Exhibit 10.1

 

SECOND AMENDMENT TO LEASE AGREEMENT

 

THIS SECOND AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is entered into as
of this 24th day of September, 2019, by and between IIP-MA 1 LLC, a Delaware
limited liability company (“Landlord”), and PharmaCannis Massachusetts Inc., a
Massachusetts corporation (“Tenant”).

 

RECITALS

 

A. WHEREAS, Landlord and Tenant are parties to that certain Lease Agreement
dated as of May 31, 2018, as amended by that certain First Amendment to Lease
Agreement dated as of November 13, 2018 (as so amended, the “Existing Lease”),
whereby Tenant leases the premises from Landlord located at 465 Hopping Brook
Road, Holliston, Massachusetts 01746;

 

B. WHEREAS, concurrently with the execution of this Amendment, Tenant and
Landlord shall execute an amendment to the Development Agreement; and

 

C. WHEREAS, Landlord and Tenant desire to modify and amend the Existing Lease
only in the respects and on the conditions hereinafter stated.

 

AGREEMENT

 

NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
agree as follows:

 

1. Definitions. For purposes of this Amendment, capitalized terms shall have the
meanings ascribed to them in the Existing Lease unless otherwise defined herein.
The Existing Lease, as amended by this Amendment, is referred to collectively
herein as the “Lease.” From and after the date hereof, the term “Lease,” as used
in the Existing Lease, shall mean the Existing Lease, as amended by this
Amendment.

 

2. Base Rent. Section 2.1 of the Existing Lease is hereby amended and restated
in its entirety as follows:

 

“2.1. The monthly Base Rent as of the date hereof shall be equal to Three
Hundred Twenty-Seven Thousand Four Hundred Seventy-Three and 44/100 Dollars
($327,473.44), subject to subsequent adjustment under this Lease (as may be
adjusted, the “Monthly Base Rent Amount”).”

 

3. Security Deposit. Section 2.2 of the Existing Lease is hereby amended and
restated in its entirety as follows:

 

“Security Deposit”: Nine Hundred Sixty Thousand Six Hundred Twenty-Five and
no/100 Dollars ($960,625.00). The parties acknowledge that Five Hundred
Sixty-Three Thousand Three Hundred Twenty-Five Dollars ($563,325.00) of the
Security Deposit have been funded as of the date hereof, and the remaining
portion shall be paid by Tenant (using its own funds) in installments in
accordance with this Section 2.2. Within two (2) Business Days following the
date that Landlord makes any Construction Payment (as defined in the Development
Agreement) to Tenant, Tenant shall deliver to Landlord a proportionate amount of
the Security Deposit as determined based upon the percentage derived from
dividing the amount of such Construction Payment by $26,500,000, until such time
as the Security Deposit has been fully funded. As an example, if the amount of
the Construction Payment made to Tenant under the Development Agreement is equal
to $5,300,000 (i.e. 20% of $26,500,000), then Tenant shall be required to pay an
amount equal to $192,125.00 within such two (2) Business Day time period, which
amount shall be retained by Landlord as part of the Security Deposit.
Notwithstanding the foregoing (and regardless of the amount of Construction
Payments then requested to be funded by Tenant), the full Security Deposit shall
be funded by Tenant no later than March 31, 2020.

 

 

 

 

4. Term. Section 3.1 of the Existing Lease is hereby amended and restated in its
entirety as follows:

 

“3.1. Term. The actual term of this Lease (as the same may be extended or
earlier terminated in accordance with this Lease, the “Term”) commenced on May
31, 2018 (the “Commencement Date”) and shall end on September 24, 2034, subject
to extension or earlier termination of this Lease as provided herein.”

 

5. Options to Extend Term. The first sentence of Section 3.2 of the Existing
Lease is hereby amended and restated in its entirety as follows:

 

“Tenant shall have two (2) options (each an “Extension Option”) to extend the
Term of this Lease for a period of five (5) years each (each an “Extension
Period”), on the same terms and conditions in effect under this Lease
immediately prior to the commencement of the Extension Period, except that
Tenant shall have no further right to extend the Term of this Lease after the
second Extension Period.”

 

6. Annual Escalation. Section 5.2.2 of the Existing Lease is hereby amended and
restated in its entirety as follows:

 

“Annual Escalation. Base Rent payable under this Lease shall be subject to an
annual upward adjustment of the greater of (a) 75% of CPI or (b) three and
one-quarter percent (3.25%) of the then-current Base Rent. The next annual
adjustment with respect to Two Hundred Thirty Thousand Eight Hundred Six and
77/100 Dollars ($230,806.77) of the current Base Rent shall be May 31, 2020
(“Tranche One Adjustment Date”), and the next annual adjustment with respect to
the remaining Ninety-Six Thousand Six Hundred Sixty-Six and 67/100 Dollars
($96,666.67) of the current Base Rent shall be September 24, 2020 (“Tranche Two
Adjustment Date”). Thereafter, subsequent adjustments for each tranche of Base
Rent shall become effective on every successive annual anniversary of the
Tranche One Adjustment Date or Tranche Two Adjustment Date, as applicable,
during the Term, including any Extension Periods.”

 

7. Broker. Each of Tenant and Landlord represents and warrants that it has not
dealt with any broker or agent in the negotiation for or the obtaining of this
Amendment and agrees to reimburse, indemnify, save, defend (at the other party’s
option and with counsel reasonably acceptable to other party, at the
indemnifying party’s sole cost and expense) and hold harmless the indemnifying
party for, from and against any and all cost or liability for compensation
claimed by any such broker or agent employed or engaged by it or claiming to
have been employed or engaged by it.

 

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8. No Default. Each of Tenant and Landlord represents, warrants and covenants
that, to the best of its knowledge, Landlord and Tenant are not in default of
any of their respective obligations under the Existing Lease and no event has
occurred that, with the passage of time or the giving of notice (or both) would
constitute a default by either Landlord or Tenant thereunder.

 

9. Effect of Amendment. Except as modified by this Amendment, the Existing Lease
and all the covenants, agreements, terms, provisions and conditions thereof
shall remain in full force and effect and are hereby ratified and affirmed. In
the event of any conflict between the terms contained in this Amendment and the
Existing Lease, the terms herein contained shall supersede and control the
obligations and liabilities of the parties.

 

10. Successors and Assigns. Each of the covenants, conditions and agreements
contained in this Amendment shall inure to the benefit of and shall apply to and
be binding upon the parties hereto and their respective heirs, legatees,
devisees, executors, administrators and permitted successors and assigns and
sublessees. Nothing in this section shall in any way alter the provisions of the
Lease restricting assignment or subletting.

 

11. Miscellaneous. This Amendment becomes effective only upon execution and
delivery hereof by Landlord and Tenant. The captions of the paragraphs and
subparagraphs in this Amendment are inserted and included solely for convenience
and shall not be considered or given any effect in construing the provisions
hereof. All exhibits hereto are incorporated herein by reference. Submission of
this instrument for examination or signature by Tenant does not constitute a
reservation of or option for a lease, and shall not be effective as a lease,
lease amendment or otherwise until execution by and delivery to both Landlord
and Tenant.

 

12. Authority. Tenant guarantees, warrants and represents that the individual or
individuals signing this Amendment have the power, authority and legal capacity
to sign this Amendment on behalf of and to bind all entities, corporations,
partnerships, limited liability companies, joint venturers or other
organizations and entities on whose behalf such individual or individuals have
signed.

 

13. Counterparts; Facsimile and PDF Signatures. This Amendment may be executed
in one or more counterparts, each of which, when taken together, shall
constitute one and the same document. A facsimile or portable document format
(PDF) signature on this Amendment shall be equivalent to, and have the same
force and effect as, an original signature.

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
date and year first above written.

 

LANDLORD:

 

IIP-MA 1 LLC

 

 

By: /s/ Catherine Hastings   Name: Catherine Hastings   Title: CFO, CAO &
Treasurer  

 

 

TENANT:

 

PHARMACANNIS MASSACHUSETTS, INC.

 

 

By: /s/ Brett Novey   Name: Brett Novey   Title: CEO