Document:

ex_101711.htm

 

 

 

 

EXHIBIT 10.2

 

 

 

 

 

 

 

 

 

 

 

 

 

AMERICANN, INC.

 

LOAN MODIFICATION AGREEMENT

 

The parties agree as follows:

 

1.     As of July 14, 2016 AmeriCann, Inc. owed Strategic Capital Partners, LLC (“SCP”) $2,431,646.

 

2.     SCP agrees to convert $500,000 of the amount owed into 400,000 shares of the restricted common stock of AmeriCann.

 

3.     In connection with the conversion, AmeriCann will issue SCP warrants to purchase 800,000 shares of AmeriCann’s common stock, exercisable at a price of $1.50 per share, and warrants to purchase an additional 800,000 shares of AmeriCann’s common stock, exercisable at a price of $3.00 per share. The warrants will be in the forms attached to this Agreement.

 

4.     The remaining $1,931,646 will be converted into two notes in the forms attached to this Agreement.

 

DATED THIS 14th day of July, 2016.

 

	
			 

				
			AMERICANN, INC.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Timothy Keogh

				
			 

			
	
			 

				
			 

				
			Timothy Keogh, Chief Executive Officer

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

	
			 

				
			STRATEGIC CAPITAL PARTNERS, LLC

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Benjamin J. Barton

				
			 

			
	
			 

				
			 

				
			Benjamin J. Barton, Managing Member

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

 

 

 

AmeriCann Loan Modification Agree. With Strategic 7-14-16

 

 

 

 

AMERICANN, INC.

 

WARRANT

 

 

This is to certify that, FOR VALUE RECEIVED, Strategic Capital Partners, LLC, or registered assigns (“Holder”) is the holder of 800,000 Warrants of AmeriCann, Inc. (the “Company”). Each Warrant allows the holder to purchase one share of the Company’s Common Stock at a price of $1.50 per share at any time on or before June 30, 2020. The number of shares of Common Stock to be received upon the exercise of this Warrant, and the price to be paid for a share of Common Stock, may be adjusted from time to time as hereinafter set forth. The shares of Common Stock deliverable upon such exercise, as may be adjusted from time to time, are hereinafter sometimes referred to as “Warrant Stock”, and the exercise price of a share of Common Stock in effect at any time, and as may be adjusted from time to time, is hereinafter sometimes referred to as the "Exercise Price."

 

Nothwithstanding the above, this Warrant will expire 45 days after written notice to the holder that the average closing price of the Company’s common stock was at least $3.00 for twenty consecutive trading days and the average daily volume of trades of the Company’s common stock during the twenty trading days was at least 100,000 shares, provided a registration statement is in effect with respect to the shares issuable upn the exercise of this Warrant.

 

(a) Exercise of Warrant. This Warrant may be exercised in whole or in part at any time or from time to time but not later than 5.00 P.M., Mountain time, June 30, 2020 (the “Expiration Date”). If June 30, 2020 is a day on which banking institutions are authorized by law to close, then this Warrant may be exercised on the next succeeding day which shall not be such a day, by presentation and surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Purchase Form annexed hereto duly executed and accompanied by payment of the Exercise Price for the number of Shares of Warrant Stock specified in such form, together with all Federal and state taxes applicable upon such exercise. 

 

If this Warrant should be exercised in part only, the Company, upon surrender of this Warrant for cancellation, shall execute and shall deliver a new Warrant evidencing the right of the Holder to purchase the balance of the Shares of Warrant Stock purchaseable hereunder. Upon receipt by the Company of this Warrant at the office or the agency of the Company, in proper form for exercise, the Holder shall be deemed to be the Holder of record of the Shares of Warrant Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Shares of Warrant Stock shall not then be actually delivered to the Holder.

 

(b) Reservation of Shares of Warrant Stock. The Company hereby agrees that, at all times, there shall be reserved for issuance and/or delivery upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance or delivery upon exercise of this Warrant.

 

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(c)   Fractional Shares. No fractional Shares of Warrant Stock or scrip representing fractional Shares of Warrant Stock shall be issued upon the exercise of this Warrant. With respect to any fraction of a Share of Warrant Stock called for upon any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction multiplied by the current market value of such fractional share determined as follows:

 

(i)     If the Company's Common Stock is publicly traded, the average daily closing prices for 30 consecutive trading days immediately preceding the date of exercise of this Warrant. The closing price for each day shall be the last sale price regular-way or, in case no such sale takes place on such date, the average of the closing bid and asked prices regular-way, on the principal national securities exchange in which the Company's Common Stock is listed or admitted to trading, or if it is not listed or admitted to trading on any national securities exchange, the last sale price of such Common Stock on the consolidated transaction reporting system of the Financial Institution Regulatory Authority (“FINRA”), if such last sale information is reported on such system, or if not so reported, the average of the closing bid and asked prices of such Common Stock on the National Association of Securities Dealers Automatic Quotation system ("NASDAQ"), or any comparable system, or if the Common Stock is not listed on NASDAQ, or a comparable system, the average of the closing bid and asked prices as furnished by two members of the NASD selected from time to time by the Company for that purpose.

 

(ii)     If the Company's Common Stock is not publicly traded, the current value shall be an amount, not less than the book value, determined in such reasonable manner as may be prescribed by the Board of Directors of the Company, such determination to be final and binding on the Holder.

 

(d)     Exchange, Assignment or Loss of Warrant. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other Warrants of different denominations entitling the Holder thereof to purchase in the aggregate the same number of Shares of Warrant Stock purchasable hereunder. This Warrant may not be sold, hypothecated, assigned, or transferred prior to the date this Warrant is first exercisable. Any assignment shall be made subject to the provisions of Section (j) by surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed hereto duly executed and with funds sufficient to pay any transfer tax; whereupon, the Company, without charge, shall execute and shall deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be cancelled. 

 

This Warrant may be divided or may be combined with other Warrants which carry the same rights upon presentation hereof at the office of the Company or at the office of its stock transfer agent, if any, together with a written notice specifying the names and the denominations in which new Warrants are to be issued and signed by the Holder hereof. The term "Warrant" as used herein includes any Warrants issued in substitution for or replacement of this Warrant or into which this Warrant may be divided or exchanged. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant, and (in the case of loss, theft, or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and will deliver a new Warrant of like tenor and date. Any such new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not this Warrant so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone.

 

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(e)     Rights of the Holder. The Holder, by virtue hereof, shall not be entitled to any rights of a stockholder in the Company, either at law or in equity, and the rights of the Holder are limited to those expressed in the Warrant and are not enforceable against the Company except to the extent set forth herein.

 

(f)     Anti-Dilution Provisions.

 

(i) Adjustment of Price. Anything in this Section (f) to the contrary notwithstanding, if the Company shall issue, at any time, Common Stock or convertible securities by way of dividend, forward stock split or other distribution on any stock of the Company or subdivide or combine the outstanding shares of Stock, the Exercise Price shall be proportionately decreased in the case of such issuance, forward stock split, or distribution (on the day following the date fixed for determining shareholders entitled to receive such additional shares) or proportionately increased in the case of such combination (on the date that such combination shall become effective), provided, however, should the Company cancel or fail to make such dividend or other distribution or other issuance, the Exercise Price shall be forthwith adjusted to the price which would have prevailed prior to the Company setting such record date.

 

(ii) No Adjustment for Small Amounts. Anything in this Section to the contrary notwithstanding, the Company shall not be required to give effect to any adjustment in the Exercise Price unless and until the net effect of one or more adjustments, determined as above provided, shall have required a change of the Exercise Price by at least one cent, but when the cumulative net effect of more than one adjustment so determined shall be to change the actual Exercise Price by at least one cent, such change in the Exercise Price shall thereupon be given effect.

 

(iii) Number of Shares Adjusted. Upon any adjustment of the Exercise Price, the Holder of this Warrant shall thereafter (until another such adjustment) be entitled to purchase, at the new Exercise Price, the number of Warrant Stock, calculated to the nearest full shares, obtained by multiplying the number of shares of Stock initially issuable upon exercise of this Warrant by the Exercise Price in effect on the date hereof and dividing the product so obtained by the new Exercise Price.

 

(g)          Officer's Certificate. Whenever the Exercise Price shall be adjusted as required by the provisions of Section (f) hereof, the Company shall forthwith file with its Secretary or an Assistant Secretary at its principal office, and with its stock transfer agent, if any, an Officer's Certificate showing the adjusted Exercise Price, determined as herein provided, and setting forth in reasonable detail the facts requiring such adjustment. Each such Officer's Certificate shall be made available at all reasonable times for inspection by the Holder; and the Company, after each such adjustment, shall forthwith deliver a copy of such certificate to the Holder. Such certificate shall be conclusive as to the correctness of such adjustment.

 

(h)     Notices to Warrant Holders. So long as this Warrant shall be outstanding and unexercised (i) if the Company shall pay any dividend or shall make any distribution upon the Common Stock or (ii) if the Company shall offer to the holders for subscription or purchase by them any shares of stock of any class or any other rights or (iii) if any capital reorganization of the Company; reclassification of the capital stock of the Company; consolidation or merger of the Company with or into another corporation; sale, lease or transfer of all or substantially all of the property and assets of the Company to another corporation; or voluntary or involuntary dissolution, liquidation, or winding up of the Company shall be effected, then, in any such case, the Company shall cause to be delivered to the Holder, at least ten (l0) days prior to the date specified in (x) or (y) below, as the case may be, a notice containing a brief description of the proposed action and stating the date on which (x) a record is to be taken for the purpose of such dividend, distribution, or rights, or (y) such reclassification, reorganization, consolidation, merger, conveyance, lease, dissolution, liquidation, or winding up is to take place and the date, if any, is to be fixed, as of which the holders of record shall be entitled to exchange their Shares for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, or winding up.

 

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(i)     Reclassification, Reorganization or Merger. In case of any reclassification, or capital reorganization (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of an issuance of Common Stock by way of dividend or other distribution or of a subdivision or combination), or in case of any consolidation or merger of the Company with or into another corporation (other than a merger with a subsidiary, in which merger the Company is the continuing corporation and which does not result in any reclassification, or capital reorganization) or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, the Company shall cause effective provision to be made so that the Holder shall have the right thereafter, by exercising this Warrant, to purchase the kind and amount of shares of Stock and other securities and property receivable upon such reclassification; capital reorganization; or other consolidation, merger, sale, or conveyance as may be issued or payable with respect to or in exchange for the number of Shares of the Company theretofore purchasable upon the exercise of this Warrant had such recapitalization; capital reorganization; or other consolidation, merger, sale or conveyance not taken place. Any such provisions shall include provision for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Warrant. The foregoing provisions of this Section (i) shall similarly apply to successive reclassifications; capital reorganizations; and to successive consolidations, mergers, sales, or conveyances.

 

In the event that in any such capital reorganization or reclassification, consolidation, merger, sale or conveyance, additional shares shall be issued in exchange, conversion, substitution or payment, in whole or in part, for a security of the Company other than Stock, any such issue shall be treated as an issue of Stock covered by the provisions of subsection (f) hereof with the amount of the consideration received upon the issue thereof being determined by the Board of Directors of the Company, such determination to be final and binding on the Holder.

 

(j)     Transfer to Comply with the Securities Act of l933.

 

(i)     This Warrant or the Warrant Stock or any other security issued or issuable upon exercise of this Warrant may not be sold, transferred, or otherwise disposed of except to a person who, in the opinion of counsel for the Company, is a person to whom this Warrant or such Warrant Stock may legally be transferred pursuant to Section (d) hereof without registration and without the delivery of a current Prospectus under the Act with respect thereto and then only against receipt of an agreement of such person to comply with the provisions of this Section (k) with respect to any resale or other disposition of such securities.

 

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(ii)     The Company may cause the following legend or one similar thereto to be set forth on each certificate representing Warrant Stock or any other security issued or issuable upon exercise of this Warrant not theretofore distributed to the public or sold to underwriters for distribution to the public pursuant to Section (j) hereof, unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary:

 

The shares represented by this Certificate have not been registered under the Securities Act of l933 (the "Act") and are "restricted securities" as that term is defined in Rule 144 under the Act. The shares may not be offered for sale, sold, or otherwise transferred except pursuant to an effective registration statement under the Act or pursuant to an exemption from registration under the Act, the availability of which is to be established to the satisfaction of the Company.

 

(iii)     Notwithstanding the above, the Company has agreed to file a registration statement covering the Warrant Stock.

 

(k)     Applicable Law. This Warrant shall be governed by and construed in accordance with the laws of Delaware.

 

 

	
			 

				
			AMERICAN, INC.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Timothy Keogh

				
			 

			
	
			 

				
			 

				
			Timothy Keogh, Chief Executive Officer

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

 

 

 

AmeriCann Warrant Strategic $1.50 7-14-16

 

5

 

 

PURCHASE FORM

 

                        Dated            .

 

The undersigned hereby irrevocable elects to exercise the within Warrant to the extent of purchasing         Shares of Warrant Stock and hereby makes payment of $____________ in payment of the actual exercise price thereof.

 

                   

 

 

INSTRUCTIONS FOR REGISTRATION OF STOCK

 

 

 

 

Name                                                                                   

                  (Please typewrite or print in block letters)

 

Address                                                                   

 

                                                                                 

 

Signature                                                                 

 

 

ASSIGNMENT FORM

 

 

FOR VALUE RECEIVED,                                              

 

hereby sell, assigns, and transfers unto:

 

Name:                                                                                      

                     (Please typewrite or print in block letters)

 

Address:                                                                  

 

the right to purchase the Common Stock represented by this Warrant to the extent of              shares as to which such right is exercisable and does hereby irrevocably constitute and appoint                    attorney, to transfer the same on the books of the Company with full power of substitution in the premises.

 

                                                                                          Signature                                                 

 

Dated:                      .

 

AmeriCann Warrant Strategic $1.50 7-14-16

 

6

 

 

AMERICANN, INC.

 

WARRANT

 

 

This is to certify that, FOR VALUE RECEIVED, Strategic Capital Partners, LLC, or registered assigns (“Holder”) is the holder of 800,000 Warrants of AmeriCann, Inc. (the “Company”). Each Warrant allows the holder to purchase one share of the Company’s Common Stock at a price of $3.00 per share at any time on or before June 30, 2020. The number of shares of Common Stock to be received upon the exercise of this Warrant, and the price to be paid for a share of Common Stock, may be adjusted from time to time as hereinafter set forth. The shares of Common Stock deliverable upon such exercise, as may be adjusted from time to time, are hereinafter sometimes referred to as “Warrant Stock”, and the exercise price of a share of Common Stock in effect at any time, and as may be adjusted from time to time, is hereinafter sometimes referred to as the "Exercise Price."

 

Nothwithstanding the above, this Warrant will expire 45 days after written notice to the holder that the average closing price of the Company’s common stock was at least $4.80 for twenty consecutive trading days and the average daily volume of trades of the Company’s common stock during the twenty trading days was at least 100,000 shares, provided a registration statement is in effect with respect to the shares issuable upn the exercise of this Warrant.

 

(a) Exercise of Warrant. This Warrant may be exercised in whole or in part at any time or from time to time but not later than 5.00 P.M., Mountain time, June 30, 2020 (the “Expiration Date”). If June 30, 2020 is a day on which banking institutions are authorized by law to close, then this Warrant may be exercised on the next succeeding day which shall not be such a day, by presentation and surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Purchase Form annexed hereto duly executed and accompanied by payment of the Exercise Price for the number of Shares of Warrant Stock specified in such form, together with all Federal and state taxes applicable upon such exercise. 

 

If this Warrant should be exercised in part only, the Company, upon surrender of this Warrant for cancellation, shall execute and shall deliver a new Warrant evidencing the right of the Holder to purchase the balance of the Shares of Warrant Stock purchaseable hereunder. Upon receipt by the Company of this Warrant at the office or the agency of the Company, in proper form for exercise, the Holder shall be deemed to be the Holder of record of the Shares of Warrant Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Shares of Warrant Stock shall not then be actually delivered to the Holder.

 

(b) Reservation of Shares of Warrant Stock. The Company hereby agrees that, at all times, there shall be reserved for issuance and/or delivery upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance or delivery upon exercise of this Warrant.

 

1

 

 

(c)  Fractional Shares. No fractional Shares of Warrant Stock or scrip representing fractional Shares of Warrant Stock shall be issued upon the exercise of this Warrant. With respect to any fraction of a Share of Warrant Stock called for upon any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction multiplied by the current market value of such fractional share determined as follows:

 

(i)     If the Company's Common Stock is publicly traded, the average daily closing prices for 30 consecutive trading days immediately preceding the date of exercise of this Warrant. The closing price for each day shall be the last sale price regular-way or, in case no such sale takes place on such date, the average of the closing bid and asked prices regular-way, on the principal national securities exchange in which the Company's Common Stock is listed or admitted to trading, or if it is not listed or admitted to trading on any national securities exchange, the last sale price of such Common Stock on the consolidated transaction reporting system of the Financial Institution Regulatory Authority (“FINRA”), if such last sale information is reported on such system, or if not so reported, the average of the closing bid and asked prices of such Common Stock on the National Association of Securities Dealers Automatic Quotation system ("NASDAQ"), or any comparable system, or if the Common Stock is not listed on NASDAQ, or a comparable system, the average of the closing bid and asked prices as furnished by two members of the NASD selected from time to time by the Company for that purpose.

 

(ii)     If the Company's Common Stock is not publicly traded, the current value shall be an amount, not less than the book value, determined in such reasonable manner as may be prescribed by the Board of Directors of the Company, such determination to be final and binding on the Holder.

 

(d)    Exchange, Assignment or Loss of Warrant. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other Warrants of different denominations entitling the Holder thereof to purchase in the aggregate the same number of Shares of Warrant Stock purchasable hereunder. This Warrant may not be sold, hypothecated, assigned, or transferred prior to the date this Warrant is first exercisable. Any assignment shall be made subject to the provisions of Section (j) by surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed hereto duly executed and with funds sufficient to pay any transfer tax; whereupon, the Company, without charge, shall execute and shall deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be cancelled. 

 

This Warrant may be divided or may be combined with other Warrants which carry the same rights upon presentation hereof at the office of the Company or at the office of its stock transfer agent, if any, together with a written notice specifying the names and the denominations in which new Warrants are to be issued and signed by the Holder hereof. The term "Warrant" as used herein includes any Warrants issued in substitution for or replacement of this Warrant or into which this Warrant may be divided or exchanged. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant, and (in the case of loss, theft, or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and will deliver a new Warrant of like tenor and date. Any such new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not this Warrant so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone.

 

2

 

 

(e)     Rights of the Holder. The Holder, by virtue hereof, shall not be entitled to any rights of a stockholder in the Company, either at law or in equity, and the rights of the Holder are limited to those expressed in the Warrant and are not enforceable against the Company except to the extent set forth herein.

 

(f)     Anti-Dilution Provisions.

 

(i)      Adjustment of Price. Anything in this Section (f) to the contrary notwithstanding, if the Company shall issue, at any time, Common Stock or convertible securities by way of dividend, forward stock split or other distribution on any stock of the Company or subdivide or combine the outstanding shares of Stock, the Exercise Price shall be proportionately decreased in the case of such issuance, forward stock split, or distribution (on the day following the date fixed for determining shareholders entitled to receive such additional shares) or proportionately increased in the case of such combination (on the date that such combination shall become effective), provided, however, should the Company cancel or fail to make such dividend or other distribution or other issuance, the Exercise Price shall be forthwith adjusted to the price which would have prevailed prior to the Company setting such record date.

 

(ii)      No Adjustment for Small Amounts. Anything in this Section to the contrary notwithstanding, the Company shall not be required to give effect to any adjustment in the Exercise Price unless and until the net effect of one or more adjustments, determined as above provided, shall have required a change of the Exercise Price by at least one cent, but when the cumulative net effect of more than one adjustment so determined shall be to change the actual Exercise Price by at least one cent, such change in the Exercise Price shall thereupon be given effect.

 

(iii)     Number of Shares Adjusted. Upon any adjustment of the Exercise Price, the Holder of this Warrant shall thereafter (until another such adjustment) be entitled to purchase, at the new Exercise Price, the number of Warrant Stock, calculated to the nearest full shares, obtained by multiplying the number of shares of Stock initially issuable upon exercise of this Warrant by the Exercise Price in effect on the date hereof and dividing the product so obtained by the new Exercise Price.

 

(g)     Officer's Certificate. Whenever the Exercise Price shall be adjusted as required by the provisions of Section (f) hereof, the Company shall forthwith file with its Secretary or an Assistant Secretary at its principal office, and with its stock transfer agent, if any, an Officer's Certificate showing the adjusted Exercise Price, determined as herein provided, and setting forth in reasonable detail the facts requiring such adjustment. Each such Officer's Certificate shall be made available at all reasonable times for inspection by the Holder; and the Company, after each such adjustment, shall forthwith deliver a copy of such certificate to the Holder. Such certificate shall be conclusive as to the correctness of such adjustment.

 

(h)     Notices to Warrant Holders. So long as this Warrant shall be outstanding and unexercised (i) if the Company shall pay any dividend or shall make any distribution upon the Common Stock or (ii) if the Company shall offer to the holders for subscription or purchase by them any shares of stock of any class or any other rights or (iii) if any capital reorganization of the Company; reclassification of the capital stock of the Company; consolidation or merger of the Company with or into another corporation; sale, lease or transfer of all or substantially all of the property and assets of the Company to another corporation; or voluntary or involuntary dissolution, liquidation, or winding up of the Company shall be effected, then, in any such case, the Company shall cause to be delivered to the Holder, at least ten (l0) days prior to the date specified in (x) or (y) below, as the case may be, a notice containing a brief description of the proposed action and stating the date on which (x) a record is to be taken for the purpose of such dividend, distribution, or rights, or (y) such reclassification, reorganization, consolidation, merger, conveyance, lease, dissolution, liquidation, or winding up is to take place and the date, if any, is to be fixed, as of which the holders of record shall be entitled to exchange their Shares for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, or winding up.

 

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(i)     Reclassification, Reorganization or Merger. In case of any reclassification, or capital reorganization (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of an issuance of Common Stock by way of dividend or other distribution or of a subdivision or combination), or in case of any consolidation or merger of the Company with or into another corporation (other than a merger with a subsidiary, in which merger the Company is the continuing corporation and which does not result in any reclassification, or capital reorganization) or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, the Company shall cause effective provision to be made so that the Holder shall have the right thereafter, by exercising this Warrant, to purchase the kind and amount of shares of Stock and other securities and property receivable upon such reclassification; capital reorganization; or other consolidation, merger, sale, or conveyance as may be issued or payable with respect to or in exchange for the number of Shares of the Company theretofore purchasable upon the exercise of this Warrant had such recapitalization; capital reorganization; or other consolidation, merger, sale or conveyance not taken place. Any such provisions shall include provision for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Warrant. The foregoing provisions of this Section (i) shall similarly apply to successive reclassifications; capital reorganizations; and to successive consolidations, mergers, sales, or conveyances.

 

In the event that in any such capital reorganization or reclassification, consolidation, merger, sale or conveyance, additional shares shall be issued in exchange, conversion, substitution or payment, in whole or in part, for a security of the Company other than Stock, any such issue shall be treated as an issue of Stock covered by the provisions of subsection (f) hereof with the amount of the consideration received upon the issue thereof being determined by the Board of Directors of the Company, such determination to be final and binding on the Holder.

 

(j)     Transfer to Comply with the Securities Act of l933.

 

(i)     This Warrant or the Warrant Stock or any other security issued or issuable upon exercise of this Warrant may not be sold, transferred, or otherwise disposed of except to a person who, in the opinion of counsel for the Company, is a person to whom this Warrant or such Warrant Stock may legally be transferred pursuant to Section (d) hereof without registration and without the delivery of a current Prospectus under the Act with respect thereto and then only against receipt of an agreement of such person to comply with the provisions of this Section (k) with respect to any resale or other disposition of such securities.

 

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(ii)     The Company may cause the following legend or one similar thereto to be set forth on each certificate representing Warrant Stock or any other security issued or issuable upon exercise of this Warrant not theretofore distributed to the public or sold to underwriters for distribution to the public pursuant to Section (j) hereof, unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary:

 

The shares represented by this Certificate have not been registered under the Securities Act of l933 (the "Act") and are "restricted securities" as that term is defined in Rule 144 under the Act. The shares may not be offered for sale, sold, or otherwise transferred except pursuant to an effective registration statement under the Act or pursuant to an exemption from registration under the Act, the availability of which is to be established to the satisfaction of the Company.

 

(iii)      Notwithstanding the above, the Company has agreed to file a registration statement covering the Warrant Stock.

 

(k)     Applicable Law. This Warrant shall be governed by and construed in accordance with the laws of Delaware.

 

 

	
			 

				
			AMERICAN, INC. 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Timothy Keogh

				
			 

			
	
			 

				
			 

				
			Timothy Keogh, Chief Executive Officer 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

 

 

 

 

 

 

 

AmeriCann Warrant Strategic $3.00 7-14-16

 

5

 

 

PURCHASE FORM

 

                        Dated            .

 

The undersigned hereby irrevocable elects to exercise the within Warrant to the extent of purchasing         Shares of Warrant Stock and hereby makes payment of $____________ in payment of the actual exercise price thereof.

 

                     

 

INSTRUCTIONS FOR REGISTRATION OF STOCK

 

 

 

Name                                                                                   

                  (Please typewrite or print in block letters)

 

Address                                                                   

 

                                                                                 

 

Signature                                                                 

 

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED,                                              

 

hereby sell, assigns, and transfers unto:

 

Name:                                                                                      

                     (Please typewrite or print in block letters)

 

Address:                                                                  

 

the right to purchase the Common Stock represented by this Warrant to the extent of              shares as to which such right is exercisable and does hereby irrevocably constitute and appoint                    attorney, to transfer the same on the books of the Company with full power of substitution in the premises.

 

                                                                          Signature                                                 

 

Dated:                      .

 

 

AmeriCann Warrant Strategic $3.00 7-14-16

 

6

 

 

AMERICANN, INC.

CONVERTIBLE PROMISSORY NOTE

$1,000,000

 

 

FOR VALUE RECEIVED, AmeriCann, Inc., a Delaware corporation, and its successors and assigns, (the "Company") promises to pay to the order of Strategic Capital Partners, LLC, (the "Holder"), the principal sum of $1,000,000 in lawful money of the United States of America, together with interest on so much of the principal balance thereof as is from time to time outstanding at the rate hereinafter provided, and payable as hereinafter provided.

 

1.     Interest Rate. The unpaid balance of this Note shall bear interest at the rate of 9.5% per annum, simple interest. Interest shall be calculated on a 365-day year and the actual number of days in each month.

 

2.     Payment/Maturity Date. Interest will be payable quarterly, with the first interest payment due on September 30, 2016. Interest payable on September 30, 2016 will accrue from the date the Company accepts the Holder’s subscription. Interest will only be payable on Notes which are outstanding on an interest payment date. The total outstanding principal balance hereof, together with all accrued and unpaid interest, will be due on December 31, 2019. 

 

3.     Conversion.

 

(a)     The Holder shall have the option to convert all or any part of the principal amount of this Note, together with all accrued interest thereon in accordance with the provisions of and upon satisfaction of the conditions contained in this Note, into fully paid and non-assessable shares of the Company’s common stock as is determined by dividing that portion of the outstanding principal balance and accrued interest under this Note as of such date that the Holder elects to convert by the Conversion Price. The initial Conversion Price will be $1.25.

 

(b)     No fractional shares of common stock shall be issued upon conversion of this Note, and in lieu thereof the number of shares of common stock to be issued upon each conversion shall be rounded up to the nearest whole number of shares of common stock.

 

(c)     The Holder’s conversion right set forth in this Section may be exercised at any time and from time to time but prior to payment in full of the principal and accrued interest on this Note.

 

(d)     The Holder may exercise the right to convert all or any portion of this Note only by delivery of a properly completed conversion notice on a Business Day to the Company’s principal executive offices. Such conversion shall be deemed to have been made immediately prior to the close of business on the Business Day of such delivery of the conversion notice (the “Conversion Date”), and the Holder shall be treated for all purposes as the record holder of the shares of common stock into which this Note is converted as of such date. For purposes of this Note, a Business Day is any day the Federal Reserve Bank is open.

 

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(e)     As promptly as practicable after the Conversion Date, the Company at its expense shall issue and deliver to the Holder of this Note a stock certificate or certificates representing the number of shares of common stock into which this Note has been converted.

 

(f)     Upon the full conversion of this Note the Company shall be forever released from all of its obligations and liabilities under this Note.

 

(g)     Holder acknowledges that the shares of common stock issuable upon conversion of this note are “restricted securities,” as such term is defined under the Securities Act. Holder agrees that Holder will not attempt to pledge, transfer, convey or otherwise dispose of such shares except in a transaction that is the subject of either: (i) an effective registration statement under the Securities Act and any applicable state securities laws; or (ii) an opinion of counsel rendered by legal counsel satisfactory to the Company, which opinion of counsel shall be satisfactory to the Company, to the effect that such registration is not required. The Company may rely on such an opinion of Holder's counsel in making such determination. Holder consents to the placement of a legend on the shares of common stock issuable upon the exercise of this Note stating that the shares represented by the certificate have not been registered under the Securities Act and setting forth or referring to the restrictions on transferability and sale thereof. 

 

(h)     If at any time there shall be a stock split of this Company’s common stock, the Conversion Price will be proportionately adjusted. 

 

(i)     If the common stock to be issued on conversion of this Note shall be changed into any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise, the holder of this Note shall, upon its conversion be entitled to receive, in lieu of the common stock which the Holder would have become entitled to receive but for such change, a number of shares of such other class or classes of stock that would have been subject to receipt by the Holder if it had exercised its rights of conversion immediately before such changes.

 

(j)     If at any time there shall be a capital reorganization of the Company’s common stock (other than of shares as provided for elsewhere in this Section 3) or merger of the Company into another corporation, or the sale of the Company’s properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger or sale, lawful provision shall be made so that the Holder of this Note will be entitled to receive the number of shares of stock or other securities or property from the successor corporation resulting from such merger to which the Holder would have been entitled as a result of such capital reorganization, merger or sale if this Note had been converted immediately before such capital reorganization, merger or sale.

 

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(k)     The Company will not, by amendment of its Articles of Incorporation or through any reorganization, recapitalization, transfer of assets, merger, dissolution, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holder of this Note against impairment.

 

(l)     Upon the occurrence of each adjustment or readjustment pursuant to any provision hereof, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder of this Note a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.

 

(m)     Notwithstanding the above, if the average closing price of the Company’s common stock is at least $2.50 for twenty consecutive trading days, and the average daily volume of trades of the Company’s common stock during the twenty trading days is at least 100,000 shares, the Company may, within 10 days of the end of such twenty day period, notify the Holder that the right to convert this Note into shares of the Company’s common stock will end 45 days after the date of the notice. 

 

4.     Reservation of Shares. At all times while this Note shall be convertible into shares of common stock, the Company shall reserve and keep available out of its authorized but unissued shares of common stock solely for the purpose of effecting the conversion of this Note such number of its shares of such common stock as shall from time to time be sufficient to effect the conversion of this Note in full. In the event that the number of authorized but unissued shares of such common stock shall not be sufficient to effect the conversion of the entire outstanding principal amount of this Note, then in addition to such other remedies as shall be available to the Holder, the Company shall take such corporate action as may be necessary to increase its authorized but unissued shares of such common stock to such number of shares as shall be sufficient for such purpose. 

 

5.     Prepayment. The Company may repay this Note at any time prior to maturity without the consent of the Holder.

 

6.     Security. This Note is unsecured. 

 

7.     Default. At the option of Holder, the unpaid principal balance of this Note and all accrued interest thereon shall become immediately due, payable, and collectible, without notice or demand, upon the occurrence at any time of any of the following events, each of which shall be deemed to be an event of default hereunder.

 

(a)     The Company fails to make any payment of interest or principal on the date on which such payment becomes due and payable under this Note, the Notes, or the notes referred to in Section 6(b) and the failure to pay continues uncured for a period of ten business days after the date on which notice of the failure to pay is first given to the Company

 

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(b)     The Company breaches any representation, warranty or covenant or defaults in the timely performance of any other obligation in its agreements with the Note holders and the breach or default continues uncured for a period of ten trading days after the date on which notice of the breach or default is first given to the Company, or ten trading days after the Company becomes, or should have become aware of such breach or default;

 

(c)     The Company files for protection from its creditors under the federal bankruptcy code or a third party files an involuntary bankruptcy petition against the Company and the involuntary petition is not dismissed within 30 days.

 

8.     Default, Interest and Attorney Fees. Upon declaration of a default hereunder, the balance of the principal remaining unpaid, interest accrued thereon, and all other costs, and fees shall be immediately due and payable and the balance of the principal remaining unpaid will bear interest at 15% per year. In the event of default, the Company agrees to pay all costs of collection including reasonable attorney’s fees.

 

9.     Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:

 

(a)     Authorization; Enforceability. All action on the part of the Company, necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(b)     Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note.

 

(c)     No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the obligations contemplated hereby will not result in a violation in any material respect of its Articles of Incorporation or By-Laws, or of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets.

 

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(d)     Covenants. So long as any Note is outstanding the Company will not pay any dividends or other distributions to the holders of any shares of its preferred stock or common stock unless all payments have been made to the Holders on a current basis.

 

10.     Assignment of Note. This Note may not be assigned by the Company. The Note may be assigned by Holder with the express written consent of the Company.

 

11.     Loss of Note. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, and in case of loss, theft or destruction of indemnification in form and substance acceptable to the Company in its reasonable discretion, and upon surrender and cancellation of this Note, if mutilated, the Company shall execute and deliver a new Note of like tenor and date.

 

12.     Non-Waiver. No delay or omission on the part of Holder in exercising any rights or remedy hereunder shall operate as a waiver of such right or remedy or of any other right or remedy under this Note. A waiver on any one or more occasion shall not be construed as a bar to or waiver of any such right and/or remedy on any future occasion.

 

13.     Maximum Interest. In no event whatsoever shall the amount paid, or agreed to be paid, to Holder for the use, forbearance, or retention of the money to be loaned hereunder ("Interest") exceed the maximum amount permissible under applicable law. If the performance or fulfillment of any provision hereof, or any agreement between Company and Holder shall result in Interest exceeding the limit for Interest prescribed by law, then the amount of such Interest shall be reduced to such limit. If, from any circumstance whatsoever, Holder should receive as Interest an amount which would exceed the highest lawful rate, the amount which would be excessive Interest shall be applied to the reduction of the principal balance owing hereunder (or, at the option of Holder, be paid over to Company) and not to the payment of Interest.

 

14.     Purpose of Loan. Company certifies that the loan evidenced by this Note is obtained for business or commercial purposes and that the proceeds thereof will not be used primarily for personal, family, household or agricultural purposes.

 

15.     Waiver of Presentment. Company and the endorsers, sureties, guarantors and all persons who may become liable for all or any part of this obligation shall be jointly and severally liable for such obligation and hereby jointly and severally waive presentment and demand for payment, notice of dishonor, protest and notice of protest, and any and all lack of diligence or delays in collection or enforcement hereof. Said parties consent to any modification or extension of time (whether one or more) of payment hereof, the release of all or any part of the security for the payment hereof, and the release of any party liable for payment of this obligation. Any modification, extension, or release may be without notice to any such party and shall not discharge said party's liability hereunder.

 

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16.     Governing Law. As an additional consideration for the extension of credit, Company and each endorser, surety, guarantor, and any other person who may become liable for all or any part of this obligation understand and agree that the loan evidenced by this Note will be construed in accordance with the laws of the State of Colorado.

 

17.     Arbitration. Any controversy or claim arising out of, or relating to this Note, or the making, performance, or interpretation thereof, shall be settled by arbitration in Denver, Colorado in accordance with the Commercial Rules of the American Arbitration Association then existing, and judgment on the arbitration award may be entered in any court having jurisdiction over the subject matter of the controversy.

 

18.     Binding Effect. The term "Company" as used herein shall include the original Company of this Note and any party who may subsequently become liable for the payment hereof as an assumer with the consent of the Holder, provided that Holder may, at its option, consider the original Company of this Note alone as Company unless Holder has consented in writing to the substitution of another party as Company.

 

19.     Relationship of Parties. Nothing herein contained shall create or be deemed or construed to create a joint venture or partnership between Company and Holder, Holder is acting hereunder as a lender only.

 

20.     Severability. Invalidation of any of the provisions of this Note or of any paragraph, sentence, clause, phrase, or word herein, or the application thereof in any given circumstance, shall not affect the validity of the remainder of this Note.

 

21.     Amendment. This Note may not be amended, modified, or changed, except only by an instrument in writing signed by both of the parties.

 

22.     Time of the Essence. Time is of the essence for the performance of each and every obligation of Company hereunder.

 

23.     Notices. All notices, consents, approvals, requests, demands and other communications which are required or may be given hereunder shall be in writing and shall be duly given if personally delivered, sent by overnight courier or posted by U.S. registered or certified mail, return receipt requested, postage prepaid and addressed to the other parties at the addresses set forth below.

 

If to the Company:

 

AmeriCann, Inc.

 3200 Brighton Blvd., Unit 144

Denver, CO 80216

Attn: President

 

If to the Holder, at the address as shown on the register maintained by the Company for such purpose.

 

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The Company or the Holder may change their address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section. If the Company receives any notice pursuant to this Note or any other Note of this series, it must, not later than five business days thereafter, dispatch a copy of such notice to the Holder of this Note and to each other Holder of any Note as reflected in the current Note Register.

 

IN WITNESS WHEREOF, the undersigned has executed this Note as of the 14th day of July, 2016.

 

	
			 

				
			AMERICANN, INC.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Timothy Keogh

				
			 

			
	
			 

				
			 

				
			Timothy Keogh, President 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

 

 

 

 

 

 

 

 

 

 

AmeriCann Conv. Prom. Note Strategic $1,000,000 7-14-16

 

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NOTICE OF CONVERSION

 

The undersigned hereby elects to convert the Convertible Note of AmeriCann, Inc., (the “Company”) into shares of the Company’s common stock according to the terms of the Note, as of the date written below. 

 

Conversion calculations: 

	 	Date of Conversion:	 
	 	 	 	 
	 	Principal Amount of Note to be Converted:	 
	 	 	 	 
	 	Payment of Interest in Common Stock __Yes       _No ___	 
	 	 	 	 
	 	If yes, $       of Accrued Interest to be converted.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	Signature:	 	 
	 	 	 	 
	 	Name (Print):	 	 
	 	 	 	 
	 	Address:	 	 
	 	 	 	 
	 	 	 	 

  

 

 

 

 

 

 

AmeriCann Conv. Prom. Note Strategic $1,000,000 7-14-16

 

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AMERICANN, INC.

 

ASSIGNMENT OF CONVERTIBLE NOTE

 

(Form of Assignment to be Executed if Note Holder

Desires to Transfer all or part of Convertible Note)

 

 

 

     FOR VALUE RECEIVED,                                hereby sells, assigns and transfers to                                                                                         .

                                                                                                   (Please print name and address including zip code)

 

	 	Please insert social security, federal tax ID number or other identifying number:
	 	 
	 	 

 

 

Check one:

 

	 	
			☐

				
			the attached Note, or

			

	 	
			☐

				
			$______ of the principal represented by the attached Note

			

 

 

 

 

	Dated:	 	 	 
	 	 	 	              Signature
	 	 	 	(Signature must conform in all respects to name of holder as shown on the face of the Note).

 

 

 

 

	
			Note:

				
			Any transfer or assignment of the Note is subject to compliance with the restrictions on transfer imposed by the terms of the Note.

			

 

 

 

 

 

 

 

 

AmeriCann Conv. Prom. Note Strategic $1,000,000 7-14-16

 

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AMERICANN, INC.

SECURED CONVERTIBLE PROMISSORY NOTE

$931,640

 

FOR VALUE RECEIVED, AmeriCann, Inc., a Delaware corporation, and its successors and assigns, (the "Company") promises to pay to the order of Strategic Capital Partners, LLC, (the "Holder"), the principal sum of $931,640 in lawful money of the United States of America, together with interest on so much of the principal balance thereof as is from time to time outstanding at the rate hereinafter provided, and payable as hereinafter provided.

 

1.     Interest Rate. The unpaid balance of this Note shall bear interest at the rate of 8% per annum, simple interest. Interest shall be calculated on a 365-day year and the actual number of days in each month.

 

2.     Payment/Maturity Date. Interest will be payable quarterly, with the first interest payment due on September 30, 2016. Interest payable on September 30, 2016 will accrue from the date the Company accepts the Holder’s subscription. Interest will only be payable on Notes which are outstanding on an interest payment date. The total outstanding principal balance hereof, together with all accrued and unpaid interest, will be due on December 31, 2019.

 

In addition to the foregoing, any amounts received from Wellness Group Pharms will be applied to the principal amount of the Note.

 

3.     Prepayment. The Company may repay this Note at any time prior to maturity without consent of the Holder.

 

4.     Security.

 

This Note will be secured by

 

	 	
			●

				
			a second lien on the Company’s property in Denver, Colorado, as well as any improvements constructed and any trade fixtures located on the property, and

			

 

	 	
			●

				
			the Company’s claims against Wellness Group Pharms.

			

 

5.     Default. At the option of Holder, the unpaid principal balance of this Note and all accrued interest thereon shall become immediately due, payable, and collectible, without notice or demand, upon the occurrence at any time of any of the following events, each of which shall be deemed to be an event of default hereunder.

 

(a)     The Company fails to make any payment of interest or principal on the date on which such payment becomes due and payable under this Note, the Notes, or the notes referred to in Section 6(b) and the failure to pay continues uncured for a period of ten business days after the date on which notice of the failure to pay is first given to the Company.

 

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(b)     The Company breaches any representation, warranty or covenant or defaults in the timely performance of any other obligation in its agreements with the Note holders and the breach or default continues uncured for a period of ten trading days after the date on which notice of the breach or default is first given to the Company, or ten trading days after the Company becomes, or should have become aware of such breach or default;

 

(c)     The Company files for protection from its creditors under the federal bankruptcy code or a third party files an involuntary bankruptcy petition against the Company and the involuntary petition is not dismissed within 30 days.

 

6.     Default, Interest and Attorney Fees. Upon declaration of a default hereunder, the balance of the principal remaining unpaid, interest accrued thereon, and all other costs, and fees shall be immediately due and payable and the balance of the principal remaining unpaid will bear interest at 15% per year. In the event of default, the Company agrees to pay all costs of collection including reasonable attorney’s fees.

 

7.     Representations, Warranties and Covenants of the Company. The Company represents, warrants and covenants with the Holder as follows:

 

(a)     Authorization; Enforceability. All action on the part of the Company, necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(b)     Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Note.

 

(c)     No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the obligations contemplated hereby will not result in a violation in any material respect of its Articles of Incorporation or By-Laws, or of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets.

 

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(d)     Covenants. So long as any Note is outstanding the Company will not pay any dividends or other distributions to the holders of any shares of its preferred stock or common stock unless all payments have been made to the Holders on a current basis.

 

8.     Assignment of Note. This Note may not be assigned by the Company. The Note may be assigned by Holder with the express written consent of the Company.

 

9.     Loss of Note. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, and in case of loss, theft or destruction of indemnification in form and substance acceptable to the Company in its reasonable discretion, and upon surrender and cancellation of this Note, if mutilated, the Company shall execute and deliver a new Note of like tenor and date.

 

10.     Non-Waiver. No delay or omission on the part of Holder in exercising any rights or remedy hereunder shall operate as a waiver of such right or remedy or of any other right or remedy under this Note. A waiver on any one or more occasion shall not be construed as a bar to or waiver of any such right and/or remedy on any future occasion.

 

11.     Maximum Interest. In no event whatsoever shall the amount paid, or agreed to be paid, to Holder for the use, forbearance, or retention of the money to be loaned hereunder ("Interest") exceed the maximum amount permissible under applicable law. If the performance or fulfillment of any provision hereof, or any agreement between Company and Holder shall result in Interest exceeding the limit for Interest prescribed by law, then the amount of such Interest shall be reduced to such limit. If, from any circumstance whatsoever, Holder should receive as Interest an amount which would exceed the highest lawful rate, the amount which would be excessive Interest shall be applied to the reduction of the principal balance owing hereunder (or, at the option of Holder, be paid over to Company) and not to the payment of Interest.

 

12.     Purpose of Loan. Company certifies that the loan evidenced by this Note is obtained for business or commercial purposes and that the proceeds thereof will not be used primarily for personal, family, household or agricultural purposes.

 

13.     Waiver of Presentment. Company and the endorsers, sureties, guarantors and all persons who may become liable for all or any part of this obligation shall be jointly and severally liable for such obligation and hereby jointly and severally waive presentment and demand for payment, notice of dishonor, protest and notice of protest, and any and all lack of diligence or delays in collection or enforcement hereof. Said parties consent to any modification or extension of time (whether one or more) of payment hereof, the release of all or any part of the security for the payment hereof, and the release of any party liable for payment of this obligation. Any modification, extension, or release may be without notice to any such party and shall not discharge said party's liability hereunder.

 

14.     Governing Law. As an additional consideration for the extension of credit, Company and each endorser, surety, guarantor, and any other person who may become liable for all or any part of this obligation understand and agree that the loan evidenced by this Note will be construed in accordance with the laws of the State of Colorado.

 

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15.     Arbitration. Any controversy or claim arising out of, or relating to this Note, or the making, performance, or interpretation thereof, shall be settled by arbitration in Denver, Colorado in accordance with the Commercial Rules of the American Arbitration Association then existing, and judgment on the arbitration award may be entered in any court having jurisdiction over the subject matter of the controversy.

 

16.     Binding Effect. The term "Company" as used herein shall include the original Company of this Note and any party who may subsequently become liable for the payment hereof as an assumer with the consent of the Holder, provided that Holder may, at its option, consider the original Company of this Note alone as Company unless Holder has consented in writing to the substitution of another party as Company.

 

17.     Relationship of Parties. Nothing herein contained shall create or be deemed or construed to create a joint venture or partnership between Company and Holder, Holder is acting hereunder as a lender only.

 

18.     Severability. Invalidation of any of the provisions of this Note or of any paragraph, sentence, clause, phrase, or word herein, or the application thereof in any given circumstance, shall not affect the validity of the remainder of this Note.

 

19.     Amendment. This Note may not be amended, modified, or changed, except only by an instrument in writing signed by both of the parties.

 

20.     Time of the Essence. Time is of the essence for the performance of each and every obligation of Company hereunder.

 

21.     Notices. All notices, consents, approvals, requests, demands and other communications which are required or may be given hereunder shall be in writing and shall be duly given if personally delivered, sent by overnight courier or posted by U.S. registered or certified mail, return receipt requested, postage prepaid and addressed to the other parties at the addresses set forth below.

 

If to the Company:

 

AmeriCann, Inc.

 3200 Brighton Blvd., Unit 144

Denver, CO 80216

Attn: President     

 

If to the Holder, at the address as shown on the register maintained by the Company for such purpose.

 

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The Company or the Holder may change their address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section. If the Company receives any notice pursuant to this Note or any other Note of this series, it must, not later than five business days thereafter, dispatch a copy of such notice to the Holder of this Note and to each other Holder of any Note as reflected in the current Note Register.

 

IN WITNESS WHEREOF, the undersigned has executed this Note as of the 14th day of July, 2016.

 

	
			 

				
			AMERICANN, INC. 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Timothy Keogh

				
			 

			
	
			 

				
			 

				
			Timothy Keogh, President 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

 

 

 

 

 

 

 

 

 

AmeriCann Secured Conv. Prom. Note Strategic $931,640 7-14-16

 

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NOTICE OF CONVERSION

 

The undersigned hereby elects to convert the Convertible Note of AmeriCann, Inc., (the “Company”) into shares of the Company’s common stock according to the terms of the Note, as of the date written below. 

 

Conversion calculations: 

 

	 	Date of Conversion:
	 	 	 	 
	 	Principal Amount of Note to be Converted:
	 	 	 	 
	 	
			Payment of Interest in Common Stock __Yes       _No ___  

			
	 	 	 	 
	 	If yes, $       of Accrued Interest to be converted.
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	Signature:	 	 
	 	 	 	 
	 	Name (Print):	 	 
	 	 	 	 
	 	Address:	 	 
	 	 	 	 
	 	 	 	 

 

 

 

 

 

 

 

AmeriCann Secured Conv. Prom. Note Strategic $931,640 7-14-16

 

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AMERICANN, INC.

 

ASSIGNMENT OF CONVERTIBLE NOTE

 

(Form of Assignment to be Executed if Note Holder

Desires to Transfer all or part of Convertible Note)

 

 

 

     FOR VALUE RECEIVED,                                hereby sells, assigns and transfers to                                                                                        .

                                                                                                  (Please print name and address including zip code)

 

	 	Please insert social security, federal tax ID number or other identifying number:
	 	 
	 	 

 

 

Check one:

 

	 	
			☐

				
			the attached Note, or

			

	 	
			☐

				
			$______ of the principal represented by the attached Note

			

 

 

	Dated:	 	 	 
	 	 	 	
			Signature

			 

			 

			
			(Signature must conform in all respects to name of holder as shown on the face of the Note).

			

			

 

 

 

	
			Note:

				
			Any transfer or assignment of the Note is subject to compliance with the restrictions on transfer imposed by the terms of the Note.

			

 

 

 

 

 

 

 

AmeriCann Secured Conv. Prom. Note Strategic $931,640 7-14-16ex_101712.htm

 

 

 

 

 

EXHIBIT 10.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSULTING AGREEMENT

 

 

THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into the 7th day of April, 2016 (the "Effective Date") by and between Coastal Compassion, Inc., a Massachusetts non-profit organization with an address at 36 N. Water Street, Unit 2, New Bedford, MA 02740 (hereinafter “Company"), and AmeriCann, Inc., a Delaware corporation with an address at 3200 Brighton Blvd., Unit 114, Denver, CO 80216 (hereinafter "Consultant") (each a “party” and collectively the “parties”).

 

RECITALS

 

WHEREAS, Company and Consultant entered into a Development Agreement dated __________________, 2015, to finance (the “Loan”) and support the construction and operation of a marijuana cultivation, processing, and dispensary facility in Fairhaven, MA (the “Fairhaven Facility”); the Development Agreement is hereby incorporated into this Agreement by reference where relevant and any capitalized terms appearing herein shall have the same meaning of the same terms in the Development Agreement; and,

 

WHEREAS, Company wishes to engage Consultant to provide the services described herein and Consultant agrees to provide the services for the compensation and otherwise in accordance with the terms and conditions contained in this Agreement.

 

NOW THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, accepted and agreed to, Company and Consultant, intending to be legally bound, agree to the terms set forth below.

 

	
			1. 

				
			THE SERVICES.

			

 

Consultant shall provide consulting and support services to Company during preconstruction, construction, preopening, operations and throughout the term of the agreement. 

 

(a)     Consultant will make regularly-scheduled visits to the Fairhaven Facility to meet with Company and consultants, assist with implementation of programs and provide relevant support and access to Consultant’s staff, contractors, consultants, advisors and experts.

 

(b)     Company will have access to Consultant’s staff, contractors, consultants, advisors and experts throughout the term of the Agreement by phone, email, and video conference to supplement the regularly-scheduled visits. Company and Consultant agree to identify a mutually acceptable day and time for a weekly or by-weekly conference call.

 

(c)     Company shall have access to Consultant’s facilities throughout the country, where permissible, for training, education and research.

 

(d)     The initial areas of focus for the consulting services (the “Services”) include the following areas which may be expanded and adjusted to meet the needs of the Company during the Term of the Agreement:

 

2

 

 

1)     Construction Loan Administration – Consultant will assist Company with reviewing and approving construction budgets, estimates, and systems for monitoring construction costs to streamline construction progress and the administration of the Construction Loan.

 

2)     Working Capital Loan Administration – Consultant will review Company’s operating budgets and forecasts; make recommendations of improved efficiencies in all areas of expenses; provide strategic start-up consultation prior to the commencement of operations and administer the Working Capital Loan. 

 

3)     Compliance – During the term of the agreement the Consultant will conduct compliance audits, reviews, and help address deficiencies to protect the license and the Consultant’s investment. 

 

4)     Lean Manufacturing – Consultant will conduct audits and inspections of work-flow of the operation and implement lean manufacturing practices to eliminate waste (time, process, labor) within the operation.

 

5)     Marketing Support – Consultant will assist Company with designing and developing a marketing plan that complies with DPH regulations to raise the profile of the Company, educate patients on benefits of medical cannabis, and promote community outreach efforts.

 

6)     Remote Monitoring – Consultant will review the designed and selected environmental controls and security systems to determine remote monitoring capabilities. Consultant will present options to Company for systems to remotely monitor the facility.

 

7)     Infused Product Manufacturing – Consultant will assist Company in designing and developing the infused product offerings designed to treat specific medical conditions outlined by DPH. The infused product offerings will be tailored to the size of production and manufacturing space within the current facility. 

 

	 	
			A)

				
			Consultant will assist Company with creation of Good Manufacturing Practices (GMPs) for products within the line.

			

 

	 	
			B)

				
			Consultant will assist Company with the selection and installation of infused product manufacturing equipment and provide training and Standard Operating Procedures for selected equipment.

			

 

	 	
			C)

				
			Consultant will assist Company with training and Standard Operation Procedures for selected C02 extraction equipment.

			

 

	 	
			D)

				
			Consultant may provide Company with the “Cannabis Consumer Advisor Program (C-CAP).” C-CAP is being designed, developed and financed by Consultant to solicit objective feedback from medical cannabis patients to empower Company to improve product offerings and educate patients. An outline of C-CAP is attached to this Agreement as Exhibit 1. 

			

 

3

 

 

(e)     Company has budgeted up to forty (40) hours of consulting per month during the Term of the Agreement. 

 

(f)     Consultant represents and warrants to Company that it is under no contractual or other restrictions or obligations which are inconsistent with the execution of this Agreement, or which will interfere with the rendering of the Services. Consultant represents and warrants that the execution and performance of this Agreement will not violate any policies or procedures of any other person or entity for which it performs services concurrently with those performed herein. Consultant’s work is not restricted or exclusive to Company and Consultant is not prohibited from providing the same or similar services to competitors of Company.

 

(g)     When rendering the Services, Consultant shall comply, to the best of its knowledge, with all business conduct, regulatory, and health and safety guidelines established by Company and by any governmental authority with respect to Company’s business, including but not limited Massachusetts’ 105 CMR 725.000 et seq.

 

(h)     Consultant agrees that all Services will be rendered by it as an independent contractor and that this Agreement does not create an employer-employee relationship between Company and Consultant or any of Consultant’s employees or agents. Neither Consultant nor any of Consultant’s employees or agents shall have the right to receive any employee benefits from Company including, but not limited to, health and accident insurance, life insurance, sick leave and/or vacation. Consultant agrees to pay all taxes due in respect of the Consulting Fee (as defined in Section 2 herein) and to indemnify Company in the event Company is required to pay any such taxes on behalf of Consultant.

 

(i)     Consultant does not cultivate, harvest, distribute or sell cannabis.

 

	
			2. 

				
			CONSULTING FEE.

			

 

(a)     Beginning on the first (1st) day of the first (1st) Calendar month after Consultant provides any portion of the Loan amount as described in the Development Agreement (“Commencement Date”) and subject to the provisions hereof, Company shall pay Consultant a consulting fee of Ten Thousand Dollars ($10,000.00) per month for the Services provided to Company (the "Consulting Fee").

 

(b)     The Consulting Fee shall initially accrue and be added to the Loan as principal until the first day of the sixth (6th) calendar month after which Company begins sales in the Fairhaven Facility (the “Accrued Consulting Fee”).

 

(c)     The Accrued Consulting Fee shall be paid along with the Loan as specified in Section 3 of Development Agreement and in particular as specified in Sections 3.1 and 3.2 of the Development Agreement.

 

(d)     Company shall have the right, but not the obligation, to commence repayment of the Accrued Consulting Fee at any time.

 

(e)     Beginning with the fifth (5th) calendar month after which Company begins sales at the Fairhaven Facility, Company shall pay the Consulting Fee by the tenth (10th) day of the month for which the Consulting Fee shall be due. Consultant shall issue an invoice for the Consulting Fee by the first (1st) business day of each month for the month for which the Consulting Fee shall be due.

 

4

 

 

(f)     Consultant shall be entitled to prompt reimbursement for all pre-approved expenses incurred when rendering the Services, upon submission and approval of written statements and receipts. Company shall make reimbursements to Consultant within fifteen (15) days after Consultant submits its statements and receipts.

 

(g)     Once the Consulting Fee becomes payable on a monthly basis, if the Consulting Fee is not paid by the tenth (10th) day of any month, a late fee of two point five percent (2.5%) shall be added to the Consulting Fee for each such month the payment is late and Consultant may commence collection of the amount due under this Agreement.

 

	
			3. 

				
			SECURITY INTEREST.

			

 

(a)     To secure the payment of the Consulting Fee and the reimbursements under Section 2(f) during the Term, to the extent allowed for under Massachusetts law, Company grants to Consultant a security interest in all of the same collateral described in Section 1(b) of the Security Agreement(s) (“Collateral”) that secures repayment of, among other things, the Commercial Promissory Note(s). The Security Agreement(s) and Commercial Promissory Note(s) are hereby incorporated into this Agreement by reference.

 

(b)     Consultant shall be entitled to file a separate financing statement or any other documents deemed necessary as provided for in the Security Agreement(s) to perfect the security interest herein granted.

 

(c)     Company’s obligations to pay the Consulting Fee for each month and reimbursements under Section 2(f) of this Agreement are separate, distinct and independent obligations of Company from the Commercial Promissory Note(s), and payment of the Commercial Promissory Note(s) does not in any way affect the validity and enforceability of this Agreement nor of the rights of Consultant under the Security Agreement(s) as a secured creditor, which shall continue in full force and effect notwithstanding the Commercial Promissory Note(s) obligations.

 

(d)     Notwithstanding any provision of this Agreement, the Consultant hereby agrees that Consultant’s security interest shall not include the seizure of assets protected by the Humanitarian Medical Use of Marijuana Act, Ch. 369 of the Acts of 2012, i.e. any product containing any amount of marijuana. The Consultant shall not be entitled to a security interest that provides to Consultant inventory of Company that contains any amount of marijuana, in any form, whether flower or infused product. The Consultant hereby forfeits any such remedy. In addition, Consultant hereby understands and agrees that a Certificate of Registration, whether provisional or final, is non-transferrable, and may not be assigned or transferred without prior Department of Public Health approval. Consultant agrees that Company’s Certificate of Registration is not an asset that may be seized by Consultant and is not available as a remedy for Consultant’s default under this or any other Agreement, and hereby expressly waives any such remedy or security interest.

 

5

 

 

	
			4. 

				
			TERM AND TERMINATION.

			

 

(a)     This Agreement shall commence on the Effective Date and shall continue for a period of three (3) years or until such time as Company makes the final payment under the Commercial Promissory Note(s), whichever is later (the “Term”).

 

(b)     If Consultant voluntarily ceases rendering the Services, or is unable to render the Services, the Company shall no longer be obligated to pay the Consulting Fee as of such date.

 

(c)     This Agreement may be terminated without cause by Consultant upon not less than thirty (30) days prior written notice by Consultant to Company.

 

(d)     Company shall not have a right to terminate this Agreement except under the following three circumstances:

 

1)     If Consultant has failed to perform the duties and services outlined in Section 1 of this Agreement and failed to cure within thirty (30) days following written notice from Company.

 

2)     If Consultant has failed to fund more than 50% of the Loan through no fault of Company. “Through no fault of Company” shall mean that Company has timely complied with each of the following conditions:

 

	 	
			A)

				
			Provided Consultant copies of all invoices, payments, checks, receipts for expenses and the like for all activities and transactions related to the startup and operations of the business in the Fairhaven Facility;

			

 

	 	
			B)

				
			Provided Consultant with a Balance Sheet, General Ledger and a Profit and Loss Statement, all current as of the date of submittal;

			

 

	 	
			C)

				
			Has and continues to diligently complete startup of the business and operates the business in a businesslike manner; and

			

 

	 	
			D)

				
			Following individual members of Consultant’s teams’ approval as may be required by the Massachusetts’ Department of Public Health, provided Consultant access to the Fairhaven Facility at any time during business hours to inspect the build-out, construction and operations of the business in the Fairhaven Facility.

			

 

If Company has not timely complied with each of the foregoing conditions A through D, and Consultant does not fund at least 50% of the Loan as described in the “Development Agreement”, the lack of such funding shall be deemed to be through the fault of Company, and Company shall have no right to terminate this Agreement. In that event, this Agreement shall remain in full force and effect and Consultant shall have no obligation to advance additional funds on the Loan.

 

6

 

 

3)     If the provisions of this Section 4(b) above apply.

 

(e)     Upon termination under Sections 4(b), 4(c) or 4(d), neither party shall have any further obligations under this Agreement, except for the obligations which by their terms survive this termination as noted in Section 14 herein.

 

(f)     Notwithstanding anything to the contrary contained herein, the termination of this Agreement under any part of this Section 4, or for any other reason, shall have no effect on the independent obligations of Company to Consultant under the Development Agreement, the Commercial Promissory Note(s), and/or the Security Agreement(s)

 

5.           RESTRICTED ACTIVITIES. During the Term and for a period of one (1) year thereafter, Company will not, directly or indirectly:

 

(i)     solicit or request any employee of or consultant to Consultant to leave the employ of or cease consulting for Consultant;

 

(ii)     solicit or request any employee of or consultant to Consultant to join the employ of, or begin consulting for, any individual or entity that researches, develops, markets or sells products that compete with those of Consultant;

 

(iii)     solicit or request any individual or entity that researches, develops, markets or sells products that compete with those of Consultant, to employ or retain as a consultant any employee or consultant of Consultant; or

 

(iv)     Induce or attempt to induce any supplier or vendor of Consultant to terminate or breach any written or oral agreement or understanding with Consultant.

 

6.           WAIVER. Any waiver by Consultant of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or any other provision hereof. All waivers by Consultant shall be in writing.

 

 

7.         SEVERABILITY; REFORMATION. In case any one or more of the provisions or parts of a provision contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall have no effect on any other provision or part of a provision of this Agreement; and this Agreement shall, to the fullest extent lawful, be reformed and construed as if such invalid or illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provision or part reformed so that it would be valid, legal and enforceable to the maximum extent possible. Without limiting the foregoing, if any provision (or part of provision) contained in this Agreement shall for any reason be held to be excessively broad as to duration, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the fullest extent compatible with then existing applicable law.

 

7

 

 

8.     NON-ASSIGNMENT. Company shall not have the right to assign its rights or obligations under this Agreement to a party which assumes Company's obligations hereunder without the prior written consent of Consultant.

 

9.     HEADINGS. Headings and subheadings are for convenience only and shall not be deemed to be a part of this Agreement.

 

10.     AMENDMENTS. This Agreement may be amended or modified, in whole or in part, only by an instrument in writing signed by all parties hereto. Any amendment, consent, decision, waiver or other action to be made, taken or given by Company with respect to the Agreement shall be made, taken or given on behalf of Company only by authority of the Board of Directors.

 

11.     NOTICES. Any notice, consent, request, instruction, approval or other communication required or permitted under this Agreement, or any other document or instrument in connection herewith, shall be in writing and shall be deemed to have been validly given, made or served on the date when personally delivered, or mailed by certified United States mail, return receipt requested, postage prepaid and properly addressed, to the respective party to whom such notice, consent, request, instruction, approval or other communication relates, at the addresses for Consultant and Company stated on the first page hereof, or to such other address as shall be furnished in writing by either party to the other.

 

12.     COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall constitute an original and all of which shall be deemed a single agreement.

 

13.      GOVERNING LAW, MEDIATION and ARBITRATION. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the laws of the State of Colorado, without giving effect to any choice of law or conflict of law provision or rule.

 

For any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, the parties will attempt in good faith to resolve any dispute or claim arising out of or in relation to this Agreement through negotiations between a Director of each of the parties with authority to settle the relevant dispute. If the dispute cannot be settled amicably within fourteen (14) days from the date on which either party has served written notice on the other of the dispute then the remaining provisions of this Paragraph shall apply. Following good faith attempts to resolve the dispute, the parties agree to participate in at least four hours of mediation. The parties agree to share equally in the costs of the mediation. Mediation involves each side of a dispute sitting down with an impartial person, the mediator, to attempt to reach a voluntary settlement. Mediation involves no formal court procedures or rules of evidence, and the mediator does not have the power to render a binding decision or force an agreement on the parties. Mediation shall be conducted at a mutually-agreeable site in Boston, Massachusetts.

 

In the event that good faith attempts of resolution and mediation fail to provide a resolution to the dispute, resolution of the dispute shall be determined by arbitration at a mutually-agreeable site Denver, Colorado before one arbitrator. The arbitration shall be administered by the American Arbitration Association or JAMS. Judgment on the award may be entered in any court having jurisdiction. The losing party shall pay for all arbitrator’s fees and costs, and shall reimburse the prevailing party for its attorneys’ fees and costs.

 

8

 

 

14.     SURVIVAL. The provisions of Sections 1(d), 2(f), 3, 5, 13 and 14 of this Agreement shall survive the expiration or termination of this Agreement. This Agreement shall prevail over any conflicting provisions in the Development Agreement with respect to the subject matter hereof; and other than observing the relevant provisions of the Development Agreement, this Agreement supersedes all prior agreements, written or oral, between Company and Consultant relating to the subject matter of this Agreement.

 

 

 

 

 

 

 

 

<signature page to follow>

 

 

 

9

 

 

IN WITNESS WHEREOF, Consultant and Company have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date written above.

 

 

AMERICANN, INC.

 

 

By: /s/ Benjamin J. Barton                                   

Name: Benjamin J. Barton

Title: Director, CFO

 

 

COASTAL COMPASSION, INC.

 

 

By: /s/ Joanne Leppanen                                     

Name: Joanne Leppanen

Title: Director, Executive Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AmeriCann Consult. Agree Coastal 2-2-17

 

10

 

 

COASTAL COMPASSION, INC | AMERICANN, INC

PROMISSORY NOTE & AGREEMENT

 

 

	
			1.

				
			DEFINED TERMS. As used in this Promissory Note (this “Note”), the following terms shall have the following meanings:

			

 

	a.	Borrower:	
			Coastal Compassion, Inc.

			
			36 N. Water Street, Unit 2

			

			New Bedford, MA 02739

			
	 	 	 
	b.	Lender:	
			AMERICANN, INC

			3200 Brighton Blvd, Unit 114

			Denver, CO 80216

			
	 	 	 
	c.	Loan Amount: 	Two Million Five-Hundred Thousand Dollars ($2,500,000)
	 	 	 
	d.	Loan:	The obligations of the Borrower under this Note.
	 	 	 
	e.	Payment Date:	The 1st day of each calendar quarter, with the first payment commencing on the first (1st) day of the sixth (6th) calendar month the Borrower begins providing medicine to qualifying patients and their personal caregivers through the related Registered Marijuana Dispensary (“RMD”), as defined in105 CMR 725.000 et seq.
	 	 	 
	f.	Maturity Date:	Sixty (60) months after the first Payment Date.

   

	
			2.

				
			DEBT: For value received, the Borrower hereby promises to pay to the order of the Lender the Loan Amount, or so much of the Loan Amount as has been advanced by the Lender, together with interest on the unpaid balance under this Note at the applicable interest rate set forth in Section 3 below and with all other amounts due hereunder. All amounts due from Borrower to Lender under this Note shall be made without benefit of any setoff, counterclaim, or other defense.

			

 

	
			3.

				
			INTEREST: From the date the loan is made, interest shall accrue on the unpaid principal balance at a fixed rate of interest equal to eighteen (18) percent, compounded quarterly (the “Fixed Rate”). Interest shall at all times be calculated on a 90-day quarter of three 30-day months, but shall accrue and be payable on the actual number of days elapsed.

			

 

	
			4.

				
			PAYMENTS: Commencing on the first Payment Date and thereafter on each subsequent Payment Date until the Maturity Date, the Borrower shall make equal monthly payments of principal and interest sufficient to fully amortize the outstanding principal balance of the Loan at the Fixed Rate over a five (5) year period of time. If not otherwise paid, all outstanding principal and accrued but unpaid interest shall otherwise be paid on or before the Maturity Date. If interest is due and accrued for a period of more or less than one (1) quarter on the First Payment Date, the amount of the first payment shall be increased or decreased to the extent that the amount of interest then due exceeds or is less than one (1) quarter’s interest. 

			

 

11

 

 

All principal, accrued interest, and any other amounts due hereunder, shall be due and payable on the Maturity Date or on such earlier date as may be required under the terms of this Note. Any payments on this Note, whether such payment is of a regular installment or represents a prepayment (if permitted hereunder), shall be made in coin and currency of the United States of America which is legal tender for the payment of public and private debts, in immediately available funds, to the Lender at Lender’s address set forth or at such other address as Lender may from time to time designate in writing.

 

	
			5.

				
			DELINQUENCY CHARGES: If the Borrower fails to pay any amount due under this Note for thirty (30) days after such payment becomes due, the Lender may, at its option, whether immediately or at the time of final payment of the amounts evidenced by this Note, impose a delinquency or “late” charge equal to five (5) percent of the amount of such past due payment, notwithstanding the date on which such payment is actually paid in full. To the extent permissible by law, the Borrower and Lender agree that any such delinquency charges shall not be deemed to be additional interest or penalty, but shall be deemed to be liquidated damages because of the difficulty in computing the actual amount of damages in advance.

			

 

	
			6.

				
			DEFAULT: “Event(s) of Default” shall mean the occurrence of any of the following events: 

			

 

	 	
			a.

				
			The Borrower fails to make any payment of principal or interest on the Note when due thereunder or any other payment obligation in respect of this Note within thirty (30) days of the date when due, unless excused in writing by the Lender; or

			

 

	 	
			b.

				
			The Borrower defaults in the performance of any other term, covenant or agreement contained in this Note and such default shall continue uncured for thirty (30) days; or

			

 

	 	
			c.

				
			The Borrower is dissolved, becomes insolvent or bankrupt or ceases paying its debts as they mature for a period of thirty (30) days after such maturity or Borrower makes an assignment for the benefit of creditors; or a trustee, receiver or liquidator is appointed for the Borrower or for a substantial part of the property of the Borrower; or bankruptcy, reorganization, arrangement, insolvency or similar proceedings are instituted by or against the Borrower under the laws of any jurisdiction (provided that, if involuntary, such proceedings shall not be an Event of Default unless they are not stayed or dismissed within forty-five (45) days); or

			

 

	 	
			d.

				
			Entry of any court order against the Borrower which enjoins, restrains or in any way prevents the Borrower from conducting a substantial part of their business activities or materially interferes with the ownership, use or occupation of any if their assets which court order is not rescinded or dismissed within ninety (90) days of its issuance; or

			

 

	 	
			e.

				
			The criminal conviction or indictment of the Borrower or any director, officer or manager of the Borrower, or the entry of any judgment against the Borrower or any director, officer or manager of the Borrower for any act involving moral turpitude, dishonesty, theft, unethical business conduct or any conduct which, in the reasonable discretion of the Lender, substantially and materially impairs or injures the reputation of the Borrower or any senior officer or manager of the Borrower or substantially and materially harms the Borrower in any way; or

			

 

12

 

 

	 	
			f.

				
			Borrower’s breach of any representations or warranties made or agreed to be made in this Agreement or otherwise in connection with the Note by any party to this Agreement or the in any respect or if such representations and warranties shall prove to be false or misleading in any respect when made; or

			

 

	 	
			g.

				
			A levy be made on any property of the Borrower under any process, or any lien creditor commences suit to enforce a judgment lien against any property of the Borrower or any assets of the Borrower and such levy or action shall not be bonded against by sureties deemed by Lender to be sufficient in its sole opinion and judgment; or

			

 

	 	
			h.

				
			Borrower’s failure to obtain a final registration to operate a RMD in the Commonwealth of Massachusetts, or such registration has been revoked or suspended for a period of sixty (60) days or longer. 

			

 

	
			7.

				
			ACCELERATION AND OTHER REMEDIES: If an Event of Default, as such term is defined in Section 6 of this Note occurs, then, and in any such event, the Lender may, at its option, declare the entire unpaid balance of this Note, together with interest accrued thereon, to be immediately due and payable and may proceed to exercise any rights or remedies that it may have under this Note, or such other rights and remedies which the Lender may have at law, equity or otherwise, and Lender shall be released from any and all obligations to the Borrower under the terms of this Agreement. In addition to the rights and remedies set forth in this Agreement, Lender shall have all the other rights and remedies accorded in equity and under all other applicable laws, and under any other instrument or agreement now or in the future entered into between Lender and the Borrower, and all of such rights and remedies are cumulative and none is exclusive. Exercise or partial exercise by Lender of one or more of its rights or remedies shall not be deemed an election, nor bar the Lender from subsequent exercise or partial exercise of any other rights or remedies. The failure or delay of the Lender to exercise any rights or remedies shall not operate as a waiver thereof, but all rights and remedies shall continue in full force and effect until all of the obligations of Borrower have been indefeasibly paid and performed.

			

 

	
			8.

				
			LIMITATION OF REMEDIES: Notwithstanding any provision of this Note, the Lender hereby agrees that Lender’s rights and remedies following a default shall not include the seizure of assets protected by the Humanitarian Medical Use of Marijuana Act, Ch. 369 of the Acts of 2012, i.e. any product containing any amount of marijuana. The Lender shall not be entitled to a repayment or remedy that provides to Lender inventory of Borrower that contains any amount of marijuana, in any form, whether flower or infused product. The Lender hereby forfeits any such remedy. In addition, Lender hereby understands and agrees that a Certificate of Registration, whether provisional or final, is non-transferrable, and may not be assigned or transferred without prior Department of Public Health approval. Lender agrees that Borrower’s Certificate of Registration is not an asset that may be seized by Lender or available as a remedy for Borrower’s default under this Agreement, and hereby expressly waives any such remedy.

			

 

13

 

 

	
			9.

				
			COSTS AND EXPENSES UPON DEFAULT: In addition to principal, interest and delinquency charges, the Lender shall be entitled to collect all costs of collection, including, but not limited to, reasonable attorneys’ fees and expenses incurred in connection with Lender’s collection efforts, whether or not suit on this Note is filed, and all such costs and expenses shall be payable on demand. 

			

 

	
			10.

				
			APPLICATION OF PAYMENTS: All payments hereunder shall be applied first to delinquency charges, costs of collection and enforcement and other similar amounts due, if any, under this Note, then to interest which is due and payable under this Note, and the remainder, if any, to principal due and payable under this Note. Notwithstanding anything herein to the contrary, if an Event of Default has occurred which has not been waived in writing by the Lender, such payments may be applied to sums due under this Note in any order and combination that Lender may, in its sole and absolute discretion, determine.

			

 

	
			11.

				
			PERMITTED PREPAYMENT: The Borrower shall have the right to prepay the Loan in whole, or in part, together with all delinquency charges and any other amounts which may be due hereunder at any time, without premium or penalty. The Borrower must give Lender no less than five (5) days’ prior written notice of the Borrower’s intention to prepay. The date fixed for prepayment in such notice shall become the maturity date with respect to such portion of the outstanding balance being repaid.

			

 

	
			12.

				
			INDEMNIFICATION: To the extent permitted by applicable Law, the Borrower hereby indemnifies and agrees to hold Lender and its directors, officers, agents, and employees (individually and collectively, the “Indemnitee(s)”) harmless from and against: 

			

 

	 	
			a.

				
			Any and all claims, demands, actions, or causes of action (including, without limitation, any such matters that relate to Lender’s direct or indirect involvement in the funding or construction of the RMD) that are asserted against any Indemnitee by any person, if the claim, demand, action or cause of action, directly or indirectly, relates to a claim, demand, action, or cause of action that the person has or asserts against the Borrower; and 

			

 

	 	
			b.

				
			Any and all liabilities, losses, costs, or expenses (including court costs and attorneys’ fees) that any Indemnitee suffers or incurs as a result of the assertion of any claim, demand, action, or cause of action specified in this Section 11. 

			

 

The Borrower agrees to indemnify and hold the Lender harmless from and against all loss, cost or expense which Lender may sustain or incur as a consequence of default by the Borrower in prepayment of any portion of the Loan and accrued interest thereon, after having given notice that prepayment will occur, or payment by acceleration or otherwise, including, but not limited to, any such loss or expense arising from interest or fees payable by the Lender to lenders of funds obtained by the Lender in order to make or maintain the Loan. This indemnification shall survive the payment of the outstanding principal balance of the Loan. A certificate of the Lender as to any additional amounts payable pursuant to this grammatical paragraph shall, absent manifest error, be final, conclusive and binding upon the Borrower.

 

14

 

 

	
			13.

				
			COSTS; ILLEGALITY OF LOAN: The Borrower shall pay to the Lender on demand: 

			

 

	 	
			a.

				
			All costs and reasonable expenses of the Lender in connection with, and any stamp or other taxes or charges (including filing fees) payable with respect to, this Note and the enforcement hereof; 

			

 

	 	
			b.

				
			Any amount necessary to compensate the Lender for any losses or costs (including funding costs) sustained by it as a consequence of any Event of Default by the Borrower hereunder; and 

			

 

	 	
			c.

				
			Any increased costs the Lender may sustain in maintaining the borrowing evidenced hereby due to the introduction of, or any change in, law or applicable regulations (including the interpretation thereof) or due to the compliance by the Lender with any guideline or request from any central bank or governmental authority. In addition, if it shall become unlawful, or any central bank or other governmental authority shall assert it to be unlawful, for the Lender (or any bank which is directly or indirectly funding the Lender with respect to the Loan) to maintain the borrowing evidenced hereby, the Borrower agrees to prepay this Note in full together with accrued interest and other amounts payable hereunder on demand. It is understood that the marijuana is currently illegal under the laws of the United States of America and such illegality shall have no effect upon this loan.

			

 

	
			14.

				
			WAIVERS: THE BORROWER IRREVOCABLY WAIVES ITS RIGHTS TO NOTICE AND HEARING TO THE EXTENT PERMITTED BY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER MAY DESIRE TO USE, and, further, irrevocably waives presentment for payment, demand, notice of nonpayment, diligence in collection, commencement of suit against any obligor, notice of protest, and protest of this Note and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Note, before or after the maturity of this Note, with or without notice to the Borrower, and agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Lender. The Borrower consents to any and all extensions of time, renewals, waivers or modifications that may be granted by Lender with respect to the payment or other provisions of this Note, and to any substitution, exchange or release of the collateral for this Note, or any part thereof, with or without substitution of said collateral, and agrees to the addition or release of any guarantor, all whether primarily or secondarily liable, before or after maturity of this Note, with or without notice to the Borrower, and without affecting its liability under this Note. Any delay on the part of Lender in exercising any right under this Note shall not operate as a waiver of any such right, and any waiver granted or consented to on one occasion shall not operate as a waiver in the event of any subsequent default.

			

 

15

 

 

	
			15.

				
			NO USURY: The Lender and the Borrower intend to comply at all times with applicable usury laws. If at any time such laws would ever render usurious any amounts called for under this Note, then it is the Borrower’s and the Lender’s express intention that the Borrower shall not be required to pay interest on this Note at a rate in excess of the maximum lawful rate, that the provisions of this Section 12 shall control over all other provisions of this Note which may be in apparent conflict herewith, that such excess amount shall be credited to the principal balance of this Note (or, if this Note has been fully paid, refunded by the Lender to the Borrower), and the provisions hereof shall be reformed and the amounts thereafter collectible under this Note reduced, without the necessity of the execution of any further documents, so as to comply with the then applicable law, but so as to permit the recovery by the Lender of the fullest amount otherwise called for under this Note. Any such crediting or refund shall not cure or waive any default by the Borrower under this Note. If, at any time following any reduction in the interest rate payable by the Borrower there remains unpaid any principal amount under this Note and the maximum interest rate allowed by applicable law is increased or eliminated, then the interest rate payable under this Note shall be readjusted, to the extent not prohibited by applicable law, so that the dollar amount of interest payable hereunder shall be equal to the dollar amount of interest which would have been paid by the Borrower without giving effect to the reduction in interest resulting from compliance with applicable usury laws. The Borrower agrees that in determining whether or not any interest payable under this Note exceeds the highest rate allowed by law, any non-principal payment (except payments specifically stated in this Note to be “interest”), including, without limitation, if any are applicable as provided herein, prepayment fees and delinquency charges, shall, to the maximum extent allowed by law, be an expense, fee or premium rather than interest. The term “Applicable Law”, as used in this Note shall mean the laws of The Commonwealth of Massachusetts or the laws of the United States, whichever laws allow the greater rate of interest, as such laws now exist or may be changed or amended or come into effect in the future. 

			

 

	
			16.

				
			JOINT AND SEVERAL LIABILITY: The liabilities of the Borrower are joint and several; provided, however, the release by Lender of any other person liable hereunder shall not release any other person obligated on account of this Note. Each reference herein to “Borrower” or “Borrowers” is to such party individually and also to all such parties jointly. No party obligated on account of this Note may seek contribution from any other party also obligated unless and until all liabilities to Lender from the party from whom contribution is sought have been satisfied in full.

			

 

	
			17.

				
			SUCCESSORS AND ASSIGNS: This Note shall be binding upon the Borrower and upon its successors and assigns, and shall inure to the benefit of the Lender and its successors, endorsees, and assigns.

			

 

	
			18.

				
			SECURITY: The Borrower hereby grants to the Lender a continuing security interest in all personal property, furnishings, fixtures, equipment, leases, tangible property, intangible property not subject to an encumbrance by a lessor, contractual agreements with third parties, and any and all deposits or other sums at any time credited by or due from the Lender to the Borrower and any cash, securities, instruments, or other property of the Borrower which now or hereafter are at any time in the possession or control of the Lender, and such sums shall constitute additional security to the Lender for the liabilities of the Borrower to the Lender, including, without limitation, the liability evidenced hereby, and may be applied or set off by the Lender against such liabilities at any time from and after an Event of Default hereunder or after demand for payment is made by the Lender, whether or not available to Lender. Borrower agrees that Lender may file any financing statement, lien entry form or other document Lender requires in order to perfect, amend or continue Lender’s security interest and Borrower agrees to cooperate with Lender as may be necessary to accomplish said filing and to do whatever Lender deems necessary to protect Lender’s security interest. Borrower agrees and warrants that all records shall be located at Borrower's address as set forth in Section 1. In the event of Default, the security interest described herein shall be disbursed to all Lenders on a pro rata basis based on their loan amount as compared to the entire loan amount. Lender hereby agrees that filing a UCC-1 statement or bringing an action in the trial court shall not make their interest superior or provide priority above any other Lender’s interest, but instead agrees to the pro rata disbursement of the security interest as defined herein.

			

 

16

 

 

	
			19.

				
			COLLECTION: Any check, draft, money order or other instrument given in payment of all or any portion hereof may be accepted by the Lender and handled by collection in the customary manner, but the same shall not constitute payment hereunder or diminish any rights of the Lender except to the extent that actual cash proceeds of such instrument are unconditionally received by the Lender and applied to this indebtedness in the manner elsewhere herein provided.

			

 

	
			20.

				
			AMENDMENTS: This Note may be changed or amended only by an agreement in writing signed by the party against whom enforcement is sought.

			

 

	
			21.

				
			GOVERNING LAW; SUBMISSION TO JURISDICTION: This Note is given to evidence debt for business or commercial purposes, is being delivered to Lender at one of its offices in The Commonwealth of Massachusetts and shall be governed by and construed under the laws of said Commonwealth. The Borrower and each officer, director, and employee of the Borrower hereby submit to personal jurisdiction in said Commonwealth for the enforcement of the Borrower’ obligations hereunder, and waive any and all personal rights under the law of any other state to object to jurisdiction within such Commonwealth for the purposes of litigation to enforce such obligations of the Borrower. In the event such litigation is commenced, the Borrower agrees that service of process may be made, and personal jurisdiction over the Borrower obtained, by service of a copy of the summons, complaint and other pleadings required to commence such litigation upon the Borrower at the address set forth in Section 1 of this Note or at another address provided in writing by the Borrower to the Lender. The terms of this Agreement shall be subject to approval by the Massachusetts Department of Public Health, and in the event that the Department of Public Health requires amendments, this Agreement shall be amended as required by the Department of Public Health and to reflect the intent of the parties.

			

 

17

 

 

	
			22.

				
			CAPTIONS: All paragraph and subparagraph captions are for convenience of reference only and shall not affect the construction of any provision herein.

			

 

	
			23.

				
			SEVERABILITY: The invalidity of any provision of this Note shall in no way affect the validity of any other provision.

			

 

	
			24.

				
			NON-LIABILITY OF LENDER: The Borrower acknowledges and agrees that by accepting or approving anything required to be observed, performed, fulfilled, or given to Lender pursuant to this Agreement, including any certificate, financial statement, appraisal, statement of profit and loss, or other financial statement, survey, appraisal or insurance policy, Lender shall not be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision, or condition thereof, and such acceptance or approval thereof shall not be or constitute any warranty or representation to anyone with respect thereto by Lender.

			

 

	
			25.

				
			BORROWER’S REPRESENTATIONS AND WARRANTIES: Borrower represents and warrants that:

			

 

	 	
			a.

				
			Borrower will comply with all laws, statutes, regulations and ordinances pertaining to the conduct of Borrower’s business and promises to hold Lender harmless from any damages, liabilities, costs, expenses (including attorneys’ fees) or other harm arising out of any violation thereof;

			

 

	 	
			b.

				
			Borrower is duly organized, licensed, validly existing and in good standing under the laws of its state of formation and shall hereafter remain in good standing in that state, and is duly qualified, licensed and in good standing in every other state in which it is doing business, and shall hereafter remain duly qualified, licensed and in good standing in every other state in which it is doing business, and shall hereafter remain duly qualified, licensed and in good standing in every other state in which the failure to qualify or become licensed could have a material adverse effect on the financial condition, business or operations of Borrower. Notwithstanding the foregoing, at the time of this Note, Borrower has a provisional registration for the operation of a RMD and is seeking a Final Certificate of Registration;

			

 

	 	
			c.

				
			the execution, delivery and performance of this Agreement and any other document executed in connection herewith, are within Borrower’s powers, have been duly authorized, are not in contravention of law or the terms of Borrower’s charter, by-laws or other organization papers, or of any indenture, agreement or undertaking to which Borrower is a party;

			

 

	 	
			d.

				
			Borrower is in compliance with its organization documents and by-laws, all contractual requirements by which it may be bound and all applicable laws, rules and regulations other than laws, rules or regulations the validity or applicability of which it is contesting in good faith or provisions of any of the foregoing the failure to comply with which cannot reasonably be expected to materially adversely affect its financial condition, business or prospects or the value of the Collateral; and

			

 

18

 

 

	 	
			e.

				
			There is no action, suit, proceeding or investigation pending or, to Borrower’s knowledge, threatened against or affecting it or any of its assets before or by any court or other governmental authority which, if determined adversely to it, would have a material adverse effect on its financial condition, business or prospects.

			

 

	
			26.

				
			SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES: All representations and warranties of the Borrower contained herein shall survive the making of the Note and the execution and delivery of the Note, and are material and have been or will be relied upon by Lender, notwithstanding any investigation made by Lender or on behalf of Lender. For the purpose of this Agreement, all statements contained in any certificate, agreement, financial statement, or other writing delivered by or on behalf of the Borrower pursuant or in connection with the transactions contemplated hereby or thereby shall be deemed to be representations and warranties of the Borrower contained herein or in the other loan documents, as the case may be.

			

 

	
			27.

				
			NO PRESUMPTION AGAINST ANY PARTY: Neither this Agreement, any of the other Loan Documents, any other documents, agreement, or instrument entered into in connection herewith, nor any uncertainty or ambiguity herein or therein shall be construed or resolved using any presumption against any party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement, and all other documents, instruments, and agreements entered into in connection herewith have been reviewed by each of the parties and by their respective counsel and shall be construed and interpreted according to the ordinary meanings of the words used so as to accomplish fairly the purposes and intentions of all parties hereto. 

			

 

	
			28.

				
			USE OF LOAN AMOUNT/RETURN OF FUNDS: The Lender shall disburse the Loan Amount to Borrower after Borrower signs this Agreement. The amount loaned under this Agreement shall be used for the operating and capital expenses of the build out and opening of Coastal Compassion, Inc. 

			

 

	
			29.

				
			EQUALITY OF TERMS AMONG LENDERS: All Lenders who contribute prior to December 1st, 2015 shall be offered substantially similar terms by Borrower.

			

 

	
			30.

				
			DISPUTE RESOLUTION. For any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, the parties will attempt in good faith to resolve any dispute or claim arising out of or in relation to this Agreement through negotiations between a Director of each of the parties with authority to settle the relevant dispute. If the dispute cannot be settled amicably within fourteen (14) days from the date on which either party has served written notice on the other of the dispute then the remaining provisions of this Paragraph shall apply. Following good faith attempts to resolve the dispute, the parties agree to participate in at least four hours of mediation. The parties agree to share equally in the costs of the mediation. Mediation involves each side of a dispute sitting down with an impartial person, the mediator, to attempt to reach a voluntary settlement. Mediation involves no formal court procedures or rules of evidence, and the mediator does not have the power to render a binding decision or force an agreement on the parties. Mediation shall be conducted at a mutually-agreeable site in Boston, Massachusetts.

			

 

In the event that good faith attempts of resolution and mediation fail to provide a resolution to the dispute, resolution of the dispute shall be determined by arbitration at a mutually-agreeable site Denver, Colorado before one arbitrator. The arbitration shall be administered by the American Arbitration Association or JAMS. Judgment on the award may be entered in any court having jurisdiction. The losing party shall pay for all arbitrator’s fees and costs, and shall reimburse the prevailing party for its attorneys’ fees and costs.

 

19

 

 

IN WITNESS WHEREOF, this Note has been executed and delivered under seal this 4th of April, 2016.

 

	
			 

				
			 

			
			BORROWER:

			

			 

			Coastal Compassion, Inc.

			A Massachusetts non-profit corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ JoAnne Leppanen

				
			 

			
	
			 

				
			 

				
			Name: JoAnne Leppanen 

				
			 

			
	
			 

				
			 

				
			Title: Executive Director, Director 

				
			 

			

 

	
			 

				
			LENDER:

			 

			 

			
			
			AmeriCann, Inc.

			

			

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Benjamin J. Barton

				
			 

			
	
			 

				
			 

				
			Name: Benjamin J. Barton 

				
			 

			
	
			 

				
			 

				
			Title: Director, CFO 

				
			 

			

 

 

 

 

 

 

 

AmeriCann Prom. Note Coastal $2.5M 2-2-17

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