AMENDED AND RESTATED LEASE BETWEEN Formosa Mountain Ltd. (the “Landlord”) AND 2323414 Alberta Ltd. (the “Tenant”) AND CannaPharmaRX Inc. (the “Indemnifier”)

1.1

Basic Terms

(a)

(i)

Landlord:

Formosa Mountain Ltd.

(ii)

Address of Landlord:

▇▇▇ ▇ ▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

(b)

(i)

Tenant:

▇▇▇▇▇▇▇ Alberta Ltd.

(ii)

Indemnifier:

CannaPharmaRX Inc.

(iii)

Address of Tenant and Indemnifier:

▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇

(c)

Lands:

▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇(the whole as outlined in black on the plan attached as Schedule A) forming part of the Greater Lands.

(d)

Area of Building:

55,000 Square Feet

(e)

(i)

Term:

Seventeen (17) Years, plus the part of the month, if any, from the seventeenth (17^th) anniversary of the Commencement Date to the end of the month in which the Commencement Date occurs.

(ii)

Commencement Date:

January 1, 2025.

(iii)

Expiry Date:

Seventeen (17) years after the Commencement Date (unless the Commencement Date is not the first day of a month, in which case the Term shall expire Seventeen (17) years after the last day in the month in which the Commencement Date occurs).

(f)

Basic Rent: $125,000.00 CAD monthly. This is a “Triple Net” Lease.

(g)

Lease Deposit:

One Million Two Hundred and Fifty Thousand

($1,250,000.00) Dollars (the “Lease Deposit”), which is to be paid to the Landlord upon the execution of this Lease and become the absolute property of the Landlord to be applied and held as provided in this Lease. This reflects an initial Lease Deposit due at the initial signing that was never paid by the Tenant.

(h)

Extension Term:

Two (2) Extension Terms of Five (5) Years Each

(i)

Permitted Use:

Tenant shall be permitted to use the Premises (as hereinafter defined) for a fully licensed cannabis manufacturing facility and, subject to Tenant having obtained the Landlord’s prior written consent (not to be unreasonably withheld), any legal ancillary use permitted by its authorizing license from Health Canada, the province of Alberta and any municipal permits, and for no other purpose whatsoever.

In this Lease, the following terms shall have the following meanings:

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

(l)

FIRSTLY MERIDIAN 5 RANGE 4 TOWNSHIP 30 SECTION 20 QUARTER NORTH EAST CONTAINING 64.7 HECTARES (160 ACRES) MORE OR LESS EXCEPTING THEREOUT: PLAN NUMBER HECTARES (ACRES) MORE OR LESS ROAD 9110540 1.08 2.66 SUBDIVISION 1210814 4.23 10.45 EXCEPTING THEREOUT ALL MINES AND MINERALS

SECONDLY PLAN 1210814 BLOCK 1 LOT 2 EXCEPTING THEREOUT ALL MINES AND MINERALS AREA: 2.81 HECTARES (6.94 ACRES) MORE OR LESS

(m)

(n)

(o)

(p)

(q)

(r)

(s)

(t)

(u)

(v)

(i)

in the case of the first Lease Year, the period beginning on the Commencement Date and ending upon expiry of:

(A)

if the Commencement Date occurs on a date other than the first day of the month, the broken portion of the calendar month from the Commencement Date to the end of the month in which the Commencement Date occurs; plus

(B)

a full consecutive twelve (12) calendar month period following the Commencement Date and expiry of the period, if any, set out in subparagraph 1.2(v)(i)(A) immediately above; and

(ii)

in the case of each subsequent Lease Year, full consecutive twelve (12) calendar month periods.

(w)

(x)

(y)

(z)

(aa)

(bb)

(cc)

(dd)

(ee)

(ff)

(gg)

(i)

the Tenant is ▇▇▇▇▇▇▇ Alberta Ltd. or a Permitted Transferee;

(ii)

no Rent is then overdue;

(iii)

the Tenant is not then in default under the terms of this Lease, whether or not any such default is subject to a cure period provided hereunder;

(iv)

the Tenant has not undergone a Change of Control;

(v)

the Tenant is itself in physical occupation of an actively conducting and carrying on business from the whole of the Premises; and

(vi)

there has been no change to the Permitted Use.

(hh)

(ii)

(jj)

(kk)

(ll)

(mm)

2.1

Demise

2.2

Acceptance of Premises

2.3

Permits, Licenses, Approvals, and Zoning

(a)

Before commencing business in the Premises, the Tenant shall deliver to the Landlord: an occupancy permit for the Premises (if required); a business license permitting the Tenant to lawfully conduct the Permitted Use from the Premises; all other licenses and permits required for the Tenant to lawfully conduct the Permitted Use from the Premises; and certificates of insurance evidencing insurance policies required to be carried by the Tenant under the Lease with proof, satisfactory to the Landlord, that such insurance policies are valid. All permits and licenses must be duly issued by the appropriate municipal or planning authority. The Tenant shall not commence its business without first providing the occupancy permit, building license, and all other licenses and permits and approvals required for the Tenant to lawfully conduct the Permitted Use from the Premises. The Tenant shall be solely responsible for obtaining all permits and licenses and approvals and insurance policies and determining whether it has obtained all the proper and required permits, licenses, approvals and insurance.

(b)

The Landlord makes no representations about any existing or future zoning or land use of the Premises or the availability of any or all permits, licenses, or approvals or any of them, and the Tenant is responsible for all investigations required to ensure the same are and will be available. The Tenant shall, in a timely manner so as to satisfy its obligations under this paragraph, apply for, pay for, and obtain all applicable licenses and permits and approvals and insurance policies required for the Tenant to conduct the Tenant’s Work (if any) and carry-out the Permitted Use from the Premises.

(c)

Except as otherwise expressly provided in this Lease, the Landlord has no obligation to demand, review, or assist the Tenant in obtaining any permits, licenses, approvals, and/or insurance policies and no review by the Landlord is to be deemed a waiver of the Tenant’s obligations under this Lease or to be a representation that the Tenant has obtained all necessary permits, approvals, licenses, or insurance or otherwise form the basis of an estoppel against the Landlord.

(d)

The Tenant is solely responsible for any inability to obtain (including future inability to obtain) or any revocation of any permits, approvals, licenses, or insurance (including as a result of the same not being available due to any change of Applicable Laws). The Landlord shall permit the Tenant to make all necessary applications and shall provide the Tenant with information and documentation required for such application as may reasonably be requested by the Tenant; provided the Landlord is entitled to charge the Tenant a reasonable processing fee (not to exceed $500 plus disbursements in each instance) in respect of the same. The Tenant is responsible for ensuring it can conduct its business (both from the Premises and at all), and the Tenant is responsible for compliance with all Applicable Laws. The Tenant bears the risk of any change to Applicable Laws affecting the Premises and/or its business (including zoning and land use changes) and same along with any changes to permits, licenses, and approvals will not frustrate nor terminate this Lease nor result in any abatement in Rent, except where such change is caused intentionally by the Landlord.

3.1

Permitted Use

3.2

Prohibited Uses

3.3

Nuisance, Interference, Waste, Overloading

4.1

Length of Term

4.2

Overholding Tenancy

4.3

Surrender of Premises

4.4

Tenant’s Fixtures

(a)

At the end of the Term, or any extension of the Term, the Tenant, when not in default hereunder, may remove its chattels, supplies, equipment, and trade or tenant’s fixtures. Tenant’s trade fixtures and equipment do not include the items listed in Schedule B which are leased to the Tenant for the term and may not be removed from the Premises.

(b)

All installations, alterations, additions, partitions, and fixtures in, upon or to the Premises, whether placed there by the Tenant or the Landlord shall be the Landlord’s property (other than the Tenant property described under Section 4.4(a)) free and clear of any liens, encumbrances or other interests without compensation therefor to the Tenant, subject in all cases to the Tenant’s rights of removal under Section 4.4(a). Nothing herein shall imply or create any obligation of the Landlord to repair or maintain any installations, alterations, additions, partitions or fixtures or anything in the nature of a leasehold improvement made or installed by or for the Tenant. Notwithstanding anything to the contrary, any Hazardous Substances placed or caused by the Tenant shall not become the property of the Landlord and shall remain the property of the Tenant, unless otherwise elected by the Landlord in writing.

(c)

The Landlord shall have the right upon the termination of this Lease by effluxion of time or otherwise to require the Tenant to remove any alterations or improvements installed by or on behalf of the Tenant or any person for whom the Tenant is responsible after the Commencement Date (other than those approved by the Landlord as standard improvements not requiring removal, which approval shall not be unreasonably withheld by the Landlord) and any trade fixtures, chattels or equipment.

(d)

The Tenant shall make good any damage caused to the Premises by any installation or removal of any installations, alterations, additions, partitions, fixtures, furniture, chattels, or equipment or anything in the nature of a leasehold improvement made or installed by the Tenant.

4.5

Abandonment of Goods

5.1

Basic Rent

5.2

Additional Payment and Security Interest

(a)

In connection with entering into this Lease, the Landlord (or its assigns) shall be granted a security interest in any and all licenses and permits of the Tenant and Indemnitor necessary to conduct the business of the Tenant and Indemnitor against payment of the amounts due under this Lease. This security interest will be subject to a separate security agreement between the parties entered into in connection herewith.

(b)

Except as directed by the Landlord, the Tenant shall also pay throughout the Term, at the times and in the manner provided in this Lease, all Additional Rent which shall, except as otherwise provided in this Lease, be payable within ten (10) days of receipt by the Tenant of an invoice, statement or demand for it. Additional Rent includes but is not limited to Landlord’s Capital Taxes, accounting fees, management expense, entity fees capital repairs and replacements (if performed by the Landlord pursuant to the provisions hereof), and Landlord’s insurance obtained and maintained pursuant to the provisions hereof. There will be a fifteen percent (15%) administrative fee added to all such amounts.

(c)

The Landlord shall make a reasonable estimate of the Tenant’s portion of all Real Property Taxes that are applicable to the Lands and Building and improvements thereon.

(d)

The Tenant shall pay all business taxes, utilities, income taxes, GST, pension contributions, payroll taxes (including WBC), and other taxes promptly when due. Should Tenant fail to make such payment, Landlord may, but is not required, to pay the same on the Tenant’s behalf.

5.3

Payment of Rent - General

(a)

All payments required to be made by the Tenant pursuant to this Lease shall be paid in lawful money of Canadian Dollars when due, without prior demand and without any abatement, set-off, compensation, abatement, or deduction whatsoever, except as may be otherwise expressly provided herein, and, if payable to the Landlord, at the address of the Landlord set out in Section 1.1(a)(ii) or at such other place as the Landlord may designate from time to time to the Tenant.

(b)

All payments required to be made by the Tenant pursuant to this Lease, except for Sales Taxes, shall be deemed to be Rent and shall be payable and recoverable as Rent, and the Landlord shall have all rights against the Tenant for default in any such payment as in the case of arrears of Rent.

(c)

The Tenant shall pay to the Landlord all Sales Taxes applicable from time to time, calculated and payable in accordance with Applicable Laws and the Tenant shall pay such amount at the earlier of: (i) the time provided for by Applicable Laws; and (ii) the time such Rent is required to be paid under this Lease. The amount payable by the Tenant on account of Sales Taxes shall be deemed not to be Rent for the purpose of such calculation but in the event of a failure by the Tenant to pay any amount, the Landlord shall have the same rights and remedies as it has in the event of a failure by the Tenant to pay Rent.

(d)

At the Landlord’s request, the Tenant shall make all payments under this Lease by way of a pre-authorized bank debit payment system. Concurrently with the execution and delivery of this Lease by the Tenant to the Landlord, and from time to time throughout the Term, the Tenant shall execute and deliver to the Landlord all pre-authorization documentation as may be requested by the Landlord or as may otherwise be necessary in order to enable the Landlord to debit the Tenant’s bank account on the first day of each and every month throughout the Term.

(e)

If the Commencement Date is not on the first day of the month, the Tenant shall pay Basic Rent and Additional Rent for the period commencing on the 17th anniversary of the Commencement Date until the last day of the month in which the 17th anniversary of the Commencement Date at the rate per day based on a 365 day year equal to the Basic Rent and Additional Rent payable during the last full twelve (12) calendar months in the last Lease Year.

5.4

Utilities

5.5

Business Taxes and Sales Taxes

(a)

The Tenant shall pay, as Additional Rent, or cause to be paid, as Additional Rent, directly to the person entitled to receive the same, when due, all business and other rates, taxes and assessments, of whatsoever description, that are imposed upon or in respect of, and become due and payable in respect of, the Tenant’s occupancy of the Premises or in respect of the personal property or business of the Tenant located therein or conducted thereon or therefrom. Notwithstanding anything herein to the contrary, Tenant shall not be responsible for any taxes personal to the Landlord such as, but not limited to, income tax, corporation taxes, inheritance tax, profit taxes, excess profit taxes, capital gains taxes, place of business taxes, gross or net income taxes, gross receipts taxes, revenue taxes, payroll taxes, transfer taxes, gift tax or estate tax, succession taxes, franchise taxes, or any penalties or fines incurred as a result of the Landlord’s late payment of same (collectively, “Excluded Taxes”).

(b)

Except for the Excluded Taxes, the Tenant shall pay to the Landlord an amount equal to any and all goods and services taxes, sales taxes, value added taxes, business transfer taxes or any other taxes imposed on the Landlord from time to time with respect to Rent payable by the Tenant to the Landlord under this Lease, or in respect of the leasing of the Premises under this Lease, whether characterized as a goods and services tax, sales tax, value added tax, business transfer tax or otherwise, and not matter when or how imposed (herein called “Sales Taxes”), it being the intention of the parties that the Landlord shall be fully reimbursed by the Tenant, but shall not derive any net after tax benefit, with respect to any and all Sales Taxes collectible and remittable and payable by the Landlord (other than and except for taxes payable on the income of the Landlord) collectible and remittable and payable by the Landlord and allocated or apportioned by the Landlord to the Premises, acting reasonably. The amount of the Sales Taxes so payable by the Tenant shall be calculated by the Landlord in accordance with the applicable legislation and shall be paid to the Landlord at the same time as the amounts to which such Sales Taxes apply are payable to the Landlord under the terms of this Lease or, in the sole discretion of the Landlord, upon demand at such other time or times as the Landlord from time to time determines. Notwithstanding any other provision contained in this Lease to the contrary, the amount payable by the Tenant under this Section 5.5(b) shall be deemed not to be Rent but the Landlord shall have all of the same remedies for and rights of recovery of such amount as it has for recovery of Rent under this Lease.

(c)

All amounts under this Lease are plus Sales Taxes.

5.6

Real Property Taxes

5.7

Interest on Rent in Default

5.8

Lease Deposit

6.1

Access and Quiet Possession

(a)

The Landlord, and its officers, servants, or agents, shall have full and free access, for inspection purposes upon not less than forty-eight (48) hours prior written notice (except in the event of emergency where no notice is required) and, if the Tenant or a representative is made available by the Tenant for such purposes in the presence of the Tenant or a representative of the Tenant, to any and every part of the Premises, provided that the exercise of such rights shall not unreasonably interfere with the Tenant’s business, it being expressly understood and agreed, however, that in cases of an emergency the Landlord and its officers, servants or agents, shall at all times and for all purposes have full and free access to the Premises without prior written notice and without the Tenant, or a representative of the Tenant, being present.

(b)

If the Tenant pays the Rent hereby reserved and duly and punctually observes and performs the covenants and conditions herein on the part of the Tenant to be observed and performed and subject to the other terms of this Lease, the Landlord shall not interfere with the Tenant’s quiet possession of the Premises; provided that nothing in this Section 6.1(b) shall limit or restrict the rights of inspection or access conferred upon the Landlord pursuant to this Lease including, without limitation, under Section 6.1(a).

(c)

The Landlord, and its officers, servants or agents, shall have full and free access at all times during the Term, over certain agreed upon portions of the Lands, in order to have access to and egress from the land area adjacent to the Lands.

(d)

The Landlord acknowledges that the Tenant’s Permitted Use of the Premises specifically relates to cannabis and that, as a result, the Landlord covenants with the Tenant that Landlord’s access (except in cases of emergency) to the Premises shall at all times comply with Applicable Laws and all applicable Authorities, including, without restriction, the specifications and requirements of Health Canada. The Landlord agrees, at the Tenant’s sole cost and expense, to comply with the Tenant’s reasonable requirements with respect to accessing the Premises so as to ensure there shall be no breach of the specifications and requirements of Applicable Laws and all applicable Authorities, including, without restriction, those of Health Canada. The Landlord shall not knowingly cause a default under the Tenant’s licenses; provided ▇▇▇▇▇▇ is responsible to inform the Landlord of any such possible default and the Landlord is not required to investigate the same. The Tenant hereby releases and forever discharges the Landlord (including its employees, agents and contractors) from and against any claims, damages, costs or expenses incurred or suffered by Tenant as a result of any emergency access by Landlord.

6.2

Repairs and Maintenance

6.3

Notice of Repair or Maintenance

(a)

the default specified in such notice has not been remedied;

(b)

the Landlord has not provided notice to the Tenant that it requires more time to commence to remedy the default due to the location of the Premises or nature of the default, and the Landlord has not thereafter used and continued to use reasonable diligence to cure such default; and

(c)

if the nature of such default reasonably requires more than forty-five (45) days to remedy and make right, the Landlord has not commenced, or, having commenced, is not diligently completing the remedying of such default;

the Tenant may at its sole option perform such repair or maintenance with the reasonable cost and expense thereof to be repaid by the Landlord to the Tenant (together with a fifteen (15%) percent administration fee on the amount of such cost and expense) forthwith upon demand being made therefor by the Tenant upon the Landlord; provided Landlord may still amortize and charge such repair or maintenance to the Tenant less the administrative fee. In the event of any dispute as to the time necessary to complete any repair or maintenance specified in a notice, the matter will be determined by the Architect.

6.4

Landlord’s Recovery

6.5

Compliance with Law

6.6

Nuisance

6.7

Pest Control

6.8

Advertising

6.9

Alterations, Erections, Etc.

6.10

Liens

6.11

Security System

7.1

Transfers by Tenant

(a)

Except for a Permitted Transfer, the Tenant shall neither effect nor permit a Transfer without first obtaining the Landlord’s express written consent, such consent to be in the Landlord’s sole and unfettered discretion, in each instance.

(b)

The Landlord’s consent to any Transfer may be conditional based on the following conditions which may be imposed by the Landlord:

(i)

the Transferee must have a third party whose net worth is acceptable to the Landlord, and such third party shall agree with the Landlord on the Landlord’s standard form of Indemnity Agreement, to indemnify the Landlord as a primary covenant to the Lease. The addition of such third party will be without prejudice to the Landlord’s right against the Transferee and the Transferor;

(ii)

the Transferor, Transferee, and Landlord must first enter into and duly execute the Landlord’s standard form of consent to Transfer agreement, which agreement provides that the Transferee shall carry out the Tenant’s obligations under this Lease, and the Transferee and the Transferor shall remain jointly and severally liable under the Lease for all liabilities and obligations of the Tenant under this Lease, regardless of if assumed by the Transferee and regardless of any future Transfer or other act;

(iii)

the Transferor and Transferee first pay the Landlord’s standard administrative fee and legal fees (on a solicitor and his own client basis) not exceeding $1,500 per instance (provided no material amendments to the Lease are required, such as, by way of example and without limitation, amendments with respect to extensions or renewals, allowances, permitted use, or any alterations or work) incurred by the Landlord in reviewing and preparing all the agreements related to the Transfer;

(iv)

if the basic and additional rent to be paid by the Transferee under such Transfer exceeds the Basic Rent and Additional Rent payable by the Tenant hereunder, the amount of such excess shall be paid by the Tenant to the Landlord (net of any expenses incurred by Tenant to obtain such Transfer, including without limitation, legal fees and brokerage commissions). If the Transferor receives from any Transferee, either directly or indirectly, any consideration other than basic rent or additional rent for such Transfer, either in the form of cash, goods or services, the Tenant shall immediately pay to the Landlord an amount equivalent to such consideration, provided that notwithstanding the foregoing, Tenant shall be entitled to any proceeds received by Tenant which are not related to the Premises or the Landlord’s interest under this Lease, such as proceeds related to Tenant’s trade fixtures and goodwill, provided however, any fixtures, equipment or moveable property existing at or installed in the Premises prior to occupancy by Tenant are the exclusive property of Landlord and may not be transferred or sold by Tenant as are any substitution thereof;

(v)

if the Transfer is a sublease, the Transferee will agree to waive all statutory or other rights (if any) to apply to a court or to otherwise elect to: (i) retain the unexpired term of the Lease or the unexpired term of the sublease; (ii) obtain any right to enter into any lease or other agreement directly with the Landlord; and/or (iii) otherwise remain in possession of any portion of the Premises, in any case where the Lease is terminated, surrendered, or otherwise cancelled, including any disclaimer, repudiation, surrender, or other termination (each of these transactions, whether or not under a sublease, being referred to as an “Early Termination”) by any trustee in bankruptcy of the Tenant or a Transferee, by any court appointed officer, or by the Tenant or a Transferee in connection with any insolvency proceedings;

(vi)

if there is an Early Termination, each of the Transferee and the Transferor (except if a party that has become the bankrupt or insolvent) to whom the Landlord gives notice within sixty (60) days after the Early Termination, shall be considered to have entered into a lease (or if specified in such notice, an indemnity agreement for such new lease) with the Landlord. If the Landlord gives notice to more than one of the foregoing, then each such person shall enter into the new lease as co-tenants and be jointly and severally liable thereunder. Such new lease is on the same terms and conditions as are contained in this Lease (as relate to future obligations of the Landlord and Tenant and so as to assume responsibility for past and existing obligations and defaults by the Tenant) except that the term of the lease shall commence on the date of the Early Termination and shall expire on the date this Lease would have expired but for the Early Termination;

(vii)

notwithstanding the effective date of any permitted Transfer as between the Tenant and the Transferee, all Rent for the month in which such effective date occurs shall be paid in advance by the Tenant so that the Landlord will not be required to accept partial Rent from the Transferor and the Transferee; and

(viii)

in the event of a sublease and Section 7.1(b)(v) not being enforceable, the Transferee shall covenant to pay the Landlord Rent at two hundred present (200%) of the Basic Rent plus all other amounts payable under this Lease if the Transferee exercises its right to possession of the Premises or any part thereof under the Landlord’s Rights on Bankruptcy Act (Alberta) or any similar legislation.

(c)

If the Landlord’s consent is given, the Tenant shall complete the Transfer, but only upon the terms set out in the offer submitted to the Landlord pursuant to Section 7.2 and not otherwise. Such Transfer must occur within ninety (90) days after the granting of the Landlord’s consent and then only after: (i) the Transferee enters into an agreement directly with the Landlord and in a form satisfactory to the Landlord, acting reasonably, to perform, observe, and keep each and every covenant, proviso, condition, and agreement in this Lease on the part of the Tenant to be performed, observed, and kept, including payment of Rent, in all cases, to the extent applicable, taking into account partial subleases of the Premises; (ii) the Transferor has duly executed and returned to the Landlord all reasonable documents required by the Landlord; and (iii) the Transferee has paid to the Landlord all reasonable costs incurred by the Landlord with respect to the Transfer. The failure to execute any instrument will, at the Landlord’s election, void the Transfer.

(d)

Subject to this Section 7.1, the Tenant shall pay upon demand by the Landlord, the Landlord’s expenses incurred with respect to any Transfer or proposed Transfer by the Tenant, whether or not the Landlord’s consent to the Transfer or proposed Transfer has been obtained. Tenant and Transferee will be jointly and severally liable for such amount.

7.2

Request of Transfer

7.3

Landlord’s Rights

(a)

it consents to the Transfer in accordance with the provisions of this Lease; or

(b)

it does not consent to the Transfer.

7.4

Continuing Obligations of Tenant

(a)

No Transfer is a release and no Transfer will relieve the Transferor or any other party (other than the Landlord) from any of its obligations, including any renewals or extensions of the Term, and notwithstanding any such Transfer, the Transferor shall remain bound by the Lease, and the Transferor shall not be released from performing or observing all of the terms, covenants, and conditions under the Lease throughout the Term, including in the event of the insolvency of the Transferee or any future Transferee and disclaimer of this Lease or any subsequent Transfer or any renewal or extension of the Lease or Term.

(b)

No consent by the Landlord to any Transfer means that the Landlord has consented or will consent to any further Transfer; all future Transfers will remain subject to the provisions of this Article 7.

7.5

Corporate Records

7.6

No Advertising of the Premises

7.7

Receipt of Rent

7.8

Permitted Transfers

(i)

an assignment of the Lease to an affiliate corporation of the Tenant (within the meaning of the Canada Business Corporations Act) or a partnership composed of affiliate corporations of the Tenant; provided if the affiliate ceases to be an affiliate corporation of the Indemnifier, the same is a Transfer that requires the Landlord’s consent;

(ii)

the Tenant becoming a corporation formed as a result of a merger or amalgamation (within the meaning of the Canada Business Corporations Act) of the Tenant with a corporation or corporations provided that the resulting company has a net worth equal to or greater than that of Tenant and Indemnifier;

(iii)

an assignment to a public corporation or an income trust or similar entity whose shares or units, in each case, are listed on a recognized North American stock exchange and whose net worth is equal to or greater than that of Tenant and Indemnifier;

(iv)

the purchaser of all or substantially all of the Tenant’s assets provided that the purchaser company has a net worth equal to or greater than that of Tenant and Indemnifier; and

(v)

a license to any Tenant who will be farming the Excluded Greater Lands (the Tenant having the right to grant the same).

7.9

Assignment by Landlord

8.1

Suspension of Services

8.2

Claim or Demand

8.3

Indemnity

(a)

any action taken or things done or maintained by virtue, or the exercise in any manner of rights arising hereunder or any breach, violation or non-performance of any covenant or condition in this Lease set forth and contained on the part of the Tenant to be performed or observed;

(b)

any occurrence in, on or at the Premises or the occupancy or use by the Tenant of the Premises and/or any act or omission of any person on the Premises (other than the Landlord) or any use or occupancy of any property in the Premises;

(c)

any act or omission of the Tenant, its officers, employees, agents, contractors, invitees, licensees or by any Person permitted by the Tenant to be on the Premises;

(d)

any act or omission of Tenant or any of the Tenant, its agents, employees, officers, directors, subtenants, licensees, assignees, suppliers, trades, contractors, invitees or any other person for whom the Tenant is legally responsible, or any other person on the Premises or elsewhere on or about the Lands;

(e)

any injury, death or damage to Persons or property of Tenant or any other persons on the Premises or Lands by or with the invitation, license or consent of Tenant caused by any reason whatsoever;

(f)

any damage, destruction or need of repair to any part of the Lands or Building caused by any act or omission of Tenant or any subtenant, licensee, agent, contractor, employee, agent, customer, supplier, trade, officer, director, invitee or other person for whom the Tenant is legally responsible, notwithstanding any other provisions of this Lease; and

(g)

any regulatory, quasi-regulatory, or criminal proceedings related to the Premises, this Lease, or anything done hereunder, all except, in each case, any claims for damage resulting from the gross negligence or willful misconduct of the Landlord or any officer, servant or agent of the Landlord while acting within the scope of his duties or employment.

8.4

Hazardous Substances

(a)

The Tenant shall, at its own cost and expense, comply with all Laws from time to time or at any time in force relating to the Tenant, the business of the Tenant and the Premises relating to Hazardous Substances brought upon the Lands (or Greater Lands) by the Tenant or anyone for whom the Tenant is responsible at law and the protection of the environment including, without limitation, all statutes, laws, by-laws, regulations, ordinances and orders regulating the manufacture, use, storage, transportation or disposal of any Hazardous Substances shall immediately give written notice to the Landlord of the occurrence of any event in or on the Premises constituting an offence thereunder or being in breach thereof and shall make, obtain and deliver all reports or studies required by any Authorities having jurisdiction.

(b)

If any Authority having jurisdiction shall require the clean-up of any Hazardous Substances held, released, spilled, abandoned, or placed upon the Premises or released into the environment by the Tenant in the course of the Tenant’s business or as a result of the Tenant’s use or occupancy of the Premises (or its activities on the Greater Lands or any part thereof), then the Tenant shall, at its own cost and expense, prepare all necessary studies, plans, and proposals and submit the same for approval, provide all bonds and other security required by Authorities and carry out the work required and shall keep the Landlord fully informed and provide to the Landlord full information with respect to proposed plans and comply with the Landlord’s reasonable requirements with respect to such plans. The Tenant agrees that if the Landlord determines, in its own sole discretion, acting reasonably, that the Landlord, its property or its reputation, is placed in any jeopardy by the requirement for any such work, the Landlord may itself undertake such work or any part thereof and the Tenant will forthwith pay all costs and expenses incurred by the Landlord in this regard and the Tenant agrees that all such costs and expenses shall be recoverable by the Landlord as if the same were Additional Rent reserved and in arrears under this Lease.

(c)

The Tenant hereby authorizes the Landlord to make enquiries from time to time of any government authority having jurisdiction with respect to the Tenant’s compliance with any and all laws and regulations pertaining to the Tenant, the Tenant’s business and the Premises including without limitation laws and regulations pertaining to any Hazardous Substances and the protection of the environment; and the Tenant covenants and agrees that the Tenant will from time to time provide to the Landlord such written authorization as the Landlord may reasonably require in order to facilitate the obtaining of such information on and subject to the condition that all such information will be kept confidential by Landlord (except to the extent required to be released by law or to any lender or prospective purchaser if such lender or prospective purchaser agrees in writing to keep such information confidential).

(d)

If at any time:

(i)

notwithstanding the covenant of the Tenant contained in this Section 8.4, in the event that there shall at any time be any Hazardous Substances upon the Premises or Lands, or any part thereof; or

(ii)

there occurs an event in or on the Premises or Lands (including portions of the Greater Lands not occupied by a building) constituting an offence under, or being in breach of, any Laws from time to time or at any time in force relating to the Landlord, the Tenant, the business of the Tenant, or the Premises relating to Hazardous Substances and the Tenant, either alone or with others, causes the happening of such event;

the Tenant shall at its own cost and expense:

(A)

immediately give the Landlord notice to the appropriate effect and thereafter give the Landlord from time-to-time written notice of the extent and nature of the Tenant’s compliance with the provisions of the provisions contained in Sections 8.4(d)(ii)(B) and (C);

(B)

promptly remove any Hazardous Substances from the Premises (or relevant area) in a manner which conforms with all laws and regulations governing the movement of the same;

(C)

if requested by the Landlord, obtain a report at the Tenant’s cost and expense from an independent consultant designated or approved by the Landlord verifying the complete and proper removal thereof from the Premises (and any other area) or, if such is not the case, reporting as to the extent and nature of any failure to comply with the provisions of Sections 8.4(d)(ii)(B) and (C); and

(D)

remedy any damage to the Premises (or other area) caused by an event such as is referred to in either or both of Sections 8.4(d)(i) and (ii) above or by the performance of the Tenant’s obligations under this Section 8.4(d) as a result of the occurrence of either or both of such events.

(e)

If the Tenant shall bring or create upon the Premises (or Greater Lands) any Hazardous Substances or if the conduct of the Tenant’s business or operations shall cause there to be any Hazardous Substances upon the Premises then, notwithstanding any rule of law to the contrary or any other term of this Lease, such Hazardous Substances shall be and remain the sole and exclusive property of the Tenant and shall not become the property of the Landlord notwithstanding the degree of affixation of Hazardous Substances or the goods containing the Hazardous Substances and notwithstanding the expiry or earlier termination of this Lease.

(f)

The obligations of the Tenant hereunder relating to Hazardous Substances shall survive the expiry or earlier termination of this Lease save only that, to the extent that the performance of those obligations requires access to or entry upon the Premises (or remainder of the Greater Lands) or any part thereof the Tenant shall have such entry and access only at such times and upon such terms and conditions as the Landlord may from time to time specify; and the Landlord may, at the Tenant’s cost and expense, itself or by its agents, servants, employees, contractors and subcontractors, undertake the performance of any necessary work in order to complete such obligations of the Tenant; but having commenced such work, the Landlord shall have no obligation to the Tenant to complete such work.

(g)

(h)

(i)

(j)

(k)

9.1

Insurance

(a)

The Landlord covenants and agrees that throughout the Term, and every extension thereof, it will take out and maintain at Tenant’s sole cost and expense and in the names of the Landlord and any mortgagee designated by the Landlord from time to time and the Tenant, as their respective interests appear, insurance on the Building and all improvements on the Greater Lands against loss or damage by fire and such other risks, hazards or perils as the Landlord, acting reasonably, or its mortgagees, may require to be protected against from time to time to the full extent of their insurable value for replacement cost on a stated amount basis including, without limitation, the following insurance coverage in respect of the Greater Lands and the Building and any other buildings or improvements constructed on the Greater Lands. Such insurance may, but need not, include but may also be in excess of:

(i)

fire insurance with all risk extended coverage including coverage for the foundation of all improvements with malicious damage endorsements and coverage for leakage from sprinklers and fire protection equipment, on a 100% replacement cost basis with a stated amount endorsement (in accordance with Insurance Bureau of Canada (“IBC”) wording with loss payable to the Landlord’s mortgagee by way of an IBC approved mortgage clause, all risk direct damage insurance on the Tenant’s fixtures, improvements and all other contents of the Premises and all parts of the Premises to the full replacement value thereof. Such insurance shall at all times be in an amount sufficient to prevent any coinsurance by the Tenant or the Landlord. In the event that the IBC shall cease to exist, the aforesaid stipulation and approval shall be by the Landlord, acting reasonably, or its mortgagee in its sole discretion. Such insurance shall permit the Building or other improvements on the Lands to be unoccupied for a period of at least thirty (30) days, notwithstanding that same is not permitted under this Lease;

(ii)

flood, earthquake and building by-laws insurance coverage; and

(iii)

comprehensive broad form boiler insurance (if such vessels are required to be inspected pursuant to provincial or federal legislation) including unfired pressure vessels and air-conditioning equipment, if any, including repair and replacement coverage and including use and occupancy coverage, all for an amount satisfactory to the Landlord, acting reasonably, or its mortgagee with loss payable to the Landlord’s mortgagee by way of a Boiler and Machinery Insurance Association mortgage clause acceptable to the Landlord, acting reasonably, or its mortgagee;

(iv)

the Landlord may take out and maintain: (I) insurance against loss of rents in an amount equivalent to the Basic Rent and Additional Rent (estimated by the Landlord acting reasonably) payable under this Lease for a period of twelve (12) months and the Tenant shall pay to the Landlord, as Additional Rent, within fifteen (15) days after notice in writing thereof by the Landlord to the Tenant, the costs of all premiums paid or payable in respect of such insurance (without in anyway limiting or reducing the Tenant’s obligation to pay for all other insurance taken out by the Landlord pursuant to the terms of this Lease); and (II) comprehensive general liability insurance with respect to the Landlord’s ownership of the building leased by the Tenant for personal injury or death and damage to property of others in an amount of not less than Ten Million ($10,000,000) Dollars or such increased amount required by the Landlord, acting reasonably, from time to time per occurrence on an inclusive basis.

(v)

the Landlord shall use reasonable commercially efforts to ensure that all of its insurance policies (above) and from time to time shall contain a waiver of subrogation in favor of Tenant and for those whom ▇▇▇▇▇▇ is responsible for at law. If the Landlord erects another building on the Greater Lands, it shall apportion its insurance between the Premises and the other building in a commercially reasonable manner, and the Tenant will be responsible only for the portion attributed to the Premises and Lands by the Landlord.

(b)

Tenant’s Effect on Landlord’s Insurance

(i)

Tenant shall not do and shall not cause, suffer or permit to be done or omitted to be done by any of its servants, agents, contractors, persons for whom Tenant is in law responsible or by any person in, on or about the Premises or Greater Lands and shall not permit there to be on the Premises anything which might:

(A)

result in any increase in the cost of any insurance policies of Landlord related to the Greater Lands (including the Premises) or any part or contents thereof;

(B)

result in an actual or threatened cancellation of or adverse change in any policy of insurance of Landlord; or

(C)

be prohibited by any policy of insurance of Landlord in force from time to time in respect of the Premises or any part or contents thereof.

(ii)

If the cost of any insurance policies of Landlord shall be increased as a result of:

(A)

the use or occupancy of the Premises by Tenant or any other person on the Premises; or

(B)

anything kept or permitted to be kept by Tenant or by any person anywhere on the Premises; or

(C)

any act or omission of Tenant or any person on the Premises (or Greater Lands to the extent not occupied by another building), Tenant shall pay the full amount of such increase in cost to Landlord forthwith upon demand following receipt by Tenant of reasonable supporting documentation from ▇▇▇▇▇▇▇▇’s insurer evidencing ▇▇▇▇▇▇’s specific act or omission that caused such increase. In determining Tenant’s responsibility for any increased cost of insurance as aforesaid, a statement issued by the organization, company or insurer establishing the insurance costs or rates for the relevant policy shall be conclusive evidence of the various components of such costs or rates and the factors giving rise to any increase therein.

(iii)

In the event of an actual or threatened cancellation of or adverse change in any policy of insurance of Landlord by reason of:

(A)

the use or occupancy of the Premises by Tenant or any other person permitted by Tenant on the Premises; or

(B)

anything placed on or permitted by Tenant or any person on the Premises; or

(C)

any act or omission of Tenant or any person in the Premises;

and if Tenant fails to remedy the situation, condition, use, occupancy or other factor giving rise to such actual cancellation or change within forty- eight (48) hours after notice thereof by Landlord, Landlord may, at its option, remedy the situation, condition, use, occupancy or other factor giving rise to such actual or threatened cancellation or change (which Tenant hereby agrees shall be deemed an emergency situation permitting access by Landlord or its agents to the Premises without notice), all at the cost of Tenant to be paid to Landlord forthwith upon demand. For any or all of such purposes as set forth in this Section 9.1(b), Landlord shall have the right to enter upon the Premises without further notice. Tenant hereby releases and discharges Landlord from and against any claims, actions and/or damages incurred or sustained by Tenant as result of any reasonable efforts taken by Landlord to effect such remedy, including, without limitation, any access to the Premises by Landlord or its agents.

(c)

Tenant’s Insurance

(i)

Tenant shall, at its sole cost and expense, obtain and maintain in full force and effect at all times throughout the Term and such other times, if any, as Tenant occupies the Premises or any portion thereof:

(1) commercial general liability insurance including, but not limited to property damage, personal injury liability, contractual liability, products and completed operations, non-owned automobile liability coverage, all on an occurrence basis, with respect to any use, occupancy, activities or things on the Premises (or Greater Lands not occupied by a Building) by Tenant or any of its servants, agents, contractors or persons for whom Tenant is in law responsible, with coverage for any one occurrence or claim including bodily injury (including death), personal injury, property damage and loss of use of not less than Ten Million Dollars ($10,000,000.00) or such higher amount as Landlord may reasonably require upon not less than one month’s notice at any time. The aforementioned per occurrence limit of liability may be obtained through a combination of primary, umbrella and excess insurance. The umbrella and excess insurance shall be follow-form to the primary commercial general liability policy;

(B)

insurance, in respect of such perils as are from time to time covered in an all risks policy including earthquake, wind and flood, covering the leasehold improvements, trade fixtures, furnishings, equipment, stock in trade, storefront and store facing materials and all signs in, on or about the Premises, and all other property of every other description owned by Tenant or for which Tenant is legally liable for not less than the full replacement cost thereof;

(C)

broad form comprehensive machinery risk and/or equipment breakdown insurance on all insurable objects located on the Premises or which are the property or responsibility of Tenant on a blanket repair or replacement basis with a replacement cost endorsement and with limits for each accident in an amount not less than the full replacement cost of all leasehold improvements, trade fixtures, furnishings, equipment, stock in trade, storefront and store facing materials and all signs in, on or about the Premises, and all other property of every other description owned by Tenant or for which Tenant is legally liable;

(D)

business interruption insurance, including extra expense coverage, either as an extension to or on the same form as the insurance referred to in subsections 9.1(c)(i)(A) and 9.1(c)(i)(B) above, and in such amounts from time to time as necessary to fully compensate Tenant for direct or indirect loss of sales or earnings resulting from or attributable to any of the perils required to be insured against under the policies referred to in subsections 9.1(c)(i)(A) and 9.1(c)(i)(B) above and all circumstances usually insured against by cautious tenants including losses resulting from interference with or prevention of access to the Premises as a result of such perils or for any other reason;

(E)

tenant’s legal liability insurance for the full replacement cost of the Premises, and the loss of use thereof;

(F)

leasehold interest insurance to fully protect Tenant for loss of its interest in this Lease and its leasehold improvements in the event of termination of this Lease pursuant to Article 10;

(G)

standard owners’ form of automobile insurance policy providing third party liability insurance on all automobiles owned by or registered in the name of Tenant with inclusive limits and on such terms as reasonably required by Landlord from time to time, covering all licensed vehicles owned by or operated by or on behalf of Tenant;

(H)

plate glass insurance on all internal and external glass;

(I)

bylaw compliance insurance;

(J)

environmental impairment liability insurance; and

(K)

other insurance against such risks and in such amounts as Landlord or any mortgagee, debenture holder or other secured creditor of Landlord may from time to time reasonably require upon not less than thirty (30) days’ written notice to ▇▇▇▇▇▇.

(ii)

Each of Tenant’s insurance policies and property policies shall name Landlord and any others designated by Landlord as a first loss payee with respect to insurance under Section 9.1(c)(i)(B), (C), (H), and (I) and as additional insureds for all other insurance required hereunder, and each of Tenant’s insurance policies shall contain, as deemed appropriate by Landlord:

(A)

the mortgage clause as may be required by any mortgagee, debenture holder or other secured creditor of Landlord;

(B)

a waiver by the insurer of any rights of subrogation, or indemnity, or any other claim over, to which such insurer might otherwise be entitled against Landlord, its mortgagee, debenture holder or other secured creditor, or others for whom the Landlord is responsible in law, the Landlord acting as trustee for and on behalf of such persons;

(C)

an undertaking by the insurer that no material change adverse to Landlord or Tenant or the mortgagee, debenture holder or other secured creditor of Landlord will be made and the policy will not lapse or be cancelled or terminated, except after not less than ten (10) days’ written notice to Landlord and ▇▇▇▇▇▇ and the mortgagee, debenture holder or other secured creditor of either of them of the intended change, lapse, cancellation or termination;

(D)

a provision stating that all of Tenant’s insurance policies (regardless how obtained and whether through primary, umbrella, and excess insurance policies) shall be primary and shall not call into contribution any other insurance available to Landlord;

(E)

a disputed loss endorsement or agreement, where applicable;

(F)

a severability of interests clause and a cross liability endorsement clause for liability policies, where applicable; and

(G)

a waiver, in respect of the interests of Landlord and of any mortgagee, debenture holder or other secured creditor of Landlord, of any provision in any such insurance policies with respect to any breach of any warranties, representations, declarations or conditions contained in the said policies.

All of Tenant’s insurance policies shall be taken out with insurers licensed to do business in the jurisdiction for which the insurance is required and shall be in such form and on such terms as are reasonably satisfactory to Landlord from time to time. The Tenant shall ensure that its insurance policies do not contain a co- insurance clause.

(iii)

Tenant shall ensure that Landlord shall at all times be in possession of certificates of insurance in the form designated or approved by Landlord which are current and in force in good standing including such certificates or other evidence satisfactory to Landlord as to Tenant’s insurance in effect and its renewal or continuation in force together with such evidence as may be required by Landlord as to the method of determination of the full replacement cost of the leasehold improvements, trade fixtures, furnishings, equipment, stock in trade, plate glass, storefront and store facing materials and signs and full particulars of the full replacement cost of each of the same, and if Landlord reasonably concludes that the full replacement cost has been underestimated or understated, Tenant shall forthwith arrange for any consequent increase in coverage required pursuant to this Section 9.1.

(iv)

Tenant hereby releases Landlord and its servants, agents, employees, contractors and those for whom Landlord is in law responsible from all losses, damages and claims of any kind in respect of which Tenant is required to maintain insurance or is otherwise insured.

(v)

In addition to the release in (iv), above, the Tenant hereby releases the Landlord in respect of any injury, death, loss or damage to any persons or property caused or contributed to by any of the following: fire, explosion steam, water, rain, snow, electricity, gas, or falling plaster; or by dampness or leaks from any pipes, appliances, plumbing works, roof, exterior walls, or any Hazardous Substances or any other source whatsoever; and Landlord shall not be liable or responsible in any way for any injury, death, loss or damage to any person or property caused by any other tenants or occupants of the Landlord or by any occupants of any adjoining property or by the public or by the construction of any public, quasi- public or private work or utilities. All property kept or stored in or about the Premises or kept or stored by Tenant or any of its servants, agents, customers, contractors or Persons for whom Tenant is in law responsible elsewhere shall be at the sole risk of Tenant and Tenant shall indemnify Landlord and save it harmless in respect of the same. Without in any way limiting or affecting the generality or interpretation of the foregoing provisions of this Section 9.1, it is agreed that Landlord shall in no event be liable for any indirect, special, or consequential damages suffered by Tenant, excepting any damages caused directly by ▇▇▇▇▇▇▇▇’s gross negligence or willful misconduct but only to the extent such damages are not covered, in whole or in part, by any insurance which Tenant is required to maintain hereunder.

(vi)

Tenant acknowledges and agrees that, if it fails to obtain and maintain in force any of the insurance policies set out in this Section 9.1, then Tenant shall indemnify and hold harmless Landlord and Landlord’s Parties in respect of any such losses arising therefrom.

9.2

Policy Requirements

9.3

Cancellation

9.4

Proceeds

10.1

Damage and Destruction

10.2

Damage to 50% During Last Two Years

11.1

Default and Re-entry

(a)

(i)

if the Tenant shall be in default in the payment of Rent or amounts collectable hereunder as rent, and such default shall continue for a period of five (5) days without any notice required; or

(ii)

if the Tenant shall be in default of any of its covenants and agreements hereunder (other than its covenant to pay Rent or amounts collectable hereunder as Rent) and such default shall continue for a period of ten (10) days after notice by the Landlord to the Tenant specifying with reasonable particularity the nature of such default and requiring the same to be remedied; or

(iii)

if the default set out in the notice given to the Tenant by the Landlord pursuant to paragraph (ii) reasonably requires more time to cure than the ten (10) day period referred to in that paragraph and the Tenant has not commenced remedying or curing the same within the ten (10) day period or, in the opinion of the Landlord, fails to diligently complete the same within a reasonable time; or

(iv)

the Tenant or any occupant of the Premises becomes insolvent or commits an act of bankruptcy or takes the benefit of any statute for bankrupt or insolvent debtors or makes any proposal, assignment, compromise, or arrangement with its creditors or if a receiver is appointed for all or part of the business, property, affairs, or revenues of the Tenant or any occupant of the Premises; or

(v)

if the Tenant shall make an assignment for the benefit of creditors, or shall make an assignment or have a receiving order made against it under any bankruptcy legislation, or becoming bankrupt or insolvent shall make application for relief under the provisions of any statute now or hereafter in force concerning bankrupt or insolvent debtors, or any action whatsoever, legislative or otherwise, shall be taken with a view to the winding-up, dissolution of liquidation of the Tenant; or

(vi)

if the term of this Lease hereby granted or any of the goods or chattels on the Premises are at any time possessed, seized, or taken in execution or attachment by any creditor of the Tenant, whether under a bill of sale, chattel mortgage, debenture, conditional sales contract, lien note, lease of personal property, consignment contract or otherwise; or

(vii)

if a writ of execution or replevin order issues against the goods or chattels of the Tenant; or

(viii)

if the Tenant abandons the Premises or ceases to conduct business from the Premises or the Premises become vacant or substantially unoccupied for a period of five (5) consecutive days; or

(ix)

if any insurance policy insuring the Premises or the Landlord in respect thereof is cancelled, threatened with termination or is refused to be renewed by reason of the use and occupation of the Premises or any part thereof by the Tenant and Tenant fails to cure such default within 5 days of notice thereof; or

(x)

if the Tenant fails to move into or take possession of the Premises by later than 365 days from the Commencement Date; or

(xi)

the Tenant has intentionally provided any information to the Landlord prior to the execution of the Lease that is materially incorrect or misleading; or

(xii)

the Tenant or any of its officers, directors, or shareholders is convicted of an offence under the Criminal Code (Canada); or

(xiii)

if the Tenant or any occupant of the Premises makes any bulk sale of its assets (or any series of transactions amounting to a bulk sale of its assets), except to a successor in conjunction with a permitted assignment of this Lease or the Tenant otherwise disposes of through one or more transactions a material portion of its assets except in the ordinary course of business; or

(xiv)

the Tenant conducts a business which the Landlord or its insurer deems to be extra-hazardous or the Premises are used for a purpose other than the Permitted Use; or

(xv)

the Tenant purports to effect a Transfer other than in compliance with the provisions of this Lease; or

(xvi)

the Tenant has been in material default (whether or not cured) of one or more provisions of this Lease on more than five (5) occasions in any consecutive 12- month period, the Landlord has issued a notice warning the Tenant that its defaults have become chronic, and the Tenant defaults under the Lease within twelve (12) months of such notice; or

(xvii)

the Tenant loses any of its permits, approvals, or authorizations that are required in order for it to carry on the Permitted Use in the Premises; or

(xviii)

the Tenant fails to keep the Equipment free and clear of all claims, liens or encumbrances; or

(xix)

if separate from this Lease, the Tenant defaults under the Equipment Lease; or

(xx)

anything else stated to be an Event of Default under the Lease;

then at the option of the Landlord, the current month’s Rent, together with the Rent for the three (3) months ensuing, shall immediately become due and payable and, at the option of the Landlord, the Term hereby granted, and any extension thereof, shall become forfeited and void, and the Landlord shall be entitled to re-enter upon the Premises, or any part thereof, in the name of the whole and repossess and enjoy the same as its former estate, anything contained in any statute or law to the contrary notwithstanding. No re- entry or taking possession of the Premises shall be construed as an election on the part of the Landlord to terminate this Lease unless at the time of or subsequent to such re-entry or taking of possession written notice of such intention has been given to the Tenant or such termination is decreed by a Court of competent jurisdiction.

(b)

If and whenever an Event of Default occurs, the Tenant will have breached this Lease and the Landlord is entitled to the following rights and remedies, each exercisable immediately and without further notice:

(i)

to accelerate Rent by providing notice to the Tenant such that the current month’s Rent, Rent for the ensuing three (3) months and all amounts under this Lease outstanding are all immediately due;

(ii)

to terminate this Lease and re-enter the Premises. The Landlord shall provide notice of its election to terminate and re-enter to the Tenant. The Landlord may remove all persons and property from the Premises and store such property at the expense and risk of the Tenant or sell or dispose of such property in such manner as the Landlord sees fit without notice to the Tenant (the Tenant being responsible for the cost of such sale or disposal, and any profits from such sale being applied to damages as set-out below). Notwithstanding any termination of this Lease, the Landlord shall be entitled to receive Rent and all Sales Taxes up to the time of termination (plus accelerated Rent, if elected by the Landlord) as provided in this Lease and damages including:

(A)

damages for the loss of Rent suffered by reason of this Lease having been prematurely terminated and any decrease in rent the Landlord expects to or does receive in re-letting the Premises for the remainder of the Term from what it would have received had the Lease not been terminated;

(B)

costs of reclaiming, repairing, and re-letting the Premises (including any commissions, tenant inducements, administrative expenses, legal fees, expenses for renovations, or other inducements) and keeping the Premises in good order;

(C)

all expenses in collecting sums due or payable by the Tenant for realizing upon assets seized including brokerage expense and disbursements for the release of the premises and sale of items; and

(D)

legal fees related to the same including any reletting and any steps to enforce the Lease or retake the Premises (on a solicitor and his own client basis);

(iii)

to enter the Premises, without terminating this Lease, and relet the Premises as agent for whatever length of time and on such terms as the Landlord in its sole and unfettered discretion may determine including the right to: (i) take possession of any property of the Tenant on the Premises; (ii) store such property at the expense and risk of the Tenant; (iii) sell or otherwise dispose of such property in such manner as the Landlord sees fit (the Tenant being responsible for the cost of such sale or disposal, and any profits from such sale being applied to damages as set-out below); and (iv) make alterations to the Premises to facilitate the reletting at the Tenant’s expense (including brokers fees). The Landlord shall receive the rent and proceeds of sale as agent of the Tenant and shall apply the proceeds of any such sale or reletting first to the payment of any expenses incurred by the Landlord with respect to any such reletting or sale (including any commissions, tenant inducements, administrative expenses, legal fees (on a solicitor and his own client basis), expenses for renovations, or other inducements), second, to the payment of any indebtedness of the Tenant to the Landlord other than Rent, and third, to the payment of Rent in arrears, with the residue to be held by the Landlord and applied to payment of future Rent as it becomes due and payable. The Tenant shall remain liable for any deficiency between the amount received by the Landlord (net of any deductions) and what would otherwise be payable to the Landlord;

(iv)

to exercise its right of distress, and the Tenant hereby waives any present or future limitation on the Landlord’s right of distress (for clarity if insufficient proceeds from the distress are received to cover the amount of arrears under the Lease, then the same is a separate Event of Default); and

(v)

without terminating this Lease, to require the Tenant immediately pay the Landlord an amount equal to the Rent payable under this Lease for the balance of the Term. Such amount shall be held on the same terms as a Security Deposit, below, except the amount held will be applied to Rent as it becomes due. If any part of such Rent cannot be absolutely determined as of such date, the Landlord is entitled to estimate such amount on a reasonable basis.

11.2

Landlord’s Right of Distress

(a)

For the purposes of ▇▇▇▇▇▇▇▇’s right to distrain, ▇▇▇▇▇▇’s trade fixtures shall be treated as chattels notwithstanding their level of affixation to the Premises.

(b)

Tenant hereby waives and renounces the benefit of any present or future statute taking away or limiting or purporting to limit Landlord’s right of distress and agrees with Landlord that, notwithstanding any such statute, all goods and chattels from time to time on the Premises (including, without limitation, any cannabis or cannabis-related property) shall be subject to distress for Rent and the fulfilment of all of Tenant’s obligations under this Lease in the same manner as if such statute had not been passed. Unless permitted under Applicable Laws, Landlord’s distress rights may not apply to any cannabis and cannabis-related property location in or about the Premises.

(c)

In addition to any other rights of Landlord to distrain, Landlord shall have the right to distrain for any arrears of Rent all goods and chattels, including without limitation all heavy or connected machinery and equipment. Landlord may exercise any right of distress on the Premises and for such purpose may lock the Premises, change any locks on the Premises and by any means exclude Tenant from all or any parts of the Premises and Landlord shall not thereby be terminating this Lease in the absence of express written notice terminating this Lease. Tenant consents to being excluded by Landlord from all or any parts of the Premises for purposes of Landlord’s exercising any right of distress.

(d)

▇▇▇▇▇▇ further agrees that distress of all or any goods and chattels may be effected by written notice whether or not Landlord locks or otherwise secures such goods or chattels from Tenant on the Premises or elsewhere.

(e)

If Landlord effects distress by written notice or any other means, ▇▇▇▇▇▇ agrees not to remove or permit to be removed any distrained goods or chattels and not to interfere with the exercise of any right of distress.

(f)

▇▇▇▇▇▇ agrees that ▇▇▇▇▇▇▇▇’s exercise of any right of distress as permitted hereby or at law shall not constitute a trespass or breach of any express or implied term of this Lease. Landlord shall not be liable for loss or damage to goods or chattels against which distress is levied no matter how caused except to the extent of direct (and not indirect or consequential) damage caused by the gross negligence of Landlord or its employees; but Landlord shall not be liable for any loss or damage caused by its bailiff or any agent through negligence or otherwise.

(g)

In exercising any right of distress, Landlord may distrain against all or any goods or chattels, irrespective of whether or of the degree to which the same may be excessive and Tenant waives any and all rights and remedies in respect thereof, including all rights under any laws governing commercial tenancies in the jurisdiction in which the Premises are located.

(h)

In exercising any right of distress, Landlord may hold all distrained goods or chattels without limit in time and Tenant waives all rights and remedies in respect thereof.

(i)

In addition to others entitled to do so, Landlord and its agents and employees shall have the right to purchase any goods or chattels on the Premises distrained by Landlord so long as the price paid by Landlord or its agents or employees is reasonably comparable to that which might reasonably be obtained by sale under distress to an arm’s length third party.

(j)

If any goods or chattels of Tenant shall be removed from the Premises, Landlord shall have the right to follow the same and exert against the same all of its rights as if such goods and chattels had remained on the Premises, such right of Landlord to include, without limitation, the right to follow such goods and chattels for thirty (30) days.

11.3

Remedies Cumulative

11.4

Legal Fees

11.5

Self Help

11.6

Assignment

12.1

Estoppel Certificates or Statements

(a)

The Tenant or the Landlord at any time and from time to time, upon not less than seven (7) day’s prior written notice, shall execute and deliver to the other a statement in writing certifying that this Lease is unmodified and in full force and effect (or if modified, stating the modifications and that the same is in full force and effect as modified); certifying the amount of the Rent then being paid hereunder; certifying the dates to which the same relates, by instalment or otherwise, and that other sums herein provided to be paid by the Tenant have been paid; and stating, whether or not there is any existing default on the part of the Landlord or the Tenant, as the case may be, of which the other has notice; the particulars and amount of insurance policies on the Premises in which the interest of the party giving such certificate is noted; the amount of prepaid Rent or security deposit being held by the Landlord; and providing such other information with respect to this Lease or the Premises as may be reasonably requested.

(b)

Any statement delivered pursuant to the provisions of this Article 12 may be conclusively relied upon by any purchaser or prospective purchaser or any mortgagee or prospective mortgagee of the Premises or any sublessee or prospective sublessee save as to any default on the part of the Landlord or the Tenant of which the party giving such statement does not have notice at the date thereof.

13.1

Financing and Subordination

13.2

Priority of Lease

14.1

Right to Show Premises and Place Signs

15.1

Equipment Leased

15.2

Use of Equipment

(a)

The Lessee shall use the Equipment only in connection with the Tenant’s cannabis cultivation operations carried at the Premises and for no other purpose whatsoever.

(b)

The Lessee shall ensure that the Equipment is operated with care, in compliance with all applicable specifications and all Applicable Law. The Lessee shall bear full risk and liability for any and all loss or damage caused by or arising directly or indirectly from the acts or omissions of any operator of the Equipment.

(c)

The Lessee shall not move, remove, or relocate any of the Equipment (including the whole thereof) from the Premises, except with the Lessor’s prior written consent in each instance, which consent is to be given in the Landlord’s sole and unfettered discretion. The Lessee shall not give possession of any or all of the Equipment to any other person, provided, however, that the Lessee may give temporary possession of the Equipment to another person for the purpose of maintenance or repair thereof in accordance with the terms of this Lease for such time as is reasonably necessary to effect such maintenance or repair. The Lessee must provide notice to the Lessor prior to doing the same.

(d)

The Lessee shall maintain, in effect, an all-risk insurance policy covering the Equipment, for the full replacement of the Equipment pursuant to the minimum requirements established by the Lessor acting in a commercially reasonable manner. The Lessor shall be named as the first loss payee on any such policy. All proceeds from any such insurance policy shall be payable solely to the Lessor. At the Lessor’s option, all proceeds paid by the insurer following the occurrence of an accident may be allocated to the repair or replacement of the Equipment.

15.3

Standard of Maintenance and Repair of Equipment

(a)

The Lessee shall keep the Equipment in the same condition that it was in as of the date of occupancy of the Premises or any portion thereof by Tenant, repairing and maintaining the same as and when would a prudent owner (it being agreed that Lessee shall not be responsible for the replacement of the same but shall pay to Lessor, promptly upon demand, the cost of such replacement, as Additional Rent, amortized on a straight line to zero basis over its useful life in accordance with GAAP, unless charged entirely in the year incurred in accordance with GAAP). The Lessee shall ensure the Equipment is used only in reasonable manner as would a prudent owner. The Lessee shall maintain and clean the Equipment and keep detailed records of its maintenance and repair of the same. The Lessee shall not remove the Equipment from the Premises. The Tenant shall keep the equipment insured as though it were the owner of such Equipment and shall name the Landlord as an additional insured and first loss payee in respect of the Equipment; provided that so long as this Lease is not terminated, the Landlord will use the proceeds for the replacement of the Equipment. The Lessee shall ensure no warranty in respect of the Equipment, or any part thereof is voided. The Tenant is responsible for all capital repairs of the Equipment (other than replacement) of portions thereof and all upgrades required to keep the same in accordance with and use the same in accordance with Applicable Laws.

(b)

Without prejudice to any of its other rights, remedies, and recourses with respect thereto, at any time during this Lease or upon expiration of this Lease, the Lessor may examine the Equipment and all parts thereof and effect or cause such repairs, replacements or maintenance as it deems necessary acting in a commercially reasonable manner. All reasonable amounts paid or reasonable expenses (plus an administrative fee equal to 15% of the same) incurred by the Lessor for such purposes shall be immediately reimbursed by the Lessee to the Landlord, as Additional Rent, upon receipt of written notice with respect thereto.

15.4

Surrender of Equipment

15.5

Security Interest

(a)

The Tenant shall not charge, pledge, assign, or otherwise encumber the Equipment or any part thereof or do any act or thing, or fail to do any act or thing, which would result in the creation of any lien, charge, or adverse interest in the Equipment or the loss of its possession of the Equipment for all times during the Term, without the Landlord’s consent in each instance, which consent may be withheld in the Landlord’s sole and unfettered discretion. The Tenant shall not sell, lease, transfer, release, or assign in any manner whatsoever any of the Equipment (including the whole) or allow any third party to use the Equipment or any part thereof without the written consent of the Lessor in each instance, which consent is in the Landlord’s sole and unfettered discretion.

(b)

As security for the Tenant’s performance of its obligations under this Lease and as part of the Equipment Lease, including the payment of Rent and Sales Taxes for the whole of the Term, and as security for the amounts now or hereafter owed to the Landlord by the Tenant (including Damages whether or not crystallized), the Tenant hereby grants to the Landlord by way of security interest, mortgage, pledge, charge, and assignment a continuing and specific security interest (collectively the “Security Interest”) as follows: (i) a first-in-priority security interest in the Equipment; and (ii) in the Tenant’s present and after acquired personal property, and its right, title, interest, and benefit of all present and after acquired personal property and assets and the proceeds thereof and all amounts paid to the Landlord as pre-paid rent or security under this Lease (the “Collateral”). The Security Interest includes proceeds of all goods, documents of title, chattel paper, instruments, money, investment properties and intangibles. The Security Interest is a continuing security interest (which will continue to exist even if no amount is owed) and the Security Interest extends to, and the Collateral includes, all personal property hereafter acquired by the Tenant. However, prior to the occurrence of an Event of Default, the Tenant may collect and use its account receivables and sell or dispose of its inventory to customers in the ordinary course of its business, without the consent of the Landlord. The Tenant shall promptly execute whatever additional documents and will provide whatever additional information is required by the Landlord from time-to-time to perfect this Security Interest. The Tenant authorizes the Landlord to file a financing statement or any other form of document required to evidence the Landlord’s Security Interest and to protect and present its Security Interest.

(c)

The Security Interest is security for all damages that would be suffered by the Landlord from the loss of the Equipment Lease in the event the Lease is disclaimed or otherwise terminated pursuant to any bankruptcy or insolvency or similar proceedings, which damages include all damages the Landlord would be entitled to if the Lease was terminated pursuant to the Tenant’s repudiation of the Lease as opposed to the Tenant’s insolvency or bankruptcy.

(d)

The Landlord may enforce its Security Interest upon the occurrence of an Event of Default or the failure to pay an amount when due or any other breach of this Lease.

(e)

The Tenant waives its right to receive, pursuant to the Personal Property Security Act (Alberta), a printed copy of a financing statement relating to the Security Interest or a copy of the statement used by the personal Property Registry to confirm the registration.

(f)

The Security Interest is given in addition to, and not as an alternative to, and may be exercised by the Landlord without prejudice to any other rights of the Landlord under the Lease or at law including the Landlord’s right of distress.

(g)

The Security Interest and the Tenant’s obligation thereunder will survive termination or disclaimer of this Lease and form a separate agreement from this Lease and the lease of the Equipment.

(h)

Upon the Landlord’s demand, the Tenant shall enter into a further agreement with the Landlord in respect to the Security Interest.

15.6

Bankruptcy Proceedings

15.7

No Assignment

15.8

Indemnification

15.9

Standard form of Lease

15.10

Termination

16.1

No Implied Obligations

16.2

Net Lease

16.3

Force Majeure

16.4

Partnership

16.5

Entire Agreement

16.6

Effect of Lease

16.7

Provisions Separately Valid

16.8

Waiver Negated

16.9

Waivers and Releases

16.10

Governing Law

16.11

Tenant’s Financial

16.12

Time of the Essence

16.13

Expropriation

(a)

If the whole or any part of the Premises shall be expropriated (which term shall for the purposes of this Section 16.13 include expropriation, condemnation or sale by Landlord to an authority with the power to expropriate, condemn or take) by any competent authority, then:

(i)

Landlord and Tenant shall co-operate with each other in respect of such expropriation so that Tenant may receive the appropriate award to which it is entitled in law for relocation costs and business interruption and so that Landlord may receive the maximum award to which it may be entitled in law for all other compensation arising from such expropriation, including, without limitation, all compensation for the value of Tenant’s leasehold interest in the Premises, all of which shall be the property of Landlord, and all of such ▇▇▇▇▇▇’s rights in respect of such expropriation, excluding only rights in respect of relocation costs and business interruption, shall be and are hereby assigned to Landlord; to give effect to such assignment to Landlord, Tenant shall execute such further documents as are necessary, in Landlord’s opinion, to effect such assignment, and in default of Tenant’s completing such documents within ten (10) days after demand, Landlord shall be and is hereby appointed the attorney for Tenant to execute such documents for and on behalf of ▇▇▇▇▇▇ and in its name, such appointment being hereby made pursuant to the Powers of Attorney Act, R.S.A. 2000 c.P- 20 and shall survive and may be exercised during any subsequent legal incapacity of Tenant;

(ii)

Landlord shall have the option, to be exercised by written notice to Tenant, to terminate this Lease, such termination to be effective on the date the expropriating authority takes possession of the whole or any portion of the Premises; and

(iii)

this Lease shall continue in full force and effect in accordance with its terms until the date on which this Lease is terminated in accordance with the provisions of this Section 16.13, if terminated in accordance with the express provisions hereof and, if terminated, Rent and all other obligations under this Lease shall be adjusted as of the date of such termination.

(b)

If the whole or any part of the Lands shall be expropriated, then subject to the foregoing provisions respecting expropriation of the Premises:

(i)

all compensation resulting from such expropriation shall be the absolute property of Landlord and all of Tenant’s rights, if any, to any such compensation shall be and are hereby assigned to Landlord; Tenant shall execute such further documents as are necessary, in Landlord’s opinion, to effect such assignment, and in default of Tenant’s completing such documents within ten (10) days after demand, Landlord shall be and is hereby irrevocably appointed the attorney for Tenant to execute such documents for and on behalf of ▇▇▇▇▇▇ and in its name, such appointment being made pursuant to the Powers of Attorney Act, R.S.A. 2000 c.P-20 and shall survive and may be exercised during any subsequent legal incapacity of Tenant;

(ii)

this Lease shall continue in full force and effect in accordance with its terms unless and until terminated as herein provided; and

(iii)

if the expropriation of part of the Lands is such as to render undesirable, in Landlord’s opinion, the continuing operation of the portion of the Lands in which the Lands are situate, Landlord shall have the right to terminate this Lease as of the date upon which the expropriating authority takes possession of all or any portion of the Lands and all of the obligations of the parties pursuant hereto shall be adjusted to the date of such termination.

16.14

Decision of Architect

16.15

Headings

16.16

Registration

16.17

Singular Plural

16.18

Due Execution

16.19

Surviving Obligations

16.20

Brokerage

16.21

Liability of Landlord

16.22

Rules and Regulations

16.23

Land Titles and Excluded Greater Lands

16.24

Releases

(a)

Whether or not otherwise stated, each obligation of the Tenant that is unfulfilled on expiry or sooner termination of this Lease will survive expiry or sooner termination of the Lease until fulfilled, and the indemnity provisions and rights of the Landlord arising on Tenant’s failure to perform any of its obligations under the Lease shall remain in full force and effect notwithstanding the expiry or sooner termination of the Lease. Without limitation to the generality of the foregoing, to the extent the Tenant is liable to the Landlord or the Landlord is entitled to a remedy against the Tenant, such liability, entitlement to remedy, or both will survive the expiry or sooner termination of this Lease, and the Landlord will remain entitled to such remedy as against the Tenant.

(b)

Whether or not so stated, all releases, waivers, and limitations on liability in favor of the Landlord shall survive expiry or sooner termination of the Lease (including pursuant to the Landlord’s repudiation of the Lease). Whether or not so stated, the releases and limits on liability contained in this Lease may overlap and/or partially overlap in scope. Such overlap is intentional and arises out of an abundance of caution. Each release is to be construed broadly in favor of the Landlord. Each release of the Landlord and limit on liability of the Landlord will apply to every situation where reasonably applicable, and multiple releases and limits on liability will apply in conjunction in some situations (even if partially or wholly duplicative).

16.25

No Surrender

16.26

Schedules

16.27

Deemed Covenants

16.28

Rent

16.29

Counterparts and Electronic Copies

16.30

Tenant Responsible

16.31

Indemnifier

17.1

Notices

20.1

Option to Purchase

FORMOSA MOUNTAIN LTD.

By:

▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signer

▇▇▇▇▇▇▇ ALBERTA LTD.

By:

▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signer

CANNAPHARMARX INC.

By:

▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signer

(a)

Terms inferring either gender or number used herein shall be read respectively to include all genders and both the singular and plural as the case reasonably permits;

(b)

The Lease is valid and binding upon the Indemnifier and enforceable against it in accordance with its terms as though the Indemnifier was the Tenant thereunder;

(c)

The Indemnifier acknowledges receipt of a copy of the Lease and all Schedules, including this Indemnity Agreement, attached thereto;

(d)

If at any time during the term of the Lease (including all renewals and extensions thereof), Tenant for any reason fails to:

(i)

make any payment, whether to Landlord or otherwise; or

(ii)

perform, observe or keep each and every of Tenant's covenants and conditions, when and as required by the Lease, then in each such event, and so often as the same occurs, the Indemnifier will jointly and severally with Tenant and any other indemnifiers have the obligation to promptly make such payment or perform, observe or keep each and every covenant and condition wherein Tenant has failed, and will hold harmless Landlord on demand from time to time to the extent that Landlord will receive an amount equal to the rents and monies to be paid to Landlord pursuant to the Lease had the Lease continued without default by Tenant;

(e)

The Indemnifier shall be bound, as principal obligor, to perform all of the obligations contained in the Lease (other than those of the Landlord) to the same extent and with the same effect as if the Indemnifier were named in the Lease as the sole Tenant and irrespective of:

(i)

the unenforceability of the Lease as against the Tenant;

(ii)

the termination or disclaimer of any obligations of the Tenant under the Lease by operation of law or otherwise; and/or

(iii)

the bankruptcy, insolvency, dissolution or other liquidation of the Tenant including any surrender, repudiation or disclaimer of the Lease by the Tenant or a trustee in bankruptcy of the Tenant;

(f)

The obligations of the Indemnifier under the Lease and this Indemnity Agreement are absolute and unconditional and shall be in no way be released, discharged, or reduced, and the rights of the Landlord under the Lease and this Indemnity Agreement shall be in no way prejudiced or impaired, by any neglect, delay, or forbearance of the Landlord in demanding, requiring, or enforcing performance by the Tenant or any other obligated person of any of its obligations under the Lease, or by the Indemnifier of any of its obligations under this Indemnity Agreement or the Lease, or by granting any extensions of time for performance, or by waiving any performance (except as to the particular performance which has been waived), or by permitting or consenting to any assignment or by the bankruptcy, receivership, insolvency, or any other creditor's proceedings of or against the Tenant, or by the winding up or dissolution of the Tenant, or any other event or occurrence which would have the effect at law of terminating the existence of obligations of the Tenant prior to the termination of the Lease or by any agreements or other dealings between the Landlord and the Tenant having the effect of amending or altering the Lease or the obligations of the Tenant hereunder or by any want of notice by the Landlord to the Indemnifier of any default of the Tenant or by any other matter, thing, act or omission of the Landlord whatsoever;

(g)

For greater certainty, the Indemnifier will not be released from this Indemnity Agreement by reason of:

(i)

The Landlord's failure to notify Indemnifier of any default by ▇▇▇▇▇▇;

(ii)

Any amendment, variation, extension, or renewal of the Lease agreed to by Landlord and ▇▇▇▇▇▇, whether with or without the knowledge of Indemnifier;

(iii)

Any assignment or termination of the Lease or any sub-letting or abandonment by Tenant of all or part of the Premises;

(iv)

Any distress, re-entry or dispossession by Landlord or any action taken by Landlord under this Indemnity Agreement; and/or

(v)

Any other security of which Landlord may now or hereafter possess or obtain with respect to the Lease, or the surrender or release by Landlord of any portion thereof;

(h)

The Indemnifier also hereby acknowledges and agrees that the Landlord may apply any security deposit, deposit, prepaid rent, or other amount or other credit in favor of the Tenant as the Landlord determines in its sole discretion. The Indemnifier further acknowledges that the Landlord shall not be obligated to apply any such deposit or credit to cure any default or offset any damages incurred by the Landlord under the Lease before bringing any actions or pursuing any remedy available to the Landlord through the Indemnifier. The Indemnifier's obligations and liability shall not be affected in any manner whatsoever by the Landlord's application or non-application, as the case may be, of any such deposit or credit under the Lease;

(i)

Without limiting any other provisions hereof, Indemnifier will pay to Landlord all expenses incurred and recoverable by Landlord pursuant to the terms of the Lease in connection with any action taken by Landlord under the Lease or this Indemnity Agreement, which will be deemed to be a loss by Landlord resulting from a default by Tenant under the Lease, (including legal fees on a solicitor and his own client basis);

(j)

The Landlord is not bound to commence, proceed with or exhaust its recourse against Tenant or any other indemnifier before requiring Indemnifier to perform any obligation of Indemnifier under this Indemnity Agreement;

(k)

For greater certainty, the obligations of the Indemnifier under the Lease and this Indemnity Agreement extend not only to the Term and to any overholding by the Tenant thereafter but also to any renewal or extension of the Term whether or not resulting from the exercise by the Tenant of any right contained in the Lease;

(l)

This Indemnity Agreement shall apply to and bind the successorsfd5 and assigns of the Indemnifier (as applicable), and the benefit of the Indemnifier's obligations under the Lease may be assigned by the Landlord and will benefit and be enforceable by the successors and assigns of the Landlord. If there is more than one person comprising Indemnifier, their covenants and obligations hereunder are joint and several;

(m)

In the event of either the termination of the Lease or repudiation or a disclaimer of the Lease pursuant to any statute or proceedings (including but not limited to any bankruptcy, receivership, liquidation or insolvency of Tenant, any act by any trustee in bankruptcy, receiver or liquidator, including, without limiting the generality of the foregoing, any disclaimer of the Lease by a trustee in bankruptcy, any termination or repudiation of the Lease pursuant to any bankruptcy or any insolvency legislation), then in either case at the sole option of the Landlord, which option is exercisable by notice to the Indemnifier at any time within six (6) months of such termination, repudiation or disclaimer, as the case may be, the Indemnifier agrees to upon the Landlord's request execute and deliver a new lease of the Premises between the Landlord, as lessor, and the Indemnifier, as lessee, for a term equal to the portion of the Term remaining unexpired at the time of such termination, repudiation or disclaimer. Such lease shall be on the same terms and conditions as are contained in this Lease as relate to future obligations of the Landlord and Tenant after the date of termination, repudiation, or disclaimer and also so as to require the lessee to assume responsibility for past and existing obligations and defaults by the Tenant under the former Lease. There will be no provision providing for a free rent period or other inducement will be applicable to the new lease and such new lease will not release the Indemnifier of its existing liabilities under the Lease or otherwise be a novation or derogation with respect to either this Indemnity Agreement or the Lease;

(n)

The entering into of this Indemnity Agreement is not a novation or derogation of the Lease or any other agreement related thereto;

(o)

All amounts under this Indemnity Agreement (including damages) not paid when due will bear interest at 12% per annum until such amount is paid to the Landlord both before and after termination of this Indemnity Agreement. The Indemnifier acknowledges that it is aware of the provisions of the Judgment Interest Act (Alberta), which specifies the accrual of interest on damages after breach and hereby waives the benefit of such provisions or any similar or replacement legislation and agrees to pay interest in accordance with the terms of this Indemnity Agreement, both before and after default. This Section shall survive termination of the Indemnity Agreement;

(p)

In the event the Lease is terminated, repudiated, or disclaimed, this Indemnity Agreement will continue as a separate agreement between the Landlord and each Indemnifier, and the Lease will be deemed to be appended to this Indemnity Agreement;

(q)

The terms of the Lease are hereby incorporated into this Indemnity Agreement, and the clauses of the Lease apply to this Indemnity Agreement, although a separate agreement;

(r)

Indemnifier will be released from this Indemnity Agreement only upon termination of the Lease by effluxion of time or if pursuant to the surrender of this Indemnity Agreement as accepted by Landlord;

(s)

This Indemnity Agreement will remain in full force and effect, notwithstanding any change of name, amalgamation, merger or change of status of the Landlord, the Tenant, any other indemnifier or any other person, notwithstanding any judicial acts or events by which the Landlord is replaced by any other entity as a party to the Lease or by which any party other than the Tenant becomes the debtor of any obligations pursuant to the present Lease;

(t)

This Indemnity Agreement will be governed by the laws of Alberta, and Indemnifier hereby submits to the jurisdiction of the courts thereof in any action or proceeding whatever by Landlord to enforce its right hereunder. The language of any proceeding shall be English;

(u)

The Landlord and Indemnifier each covenant, represent, and warrant (as applicable) that: (a) it has the power, capacity, and authority to enter into this Indemnity Agreement; (b) it has the power, capacity, and authority to perform all its obligations under this Indemnity Agreement; (c) there are no covenants, restrictions, or commitments given by it that would prevent or inhibit it from entering into this Indemnity Agreement or performing its obligation hereunder; (d) it has done all things necessary to lawfully enter into and perform each of its obligations under this Indemnity Agreement; and (e) that the person signing this Indemnity Agreement is duly authorized to do so on its behalf;

(v)

The Indemnifier acknowledges that it is familiar with the Lease and that it fully understands the extent of Tenant's obligations thereunder during the entire Term of the Lease, as same may be renewed;

(w)

All notices or demands required or permitted to be given to Landlord hereunder will be in writing and will be deemed ▇▇▇▇ served when delivered personally to Landlord in accordance with the Lease;

(x)

All notices or demands required or permitted to be given to Indemnifier hereunder will be in writing and will be deemed duly served when deposited in the mail, postage prepaid, certified or registered, return receipt requested, addressed to Indemnifier at the address of Indemnifier being:

TBD.

The Landlord’s address for notice is that under the Lease. Either party will have the right to designate in writing by notice served as above, a different address to which notice is to be mailed;

(y)

Any condoning, waiving, excusing, or overlooking by the Landlord of any default, breach or non-observance by the Indemnifier at any time or times of or in respect of any covenant, proviso or condition herein contained shall not operate as a waiver of the Landlord's rights hereunder in respect of any subsequent default, breach or non- observance so as to defeat or affect in any way the rights of the Landlord herein in respect of any such default or breach, and no waiver shall be inferred from or implied by anything done or omitted by the Landlord save only express waiver in writing;

(z)

Notwithstanding any direction to the contrary, the Landlord may apply any payment received by the Landlord towards amounts that are outstanding under this Indemnity Agreement;

(aa)

No payment by the Indemnifier or receipt by the Landlord of a lesser amount than the full amount owed will be other than on account of the amount so owed;

(bb)

No endorsement or statement on any payment or letter accompanying any payment will be deemed an accord or satisfaction, and the Landlord may accept such payment without prejudice to its right to collect the balance of the amount so owed;

(cc)

The acceptance of any payment by the Landlord from the Indemnifier shall not be deemed a waiver of any preceding breach of any obligation under the Lease by the Tenant or of any liability of the Indemnifier hereunder;

(dd)

The acceptance by the Landlord of any amount from any person other than the Tenant or Indemnifier shall not be construed as a recognition of any rights not herein expressly granted as a waiver of any of the Landlord's rights;

(ee)

The Landlord may assign the benefit of this Indemnity Agreement without consent, and the Indemnifier may not assign its obligations under this Indemnity Agreement;

(ff)

Any party may deliver an executed copy of this Indemnity Agreement by fax of other electronic transmission;

(gg)

No change or modification to this Indemnity Agreement is valid unless in writing and signed by both of the parties;

(hh)

Each party shall at any time and from time to time, upon request of the other party do, execute and deliver, or cause to be done, executed or delivered such further acts and documents as may be reasonably required to give effect to this Indemnity Agreement;

(ii)

Any agreement between the Landlord and the Indemnifier, other than the Lease, related to the lease of the Premises or this Indemnity Agreement is hereby nullified;

(jj)

If any provision of this Indemnity Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability attaches only to the provision and everything else in this Indemnity Agreement continues in full force and effect;

(kk)

This Indemnity Agreement may be executed and delivered in any number of counter parts each of which will be an original;

(ll)

Time is of the essence with respect to this Indemnity Agreement;

(mm)

The Indemnifier acknowledges that he/she has been advised that he/she should obtain independent legal advice as to the terms of the Lease and this Indemnity Agreement and carefully read both of the same.

CANNAPHARMARX INC.

By:

▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signer

FORMOSA MOUNTAIN LTD.

By:

▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signer

(i)

The Borrower leases certain property (the “Property”) from the Lender pursuant to that certain Lease between the parties dated January 1, 2022 (the “Lease”). Due to a misunderstanding by the Borrower, the Borrower has been accruing amounts owed to the Lender under the Lease in Canadian Dollars, whereas the Lease is to be paid in USD. To rectify this misunderstanding, the parties are entering into this Note to account for the excess due but unpaid amounts under the Lease reflecting the currency differences. The Guarantor is also guaranteeing repayment of this Note.

(ii)

Commencing on the date hereof, interest shall accrue on a daily basis on the outstanding principal balance at a rate of five percent (5%) per annum (the “Interest Rate”), shall be compounded annually, and shall be due and payable as set forth below.

(iii)

The entire principal balance, together with all interest accrued and unpaid thereon and all other sums due under this Note, shall be paid quarterly over a three (3) year period. Notwithstanding the foregoing, the Borrower shall pay (or the Guarantor shall pay on Borrower’s behalf), (i) twenty-five percent (25%) of any capital raised by the Borrower and/or Guarantor and (ii) fifty percent (50%) of all profits of the Borrower and/or Guarantor until the principal amount and any interest accrued thereon has been paid in full to Lender. Payments under subsection (i) and (ii) shall be made to Landlord within sixty (60) days of receipt.

(iv)

Borrower may, at its option, prepay all or any part of the principal from time to time without premium, penalty or prior notice.

(v)

All payments shall be credited first to accrued interest and the balance to principal.

Promissory note

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Promissory note

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Promissory note

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BORROWER

▇▇▇▇▇▇▇ ALBERTA LTD.

By:

▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signer

GUARANTOR

CANNAPHARMARX, INC.

By:

▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signer

Promissory note

Signature Page

Audit trail

Title

Revised Lease and Note Separated

File name

A_R_Formosa_-_Alberta_Lease_-_v06.docx and 1 other

Document ID

2e6f01ffc4807ca3db1a3f5863cdecab407237d2

Audit trail date format

MM / DD / YYYY

Status

 Signed

05 / 07 / 2025

Sent for signature to ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇) from ▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

21:44:49 UTC

IP: 131.239.138.134

05 / 07 / 2025

Viewed by ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇)

21:45:11 UTC

IP: 209.89.20.138

05 / 07 / 2025

Signed by ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇)

21:47:50 UTC

IP: 209.89.20.138

05 / 07 / 2025

The document has been completed.

 21:47:50 UTC