Exhibit 10.61

 

FIRST AMENDMENT TO OPTION AGREEMENT

 

This First Amendment to Option Agreement (this “Amendment”) is executed
effective as of August 26, 2019 by and between CLS MASSACHUSETTS, INC., a
Massachusetts corporation (the “Optionee”), CLS HOLDINGS USA, INC., a Nevada
corporation (“CLS Holdings”), and IN GOOD HEALH, INC., a Massachusetts
corporation (the “Company”), and amends that certain Option Agreement dated
October 31, 2018 (the “Original Agreement”). Capitalized terms not otherwise
defined herein shall have the same meaning as in the Agreement. The Original
Agreement, as amended by this Amendment, shall be referred to herein as the
“Agreement.”

 

NOW, THEREFORE, in consideration of Optionee’s, CLS Holdings’ and the Company’s
agreement to enter into this Amendment and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties agree to amend the Original Agreement
as follows:

 

1.     Option Period. The definition of “Option Period” in the third Whereas
Clause shall be deleted and replaced with the following:

 

“Option Period” shall mean the period beginning on January 1, 2020 and ending on
January 31, 2020, subject to extension as provided in this Amendment.

 

2.     Option Termination Date. The definition of Option Termination date in
Section 1 shall be deleted and replaced with the following:

 

“Option Termination Date” shall mean January 31, 2020, subject to extension as
provided in this Amendment.

 

3.     Delivery of Company Financial Statements. During the Option Period and
not later than the Option Termination Date, the Company shall deliver the
Company Financial Statements to the Optionee, which shall include audited
financial statements prepared under U.S. GAAP for the year ended December 31,
2019. The Purchase Exception for minimum EBITDA set forth in Section 3(a) of the
Agreement shall apply to the financial statements for the year ended December
31, 2019. If the Company is unable to deliver its 2019 audited financial
statements to Optionee on or before January 31, 2020 but has complied with all
of its other requirements set forth in the Agreement, then the Option Period and
Option Termination Date shall be extended until February 29, 2020, solely to
provide the Company with additional time to deliver the 2019 audited financial
statements. If the Company is unable to deliver its 2019 audited financial
statements to Optionee by February 28, 2020, then the Optionee, in its sole
discretion, shall have the right to either terminate the Agreement, which
termination shall constitute a Purchase Exception, or (i) extend the Option
Period and Option Termination Date until June 30, 2020, and (ii) appoint
auditors of its choosing and at the Company’s sole expense to conduct the audit
of the Company’s 2019 financial statements. If the Company has not delivered its
2019 audited financial statements to the Optionee by June 30, 2020, then either

 

 

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the Optionee or the Company may terminate the Agreement and such termination
shall constitute a Purchase Exception. In all cases, the exercise of the Option
pursuant to this Agreement, and closing of the Merger Agreement, shall not occur
unless all of the requirements and conditions set forth in the Agreement
(including Section 7 of the Original Agreement), and in the Merger Agreement,
have been fulfilled or waived by the party for whom the respective requirement
or condition was intended to benefit. This Section shall replace Section 4 of
the Original Agreement in its entirety.

 

4.     Closing Following Exercise of Option.     Following the Optionee’s
exercise of the Option, the Optionee and the Company shall: (i) follow the
schedule set forth in Section 7 of the Original Agreement related to the
Company’s delivery of the Bring-Down Certificate and the signing of the Merger
Agreement, and (ii) use their commercially reasonable efforts to satisfy the
closing conditions in the Merger Agreement and effect a closing under the Merger
Agreement. Beginning not later than January 1, 2020, the Company shall begin to
prepare the Bring-Down Certificate, determine whether any Updated Schedules are
necessary, and begin to prepare such Updated Schedules, if applicable, even
though the Optionee has not yet exercised the Option. The Company shall also
deliver drafts of the Bring-Down Certificate and Updated Schedules to the
Optionee, and the Optionee and the Company shall exchange updated drafts of the
Merger Agreement during January 2020 with the goal of expediting execution and
closing of the Merger Agreement following exercise of the Option by Optionee.

 

5.     Purchase Exceptions. Section 3(e) shall be deleted and replaced with the
following language:

 

“Subject to and incorporating the terms of Section 2 of this Amendment, the
Company has not delivered the following financial statements, prepared in
accordance with U.S. generally accepted accounting practices (“GAAP”), to
Optionee at least 45 days prior to the anticipated closing of the Merger:
audited financial statements, including balance sheet, income statement,
statement of cash flows and statement of stockholders’ equity, for the years
ended December 31, 2018 and 2019, and unaudited financial statements, if
applicable, for each quarter (sand year to end of each such quarter) and for the
comparable period of the prior year, which unaudited financial statements have
been reviewed by the Company’s auditors, and which financial statements are
accompanied by an unqualified report (where audited) or review report (where
unaudited) of the Company’s auditors (collectively, the Company Financial
Statements”);

 

6.     Effect of Amendment. Except as expressly modified by this Amendment, the
Original Agreement shall remain unmodified and in full force and effect.

 

7.     Counterparts. This Amendment may be executed in two or more counterparts
(including by facsimile or PDF copy), each of which shall be deemed an original
and all of which together shall constitute one instrument.

 

(Signature Page Follows)

 

 

 

 

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The parties have executed this Amendment as of the date first written above.

 

 

COMPANY:

 

IN GOOD HEALTH, INC.

 

 

By: /s/ David Noble                                   

Name: David Noble

Title: President

 

 

 

 

OPTIONEE:

 

CLS MASSACHUSETTS, INC.

 

 

By: /s/ Jeffrey I. Binder                        

Name: Jeffrey I. Binder

Title: Chairman and CEO

 

 

CLS HOLDINGS:

 

CLS HOLDINGS USA, INC.

 

 

By: /s/ Jeffrey I. Binder                        

Name: Jeffrey I. Binder

Title: Chairman and CEO