and have no fixed term of repayment.
F-40

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


11.
 WARRANT LIABILITY

In connection with the private placements completed during the period ended December 31, 2018, the Company issued a total of 13,229,194 warrants exercisable at a price ranging from CDN$0.05 to CDN$0.60 per share. These warrants were assigned a fair value of $747,807 using the Black-Scholes Pricing Model.  The fair value allocated to the warrants at December 31, 2018 was $1,771,393 and is recorded as a derivative financial liability as these warrants are exercisable in Canadian dollars, differing from the Company's functional currency. The change in fair value totalling $1,023,586 is recognized in the statement of loss and comprehensive loss for the period ended December 31, 2018.

The fair value of the warrants is calculated using the Black-Scholes Option Pricing Model. Option pricing models require the input of highly speculative assumptions, including the expected future price volatility of a Company's shares. Changes in these assumptions can materially affect the fair value estimate and, therefore, existing models do not necessarily provide a reliable single measure of the fair value of the Company's warrants.

  The Company used the following assumptions to estimate the fair value of the warrant liability:

   December 31,
2018
Expected warrant life
1.30 years
Expected stock price volatility
100%
Dividend payment during life of warrant
Nil
Expected forfeiture rate
Nil
Risk free interest rate
2.14%
Exercise price
CAD $0.38
Share price
              CAD $0.35

12.
 MANAGEMENT OF CAPITAL

The Company defines the capital that it manages as its shareholders' equity.

The Company's objective when managing capital is to maintain corporate and administrative functions necessary to support the Company's operations and corporate functions; and to seek out and acquire new projects of merit.

The Company manages its capital structure in a manner that provides sufficient funding for operational and capital expenditure activities.  Funds are secured, when necessary, through debt funding or equity capital raised by means of private placements.  There can be no assurances that the Company will be able to obtain debt or equity capital in the case of working capital deficits.
The Company does not pay dividends and has no long-term debt or bank credit facility. The Company is not subject to any externally imposed capital requirements.
F-41

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


13.       RISK MANAGEMENT

13.1 Financial Risk Management

The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The main objectives of the Company's risk management processes are to ensure that risks are properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the Company is exposed are described below.

a.
Capital Risk
The Company manages its capital to ensure that there are adequate capital resources for the Company to maintain operations. The capital structure of the Company consists of items in shareholders' equity.

b.
Credit Risk
Credit risk is the risk that a counter party will be unable to pay any amounts owed to the Company. Management's assessment of the Company's exposure to credit risk is low.

c.
Liquidity Risk
Liquidity risk is the risk that the Company is not able to meet its financial obligations as they fall due. As at December 31, 2018, the Company has working capital of $2,269,428 (excluding the warrant liability), and it does not have any long-term monetary liabilities. The Company may seek additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will result in dilution to the ownership interests of the Company's shareholders and may result in dilution to the value of such interests. The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2018, the Company had cash of $2,358,086 and total liabilities of $156,904 (excluding the warrant liability).

d.
Market Risk
Market risk incorporates a range of risks. Movements in risk factors, such as market price risk and currency risk, affect the fair values of financial assets and liabilities. The Company is not exposed to these risks.

13.2 Fair Values

The carrying values of cash, accounts payable and accrued liabilities and shareholders' loan approximate their fair values due to their short-term to maturity.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Quoted prices in markets that are not active, or inputs that are not observable, either directly or indirectly, for substantially the full term of the asset or liability.
F-42

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The fair value of warrant liability is based on level 3 inputs of the fair value hierarchy.

14.
 COMMITMENT

The Company has entered into the following agreements:

The commercial premises from which the Company carries out its operations are leased from multiple groups, all of which are related parties (see note 10).  These lease agreements are classified as operating leases since there is no transfer of risks and rewards inherent to ownership. The minimum rent payable under the leases are as follows:
 
 
 
Total
 
       
Within one year
 
$
826,451
 
Between two and five years
   
3,519,907
 
         
 
 
$
4,346,358
 
         
 
15.
  INCOME TAXES

A reconciliation of income taxes at statutory rates is as follows:
   
2018
 
Loss for the period
 
$
(3,369,485
)
         
Expected income tax expense (recovery)
   
(943,000
)
Change in statutory, foreign tax, foreign exchange rates and other
   
(13,000
)
Permanent differences
   
290,000
 
Change in unrecognized temporary tax differences
   
649,000
 
Income tax expense (recovery)
 
$
-
 

The significant components of the Company's deferred tax assets that have not been included on the consolidated statement of financial position are as follows:
   
2018
 
Deferred income tax asset:
     
Property and equipment
 
$
-
 
Intangible assets
   
193,000
 
Non-capital losses available for future periods
   
456,000
 
     
649,000
 
Unrecognized deferred tax assets
   
(649,000
)
Net deferred tax assets
 
$
-
 

The Company did not recognize the deferred tax assets for the period ended December 31, 2018 as future taxable profits are uncertain.

F-43

Juva Life, Inc.
Notes to the Consolidated Financial Statements
For the period from incorporation on June 29, 2018 to December 31, 2018
(Expressed in US dollars)


The significant components of the Company's temporary differences, unused tax credits and unused tax losses that have not been included on the consolidated statement of financial position are as follows:

   
2018
   
Expiry
 
Temporary Differences:
           
Intangible assets
 
$
690,000
   
No expiry date
 
Non-capital losses available for future periods
   
1,637,000
     
2038
 

Tax attributes are subject to review, and potential adjustment, by tax authorities.

16.
 SUBSEQUENT EVENTS

a)
Subsequent to December 31, 2018, the Company completed a non-brokered private placement of 1,542,581 units ("Units") at a price of CAD $0.35 per Unit for gross proceeds of CDN$539,903.  Each Unit is comprised of one share of common stock and one-half of a warrant ("Warrant").  Each Warrant enables the holder to purchase one additional share at an exercise price of CAD $0.60 per share, subject to certain adjustments, over an 18-month exercise period following the date of issuance.

b)
The transaction between the Company and Juva Canada was completed on May 30, 2019.

c)
Concurrent with the merger with Juva Canada as outlined in Note 1, Juva Canada intends to complete a non-brokered private placement of 40,000,000 Juva Canada Units (each a "Concurrent Offering Unit") at a price of $0.50 per Concurrent Offering Unit for gross proceeds of $20,000,000 (the "Concurrent Offering").  Each Unit is comprised of one share of Common Stock, with no par value per share, and one-half of a Warrant.  Each whole Warrant enables the holder to purchase one additional share of Warrant Share at an exercise price of $0.75 per share, subject to certain adjustments, over an 18-month exercise period following the date of issuance of the Warrant.

d)
The Company granted 2,675,000 stock options with an exercise price of CDN$0.35 and an expiry date of ten years from the date of grant.

e)
Subsequent to December 31, 2018, the Company amended the terms of certain stock options granted during the period ended December 31, 2018 and allowed for early exercise of these stock options, with any unvested shares to be held in trust until such time as shares vest per the terms of the original agreements.

f)
The Company issued 8,400,000 common shares pursuant to exercise of stock options with exercise prices ranging from CDN$0.02 to CDN$0.055.

 

F-44


 
Pro Forma Consolidated Financial Statements
 
Juva Life Inc.
(unaudited)
 
As at December 31, 2018
(Expressed in US dollars)
 
 
 
 
 
 
 
 
 
F-45

JUVA LIFE INC.
Pro-Forma Consolidated Statement of Financial Position 
As at December 31, 2018
(Expressed in US dollars)
                               
   
Juva Life Inc. as at May 15, 2019
   
Juva Life, Inc. as at December 31, 2018
   
Notes
   
Pro Forma Adjustments
   
Pro Forma
Consolidated
 
 
                             
                               
                               
Assets
                             
Current assets
                             
                               
Cash
 
$
1
   
$
2,358,086
     
2
a
 
$
20,000,000
   
$
22,474,584
 
     
-
     
-
     
2
c
   
(300,000
)
   
-
 
     
-
     
-
     
2
b
   
416,497
     
-
 
   Receivables
   
-
     
-
     
2
d
   
800,865
     
800,865
 
   Prepaid expenses
   
-
     
68,246
             
-
     
68,246
 
     
1
     
2,426,332
             
20,917,362
     
23,343,695
 
Non-current assets
                                       
   Deposits
   
-
     
260,645
             
-
     
260,645
 
Property and equipment
   
-
     
328,129
             
-
     
328,129
 
Intangible assets
   
-
     
83,541
             
-
     
83,541
 
 Total assets
 
$
1
   
$
3,098,647
           
$
20,917,362
   
$
24,016,010
 
                                         
Liabilities
                                       
Current liabilities
                                       
Accounts payable and accrued        liabilities
 
$
-
   
$
156,904
           
$
-
   
$
156,904
 
   Warrant liability
   
-
     
1,771,393
     
2
b
   
72,152
     
1,843,545
 
Total liabilities
   
-
     
1,928,297
             
72,152
     
2,000,449
 
 
Shareholder's equity
                                       
Share capital
   
1
     
4,490,107
     
2
a
   
19,700,000
     
25,335,318
 
     
-
     
-
     
2
b
   
416,497
     
-
 
     
-
     
-
     
2
b
   
(72,152
)
   
-
 
     
-
     
-
     
2
d
   
800,865
     
-
 
Reserves
   
-
     
75,509
             
-
     
75,509
 
Other comprehensive loss
   
-
     
(25,781
)
           
-
     
(25,781
)
Deficit
   
-
     
(3,369,485
)
           
-
     
(3,369,485
)
Total shareholders' equity
   
1
     
1,170,350
             
20,845,210
     
22,015,561
 
Total liabilities and shareholders' equity
 
$
1
   
$
3,098,647
           
$
20,917,362
   
$
24,016,010
 
  
 
The accompanying notes are an integral part of these pro-forma consolidated financial statements
F-46

 
JUVA LIFE INC.
Pro-Forma Consolidated Statement of Loss and Comprehensive Loss 
As at December 31, 2018
(Expressed in US dollars)
 
   
Juva Life Inc.
period ending May 15, 2019
   
Juva Life, Inc. for the period ending December 31, 2018
   
Notes
   
Pro Forma Adjustments
   
Pro Forma Consolidated
 
                               
Expenses
                             
Consulting fees
 
$
-
   
$
173,149
   
 
 
   
$
-
   
$
173,149
 
Share-based payments
   
-
     
52,681
             
-
     
52,681
 
Rent
   
-
     
286,826
             
-
     
286,826
 
Professional fees
   
-
     
407,529
             
-
     
407,529
 
Salaries and benefits
   
-
     
236,015
             
-
     
236,015
 
Marketing and promotion
   
-
     
186,771
             
-
     
186,771
 
Permits
   
-
     
49,970
             
-
     
49,970
 
Office and administration
   
-
     
90,653
             
-
     
90,653
 
Operating expenses
    -      
1,483,594
              -      
1,483,594
 
 
                                       
Other Items
                                       
Change in fair value of warrant liability
   
-
     
1,023,586
             
-
     
1,023,586
 
Impairment of intangible assets
   
-
     
690,041
             
-
     
690,041
 
Foreign exchange loss
   
-
     
172,264
             
-
     
172,264
 
 
   
-
     
1,885,891
             
-
     
1,885,891
 
 
                                       
Loss for the period
 
$
-
   
$
(3,369,485
)
 
 
 
   
$
-
   
$
(3,369,485
)
 
                                       
Other comprehensive loss
                                       
Foreign currency translation adjustment
   
-
     
(25,781
)
           
-
     
(25,781
)
 
                                       
Comprehensive loss for the period
 
$
-
   
$
(3,395,266
)
 
 
 
   
$
-
   
$
(3,395,266
)
 
  

The accompanying notes are an integral part of these pro-forma consolidated financial statements
F-47

JUVA LIFE INC.
Notes to Pro-Forma Consolidated Financial Statements 
As at December 31, 2018
(Expressed in US dollars)
 
1.
   BASIS OF PRESENTATION
 
The accompanying unaudited pro forma consolidated financial statements (the "Pro Forma Financial Statements") have been compiled for purposes of inclusion in the offering circular (the "Circular") of Juva Life Inc. ("Juva Canada"), dated June 10, 2019, relating to its proposed offering of a maximum 40,000,000 units (the "Units").  Each Unit is comprised of one share of common stock, with no par value per share ("Common Stock"), and one-half of a warrant (a "Warrant").  Each warrant entitles the holder to purchase one additional share of Common Stock a ("Warrant Share") at an exercise price of $0.75 per share, subject to certain adjustments, over an 18-month exercise period following the date of issuance of the Warrant. The Units are being offered at a purchase price of $0.50 per Unit on a "best efforts" basis.

On May 15, 2019, the Company entered into a Merger Agreement (the "Agreement") with Juva Holdings (California) Ltd. ("Subco"), a company incorporated under the laws of the State of California and Juva Life, Inc. ("Juva USA"), a company incorporated under the laws of the State of California (together "SubCo").  Under the terms of the Agreement, Subco will merge with Juva USA and the legal existence of Subco will cease and Juva USA will be the surviving entity.  After the transaction, the Company will apply for a listing on the Canadian Securities Exchange ("CSE").   The merger was effective on May 30, 2019.

Foreign Exchange

For the purposes of these Pro Forma Financial Statements, Juva Canada's assets, liabilities and equity, presented in Canadian dollars ("CAD") were translated to United States dollars ("USD").  The CAD/USD exchange rate of 0.74 represents the CAD/USD exchange rate per the Bank of Canada on December 31, 2018. Rates of exchange on the closing date of the Transactions will impact the purchase price consideration.

2.
   PRO-FORMA ADJUSTMENTS
 
These Pro Forma Financial Statements have been prepared by management of Juva Canada in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board from information derived from the financial statements of Juva USA and Juva Canada.

The Pro Forma Financial Statements gives effect to the accounting continuation of Juva USA as described in the Circular, as if it had occurred as at December 31, 2018, for the purposes of the pro-forma consolidated statement of financial position.  For the purposes of the pro-forma consolidated statement of loss and comprehensive loss, the Pro Forma Financial Statements gives effect to the combined statements of loss and comprehensive loss for the latest fiscal period end.

It is management's opinion that these Pro Forma Financial Statements include all adjustments necessary for the fair presentation of the transaction, as described below. The unaudited pro forma consolidated financial statements are not intended to reflect the financial position of Juva USA, which would have actually resulted had the transaction been effected on the dates indicated. Actual amounts recorded upon consummation of the transaction will differ from those recorded in the unaudited pro forma consolidated financial statements and the differences may be material.

The pro forma adjustments contained in these Pro Forma Financial Statements reflect estimates and assumptions by management of Juva USA based on currently available information.  The Pro Forma Financial Statements are not necessarily indicative of Juva USA as at the time of closing of the transaction.  The Pro Forma Financial Statements should be read in conjunction with the audited consolidated financial statements of Juva USA as at and for the period from incorporation on June 29, 2018 to December 31, 2018; and the audited financial statements of Juva Canada as at and for the period from incorporation on April 3, 2019 to May 15, 2019.  Juva Canada was incorporated on April 3, 2019; for the purposes of the pro-forma consolidated financial statements, the balances as of May 15, 2019 were presented as if the period end date was December 31, 2018.  The Pro Forma Financial Statements have been prepared in accordance with Juva USA's accounting policies.


F-48

JUVA LIFE INC.
Pro-Forma Consolidated Statement of Loss and Comprehensive Loss 
As at December 31, 2018
(Expressed in US dollars)  

2.
   PRO-FORMA ADJUSTMENTS (CONTINUED)
 
The following pro forma adjustments have been reflected herein:

a)
Concurrent with the Transaction, Juva Canada intends to complete a non-brokered private placement of 40,000,000 Juva Canada Units (each a "Concurrent Offering Unit") at a price of $0.50 per Concurrent Offering Unit for gross proceeds of $20,000,000 (the "Concurrent Offering").  Each Unit is comprised of one share of Common Stock, with no par value per share, and one-half of a Warrant.  Each Warrant enables the holder to purchase one additional share of Warrant Share at an exercise price of $0.75 per share, subject to certain adjustments, over an 18-month exercise period following the date of issuance of the Warrant.  Share issue costs related to the Concurrent Offering Unit are estimated to be $300,000.

b)
Juva USA completed a non-brokered private placement of 1,542,581 units (the "Juva USA Units") at a price of CAD $0.35 per Juva USA Unit for gross proceeds of $416,497.  Each Juva USA Unit is comprised of one share of common stock ("Juva USA Common Stock"), with no par value per share, and one-half of a warrant ("Juva USA Warrant").  Each whole warrant enables the holder to purchase one additional share at an exercise price of CAD $0.60 per share, subject to certain adjustments, over an 18-month exercise period following the date of issuance of the Juva USA Warrant.

The Juva USA Warrants were assigned a fair value of $72,152 using the Black-Scholes Pricing Model and is recorded as a derivative financial liability, with the corresponding offset recorded in shares capital, as these warrants are exercisable in Canadian dollars, differing from the Company's functional currency. The fair value is recognized as an offset to share capital, with subsequent changes in fair value recorded in the pro forma consolidated statement of loss and comprehensive loss. Fair value of the derivative liability was determined using the following weighted average assumptions; exercise price of $0.43 per common share; expiry of 1.5 years; volatility of 100%; risk-free rate of 2.14%.  The results of the subsequent financing have been reflected in the Pro Forma Financial Statements.

c)
The transaction between the Company and Juva USA was completed.

d)
Juva USA issued 8,400,000 common shares pursuant to exercise of stock options.

 
3.
SHARE CAPITAL CONTINUITY

   
Number of Shares
   
Share Capital
 
             
Opening Balance
   
2
   
$
1
 
Equity of Juva USA
   
76,103,977
     
4,490,107
 
Juva USA private placement
   
1,542,581
     
344,345
 
Exercise of Juva USA's stock options
   
8,400,000
     
800,865
 
Concurrent private placement
   
40,000,000
     
19,700,000
 
                 
Ending balance
   
126,046,560
   
$
25,335,318
 

 
4.
INCOME TAXES

There is no tax effect of pro forma adjustments relating to either entity because both entities have net deferred income tax assets which have not been recognized due to uncertainty as to whether those assets will be realized.
 
 
F-49

PART III – EXHIBITS
 
Exhibit No.
 
Description
 
 
 
EX1A-2.1†
 
Notice of Articles of Juva Life Inc.
 
 
 
EX1A-2.2†
 
Articles of Juva Life Inc.
 
 
 
EX1A-4.1†
 
Form of Subscription Agreement
     
EX1A-4.2*
 
Form of Common Share Purchase Warrant.
 
 
 
EX1A-6.1†
 
Consulting Agreement dated August 24, 2018 between Juva Life, Inc. and Mathew Lee.
     
EX1A-6.2†
 
Standard Sublease between Best Leasing Services, Inc. and Juva Life, Inc. for the San Juan facility.
     
EX1A-6.3†
 
Standard Industrial/Commercial Single-Tenant Lease between Ramundy Springfield and Juva Life, Inc. for the Navy Drive facility.
     
EX1A-6.4†
 
Standard Sublease between Best Leasing Services, Inc. and Juva Life, Inc. for the Clawiter Road facility.
     
EX1A-6.5†
 
Standard Sublease between Best Leasing Services, Inc. and Juva Life, Inc. for the Enterprise Avenue facility.
     
EX1A-6.6†
 
Standard Industrial/Commercial Multi-Tenant Lease between William J. Stoesser and Juva Life, Inc. for the Convention Way facility.
     
EXA1-6.7†
 
Consulting Agreement dated August 24, 2018 between Juva Life, Inc. and Drivon Consulting.
     
EX1A-6.8†
 
Consulting Agreement dated August 1, 2018 between Juva Life, Inc. and Jackson and Main, LLC.
     
EX1A-7.1*
 
Agreement and Plan of Merger dated May 15, 2019, by and among Juva Life Inc., Juva Life, Inc., and Juva Holdings (California) Ltd.
 
 
 
EX1A-10.1
 
Power of Attorney (included on signature page hereto).
 
 
 
EX1A-11.1†
 
Consent of Davidson & Company LLP
 
 
 
EX1A-12.1†
 
Opinion of McMillan LLP
     
EX1A-14.1†
 
Appointment of Agent for Service of Process
 
† Filed herewith.
* To be filed by amendment.

57


SIGNATURES
 
Pursuant to the requirements of Regulation A+, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on June 11, 2019.
 
 
Juva Life Inc.
 
 
 
By:
/s/ Douglas Chloupek
 
 
Name:  Douglas Chloupek
 
 
Title:   Chief Executive Officer
 
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Douglas Chloupek and Mathew Lee, or any of them, his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Form 1-A offering statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. 
 
This offering statement has been signed by the following persons in the capacities and on the dates indicated.
 
/s/ Douglas Chloupek
 
Date:  June 11, 2019
 
Name: Douglas Chloupek
Title: Chief Executive Officer, President and Director
(Principal Executive Officer)
 
 
 
 
/s/ Mathew Lee
 
Date:  June 11, 2019
 
Name: Mathew Lee
Title: Chief Financial Officer, Treasurer and Secretary
(Principal Financial Officer and
Principal Accounting Officer)
 
 
 
 
/s/ Norton Singhavon
 
Date:  June 11, 2019
 
Name: Norton Singhavon
Title: Director
 
 
 
 
/s/ Rakesh Patel
 
Date:  June 11, 2019
 
Name: Rakesh Patel
Title: Director
 
 
 
       
/s/ Kari Gothie
 
Date:  June 11, 2019
 
Name: Kari Gothie
Title: VP Finance and Director
 
 
 
       
/s/ Neil Ruditsky
 
Date:  June 11, 2019
 
Name: Neil Ruditsky
Title: Chief Operating Officer  
 
 

58



 
Mailing Address:
PO Box 9431 Stn Prov Govt
Victoria BC V8W 9V3
www.corporateonline.gov.bc.ca
 
 
 
Location:
2nd Floor - 940 Blanshard Street
Victoria BC
1 877 526-1526
 
 
         
CERTIFIED COPY
Of a Document filed with the Province of British Columbia Registrar of Companies
 
    CAROL PREST
 

Notice of Articles
BUSINESS CORPORATIONS ACT
 
This Notice of Articles was issued by the Registrar on: April 3, 2019 04:38 PM Pacific Time
 
Incorporation Number:       BC1203854
 
Recognition Date and Time: Incorporated on April 3, 2019 04:38 PM Pacific Time
 
 
NOTICE OF ARTICLES

Name of Company:
JUVA LIFE INC.
 
REGISTERED OFFICE INFORMATION
Mailing Address:
1055 WEST GEORGIA STREET
1500 ROYAL CENTRE, P.O. BOX 11117
VANCOUVER BC V6E 4N7
CANADA


Delivery Address:
1055 WEST GEORGIA STREET
1500 ROYAL CENTRE, P.O. BOX 11117
VANCOUVER BC V6E 4N7
CANADA
 

RECORDS OFFICE INFORMATION
Mailing Address:
1055 WEST GEORGIA STREET
1500 ROYAL CENTRE, P.O. BOX 11117
VANCOUVER BC V6E 4N7
CANADA


Delivery Address:
1055 WEST GEORGIA STREET
1500 ROYAL CENTRE, P.O. BOX 11117
VANCOUVER BC V6E 4N7
CANADA


   DIRECTOR INFORMATION
Last Name, First Name, Middle Name:
Lee, Mathew
 
Mailing Address:
908 - 602 CITADEL PARADE
VANCOUVER BC V6B 1X2
CANADA

 
Delivery Address:
908 - 602 CITADEL PARADE
VANCOUVER BC V6B 1X2
CANADA


AUTHORIZED SHARE STRUCTURE
1. No Maximum
Common Shares
Without Par Value
     
   
Without Special Rights or Restrictions attached
 
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
 


 
Number:  BC1203854
BUSINESS CORPORATIONS ACT
(British Columbia)
ARTICLES
of
JUVA LIFE INC.
(the "Company")
TABLE OF CONTENTS
PART 1 INTERPRETATION
 1
PART 2 SHARES AND SHARE CERTIFICATES
 2
PART 3 ISSUE OF SHARES
 4
PART 4 SHARE REGISTERS
 5
PART 5 SHARE TRANSFERS
 5
PART 6 TRANSMISSION OF SHARES
 6
PART 7 PURCHASE, REDEEM OR OTHERWISE ACQUIRE SHARES
 7
PART 8 BORROWING POWERS
 8
PART 9 ALTERATIONS
 8
PART 10 MEETINGS OF SHAREHOLDERS
 10
PART 11 PROCEEDINGS AT MEETINGS OF SHAREHOLDERS
 12
PART 12 VOTES OF SHAREHOLDERS
 16
PART 13 DIRECTORS
 20
PART 14 ELECTION AND REMOVAL OF DIRECTORS
 22
PART 15 ALTERNATE DIRECTORS
 29
PART 16 POWERS AND DUTIES OF DIRECTORS
 31
PART 17 INTERESTS OF DIRECTORS AND OFFICERS
 31
PART 18 PROCEEDINGS OF DIRECTORS
 33
PART 19 EXECUTIVE AND OTHER COMMITTEES
 36
PART 20 OFFICERS
 37
PART 21 INDEMNIFICATION
 38
PART 22 DIVIDENDS
 40
PART 23 ACCOUNTING RECORDS AND AUDITORS
 42
PART 24 NOTICES
 42
PART 25 SEAL
 44
PART 26 PROHIBITIONS
 45




1
 
Number:  BC1203854
 
BUSINESS CORPORATIONS ACT
(British Columbia)
ARTICLES
of
JUVA LIFE INC.
(the "Company")
PART 1


INTERPRETATION
Definitions
1.1   In these Articles, unless the context otherwise requires:
(a)
"Act" means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;
(b)
"board of directors", "directors" and "board" mean the directors or sole director of the Company for the time being;
(c)
"Interpretation Act" means the Interpretation Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;
(d)
"legal personal representative" means the personal or other legal representative of the shareholder;
(e)
"registered address" of a shareholder means the shareholder's address as recorded in the central securities register;
(f)
"seal" means the seal of the Company, if any;
(g)
"share" means a share in the share structure of the Company; and
(h)
"special majority" means the majority of votes described in §11.2 which is required to pass a special resolution.

2
Act and Interpretation Act Definitions Applicable
1.2        The definitions in the Act and the definitions and rules of construction in the Interpretation Act, with the necessary changes, so far as applicable, and except as the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict OR inconsistency between a definition in the Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Act will prevail.  If there is a conflict or inconsistency between these Articles and the Act, the Act will prevail.
PART 2


SHARES AND SHARE CERTIFICATES
Authorized Share Structure
2.1        The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.
Form of Share Certificate
2.2        Each share certificate issued by the Company must comply with, and be signed as required by, the Act.
Shareholder Entitled to Certificate, Acknowledgment or Written Notice
2.3        Unless the shares of which the shareholder is the registered owner are uncertificated shares, each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder's name or (b) a non-transferable written acknowledgment of the shareholder's right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders' duly authorized agents will be sufficient delivery to all.  If a shareholder is the registered owner of uncertificated shares, the Company must send to a holder of an uncertificated share a written notice containing the information required by the Act within a reasonable time after the issue or transfer of such share.
Delivery by Mail
2.4        Any share certificate or non-transferable written acknowledgment of a shareholder's right to obtain a share certificate, or written notice of the issue or transfer of an uncertificated share may be sent to the shareholder by mail at the shareholder's registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate, acknowledgement or written notice is lost in the mail or stolen.

3
Replacement of Worn Out or Defaced Certificate or Acknowledgement
2.5        If a share certificate or a non-transferable written acknowledgment of the shareholder's right to obtain a share certificate is worn out or defaced, the Company must, on production of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as are deemed fit:
(a)
cancel the share certificate or acknowledgment; and
(b)
issue a replacement share certificate or acknowledgment.
Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment
2.6        If a share certificate or a non-transferable written acknowledgment of a shareholder's right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, if the requirements of the Act are satisfied, as the case may be, if the directors receive:
(a)
proof satisfactory to it of the loss, theft or destruction; and
(b)
any indemnity the directors consider adequate.
Splitting Share Certificates
2.7        If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder's name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.
Certificate Fee
2.8   There must be paid to the Company, in relation to the issue of any share certificate under §2.5, §2.6 or §2.7, the amount, if any, not exceeding the amount prescribed under the Act, determined by the directors.
Recognition of Trusts
2.9        Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as required by law or statute or these Articles or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

4
PART 3


ISSUE OF SHARES
Directors Authorized
3.1        Subject to the Act and the rights, if any, of the holders of issued shares of the Company, the Company may allot, issue, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the consideration (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.
Commissions and Discounts
3.2        The Company may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person's purchase or agreement to purchase shares of the Company from the Company or any other person's procurement or agreement to procure purchasers for shares of the Company.
Brokerage
3.3        The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.
Conditions of Issue
  
3.4        Except as provided for by the Act, no share may be issued until it is fully paid. A share is fully paid when:
 
(a)
consideration is provided to the Company for the issue of the share by one or more of the following:
(i)
past services performed for the Company;
(ii)
property;
(ii)
money; and

(b)
the value of the consideration received by the Company equals or exceeds the issue price set for the share under §3.1.

Share Purchase Warrants and Rights
3.5        Subject to the Act, the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

5
 
PART 4


SHARE REGISTERS
Central Securities Register
4.1        As required by and subject to the Act, the Company must maintain in British Columbia a central securities register and may appoint an agent to maintain such register.  The directors may appoint one or more agents, including the agent appointed to keep the central securities register, as transfer agent for shares or any class or series of shares and the same or another agent as registrar for shares or such class or series of shares, as the case may be.  The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.
PART 5


SHARE TRANSFERS
Registering Transfers
5.1        A transfer of a share must not be registered unless the Company or the transfer agent or registrar for the class or series of shares to be transferred has received:
(a)
except as exempted by the Act, a written instrument of transfer in respect of the share has been received by the Company (which may be a separate document or endorsed on the share certificate for the shares transferred) made by the shareholder or other appropriate person or by an agent who has actual authority to act on behalf of that person;
(b)
if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate;
(c)
if a non-transferable written acknowledgment of the shareholder's right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment; and
(d)
such other evidence, if any, as the Company or the transfer agent or registrar for the class or series of share to be transferred may require to prove the title of the transferor or the transferor's right to transfer the share, that the written instrument of transfer is genuine and the right of the transferee to have the transfer registered.
Form of Instrument of Transfer
5.2         The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company's share certificates or in any other form that may be approved by the directors from time to time or by the transfer agent or registrar for those shares.

6
Transferor Remains Shareholder
5.3        Except to the extent that the Act otherwise provides, the transferor of a share is deemed to remain the holder of it until the name of the transferee is entered in a securities register of the Company in respect of the transfer.
Signing of Instrument of Transfer
5.4        If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer, or if the shares are uncertificated shares, then all of the shares registered in the name of the shareholder on the central securities register:
(a)
in the name of the person named as transferee in that instrument of transfer; or
(b)
if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.
Enquiry as to Title Not Required
5.5        Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares transferred, of any interest in such shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.
Transfer Fee
5.6        There must be paid to the Company, in relation to the registration of a transfer, the amount, if any, determined by the directors.
PART 6


TRANSMISSION OF SHARES
Legal Personal Representative Recognized on Death
6.1        In case of the death of a shareholder, the legal personal representative of the shareholder, or in the case of shares registered in the shareholder's name and the name of another person in joint tenancy, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder's interest in the shares. Before recognizing a person as a legal personal representative of a shareholder, the Company shall receive the documentation required by the Act.

7
Rights of Legal Personal Representative
6.2        The legal personal representative of a shareholder has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Act and the directors have been deposited with the Company.  This §6.2 does not apply in the case of the death of a shareholder with respect to shares registered in the name of the shareholder and the name of another person in joint tenancy.
PART 7


PURCHASE, REDEEM OR OTHERWISE ACQUIRE SHARES
Company Authorized to Purchase, Redeem or Otherwise Acquire Shares
7.1        Subject to §7.2, to the special rights and restrictions attached to the shares of any class or series and to the Act, the Company may, if authorized by the directors, purchase, redeem or otherwise acquire any of its shares at the price and upon the terms determined by the directors.
Purchase When Insolvent
7.2        The Company must not make a payment or provide any other consideration to purchase, redeem or otherwise acquire any of its shares if there are reasonable grounds for believing that:
(a)
the Company is insolvent; or
(b)
making the payment or providing the consideration would render the Company insolvent.
Sale and Voting of Purchased Shares, Redeemed or Otherwise Acquired Shares
7.3        If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:
(a)
is not entitled to vote the share at a meeting of its shareholders;
(b)
must not pay a dividend in respect of the share; and
(c)
must not make any other distribution in respect of the share.

8
Company Entitled to Purchase or Redeem Share Fractions
7.4        The Company may, without prior notice to the holders, purchase, redeem or otherwise acquire for fair value any and all outstanding share fractions of any class or kind of shares in its authorized share structure as may exist at any time and from time to time. Upon the Company delivering the purchase funds and confirmation of purchase or redemption of the share fractions to the holders' registered or last known address, or if the Company has a transfer agent then to such agent for the benefit of and forwarding to such holders, the Company shall thereupon amend its central securities register to reflect the purchase or redemption of such share fractions and if the Company has a transfer agent, shall direct the transfer agent to amend the central securities register accordingly. Any holder of a share fraction, who upon receipt of the funds and confirmation of purchase or redemption of same, disputes the fair value paid for the fraction, shall have the right to apply to the court to request that it set the price and terms of payment and make consequential orders and give directions the court considers appropriate, as if the Company were the "acquiring person" as contemplated by Division 6, Compulsory Acquisitions, under the Act and the holder were an "offeree" subject to the provisions contained in such Division, mutatis mutandis.
PART 8


BORROWING POWERS
8.1 The Company, if authorized by the directors, may:
(a)
borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;
(b)
issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as the directors consider appropriate;
(c)
guarantee the repayment of money by any other person or the performance of any obligation of any other person; and
(d)
mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.
PART 9


ALTERATIONS
Alteration of Authorized Share Structure
9.1        Subject to §9.2 and the Act, the Company may by ordinary resolution (or a resolution of the directors in the case of §9.1(c) or §9.1(f):

9
(a)
create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;
(b)
increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;
(c)
subdivide or consolidate all or any of its unissued, or fully paid issued, shares;
(d)
if the Company is authorized to issue shares of a class of shares with par value:
(i)
decrease the par value of those shares; or
(ii)
if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;
(e)
change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;
(f)
alter the identifying name of any of its shares; or
(g)
otherwise alter its shares or authorized share structure when required or permitted to do so by the Act where it does not specify by a special resolution;
and, if applicable, alter its Notice of Articles and Articles accordingly.
Special Rights and Restrictions
9.2        Subject to the Act and in particular those provisions of the Act relating to the rights of holders of outstanding shares to vote if their rights are prejudiced or interfered with, the Company may by ordinary resolution:
(a)
create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or
(b)
vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued,
and alter its Notice of Articles and Articles accordingly.
Change of Name
9.3        The Company may by directors resolution authorize an alteration of its Notice of Articles in order to change its name or adopt or change any translation of that name.

10
Other Alterations
9.4        If the Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by ordinary resolution alter these Articles.
PART 10


MEETINGS OF SHAREHOLDERS
Annual General Meetings
10.1      Unless an annual general meeting is deferred or waived in accordance with the Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.
Resolution Instead of Annual General Meeting
10.2      If all the shareholders who are entitled to vote at an annual general meeting consent in writing by a unanimous resolution to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution.  The shareholders must, in any unanimous resolution passed under this §10.2, select as the Company's annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.
Calling of Meetings of Shareholders
10.3      The directors may, at any time, call a meeting of shareholders.
Notice for Meetings of Shareholders
10.4      The Company must send notice of the date, time and location of any meeting of shareholders (including, without limitation, any notice specifying the intention to propose a resolution as an exceptional resolution, a special resolution or a special separate resolution, and any notice to consider approving an amalgamation into a foreign jurisdiction, an arrangement or the adoption of an amalgamation agreement, and any notice of a general meeting, class meeting or series meeting), in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:
(a)
if the Company is a public company, 21 days;
(b)
otherwise, 10 days.

11
Record Date for Notice
10.5      The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders.  The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:
(a)
if the Company is a public company, 21 days;
(b)
otherwise, 10 days.
If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.
Record Date for Voting
10.6      The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.
Failure to Give Notice and Waiver of Notice
10.7      The accidental omission to send notice of any meeting of shareholders to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive that entitlement or may agree to reduce the period of that notice.  Attendance of a person at a meeting of shareholders is a waiver of entitlement to notice of the meeting unless that person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.
Notice of Special Business at Meetings of Shareholders
10.8       If a meeting of shareholders is to consider special business within the meaning of §11.1, the notice of meeting must:
(a)
state the general nature of the special business; and
(b)
if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:
(i)
at the Company's records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

12
(ii)
during statutory business hours on any one or more specified days before the day set for the holding of the meeting.
Place of Meetings
10.9      In addition to any location in British Columbia, any general meeting may be held in any location outside British Columbia approved by a resolution of the directors.
PART 11


PROCEEDINGS AT MEETINGS OF SHAREHOLDERS
Special Business
11.1      At a meeting of shareholders, the following business is special business:
(a)
at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;
(b)
at an annual general meeting, all business is special business except for the following:
(i)
   business relating to the conduct of or voting at the meeting;
(ii)
  consideration of any financial statements of the Company presented to the meeting;
(iii)
  consideration of any reports of the directors or auditor;
(iv)
  the setting or changing of the number of directors;
(v)
  the election or appointment of directors;
(vi)
  the appointment of an auditor;
(vii)
  the setting of the remuneration of an auditor;
(viii)
  business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;
(ix)
  any other business which, under these Articles or the Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.
 
Special Majority
11.2      The majority of votes required for the Company to pass a special resolution at a general meeting of shareholders is two-thirds of the votes cast on the resolution.

13
Quorum
11.3      Subject to the special rights and restrictions attached to the shares of any class or series of shares, and to §11.4, the quorum for the transaction of business at a meeting of shareholders is at least one person who is, or who represents by proxy, one or more shareholders who, in the aggregate, hold at least five percent of the issued shares entitled to be voted at the meeting.
One Shareholder May Constitute Quorum
11.4      If there is only one shareholder entitled to vote at a meeting of shareholders:
(a)
the quorum is one person who is, or who represents by proxy, that shareholder, and
(b)
that shareholder, present in person or by proxy, may constitute the meeting.
Persons Entitled to Attend Meeting
11.5      In addition to those persons who are entitled to vote at a meeting of shareholders, the only other persons entitled to be present at the meeting are the directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company, any persons invited to be present at the meeting by the directors or by the chair of the meeting and any persons entitled or required under the Act or these Articles to be present at the meeting; but if any of those persons does attend the meeting, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.
Requirement of Quorum
11.6      No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.
Lack of Quorum
11.7      If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:
(a)
in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and
(b)
in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

14
Lack of Quorum at Succeeding Meeting
11.8      If, at the meeting to which the meeting referred to in §11.7(b) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting shall be deemed to constitute a quorum.
Chair
11.9      The following individual is entitled to preside as chair at a meeting of shareholders:
(a)
the chair of the board, if any; or
(b)
if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.
Selection of Alternate Chair
11.10    If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present may choose either one of their number or the solicitor of the Company to be chair of the meeting.  If all of the directors present decline to take the chair or fail to so choose or if no director is present or the solicitor of the Company declines to take the chair, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.
Adjournments
11.11    The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
Notice of Adjourned Meeting
11.12    It is not necessary to give any notice of an adjourned meeting of shareholders or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.
Decisions by Show of Hands or Poll
11.13    Subject to the Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by any shareholder entitled to vote who is present in person or by proxy.

15
Declaration of Result
11.14    The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting.  A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under §11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.
Motion Need Not be Seconded
11.15    No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.
Casting Vote
11.16    In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.
Manner of Taking Poll
11.17    Subject to §11.18, if a poll is duly demanded at a meeting of shareholders:
(a)
the poll must be taken:
(i)
at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and
(ii)
in the manner, at the time and at the place that the chair of the meeting directs;
(b)
the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and
(c)
the demand for the poll may be withdrawn by the person who demanded it.
Demand for Poll on Adjournment
11.18    A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.
Chair Must Resolve Dispute
11.19    In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

16
Casting of Votes
11.20    On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.
No Demand for Poll on Election of Chair
11.21    No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.
Demand for Poll Not to Prevent Continuance of Meeting
11.22    The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.
Retention of Ballots and Proxies
11.23    The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.
PART 12


VOTES OF SHAREHOLDERS
Number of Votes by Shareholder or by Shares
12.1      Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under §12.3:
(a)
on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and
(b)
on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.
Votes of Persons in Representative Capacity
12.2 A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

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Votes by Joint Holders
12.3      If there are joint shareholders registered in respect of any share:
(a)
any one of the joint shareholders may vote at any meeting of shareholders, personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or
(b)
if more than one of the joint shareholders is present at any meeting of shareholders, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.
Legal Personal Representatives as Joint Shareholders
12.4      Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of §12.3, deemed to be joint shareholders registered in respect of that share.
Representative of a Corporate Shareholder
12.5      If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:
(a)
for that purpose, the instrument appointing a representative must be received:
(i)
at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting or any adjourned meeting; or
(ii)
at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting or by a person designated by the chair of the meeting or adjourned meeting;
(b)
if a representative is appointed under this §12.5:
(i)
the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and
(ii)
the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

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Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other customary method of transmitting recorded messages.
Proxy Provisions Do Not Apply to All Companies
12.6      If and for so long as the Company is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply, then §12.7 to §12.15 are not mandatory, however the directors of the Company are authorized to apply all or part of such sections or to adopt alternative procedures for proxy form, deposit and revocation procedures to the extent that the directors deem necessary in order to comply with securities laws applicable to the Company.
Appointment of Proxy Holders
12.7      Every shareholder of the Company entitled to vote at a meeting of shareholders may, by proxy, appoint one or more (but not more than two) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.
Alternate Proxy Holders
12.8      A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.
Proxy Holder Need Not Be Shareholder
12.9      A proxy holder need not be a shareholder of the Company.
Deposit of Proxy
12.10     A proxy for a meeting of shareholders must:
(a)
be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting or any adjourned meeting; or
(b)
unless the notice provides otherwise, be received, at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting or by a person designated by the chair of the meeting or adjourned meeting.
A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages, including through Internet or telephone voting or by email, if permitted by the notice calling the meeting or the information circular for the meeting.
Validity of Proxy Vote
12.11    A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

19
(a)
at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used; or
(b)
at the meeting or any adjourned meeting by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given has been taken.
Form of Proxy
12.12     A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:
[name of company]
(the "Company")
The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at any adjournment of that meeting.
Number of shares in respect of which this proxy is given (if no number is specified, then this proxy if given in respect of all shares registered in the name of the undersigned):
Signed [month, day, year]
[Signature of shareholder]
[Name of shareholder—printed]
Revocation of Proxy
12.13    Subject to §12.14, every proxy may be revoked by an instrument in writing that is received:
(a)
at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used; or
(b)
at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given has been taken.

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Revocation of Proxy Must Be Signed
12.14    An instrument referred to in §12.13 must be signed as follows:
(a)
if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or the shareholder's legal personal representative or trustee in bankruptcy;
(b)
if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under §12.5.
Production of Evidence of Authority to Vote
12.15    The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.
PART 13


DIRECTORS
First Directors; Number of Directors
13.1      The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Act. The number of directors, excluding additional directors appointed under §14.8, is set at:
(a)
subject to §(b) and §(c), the number of directors that is equal to the number of the Company's first directors;
(b)
if the Company is a public company, the greater of three and the most recently set of:
(i)
the number of directors set by a resolution of the directors (whether or not previous notice of the resolution was given); and
(ii)
the number of directors in office pursuant to §14.4;
(c)
if the Company is not a public company, the most recently set of:
(i)
the number of directors set by a resolution of the directors (whether or not previous notice of the resolution was given); and
(ii)
the number of directors in office pursuant to §14.4.

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Change in Number of Directors
13.2      If the number of directors is set under §13.1(b)(i) or §13.1(c)(i):
(a)
the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number; or
(b)
if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number then the directors, subject to §14.8, may appoint directors to fill those vacancies.
Directors' Acts Valid Despite Vacancy
13.3      An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.
Qualifications of Directors
13.4      A director is not required to hold a share as qualification for his or her office but must be qualified as required by the Act to become, act or continue to act as a director.
Remuneration of Directors
13.5      The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders.
Reimbursement of Expenses of Directors
13.6      The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.
Special Remuneration for Directors
13.7      If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, he or she may be paid remuneration fixed by the directors, or at the option of the directors, fixed by ordinary resolution, and such remuneration will be in addition to any other remuneration that he or she may be entitled to receive.
Gratuity, Pension or Allowance on Retirement of Director
13.8      Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

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PART 14


ELECTION AND REMOVAL OF DIRECTORS
Election at Annual General Meeting
14.1      At every annual general meeting and in every unanimous resolution contemplated by §10.2:
(a)
the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and
(b)
all the directors cease to hold office immediately before the election or appointment of directors under §(a), but are eligible for re-election or re-appointment.
Consent to be a Director
14.2      No election, appointment or designation of an individual as a director is valid unless:
(a)
that individual consents to be a director in the manner provided for in the Act;
(b)
that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or
(c)
with respect to first directors, the designation is otherwise valid under the Act.
Failure to Elect or Appoint Directors
14.3      If:
(a)
the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by §10.2, on or before the date by which the annual general meeting is required to be held under the Act; or
(b)
the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by §10.2, to elect or appoint any directors;
then each director then in office continues to hold office until the earlier of:
(c)
when his or her successor is elected or appointed; and
(d)
when he or she otherwise ceases to hold office under the Act or these Articles.

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Places of Retiring Directors Not Filled
14.4      If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles but their term of office shall expire when new directors are elected at a meeting of shareholders convened for that purpose.  If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.
Directors May Fill Casual Vacancies
14.5       Any casual vacancy occurring in the board of directors may be filled by the directors.
Remaining Directors Power to Act
14.6      The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of calling a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Act, for any other purpose.
Shareholders May Fill Vacancies
14.7      If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.
Additional Directors
14.8      Notwithstanding §13.1 and §13.2, between annual general meetings or by unanimous resolutions contemplated by §10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this §14.8 must not at any time exceed:
(a)
one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or
(b)
in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this §14.8.
Any director so appointed ceases to hold office immediately before the next election or appointment of directors under §14.1(a), but is eligible for re-election or re-appointment.

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Ceasing to be a Director
14.9      A director ceases to be a director when:
(a)
the term of office of the director expires;
(b)
the director dies;
(c)
the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or
(d)
the director is removed from office pursuant to §14.10 or §14.11.
Removal of Director by Shareholders
14.10    The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy.  If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.
Removal of Director by Directors
14.11    The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.
Nomination of Directors
14.12 
(a)
Subject only to the Act, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the board may be made at any annual meeting of shareholders, or at any special meeting of shareholders (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting):
(i)
by or at the direction of the board or an authorized officer of the Company, including pursuant to a notice of meeting;
(ii)
by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Act or a requisition of the shareholders made in accordance with the provisions of the Act; or

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(iii)
by any person (a "Nominating Shareholder") (A) who, at the close of business on the date of the giving of the notice provided for below in this §14.12 and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting and (B) who complies with the notice procedures set forth below in this §14.12.
(b)
In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, such person must be give
(i)
timely notice thereof in proper written form to the Corporate Secretary of the Company at the principal executive offices of the Company in accordance with this §14.12.and
(ii)
the representation and agreement with respect to each candidate for nomination as required by, and within the time period specified in §14.12(d).
(c)
To be timely under §14.12(b)(i), a Nominating Shareholder's notice to the Corporate Secretary of the Company must be made:
(i)
in the case of an annual meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is called for a date that is less than 40 days after the date (the "Notice Date") on which the first public announcement of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the tenth (10th) day following the Notice Date; and
(ii)
in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the fifteenth (15th) day following the day on which the first public announcement of the date of the special meeting of shareholders was made.
(iii)
Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this §14.12(c).
(d)
To be in proper written form, a Nominating Shareholder's notice to the Corporate Secretary of the Company, under §14.12(b)(i) must set forth:
(i)
as to each person whom the Nominating Shareholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the person as of the record date for the Meeting of Shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice, (D) a statement as to whether such person would be "independent" of the Company (within the meaning of sections 1.4 and 1.5 of National Instrument 52-110 – Audit Committees of the Canadian Securities Administrators, as such provisions may be amended from time to time) if elected as a director at such meeting and the reasons and basis for such determination and (E) any other information relating to the person that would be required to be disclosed in a dissident's proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws; and

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(ii)
as to the Nominating Shareholder giving the notice, (A) any information relating to such Nominating Shareholder that would be required to be made in a dissident's proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws, and (B) the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the Nominating Shareholder as of the record date for the Meeting of Shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice.
(e)
To be eligible to be a candidate for election as a director of the Company and to be duly nominated, a candidate must be nominated in the manner prescribed in this §14.12 and the candidate for nomination, whether nominated by the board or otherwise, must have previously delivered to the Corporate Secretary of the Company at the principal executive offices of the Company, not less than 5 days prior to the date of the Meeting of Shareholders, a written representation and agreement (in form provided by the Company) that such candidate for nomination, if elected as a director of the Company, will comply with all applicable corporate governance, conflict of interest, confidentiality, share ownership, majority voting and insider trading policies and other policies and guidelines of the Company applicable to directors and in effect during such person's term in office as a director (and, if requested by any candidate for nomination, the Corporate Secretary of the Company shall provide to such candidate for nomination all such policies and guidelines then in effect).
(f)
No person shall be eligible for election as a director of the Company unless nominated in accordance with the provisions of this §14.12; provided, however, that nothing in this §14.12 shall be deemed to preclude discussion by a shareholder (as distinct from nominating directors) at a meeting of shareholders of any matter in respect of which it would have been entitled to submit a proposal pursuant to the provisions of the Act. The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.
(g)
For purposes of this §14.12:

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(i)
"Affiliate", when used to indicate a relationship with a person, shall mean a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person;
(ii)
"Applicable Securities Laws" means the Securities Act (British Columbia) and the equivalent legislation in the other provinces and in the territories of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commissions and similar regulatory authorities of each of the applicable provinces and territories of Canada;
(iii)
"Associate", when used to indicate a relationship with a specified person, shall mean (A) any corporation or trust of which such person owns beneficially, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all voting securities of such corporation or trust for the time being outstanding, (B) any partner of that person, (C) any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity, (D) a spouse of such specified person, (E) any person of either sex with whom such specified person is living in conjugal relationship outside marriage or (F) any relative of such specified person or of a person mentioned in clauses (D) or (E) of this definition if that relative has the same residence as the specified person;
(iv)
"Derivatives Contract" shall mean a contract between two parties (the "Receiving Party" and the "Counterparty") that is designed to expose the Receiving Party to economic benefits and risks that correspond substantially to the ownership by the Receiving Party of a number of shares in the capital of the Company or securities convertible into such shares specified or referenced in such contract (the number corresponding to such economic benefits and risks, the "Notional Securities"), regardless of whether obligations under such contract are required or permitted to be settled through the delivery of cash, shares in the capital of the Company or securities convertible into such shares or other property, without regard to any short position under the same or any other Derivatives Contract. For the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate governmental authority shall not be deemed to be Derivatives Contracts;
(v)
"Meeting of Shareholders" shall mean such annual shareholders meeting or special shareholders meeting, whether general or not, at which one or more persons are nominated for election to the board by a Nominating Shareholder;

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(vi)
"owned beneficially" or "owns beneficially" means, in connection with the ownership of shares in the capital of the Company by a person, (A) any such shares as to which such person or any of such person's Affiliates or Associates owns at law or in equity, or has the right to acquire or become the owner at law or in equity, where such right is exercisable immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any payment, upon the exercise of any conversion right, exchange right or purchase right attaching to any securities, or pursuant to any agreement, arrangement, pledge or understanding whether or not in writing; (B) any such shares as to which such person or any of such person's Affiliates or Associates has the right to vote, or the right to direct the voting, where such right is exercisable immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any payment, pursuant to any agreement, arrangement, pledge or understanding whether or not in writing; (C) any such shares which are beneficially owned, directly or indirectly, by a Counterparty (or any of such Counterparty's Affiliates or Associates) under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which such person or any of such person's Affiliates or Associates is a Receiving Party; provided, however that the number of shares that a person owns beneficially pursuant to this clause (C) in connection with a particular Derivatives Contract shall not exceed the number of Notional Securities with respect to such Derivatives Contract; provided, further, that the number of securities owned beneficially by each Counterparty (including their respective Affiliates and Associates) under a Derivatives Contract shall for purposes of this clause be deemed to include all securities that are owned beneficially, directly or indirectly, by any other Counterparty (or any of such other Counterparty's Affiliates or Associates) under any Derivatives Contract to which such first Counterparty (or any of such first Counterparty's Affiliates or Associates) is a Receiving Party and this proviso shall be applied to successive Counterparties as appropriate; and (D) any such shares which are owned beneficially within the meaning of this definition by any other person with whom such person is acting jointly or in concert with respect to the Company or any of its securities; and
(vii)
"public announcement" shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company or its agents under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com.
(h)
Notwithstanding any other provision to this §14.12, notice or any delivery given to the Corporate Secretary of the Company pursuant to this §14.12 may only be given by personal delivery, facsimile transmission or by email (provided that the Corporate Secretary of the Company has stipulated an email address for purposes of this notice, at such email address as stipulated from time to time), and shall be deemed to have been given and made only at the time it is served by personal delivery, email (at the address as aforesaid) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received) to the Corporate Secretary at the address of the principal executive offices of the Company; provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.

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(i)
In no event shall any adjournment or postponement of a Meeting of Shareholders or the announcement thereof commence a new time period for the giving of a Nominating Shareholder's notice as described in §14.12(c) or the delivery of a representation and agreement as described in §14.12(e).
PART 15


ALTERNATE DIRECTORS
Appointment of Alternate Director
15.1      Any director (an "appointor") may by notice in writing received by the Company appoint any person (an "appointee") who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.
Notice of Meetings
15.2      Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at  any such meetings at which his or her appointor is not present.
Alternate for More than One Director Attending Meetings
15.3      A person may be appointed as an alternate director by more than one director, and an alternate director:
(a)
will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;
(b)
has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;
(c)
will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a directors, once more in that capacity; and

30
(d)
has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.
Consent Resolutions
15.4      Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.
Alternate Director an Agent
15.5      Every alternate director is deemed to be the agent of his or her appointor.
Revocation or Amendment of Appointment of Alternate Director
15.6      An appointor may at any time, by notice in writing received by the Company, revoke or amend the terms of the appointment of an alternate director appointed by him or her.
Ceasing to be an Alternate Director
15.7      The appointment of an alternate director ceases when:
(a)
his or her appointor ceases to be a director and is not promptly re-elected or re-appointed;
(b)
the alternate director dies;
(c)
the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;
(d)
the alternate director ceases to be qualified to act as a director; or
(e)
the term of his appointment expires, or his or her appointor revokes the appointment of the alternate directors.
Remuneration and Expenses of Alternate Director
15.8      The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

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PART 16


POWERS AND DUTIES OF DIRECTORS
Powers of Management
16.1      The directors must, subject to the Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Act or by these Articles, required to be exercised by the shareholders of the Company.  Notwithstanding the generality of the foregoing, the directors may set the remuneration of the auditor of the Company.
Appointment of Attorney of Company
16.2      The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit.  Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit.  Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.
Remuneration of an Auditor
16.3      The directors may from time to time set the remuneration of an auditor.
PART 17


INTERESTS OF DIRECTORS AND OFFICERS
Obligation to Account for Profits
17.1      A director or senior officer who holds a disclosable interest (as that term is used in the Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Act.
Restrictions on Voting by Reason of Interest
17.2      A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors' resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

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Interested Director Counted in Quorum
17.3      A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.
Disclosure of Conflict of Interest or Property
17.4      A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Act.
Director Holding Other Office in the Company
17.5      A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.
No Disqualification
17.6      No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.
Professional Services by Director or Officer
17.7      Subject to the Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.
Director or Officer in Other Corporations
17.8      A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

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PART 18


PROCEEDINGS OF DIRECTORS
Meetings of Directors
18.1      The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.
Voting at Meetings
18.2      Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting has a second or casting vote.
Chair of Meetings
18.3      The following individual is entitled to preside as chair at a meeting of directors:
(a)
the chair of the board, if any;
(b)
in the absence of the chair of the board, the president, if any, if the president is a director; or
(c)
any other director chosen by the directors if:
(i)
neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;
(ii)
neither the chair of the board nor the president, if a director, is willing to chair the meeting; or
(iii)
the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.
Meetings by Telephone or Other Communications Medium
18.4      A director may participate in a meeting of the directors or of any committee of the directors:
(a)
in person; or
(b)
by telephone or by other communications medium if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other.

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A director who participates in a meeting in a manner contemplated by this §18.4 is deemed for all purposes of the Act and these Articles to be present at the meeting and to have agreed to participate in that manner.
Calling of Meetings
18.5      A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.
Notice of Meetings
18.6      Other than for meetings held at regular intervals as determined by the directors pursuant to §18.1, 48 hours' notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors by any method set out in §24.1 or orally or by telephone.
When Notice Not Required
18.7      It is not necessary to give notice of a meeting of the directors to a director if:
(a)
the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or
(b)
the director has waived notice of the meeting.
Meeting Valid Despite Failure to Give Notice
18.8      The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director, does not invalidate any proceedings at that meeting.
Waiver of Notice of Meetings
18.9      Any director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director.  Attendance of a director or alternate director at a meeting of the directors is a waiver of notice of the meeting unless that director or alternate director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.
Quorum
18.10    The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be a majority of the directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

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Validity of Acts Where Appointment Defective
18.11    Subject to the Act, an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.
Consent Resolutions in Writing
18.12     A resolution of the directors or of any committee of the directors may be passed without a meeting:
(a)
in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or
(b)
in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who have not made such a disclosure consents in writing to the resolution.
A consent in writing under this Article 18 may be by signed document, fax, email or any other method of transmitting legibly recorded messages.  A consent in writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this §18.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.
PART 19


EXECUTIVE AND OTHER COMMITTEES
Appointment and Powers of Executive Committee
19.1      The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors' powers, except:
(a)
the power to fill vacancies in the board of directors;
(b)
the power to remove a director;
(c)
the power to change the membership of, or fill vacancies in, any committee of the directors; and

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(d)
such other powers, if any, as may be set out in the resolution or any subsequent directors' resolution.
Appointment and Powers of Other Committees
19.2      The directors may, by resolution:
(a)
appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;
(b)
delegate to a committee appointed under §(a) any of the directors' powers, except:
(i)
the power to fill vacancies in the board of directors;
(ii)
the power to remove a director;
(iii)
the power to change the membership of, or fill vacancies in, any committee of the directors; and
(iv)
the power to appoint or remove officers appointed by the directors; and
(c)
make any delegation referred to in §(b) subject to the conditions set out in the resolution or any subsequent directors' resolution.
Obligations of Committees
19.3       Any committee appointed under §19.1 or §19.2, in the exercise of the powers delegated to it, must:
(a)
conform to any rules that may from time to time be imposed on it by the directors; and
(b)
report every act or thing done in exercise of those powers at such times as the directors may require.
Powers of Board
19.4      The directors may, at any time, with respect to a committee appointed under §19.1 or §19.2:
(a)
revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;
(b)
terminate the appointment of, or change the membership of, the committee; and
(c)
fill vacancies in the committee.

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Committee Meetings
19.5      Subject to §19.3(a) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under §19.1 or §19.2:
(a)
the committee may meet and adjourn as it thinks proper;
(b)
the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;
(c)
a majority of the members of the committee constitutes a quorum of the committee; and
(d)
questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.
PART 20


OFFICERS
Directors May Appoint Officers
20.1      The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.
Functions, Duties and Powers of Officers
20.2      The directors may, for each officer:
(a)
determine the functions and duties of the officer;
(b)
entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and
(c)
revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.
Qualifications
20.3      No person may be appointed as an officer unless that person is qualified in accordance with the Act. One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as a managing director must be a director. Any other officer need not be a director.

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Remuneration and Terms of Appointment
20.4       All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.
PART 21


INDEMNIFICATION
Definitions
21.1      In this Part 21:
(a)
"eligible party", in relation to a company, means an individual who:
(i)
is or was a director, alternate director or officer of the Company;
(ii)
is or was a director, alternate director or officer of another corporation
(A)
at a time when the corporation is or was an affiliate of the Company, or
(B)
at the request of the Company; or
(iii)
at the request of the Company, is or was, or holds or held a position equivalent to that of, a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;
and includes, except in the definition of "eligible proceeding", and §163(1)(c) and (d) and §165 of the Act, the heirs and personal or other legal representatives of that individual;
(b)
"eligible penalty" means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
(c)
"eligible proceeding" means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the Company or an associated corporation
(i)
is or may be joined as a party; or
(ii)
is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

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(d)
"expenses" has the meaning set out in the Act and includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding; and
(e)
"proceeding" includes any legal proceeding or investigative action, whether current, threatened, pending or completed.
Mandatory Indemnification of Eligible Parties
21.2      Subject to the Act, the Company must indemnify each eligible party and the heirs and legal personal representatives of each eligible party against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each eligible party is deemed to have contracted with the Company on the terms of the indemnity contained in this §21.2.
Indemnification of Other Persons
21.3      Subject to any restrictions in the Act, the Company may agree to indemnify and may indemnify any person (including an eligible party) against eligible penalties and pay expenses incurred in connection with the performance of services by that person for the Company.
Authority to Advance Expenses
21.4      The Company may advance expenses to an eligible party to the extent permitted by and in accordance with the Act.
Non-Compliance with Act
21.5      Subject to the Act, the failure of an eligible party of the Company to comply with the Act or these Articles or, if applicable, any former Companies Act or former Articles does not, of itself, invalidate any indemnity to which he or she is entitled under this Part 21.
Company May Purchase Insurance
21.6      The Company may purchase and maintain insurance for the benefit of any eligible party person (or his or her heirs or legal personal representatives of any eligible party) against any liability incurred by any eligible party.
PART 22


DIVIDENDS
Payment of Dividends Subject to Special Rights
22.1      The provisions of this Part 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

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Declaration of Dividends
22.2      Subject to the Act, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.
No Notice Required
22.3      The directors need not give notice to any shareholder of any declaration under §22.2.
Record Date
22.4      The directors must set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months.
Manner of Paying Dividend
22.5      A resolution declaring a dividend may direct payment of the dividend wholly or partly in money or by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company or any other corporation, or in any one or more of those ways.
Settlement of Difficulties
22.6      If any difficulty arises in regard to a distribution under §22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:
(a)
set the value for distribution of specific assets;
(b)
determine that money in substitution for all or any part of the specific assets to which any shareholders are entitled may be paid to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and
(c)
vest any such specific assets in trustees for the persons entitled to the dividend.
When Dividend Payable
22.7      Any dividend may be made payable on such date as is fixed by the directors.
Dividends to be Paid in Accordance with Number of Shares
22.8      All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.
Receipt by Joint Shareholders
22.9      If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

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Dividend Bears No Interest
22.10     No dividend bears interest against the Company.
Fractional Dividends
22.11     If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.
Payment of Dividends
22.12    Any dividend or other distribution payable in money in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the registered address of the shareholder, or in the case of joint shareholders, to the registered address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.
Capitalization of Retained Earnings or Surplus
22.13    Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any retained earnings or surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the retained earnings or surplus so capitalized or any part thereof.
PART 23


ACCOUNTING RECORDS AND AUDITORS
Recording of Financial Affairs
23.1      The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Act.
Inspection of Accounting Records
23.2      Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.
Remuneration of Auditor
23.3      The directors may set the remuneration of the auditor of the Company.

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PART 24


NOTICES
Method of Giving Notice
24.1      Unless the Act or these Articles provide otherwise, a notice, statement, report or other record required or permitted by the Act or these Articles to be sent by or to a person may be sent by:
(a)
mail addressed to the person at the applicable address for that person as follows:
(i)
for a record mailed to a shareholder, the shareholder's registered address;
(ii)
for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;
(iii)
in any other case, the mailing address of the intended recipient;
(b)
delivery at the applicable address for that person as follows, addressed to the person:
(i)
for a record delivered to a shareholder, the shareholder's registered address;
(ii)
for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;
(iii)
in any other case, the delivery address of the intended recipient;
(c)
sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;
(d)
sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;
(e)
physical delivery to the intended recipient.
Deemed Receipt of Mailing
24.2      A notice, statement, report or other record that is:
(a)
mailed to a person by ordinary mail to the applicable address for that person referred to in §24.1 i is deemed to be received by the person to whom it was mailed on the day (Saturdays, Sundays and holidays excepted) following the date of mailing;

43
(b)
faxed to a person to the fax number provided by that person referred to in §24.1 is deemed to be received by the person to whom it was faxed on the day it was faxed; and
(c)
emailed to a person to the e‑mail address provided by that person referred to in §24.1 is deemed to be received by the person to whom it was e‑mailed on the day that it was emailed.
Certificate of Sending
24.3      A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that capacity on behalf of the Company stating that a notice, statement, report or other record was sent in accordance with §24.1 is conclusive evidence of that fact.
Notice to Joint Shareholders
24.4      A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing such record to the joint shareholder first named in the central securities register in respect of the share.
Notice to Legal Personal Representatives and Trustees
24.5      A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:
(a)
mailing the record, addressed to them:
(i)
by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and
(ii)
at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or
(b)
if an address referred to in §(a)(ii) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.
Undelivered Notices
24.6      If on two consecutive occasions, a notice, statement, report or other record is sent to a shareholder pursuant to §24.1 and on each of those occasions any such record is returned because the shareholder cannot be located, the Company shall not be required to send any further records to the shareholder until the shareholder informs the Company in writing of his or her new address.

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PART 25


SEAL
Who May Attest Seal
25.1      Except as provided in §25.2 and §25.3, the Company's seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:
(a)
any two directors;
(b)
any officer, together with any director;
(c)
if the Company only has one director, that director; or
(d)
any one or more directors or officers or persons as may be determined by the directors.
Sealing Copies
25.2      For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite §25.1, the impression of the seal may be attested by the signature of any director or officer or the signature of any other person as may be determined by the directors.
Mechanical Reproduction of Seal
25.3      The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time.  To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and such persons as are authorized under §25.1 to attest the Company's seal may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.
PART 26


PROHIBITIONS
Definitions
26.1      In this PART 26:

45
(a)
"designated security" means:
(i)
a voting security of the Company;
(ii)
a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or
(iii)
a security of the Company convertible, directly or indirectly, into a security described in §(a) or §(b);
(b)
"security" has the meaning assigned in the Securities Act (British Columbia); and
(c)
"voting security" means a security of the Company that:
(i)
is not a debt security; and
(ii)
carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.
Application
26.2      §26.3 does not apply to the Company if and for so long as it is a public company, a private company which is no longer eligible to use the private issuer exemption under the Securities Act (British Columbia), or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or a company to which the Statutory Reporting Company Provisions apply.
Consent Required for Transfer of Shares or Designated Securities
26.3      No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition

Full name and signature of Incorporator
Date of signing
1055 CORPORATE SERVICES LTD.
 
Per: /s/ Desmond Balakrishnan 
        Authorized Signatory
 
 
April 3, 2019




THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATUTES OR REGULATIONS OF NON-U.S. JURISDICTIONS OR ANY STATE SECURITIES OR BLUE SKY LAWS, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING CIRCULAR ON FORM 1-A FOR A TIER II OFFERING HAS BEEN FILED AND QUALIFIED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT.
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement" or this "Subscription") is made and entered into as of [________ __, 20__], by and between the undersigned (the "Subscriber") and Juva Life Inc., a corporation formed under the laws of the Province of British Columbia (the "Company"), with reference to the facts set forth below.
WHEREAS, subject to the terms and conditions of this Agreement, the Subscriber wishes to irrevocably subscribe for and purchase (subject to acceptance of such subscription by the Company) certain units (the "Units") of the Company, each comprised of one common share in the capital of the Company (each, a "Common Share" and collectively, the "Common Shares"), and one-half of one common share purchase warrant, as more particularly set forth in Section 1 and on the signature page hereto, offered pursuant to that certain Offering Circular, incorporated into the Company's Form 1-A, filed and qualified with the SEC effective [________ __, 2019] (the "Offering Circular") of the Company.
NOW, THEREFORE, in order to implement the foregoing, and in consideration of the mutual representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Subscription for Units.
1.1 Subject to the express terms and conditions of this Agreement, the Subscriber hereby irrevocably subscribes for and agrees to purchase the number of Units, at a price of US$0.50 per Unit (the "Purchase"), for the aggregate purchase price (the "Purchase Price") set forth on the signature page to this Agreement. Each Unit consists of one Common Share and one-half of one common share purchase warrant (each whole warrant, a "Warrant") to purchase one additional Common Share (a "Warrant Share") at an exercise price of US$0.75 per Warrant Share for a period of eighteen (18) months following the closing of the Purchase, pursuant to the terms contained in the form of Warrant attached hereto as Annex A (the "Warrant Certificate").
1.2 The offering of Units is described in the Offering Circular, which is available at [insert URL for the filing available on the Company's website] (the "Site"), as well as on the EDGAR website of the SEC. Please read this Agreement and the Offering Circular. While they are subject to change, as described below, the Company advises the Subscriber to print and retain a copy of these documents for the Subscriber's records. By signing below, the Subscriber agrees to the following terms and consents to receive communications relating to the Units electronically from the Company.
1

1.3 The Company has the right to reject this Subscription in whole or in part for any reason. The Subscriber may not cancel, terminate or revoke this Agreement, which, in the case of an individual, shall survive the Subscriber's death or disability and shall be binding upon the Subscriber and the Subscriber's heirs, trustees, beneficiaries, executors, personal or legal administrators or representatives, successors, transferees and assigns.
1.4 Once the Subscriber makes a funding commitment to purchase Units, such commitment shall be irrevocable until the Units are issued, the Purchase is rejected by the Company, or the Company otherwise determines not to consummate the transactions contemplated by this Agreement.
1.5 Upon acceptance of this Subscription by the Company, the Subscriber will become a stockholder of the Company as a holder of the Common Shares (as part of the Subscriber's Units).
2. Purchase of Units.
2.1 The Subscriber understands that the Purchase Price is payable with the execution and submission of this Agreement, and accordingly, will submit payment in the amount of the Purchase Price to the Company by certified check or wire transfer of immediately available funds drawn on a United States bank in accordance with the banking instructions to be provided to the Subscriber upon execution and delivery of this Agreement to the Company.
2.2 If the Company returns the Subscriber's Purchase Price to the Subscriber, the Company will not owe or pay any interest to the Subscriber.
2.3 If this Subscription is accepted by the Company, the Subscriber agrees to comply fully with the terms of this Agreement, the Common Shares, the Warrant Certificate, and all other applicable documents or instruments of the Company. The Subscriber further agrees to execute any other necessary documents or instruments in connection with this Subscription and the Subscriber's purchase of the Units.
2.4 In the event that this Subscription is rejected in full or the offering is terminated, payment made by the Subscriber for the Units will be refunded to the Subscriber without interest and without deduction, and all of the obligations of the Subscriber hereunder shall terminate. To the extent that this Subscription is rejected in part, the Company shall refund to the Subscriber any payment made by the Subscriber to the Company with respect to the rejected portion of this Subscription without interest and without deduction, and all of the obligations of Subscriber hereunder shall remain in full force and effect except for those obligations with respect to the rejected portion of this Subscription, which shall terminate.
3. Investment Representations and Warranties of the Subscriber. The Subscriber represents and warrants to the Company the following:
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3.1 The information that the Subscriber has furnished herein, including, without limitation, the information set forth in the Investor Questionnaire attached hereto as Annex B, which has been completed by the Subscriber and submitted herewith to the Company, and any other information furnished by the Subscriber to the Company regarding whether the Subscriber qualifies as (i) an "accredited investor" as that term is defined in Rule 501 under Regulation D ("Regulation D") promulgated under the U.S. Securities Act of 1933, as amended (the "Act"), which definition is set forth on Annex C attached hereto, and/or (ii) a "qualified purchaser" as that term is defined in Regulation A promulgated under the Act, is correct and complete as of the date of this Agreement and will be correct and complete on the date, if any, that the Company accepts this Subscription. Further, the Subscriber shall immediately notify the Company of any change in any statement made herein prior to the Subscriber's receipt of the Company's acceptance of this Subscription, including, without limitation, the Subscriber's status as an "accredited investor" and/or "qualified purchaser." The representations and warranties made by the Subscriber may be fully relied upon by the Company and by any investigating party relying on them. The Subscriber (i) is an "accredited investor" as that term is defined in Rule 501 under Regulation D, which definition is set forth on Annex C attached hereto, or (ii) if the Subscriber is not an "accredited investor" as that term is defined in Rule 501 under Regulation D, the amount of Units being purchased by the Subscriber does not exceed 10% of the greater of the Subscriber's annual income or net worth (for natural persons), or 10% of the greater of the Subscriber's annual revenue or net assets at fiscal year-end (for non-natural persons). The Subscriber agrees to provide to the Company any additional documentation the Company may reasonably request, including, in addition to the Investor Questionnaire attached hereto as Annex B, any other documentation as may be required by the Company to form a reasonable basis that the Subscriber qualifies as an "accredited investor" as that term is defined in Rule 501 under Regulation D promulgated under the Act.
3.2 The Subscriber, if an entity, is, and shall at all times while it holds Common Shares or Warrants remain, duly organized, validly existing and in good standing under the laws of the state or other jurisdiction of the United States of America (or non-U.S. country) of its incorporation or organization, having full power and authority to own its properties and to carry on its business as conducted. The Subscriber, if a natural person, is eighteen (18) years of age or older and competent to enter into a contractual obligation. The principal place of business or principal residence of the Subscriber is as shown on the signature page to this Agreement.
3.3 The Subscriber has the requisite power and authority to deliver this Agreement, perform his, her or its obligations set forth herein, and consummate the transactions contemplated hereby. The Subscriber has duly executed and delivered this Agreement and has obtained the necessary authorization to execute and deliver this Agreement and to perform his, her or its obligations herein and to consummate the transactions contemplated hereby. This Agreement, assuming the due execution and delivery hereof by the Company, is a legal, valid and binding obligation of the Subscriber enforceable against the Subscriber in accordance with its terms.
3.4 At no time has it been expressly or implicitly represented, guaranteed or warranted to the Subscriber by the Company or any other person that:
(a)
A percentage of profit and/or amount or type of gain or other consideration will be realized as a result of this investment; or
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(b)
The past performance or experience on the part of the Company and/or its officers or directors in any way indicates the predictable or probable results of the ownership of Units, Common Shares or Warrants, or the overall Company venture.
3.5 The Subscriber has received and reviewed this Agreement and the Offering Circular. The Subscriber and/or the Subscriber's advisors, who are not affiliated with and not compensated directly or indirectly by the Company or an affiliate thereof, have such knowledge and experience in business and financial matters as will enable them to utilize the information which they have received regarding the Company and its business to evaluate the merits and risks of this investment, to make an informed investment decision and to protect the Subscriber's own interests in connection with the Purchase.
3.6 The Subscriber understands that the Units being purchased are a speculative investment which involves a substantial degree of risk of loss of the Subscriber's entire investment in the Units, and the Subscriber understands and is fully cognizant of the risk factors related to the purchase of the Units. The Subscriber has read, reviewed and understood the risk factors set forth in the Offering Circular.
3.7 The Subscriber understands that any forecasts or predictions as to the Company's performance are based on estimates, assumptions and forecasts that the Company believes to be reasonable but that may prove to be materially incorrect, and no assurance is given that actual results will correspond with the results contemplated by the various forecasts.
3.8 The Subscriber is able to bear the economic risk of an investment in the Units being purchased and, without limiting the generality of the foregoing, is able to hold the Common Shares and any Warrants purchased for an indefinite period of time. The Subscriber has adequate means to provide for the Subscriber's current needs and personal contingencies and has a sufficient net worth to sustain the loss of the Subscriber's entire investment in the Company.
3.9 The Subscriber has had an opportunity to ask questions of the Company or anyone acting on behalf of the Company and to receive answers concerning the terms of this Agreement and the Units, as well as information about the Company and its business generally, and to obtain any additional information that the Company possesses or can acquire without unreasonable effort or expense, that is necessary to verify the accuracy of the information contained in this Agreement. Further, all such questions have been answered to the full satisfaction of the Subscriber.
3.10 The Subscriber understands that no state or federal authority in the U.S. or authority outside the U.S. has scrutinized the terms of this Agreement or the Units offered pursuant hereto, has made any finding or determination relating to the fairness of an investment of the Units, or has recommended or endorsed the Units, and that the Units have not been registered under the Act or any state securities laws, in reliance upon exemptions from registration thereunder.
3.11 The Subscriber is subscribing for and purchasing the Units without being furnished any offering materials, other than the Offering Circular and this Agreement with the Annexes hereto, and such other related documents, agreements or instruments as may be attached to the foregoing documents as exhibits or supplements thereto, or as the Subscriber has otherwise requested from the Company in writing, and without receiving any representations or warranties from the Company or its agents and representatives other than the representations and warranties contained in said documents, and is making this investment decision solely in reliance upon the information contained in said documents and upon any independent investigation made by the Subscriber or the Subscriber's advisors.
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3.12 The Subscriber's true and correct full legal name, address of residence (or, if an entity, principal place of business), phone number, electronic mail address, United States taxpayer identification number, if any, and other contact information are accurately provided on the signature page hereto. The Subscriber is currently a bona fide resident of the state or jurisdiction set forth in the current address provided to the Company. The Subscriber has no present intention of becoming a resident of any other state or jurisdiction.
3.13 The Subscriber is subscribing for and purchasing the Units solely for the Subscriber's own account, for investment purposes only, and not with a view toward or in connection with resale, distribution (other than to its shareholders or members, if any), subdivision or fractionalization thereof. The Subscriber has no agreement or other arrangement, formal or informal, with any person or entity to sell, transfer or pledge any part of the Units, or which would guarantee the Subscriber any profit, or insure against any loss with respect to the Units, and the Subscriber has no plans to enter into any such agreement or arrangement.
3.14 The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and the performance of the obligations hereunder will not conflict with or result in any violation of or default under any provision of any other agreement or instrument to which the Subscriber is a party or any license, permit, franchise, judgment, order, writ or decree, or any statute, rule or regulation, applicable to the Subscriber. The Subscriber confirms that the consummation of the transactions contemplated herein, including, but not limited to, the Subscriber's Purchase, will not violate any foreign law and that such transactions are lawful in the Subscriber's country of citizenship and residence.
3.15 The Company's intent is to comply with all applicable federal, state and local laws designed to combat money laundering and similar illegal activities, including the provisions of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "PATRIOT Act").  The Subscriber agrees that, if at any time it is discovered that the Company has been or may be found to have violated the PATRIOT Act or any other anti-money laundering laws or regulations as a result of the Purchase or receipt of the Purchase Price, or if otherwise required by applicable laws or regulations, the Company may undertake appropriate actions, and the Subscriber agrees to cooperate with such actions, to ensure compliance with such laws or regulations, including, but not limited to, segregation and/or redemption of the Subscriber's interest in the Units.  The Subscriber agrees to provide any and all documentation requested by the Company to ensure compliance with the PATRIOT Act or other laws or regulations.
3.16 The Subscriber confirms that the Subscriber has been advised to consult with the Subscriber's independent attorney regarding legal matters concerning the Company, and to consult with independent tax advisers regarding the tax consequences of investing in the Company.
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3.17 If the Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), the Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Units or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Units, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Units. The Subscriber's subscription and purchase of and continued beneficial ownership of the Units will not violate any applicable securities or other laws of the Subscriber's jurisdiction.
3.18 The Subscriber acknowledges that the purchase price per Unit to be sold in this offering was set by the Company on the basis of the Company's internal valuation, and no warranties are made as to value. The Subscriber further acknowledges that future offerings of securities of the Company may be made at lower valuations, with the result that the Subscriber's investment will bear a lower valuation.
4. Indemnification.  The representations, warranties and covenants made by the Subscriber herein shall survive the closing of the Purchase. The Subscriber agrees to indemnify and hold harmless the Company and its affiliates and each of their respective officers, directors, employees, agents and representatives, and each other person, if any, who controls the Company within the meaning of Section 15 of the Act, against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all reasonable attorneys' fees, including attorneys' fees on appeal) and expenses reasonably incurred in investigating, preparing or defending against any false representation or warranty or breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein or in any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.
5. No Advisory Relationship. The Subscriber acknowledges and agrees that the purchase and sale of the Units pursuant to this Agreement is an arms-length transaction between the Subscriber and the Company. The Company is not acting as the Subscriber's agent or fiduciary in connection with the Purchase. The Company has not provided the Subscriber with any legal, accounting, regulatory or tax advice with respect to the Units, and the Subscriber has consulted his, her or its own respective legal, accounting, regulatory and tax advisors to the extent the Subscriber has deemed appropriate.
6. Bankruptcy. In the event that the Subscriber files or enters a bankruptcy, insolvency or other similar proceeding, the Subscriber agrees to use its best efforts to avoid the Company being named as a party or otherwise involved in the proceeding. Furthermore, this Agreement should be interpreted so as to prevent, to the maximum extent permitted by applicable law, any bankruptcy trustee, receiver or debtor-in-possession from asserting, requiring or seeking that (i) the Subscriber be allowed by the Company to return any part of the Units to the Company for a refund or (ii) the Company be mandated or ordered to redeem or withdraw any part of the Units held or owned by the Subscriber.
7. Legends.  It is understood that the certificates evidencing the Common Shares, Warrants or Warrant Shares may bear any legend required by the Articles of the Company or applicable state or federal securities laws in the U.S., in Canada, or in other laws and regulations of the U.S. or non-U.S. jurisdiction where the Subscriber is resident or domiciled.
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The Subscriber understands, acknowledges and agrees that the certificates representing the Common Shares, Warrants and Warrant Shares, if the Warrant Shares are issued prior to the expiration of the below legend, will bear the following legend:
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (I) [THE DISTRIBUTION DATE], AND (II) THE DATE THE COMPANY BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY IN CANADA."
8. Consent to Electronic Delivery.
8.1 The Subscriber hereby agrees that the Company may deliver all SEC reports, including offering circulars, exhibits, supplements, U.S., Canadian or other non-U.S. legends, notices, financial statements, valuations, reports, reviews, analyses or other materials, and any and all other documents, information and communications concerning the affairs of the Company and its investments, including, without limitation, information about the investment required or permitted to be provided to the Subscriber with respect to the Units or hereunder, by means of e-mail or by posting on an electronic message board or by other means of electronic communication. The Subscriber hereby consents to receive from the Company electronically all documents, communications, notices, contracts, and agreements arising from or relating in any way to the Subscriber's or the Company's rights, obligations or services under this Agreement (each, a "Disclosure"). The decision to do business with the Company electronically is the Subscriber's decision. This Agreement informs the Subscriber of its rights concerning Disclosures.
8.2 The Subscriber's consent to receive Disclosures and transact business electronically, and the Company's agreement to do so, applies to any transactions to which such Disclosures relate.
8.3 Before the Subscriber decides to do business electronically with the Company, the Subscriber should consider whether he, she or it has the required hardware and software capabilities described below.
8.4 In order to access and retain Disclosures electronically, the Subscriber must satisfy the following computer hardware and software requirements: access to the Internet; an e-mail account and related software capable of receiving e-mail through the Internet; a web browser which is SSL-compliant and supports secure sessions; and hardware capable of running this software.
8.5 The Subscriber agrees to keep the Company informed of any change in the Subscriber's e-mail or home mailing address. If the Subscriber's registered e-mail address changes, the Subscriber must notify the Company of the change by sending an e-mail to [__________]. The Subscriber also agrees to update the Subscriber's registered residence address and telephone number on file with the Company if they change. The Subscriber will print a copy of this Agreement for his, her or its records, and the Subscriber agrees and acknowledges that the Subscriber can access, receive and retain all Disclosures electronically sent via e-mail.
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9. Lock Up.
9.1 Agreement.  The Subscriber, if requested by the Company and the lead underwriter (the "Lead Underwriter") of any underwritten or Regulation A+ offering of securities of the Company under the Act, hereby irrevocably agrees not to sell, contract to sell, grant any option to purchase, transfer the economic risk of ownership in, make any short sale of, pledge or otherwise transfer or dispose of any interest in the Units, Common Share, Warrants, Warrant Shares or any other securities convertible into or exchangeable or exercisable for or any other rights to purchase or acquire Common Share (except Common Share included in such offering or acquired on the public market after such offering) during the 180-day period following the effective date of a registration statement or offering statement of the Company filed under the Act, or such shorter or longer period of time as the Lead Underwriter shall specify.  The Subscriber further agrees to sign such documents as may be requested by the Lead Underwriter to effect the foregoing and agrees that the Company may impose stop-transfer instructions with respect to such Common Share subject to the lock-up period until the end of such period.  The Company and the Subscriber acknowledge that each Lead Underwriter of such offering of the Company's securities, during the period of such offering and for the lock-up period thereafter, is an intended beneficiary of this Section 9.
9.2 No Amendment Without Consent of Underwriter.  During the period from identification of a Lead Underwriter in connection with any offering of the Company's Common Share specified in Section 9.1 until the earlier of (i) the expiration of the lock-up period specified in Section 9.1 in connection with such offering or (ii) the abandonment of such offering by the Company and the Lead Underwriter, the provisions of this Section 9 may not be amended or waived except with the consent of the Lead Underwriter.
10. Limitations on Damages. IN NO EVENT SHALL THE COMPANY BE LIABLE TO THE SUBSCRIBER FOR ANY LOST PROFITS OR SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING SHALL BE INTERPRETED AND HAVE EFFECT TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, RULE OR REGULATION.
11. Miscellaneous Provisions.
11.1 This Agreement is to be construed in accordance with and governed by the internal laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. The parties hereby irrevocably and unconditionally (a) submit to the jurisdiction of the federal and state courts located within the geographical boundaries of Santa Clara County, California] for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the geographical boundaries of Santa Clara County, California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
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11.2 All notices and communications to be given or otherwise made to the Subscriber shall be deemed to be sufficient if sent by electronic mail to such address as set forth for the Subscriber in the records of the Company (or that the Subscriber submitted to the Company). The Subscriber shall send all notices or other communications required to be given hereunder via e-mail to [__________] (with a copy to be sent concurrently via prepaid certified mail to:  [____________________], Attention: [__________].  Any such notice or communication shall be deemed to have been delivered and received on the first business day following that on which the electronic mail has been sent (assuming that there is no error in delivery). As used in this Section, "business day" shall mean any day other than a day on which banking institutions in the State of California are legally closed for business.
11.3 This Agreement, and the rights, obligations and interests of the Subscriber hereunder, may not be assigned, transferred or delegated by the Subscriber without the prior written consent of the Company. Any such assignment, transfer or delegation in violation of this Section shall be null and void.
11.4 The parties agree to execute and deliver such further documents and information as may be reasonably required in order to effectuate the purposes of this Agreement.
11.5 Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of each of the parties hereto.
11.6 If one or more provisions of this Agreement are held to be unenforceable under applicable law, rule or regulation, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
11.7 In the event that either party hereto shall commence any suit, action or other proceeding to interpret this Agreement, or determine to enforce any right or obligation created hereby, then such party, if it prevails in such action, shall recover its reasonable costs and expenses incurred in connection therewith, including, but not limited to, reasonable attorneys' fees and expenses and costs of appeal, if any.
11.8 This Agreement and the documents referred to herein constitute the entire agreement among the parties and shall constitute the sole documents setting forth terms and conditions of the Subscriber's contractual relationship with the Company with regard to the matters set forth herein. This Agreement supersedes any and all prior or contemporaneous communications, whether oral, written or electronic, between the Company and the Subscriber.
11.9 This Agreement may be executed in any number of counterparts, or facsimile counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
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11.10 The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. The singular number or masculine gender, as used herein, shall be deemed to include the plural number and the feminine or neuter genders whenever the context so requires.
11.11 The parties acknowledge that there are no third party beneficiaries of this Agreement.

[Signature page follows]
 
 
 
 
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the Subscriber, or its duly authorized representative(s), hereby acknowledges that the Subscriber has read and understood the risk factors set forth in the Offering Circular, and has hereby executed and delivered this Agreement, and executed and delivered herewith the Purchase Price, as of the date set forth above.
THE SUBSCRIBER:

                                                                                         
Name of the Subscriber

                                                                                         
Description of Entity (if applicable)

                                                                                         
Signature of the Subscriber

                                                                                         
Name of Person Signing on behalf of the Subscriber

                                                                                         
Title (if applicable)


Address of the Subscriber:
_________________________________________
_________________________________________
_________________________________________
Telephone: ________________________________
E-mail: ___________________________________

U.S. Taxpayer Identification Number (if applicable)
Number of Units Purchased: __________________
Purchase Price per Unit:  US$0.50
Aggregate Purchase Price:  US$[______]
[Signature Page to Subscription Agreement]


AGREED AND ACCEPTED BY:

JUVA LIFE INC.


By:                                                                                          
Name:                                                                                          
Title:                                                                                         

[Counterpart Signature Page to Subscription Agreement]



ANNEX A
FORM OF WARRANT
 [Attached]



ANNEX B
INVESTOR QUESTIONNAIRE
[Attached]


ANNEX C
DEFINITION OF "ACCREDITED INVESTOR"
Accredited investor. Accredited investor shall mean any person who comes within any of the following categories, or who the Company reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person:
(1) Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(a)(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;
(2) Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
(4) Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;
(5) Any natural person whose individual net worth, or joint net worth with that person's spouse, exceeds $1,000,000.
(i) Except as provided in paragraph (a)(5)(ii) of this section, for purposes of calculating net worth under this paragraph (a)(5):
(A) The person's primary residence shall not be included as an asset;
(B) Indebtedness that is secured by the person's primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and
(C) Indebtedness that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability;
(6) Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
(7) Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in § 230.506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited investors.


CONSULTING AGREEMENT

This Consulting Agreement (this "Agreement") is entered into as of the 24th day of August, 2018 between Juva Life, Inc., a California corporation and Mathew Lee. ("Consultant").

In consideration of the mutual covenants set forth below, Company and Consultant agree as follows:

1. Term; Services; Records and Materials; Compensation.

(a) Term.  Company hereby engages Consultant as an independent Consultant to Company for the period commencing on the date hereof and continuing for twelve (12) months thereafter unless earlier terminated by either party at any time by written notice to the other party or extended by mutual written agreement between the parties.

(b) Services.  The Consultant will provide services to the Company in the position of Chief Financial Officer (the "CFO") and will perform the duties described in Appendix A attached hereto as the same may be amended or modified from time to time as agreed to in writing by Consultant and Company (collectively, "Services").  Consultant will perform all such Services in a timely and professional manner and in compliance with all applicable federal, state and local laws and regulations.  Consultant will perform such services out of Vancouver, British Columbia.

  (c)               The Consultant will report to the board of directors of the Company and will keep the Company informed of all matters concerning the Services as requested by the Company from time to time.

(d) Compensation.  As consideration for the Services to be provided by Consultant and other obligations, the Company shall compensate Consultant as specified in Appendix A.  Consultant shall be reimbursed for reasonable travel and other out-of-pocket expenses incurred by Consultant at the request of the Company in connection with the Services; provided that Consultant provides the Company with receipts for such expenses and obtains prior approval of the Company for any expenses in excess of $200 CAD, individually or in the aggregate.

2. Protected Information.

(a) Definition.  For purposes of this Agreement, "Protected Information" means:  (i) all proprietary information of Company, whether oral or in writing or in any other medium, relating to the management, operations, products, data and inventions of the Company and its affiliated and related companies, if any; (ii) all information marked or designated by Company as confidential; (iii) all information, whether or not in written or other tangible form and whether or not designated as confidential, which is treated by Company as confidential; and (iv) all information provided to Company by third parties which Company is obligated to keep confidential.  Without limiting the foregoing, Protected Information includes patents, patent applications, inventions (whether or not patentable), discoveries, trade secrets, copyrights, trademarks, information related to or underlying such intellectual property rights and other proprietary information, know-how, ideas, drawings, specifications, data including clinical and preclinical data, techniques, models, designs, formulations, ingredients, samples, processes, testing procedures, computer programs, documentation, processing and control information, research plans and results, experimental work, product data, manuals, supplier lists, purchase and sales records, customer lists, marketing plans, product pricing information, financial information, that (i) the Company owns or has any rights in or (ii) arises out of Consultant's performance of Services, including, but not limited to, any Developments and all information relating to Consultant's analysis of the Protected Information.


Notwithstanding the previous paragraph, Protected Information excludes any information that (i) is or becomes part of the public domain through no act or failure to act on the part of Consultant; (ii) is furnished to Consultant by a third party without restriction on
disclosure, where such third party obtained such information and the right to disclose it to the receiving party without violation of any rights which Company may have in such information; or (iii) has been independently developed by Consultant (as evidenced by Consultant's written records) before or after the date of this Agreement without any use of Protected Information or violation of any rights which Company may have in such information. In any dispute between the parties with respect to the exclusions in this paragraph, the burden of proof is on Consultant and such proof must be established by clear and convincing evidence.
 
  (b) Consultant's  Obligation's .  Consultant must:

(i) not disclose Protected Information, directly or indirectly, to any third person without the Company's express prior written consent;

(ii) not use any Protected Information for any purpose other than for the purposes of performing Services hereunder;

(iii)             hold and maintain Protected Information in trust and confidence for the benefit of Company;

(iv)             not copy, transmit, reproduce, summarize, quote or make any commercial or other use of any Protected Information except for the purposes of performing Services hereunder;

(v) inform all persons having access to Protected Information of the confidential nature thereof and of Consultant's obligations hereunder; and

(vi)             take reasonable security precautions and such other actions as may be necessary, and exercise the same degree of care as Recipient accords to Recipient's own similar Protected Information, but under no circumstances less than reasonable care, to insure that there is no use or disclosure of Protected Information in violation of this Agreement.

Consultant also acknowledges that, in accordance with applicable Canadian securities and corporate legislation, the Consultant may be considered an "insider" of or an individual in a special relationship with the Company and, to the extent
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Protected Information constitutes a material fact or material change that has not been generally disclosed ("Material Information"), the Consultant shall not (i) buy or sell securities of the Company with Material Information; (ii) inform another person or company, other than in the necessary course of business, of Material Information; and (iii) recommend or encourage another person or company to buy or sell securities of the Company with Material Information, other than in the necessary course of business. Examples of Material Information include, but are not limited to, the following: changes in corporate structure, changes in capital structure, changes in financial results, changes in business and operations, acquisitions and dispositions, changes in credit arrangements, etc. Material Information is considered Protected Information until it has been generally disclosed to the public.  In addition, Consultant acknowledges by accepting Protected Information from Company, Consultant voluntarily accepts the risk that Consultant will thereby be precluded from trading in Company's securities with third persons for an indefinite period of time.  Consultant further expressly agrees (v) to consult with Company before buying or selling any Company securities, to evaluate whether any disclosed Protected Information still constitutes Material Information; (vi) not to, while in possession of any Protected Information which is still Material Information, directly or indirectly buy or sell any securities of Company in a transaction with anyone who does not also possess such information; and (vii) in addition, to avoid some disputes and to provide further safety for Company, not to (under any circumstances whatever), within ninety (90) days after last receiving any Protected Information, directly or indirectly buy or sell any securities of Company in a transaction with any third person. Item (vii) of this Section 2(b) shall not apply after the time all such last disclosed Protected Information was or has become (through no improper action or inaction by Consultant or any affiliate, agent, consultant or employee of Consultant) generally available or known to the public.
 
      (c) Company Property. All Protected Information remains the sole property of Company.  Upon the termination of this Agreement or at any other time requested by Company, Consultant will promptly return and deliver to Company (i) all Protected Information, and (ii) all other information (whether or not Protected Information) made available by Company to Consultant.  Consultant will also return to Company any copies of such items or materials on termination.
 
      (d) No Rights.  Nothing contained in this Agreement can be construed as granting to or conferring upon Consultant any right, title or license in or to any Protected Information, patent, trademark, copyright or any other intellectual property that Company now or subsequently owns or has rights in.

3. Work Product.

    (a) Developments.  "Developments" means each invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) that is made, conceived, discovered, or reduced to practice by Consultant (either alone or with others) and that (i) relates to the business of Company or any customer of or supplier to Company or any of the products or services being developed, manufactured or sold by Company or which may be used in relation therewith, (ii) results from the Services performed by Consultant for Company or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by
Company.
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    (b) Ownership.  All Developments and any rights associated therewith are immediately and automatically the sole and absolute property of Company. Consultant will execute all documents necessary to perfect Company's right, title and interest in such Developments and related rights. Consultant will immediately disclose to Company in writing each such Development and hereby assigns to Company, or to a party(ies) or entity(ies) that Company designates, all right, title and interest that Consultant may have or acquire in each such Development.  Consultant will execute any instruments and do all other things reasonably requested by Company (both during and after the term of this Agreement) in order to vest more fully in Company any and all ownership rights in those items hereby transferred by Consultant to Company.

    (c) Work Made for Hire.  Each copyrightable Development authored by Consultant under this Agreement is deemed a "work made for hire" and all right, title and interest therein vests with Company. If any copyrightable Development is not considered to be included in the categories of works covered by the "work made for hire" doctrine, such Development is hereby assigned and transferred completely and exclusively to Company.

4. Non-Solicitation.  Consultant agrees that Consultant shall not use any Protected Information to attempt to negatively influence any of the Company's clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

5. No Conflicting Obligations.  Consultant represents that the performance of Services for Company under this Agreement will not conflict with, violate, or result in a breach of, any term of employment, non-disclosure, proprietary information and inventions agreement or any other agreements, understandings or obligations that Consultant may have to any other person or entity, and Consultant further agrees that Consultant will not use in the course of performing Services for, or disclose to, Company any confidential information of any other person or entity without the prior written consent of that person or entity. Consultant will
indemnify and hold harmless Company from and against any and all liability, loss, cost, expense, damage, claims or demands for actual or alleged violations of the rights of others by reason of Consultant's performance of Services under this Agreement or Company's receipt or use of confidential information wrongfully disclosed by Consultant to Company. In addition, Consultant agrees, during the term of this Agreement, not to enter into or engage in, without Company's express prior written consent, any employment, consulting or business activity, agreement or arrangement that in any way conflicts with Consultant's performance of Services
on behalf of the Company or which is competitive with the Company, or which would otherwise conflict with, Consultant's relationship with the Company.  For the avoidance of doubt, the Company acknowledges and agrees that during the term of this Agreement Consultant may perform other employment or consulting services which do not conflict with Consultant's performance of Services on behalf of the Company, which are not competitive with the Company, or which do not otherwise conflict with Consultant's relationship with the Company.
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6. Independent Contractor. Consultant agrees that Consultant is an independent contractor to Company, that Consultant is not by this Agreement constituted or appointed the legal representative or agent of Company, and that Consultant does not have the right or authority to make any representation, warranty, guarantee or commitment or assume, execute or incur any liability or any obligation of any kind, express or implied, against or in the name of or
on behalf of Company, whether directly or indirectly.
  7. Termination.
This Agreement will continue indefinitely unless terminated as follows:
(a)
by the Consultant, by giving at least thirty (30) days written notice to the Company;
(b)
by the Company, by giving the Consultant sixty (60) days written notice, or by paying the Consultant two months Fees plus GST, in lieu of such notice; and
(c)
by the Company, without notice in the event the Consultant breaches a material term of this Agreement or in the event the Consultant is unable to provide the Services for a period of thirty (30) consecutive days.
Upon termination of this Agreement, the Consultant will, upon receipt of all sums due and owing, promptly deliver to the Company all records and documents pertaining to the Company, including but not limited to, all books of account, correspondence and contracts and all equipment and any other property belonging to the Company.

8. Miscellaneous.

(a) Notices.  Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, 48 hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party's address or facsimile number as set forth below, or as subsequently modified by written notice.

(b) Survival of Certain Provisions.  Consultant's representations, warranties and the provisions of Sections 1(c), 2, 3, 4, 5 and this Section 8 survive the termination of this Agreement.

(c) Governing Law.  This Agreement is governed by and construed under the laws of the State of California, without regard to principles of conflicts of law.

(d) Assignment.  Neither party may assign or transfer this Agreement or any rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that Company may assign this Agreement and its rights and obligations hereunder without such consent (i) in connection with the transfer or sale of all or substantially all of the business of Company to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise, or (ii) to any affiliate of Company.  The rights and obligations of the parties under this Agreement will be binding upon and inure to the benefit of the successors and permitted assigns of the parties. Any assignment not in accordance with this Agreement will be void.
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(e) Entire Agreement; Amendments.  This Agreement, together with any Appendices attached hereto sets forth the complete and final agreement of the parties with respect to the matters covered, and supersedes and terminates all prior agreements and understandings between the parties, whether oral or written, with respect to the matters covered.  This Agreement may be amended only by a writing signed by the parties.

(f)  Attorneys '  Fees. In the event of any action at law or suit in equity in relation to this Agreement, the prevailing party, in addition to all other sums which the other party may be called upon to pay, is entitled to recover such additional sum for the prevailing party's attorneys' fees incurred therein, as the trial court or any appellate court adjudges reasonable in the suit or action.
(g) Severability.  Consultant and Company hereby agree that each provision herein is a separate and independent clause, and the unenforceability of any one clause in no way impairs the enforceability of any of the other clauses. If a final judgment of the highest competent authority holds that one or more of the provisions is unenforceable, the parties intend modification of such provision(s), so as to be enforceable to the maximum extent (i) compatible with applicable law and (ii) consistent with their expressed intent.

(h) Equitable Relief.  Consultant agrees that any breach of this Agreement by Consultant would cause irreparable harm for which Company would not be fully or adequately compensated by recovery of monetary damages. Accordingly, in the event of any such breach or threatened breach, Company is entitled to enforce this Agreement by equitable remedies, including injunction and specific performance, in addition to any other remedy available at law
or in equity.

(i) No Obligation to Continue Relationship.  Consultant understands that this Agreement does not create an obligation on Company or any other person or entity to continue any independent contractor relationship with Company.

 
Juva Life, Inc.


         
/s/Doug Chloupek
   
 
 
Name: Doug Chloupek
   
 
 
Title: CEO
   
 
 


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/s/Mathew Lee
   Address:
 
 
Mathew Lee
   
 
 
 
   
 
 



 


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APPENDIX A

Consultant will provide the following services to Company:


1.
Serve as Chief Financial Officer with the duties typical of such position in a publicly traded company including the following:
a.
Financial reporting, including preparing financial statements, reports and disclosure documents, coordinating as necessary with any outside accountants or auditors to prepare regulatory disclosure documents or making certifications of same;
b.
Economic strategy and forecasting, including studying, analyzing and reporting on trends and opportunities for expansion and projection of future company growth and acquisitions or research which may involve handling press and public relations;
c.
Preparing, overseeing and necessary analysis of annual operating and capital budgets and preparing such additional budgets that may be required from time to time, and;
d.
Oversee the Company's accounting function including review and payment of expense reports, all other expenses, and monitoring income of the Company and its subsidiaries;

2.
Such other services requested by the Company from time to time.

Consultant shall receive the following compensation:

1.
A monthly fee of $5,000 CAD plus GST, provided however that upon the Company's securities being listed on a stock exchange or traded on the over-the-counter marketplace, such monthly fee will increase to $7,500 CAD plus GST.
Subject to approval by the Company's Board of Directors, Consultant shall receive an option to purchase 250,000 shares (the "Option") in the capital of the Company  or, in the event of a reverse takeover or other going-public transaction, Consultant acknowledges and agrees that the Option may be exchangeable into or exercisable for options of the resulting public company, subject to such vesting terms as determined by the Board of Directors and with an exercise price equal to the fair market value of the Company's (or the resulting public company's) shares on the date of issuance.

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STANDARD SUBLEASE
(Short-form to be used with post 1995 AIR leases)
(NOTE:  DO NOT USE IF LESS THAN ENTIRE PREMISES ARE BEING SUBLET.  FOR SITUATIONS WHERE THE PREMISES ARE TO BE OCCUPIED BY MORE THAN ONE TENANT OR SUBTENANT USE THE "STANDARD SUBLEASE--MULTI-TENANT" FORM)
1.           Basic Provisions ("Basic Provisions").
1.1 Parties:  This Sublease ("Sublease"), dated for reference purposes only August 1, 2018 is made by and between Best Leasing Services, Inc. ("Sublessor") and Juva Life, Inc., a California corporation ("Sublessee"), (collectively the "Parties", or individually a "Party").
1.2 Premises:  That certain real property, including all improvements therein, and commonly known by the street address of 633 San Juan, Stockton located in the County of San Joaquin, State of California and generally described as (describe briefly the nature of the property) Approximately 31, 000 square feet ("Premises").
1.3 Term5 years and 0 months commencing August 1, 2018 ("Commencement Date") and ending July 31, 2023 ("Expiration Date").
1.4 Early Possession:  If the Premises are available Sublessee may have non-exclusive possession of the Premises commencing _____________________ ("Early Possession Date").
1.5 Base Rent:  $ 13,200.00 per month ("Base Rent"), payable on the 1st day of each month commencing August 1, 2018
               ☐  If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.
1.6             Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent:  $13,200.00 for the period _____________________.
(b)             Security Deposit:  $24,000.00 ("Security Deposit").
(c)             Association Fees:  $____________________ for the period _____________________
(d)             Other:  $_________________ for _______________________________.
Total Due Upon Execution of this Lease:  $37, 200.00
1.7 Agreed Use:  The Premises shall be used and occupied only for Cannabis cultivation, manufacturing, processing, nursery, research, development, distribution, and all lawful  related uses and for no other purposes.
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                           1.8             Real Estate Brokers:
        (a)          Representation:  The following real estate brokers ( the "Brokers") and brokerage relationships exist in this transaction (check applicable boxes): 
            None represents Sublessor exclusively ("Sublessor's Broker");
         None represents Sublessee exclusively ("Sublessee's Broker"); or
         None represents both Sublessor and Sublessee ("Dual Agency").
(b)
             Payment to BrokersUpon execution and delivery of this Sublease by both Parties, Sublessor shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to in the attached separate written agreement or if no such agreement is attached, the sum of ____ or _____% of the total Base Rent payable for the original term of the Sublease, the sume of ___ or ___ of the total Base Rent payable during any period ot time that the Sublease occupies the Premises subsequent to the original term of the Sublease, and/or the sum of ___ or ___% of the purchase price in the event that the Sublessee or anyone affiliated with Sublessee acquires from the owner of the Premises any rights to the Premises.
           1.9            Guarantor.  The obligations of the Sublessee under this Sublease shall be guaranteed by None ("Guarantor").
 
             1.10          Attachments.  Attached hereto are the following, all of which constitute a part of this Sublease
  ☐         an Addendum consisting of Paragraphs 13 through _____;
  ☐         a plot plan depicting the Premises;
  ☐         a Work Letter
  ☐         a copy of the master lease and any and all amendments to such lease (collectively the "Master Lease");
  ☐        other (specify):
      2.         Premises.
        2.1          Letting.  Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Sublease.  While the approximate square footage of the Premises may have been used in the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment should the actual size be determined to be different.  Note:  Sublessee is advised to verify the actual size prior to executing this Sublease.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
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 2.2 Condition.  Sublessor shall deliver the Premises to Sublessee in its present "As-Is" condition.  broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), and any items which the Sublessor is obligated to construct pursuant to the Work Letter attached hereto, if any, other than those constructed by Sublessee, shall be in good operating condition on said date.  If a non-compliaance with such warranty exists as of the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty period, Sublessor shall, as Sublessor's sole obligation with respect to such matter, except as otherwise provided in this Sublease, promptly after receipt of written notice from Sublessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure, rectify same at Sublessor'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.  If Sublessee does not give Sublessor the required notice within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of Sublessee at Sublessee's sole cost and expense.
 2.3 ComplianceSublessor warrants that any improvements, alterations or utility installations made or installed by or on behalf of Sublessor to or on the Premises comply with all applicable covenants or restrictions of record and applicable building codes, regulations and ordinances ("Applicable Requirements") in effect on the date that they were made or installed.  Sublessor makes no warranty as to the use to which Sublessee will put the Premises or to modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Sublessee's use.  NOTE:  Sublessee is responsible for determining whether or not the zoning and other Applicable Requirements are appropriate for Sublessee'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, Sublessor shall, except as otherwise provided, promptly after receipt of written notice from Sublessee setting forth with specificity the nature and extent of such non-compliance, rectify the same.
 2.4 Acknowledgements.  Sublessee acknowledges that:  (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised by Sublessor and/or Brokers to satisfy itself with respect to the size and condition 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 Disabilities Act), and their suitability for Sublessee's intended use, (c) Sublessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, (d) it is not relying on any representation as to the size of the Premises made by Brokers or Sublessor, (e) the square footage of the Premises was not material to Sublessee's decision to sublease the Premises and pay the Rent stated herein, and (f) neither Sublessor, Sublessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Sublease.  In addition, Sublessor acknowledges that:  (i) Brokers have made no representations, promises or warranties concerning Sublessee's ability to honor the Sublease or suitability to occupy the Premises, and (ii) it is Sublessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
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 2.5 Americans with Disabilities Act.  In the event that as a result of Sublessee's use, or intended use, of the Premises the Americans with Disabilities Act or any similar law requires modifications or the construction or installation of improvements in or to the Premises, Building, Project and/or Common Areas, the Parties agree that such modifications, construction or improvements shall be made at:  Sublessor's expense Sublessee's expense.
3.           Possession.
 3.1 Early Possession.  Any provision herein granting Sublessee Early Possession of the Premises is subject to and conditioned 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 Sublessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such Early Possession.  All other terms of this Sublease (including but not limited to the obligations to pay Sublessee's Share of Common Area Operating Expenses, Real Property Taxes and insurance premiums and to maintain the Premises) shall, however, be in effect during such period.  Any such Early Possession shall not affect the Expiration Date.
 3.2 Delay in Commencement.  Sublessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises by the Commencement Date.  If, despite said efforts, Sublessor is unable to deliver possession as agreed, the rights and obligations of Sublessor and Sublessee shall be as set forth in Paragraph 3.3 of the Master Lease (as modified by Paragraph 6.3 of this Sublease).
 3.3 Sublessee Compliance.  Sublessor shall not be required to tender possession of the Premises to Sublessee until Sublessee complies with its obligation to provide evidence of insurance.  Pending delivery of such evidence, Sublessee shall be required to perform all of its obligations under this Sublease from and after the Start Date, including the payment of Rent, notwithstanding Sublessor's election to withhold possession pending receipt of such evidence of insurance.  Further, if Sublessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Sublessor may elect to withhold possession until such conditions are satisfied.
4.           Rent and Other Charges.
 4.1 Rent Defined.  All monetary obligations of Sublessee to Sublessor under the terms of this Sublease (except for the Security Deposit) are deemed to be rent ("Rent").  Rent shall be payable in lawful money of the United States to Sublessor c/o CAC Management, LLC, 39899 Balentine, Suite 200, Newark, CA 94560.  Make check payable to "CAC Management, LLC, in trust for Best Leasing Services, Inc." at the address stated herein or to such other persons or at such other places as Sublessor may designate in writing.
 4.2 Utilities.  Sublessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon.
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    5.           Security Deposit.  The rights and obligations of Sublessor and Sublessee as to said Security Deposit shall be as set forth in Paragraph 5 of the Master Lease (as modified by Paragraph 6.3 of this Sublease).
      6.           Master Lease.
6.1         Sublessor is the lessee of the Premises by virtue of the "Master Lease", wherein Pan Resources International, Inc.  is the lessor, hereinafter the "Master Lessor".
6.2          This Sublease is and shall be at all times subject and subordinate to the Master Lease.
6.3          The terms, conditions and respective obligations of Sublessor and Sublessee to each other under this Sublease shall be the terms and conditions of the Master Lease except for those provisions of the Master Lease which are directly contradicted by this Sublease in which event the terms of this Sublease document shall control over the Master Lease.  Therefore, for the purposes of this Sublease, wherever in the Master Lease the word "Lessor" is used it shall be deemed to mean the Sublessor herein and wherever in the Master Lease the word "Lessee" is used it shall be deemed to mean the Sublessee herein.
6.4         During the term of this Sublease and for all periods subsequent for obligations which have arisen prior to the termination of this Sublease, Sublessee does hereby expressly assume and agree to perform and comply with, for the benefit of Sublessor and Master Lessor, each and every obligation of Sublessor under the Master Lease except for the following paragraphs which are excluded therefrom:  1.5, 1.6, 4.2, 12.
6.5          The obligations that Sublessee has assumed under paragraph 6.4 hereof are hereinafter referred to as the "Sublessee's Assumed Obligations".  The obligations that sublessee has not assumed under paragraph 6.4 hereof are hereinafter referred to as the "Sublessor's Remaining Obligations".
6.6          Sublessee shall hold Sublessor free and harmless from all liability, judgments, costs, damages, claims or demands, including reasonable attorneys fees, arising out of Sublessee's failure to comply with or perform Sublessee's Assumed Obligations.
6.7          Sublessor agrees to maintain the Master Lease during the entire term of this Sublease, subject, however, to any earlier termination of the Master Lease without the fault of the Sublessor, and to comply with or perform Sublessor's Remaining Obligations and to hold Sublessee free and harmless from all liability, judgments, costs, damages, claims or demands arising out of Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.
6.8          Sublessor represents to Sublessee that the Master Lease is in full force and effect and that no default exists on the part of any Party to the Master Lease.
6.9         Termination of Master Lease.  If for any reason the term of the Master Lease shall terminate prior to the expiration of this Sublease, this Sublease shall thereupon be terminated and Sublessor shall not be liable to Sublessee by reason thereof unless both (a) Sublesee shall not then be in default hereunder and (b) said termination shall have been effected because of the breach or default of Sublessor under the Master Lease.
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6.10        Options to Extend and Purchase Rights.  Provided Sublessee is not in default of this Sublease, Sublessee shall have the right to exercise any options to extend or any other rights to purchase the Premises granted to Sublessor under the Master Lease by providing Sublessor written notice no less than thirty (30) days prior to any date upon which such right accrues to Sublessor under the Master Lease.  Upon written notice Sublessor shall provide to Master Lessor the requisite written notice required under the Master Lease.
          7.              Assignment of Sublease and Default.
7.1          Sublessee shall not assign, transfer, or sublet this Sublease without the express written consent of Sublessor, which consent may be withheld in Sublessor's sole and absolute discretion.  Sublessor hereby assigns and transfers to Master Lessor Sublessor's interest in this Sublease, subject however to the provisions of Paragraph 8.2 hereof.
7.2          Master Lessor, by executing this document, agrees that until a Default shall occur in the performance of Sublessor's Obligations under the Master Lease, that Sublessor may receive, collect and enjoy the Rent accruing under this Sublease.  However, if Sublessor shall Default in the performance of its obligations to Master Lessor then Master Lessor may, at its option, receive and collect, directly from Sublessee, all Rent owing and to be owed under this Sublease.  In the event, however, that the amount collected by Master Lessor exceeds Sublessor's obligations any such excess shall be refunded to Sublessor.  Master Lessor shall not, by reason of this assignment of the Sublease nor by reason of the collection of the Rent from the Sublessee, be deemed liable to Sublessee for any failure of the Sublessor to perform and comply with Sublessor's Remaining Obligations.
7.3          Sublessor hereby irrevocably authorizes and directs Sublessee upon receipt of any written notice from the Master Lessor stating that a Default exists in the performance of Sublessor's obligations under the Master Lease, to pay to Master Lessor the Rent due and to become due under the Sublease.  Sublessor agrees that Sublessee shall have the right to rely upon any such statement and request from Master Lessor, and that Sublessee shall pay such Rent to Master Lessor without any obligation or right to inquire as to whether such Default exists and notwithstanding any notice from or claim from Sublessor to the contrary and sublessor shall have no right or claim against Sublessee for any such Rent so paid by Sublessee.
7.4         No changes or modifications shall be made to this Sublease without the consent of Master Lessor.
8.    Consent of Master Lessor.
8.1          In the event that the Master Lease requires that Sublessor obtain the consent of Master Lessor to any subletting by Sublessor then, this Sublease shall not be effective unless, within 10 days of the date hereof, Master Lessor signs this Sublease thereby giving its consent to this Subletting.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
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8.2          In the event that the obligations of the Sublessor under the Master Lease have been guaranteed by third parties then neither this Sublease, nor the Master Lessor's consent, shall be effective unless, within 10 days of the date hereof, said guarantors sign this Sublease thereby giving their consent to this Sublease.
8.3          In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its obligations or alter the primary liability of Sublessor to pay the Rent and perform and comply with all of the obligations of Sublessor to be performed under the Master Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or any one else liable under the Master Lease shall not be deemed a waiver by Master Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a consent to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under the Master Lease, Master Lessor may proceed directly against Sublessor, any guarantors or any one else liable under the Master Lease or this Sublease without first exhausting Master Lessor's remedies against any other person or entity liable thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings and assignments of the Master Lease or this Sublease or any amendments or modifications thereto without notifying Sublessor or any one else liable under the Master Lease and without obtaining their consent and such action shall not relieve such persons from liability.
(f) In the event that Sublessor shall Default in its obligations under the Master Lease, then Master Lessor, at its option and without being obligated to do so, may require Sublessee to attorn to Master Lessor in which event Master Lessor shall undertake the obligations of Sublessor under this Sublease from the time of the exercise of said option to termination of this Sublease but Master Lessor shall not be liable for any prepaid Rent nor any Security Deposit paid by Sublessee, nor shall Master Lessor be liable for any other Defaults of the Sublessor under the Sublease.
(g) Unless directly contradicted by other provisions of this Sublease, the consent of Master Lessor to this Sublease shall not constitute an agreement to allow Sublessee to exercise any options which may have been granted to Sublessor in the Master Lease (see Paragraph 39.2 of the Master Lease).
8.4            The signatures of the Master Lessor and any Guarantors of Sublessor at the end of this document shall constitute their consent to the terms of this Sublease.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E
 

8.5           Master Lessor acknowledges that, to the best of Master Lessor's knowledge, no Default presently exists under the Master Lease of obligations to be performed by Sublessor and that the Master Lease is in full force and effect.
8.6           In the event that Sublessor Defaults under its obligations to be performed under the Master Lease by Sublessor, Master Lessor agrees to deliver to Sublessee a copy of any such notice of default.  Sublessee shall have the right to cure any Default of Sublessor described in any notice of default within ten days after service of such notice of default on Sublessee.  If such Default is cured by Sublessee then Sublessee shall have the right of reimbursement and offset from and against Sublessor.
9.           Additional Brokers Commissions.
9.1            Sublessor agrees that if Sublessee exercises any option or right of first refusal as granted by Sublessor herein, or any option or right substantially similar thereto, either to extend the term of this Sublease, to renew this Sublease, to purchase the Premises, or to lease or purchase adjacent property which Sublessor may own or in which Sublessor has an interest, then Sublessor shall pay to Broker a fee in accordance with the schedule of Broker in effect at the time of the execution of this Sublease.  Notwithstanding the foregoing, Sublessor's obligation under this Paragraph is limited to a transaction in which Sublessor is acting as a Sublessor, lessor or seller.
9.2            If a separate brokerage fee agreement is attached then Master Lessor agrees that if Sublessee shall exercise any option or right of first refusal granted to Sublessee by Master Lessor in connection with this Sublease, or any option or right substantially similar thereto, either to extend or renew the Master Lease, to purchase the Premises or any part thereof, or to lease or purchase adjacent property which Master Lessor may own or in which Master Lessor has an interest, or if Broker is the procuring cause of any other lease or sale entered into between Sublessee and Master Lessor pertaining to the Premises, any part thereof, or any adjacent property which Master Lessor owns or in which it has an interest, then as to any of said transactions, Master Lessor shall pay to Broker a fee, in cash, in accordance with the schedule attached to such brokerage fee agreement.
9.3            Any fee due from Sublessor or Master Lessor hereunder shall be due and payable upon the exercise of any option to extend or renew, upon the execution of any new lease, or, in the event of a purchase, at the close of escrow.
9.4            Any transferee of Sublessor's interest in this Sublease, or of Master Lessor's interest in the Master Lease, by accepting an assignment thereof, shall be deemed to have assumed the respective obligations of Sublessor or Master Lessor under this Paragraph 9.  Broker shall be deemed to be a third-party beneficiary of this paragraph 9.
10.         Representations and Indemnities of Broker Relationships.  The Parties each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Sublease, and that no one other than said named Brokers is entitled to any commission or finder's fee in connection herewith.  Sublessee and Sublessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E
 

11.         Attorney's fees.  If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees.  Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment.  The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense.  The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred.  In addition, Sublessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).
12.          No Prior or Other Agreements; Broker Disclaimer.  This Sublease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.  Sublessor and Sublessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Sublease 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.  The liability (including court costs and attorneys' fees), of any Broker with respect to negotiation, execution, delivery or performance by either Sublessor or Sublessee under this Sublease or any amendment or modification hereto shall be limited to an amount up to the fee received by such Broker pursuant to this Sublease; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
ATTENTION:  NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE 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 SUBLEASE.
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 STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E
 

WARNING:  IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED
Executed at: 
Executed at: 
On: 
On: 
By Sublessor:
By Sublessee:
JUVA LIFE, INC., a California corporation
BEST LEASING SERVICES, INC.
By: /s/Doug Chloupek 
By: /s/Doug Chloupek 
Name Printed:  DOUG CHLOUPEK
Name Printed:  DOUG CHLOUPEK
Title: 
Title: 
By: 
By: 
Name Printed: 
Name Printed: 
Title: 
Title: 
Address: 
  
Address: 
  
Telephone:(___) 
 Telephone:(___) 
Facsimile:(___) 
 Facsimile:(___) 
Email: 
Email: 
Email: 
Email: 
Federal ID No. 
Federal ID No. 
 
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E
 

BROKER:
BROKER:
   
   
Attn: 
Attn: 
Title: 
Title: 
Address: 
Address: 
   
Telephone:(___) 
 Telephone:(___) 
Facsimile:(___) 
 Facsimile:(___) 
Email: 
Email: 
Federal ID No. 
Federal ID No. 
Broker/Agent DRE License #: 
Broker/Agent DRE License #: 
   
   
Consent to the above Sublease is hereby given.
 
Executed at: 
Executed at: 
On: 
On: 
By Master Lessor:
By Guarantor(s):
 
By: 
 
Name Printed: 
 
Address: 
By: 
 
Name Printed: 
 
Title: 
 
 
By: 
 
Name Printed: 
By: 
Address: 
Name Printed: 
 
Address: 
 
   
Telephone:(___) 
 
Facsimile:(___) 
 
Email: 
 
Federal ID No. 
 

NOTICE:  These forms are often modified to meet changing requirements of law and industry needs.  Always write or call to make sure you are utilizing the most current form:  AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017.
Telephone No. (213) 687-8777.  Fax No.:  (213) 687-8616.
©Copyright 1997 By AIR Commercial Real Estate Association.  All rights reserved.  No part of these works may be reproduced in any form without permission in writing.
 
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E
 


ADDENDUM
Date:  August 1, 2018
By and Between (Lessor)
SUBLESSOR:  BEST LEASING SERVICES, INC.
(Lessee)
JUVA LIFE, INC.

Address of Premises:
633 SAN JUAN, STOCKTON, CA

Paragraph 13
In the event of any conflict between the provisions of this Addendum and the printed provisions of the Lease, this Addendum shall control.
RENT SCHEDULE
 
RENT
ADMIN FEE
TOTAL
August 1, 2018 - July 31, 2019
$12,000.00
$1,200.00
$13,200.00
August 1, 2019 - July 31, 2020
$24,000.00
$2,400.00
$26,400.00
August 1, 2020 - July 31, 2021
$32,550.00
$3,255.00
$35,805.00
August 1, 2021 - July 31, 2022
$34,178.00
$3,417.80
$37,595.80
August 1, 2022 - July 31, 2023
$35,886.00
$3,588.60
$39,474.60

Base Rent during the Option Period(s) shall be the same as the Base Rent under the Master Lease plus an admin fee of 10%.
Lease is NNN.  Lessor will invoice, and Lessee will be responsible to pay, all expenses related to property insurance, maintenance, and taxes in addition to rent and utilities.
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AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD
INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE -- NET
 
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
 
 
1.   Basic Provisions ("Basic Provisions").
1.1 Parties:  This Lease ("Lease"), dated for reference purposes only August 1, 2018, is made by and between Ramundy Springfield ("Lessor") and Juva Life, Inc., a California corporation ("Lessee") (collectively the "Parties," or individually a "Party").
1.2 Premises:  That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as 1903 Navy Drive, Stockton, located in the County of San Joaquin, State of California, and generally described as (describe briefly the nature of the property and, if applicable, the "Project", if the property is located within a Project) approximately 11,500 square foot building ("Premises").  (See also Paragraph 2)
1.3 Term:  5 years and 0 months ("Original Term") commencing August 1, 2018 ("Commencement Date") and ending July 31, 2023 ("Expiration 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$11,500.00 per month ("Base Rent"), payable on the 1st day of each month commencing August 1, 2018.  (See also Paragraph 4)
            If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.  See Paragraph 11,500.00
1.6 Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent:  $11,500.00 for the period 1st month of Base Rent.
(b) Security Deposit:  $________ ("Security Deposit").  (See also Paragraph 5)
(c) Association Fees:  $________ for the period _______________________
(d) Other:  $_______________ for _________________________________.
(e) Total Due Upon Execution of this Lease:  $11,500.00.
    /s/RS
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1.7 Agreed Use:  Cannabis cultivation, manufacturing, processing, nursery, research, development, distribution and all lawful related uses.  (See also Paragraph 6)
1.8 Insuring Party:  Lessor is the "Insuring Party" unless otherwise stated herein.  (See also Paragraph 8)
1.9 Real Estate Brokers:  (See also Paragraph 15 and 25)
    (a) Representation:  The following real estate brokers (the "Brokers") and brokerage relationships exist in this transaction (check applicable boxes);
           None    represents Lessor exclusively ("Lessor's Broker");
           None   represents Lessee exclusively ("Lessee's Broker"); or
           None    represents both Lessor and Lessee ("Dual Agency").
    (b) Payment to Brokers:  Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to in the attached separate written agreement or if no such agreement is attached, the sum of _______ or _______% of the total Base Rent payable for the Original Term, the sum of ______ or _______ of the total Base Rent payable during any period of time that the Lessee occupies the Premises subsequent to the Original Term, and/or the sum of _______ or _______% of the purchase price in the event that the Lessee or anyone affiliated with Lessee acquires from Lessor any rights to the Premises.
1.10            Guarantor.  The obligations of the Lessee under this Lease are to be guaranteed by _______ ("Guarantor").  (See also Paragraph 37)
1.11            Attachments.  Attached hereto are the following, all of which constitute a part of this Lease:
              ☒  an Addendum consisting of Paragraphs 51 through 54;
                  a plot plan depicting the Premises;
                  ☐  a current set of the Rules and Regulations;
           ☐  a Work Letter;
           ☐   other (specify):                                                       
    /s/RS
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

 
2.        Premises
 
      2.1            Letting.  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 conditions set forth in this Lease.  While the approximate square footage of the Premises may have been used in the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied 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 executing this Lease.
 
2.2            Condition.  Lessor shall deliver the Premises to Lessee in their present "As-Is" condition 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 existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, sump pumps, if any, and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural elements of the roof, bearing walls and foundation of any buildings on the Premises (the "Building" shall be free of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law.  If a non-compliance with said warranty exists as of the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty period, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure, rectify 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 Building.  If Lessee does not give Lessor the required notice within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of Lessee at Lessee's sole cost and expense.
 
2.3            ComplianceLessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") that were in effect at the time that each improvement, or portion thereof, was constructed.  Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use (see Paragraph 50), or to any Alterations or Utility Installations (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 after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense.  If Lessee does not give Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date, correction of that non-compliance shall be the obligation of Lessee at Lessee's sole cost and expense.  If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Premises and/or Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows:
 
    /s/RS
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    (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 notifies Lessee, in writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 6 months' Base Rent.  If Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter.  Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize 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 modifications), 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 portion of such costs reasonably attributable to the Premises.  Lessee shall pay Interest on the balance but may prepay its obligation at any time.  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 option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notified Lessor, in writing, within 10 days after receipt of Lessor's termination notice 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 until 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 written notice 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 modification 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, however, have any right to terminate this Lease.
    /s/RS
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

      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 satisfy itself with respect to the size and condition 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 Disabilities Act), and their suitability for Lessee's intended use, (c) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, (d) it is not relying on any representation as to the size of the premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor, nor Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease.  In addition, Lessor acknowledges that:  (i) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.
             2.5             Lessee as Prior Owner/Occupant.  The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the State Date Lessee was the owner or occupant of the Premises.  In such event, Lessee shall be responsible for any necessary corrective work.
3.     Term.
        3.1      Term.  The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
     3.2      Early Possession.  Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned 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 partially occupies the Premises prior to the Commencement Date, the obligation 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 obligations to pay 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 Expiration 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 Expiration Date.  Lessee shall not, however, be obligated to pay Rent or perform its other obligations until 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 continue 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 after the Commencement Date, as the same may be extended under the terms of any Work Letter executed be Parties, Lessee may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder.  If such written notice 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 after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing.
    /s/RS
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FORM STN-13-3/10E

        3.4         Lessee Compliance.  Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5).  Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance.  Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.
4.       Rent.
    4.1     Rent Defined.  All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ("Rent").
    4.2        Payment.  Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted 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 constitute 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 time to time designate in writing.  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 stating.  In the event that any check, draft, 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 addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by cashier's check.  Payments will be applied first to accrued late charges and attorney's fees, second to accrued interest, then to Base Rent, Insurance and Real Property Taxes, and any remaining amount to any other outstanding charges or costs.
      4.3      Rent Adjustment.  The Base Rent shall increase by the amount of three percent (3%) on each anniversary of this Lease, Including any option periods.   Association Fees.  In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner's association or condominium fees levied or assessed against the Premises.  Said monies shall be paid at the same time and in the same manner as the Base Rent.
    /s/RS
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

5. Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its obligations under this Lease.  If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion 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 portion of the Security Deposit, Lessee shall within 10 days after written 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 written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial 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 condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional 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 condition.  Lessor shall not be required to keep the Security Deposit separate from its general accounts.  Within 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or applied by Lessor.  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.
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 properties.  Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles.  Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein, and/or is not significantly more burdensome to the Premises.  If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include an explanation of Lessor's objections 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, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either:  (i) potentially 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 potential 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
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fractions thereof.  Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements.  "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration 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 notice be given to persons entering or occupying the Premises or neighboring properties.  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 contamination or damage or expose Lessor to any liability therefor.  In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (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 written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance. 
    (c) Lessee Remediation.  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 investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, 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.
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    (d) Lessee Indemnification.  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, liabilities, judgments, claims, expenses, penalties, and attorneys' 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 migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee).  Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.  No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.
    (e) Lessor Indemnification.  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 remediation, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees.  Lessor's obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.
   (f) Investigations and Remediations.  Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unless such remediation measure is required as a result of Lessee's use (including "Alterations", 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 activities at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities.
   (g) Lessor Termination Option.  If a Hazardous Substance Condition (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 investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice.  In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever is greater.  Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment.  In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after the required funds are available.  If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination.
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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 timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor's engineers and/or consultants which relate in any manner to the such Requirements, without regard to whether such Requirements are now in effect or become effective after the Start Date.  Lessee shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, 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 written notice to Lessor of:  (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold in the Premises.
6.4 Inspection; Compliance.  Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultants shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease.  The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1) is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority.  In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination.  In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of a written request therefor.
7.          Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
    (a) In General.  Subject to the provisions of Paragraph-2.2-(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, Utility Installations (intended for Lessee's exclusive use, no matter where located), and Alterations in good order, condition and repair (whether or not the portion 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 portion of the Premises), including, but not limited to, all
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equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior and exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises.  Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below.  Lessee's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair.  Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition (including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the Building.
    (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, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, and (vi) clarifiers.  However, Lessor reserves the right, upon notice 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 obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days' prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof.
    (d) Replacement.  Subject to Lessee's indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, 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 Parties 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 multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (i.e.. 1/144th of the cost per month).  Lessee shall pay Interest on the unamortized balance but may prepay its obligation at any time.
7.2 Lessor's Obligations.  Subject to the provisions of Paragraphs 2.2-(Condition).-2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are intended to be that of the Lessee.  It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.
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7.3 Utility Installations; Trade Fixtures; Alterations.
    (a) Definitions.  The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting 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 "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion.  "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
    (b) Consent.  Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent.  Lessee may, however, make non-structural Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative 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 penetrations and/or install anything on the roof without the prior written approval of Lessor.  Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor.  Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans.  Consent shall be deemed conditioned upon Lessee's:  (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner.  Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials.  Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications.  For work which costs an amount in excess of one month's Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting an additional Security Deposit with Lessor.
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    (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 notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices 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 satisfy 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 participate in any such action, Lessee shall pay Lessor's attorneys' fees and costs.
7.4 Ownership; Removal; Surrender; and Restoration.
    (a) Ownership.  Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises.  Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations.  Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises.
    (b) Removal.  By delivery to Lessee of written notice 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 Alterations or Utility Installations be removed by the expiration or termination of this Lease.  Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent.
    (c) Surrender; Restoration.  Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted.  "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice.  Notwithstanding the foregoing, if this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear.  Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee.  Lessee shall completely 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 migration from areas outside of the Premises) even if such removal would require Lessee to perform or pay for work that exceeds statutory 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 Expiration Date or any earlier termination 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 timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below.
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

8.          Insurance; Indemnity.
           8.1 Payment For Insurance.  Lessee shall pay for all insurance required under Paragraph 8 except to the extent of the cost attributable to liability insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence.  Premiums for policy periods commencing prior to or extending beyond the Lease term shall be prorated to correspond to the Lease term.  Payment shall be made by Lessee to Lessor within 10 days following receipt of an invoice.
           8.2 Liability Insurance.
(a) Carried by Lessee.  Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional 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 $2,000.000.00 1,000,000 per occurrence with an annual aggregate of not less than $3,000,000.00 2,000,000.  Lessee shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization's "Additional Insured-Managers or Lessors of Premises" Endorsement.  The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligations under this Lease.  The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation 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 addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein.
8.3 Property Insurance - Building, Improvements and Rental Value.
(a) Building and Improvements.  The Insuring Party shall obtain and keep in force a policy or policies 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 time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof.  Lessee Owned Alterations and Utility Installations, 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, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss.  Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection 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 deductible clause, the deductible amount shall not exceed $5,000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an Insured Loss.
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(b) Rental Value.  The Insuring Party shall 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 additional 180 days ("Rental Value insurance").  Said insurance shall contain an agreed valuation 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.  Lessee shall be liable for any deductible amount in the event of such loss.
(c) Adjacent Premises.  If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises.
8.4 Lessee's Property; Business Interruption Insurance; Worker's Compensation Insurance.
(a) Property Damage.  Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations.  Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence.  The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations.  Lessee shall provide Lessor with written evidence that such insurance is in force.
(b) Business Interruption.  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 attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils.
(c) Worker's Compensation Insurance.  Lessee shall obtain and maintain Worker's Compensation Insurance in such amount as may be required by Applicable Requirements.
(d) No Representation of Adequate Coverage.  Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease.
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8.5 Insurance Policies.  Insurance required herein shall be by companies maintaining during the policy term a "General Policyholders Rating" of at least A-, VII, as set forth in the most current issue of "Best's Insurance Guide", or such other rating 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 certified copies of policies of such insurance or certificates with copies of the required endorsements evidencing the existence and amounts of the required insurance.  No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor.  Lessee shall, at least 10 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such insurance 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 Subrogation.  Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire 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 deductibles applicable hereto.  The Parties agree to have their respective property damage insurance carriers waive any right to subrogation 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, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Lessee.  If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory 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 Exemption 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,  obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, 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.
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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 potentially 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 portion thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater.  The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional 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 constitute 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 obligation to maintain the insurance specified in this Lease.
9.          Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction.  Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.  Notwithstanding the foregoing, Premises Partial Damage shall not include damage to windows, doors, and/or other similar items which Lessee has the responsibility to repair or replace pursuant to the provisions of Paragraph 7.1.
(b) "Premises Total Destruction" shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction.  Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation.
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(e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance, in, on, or under the Premises which requires remediation.
9.2 Partial Damage - Insured Loss.  If a Premises Partial 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 Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose.  Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee's responsibility) 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 obligation 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 written notice 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 written notice to Lessee within 10 days thereafter to:  (i) make such restoration 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 thereafter.  Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction.  Premises Partial 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 Partial Damage - Uninsured Loss.  If a Premises Partial 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, in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage.  Such termination shall be effective 60 days following the date of such notice.  In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice 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 satisfactory assurance thereof within 30 days after making such commitment.  In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available.  If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.
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9.4 Total Destruction.  Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction.  If the damage or destruction 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 time 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 effective 60 days following the date of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage.  Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option 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 after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires.  If Lessee duly exercises such option 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 continue in full force and effect.  If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee's option shall be extinguished.
9.6 Abatement of Rent; Lessee's Remedies.
(a) Abatement.  In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion 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 obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein.
(b) Remedies.  If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than 60 days following the giving of such notice.  If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice.  If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect.  "Commence" shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.
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9.7 Termination; Advance Payments.  Upon termination 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 addition, 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          Definition.  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 Premises or 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 Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises are located.  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 Premises, and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease.
10.2 Payment of Taxes.  In addition to Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least 20 days prior to the applicable delinquency date.  If any such installment shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee's share of such installment shall be prorated.  In the event Lessee incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee monthly in advance with the payment of the Base Rent.  Such monthly payments shall be an amount equal to the amount of the estimated installment of taxes divided by the number of months remaining before the month in which said installment becomes delinquent.  When the actual amount of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable taxes.  If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum as is necessary.  Advance payments may be intermingled with other moneys of Lessor and shall not bear interest.  In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance payments may be treated by Lessor as an additional Security Deposit.
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10.3 Joint Assessment.  If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other Information as may be reasonably available.
10.4 Personal Property Taxes.  Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee.  When possible, Lessee shall cause Its Lessee Owned Alterations and Utility Installations, 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 attributable to Lessee's property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property.
11.        Utilities and Services.  Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon.  If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered or billed.  There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions.
12.        Assignment and Subletting.
     12.1               Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent.
(b) Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent.  The transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, 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 accounting principles.
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(d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice and grace period.  If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either:  (i) terminate this Lease, or (ii) upon 30 days written notice, 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 option 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 injunctive relief.
(f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested.
(g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, i.e. 20 square feet or less, to be used by a third party vendor in connection with the installation of a vending machine or payphone shall not constitute a subletting.
          12.2              Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, no assignment or subletting shall:  (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations 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 constitute 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 subletting shall not constitute a consent to any subsequent assignment or subletting.
(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 obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.
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(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor's considering and processing said request.  Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested.  (See also Paragraph 36)
(f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing.
(g) Lessor's consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing.  (See Paragraph 39.2)
      12.3              Additional Terms and Conditions Applicable to Subletting.  The following terms and conditions shall apply to any subletting 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 obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations, Lessee may collect said Rent.  In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations 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 collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee.  Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease.  Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation 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 option, require sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration 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 matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.
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(d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice 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 notice.  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, conditions or Rules and Regulations 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 vacating 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 potential 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 obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice 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 constituting public or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee.
(d) The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee.
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(e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; 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 thereafter diligently prosecutes such cure to completion.
(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 petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially 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 attachment, execution or other judicial seizure of substantially 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 obligations under this Lease is guaranteed:  (i) the death of a Guarantor, (ii) the termination 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 obligation on an anticipatory basis, and Lessee's failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.
13.2              Remedies.  If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation 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 notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:
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FORM STN-13-3/10E

(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 entitled to recover from Lessee:  (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time 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 obligations 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 reletting, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease.  The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent.  Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover damages under Paragraph 12.  If termination 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 notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1.  In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue 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 limitations.  Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located.  The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters 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, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease.  Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration 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 initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.
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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 accounting 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 after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater.  The Parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment.  Acceptance of such late charge by Lessor shall in no event constitute 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 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, 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 as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled payments.  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 addition to the potential late charge provided for in Paragraph 13.4.
13.6              Breach by Lessor.
(a) Notice of Breach.  Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor.  For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor's obligation 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 thereafter diligently pursued to completion.
(b) Performance by Lessee on Behalf of Lessor.  In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, 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 seek reimbursement from Lessor for any such expense in excess of such offset.  Lessee shall document the cost of said cure and supply said documentation to Lessor.
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FORM STN-13-3/10E

14.        Condemnation.  If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs.  If more than 10% of the Building, or more than 25% of that portion of the Premises not occupied by any building, is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after 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 portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation.  Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocation 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 Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor.  In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation.
15.        Brokerage Fees.
15.1 Additional Commission.  If a separate brokerage fee agreement is attached then in addition to the payments owed pursuant to Paragraph 1.9 above, and unless Lesser and the Brokers otherwise agree in writing, Lessor agrees that:  (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lesser and located within the same Project, if any, within which the Premises is located, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause herein, the, Lessor shall pay Brokers a fee in accordance with the schedule attached to such brokerage fee agreement.
15.2 Assumption of Obligations.  Any buyer or transferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obligation hereunder.  Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.69, 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 addition, if Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent.  In addition, 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 collecting any brokerage fee owed.
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15.3 Representations and Indemnities of Broker Relationships.  Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said named Brokers is entitled to any commission or finder's fee in connection herewith.  Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto.
16.        Estoppel Certificates.
(a) Each Party (as "Responding Party") shall within 10 days after written notice from the other Party (the "Requesting Party") execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published by the AIR Commercial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party.
(b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that:  (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not more than one month's rent has been paid in advance.  Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.
(c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential 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.        Definition of Lessor.  The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee title 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 title 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 obligations and/or covenants under this Lease thereafter to be performed by the Lessor.  Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.
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FORM STN-13-3/10E

18.         Severability.  The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, 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.         Limitation on Liability.  The obligations of Lessor under this Lease shall not constitute personal obligations 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 satisfaction 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 satisfaction.
21.         Time of Essence.  Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.
22.         No Prior or Other Agreements; Broker Disclaimer.  This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.  Lessor and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation 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.         Notices.
23.1 Notice Requirements.  All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, 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 notices.  Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice.  A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.
23.2 Date of Notice.  Any notice sent by registered or certified 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 notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid.  Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier.  Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy Is also delivered via delivery or mall.  If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
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FORM STN-13-3/10E

24.         Waivers.
(a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition 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 moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.
(c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.
25.         Disclosures Regarding The Nature of a Real Estate Agency Relationship.
(a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction.  Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows:
(i) Lessor's Agent.  A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor only.  A Lessor's agent or subagent has the following affirmative obligations:  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 duties.  b. A duty of honest and fair dealing and good faith.  c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties.  An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.
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(ii) Lessee's Agent.  An agent can agree to act as agent for the Lessee only.  In these situations, the agent is not the Lessor's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor.  An agent acting only for a Lessee has the following affirmative obligations.  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 duties.  b. A duty of honest and fair dealing and good faith.  c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties.  An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.
(iii) Agent Representing Both Lessor and Lessee.  A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee.  In a dual agency situation, the agent has the following affirmative obligations 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 duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii).  In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a higher rent than that offered.  The above duties of the agent in a real estate transaction 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 transaction.  A real estate agent is a person qualified to advise about real estate.  If legal or tax advice is desired, consult a competent professional.
(b) Brokers have no responsibility with respect to any default or breach hereof by either Party.  The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys' 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 limitation 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 identify to Brokers as "Confidential" any communication or information given Brokers that is considered by such Party to be confidential.
26.         No Right To Holdover.  Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination 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 expiration or termination.  Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

27.         Cumulative Remedies.  No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.
28.         Covenants and Conditions; Construction of Agreement.  All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions.  In construing this Lease, all headings and titles are for the convenience of the Parties 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 Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.
29.         Binding Effect; Choice of Law.  This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are located.  Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.
30.         Subordination; Attornment; Non-Disturbance.
30.1              Subordination.  This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, 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 obligation to perform any of the obligations of Lessor under this Lease.  Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.
30.2              Attornment.  In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Devise to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn 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 election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations, 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 acquisition 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.
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30.3              Non-Disturbance.  With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination 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 options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises.  Further, within 60 days after the execution 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-existing 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 option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4              Self-Executing.  The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein.
31.         Attorneys' Fees.  If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees.  Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment.  The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense.  The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred.  In addition, Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).
32.         Lessor's Access; Showing Premises; Repairs.  Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises.  All such activities shall be without abatement of rent or liability to Lessee.
33.         Auctions.  Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent.  Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
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FORM STN-13-3/10E

34.        Signs.  Lessor may place on the Premises ordinary "For Sale" signs at any time and ordinary "For Lease" signs during the last 6 months of the term hereof.  Except for ordinary "for sublease" signs, Lessee shall not place any sign upon the Premises without Lessor's prior written consent.  All signs must comply with all Applicable Requirements.
35.        Termination; Merger.  Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies.  Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such interest.
36.        Consents.  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', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor.  Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent.  The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given.  In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within 10 business days following such request.
37.        Guarantor.
37.1              Execution.  The Guarantors, if any, shall each execute a guaranty in the form most recently published by the AIR Commercial Real Estate Association, and each such Guarantor shall have the same obligations as Lessee under this Lease.
37.2              Default.  It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide:  (a) evidence of the execution 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 certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.
38.        Quiet Possession.  Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions 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.
    /s/RS
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FORM STN-13-3/10E

39.        Options.  If Lessee is granted an Option, as defined below, then the following provisions shall apply:
39.1              Definition.  "Option" 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              Options Personal To Original Lessee.  Any Option 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 certifying that Lessee has no intention of thereafter assigning or subletting.
39.3              Multiple Options.  In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been validly exercised.
39.4              Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option:  (i) during the period commencing with the giving of any notice of Default and continuing until said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an Option because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a Breach of this Lease.
40.        Multiple Buildings.  If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties, including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform.  Lessee also agrees to pay its fair share of common expenses incurred in connection with such rules and regulations.
    /s/RS
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    /s/DC
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

41.         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 obligation whatsoever to provide same.  Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
42.         Reservations.  Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee.  Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.
43.         Performance Under Protest.  If at any time 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 obligation 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 institute suit for recovery of such sum.  If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.  A Party who does not initiate suit for the recovery of sums paid "under protest" with 6 months shall be deemed to have waived its right to protest such payment.
44.         Authority; Multiple Parties; Execution.
(a) If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity 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 after request, deliver to the other Party satisfactory evidence of such authority.
(b) If this Lease is executed by more than one person or entity as "Lessee", each such person or entity 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 Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
    /s/RS
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

45.         Conflict.  Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions.
46.         Offer.  Preparation 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 until executed and delivered by all Parties hereto.
47.         Amendments.  This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification.  As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.
48.         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.
49.         Arbitration of Disputes.  An Addendum requiring the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease
      is    is not attached to this Lease.
    /s/RS
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

50.         Americans with Disabilities Act.  Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation.  In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions 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 THE AIR COMMERCIAL REAL ESTATE ASSOCIATION 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, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.
WARNING:  IF THE PREMISES IS 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 IS LOCATED.
The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.
Executed at: 
On: 
Executed at: 
On: 
 
By LESSOR:

  
 
By: /s/Ramundy Springfield 
Name Printed:  RAMUNDY SPRINGFIELD
Title: 
By: 
Name Printed: 
Title: 
Address: 
 
Telephone:(       )
Facsimile:(      )
Email: 
Email: 
Federal ID No. 
 
 
By LESSEE:
JUVA LIFE, INC., a California corporation
 
 
 
By: /s/ Doug Chloupek 
Name Printed:  DOUG CHLOUPEK
Title: 
By: 
Name Printed: 
Title: 
Address: 
 
Telephone:(       )
Facsimile:(      )
Email: 
Email: 
Federal ID No. 
 
BROKER:
  
  
Attn: 
Title: 
By: 
Name Printed: 
Title: 
Address: 
 
Telephone:(       )
Facsimile:(      )
Email: 
Email: 
Federal ID No. 
Broker/Agent DRE License #:  
BROKER:
  
  
Attn: 
Title: 
By: 
Name Printed: 
Title: 
Address: 
 
Telephone:(       )
Facsimile:(      )
Email: 
Email: 
Federal ID No. 
Broker/Agent DRE License #: 
    
 
    /s/RS
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

NOTICE:  These forms are often modified to meet changing requirements of law and industry needs.  Always write or call to make sure you are utilizing the most current form:  AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017.  Telephone No. (213) 687-8777.  Fax No.:  (213) 687-8616.
© Copyright 2001 - By AIR Commercial Real Estate Association.  All rights reserved.
No part of these works may be reproduced in any form without permission in writing.
    /s/RS
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©2001 – AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-LESSEE LEASE — NET
This Addendum ("Addendum") forms an integral part of the printed form Standard Industrial/Commercial Single-Lessee Lease — Net, of even date herewith (the "Form Lease") entered into by and between Ramundy Springfield ("Lessor") and Juva Life, Inc., a California corporation ("Lessee") demising the Premises described in the Form Lease.  Unless otherwise defined herein, capitalized terms used in this Addendum have the meanings given them in the Form Lease.  Where provisions of this Addendum conflict with provisions of the Form Lease, this Addendum shall control.  References in the Form Lease and in this Addendum to "the Lease," "this Lease," and words of similar import shall refer to the Form Lease and this Addendum collectively.
51.        Permits and Approvals.
(a) Throughout the Term, and any Option Term, of this Lease, Lessee shall operate its business at the Premises in full compliance with, and shall obtain and maintain any and all permits, licenses and approvals required by, all applicable California State, San Joaquin County and City of Stockton statutes, rules and regulations, both those in effect on the date of this Lease and all which are hereafter adopted at any time during the term of this Lease, including without limitation all rules and regulations currently issued and hereafter issued by California Bureau of Medical Cannabis Regulation, the California Department of Food and Agriculture, the California Department of Public Health, the City and County of Stockton Health Code, the City and County of Stockton Department of Public Health (and its Environmental Health Section), the City of Stockton Medical Cannabis Dispensary Program.  Lessee understands and acknowledges that the foregoing authorities are in the process of reorganizing to accommodate recent changes in the statutes, which changes become effective in the future and that such reorganization will require Lessee to apply for, obtain and maintain additional permits, licenses and/or approvals.  As of the date of this Lease, Lessee agrees (unless and until the legal requirements are revised, and then in full compliance with the revised requirements) to (i) list the Premises as a registered cultivation facility with the proper authorities in connection with a registered dispensary ("Licensed Dispensary") and otherwise operate its business at the Premises in full compliance with the applicable legal requirements as they are currently in effect and hereafter revised and modified.
(b) Throughout the Term, and any Option Term, of this Lease, Lessee hereby agrees that it assumes sole and exclusive responsibility for providing, and Lessee hereby agrees that it will, at Lessee's sole cost and expense, provide adequate security to insure the safety of persons and property located everywhere on the Premises.  With respect to the foregoing, Lessee agrees to cooperate and comply with the requirements and the reasonable recommendations of local and state law enforcement agencies as they relate to security procedures for the safe operation of Lessee's business at and from the Premises.
Addendum
Java Life, Inc.
1903 Navy Dr, Stockton, CA Lessor:  RS  Lessee:  DC
 
 
1

(c) Throughout the Term, and any Option Term, of this Lease, and in addition to the other indemnification provisions set forth in this Lease, to the extent not caused by Lessor, Lessee hereby agrees to defend, indemnify and hold Lessor and the Premises free and harmless from and against any and all losses, costs (including reasonable attorneys' fees and costs), damages, liabilities, awards, judgments and settlements, ("Claims") arising out of or in any manner connected to the acts and/or omissions of Lessee, its agents, representatives, employees, vendors and invitees (i) in engaging in Lessee's business at or from the Premises (regardless of whether permitted or unpermitted under this Lease); (ii) resulting from a lack or failure of sufficient security measures employed by Lessee; (iii) and resulting from a lack or failure of maintenance of full compliance with the requirements of law (including federal, state, city and county laws, statutes, ordinances, rules and regulations) as they pertain to Lessee's business at or from the Premises (whether currently in effect or hereafter adopted).  Notwithstanding the foregoing, the indemnities provided herein shall not apply to any Claims due to (iv) the extent Federal law is inconsistent with state and local laws allowing Lessee to use the Premises for the permitted use, or (v) Lessee's permitted use violates of Lessor's covenants under any of Lessor's loan documents.
(d) Throughout the Term, and any Option Term, of this Lease, Lessee hereby agrees to keep Lessor well and currently informed of any actual or threatened actions by any governmental agency which issues permits, licenses or approvals necessary or required for the lawful operation of Lessee's business at and from the Premises, or which exercises jurisdiction over Lessee's business at or from the Premises, to conduct enforcement activities against Lessee and its operations at or from the Premises, including without limitation, the suspension or withdrawal of any permit, license or approval necessary for the lawful operation of Lessee's business at or from the Premises.
(e) Any and all capital improvements, including, without limitation, installation of a fire sprinkler system, which are required in order for Lessee to lawfully conduct the business contemplated by this Lease within the Premises shall be made by Lessee, at Lessee's sole cost and expense and without any reimbursement requirement, whether in whole or in part, on the part of Lessor.
52.         Option to Extend Original Term.  Subject to Lessee being in full compliance with the provisions of Paragraph 39 of this Lease at the relevant times, Lessor hereby grants to Lessee two (2) options (each an "Option") to extend the Original Term of this Lease, on all of the same terms and conditions set forth herein with the exception of the monthly Base Rent, for five (5) additional years ("Option Term") immediately following the expiration of the initial Term term of this Lease.  In order to exercise the Option, Lessee must deliver unequivocal, written notice of Lessee's exercise of each Option ("Notice of Exercise") to Lessor no sooner than one hundred and eighty (180) days, and no later than one hundred twenty (120) days, prior to the Expiration Date of the Original Term of this Lease, as applicable.  The Base Rent for the first twelve (12) months of each Option Term shall be 103% of the monthly Base Rent during the immediately preceding month of this Lease.
53.         Option to Purchase.
(a) Lessor hereby grants to Lessee an option to purchase the entire Premises by paying to Lessor the Purchase Price pursuant to, and in accordance with, the provisions of this Paragraph 53 (the "Purchase Option").
Addendum
Java Life, Inc.
1903 Navy Dr, Stockton, CA Lessor:  RS  Lessee:  DC
 
 
2

(b) Lessee shall exercise the Purchase Option, if at all, by delivering unequivocal, written notice to Lessor of Lessee's election to exercise the Purchase Option (the "Purchase Option Notice") on or after August 1, 2021.  The Purchase Option Notice shall provide full contact and escrow information for a nationally recognized title/escrow company (i.e. First American Title Insurance Company) at which the Lessee has opened an escrow for the purpose of managing the purchase and sale of the Premises, and into which escrow Lessee has made an initial deposit of Four Hundred Fifty Thousand Dollars ($450,000.00), which shall be credited against the Purchase Price on the close of escrow.  The Purchase Option is personal to, and may only be exercised by, the original Lessee or a Permitted Transferee under this Lease.  In addition, the conditions set forth in Paragraph 39 of the Form Lease must be satisfied by Lessee in order for the Purchase Option to be validly exercised.
(c) The form of the sale agreement to be utilized for the purchase and sale of the Premises, and the escrow agent and title company handling the transaction, shall be agreed upon reasonably and in good faith by Lessor and Lessee within thirty (30) days of Lessee's delivery to Lessor of the Purchase Option Notice.  Lessor shall be responsible for preparing the initial draft of the sale agreement, which shall include terms consistent with similar transactions but shall not include any physical inspection due diligence or financing contingencies or any representations or warranties from Lessor concerning any improvements made to the Premises since the Commencement Date of this Lease.  Additionally, the sale agreement shall provide (and its terms and provisions shall reflect the fact) that the Premises shall be conveyed to Lessee in its then AS-IS, WHERE-IS condition to the greatest extent permissible by law; Lessor shall fully pay and satisfy any and all loans it has procured with respect to the Premises and cause all monetary encumbrances related thereto or related to any other encumbrance placed against the Premises by a party for which Lessor is legally responsible to be removed at the closing for the sale of the Premises; costs associated with transfer tax, title policy and escrow fees and expenses will be allocated in accordance with the customary allocation of such expenses in connection with the transfer and sale of commercial real estate in Stockton, California; Lessee shall pay its own due diligence costs and expenses; Lessor and Lessee will cooperate with one another in any Section 1031 exchange (at no cost or liability to each party for the other); Lessor and Lessee shall mutually represent to, and indemnify, each other that no broker's commission is due or payable with respect to such sale of the Option Property; and such other provisions as the Title Company may reasonably require.
(d) The closing of the sale of the Premises to Lessee pursuant to the Purchase Option and the applicable sale agreement shall be ninety (90) days after Lessee's delivery to Lessor of the Purchase Option Notice, provided, however, that Lessor shall have the right to extend the close of escrow for up to an additional sixty (60) days by written notice to Lessee.
(e) The Purchase Price for the Option Property shall be Fair Market Value of the Premises determined in accordance herewith.  Lessor and Lessee shall meet within fifteen (15) days after Lessee's delivery the Purchase Option Notice in an attempt to reach mutual agreement on the Fair Market Value of the Premises.  If within ten (10) days after such meeting Lessor and Lessee are unable to agree upon the Fair Market Value of the Premises, each shall appoint a real estate appraiser familiar with the fair market value comparable premises in the neighborhood in which the Premises is located not less than ten (10) years of commercial real estate valuation experience.  Within ten (10) days of Lessee's and Lessor's appointment of an appraiser, Lessor's appraiser and Lessee's appraiser shall select a third (3rd) appraiser to participate in the determination of the Fair Market Value of the Premises.  Each party shall pay for its own appraiser and one-half (1/2) the cost of the third appraiser.  Within thirty (30) days of the appointment of the third (3rd) appraiser, each appraiser shall arrive at its own independent Fair Market Value of the Premises.  The Fair Market Value of the Premises shall be the average of the Fair Market Value for the Premises determined by each of the appraisers.
Addendum
Java Life, Inc.
1903 Navy Dr, Stockton, CA Lessor:  RS  Lessee:  DC
 
 
3

54. Obligations of Lessor and Lessee for Disability Access Improvements; Indemnity.
(a) Lessor and Lessee hereby agree and acknowledge that the Premises may be subject to among other laws, the requirements of the Americans with Disabilities Act, a federal law codified at 42 U.S.C. section 12101 et seq., including, but not limited to, Title III thereof, and all regulations and guidelines related thereto, together with any and all laws, rules, regulations, ordinances, codes and statutes now or hereafter enacted by local or state agencies having jurisdiction thereof, including all requirements of the California Unruh Civil Rights Act (Civil Code Section 51 et seq.), the Disabled Persons Act (Civil Code Section 54 et seq.), and the building standards set forth in Title 24 of the California Code of Regulations, as the same may be in effect on the date of this Amendment and may be hereafter modified, amended or supplemented (collectively, the "ADA").  Lessor's and Lessees' obligations for compliance with the requirements of the ADA are as follows:  If any disability access work or other work is required to the Common Areas of the Building under the ADA, then such work and the cost thereof shall be the responsibility of Lessor; provided, however, that if such work is required under the ADA as a result of Lessee's specific use of the Premises or any Lessee improvements or alterations or other work or alteration made to the Premises by or on behalf of Lessee, then such work shall be performed by Lessor at the sole cost and expense of Lessee.  If any disability access work or other work is required to the Premises under the ADA, then such work and the cost thereof shall be the responsibility of Lessee.  Any alterations to be constructed under the Lease by Lessee shall be constructed in compliance with the requirements of the ADA, Lessee shall be solely responsible for conducting its own independent investigation of this matter and for ensuring that the design of all alterations strictly complies with all requirements of the ADA.
(b) Except as otherwise expressly provided for in this paragraph, Lessee shall be responsible at its sole cost and expense for fully and faithfully complying with all applicable requirements of the ADA including, without limitation, not discriminating against any disabled persons in the operation of Lessee's business in or about the Premises, and offering or otherwise providing auxiliary aids and services as, and when, required by the ADA.  Lessee hereby agrees to use reasonable efforts to notify Lessor if Lessee makes any alterations or improvements to the Property that might impact accessibility to the Premises or Building under any disability access laws.  Lessor hereby agrees to use reasonable efforts to notify Lessee if Lessee makes any alterations or improvements to the Premises might impact accessibility to the Premises or Building under the ADA or any disability access laws.
(c) Within ten (10) days after receipt, Lessee shall advise Lessor in writing, and provide Lessor with copies of any notices alleging violation of the ADA relating to any portion of the Premises; any claims made or threatened orally or in writing regarding noncompliance with the ADA and relating to any portion of the Premises; or any governmental or regulatory actions or investigations instituted or threatened regarding noncompliance with the ADA and relating to any portion of the Premises.
Addendum
Java Life, Inc.
1903 Navy Dr, Stockton, CA Lessor:  RS  Lessee:  DC
4

(d) Pursuant to California Civil Code Section 1938, Lessor hereby notifies Lessee that as of the date of this Amendment, the Premises has not undergone inspection by a "Certified Access Specialist" to determine whether the Premises meet all applicable construction-related accessibility standards under California Civil Code Section 55.53.
(e) Lessee hereby agrees to indemnify, defend and hold Lessor and the property of which the Premises is a part free and harmless from any/all claims, losses, liabilities, judgments and awards arising out of or in any manner connect to any alleged or actual violation(s) of ADA arising from Lessee's use, occupancy, business, and/or alteration(s) of the Premises or the Building.
IN WITNESS WHEREOF, Lessor and Lessee have duly executed this Addendum concurrently with their execution of the Form Lease, intending to be bound by all terms, covenants and provisions of this Lease.
LESSOR:
LESSEE:
 
  
/s/Ramundy Springfield
Ramundy Springfield
Juva Life, Inc., a California Corporation,
By:/s/Douglas Chloupek
Douglas Chloupek, President


5


STANDARD SUBLEASE
(Short-form to be used with post 1995 AIR leases)
(NOTE:  DO NOT USE IF LESS THAN ENTIRE PREMISES ARE BEING SUBLET.  FOR SITUATIONS WHERE THE PREMISES ARE TO BE OCCUPIED BY MORE THAN ONE TENANT OR SUBTENANT USE THE "STANDARD SUBLEASE -- MULTI TENANT" FORM)
       1.   Basic Provisions ("Basic Provisions").
 
1.1
Parties:  This Sublease ("Sublease"), dated for reference purposes only August 1, 2018 is made by and between Best Leasing Services, Inc. ("Sublessor") and Juva Life, Inc., a California corporation ("Sublessee"), (collectively the "Parties", or individually a "Party").
1.2
Premises:  That certain real property, including all improvements therein, and commonly known by the street address of 25571 Clawiter Road, Hayward, CA located in the County of Alameda, State of California and generally described as (describe briefly the nature of the property) a 22,720 square foot freestanding industrial building including one (1) 5,500 square foot greenhouse ("Premises").
1.3
Term4 years and 5 months commencing August 1, 2018 ("Commencement Date") and ending December 31, 2022 ("Expiration Date").
1.4
Early Possession:  If the Premises are available Sublessee may have non exclusive possession of the Premises commencing _______________ ("Early Possession Date").
1.5
Base Rent$22,000.00 per month ("Base Rent"), payable on the 1st day of each month commencing August 1, 2018
 
☒ If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.
1.6
Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent$22,000.00 for the period _______________.
(b) Security Deposit:  $_______________ ("Security Deposit").
(c) Association Fees:  $_______________ for the period _______________
(d) Other:  $_______________ for _______________.
(e) Total Due Upon Execution of this Lease$22,000.00
1.7
Agreed Use:  The Premises shall be used and occupied only for Cannabis cultivation, manufacturing, processing, nursery, research, development, distribution, and all lawful related uses and for no other purposes.
DC
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

 
1.8
Real Estate Brokers:
(a) Representation:  The following real estate brokers (the "Brokers") and brokerage relationships exist in this transaction (check applicable boxes):
         None represents Sublessor exclusively ("Sublessor's Broker");
         None represents Sublessee exclusively ("Sublessee's Broker"); or
         None represents both Sublessor and Sublessee ("Dual Agency").
(b) Payment to BrokersUpon execution and delivery of this Sublease by both Parties, Sublessor shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to in the attached separate written agreement or if no such agreement is attached, the sum of _____ or _____% of the total Base Rent payable for the original term of the Sublease, the sum of _____ or _____% of the purchase price in the event that the Sublessee or anyone affiliated with Sublessee acquires from the owner of the Premises any rights to the Premises.
1.9
Guarantor.  The obligations of the Sublessee under this Sublease shall be guaranteed by None ("Guarantor").
1.10
            Attachments.  Attached hereto are the following, all of which constitute a part of this Sublease:
         an Addendum consisting of Paragraphs 13 through _______;
         a plot plan depicting the Premises;
         a Work Letter;
         a copy of the master lease and any and all amendments to such lease (collectively the "Master Lease");
         other (specify):  ________.
2.
          Premises.
2.1
Letting.  Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Sublease.  While the approximate square footage of the Premises may have been used in the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment should the actual size be determined to be different.  Note:  Sublessee is advised to verify the actual size prior to executing this Sublease.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

2.2
Condition.  Sublessor shall deliver the Premises to Sublessee in its present "As Is" condition.  broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), and any items which the Sublessor is obligated to construct pursuant to the Work Letter attached hereto, if any, other than those constructed by Sublessee, shall be in good operating condition on said date.  If a non compliance with such warranty exists as of the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty period, Sublessor shall, as Sublessor's sole obligation with respect to such matter, except as otherwise provide in this sublease, promptly after receipt of written notice from Sublessee setting forth with specificity the nature and extent of such non compliance, malfunction or failure, rectify same at Sublessor'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.  If Sublessee does not give Sublessor the required notice within the appropriate warranty period, correction of any such non compliance, malfunction or failure shall be the obligation of Sublessee at Sublessee's sole cost and expense.
2.3
ComplianceSublessor warrants that any improvements, alterations or utility installations made or installed by or on behalf of Sublessor to or on the Premises comply with all applicable covenants or restrictions of record and applicable building codes, regulations and ordinances ("Applicable Requirements") in effect on the date that they were made or installed.  Sublessor makes no warranty as to the use to which Sublessee will put the Premises or to modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Sublessee's use.  NOTE:  Sublessee is responsible for determining whether or not the zoning and other Applicable Requirements are appropriate for Sublessee'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, Sublessor shall, except as otherwise provided, promptly after receipt of written notice from Sublessee setting forth with specificity the nature and extent of such non compliance, rectify the same.
2.4
Acknowledgements.  Sublessee acknowledges that:  (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised by Sublessor and/or Brokers to satisfy itself with respect to the size and condition 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 Disabilities Act), and their suitability for Sublessee's intended use, (c) Sublessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, (d) it is not relying on any representation as to the size of the Premises made by Brokers or Sublessor, (e) the square footage of the Premises was not material to Sublessee's decision to sublease the Premises and pay the Rent stated herein, and (f) neither Sublessor, Sublessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Sublease.  In addition, Sublessor acknowledges that:  (i) Brokers have made no representations, promises or warranties concerning Sublessee's ability to honor the Sublease or suitability to occupy the Premises, and (ii) it is Sublessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

2.5
Americans with Disabilities Act.  In the event that as a result of Sublessee's use, or intended use, of the Premises the Americans with Disabilities Act or any similar law requires modifications or the construction or installation of improvements in or to the Premises, Building, Project and/or Common Areas, the Parties agree that such modifications, construction or improvements shall be made at:  Sublessor's expense Sublessee's expense.
3.
           Possession.
3.1
Early Possession.  Any provision herein granting Sublessee Early Possession of the Premises is subject to and conditioned 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 Sublessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such Early Possession.  All other terms of this Sublease (including but not limited to the obligations to pay Sublessee's Share of Common Area Operating Expenses, Real Property Taxes and insurance premiums and to maintain the Premises) shall, however, be in effect during such period.  Any such Early Possession shall not affect the Expiration Date.
3.2
Delay in Commencement.  Sublessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises by the Commencement Date.  If, despite said efforts, Sublessor is unable to deliver possession as agreed, the rights and obligations of Sublessor and Sublessee shall be as set forth in Paragraph 3.3 of the Master Lease (as modified by Paragraph 6.3 of this Sublease).
3.3
Sublessee Compliance.  Sublessor shall not be required to tender possession of the Premises to Sublessee until Sublessee complies with its obligation to provide evidence of insurance.  Pending delivery of such evidence, Sublessee shall be required to perform all of its obligations under this Sublease from and after the Start Date, including the payment of Rent, notwithstanding Sublessor's election to withhold possession pending receipt of such evidence of insurance.  Further, if Sublessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Sublessor may elect to withhold possession until such conditions are satisfied.
4.
           Rent and Other Charges.
4.1
Rent Defined.  All monetary obligations of Sublessee to Sublessor under the terms of this Sublease (except for the Security Deposit) are deemed to be rent ("Rent").  Rent shall be payable in lawful money of the United States to Sublessor c/o CAC Management, LLC, 39899 Balentine, Suite 200, Newark, CA 94560.  Make check payable to "CAC Management, LLC, in trust for Best Leasing Services, Inc." at the address stated herein or to such other persons or at such other places as Sublessor may designate in writing.
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 FORM SBS-5-1/10E

4.2
Utilities.  Sublessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon.
    5.           Security Deposit.  The rights and obligations of Sublessor and Sublessee as to said Security Deposit shall be as set forth in Paragraph 5 of the Master Lease (as modified by Paragraph 6.3 of this Sublease).
           6.      Master Lease
 6.1 Sublessor is the lessee of the Premises by virtue of the "Master Lease", wherein Pan Resources International, Inc. is the lessor, hereinafter the "Master Lessor".
 6.2 This Sublease is and shall be at all times subject and subordinate to the Master Lease.
 6.3 The terms, conditions and respective obligations of Sublessor and Sublessee to each other under this Sublease shall be the terms and conditions of the Master Lease except for those provisions of the Master Lease which are directly contradicted by this Sublease in which event the terms of this Sublease document shall control over the Master Lease.  Therefore, for the purposes of this Sublease, wherever in the Master Lease the word "Lessor" is used it shall be deemed to mean the Sublessor herein and wherever in the Master Lease the word "Lessee" is used it shall be deemed to mean the Sublessee herein.
 6.4 During the term of this Sublease and for all periods subsequent for obligations which have arisen prior to the termination of this Sublease, Sublessee does hereby expressly assume and agree to perform and comply with, for the benefit of Sublessor and Master Lessor, each and every obligation of Sublessor under the Master Lease except for the following paragraphs which are excluded therefrom:  1.5, 1.6, 4.2, 12.
 6.5 The obligations that Sublessee has assumed under paragraph 6.4 hereof are hereinafter referred to as the "Sublessee's Assumed Obligations".  The obligations that sublessee has not assumed under paragraph 6.4 hereof are hereinafter referred to as the "Sublessor's Remaining Obligations".
 6.6 Sublessee shall hold Sublessor free and harmless from all liability, judgments, costs, damages, claims or demands, including reasonable attorneys fees, arising out of Sublessee's failure to comply with or perform Sublessee's Assumed Obligations.
 6.7 Sublessor agrees to maintain the Master Lease during the entire term of this Sublease, subject, however, to any earlier termination of the Master Lease without the fault of the Sublessor, and to comply with or perform Sublessor's Remaining Obligations and to hold Sublessee free and harmless from all liability, judgments, costs, damages, claims or demands arising out of Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.
 6.8 Sublessor represents to Sublessee that the Master Lease is in full force and effect and that no default exists on the part of any Party to the Master Lease.
 6.9              Termination of Master Lease.  If for any reason the term of the Master Lease shall terminate prior to the expiration of this Sublease, this Sublease shall thereupon be terminated and Sublessor shall not be liable to Sublessee by reason thereof unless both (a) Sublesee shall not then be in default hereunder and (b) said termination shall have been effected because of the breach or default of Sublessor under the Master Lease.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

 
        6.10     Options to Extend and Purchase Rights.  Provided Sublessee is not in default of this Sublease, Sublessee shall have the right to exercise any options to extend or any other rights to purchase the Premises granted to Sublessor under the Master Lease by providing Sublessor written notice no less than thirty (30) days prior to any date upon which such right accrues to Sublessor under the Master Lease.  Upon written notice Sublessor shall provide to Master Lessor the requisite written notice required under the Master Lease.
 
    7.      Assignment of Sublease and Default
 
 7.1 Sublessee shall not assign, transfer, or sublet this Sublease without the express written consent of Sublessor, which consent may be withheld in Sublessor's sole and absolute discretion.  Sublessor hereby assigns and transfers to Master Lessor Sublessor's interest in this Sublease, subject however to the provisions of Paragraph 8.2 hereof.
 7.2 Master Lessor, by executing this document, agree that until a Default shall occur in the performance of Sublessor's Obligations under the Master Lease, that Sublessor may receive, collect and enjoy the Rent accruing under this Sublease.  However, if Sublessor shall Default in the performance of its obligations to Master Lessor then Master Lessor may, at its option, receive and collect, directly from Sublessee, all Rent owing and to be owed under this Sublease.  In the event, however, that the amount collected by Master Lessor exceeds Sublessor's obligations any such excess shall be refunded to Sublessor.  Master Lessor shall not, by reason of this assignment of the Sublease nor by reason of the collection of the Rent from the Sublessee, be deemed liable to Sublessee for any failure of the Sublessor to perform and comply with Sublessor's Remaining Obligations.
 7.3 Sublessor hereby irrevocably authorizes and directs Sublessee upon receipt of any written notice from the Master Lessor stating that a Default exists in the performance of Sublessor's obligations under the Master Lease, to pay to Master Lessor the Rent due and to become due under the Sublease.  Sublessor agrees that Sublessee shall have the right to rely upon any such statement and request from Master Lessor, and that Sublessee shall pay such Rent to Master Lessor without any obligation or right to inquire as to whether such Default exists and notwithstanding any notice from or claim from Sublessor to the contrary and Sublessor shall have no right or claim against Sublessee for any such Rent so paid by Sublessee.
 7.4 No changes or modifications shall be made to this Sublease without the consent of Master Lessor.
8.           Consent of Master Lessor.
 8.1 In the event that the Master Lease requires that Sublessor obtain the consent of Master Lessor to any subletting by Sublessor then, this Sublease shall not be effective unless, within 10 days of the date hereof, Master Lessor signs this Sublease thereby giving its consent to this Subletting.
 8.2 In the event that the obligations of the Sublessor under the Master Lease have been guaranteed by third parties then neither this Sublease, nor the Master Lessor's consent, shall be effective unless, within 10 days of the date hereof, said guarantors sign this Sublease thereby giving their consent to this Sublease.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

 8.3 In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its obligations or alter the primary liability of Sublessor to pay the Rent and perform and comply with all of the obligations of Sublessor to be performed under the Master Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or any one else liable under the Master Lease shall not be deemed a waiver by Master Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a consent to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under the Master Lease, Master Lessor may proceed directly against Sublessor, any guarantors or any one else liable under the Master Lease or this Sublease without first exhausting Master Lessor's remedies against any other person or entity liable thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings and assignments of the Master Lease or this Sublease or any amendments or modifications thereto without notifying Sublessor or any one else liable under the Master Lease and without obtaining their consent and such action shall not relieve such persons from liability.
(f) In the event that Sublessor shall Default in its obligations under the Master Lease, then Master Lessor, at its option and without being obligated to do so, may require Sublessee to attorn to Master Lessor in which event Master Lessor shall undertake the obligations of Sublessor under this Sublease from the time of the exercise of said option to termination of this Sublease but Master Lessor shall not be liable for any prepaid Rent nor any Security Deposit paid by Sublessee, nor shall Master Lessor be liable for any other Defaults of the Sublessor under the Sublease.
(g) Unless directly contradicted by other provisions of this Sublease, the consent of Master Lessor to this Sublease shall not constitute an agreement to allow Sublessee to exercise any options which may have been granted to Sublessor in the Master Lease (see Paragraph 39.2 of the Master Lease).
 8.4 The signatures of the Master Lessor and any Guarantors of Sublessor at the end of this document shall constitute their consent to the terms of this Sublease.
 8.5 Master Lessor acknowledges that, to the best of Master Lessor's knowledge, no Default presently exists under the Master Lease of obligations to be performed by Sublessor and that the Master Lease is in full force and effect.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

 8.6 In the event that Sublessor Defaults under its obligations to be performed under the Master Lease by Sublessor, Master Lessor agrees to deliver to Sublessee a copy of any such notice of default.  Sublessee shall have the right to cure any Default of Sublessor described in any notice of default within ten days after service of such notice of default on Sublessee.  If such Default is cured by Sublessee then Sublessee shall have the right of reimbursement and offset from and against Sublessor.
9.
           Additional Brokers Commissions.
 9.1 Sublessor agrees that if Sublessee exercises any option or right of first refusal as granted by Sublessor herein, or any option or right substantially similar thereto, either to extend the term of this Sublease, to renew this Sublease, to purchase the Premises, or to lease or purchase adjacent property which Sublessor may own or in which Sublessor has an interest, then Sublessor shall pay to Broker a fee in accordance with the schedule of Broker in effect at the time of the execution of this Sublease.  Notwithstanding the foregoing, Sublessor's obligation under this Paragraph is limited to a transaction in which Sublessor is acting as a Sublessor, lessor or seller.
 9.2 If a separate brokerage fee agreement is attached then Master Lessor agrees that if Sublessee shall exercise any option or right of first refusal granted to Sublessee by Master Lessor in connection with this Sublease, or any option or right substantially similar thereto, either to extend or renew the Master Lease, to purchase the Premises or any part thereof, or to lease or purchase adjacent property which Master Lessor may own or in which Master Lessor has an interest, or if Broker is the procuring cause of any other lease or sale entered into between Sublessee and Master Lessor pertaining to the Premises, any part thereof, or any adjacent property which Master Lessor owns or in which it has an interest, then as to any of said transactions, Master Lessor shall pay to Broker a fee, in cash, in accordance with the schedule attached to such brokerage fee agreement.
 9.3 Any fee due from Sublessor or Master Lessor hereunder shall be due and payable upon the exercise of any option to extend or renew, upon the execution of any new lease, or, in the event of a purchase, at the close of escrow.
 9.4 Any transferee of Sublessor's interest in this Sublease, or of Master Lessor's interest in the Master Lease, by accepting an assignment thereof, shall be deemed to have assumed the respective obligations of Sublessor or Master Lessor under this Paragraph 9.  Broker shall be deemed to be a third party beneficiary of this paragraph 9.
10.         Representations and Indemnities of Broker Relationships.The Parties each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Sublease, and that no one other than said named Brokers is entitled to any commission or finder's fee in connection herewith.  Sublessee and Sublessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

 
11.         Attorney's fees.  If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees.  Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment.  The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense.  The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred.  In addition, Sublessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).
 
12.        No Prior or Other Agreements; Broker Disclaimer.  This Sublease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.  Sublessor and Sublessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Sublease 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.  The liability (including court costs and attorneys' fees), of any Broker with respect to negotiation, execution, delivery or performance by either Sublessor or Sublessee under this Sublease or any amendment or modification hereto shall be limited to an amount up to the fee received by such Broker pursuant to this Sublease; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
ATTENTION:  NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE 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 SUBLEASE.
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 STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

WARNING:  IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED
Executed at: 
On: 
By Sublessor:
JUVA LIFE, INC., a California corporation 
  
By: /s/Doug Chloupek 
Name Printed:  DOUG CHLOUPEK 
Title: 
Executed at: 
On: 
By Sublessee:
BEST LEASING SERVICES, INC. 
  
By: /s/Doug Chloupek
Name Printed:  DOUG CHLOUPEK 
Title: 
By: 
Name Printed: 
Title: 
Address: 
 
Telephone:  (___) 
Facsimile:  (___) 
Email: 
Email: 
Federal ID No.: 
By: 
Name Printed: 
Title: 
Address: 
 
Telephone:  (___) 
Facsimile:  (___) 
Email: 
Email: 
Federal ID No.: 
BROKER
  
  
Attn: 
Title: 
Address: 
 
Telephone:  (___) 
Facsimile:  (___) 
Email: 
Federal ID No.: 
Broker/Agent DRE License #: 
 
 
 
BROKER
  
  
Attn: 
Title: 
Address: 
 
Telephone:  (___) 
Facsimile:  (___) 
Email: 
Federal ID No.: 
Broker/Agent DRE License #: 
 
 
 
 
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E
 

Consent to the above Sublease is hereby given.
Executed at: 
On: 
By Master Lessor:
  
  
By: 
Name Printed: 
Title: 
Executed at: 
On: 
By Guarantor(s):
By: 
Name Printed: 
Address: 
 
 
 
By: 
Name Printed: 
Address: 
 
 
By: 
Name Printed: 
Title: 
Address: 
 
Telephone:  (___) 
Facsimile:  (___) 
Email: 
Federal ID No.: 
 

NOTICE:  These forms are often modified to meet changing requirements of law and Industry needs.  Always write or call to make sure you are utilizing the most current form:  AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017.  Telephone No. (213) 687-8777.  Fax No.:  (213) 687-8616.
©Copyright 1997 By AIR Commercial Real Estate Association.  All rights reserved.
No part of these works may be reproduced in any form without permission in writing.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

ADDENDUM
Date:  August 1, 2018
By and Between (Lessor)
(Lessee)
SUBLESSOR:  BEST LEASING SERVICES, INC.
JUVA LIFE, INC.
Address of Premises:
25571 Clawiter Road, Hayward, CA

Paragraph 13
In the event of any conflict between the provisions of this Addendum and the printed provisions of the Lease, this Addendum shall control.
RENT SCHEDULE
RENT
ADMIN FEE
TOTAL
August 1, 2018 - December 31, 2018
$20,000.00
$2,000.00
$22,000.00
January 1, 2019 - December 31, 2019
$20,600.00
$2,060.00
$22,660.00
January 1, 2020 - December 31, 2020
$21,218.00
$2,121.80
$23,339.80
January 1, 2021 - December 31, 2021
$21,855.00
$2,185.50
$24,040.50
January 1, 2022 - December 31, 2022
$22,511
$2,251.10
$24,762.10

Base Rent During the Option period shall be the same as the Base Rent under the Master Lease plus an admin fee of 10%.  Lease is NNN.  Lessor will invoice, and Lessee will be responsible to pay, all expenses related to property insurance, maintenance, and taxes in addition to rent and utilities.
 
PAGE 1 OF 1

STANDARD SUBLEASE
(Short-form to be used with post 1995 AIR leases)
(NOTE:  DO NOT USE IF LESS THAN ENTIRE PREMISES ARE BEING SUBLET.  FOR SITUATIONS WHERE THE PREMISES ARE TO BE OCCUPIED BY MORE THAN ONE TENANT OR SUBTENANT USE THE "STANDARD SUBLEASE--MULTI-TENANT" FORM)
1.          Basic Provisions ("Basic Provisions").
1.1 Parties:  This Sublease ("Sublease"), dated for reference purposes only August 1, 2018, is made by and between Best Leasing Services, Inc. ("Sublessor") and Juva Life, Inc., a California corporation ("Sublessee"), (collectively the "Parties", or individually a "Party").
1.2 Premises:  That certain real property, including all improvements therein, and commonly known by the street address of 3363 Enterprise Avenue, Hayward, CA located in the County of Alameda, State of California and generally described as (describe briefly the nature of the property) 11, 750 square feet, which includes the building of 6,250 square feet plus a 5,500 square foot green house ("Premises").
1.3 Term4 years and 5.5 months commencing August 1, 2018 ("Commencement Date") and ending January 14, 2023("Expiration Date").
1.4 Early Possession:  If the Premises are available Sublessee may have non-exclusive possession of the Premises commencing ("Early Possession Date").
1.5 Base Rent$ 8, 593.75 per month ("Base Rent"), payable on the 1st day of each month commencing August 1, 2018
          ☐  If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.
1.6 Base Rent and Other Monies Paid Upon Execution:
     (a) Base Rent$ 8,593.75 for the period _______________.
     (b) Security Deposit:  $_______________ ("Security Deposit").
     (c) Association Fees:  $_______________ for the period _______________
     (d) Other:  $_______________ for _______________
     (e) Total Due Upon Execution of this Lease$8,593.75
1.7 Agreed Use:  The Premises shall be used and occupied only for Cannabis cultivation, manufacturing, processing, nursery, research, development, distribution, and all lawful related uses and for no other purposes.
1.8 Real Estate Brokers:
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

     (a) Representation:  The following real estate brokers ( the "Brokers") and brokerage relationships exist in this transaction (check applicable boxes):
          ☐  None represents Sublessor exclusively ("Sublessor's Broker");
          ☐  None represents Sublessee exclusively ("Sublessee's Broker"); or
          ☐  None represents both Sublessor and Sublessee ("Dual Agency").
     (b) Payment to BrokersUpon execution and delivery of this Sublease by both Parties, Sublesser shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to in the attached separate written agreement or if no such agreement is attached, the sum of _____ or _____% of the total Base Rent payable for the original term of the Sublease, the sum of _____ or _____ of the total Base Rent payable during any period of time that the Sublessee occupies the Premises subsequent to the original term of the Sublease, and/or the sum of _____ or _____% of the purchase price in the event that the Sublessee or anyone affiliated with Sublessee acquires from the owner of the Premises any rights to the Premises.
1.9 Guarantor.  The obligations of the Sublessee under this Sublease shall be guaranteed by None ("Guarantor").
1.10            Attachments.  Attached hereto are the following, all of which constitute a part of this Sublease:
          ☐  an Addendum consisting of Paragraphs 13 through _______________;
           a plot plan depicting the Premises;
           a Work Letter;
           a copy of the master lease and any and all amendments to such lease (collectively the "Master Lease");
           other (specify):  _______ .
2.          Premises.
2.1 Letting.  Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Sublease.  While the approximate square footage of the Premises may have been used in the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment should the actual size be determined to be different.  Note:  Sublessee is advised to verify the actual size prior to executing this Sublease.
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 FORM SBS-5-1/10E

2.2 Condition.  Sublessor shall deliver the Premises to Sublessee in its present "As-Is" conditionbroom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), and any items which the Sublessor is obligated to construct pursuant to the Work Letter attached hereto, if any, other than those constructed by Sublessee, shall be in good operating condition on said date.  If a non-compliance with such warranty exists as of the Start Date, or if on of such systems or elements should malfunction or fail within the appropriate warranty period, Sublessor shall, as Sublesser's sole obligation with respect to such matter, except as otherwise provided in this Sublease, promptly after receipt of written notice from Sublessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure, rectify same at Sublessor'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.  If Sublessee does not give Sublessor the required notice within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of Sublessee at Sublessee's sole cost and expense.
2.3 ComplianceSublessor warrants that any improvements, alterations or utility installations made or installed by or on behalf of Sublessor to or on the Premises comply with all applicable covenants or restrictions of record and applicable building codes, regulations and ordinances ("Applicable Requirements") in effect on the date that they were made or installed.  Sublessor makes no warranty as to the use to which Sublessee will put the Premises or to modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Sublessee's use.  NOTE:  Sublessee is responsible for determining whether or not the zoning and other Applicable Requirements are appropriate for Sublessee'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, Sublessor shall, except as otherwise provided, promptly after receipt of written notice from Sublessee setting forth with specificity the nature and extent of such non-compliance, rectify the same.
2.4 Acknowledgements.  Sublessee acknowledges that:  (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised by Sublessor and/or Brokers to satisfy itself with respect to the size and condition 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 Disabilities Act), and their suitability for Sublessee's intended use, (c) Sublessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, (d) it is not relying on any representation as to the size of the Premises made by Brokers or Sublessor, (e) the square footage of the Premises was not material to Sublessee's decision to sublease the Premises and pay the Rent stated herein, and (f) neither Sublessor, Sublessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Sublease.  In addition, Sublessor acknowledges that:  (i) Brokers have made no representations, premises or warranties concerning Sublessee's ability to honor the Sublease or suitability to occupy the Premises, and (ii) it is Sublessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.
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 FORM SBS-5-1/10E

2.5 Americans with Disabilities Act.  In the event that as a result of Sublessee's use, or intended use, of the Premises the Americans with Disabilities Act or any similar law requires modifications or the construction or installation of improvements in or to the Premises, Building, Project and/or Common Areas, the Parties agree that such modifications, construction or improvements shall be made at:  Sublessor's expense Sublessee's expense.
3.          Possession.
3.1 Early Possession.  Any provision herein granting Sublessee Early Possession of the Premises is subject to and conditioned 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 Sublessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such Early Possession.  All other terms of this Sublease (including but not limited to the obligations to pay Sublessee's Share of Common Area Operating Expenses, Real Property Taxes and insurance premiums and to maintain the Premises) shall, however, be in effect during such period.  Any such Early Possession shall not affect the Expiration Date.
3.2 Delay in Commencement.  Sublessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises by the Commencement Date.  If, despite said efforts, Sublessor is unable to deliver possession as agreed, the rights and obligations of Sublessor and Sublessee shall be as set forth in Paragraph 3.3 of the Master Lease (as modified by Paragraph 6.3 of this Sublease).
3.3 Sublessee Compliance.  Sublessor shall not be required to tender possession of the Premises to Sublessee until Sublessee complies with its obligation to provide evidence of insurance.  Pending delivery of such evidence, Sublessee shall be required to perform all of its obligations under this Sublease from and after the Start Date, including the payment of Rent, notwithstanding Sublessor's election to withhold possession pending receipt of such evidence of insurance.  Further, if Sublessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Sublessor may elect to withhold possession until such conditions are satisfied.
4.          Rent and Other Charges.
4.1 Rent Defined.  All monetary obligations of Sublessee to Sublessor under the terms of this Sublease (except for the Security Deposit) are deemed to be rent ("Rent").  Rent shall be payable in lawful money of the United States to Sublessor c/o CAC Management, LLC, 39899 Balentine, Suite 200, Newark, CA 94560.  Make check payable to "CAC Management, LLC, in trust for Best Leasing Services, Inc." at the address stated herein or to such other persons or at such other places as Sublessor may designate in writing.
4.2 Utilities.  Sublessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon.
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 FORM SBS-5-1/10E

5.           Security Deposit.  The rights and obligations of Sublessor and Sublessee as to said Security Deposit shall be as set forth in Paragraph 5 of the Master Lease (as modified by Paragraph 6.3 of this Sublease).
6.           Master Lease.
6.1 Sublessor is the lessee of the Premises by virtue of the "Master Lease", wherein Pan Resources International, Inc. is the lessor, hereinafter the "Master Lessor".
6.2 This Sublease is and shall be at all times subject and subordinate to the Master Lease.
6.3 The terms, conditions and respective obligations of Sublessor and Sublessee to each other under this Sublease shall be the terms and conditions of the Master Lease except for those provisions of the Master Lease which are directly contradicted by this Sublease in which event the terms of this Sublease document shall control over the Master Lease.  Therefore, for the purposes of this Sublease, wherever in the Master Lease the word "Lessor" is used it shall be deemed to mean the Sublessor herein and wherever in the Master Lease the word "Lessee" is used it shall be deemed to mean the Sublessee herein.
6.4 During the term of this Sublease and for all periods subsequent for obligations which have arisen prior to the termination of this Sublease, Sublessee does hereby expressly assume and agree to perform and comply with, for the benefit of Sublessor and Master Lessor, each and every obligation of Sublessor under the Master Lease except for the following paragraphs which are excluded therefrom:  1.5, 1.6, 4.2, 12
6.5 The obligations that Sublessee has assumed under paragraph 6.4 hereof are hereinafter referred to as the "Sublessee's Assumed Obligations".  The obligations that sublessee has not assumed under paragraph 6.4 hereof are hereinafter referred to as the "Sublessor's Remaining Obligations".
6.6 Sublessee shall hold Sublessor free and harmless from all liability, judgments, costs, damages, claims or demands, including reasonable attorneys fees, arising out of Sublessee's failure to comply with or perform Sublessee's Assumed Obligations.
6.7 Sublessor agrees to maintain the Master Lease during the entire term of this Sublease, subject, however, to any earlier termination of the Master Lease without the fault of the Sublessor, and to comply with or perform Sublessor's Remaining Obligations and to hold Sublessee free and harmless from all liability, judgments, costs, damages, claims or demands arising out of Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.
6.8 Sublessor represents to Sublessee that the Master Lease is in full force and effect and that no default exists on the part of any Party to the Master Lease.
6.9 Termination of Master Lease.  If for any reason the term of the Master Lease shall terminate prior to the expiration of this Sublease, this Sublease shall thereupon be terminated and Sublessor shall not be liable to Sublessee by reason thereof unless both (a) Sublesee shall not then be in default hereunder and (b) said termination shall have been effected because of the breach or default of Sublessor under the Master Lease.
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 FORM SBS-5-1/10E

6.10 Options to Extend and Purchase Rights.  Provided Sublessee is not in default of this Sublease, Sublessee shall have the right to exercise any options to extend or any other rights to purchase the Premises granted to Sublessor under the Master Lease by providing Sublessor written notice no less than thirty (30) days prior to any date upon which such right accrues to Sublessor under the Master Lease.  Upon written notice Sublessor shall provide to Master Lessor the requisite written notice required under the Master Lease.
7.           Assignment of Sublease and Default.
7.1 Sublessee shall not assign, transfer, or sublet this Sublease without the express written consent of Sublessor, which consent may be withheld in Sublessor's sole and absolute discretion.  Sublessor hereby assigns and transfers to Master Lessor Sublessor's interest in this Sublease, subject however to the provisions of Paragraph 8.2 hereof.
7.2 Master Lessor, by executing this document, agrees that until a Default shall occur in the performance of Sublessor's Obligations under the Master Lease, that Sublessor may receive, collect and enjoy the Rent accruing under this Sublease.  However, if Subleassor shall Default in the performance of its obligations to Master Lessor then Master Lessor may, at its option, receive and collect, directly from Sublessee, all Rent owing and to be owed under this Sublease.  In the event, however, that the amount collected by Master Lessor exceeds Sublessor's obligations any such excess shall be refunded to Sublessor.  Master Lessor shall not, by reason of this assignment of the Sublease nor by reason of the collection of the Rent from the Sublessee, be deemed liable to Sublessee for any failure of the Sublessor to perform and comply with Sublessor's Remaining Obligations.
7.3 Sublessor hereby irrevocably authorizes and directs Sublessee upon receipt of any written notice from the Master Lessor stating that a Default exists in the performance of Sublessor's obligations under the Master Lease, to pay to Master Lessor the Rent due and to become due under the Sublease.  Sublessor agrees that Sublessee shall have the right to rely upon any such statement and request from Master Lessor, and that Sublessee shall pay such Rent to Master Lessor without any obligation or right to inquire as to whether such Default exists and notwithstanding any notice from or claim from Sublessor to the contrary and Sublessor shall have no right or claim against Sublessee for any such Rent so paid by Sublessee.
7.4 No changes or modifications shall be made to this Sublease without the consent of Master Lessor.
8.           Consent of Master Lessor.
8.1 In the event that the Master Lease requires that Sublessor obtain the consent of Master Lessor to any subletting by Sublessor then, this Sublease shall not be effective unless, within 10 days of the date hereof, Master Lessor signs this Sublease thereby giving its consent to this Subletting.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

8.2 In the event that the obligations of the Sublessor under the Master Lease have been guaranteed by third parties then neither this Sublease, nor the Master Lessor's consent, shall be effective unless, within 10 days of the date hereof, said guarantors sign this Sublease thereby giving their consent to this Sublease.
8.3 In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its obligations or alter the primary liability of Sublessor to pay the Rent and perform and comply with all of the obligations of Sublessor to be performed under the Master Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or any one else liable under the Master Lease shall not be deemed a waiver by Master Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a consent to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under the Master Lease, Master Lessor may proceed directly against Sublessor, any guarantors or any one else liable under the Master Lease or this Sublease without first exhausting Master Lessor's remedies against any other person or entity liable thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings and assignments of the Master Lease or this Sublease or any amendments or modifications thereto without notifying Sublessor or any one else liable under the Master Lease and without obtaining their consent and such action shall not relieve such persons from liability.
(f) In the event that Sublessor shall Default in its obligations under the Master Lease, then Master Lessor, at its option and without being obligated to do so, may require Sublessee to attorn to Master Lessor in which event Master Lessor shall undertake the obligations of Sublessor under this Sublease from the time of the exercise of said option to termination of this Sublease but Master Lessor shall not be liable for any prepaid Rent nor any Security Deposit paid by Sublessee, nor shall Master Lessor be liable for any other Defaults of the Sublessor under the Sublease.
(g) Unless directly contradicted by other provisions of this Sublease, the consent of Master Lessor to this Sublease shall not constitute an agreement to allow Sublessee to exercise any options which may have been granted to Sublessor in the Master Lease (see Paragraph 39.2 of the Master Lease).
8.4 The signatures of the Master Lessor and any Guarantors of Sublessor at the end of this document shall constitute their consent to the terms of this Sublease.
8.5 Master Lessor acknowledges that, to the best of Master Lessor's knowledge, no Default presently exists under the Master Lease of obligations to be performed by Sublessor and that the Master Lease is in full force and effect.
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 FORM SBS-5-1/10E

8.6 In the event that Sublessor Defaults under its obligations to be performed under the Master Lease by Sublessor, Master Lessor agrees to deliver to Sublessee a copy of any such notice of default.  Sublessee shall have the right to cure any Default of Sublessor described in any notice of default within ten days after service of such notice of default on Sublessee.  If such Default is cured by Sublessee then Sublessee shall have the right of reimbursement and offset from and against Sublessor.
9.           Additional Brokers Commissions.
9.1 Sublessor agrees that if Sublessee exercises any option or right of first refusal as granted by Sublessor herein, or any option or right substantially similar thereto, either to extend the term of this Sublease, to renew this Sublease, to purchase the Premises, or to lease or purchase adjacent property which Sublessor may own or in which Sublessor has an interest, then Sublessor shall pay to Broker a fee in accordance with the schedule of Broker in effect at the time of the execution of this Sublease.  Notwithstanding the foregoing, Sublessor's obligation under this Paragraph is limited to a transaction in which Sublessor is acting as a Sublessor, lessor or seller.
9.2 If a separate brokerage fee agreement is attached then Master Lessor agrees that if Sublessee shall exercise any option or right of first refusal granted to Sublessee by Master Lessor in connection with this Sublease, or any option or right substantially similar thereto, either to extend or renew the Master Lease, to purchase the Premises or any part thereof, or to lease or purchase adjacent property which Master Lessor may own or in which Master Lessor has an interest, or if Broker is the procuring cause of any other lease or sale entered into between Sublessee and Master Lessor pertaining to the Premises, any part thereof, or any adjacent property which Master Lessor owns or in which it has an interest, then as to any of said transactions, Master Lessor shall pay to Broker a fee, in cash, in accordance with the schedule attached to such brokerage fee agreement.
9.3 Any fee due from Sublessor or Master Lessor hereunder shall be due and payable upon the exercise of any option to extend or renew, upon the execution of any new lease, or, in the event of a purchase, at the close of escrow.
9.4 Any transferee of Sublessor's interest in this Sublease, or of Master Lessor's interest in the Master Lease, by accepting an assignment thereof, shall be deemed to have assumed the respective obligations of Sublessor or Master Lessor under this Paragraph 9.  Broker shall be deemed to be a third-party beneficiary of this paragraph 9.
10.         Representations and Indemnities of Broker Relationships.  The Parties each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Sublease, and that no one other than said named Brokers is entitled to any commission or finder's fee in connection herewith.  Sublessee and Sublessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto.
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 ©1997 – AIR COMMERCIAL REAL ESTATE ASSOCIATION  
 FORM SBS-5-1/10E

11.         Attorney's fees.  If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees.  Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment.  The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense.  The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred.  In addition, Sublessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).
12.         No Prior or Other Agreements; Broker Disclaimer.  This Sublease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.  Sublessor and Sublessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Sublease 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.  The liability (including court costs and attorneys' fees), of any Broker with respect to negotiation, execution, delivery or performance by either Sublessor or Sublessee under this Sublease or any amendment or modification hereto shall be limited to an amount up to the fee received by such Broker pursuant to this Sublease; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
ATTENTION:  NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE 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 SUBLEASE.
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 STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
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 FORM SBS-5-1/10E

WARNING:  IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED
Executed at: 
On: 
By Sublessor:
JUVA LIFE, INC., a California corporation 
  
By: /s/Doug Chloupek 
Name Printed:  DOUG CHLOUPEK 
Title: 
By: 
Name Printed: 
Title: 
Address: 
  
Telephone:(_____) 
Facsimile:(_____) 
Email: 
Email: 
Federal ID No. 
BROKER:
  
  
Attn: 
Title: 
Address: 
  
Telephone:(_____) 
Facsimile:(_____) 
Email: 
Federal ID No. 
Broker/Agent DRE License #: 
  
  
Executed at: 
On: 
By Sublessee:
BEST LEASING SERVICES, INC. 
  
By: /s/Doug Chloupek 
Name Printed:  DOUG CHLOUPEK 
Title: 
By: 
Name Printed: 
Title: 
Address: 
  
Telephone:(_____) 
Facsimile:(_____) 
Email: 
Email: 
Federal ID No. 
BROKER:
  
  
Attn: 
Title: 
Address: 
  
Telephone:(_____) 
Facsimile:(_____) 
Email: 
Federal ID No. 
Broker/Agent DRE License #: 
  
  
Consent to the above Sublease is hereby given.
Executed at: 
On: 
Executed at: 
On: 
 
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 FORM SBS-5-1/10E
 

By Master Lessor:
  
  
By: 
Name Printed: 
Title: 
By: 
Name Printed: 
Title: 
Address: 
  
Telephone:(_____) 
Facsimile:(_____) 
Email: 
Federal ID No. 
By Guarantor(s):
 
 
By: 
Name Printed: 
Address: 
  
By: 
Name Printed: 
Address: 
  

NOTICE:  These forms are often modified to meet changing requirements of law and industry needs.  Always write or call to make sure you are utilizing the most current form:  AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017.  Telephone No. (213) 687-8777.  Fax No.:  (213) 687-8616.
©Copyright 1997 By AIR Commercial Real Estate Association.  All rights reserved.  No part of these works may be reproduced in any form without permission in writing.
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 FORM SBS-5-1/10E

ADDENDUM
Date:  August 1, 2018
By and Between      (Lessor) SUBLESSOR: BEST LEASING SERVICES, INC.
(Lessee) JUVA LIFE, INC.
Address of Premises:  3363 Enterprise Avenue Clawiter Road, Hayward, CA
Paragraph 13
In the event of any conflict between the provisions of this Addendum and the printed provisions of the Lease, this Addendum shall control.
RENT SCHEDULE
     
 
RENT
ADMIN FEE
TOTAL
August 1, 2018-January 31, 2019
$7,812.50
$781.25
$8,593.75
February 1, 2019-January 31, 2020
$8,046.88
$804.69
$8,851.57
February 1, 2020-January 31, 2021
$8,288.29
$828.83
$9,117.12
February 1, 2021-January 31, 2022
$8,536.94
$853.69
$9,390.63
February 1, 2022-January 31, 2023
$8,793.05
$879.31
$9,672.36

Base Rent During the Option Period shall be the same as the Base Rent under the Master Lease plus an admin. fee of 10%.  Lease is NNN. Lessor will invoice, and Lessee will be responsible to pay, all expenses related to property insurance, maintenance, and taxes in addition to rent and utilities.
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STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - GROSS
1.        Basic Provisions ("Basic Provisions").
        1.1   PartiesThis Lease ("Lease"), dated for reference purposes only November 1, 2018, is made by and between William J. Stoesser ("Lessor") and Juva Life, Inc. ("Lessee"), (collectively the "Parties", or individually a "Party").
          1.2   (a)  PremisesThat 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):  465 Convention Way, Unit 1, Redwood City, CA ("Premises").  The Premises are located in the County of San Mateo, and are generally described as (describe briefly the nature of the Premises and the "Project"):  Approximately 1,345 rentable square feet of office/r&d space.  In addition to Lessee's rights to use and occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to any utility 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 collectively referred to as the "Project."  (See also Paragraph 2)
           (b)  Parking3 unreserved vehicle parking spaces.  (See also Paragraph 2.6)
 
     1.3         Term5 years and no months ("Original Term") commencing December 1, 2018 ("Commencement Date") and ending November 30, 2023 ("Expiration 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$6,052.00 per month ("Base Rent"), payable on the first day of each month commencing December 1, 2018.  (See also Paragraph 4)
         If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.  See Paragraph 49.
 
     1.6      Lessee's Share of Common Area Operating Expenses19.4 percent (19.4%) ("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 modification.
 
    /s/WS
 
    /s/DC
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© 2017 AIR CRE. All Rights Reserved.
MTG-24.20, Revised 04-20-2018
Page 1 of 45

 
     1.7         Base Rent and Other Monies Paid Upon Execution:
 
        (a) Base Rent$6,052.00 for the period 12/1/18-12/31/18.
 
        (b) Common Area Operating Expenses_______ for the period _______.
 
(c) Security Deposit$12,104.00 ("Security Deposit").  (See also Paragraph 5)
(d) Other_______ for _______.
(e) Total Due Upon Execution of this Lease$18,156.00.
     1.8      Agreed UseCannabis storage, packaging, distribution/delivery and all lawful related uses.  (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)
        (a)  Representation:  The following real estate brokers (the "Brokers") and brokerage relationships exist in this transaction (check applicable boxes):
 
  Cushman Wakefield represents Lessor exclusively ("Lessor's Broker");
  _______ represents Lessee exclusively ("Lessee's Broker"); or
  _______ represents both Lessor and Lessee ("Dual Agency").
(b)  Payment to Brokers.  Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers the brokerage fee agreed to in a separate written 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 obligations of the Lessee under this Lease are to be guaranteed by n/a ("Guarantor").  (See also Paragraph 37)
       1.12       Attachments.  Attached hereto are the following, all of which constitute a part of this Lease:
           an Addendum consisting of Paragraphs 49 through 49;
 
         a site plan depicting the Premises;
  
  a site plan depicting the Project;
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  a current set of the Rules and Regulations for the Project;
  a current set of the Rules and Regulations adopted by the owners' association;
  a Work Letter;
  other (specify):  _______.
2.          Premises.
    2.1        Letting.  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 conditions set forth in this Lease.  While the approximate square footage of the Premises may have been used in the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied 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 executing this Lease.
    2.2        Condition.  Lessor shall deliver that portion 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 existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning 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 operating condition on said date, that the structural elements of the roof, bearing walls and foundation 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 malfunction or fail within the appropriate warranty period, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure, rectify 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 notice within the appropriate warranty period, correction of any such non‑compliance, malfunction or failure shall be the obligation of Lessee at Lessee's sole cost and expense (except for the repairs to the fire sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7).  Lessor also warrants, that unless otherwise specified in writing, Lessor is unaware of (i) any recorded Notices of Default affecting the Premise; (ii) any delinquent amounts due under any loan secured by the Premises; and (iii) any bankruptcy proceeding affecting the Premises.
    2.3        Compliance.  Lessor warrants that to the best of its knowledge the improvements on the Premises and the Common Areas comply with the building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") that were in effect at the time that each improvement, or portion thereof, was constructed.  Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use (see Paragraph 49), or to any Alterations or Utility Installations (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 after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense.  If Lessee does not give Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date, correction of that non-compliance shall be the obligation of Lessee at Lessee's sole cost and expense.  If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Unit, Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Premises and/or Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows:
 
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         (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 notifies Lessee, in writing, within 10 days after receipt of Lessee's termination notice 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 termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter.  Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize 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 modifications), 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 portion of such costs reasonably attributable to the Premises.  Lessee shall pay Interest on the balance but may prepay its obligation at any time.  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 option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor's termination notice 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 until 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 written notice to Lessor.
 
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         (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 modification 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 satisfy itself with respect to the size and condition 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 Disabilities Act), and their suitability for Lessee's intended use; (c) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises; (d) it is not relying on any representation as to the size of the Premises made by Brokers or Lessor; (e) the square footage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease.  In addition, Lessor acknowledges that:  (i) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.
2.5        Lessee as Prior Owner/Occupant.  The warranties 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 corrective work.
2.6        Vehicle Parking.  Lessee shall be entitled to use the number of Parking Spaces specified in Paragraph 1.2(b) on those portions of the Common Areas designated from time to time 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 "Permitted Size Vehicles."  Lessor may regulate the loading and unloading of vehicles by adopting Rules and Regulations as provided in Paragraph 2.9.  No vehicles other than Permitted Size Vehicles may be parked in the Common Area without the prior written permission of Lessor.  In addition:
(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 activities.
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(b) Lessee shall not service or store any vehicles in the Common Areas.
(c) If Lessee permits or allows any of the prohibited activities described in this Paragraph 2.6, then Lessor shall have the right, without notice, in addition 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 - Definition.  The term "Common Areas" is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Project and interior utility raceways and installations within the Unit that are provided and designated by the Lessor from time to time for the general non-exclusive use of Lessor, Lessee and other tenants of the Project and their respective 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 entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulations or restrictions 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 permitted only by the prior written consent of Lessor or Lessor's designated agent, which consent may be revoked at any time.  In the event that any unauthorized storage shall occur, then Lessor shall have the right, without notice, in addition 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 Regulations.  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 time to time, to establish, modify, amend and enforce reasonable rules and regulations ("Rules and Regulations") for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation 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 Regulations, 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 Regulations by other tenants of the Project.
2.10      Common Areas - Changes.  Lessor shall have the right, in Lessor's sole discretion, from time to time:
          (a) To make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways;
 
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(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 additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any portion 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, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.2       Early Possession.  Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned 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 partially occupies the Premises prior to the Commencement Date, the obligation 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 obligations to pay Lessee's Share of Common Area Operating 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 Expiration 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 Expiration Date.  Lessee shall not, however, be obligated to pay Rent or perform its other obligations until 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 continue 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 after the Commencement Date, as the same may be extended under the terms of any Work Letter executed by Parties, Lessee may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder.  If such written notice 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 after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing.
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3.4        Lessee Compliance.  Lessor shall not be required to tender possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5).  Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance.  Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.
4.   Rent.
        4.1        Rent DefinedAll monetary obligations 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 Operating ExpensesLessee shall pay to Lessor during the term hereof, in addition to the Base Rent, Lessee's Share (as specified in Paragraph 1.6) of all Common Area Operating Expenses, as hereinafter defined, during each calendar year of the term of this Lease, in accordance with the following provisions:
 (a) The following costs relating to the ownership and operation of the Project are defined as "Common Area Operating Expenses":
(i) Costs relating to the operation, repair and maintenance, in neat, clean, good order and condition, but not the replacement (see subparagraph (e)), 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, irrigation systems, Common Area lighting facilities, 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 utilities not separately metered.
 
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(iii)The cost of trash disposal, pest control services, property management, security services, owners' association dues and fees, the cost to repaint the exterior of any structures and the cost of any environmental inspections.
(iv)Reserves set aside for maintenance and repair of Common Areas and Common Area equipment.
(v)Any increase above the Base Real Property Taxes (as defined in Paragraph 10).
(vi)Any "Insurance Cost Increase" (as defined in Paragraph 8).
(vii)Any deductible portion of an insured loss concerning the Building or the Common Areas.
(viii)Auditors', accountants' and attorneys' fees and costs related to the operation, 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 unamortized balance but may prepay its obligation at any time
(x)The cost of any other services to be provided by Lessor that are stated elsewhere in this Lease to be a Common Area Operating Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes that are specifically attributable to the Unit, the Building or to any other building in the Project or to the operation, repair and maintenance thereof, shall be allocated entirely to such Unit, Building, or other building.  However, any Common Area Operating Expenses and Real Property Taxes that are not specifically attributable to the Building or to any other building or to the operation, repair and maintenance thereof, shall be equitably allocated by Lessor to all buildings in the Project.
(c) The inclusion of the improvements, facilities and services set forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor to either have said improvements or facilities 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 Operating 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 estimate of the annual Common Area Operating Expenses.  Within 60 days after written 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 Operating 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 after delivery by Lessor to Lessee of the statement.
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(e) Common Area Operating Expenses shall not include the cost of replacing equipment or capital components such as the roof, foundations, exterior walls or Common Area capital improvements, such as the parking lot paving, elevators, fences that have a useful life for accounting purposes of 5 years or more.
(f) Common Area Operating Expenses shall not include any expenses paid by any tenant directly to third parties, 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 deduction (except as specifically permitted 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 statement or invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute 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 time to time designate in writing.  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 stating.  In the event that any check, draft, 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 addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by cashier's check.  Payments will be applied first to accrued late charges and attorney's fees, second to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount to any other outstanding charges or costs.
5.          Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its obligations under this Lease.  If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion 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 portion of the Security Deposit, Lessee shall within 10 days after written 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 written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial 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 condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional 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 condition.  Lessor shall not be required to keep the Security Deposit separate from its general accounts.  Within 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or applied by Lessor.  Lessor shall upon written request provide Lessee with an accounting showing how that portion 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.
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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 properties.  Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles.  Lessor shall not unreasonably withhold or delay its consent to any written request for a modification 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 after such request give written notification of same, which notice shall include an explanation of Lessor's objections 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, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either:  (i) potentially 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 potential 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 fractions thereof.  Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements.  "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank; (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration 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 notice be given to persons entering or occupying the Premises or neighboring properties.  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 contamination or damage or expose Lessor to any liability therefor.  In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit.
 
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(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 written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance.
(c) Lessee Remediation.  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 investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, 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 Indemnification.  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, liabilities, judgments, claims, expenses, penalties, and attorneys' 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 migration of any Hazardous Substance under the Premises from areas outside of the Project not caused or contributed to by Lessee).  Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.  No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.
(e) Lessor Indemnification.  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 remediation, 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 obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.
 
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(f) Investigations and Remediations.  Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to the Lessee taking possession, unless such remediation measure is required as a result of Lessee's use (including Alterations, 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 activities at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities.
(g) Lessor Termination Option.  If a Hazardous Substance Condition (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 investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice.  In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever is greater.  Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment.  In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after the required funds are available.  If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination.
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 timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations 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 effective after the Start Date.  Lessee shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, 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 written notice to Lessor of:  (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold in the Premises.  Lessee agrees to comply with all federal laws to the extent those laws are not inconsistent with state and local laws allowing Lessee to use the Premises for the Agreed Use.
 
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6.4       Inspection; 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 time in the case of an emergency, and otherwise at reasonable times after reasonable notice, for the purpose of inspecting and/or testing the condition of the Premises and/or for verifying compliance by Lessee with this Lease.  The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see Paragraph 9.1) is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority.  In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination.  In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of written request therefor.  Lessee acknowledges that any failure on its part to allow such inspections or testing will expose Lessor to risks and potentially 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 inspections and/or testing in a timely fashion the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater for the remainder to the Lease.  The Parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee's failure to allow such inspection and/or testing.  Such increase in Base Rent shall in no event constitute 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; Utility Installations; Trade Fixtures and Alterations.
7.1       Lessee's Obligations.
(a) In General.  Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, Utility Installations (intended for Lessee's exclusive use, no matter where located), and Alterations in good order, condition and repair (whether or not the portion 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 portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, 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, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below.  Lessee's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair.
 
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(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 notice 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 obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days' prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof.
(d) Replacement.  Subject to Lessee's indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, 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 Parties 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 multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (i.e. 1/144th of the cost per month).  Lessee shall pay Interest on the unamortized balance but may prepay its obligation at any time.
7.2        Lessor's Obligations.  Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, Common Area fire alarm and/or smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs and utility systems serving the Common Areas and all parts thereof, as well as providing the services for which there is a Common Area Operating 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.
 
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7.3       Utility Installations; Trade Fixtures; Alterations.
(a) Definitions.  The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting 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 "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion.  "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(b) Consent.  Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent.  Lessee may, however, make non-structural Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, do not trigger the requirement for additional modifications and/or improvements to the Premises resulting from Applicable Requirements, such as compliance with Title 24, and the cumulative 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 penetrations and/or install anything on the roof without the prior written approval of Lessor.  Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor.  Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans.  Consent shall be deemed conditioned upon Lessee's:  (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner.  Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials.  Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications.  For work which costs an amount in excess of one month's Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting an additional 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 notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices 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 satisfy 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 participate in any such action, Lessee shall pay Lessor's attorneys' fees and costs.
 
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7.4       Ownership; Removal; Surrender; and Restoration.
(a) Ownership.  Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises.  Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations.  Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises.
(b) Removal.  By delivery to Lessee of written notice 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 Alterations or Utility Installations be removed by the expiration or termination of this Lease.  Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent.
(c) Surrender; Restoration.  Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted.  "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice.  Notwithstanding the foregoing, if the Lessee occupies the Premises for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear.  Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, 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 migration from areas outside of the Premises) 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 Expiration Date or any earlier termination 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 timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below.
 
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8.           Insurance; Indemnity.
8.1       Payment of Premium Increases.
(a) As used herein, the term "Insurance Cost Increase" is defined as any increase in the actual cost of the insurance applicable to the Building and/or the Project and required to be carried by Lessor, pursuant to Paragraphs 8.2(b), 8.3(a) and 8.3(b), over and above the Base Premium, as hereinafter defined, calculated on an annual basis.  Insurance Cost Increase shall include, but not be limited to, requirements of the holder of a mortgage or deed of trust covering the Premises, Building and/or Project, increased valuation of the Premises, Building and/or Project, and/or a general premium rate increase.  The term Insurance Cost Increase shall not, however, include any premium increases resulting from the nature of the occupancy of any other tenant of the Building.  The "Base Premium" shall be the annual premium applicable to the 12 month period immediately preceding the Start Date.  If, however, the Project was not insured for the entirety of such 12 month period, then the Base Premium shall be the lowest annual premium reasonably obtainable for the Required Insurance as of the Start Date, assuming the most nominal use possible of the Building.  In no event, however, shall Lessee be responsible for any portion of the premium cost attributable to liability insurance coverage in excess of $2,000,000 procured under Paragraph 8.2(b).
(b) Lessee shall pay any Insurance Cost Increase to Lessor pursuant to Paragraph 4.2.  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 Expiration Date.
8.2       Liability Insurance.
(a) Carried by Lessee.  Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional 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 additional insured by means of an endorsement at least as broad as the Insurance Service Organization's "Additional Insured-Managers or Lessors of Premises" Endorsement.  The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligations under this Lease.  The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation 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 addition to, and not in lieu of, the insurance required to be maintained by Lessee.  Lessee shall not be named as an additional insured therein.
 
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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 time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof.  Lessee Owned Alterations and Utility Installations, 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, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss.  Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection 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 deductible clause, the deductible 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 additional 180 days ("Rental Value insurance").  Said insurance shall contain an agreed valuation 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 Alterations and Utility Installations unless the item in question has become the property of Lessor under the terms of this Lease.
8.4        Lessee's Property; Business Interruption Insurance; Worker's Compensation Insurance.
(a) Property Damage.  Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations.  Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence.  The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations.
 
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(b) Business Interruption.  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 attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils.
(c) Worker's Compensation Insurance.  Lessee shall obtain and maintain Worker's Compensation Insurance in such amount as may be required by Applicable Requirements.  Such policy shall include a 'Waiver of Subrogation' endorsement.  Lessee shall provide Lessor with a copy of such endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5.
(d) No Representation of Adequate Coverage.  Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease.
8.5       Insurance Policies.  Insurance required herein shall be by companies maintaining during the policy term a "General Policyholders Rating" of at least A-, VII, as set forth in the most current issue of "Best's Insurance Guide", or such other rating 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 certified copies of policies of such insurance or certificates with copies of the required endorsements evidencing the existence and amounts of the required insurance.  No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor.  Lessee shall, at least 10 days prior to the expiration 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 Subrogation.  Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire 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 deductibles applicable hereto.  The Parties agree to have their respective property damage insurance carriers waive any right to subrogation 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       IndemnitySubject to paragraph 8.6 and except 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, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or in connection 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 action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory 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.
 
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8.8       Exemption 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, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions 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 potentially 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 portion thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater.  The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional 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 constitute 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 obligation to maintain the insurance specified in this Lease.
9.           Damage or Destruction.
9.1       Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 3 months or less from the date of the damage or destruction, and the cost thereof does not exceed a sum equal to 6 month's Base Rent.  Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
 
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(b) "Premises Total Destruction" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 3 months or less from the date of the damage or destruction and/or the cost thereof exceeds a sum equal to 6 month's Base Rent.  Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance, in, on, or under the Premises which requires restoration.
9.2       Partial Damage - Insured Loss.  If a Premises Partial 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 Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose.  Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds as and when required to complete said repairs.  In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation 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 written notice 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 written notice to Lessee within 10 days thereafter to:  (i) make such restoration 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 thereafter.  Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction.  Premises Partial 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.
 
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9.3       Partial Damage - Uninsured Loss.  If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a grossly 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 continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage.  Such termination shall be effective 60 days following the date of such notice.  In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice 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 satisfactory assurance thereof within 30 days after making such commitment.  In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available.  If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.
9.4       Total Destruction.  Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction.  If the damage or destruction 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 time 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 or Lessee may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage.  Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by (a) exercising such option 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 after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires.  If Lessee duly exercises such option 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 continue in full force and effect.  If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee's option shall be extinguished.
 
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9.6        Abatement of Rent; Lessee's Remedies.
(a) Abatement.  In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion 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 obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein.
(b) Remedies.  If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than 60 days following the giving of such notice.  If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice.  If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect.  "Commence" shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.
9.7       Termination; Advance Payments.  Upon termination 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 addition, 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     Definitions.
(a) "Real Property Taxes."  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.
 
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(b) "Base Real Property Taxes."  As used herein, the term "Base Real Property Taxes" shall be the amount of Real Property Taxes, which are assessed against the Project, during the entire calendar year in which the Lease is executed.
              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 calculation of Common Area Operating Expenses in accordance with the provisions of Paragraph 4.2.
              10.3     Additional Improvements.  Common Area Operating Expenses shall not include Real Property Taxes specified in the tax assessor's records and work sheets as being caused by additional improvements placed upon the Project by other tenants or by Lessor for the exclusive enjoyment of such other Tenants.  Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time Common Area Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee's request or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the execution of this Lease by the Parties.
      10.4      Joint Assessment.  If the Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available.  Lessor's reasonable determination thereof, in good faith, shall be conclusive.
              10.5     Personal Property Taxes.  Lessee shall pay prior to delinquency all taxes assessed against and levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises.  When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, 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 attributable to Lessee's property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property.
11.    Utilities and Services.  Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon.  Notwithstanding the provisions of Paragraph 4.2, if at any time in Lessor's reasonable sole judgment, Lessor determines that Lessee is using a disproportionate amount of water, electricity or other commonly metered utilities, or that Lessee is generating 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 times per month that it is emptied, then Lessor may allocate the increased costs to Lessee 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, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions.
 
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12.         Assignment and Subletting.
              12.1     Lessor's Consent Required.
          (a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent.
(b) Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent.  The transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, 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 accounting principles.
(d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(d), or a non-curable Breach without the necessity of any notice and grace period.  If Lessor elects to treat such unapproved assignment or subletting as a non-curable Breach, Lessor may either:  (i) terminate this Lease, or (ii) upon 30 days written notice, 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 option 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 injunctive relief.
(f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested.
(g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, i.e. 20 square feet or less, to be used by a third party vendor in connection with the installation of a vending machine or pay phone shall not constitute a subletting.
 
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       12.1     Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, no assignment or subletting shall:  (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations 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 constitute 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 subletting shall not constitute a consent to any subsequent assignment or subletting.
(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 obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor's considering and processing said request.  Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested.  (See also Paragraph 36)
(f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing.
(g) Lessor's consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing.  (See Paragraph 39.2)
 
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              12.3     Additional Terms and Conditions Applicable to Subletting.  The following terms and conditions shall apply to any subletting 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 obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations, Lessee may collect said Rent.  In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations 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 collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee.  Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease.  Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation 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 option, require sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration 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 matter 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 written consent.
(e) Lessor shall deliver a copy of any notice 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 notice.  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, conditions or Rules and Regulations 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 vacating 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 potential vandalism.
 
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(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 obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice 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 constituting public or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee.  In the event that Lessee commits waste, a nuisance or an illegal activity a second time 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 written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (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 documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee.
(e) A Default by Lessee as to the terms, covenants, conditions 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 continues for a period of 30 days after written notice; 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 thereafter diligently prosecutes such cure to completion.
(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 petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially 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 attachment, execution or other judicial seizure of substantially 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.
 
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(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 obligations under this Lease is guaranteed:  (i) the death of a Guarantor, (ii) the termination 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 obligation on an anticipatory basis, and Lessee's failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.
              13.2     Remedies.  If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation 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 notice or demand, and without limiting 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 entitled to recover from Lessee:  (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time 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 obligations 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 reletting, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease.  The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent.  Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover any damages to which Lessor is otherwise entitled.  If termination 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 notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1.  In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute.
 
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(b) Continue 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 limitations.  Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located.  The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters 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 consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease.  Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration 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 initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time 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 accounting 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 after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater.  The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment.  Acceptance of such late charge by Lessor shall in no event constitute 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 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance.
 
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              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 after 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 addition to the potential late charge provided for in Paragraph 13.4.
              13.6     Breach by Lessor.
(a) Notice of Breach.  Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor.  For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished to Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor's obligation 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 thereafter diligently pursued to completion.
(b) Performance by Lessee on Behalf of Lessor.  In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, 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 documentation to Lessor.
14.         Condemnation.  If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title 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 Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after 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 portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation.  Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocation 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 Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor.  In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation.
 
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15.         Brokerage Fees.
              15.1     Additional Commission.  In addition to the payments owed pursuant to Paragraph 1.10 above, Lessor agrees that:  (a) if Lessee exercises any Option, (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, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause herein, then, Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers in effect at the time the Lease was executed.
              15.2     Assumption of Obligations.  Any buyer or transferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obligation 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 addition, if Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent.  In addition, 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 collecting any brokerage fee owed.
              15.3     Representations and Indemnities of Broker Relationships.  Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said named Brokers is entitled to any commission or finder's fee in connection herewith.  Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto.
16.         Estoppel Certificates.
 
(a) Each Party (as "Responding Party") shall within 10 days after written notice from the other Party (the "Requesting Party") execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published BY AIR CRE, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party.
 
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(b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that:  (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not more than one month's rent has been paid in advance.  Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.  In addition, Lessee acknowledges that any failure on its part to provide such an Estoppel Certificate will expose Lessor to risks and potentially 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 Certificate in a timely fashion the monthly Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater for remainder of the Lease.  The Parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee's failure to provide the Estoppel Certificate.  Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to provide the Estoppel Certificate 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 after written notice from Lessor deliver to any potential 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.         Definition of Lessor.  The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee title 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 title 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 obligations and/or covenants under this Lease thereafter to be performed by the Lessor.  Subject to the foregoing, the obligations 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 jurisdiction, 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.         Limitation on LiabilityLessee shall look to the Project and its rents, issues, and profits, proceed of sale and condemnation or insurance recoveries, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against the individual directors, officers, shareholders, members, or managers of Lessor.
 
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The obligations of Lessor under this Lease shall not constitute personal obligations 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 satisfaction 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 satisfaction.
 
21.        Time of Essence.  Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.
 
22.         No Prior or Other Agreements; Broker Disclaimer.  This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.  Lessor and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation 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.         Notices.
 
             23.1      Notice Requirements.  All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified 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 notices.  Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice.  A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.
 
             23.2      Date of Notice.  Any notice sent by registered or certified 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 notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid.  Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier.  Notices delivered by hand, or transmitted by facsimile transmission or by email shall be deemed delivered upon actual receipt.  If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
 
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24.        Waivers.
 
             (a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition 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 conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.
(c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.
25.         Disclosures Regarding The Nature of a Real Estate Agency Relationship.
 
(a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction.  Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows:
(i) Lessor's Agent.  A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor only.  A Lessor's agent or subagent has the following affirmative obligations:  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 duties.  (b) A duty of honest and fair dealing and good faith.  (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties.  An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.
(ii) Lessee's Agent.  An agent can agree to act as agent for the Lessee only.  In these situations, the agent is not the Lessor's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor.  An agent acting only for a Lessee has the following affirmative obligations.  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 duties.  (b) A duty of honest and fair dealing and good faith.  (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties.  An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.
 
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(iii) Agent Representing Both Lessor and Lessee.  A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee.  In a dual agency situation, the agent has the following affirmative obligations 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 duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii).  In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a higher rent than that offered.  The above duties of the agent in a real estate transaction 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 transaction.  A real estate agent is a person qualified to advise about real estate.  If legal or tax advice is desired, consult a competent professional.
(b) Brokers have no responsibility with respect to any default or breach hereof by either Party.  The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys' 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 limitation 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 identify to Brokers as "Confidential" any communication or information given Brokers that is considered by such Party to be confidential.
26.         No Right To Holdover.  Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease.  In the event that Lessee holds over, then the Base Rent shall be increased to 125% 150% of the Base Rent applicable immediately preceding the expiration or termination.  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.         Cumulative Remedies.  No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.
 
28.         Covenants and Conditions; Construction of Agreement.  All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions.  In construing this Lease, all headings and titles are for the convenience of the Parties 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 Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.
 
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29.         Binding Effect; Choice of Law.  This Lease shall be binding upon the parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are located.  Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.
 
30.         Subordination; Attornment; Non-Disturbance.
 
             30.1     Subordination.  This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, 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 obligation to perform any of the obligations of Lessor under this Lease.  Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.
 
             30.2     Attornment.  In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn 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 election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations, 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 acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner.
 
             30.3     Non-Disturbance.  With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination 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 options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises.  Further, within 60 days after the execution 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-existing 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 option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.
 
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    30.4     Self-Executing.  The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein.
 
31.        Attorneys' Fees.  If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees.  Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment.  The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense.  The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred.  In addition, Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).
 
32.        Lessor's Access; Showing Premises; Repairs.  Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, 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 activities shall be without abatement of rent or liability to Lessee.
 
33.        Auctions.  Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent.  Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
 
34.        Signs.  Lessor may place on the Premises ordinary "For Sale" signs at any time 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 written consent.  All signs must comply with all Applicable Requirements.
 
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35.        Termination; Merger.  Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies.  Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such interest.
 
36.         Consents.  All requests for consent shall be in writing.  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', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor.  Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent.  The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given.  In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within 10 business days following such request.
 
37.         Guarantor.
 
             37.1      Execution.  The Guarantors, if any, shall each execute a guaranty in the form most recently published BY AIR CRE
 
             37.2      Default.  It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide:  (a) evidence of the execution 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 certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.
 
38.         Quiet Possession.  Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, following applicable written notice and expiration of any applicable cure period, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof.
 
39.         Options.  If Lessee is granted any option, as defined below, then the following provisions shall apply.
 
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             39.1      Definition.  "Option" 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      Options Personal To Original Lessee.  Any Option 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 certifying that Lessee has no intention of thereafter assigning or subletting.
 
              39.3     Multiple Options.  In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been validly exercised.
 
             39.4      Effect of Default on Options.
 
          (a) Lessee shall have no right to exercise an Option:  (i) during the period commencing with the giving of any notice of Default and continuing until said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.
 
(b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an Option because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice 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 obligation whatsoever to provide same.  Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
41.         Reservations.  Lessor reserves the right:  (i) to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, (ii) to cause the recordation of parcel maps and restrictions, and (iii) to create and/or install new utility raceways, so long as such easements, rights, dedications, maps, restrictions, and utility 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.
 
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© 2017 AIR CRE. All Rights Reserved.
MTG-24.20, Revised 04-20-2018
Page 41 of 45

 
42.        Performance Under Protest.  If at any time 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 obligation 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 institute suit for recovery of such sum.  If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.  A Party who does not initiate 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; Multiple Parties; Execution.
 
          (a) If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity 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 after request, deliver to the other Party satisfactory evidence of such authority.
 
        (b) If this Lease is executed by more than one person or entity as "Lessee", each such person or entity 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 Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
44.         Conflict.  Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions.
45.         Offer.  Preparation 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 until executed and delivered by all Parties hereto.
 
46.         Amendments.  This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification.  As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.
 
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© 2017 AIR CRE. All Rights Reserved.
MTG-24.20, Revised 04-20-2018
Page 42 of 45

 
47.         Waiver of Jury TrialTHE 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.        Arbitration of Disputes.  An Addendum requiring the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease is is not attached to this Lease.
 
49.         Accessibility; Americans with Disabilities Act.
 
(a) The Premises:
         have not undergone an inspection by a Certified Access Specialist (CASp).  Note:  A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law.  Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant.  The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.
         have undergone an inspection by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction-related accessibility standards pursuant to California Civil Code §55.51 et seq.  Lessee acknowledges that it received a copy of the inspection report at least 48 hours prior to executing this Lease and agrees to keep such report confidential.
         have undergone an inspection by a Certified Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construction-related accessibility standards pursuant to California Civil Code §55.51 et seq.  Lessee acknowledges that it received a copy of the inspection report at least 48 hours prior to executing this Lease and agrees to keep such report confidential except as necessary to complete repairs and corrections of violations of construction related accessibility standards.
In the event that the Premises have been issued an inspection report by a CASp the Lessor shall provide a copy of the disability access inspection certificate to Lessee within 7 days of the execution of this Lease.
(b) Since compliance with the Americans with Disabilities Act (ADA) and other state and local accessibility statutes are dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation.  In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in compliance with ADA or other accessibility statutes, Lessee agrees to make any such necessary modifications and/or additions at Lessee's expense.
 
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MTG-24.20, Revised 04-20-2018
Page 43 of 45

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 parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.
 
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© 2017 AIR CRE. All Rights Reserved.
MTG-24.20, Revised 04-20-2018
Page 44 of 45

Executed at:  11/12/2018
On:  11/12/2018 10:58:51 AM PST
By LESSOR:
William J. Stoesser
By:/s/ William J. Stoesser 
Name Printed:  William J. Stoesser
Title: 
Phone: 
Fax: 
Email:  bjstoesser@hotmail.com
Executed at:  Morgan Hill CA
On:  11/9/2018 3:43:02 PM PST
By LESSEE:
Juva Life, Inc.
By:/s/Doug Chloupek 
Name Printed:  Doug Chloupek
Title:  CEO
Phone:  408-667-9727
Fax: 
Email:  doug@juvalabs.com
By: 
Name Printed: 
Title: 
Phone: 
Fax: 
Email: 
Address:  465 Convention Way
Redwood City, CA 94063
Federal ID No.: 
By: 
Name Printed: 
Title: 
Phone: 
Fax: 
Email: 
Address:  177 Park Ave, Suite 220
San Jose, CA 95113
Federal ID No.:  83/1393046
BROKER
Cushman & Wakefield
Attn:  Ted Eyre
Title: 
Address:  1950 University Ave, #220
E. Palo Alto, CA 94303
Phone:  (650) 320-0216
Fax: 
Email:  ted.eyre@cushwake.com
Federal ID No.: 
Broker/Agent BRE License #:  01880493/00897564
BROKER
  
Attn: 
Title: 
Address: 
Phone: 
Fax: 
Email: 
Federal ID No.: 
Broker/Agent BRE License #: 

AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777,
Email contracts@aircre.com NOTICE:  No part of these works may be reproduced in any form without permission in writing.
 
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© 2017 AIR CRE. All Rights Reserved.
MTG-24.20, Revised 04-20-2018
Page 45 of 45

ADDENDUM
Date:
November 1, 2018
By and Between
 
Lessor:
William J. Stoesser
Lessee:
Juva Life, Inc.
Property Address:
465 Convention Way, Unit 1, Redwood City, CA
(street address, city, state, zip)

Paragraph:  _______________
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. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777,
Email contracts@aircre.com NOTICE:  No part of these works may be reproduced in any form without permission in writing.
49. Base Rent Increases:  The Base Rent described in Paragraph 1.5 shall be adjusted as per the following Base Rent Schedule:
Rent Period
Base Rental Rate
Monthly Base Rate
12/1/18-11/30/19
$4.50
$6,052.00
12/1/19-11/30/20
$4.635
$6,234.00
12/1/20-11/30/21
$4.774
$6,421.00
12/1/21-11/30/22
$4.917
$6,614.00
12/1/22-11/30/23
$5.065
$6,812.00

 
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© 2017 AIR CRE. All Rights Reserved.
MTG-24.20, Revised 04-20-2018



Consulting Services Agreement

Date: August 24, 2018
Client: Juva Life Inc.
Address: 633 San Juan Ave. Stockton, CA 95203
Phone # (831) 521-1323 (Contact Neil Ruditsky)
Email:  Ruditsky@hotmail.com Other #: 

1.
IDENTIFICATION OF PARTIES. This agreement, is made between DRIVON CONSULTING referred to hereafter as "Consultant," and Juva Life Inc., hereafter referred to as "Client".
2.
CONSULTING SERVICES TO BE PROVIDED. The Consulting services to be provided by Consultant to Client are as follows: Representation of Client with respect to Cannabis/Agricultural Industry Regulatory Consulting and Compliance in Stockton, California and surrounding Central Valley jurisdictions including but not limited to San Joaquin County from August 23, 2018 until April 30, 2019, work shall include specifically:
i. Initial Conference with Client to receive relevant information regarding Client's business entity and profile;
ii. Regular participation on client's behalf in City workshops relevant to Client's projects;
iii.  Set in person meetings with Client Meet to confer with members of Stockton City Council, Stockton Planning Commission, Stockton Community Development Department, and Stockton Police Department to advocate for expansion of local licensure (Type 11 - Distributor, Type 7 Manufacturer, Type 10 - Retail Delivery) to accomplish and accommodate Client's project specifications;
iv. Presentation and advocacy of Client interests before Stockton Planning Commission and Stockton City Council;
 
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CONSULTING SERVICES AGREEMENT

v. Monthly progress reports regarding amendments to Stockton's 'Measure P' regulatory ordinance and any relevant communications between Consultant and interested parties related thereto.
vi. Monthly updates as to the availability of regulatory developments and eligible locations for expansion of Client's operations in the San Joaquin Valley Region.
vii. Actively seek available permit opportunities in all categories in jurisdictions across the Central Valley. Client agrees to pay consultant in separate agreement $2,500/month for 36 months for every retail permit, and $1,500/month for 36 months for every additional cultivation, distribution, or manufacturing permit consultant is successful in obtaining for client outside of Stockton, CA.

3.
CONSULTING SERVICES SPECIFICALLY EXCLUDED. Consulting services that are not to be provided by Consultant under this agreement specifically include, but are not limited to, the following: representation with respect to (a) any criminal action brought against client by the State of California, The United States of America or any other prosecutorial body, (b) any financial transaction related to client's current business interests, (c) any preparation or submittal of an application for administrative hearing related to obtaining commercial licensing, (d) any technical or logistical management of client's project site or personnel (e) any appeal from an administrative decision rendered by any governmental or regulatory entity in which Client is an appellant from judgment on client's application for commercial licensing.
If Client wishes that Consultant provide any services not to be provided under this agreement, a separate written agreement between Consultant and Client will be required.
4.
RESPONSIBILITIES OF CONSULTANT AND CLIENT. Consultant will perform the Consulting services called for under this agreement, keep Client informed of progress and developments, and respond promptly to Client's inquiries and communications. Client will be truthful and cooperative with Consultant and keep Consultant reasonably informed of developments and of Client's address, telephone number, and whereabouts.
5.
CONSULTANT 'S FEES. The amount Consultant will receive for Consultant 's fees for the consulting services to be provided under this agreement will be:
(a) An initial non-refundable $5,000 dollar retainer, plus reasonable costs including airfare, hotel accommodations and other related incidentals; and $3,000.00 per month, on a month to month basis thereafter.
(b) any other legal compensation deemed reasonable and agreeable to both consultant and client
(c) All Consultant fees will be considered earned upon receipt and paid upfront in the form of a nonrefundable true retainer. This means the entire lump sum paid by client up front, prior to the rendering of services contemplated between the parties under this agreement. Upon payment of said non-refundable true retainer, the retainer will be drawn against or debited by consultant upon performance of consulting services at a rate specified above.
CLIENT IS INFORMED THAT THIS CONSULTANT'S FEE IS NOT SET BY LAW BUT RATHER IS NEGOTIABLE BETWEEN THE CONSULTANT AND THE CLIENT.
6.
CONSULTANT ASSOCIATION. Client is aware that Consultant may associate and consult with other parties regarding his or her case to better represent Client. Consultant may pay at the Consultants expense for advice, motions, court appearances of other Counsel to assist in the preparation of Client's case and in furtherance of this agreement. This will not increase the fees quoted and agreed upon in this fee agreement.
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CONSULTING SERVICES AGREEMENT

7.
COSTS. Consultant may advance "costs" related to Consultant's representation of Client under this agreement. Consultant will be reimbursed by client for such costs as may be considered reasonable between the consultant and client. Costs include, but are not limited to, travel expenses, expert fees and expenses, investigation costs, long-distance telephone charges, messenger service fees, photocopying expenses, and process server fees.
8.
REPRESENTATION OF ADVERSE INTERESTS. Client is informed that the Rules of Professional Conduct of the State Bar of California require the client's informed written consent before consultant may begin or continue to represent the client when the consultant has or had a relationship with another party interested in the subject matter of the consultant 's proposed representation of the client. consultant is not aware of any relationship with any other party interested in the subject matter of consultant 's services for Client under this agreement. So long as consultant 's services for client continue under this agreement, consultant will not agree to provide consulting services for any such party without client's prior written consent.
Protected Information.

(a) Definition.  For purposes of this Agreement, "Protected Information" means:  (i) all proprietary information of Company, whether oral or in writing or in any other medium, relating to the management, operations, products, data and inventions of the Company and its affiliated and related companies, if any; (ii) all information marked or designated by Company as confidential; (iii) all information, whether or not in written or other tangible form and whether or not designated as confidential, which is treated by Company as confidential; and (iv) all information provided to Company by third parties which Company is obligated to keep confidential.  Without limiting the foregoing, Protected Information includes patents, patent applications, inventions (whether or not patentable), discoveries, trade secrets, copyrights, trademarks, information related to or underlying such intellectual property rights and other proprietary information, know-how, ideas, drawings, specifications, data including clinical and preclinical data, techniques, models, designs, formulations, ingredients, samples, processes, testing procedures, computer programs, documentation, processing and control information, research plans and results, experimental work, product data, manuals, supplier lists, purchase and sales records, customer lists, marketing plans, product pricing information, financial information, that (i) the Company owns or has any rights in or (ii) arises out of Consultant's performance of Services, including, but not limited to, any Developments and all information relating to Consultant's analysis of the Protected Information.

Notwithstanding the previous paragraph, Protected Information excludes any information that (i) is or becomes part of the public domain through no act or failure to act on the part of Consultant; (ii) is furnished to Consultant by a third party without restriction on disclosure, where such third party obtained such information and the right to disclose it to the receiving party without violation of any rights which Company may have in such information; or (iii) has been independently developed by Consultant (as evidenced by Consultant's written records) before or after the date of this Agreement without any use of Protected Information or violation of any rights which Company may have in such information. In any dispute between the parties with respect to the exclusions in this paragraph, the burden of proof is on Consultant and such proof must be established by clear and convincing evidence.

(b) Consultant's  Obligation's .  Consultant must:

(i) not disclose Protected Information, directly or indirectly, to any third person without the Company's express prior written consent;
 
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CONSULTING SERVICES AGREEMENT


(ii) not use any Protected Information for any purpose other than for the purposes of performing Services hereunder;

(iii)             hold and maintain Protected Information in trust and confidence for the benefit of Company;

(iv)             not copy, transmit, reproduce, summarize, quote or make any commercial or other use of any Protected Information except for the purposes of performing Services hereunder;

(v) inform all persons having access to Protected Information of the confidential nature thereof and of Consultant's obligations hereunder; and

(vi)             take reasonable security precautions and such other actions as may be necessary, and exercise the same degree of care as Recipient accords to Recipient's own similar Protected Information, but under no circumstances less than reasonable care, to insure that there is no use or disclosure of Protected Information in violation of this Agreement.

No Conflicting ObligationsExcept for pending retail applications for clients already represented by Consultant in jurisdictions with a limited number of retail permits to be issued, Consultant represents that the performance of Services for Company under this Agreement will not conflict with, violate, or result in a breach of, any term of employment, non-disclosure, proprietary information and inventions agreement or any other agreements, understandings or obligations that Consultant may have to any other person or entity. Consultant further agrees that Consultant will not use in the course of performing Services for, or disclose to, Company any confidential information of any other person or entity without the prior written consent of that person or entity. Consultant will indemnify and hold harmless Company from and against any and all liability, loss, cost, expense, damage, claims or demands for actual or alleged violations of the rights of others by reason of Consultant's performance of Services under this Agreement or Company's receipt or use of confidential information wrongfully disclosed by Consultant to Company. In addition, Consultant agrees, during the term of this Agreement, not to enter into or engage in, without Company's express prior written consent, any employment, consulting or business activity, agreement or arrangement that in any way conflicts with Consultant's performance of Services on behalf of the Company or which is competitive with the Company, or which would otherwise conflict with, Consultant's relationship with the Company.  For the avoidance of doubt, the Company acknowledges and agrees that during the term of this Agreement Consultant may perform other employment or consulting services which do not conflict with Consultant's performance of Services on behalf of the Company, which are not competitive with the Company, or which do not otherwise conflict with Consultant's relationship with the Company

9.
Independent Contractor. Consultant agrees that Consultant is an independent contractor to Company, that Consultant is not by this Agreement constituted or appointed the legal representative or agent of Company, and that Consultant does not have the right or authority to make any representation, warranty, guarantee or commitment or assume, execute or incur any liability or any obligation of any kind, express or implied, against or in the name of or on behalf of Company, whether directly or indirectly.
10.
     CONSULTANT'S LIEN. Consultant will have a lien for consultant 's fees and costs advanced on all efforts that are the subject of representation of client under this agreement.
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CONSULTING SERVICES AGREEMENT

11.
     DISCHARGE OF CONSULTANT. Client may discharge consultant at any time by written notice effective when received by consultant. Unless specifically agreed by consultant and client, consultant will provide no further services and advance no further costs on client's behalf after receipt of the notice. If consultant is client's consultant of record in any matter, client will execute and return a notice of disengagement immediately on its receipt from consultant. Notwithstanding the discharge, client will be obligated to pay consultant for all services provided and to reimburse consultant for all costs advanced.
12.
     WITHDRAWAL OF CONSULTANT. Consultant may withdraw at any time as permitted under the Rules of Professional Conduct and laws under the Business and Professions Code. The circumstances under which the Rules permit such withdrawal include, but are not limited to, the following: (a) The client consents, and (b) the client's conduct renders it unreasonably difficult for the consultant to carry out the employment effectively. Notwithstanding consultant's withdrawal, client will be obligated to pay consultant for all services provided, and to reimburse consultant for all costs advanced, before the withdrawal.
13.
     RELEASE OF CLIENT'S PAPERS AND PROPERTY. At the termination of services under this agreement, consultant will release promptly to client on request all of client's papers and property. "Client's papers and property" include correspondence, transcripts, exhibits, experts' reports, legal documents, physical indicia, and other items reasonably necessary to client's representation, whether client has paid for them or not.
14.
     DISCLAIMER OF GUARANTY. Although consultant may offer an opinion about possible results regarding the subject matter of this agreement, consultant cannot guarantee any particular result. Client acknowledges that consultant has made no promises about the outcome and that any opinion offered by consultant in the future will not constitute a guaranty.
15.
     ENTIRE AGREEMENT. This agreement contains the entire agreement of the parties. No other agreement, statement, or promise made on or before the effective date of this agreement will be binding on the parties.
16.
     SEVERABILITY IN EVENT OF PARTIAL INVALIDITY. If any provision of this agreement is held in whole or in part to be unenforceable for any reason, the remainder of that provision and of the entire agreement will be severable and remain in effect.
17.
     MODIFICATION BY SUBSEQUENT AGREEMENT. This agreement may be modified by subsequent agreement of the parties only by an instrument in writing signed by both of them or an oral agreement to the extent that the parties carry it out.
18.
     ARBITRATION OF FEE DISPUTE. If a dispute arises between Consultant and Client regarding consultant's fees under this agreement and Consultant files suit in any court other than small claims court, Client will have the right to stay that suit by timely electing to arbitrate the dispute under Business and Professions Code sections 6200-6206, in which event Consultant must submit the matter to such arbitration.
19.
     ATTORNEY'S FEES AND COSTS IN ACTION ON AGREEMENT. The prevailing party in any action or proceeding to enforce any provision of this agreement will be awarded reasonable attorney's fees and costs incurred in that action or proceeding or in efforts to negotiate the matter.
20.
     EFFECTIVE DATE OF AGREEMENT. The effective date of this agreement will be the date when, having been executed by Client, one copy of the agreement is received by Attorney.
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CONSULTING SERVICES AGREEMENT


ACCEPTED AND AGREED


 
Dated: ______________________
 
 
/s/Neil Ruditsky
________________________________ 
NEIL RUDITSKY, COO, JUVA LIFE INC.
 
 
 
 
 
Dated: ______________________
 
 
/s/Zach Drivon
________________________________ 
ZACH DRIVON, CONSULTANT
 


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CONSULTING SERVICES AGREEMENT

DRIVON CONSULTING
2904 Pacific Ave. Stockton
Stockton, CA 95204 
 
 
 
(209) 915-5516
 
email:zach@drivonconsulting.com

AUTHORIZATION OF REPRESENTATION


CLIENT NAME: ____________________________________________


DATE OF AGREEMENT: ___________________________________________


Pursuant to Section 2695 (c) of the California Code of Regulations, Title 10, Chapter 5, I authorize Zach Drivon of DRIVON CONSULTING, my Consultant and his staff, to handle my affairs under the above- captioned Agreement.

This authorization shall remain valid for only eight months from the below date unless renewed or revoked by the undersigned. ANY AND ALL PRIOR AUTHORIZATIONS ARE HEREBY REVOKED BY THE UNDERSIGNED AS OF THE DATE OF THIS AUTHORIZATION.



___________________________________________
Signature of Client



___________________________________________
Printed Name of Client



___________________________________________
Date Executed



___________________________________________
Address


___________________________________________
Telephone Number

 
AUTHORIZATION OF REPRESENTATION




THIS CONSULTING AGREEMENT is made effective as of August 01, 2018, between Juva Life, Inc. ("JUVA") and with a business address at 2880 Zanker Road, Ste. 203, San Jose, CA 95134 and Jackson and Main, LLC, a Limited Liability Company engaged in the consulting business with a business address of 10 Jackson Street, Suite 105, Los Gatos, California 95030 ("Consultant").

RECITALS OF FACT

A.
JUVA desires to engage the services of a consultant with experience in the areas of government affairs and policy analysis services.

B.
Consultant is experienced in those areas of consulting and is willing to render services to JUVA.

Now, therefore, for good and valuable consideration, JUVA and Consultant agree as follows:

Article 1.  Engagement and Scope of Work

Subject to the terms and conditions of this Agreement, JUVA engages Consultant, and Consultant hereby accepts such engagement, to perform services for JUVA in the areas of governmental affairs and policy analysis for the Medical Marijuana Dispensary / Facility in the City of San Jose, County of Santa Clara, California.  Consultant will assist and provide strategic advice to and perform necessary government relations related to the following:

1)
City of Hayward
a.
Set up in person meetings with each council member to get them to either
i.
recommend approval project(s)
ii.
change the scoring level from 650 to 625 to allow projects to be considered
2)
 City of Mountain View
a.
Assist with the City of Mountain View. JUVA will go and secure property, but want to make sure we are one of the groups to be considered and want to be part of the conversation
3)
City of Santa Clara
a.
Assist with government relations and lobby on behalf of client to increase odds of selection for a retail storefront license. Assist in creating meetings to get in front of key staff to increase said odds.
4)
City of Morgan Hill
a.
Assist with government relations and lobby on behalf of client to increase odds of selection for a retail storefront license. Assist in creating meetings to get in front of key staff to increase said odds.
5)
City of Redwood City
a.
Assistance in securing a Non-Storefront Delivery License with the intent of JUVA to open a retail storefront dispensary when permitted. Also, Consultant to advocate and assist in creating a criteria to be adopted by the city for a preference of an existing non-storefront delivery operation for a storefront dispensary license.
1

6)
Santa Clara County
a.
Cultivation
7)
On-going business development work as outlines below including but not limited to "A)", "B)" and "C)" below.

For an additional fee to be negotiated in a separate agreement(s) the following:
A) City of Hollister Cultivation / Manufacturing / Delivery;
B) New dispensary or cultivations or manufacturing or licenses in locations throughout the cities in the South Bay / Silicon Valley / Monterey Bay or San Benito greater areas
C) Other projects outside the scope of items 1-10 listed in above paragraph

Consultant shall perform all services in accordance with (a) the highest professional standards and practices prevailing in Santa Clara County, California, (b) all applicable laws, rules and regulations, and (c) in compliance with any of JUVA's policies and procedures applicable to independent contractors and delivered in writing to Consultant at the time that JUVA executes this Agreement.

Article 2.  Compensation for Services

For Consultant's services rendered under this Agreement, JUVA shall pay to Consultant a fee computed as follows:

For Services under Article 1 above (items 1-9), the sum of Eight Thousand Three Hundred Thirty-Three Dollars ($8,333.00) per month payable on the first of each month.  Initial payment of $8,333.00 will be made upon execution and applicable toward the month of August 2018.

All fees due to Consultant under subparagraph A shall be paid to Consultant in check form, wire form, cash or the equivalent at Consultant's business office.

JUVA shall reimburse Consultant for reasonable out-of-pocket expenses incurred in rendering services under this Agreement, provided that JUVA shall have the right to approve in advance in writing any single expense exceeding $500.

Article 3.  Term of Agreement and Termination

This Agreement shall become effective as of August 01, 2018 and shall terminate upon the later of (a) July 31, 2019 or (b) upon termination of this Agreement in accordance with this Article 3.

Consultant may terminate this Agreement without cause by giving written notice to JUVA thirty (30) days in advance of the date of such termination.  A termination of Consultant by JUVA without cause shall not serve to relieve JUVA from its obligation to honor the terms of this entire agreement, especially Article 2, for the full term.
2


Not withstanding the foregoing JUVA may terminate this Agreement for cause, immediately and with written notice to Consultant, upon Consultant's material breach of this Agreement.  A material breach shall consist of either (a) Consultant's willful and total cessation of services or (b) Consultant's violation of any law or any written policy or procedure delivered by JUVA to Consultant under Article 1 and 5 breach of any material term contained in this agreement.  No such termination shall excuse JUVA from payment of Consultant's fee earned prior to the effective date of termination.

Article 4.  Terms of Payment

Consultant shall provide services as an independent contractor to JUVA and not as an employee.  Accordingly, JUVA will not withhold from any payments any amounts for income taxes, Social Security contributions, unemployment or workers' compensation insurance or other purposes, which obligations shall be the sole responsibility of the Consultant.  Consultant is not entitled to any of the employee benefits provided by JUVA to its employees (including without limitation any insurance, medical, workers' compensation, vacation, profit sharing, retirement, disability, pension, or other welfare or benefit plan of JUVA.

Article 5.  Confidentiality

(a) Consultant shall keep confidential all information, oral or written, obtained by Consultant in the course of performing Services under this Agreement. Consultant shall not disclose to any party other than JUVA any reports, analyses, conclusions or recommendations of any type developed by Consultant in performing the Services.  This obligation of Consultant shall be of a continuing nature and shall not be canceled by the termination of this Agreement.  Consultant further agrees that if, due to its performance of the Services, JUVA considers that Consultant may obtain knowledge or access to privileged, secret or otherwise confidential technology or other information provided to JUVA from any third parties under agreements, Consultant will comply with any request of JUVA to sign reasonable nondisclosure, secrecy, or confidentiality agreements related to such information with such third parties.  This obligation of confidentiality shall not apply to information (i) that is previously known, or available, to Consultant on an unrestricted and non-confidential basis; (ii) that is, or becomes a part of the public domain; or (iii) that is learned by consultant from a third party who has obtained such information free of any obligation of confidentiality.

Article 6.  Ownership of Work Product

Title to all tangible work product, designs, concepts, plans, slogans, trademarks, software, reports, processes, specifications, working papers and other materials created by Consultant alone in connection with the Services (the "Work Product") shall vest solely in JUVA; and Consultant shall deliver the same, together with all supporting documentation, materials and files, promptly to JUVA upon the request of JUVA or the termination of this Agreement.  The Work Product and any part thereof, may be used by JUVA in whole or in part or in modified form for such purposes as JUVA in its sole and absolute discretion, deems desirable, without further notice or compensation to Consultant or any other person.  All Work Product prepared by Consultant and its employees under this Agreement is prepared as "works made for hire" as that term is defined in Section 101 of Title 17 of the United States Code, and all title, ownership and copyright privileges are and shall at all times be in JUVA.  If for any reason JUVA may be deemed not to have commissioned a "work made for hire" and its rights to copyright are hereby in doubt, Consultant agrees that this Agreement shall constitute an irrevocable and total assignment to JUVA of all rights in the work prepared for JUVA.
3


 Article 7.  Status

Consultant is an independent contractor of JUVA and not an employee or agent.  Consultant shall have no authority to enter into any contract or assume any obligation on behalf of JUVA without the prior written consent of JUVA.  Consultant shall alone determine how and when to perform Services and will not be supervised by JUVA in the performance of Services, particularly with respect to the manner and details in which such services are performed.

THIS AGREEMENT IS NON-EXCLUSIVE.  CONSULTANT AGREES TO DEVOTE SUCH TIME TO PERFORM SERVICES UNDER THIS AGREEMENT AS IS NECESSARY OR APPROPRIATE. JUVA ACKNOWLEDGES THAT CONSULTANT WILL ENGAGE IN OTHER BUSINESS ACTIVITIES DURING THE TERM OF THIS AGREEMENT AND MAY BE EMPLOYED OR RETAINED BY OTHERS INCLUDING, BUT NOT LIMITED TO, OTHER MEDICAL MARIJUANA COLLECTIVES, DISPENSARIES, CULTIVATIONS, MANUFACTURING FACILITIES OR ANY OTHER MEDICAL MARIJUANA RELATED AND NON-RELATED BUSINESSES.

THE ONLY EXCEPTION(S) TO THE ABOVE NON-EXCLUSIVE AGREEMENT IS THAT CONSULTANT WILL NOT WORK WITH THOSE PERSONS OR PARTIES LISTED IN "ATTACHMENT – A" OF THIS AGREEMENT. THE EXCEPTION(S) MUST BE LISTED ON "ATTACHMENT – A" OR ARE INVALID.

Article 8.  Arbitration

Any controversy or any claim involving a monetary claim in excess of $5,000 arising out of or relating to this Agreement or any breach thereof, shall be resolved finally by binding arbitration conducted in San Jose, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  The arbitration shall be before a single arbitrator mutually selected and agreed upon by both parties.  If the parties are not able to agree to a single arbitrator within ten (10) days of the demand of either party for arbitration, either party may initiate arbitration by application to the AAA.  The parties shall have the right to discovery under the California Code of Civil Procedure.  The prevailing party shall be awarded its reasonable attorneys' fees and other costs of the arbitration and for enforcement of any judgment, in addition to any other relief awarded by the arbitrator.

Article 9.  Indemnity

JUVA shall indemnify Consultant against, and shall hold Consultant harmless from, any and all claims arising from JUVA's acts and omissions with respect to any business transaction, including without limitation the daily operation of the facility and development and construction of the subject site and acts and omissions by any business entity in which Equity exists, except to the extent that the claim arises solely from the acts or omissions of Consultant.

Similarly, the consultant shall indemnify consultant from any errors, acts or omissions with respect to its conduct beyond the span control of JUVA of the terms and conditions of this agreement.
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Article 10.  Binding Effect

The obligations of JUVA under this Agreement shall bind JUVA, its trustees, beneficiaries, partners, shareholders, principals, assignees, and affiliates.
 
Article 11.  Miscellaneous
(a)
Any modification or amendment to this Agreement must be in writing and executed by duly authorized representatives of each party.

(b)
This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and correspondence, whether oral or written, with respect to the same subject matter.

(c)
This Agreement may not be assigned by Consultant.

(d)
This Agreement shall be governed by and construed in accordance with the laws of California without giving effect to its conflicts of laws and principles.

(e)
All notices hereunder must be in writing and delivered to the parties at the addresses set forth above.  Notices shall be deemed delivered upon the receipt (if delivered personally, by overnight courier or by receipt-confirmed facsimile) or three days after mailing if placed in the United States mail.
 
###
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

Juva Life, Inc.  Jackson and Main, LLC
       
 By: /s/      By: /s/ Sharanjit S. Kali-rai
       Sharanjit S. Kali-rai "Sean"

 

1

 
ATTACHMENT – A



Listed below are the only exceptions to Article 7. of the attached agreement:

1)
BAS Research and
2)
Lukrum dba Lux
3)
Any company that either Bao Lea or Ernie Arreola have any ownership interest
 
###



Juva Life, Inc.  Jackson and Main, LLC
       
 By: /s/      By:/s/ Sharanjit S. Kali-rai
       Sharanjit S. Kali-rai "Sean"

 
2


CONSENT OF INDEPENDENT AUDITORS



We consent to the use in the Regulation A Offering Statement (Form 1-A) of our report dated June 7, 2019, relating to the consolidated financial statements of Juva Life, Inc., which is part of this Offering Statement.


"DAVIDSON & COMPANY LLP"


Vancouver, Canada
Chartered Professional Accountants
   
June 11, 2019
 
 

 

 


CONSENT OF INDEPENDENT AUDITORS



We consent to the use in the Regulation A Offering Statement (Form 1-A) of our report dated June 7, 2019, relating to the financial statements of Juva Life Inc., which is part of this Offering Statement.


"DAVIDSON & COMPANY LLP"


Vancouver, Canada
Chartered Professional Accountants
   
June 11, 2019
 



 

Our File No.
1013544-266614
June 11, 2019

Juva Life Inc.
885 West Georgia Street, Suite 1500
Vancouver, British Columbia
Canada  V6C 3E8
Attn: Board of Directors
Dear Sirs:
Re:
Juva Life Inc.
We have acted as Canadian counsel to Juva Life Inc., a British Columbia corporation (the "Company"), in connection with the Company's filing of an offering statement on Form 1-A filed on the date hereof (the "Offering Statement") with the Securities and Exchange Commission (the "SEC") pursuant to Regulation A under the U.S. Securities Act of 1933, as amended (the "Act").  The Offering Statement contemplates the offering (the "Offering") of up to 40,000,000 units (the "Units") of the Company to raise an aggregate total of US$20,000,000.
Each Unit consists of (i) one common share in the capital of the Company, with no par value per share (each, a "Share"), for an aggregate of up to 40,000,000 Shares, and (ii) one-half of one common share purchase warrant (each whole warrant, a "Warrant"), for an aggregate of up to 20,000,000 Warrants.  Each Warrant entitles the holder to purchase one common share in the capital of the Company (each, a "Warrant Share") at an exercise price of US$0.75 per Warrant Share, and is exercisable starting from the date of issuance until any time prior to 5:00 pm (Vancouver time) on the date that is 18 months from the date of issuance.
Documents Reviewed
In rendering the opinions set forth below, we have reviewed the following documents in addition to those documents referred to above:
·
the Company's Notice of Articles;
·
the Company's Articles (together with the Notice of Articles, the "Constating Documents");
·
certain records of the Company's corporate proceedings as reflected in its minute books, including resolutions of the directors approving, among other things, the Offering, the form of subscription agreement to be entered into between the Company and purchasers of the Units, and the form of the certificate representing the Warrants, and
·
other documents as we have deemed relevant.
In addition, we have relied upon a certificate (the "Officers' Certificate") of certain officers of the Company dated as of even date herewith as to certain questions of fact material to our opinions. For purposes of this opinion, we have not reviewed any documents other than the documents listed above.  In particular, we have not reviewed, and express no opinion on, any document that is referred to or incorporated by reference into the documents reviewed by us.
McMillan LLP ½ Royal Centre, 1055 W. Georgia St., Suite 1500, PO Box 11117, Vancouver, BC, Canada V6E 4N7 ½ t 604.689.9111 ½ f 604.685.7084
Lawyers ½ Patent & Trade-mark Agents ½ Avocats ½ Agents de brevets et de marques de commerce
Vancouver ½ Calgary ½ Toronto ½ Ottawa ½ Montréal ½ Hong Kong ½ mcmillan.ca
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Assumptions, Limitations and Qualifications
Our opinions expressed herein are subject in all respects to the following assumptions, limitations and qualifications:
·
the Units will be offered, issued and sold in compliance with applicable United States federal and state securities laws, and in the manner stated in the Offering Statement;
·
the Constating Documents of the Company in the forms reviewed by us are in full force and effect, and have not been amended, restated, supplemented or otherwise altered, and there has been no authorization of any such amendment or other alteration, in each case since the date hereof;
·
the minute books of the Company reflect all corporate proceedings of the Company, are accurate and up-to-date, and correctly reflect the directors and officers of the Company;
·
we have assumed (i) the legal capacity of all natural persons, (ii) the genuineness of all signatures on documents examined by us, (iii) the authenticity of all documents submitted to us as originals, (iv) the conformity to authentic originals of all documents submitted to us as certified, conformed, photostatic or other copies, and (v) that the documents, in the forms submitted to us for review, have not been and will not be altered or amended in any respect; and
·
we have assumed that each of the statements made and certified in the Officers' Certificate was true and correct when made, has at no time since being made and certified become untrue or incorrect, and remains true and correct on the date hereof.
The opinions expressed in this letter are rendered as of the date hereof and are based on our understandings and assumptions as to present facts, and on the application of applicable law as the same exists on the date hereof.  We assume no obligation to update or supplement this opinion letter after the date hereof with respect to any facts or circumstances that may hereafter come to our attention or to reflect any changes in the facts or law that may hereafter occur or take effect.
Our opinion is limited to law of the Province of British Columbia and the federal laws of Canada applicable therein, including all applicable provisions of the Business Corporations Act (British Columbia).  We have not considered, and have not expressed any opinion with regard to, or as to the effect of, any other law, rule, or regulation, state or federal, applicable to the Company.  In particular, we express no opinion as to United States federal securities laws.
Opinion
Based upon and subject to the foregoing, we are of the opinion that:
2

1.
the Units have been duly authorized by all necessary corporate action by the Company;
2.
the Shares have been duly authorized by all necessary corporate action on the part of the Company and, when the Shares are issued and sold in the manner and under the terms described in the Offering Statement, will be validly issued, fully paid and non-assessable;
3.
the Warrants have been duly authorized and, when issued and sold in accordance with and in the manner described in the Offering Statement, each Warrant will constitute a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, winding-up, moratorium, liquidation, fraudulent conveyance, or other similar law affecting creditors' rights, and subject to general principles of equity and to limitations on availability of equitable relief, including specific performance;
4.
the Warrant Shares have been duly authorized and, when issued and paid for upon exercise of the Warrants in accordance with their terms, will be validly issued, fully paid and non-assessable.
Consent
We hereby consent to the filing of this opinion with the SEC as an exhibit to the Offering Statement.  In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the SEC promulgated thereunder.
This opinion letter is furnished to you at your request in accordance with the requirements of Item 17(12) of Form 1-A in connection with the filing of the Offering Statement, and is not to be used, circulated, quoted or otherwise relied upon for any other purpose.  No opinion is expressed as to the contents of the Offering Statement, other than the opinions expressly set forth herein relating to the Shares, the Warrants and the Warrant Shares.  This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable laws.
Yours truly,

/s/ McMillan LLP

3


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-X
APPOINTMENT OF AGENT FOR SERVICE OF PROCESS
AND UNDERTAKING
A.         Name of issuer or person filing ("Filer"):  Juva Life Inc.
B.           (1) This is [check one]:
T an original filing for the Filer.
£ an amended filing for the Filer.
 
(2)          Check the following box if you are filing the Form F-X in paper in accordance with Regulation S-T Rule 101(b)(9)  £
C.          Identify the filing in conjunction with which this Form is being filed:
Name of registrant:             Juva Life Inc.
Form type:                Form 1-A
File Number (if known):  
Filed by:                                                      Juva Life Inc.
Date Filed (if filed concurrently, so indicate): June 11, 2019 (concurrent herewith)
D.
The Filer is incorporated or organized under the laws of British Columbia, Canada and has its principal place of business at:
JUVA LIFE INC.
885 West Georgia Street, Suite 1500
Vancouver, British Columbia V6C 3E8
Tel:  (833) 333-5882
E.
The Filer designates and appoints:
JUVA LIFE, INC.
177 Park Ave., Suite 200
San Jose, California  95113
Tel: (408) 667-9727
as the agent (the "Agent") of the Filer upon whom may be served any process, pleadings, subpoenas, or other papers in:
(a)
any investigation or administrative proceeding conducted by the Commission; and
(b)
any civil suit or action brought against the Filer or to which the Filer has been joined as defendant or respondent, in any appropriate court in any place subject to the jurisdiction of any State or of the United States or of any of its territories or possessions or of the District of Columbia, where the investigation, proceeding or cause of action arises out of or relates to or concerns (i) any offering made or purported to be made in connection with the securities registered or qualified by the Filer on Form 1-A on the date hereof or any purchases or sales of any security in connection therewith; (ii) the securities in relation to which the obligation to file an annual report on Form 40-F arises, or any purchases or sales of such securities; (iii) any tender offer for the securities of a Canadian issuer with respect to which filings are made by the Filer with the Commission on Schedule 13E-4F, 14D-1F or 14D-9F; or (iv) the securities in relation to which the Filer acts as a Trustee pursuant to an exemption under Rule 10a-5 under the Trust Indenture Act of 1939.  The Filer stipulates and agrees that any such civil suit or action or administrative proceeding may be commenced by the service of process upon, and that the service of an administrative subpoena shall be effected by service upon such Agent for service of process, and that service as aforesaid shall be taken and held in all courts and administrative tribunals to be valid and binding as if personal service thereof had been made.

F.
The Filer stipulates and agrees to appoint a successor agent for service of process and file an amended Form F-X if the Filer discharges the Agent or the Agent is unwilling or unable to accept service on behalf of the Filer at any time until six years have elapsed from the date of the last sale of securities in reliance upon the Regulation A exemption.
The Filer further undertakes to advise the Commission promptly of any change to the Agent's name or address during the applicable period by amendment of this Form, referencing the file number of the relevant form in conjunction with which the amendment is being filed.
G.
The Filer undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the Form 1-A; the securities to which the Form 1-A relates; and the transactions in such securities.
The Filer certifies that it has duly caused this power of attorney, consent, stipulation and agreement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vancouver, Province of British Columbia, Country of Canada this 11 day of June, 2019.
  JUVA LIFE INC.  
       
 
By:
/s/ Mathew Lee  
    Name: Mathew Lee  
    Title: Chief Financial Officer  
       
This statement has been signed by the following persons in the capacities and on the date indicated.
  JUVA LIFE, INC.  
       
 
By:
/s/ Douglas Chloupek  
    Name: Douglas Chloupek  
    Title: Chief Executive Officer  
       
    Date: June 11, 2019