Document:

Exhibit

Exhibit 4.5

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC 
 
OFFICER’S CERTIFICATE 
 
FEBRUARY 28, 2018
I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas limited liability company (the “Company”), do hereby certify that I am an Authorized Officer of the Company as such term is defined in the Indenture (as defined herein).  I am delivering this certificate pursuant to the authority granted in the Resolutions adopted by written consent of the sole Manager of the Company dated February 19, 2018, and Sections 105, 201, 301, 401(1), 401(5), 403(2)(B) and 1403 of the General Mortgage Indenture, dated as of October 10, 2002, as heretofore supplemented to the date hereof (as heretofore supplemented, the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, National Association (successor in trust to JPMorgan Chase Bank), as Trustee (the “Trustee”).  Terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Indenture, unless the context clearly requires otherwise.  Based upon the foregoing, I hereby certify on behalf of the Company as follows:
1.    The terms and conditions of the Securities of the series described in this Officer’s Certificate are as follows (the numbered subdivisions set forth in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of the Indenture):
(1)    The Securities of the twenty-eighth series to be issued under the Indenture shall be designated as the “3.95% General Mortgage Bonds, Series AB, due 2048” (the “Bonds”), as set forth in the Twenty-Seventh Supplemental Indenture, dated as of the date hereof, between the Company and the Trustee.
(2)    The Trustee shall authenticate and deliver the Bonds for original issue on February 28, 2018 (the “Issue Date”) in the aggregate principal amount of $400,000,000, upon a Company Order for the authentication and delivery thereof and satisfaction of Section 401 of the Indenture.
(3)    Interest on the Bonds shall be payable to the Persons in whose names such Securities are registered at the close of business on the Regular Record Date for such interest (as specified in (5) below), except as otherwise expressly provided in the form of such Securities attached hereto as Exhibit A.
(4)    The Bonds shall mature and the principal thereof shall be due and payable together with all accrued and unpaid interest thereon on March 1, 2048.

(5)    The Bonds shall bear interest at the rate of 3.95% per annum.  Interest shall accrue on the Bonds from the Issue Date, or the most recent date to which interest has been paid or duly provided for. The Interest Payment Dates for the Bonds shall be March 1 and September 1 in each year commencing September 1, 2018, and the Regular Record Dates with respect to the Interest Payment Dates for the Bonds shall be the February 15 and August 15, respectively, immediately preceding each Interest Payment Date (whether or not a Business Day); provided however that interest payable at maturity, upon redemption or when principal is otherwise due will be payable to the Holder to whom principal is payable.
(6)    The Corporate Trust Office of The Bank of New York Mellon Trust Company, National Association in New York, New York shall be the place at which (i) the principal of and premium, if any, and interest on the Bonds shall be payable, (ii) registration of transfer of the Bonds may be effected, (iii) exchanges of the Bonds may be effected, and (iv) notices and demands to or upon the Company in respect of the Bonds and the Indenture may be served; and The Bank of New York Mellon Trust Company, National Association shall be the Security Registrar and Paying Agent for the Bonds; provided, however, that the Company reserves the right to change, by one or more Officer’s Certificates, any such place or the Security Registrar; and provided, further, that the Company reserves the right to designate, by one or more Officer’s Certificates, its principal office in Houston, Texas as any such place or itself as the Security Registrar; provided, however, that there shall be only a single Security Registrar for each series of Bonds.

(7)    The Bonds shall be redeemable, at the option of the Company, at any time or from time to time, in whole or in part, on any date prior to September 1, 2047 at a price equal to the greater of (i) 100% of the principal amount of the Bonds to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Bonds to be redeemed that would be due if the Bonds matured on September 1, 2047 but for the redemption (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the date of redemption (the “Redemption Date”) on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 15 basis points plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the Redemption Date.  On or after September 1, 2047, the Company may redeem the Bonds, at any time or from time to time, in whole or in part, by paying 100% of the principal amount of Bonds to be redeemed plus accrued and unpaid interest on the principal amount being redeemed to the Redemption Date.
“Treasury Rate” means, with respect to any Redemption Date the yield calculated on the third business day preceding the redemption date, as follows: for the latest day that appears in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor publication) (“H.15”) under the caption “Treasury Constant Maturities - Nominal”, the independent investment banker shall select two yields – one for the maturity immediately before and one for the maturity immediately after the remaining maturity of the notes (assuming the notes matured on September 1, 2047) – and shall interpolate on a straight-line basis using such yields; if there is no such maturity either before or after, the independent investment banker shall select the maturity closest to September 1, 2047 that appears on the release; or if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated by the Independent Investment Banker using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.  The Treasury Rate will be calculated by the Independent Investment Banker on the third Business Day preceding the Redemption Date.
“Comparable Treasury Issue” means the U.S. Treasury security selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term (“remaining life”) of the Bonds to be redeemed (assuming for this purpose that the Bonds matured on September 1, 2047) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Bonds.
“Comparable Treasury Price” means (1) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means one of Mizuho Securities USA LLC, RBC Capital Markets, LLC or Wells Fargo Securities, LLC, as specified by the Company, or if these firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing selected by the Company.
“Reference Treasury Dealer” means each of (1) Mizuho Securities USA LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities dealer in the United States of America (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by the Company after consultation with the Independent Investment Banker.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third business day preceding such Redemption Date.

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The Trustee, at the written direction of the Company, will send a notice of redemption to each holder of Bonds to be redeemed by first-class mail (or in accordance with the procedures of The Depository Trust Company with respect to Bonds registered in the name of Cede & Co.) at least 15 and not more than 60 days prior to the date fixed for redemption. Unless the Company defaults on payment of the redemption price, interest will cease to accrue on the Bonds or portions thereof called for redemption on the Redemption Date. If fewer than all of the Bonds are to be redeemed, not more than 60 days prior to the Redemption Date, the particular Bonds or portions thereof for redemption will be selected from the outstanding Bonds not previously called by such method as the Trustee deems fair and appropriate.  The Trustee may select for redemption Bonds and portions of Bonds in amounts of $1,000 or whole multiples of $1,000.  In the case of a partial redemption of Bonds registered in the name of Cede & Co, the Bonds to be redeemed will be determined in accordance with the procedures of The Depository Trust Company.
(8)    Not applicable.
(9)    Not applicable.
(10)    Not applicable.
(11)    Not applicable.
(12)    Not applicable.
(13)    See subsection (7) above.
(14)    Not applicable.
(15)    Not applicable.
(16)    Not applicable.
(17)    The Bonds shall be issuable in whole or in part in the form of one or more Global Securities (as defined below). The Depositary Trust Company shall initially serve as Depositary (as defined below) with respect to the Global Securities.  “Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as depositary for such Securities. “Global Security” means a Security that evidences all or part of the Securities of a series and bears a legend in substantially the following form:
THIS SECURITY IS IN GLOBAL FORM AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:
(1) Each Global Security authenticated under the Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of the Indenture.
(2) Notwithstanding any other provision in the Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) the Company has notified the Trustee that the Depositary is unwilling or unable to continue as Depositary for such Global Security, the Depositary defaults in the performance of its duties as Depositary, or the Depositary has ceased to be a clearing agency registered under the Exchange Act, in each case, unless the Company has approved a successor Depositary within 90 days, (B) the Company in its sole discretion determines that such Global Security will be so exchangeable or transferable or (C) there shall exist such 

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circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by the Indenture.
(3) Subject to Clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to Sections 304, 305, 306, 507 or 1406 of the Indenture or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.
(18)    Not applicable.
(19)    Not applicable.
(20)    For purposes of the Bonds, “Business Day” shall mean any day, other than Saturday or Sunday, on which commercial banks and foreign exchange markets are open for business, including dealings in deposits in U.S. dollars, in New York, New York.
(21)    Not applicable.
(22)    The Bonds shall have such other terms and provisions as are provided in the form thereof attached hereto as Exhibit A, and shall be issued in substantially such form.
2.    The undersigned has read all of the covenants and conditions contained in the Indenture, and the definitions in the Indenture relating thereto, relating to the authentication, delivery and issuance of the Bonds and the execution and delivery of the Twenty-Seventh Supplemental Indenture and in respect of compliance with which this certificate is made.
3.    The statements contained in this certificate are based upon the familiarity of the undersigned with the Indenture, the documents accompanying this certificate, and upon discussions by the undersigned with officers and employees of the Company familiar with the matters set forth herein.
4.    In the opinion of the undersigned, she has made such examination or investigation as is necessary to enable her to express an informed opinion as to whether or not such covenants and conditions have been complied with.
5.    In the opinion of the undersigned, such conditions and covenants have been complied with.
6.    To my knowledge, no Event of Default has occurred and is continuing.
7.    The execution of the Twenty-Seventh Supplemental Indenture, dated as of the date hereof, between the Company and the Trustee is authorized or permitted by the Indenture.
8.    With respect to Section 403(2)(B) of the Indenture, General Mortgage Bonds, due March 1, 2014, having an aggregate principal amount of $12,895,000 out of an aggregate principal amount of $12,895,000 remaining from the $500,000,000 original aggregate principal amount, and General Mortgage Bonds, due March 15, 2013, having an aggregate principal amount of $387,105,000 out of an aggregate principal amount of $450,000,000 remaining from the $450,000,000 original aggregate principal amount (the “Retired Mortgage Bonds”), have heretofore been authenticated and delivered and as of the date of this certificate, constitute Retired Securities.  $400,000,000 aggregate principal amount of such Retired Mortgage Bonds are the basis for the authentication and delivery of $400,000,000 aggregate principal amount of the Series AB Bonds.
9.    The First Mortgage Collateralization Date has not occurred.
10.    No certificate of an Independent Accountant pursuant to Section 104 of the Indenture is required in connection with the authentication and delivery of the Bonds because (i) the Net Earnings Certificate covers a period different from that required to be covered by annual reports required to be filed by the Company and (ii) an Independent Accountant has provided the Company with a letter addressed to the Company containing the results of procedures on 

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financial information included in the Net Earnings Certificate that are agreed upon by the Authorized Officer signing the Net Earnings Certificate.
11.     Pursuant to the resolutions adopted by the Sole Manager of the Company by written consent on February 19, 2018, Carla A. Kneipp, Vice President and Treasurer, has been named an Authorized Officer, as defined under the Indenture, including for purposes of executing the Net Earnings Certificate.

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IN WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate as of the date first written above.
 
 
/s/ Carla A. Kneipp     
Carla A. Kneipp 
Vice President and Treasurer
Acknowledged and Received as 
of the date first written above 
 
THE BANK OF NEW YORK  
MELLON TRUST COMPANY, 
NATIONAL ASSOCIATION, 
as Trustee 
 
 
 
/s/ Karen Yu     
Karen Yu 
Vice President 

Signature Page to Officer’s Certificate Under the Indenture

EXHIBIT A 
 
FORM OF BONDS

THIS SECURITY IS IN GLOBAL FORM AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.
Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to CenterPoint Energy Houston Electric, LLC or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC 
3.95% General Mortgage Bonds, Series AB, due 2048
	
		
	Original Interest Accrual Date: February 28, 2018
Stated Maturity: March 1, 2048
Interest Rate: 3.95%
Interest Payment Dates: March 1 and September 1
Regular Record Dates: February 15 and August 15 immediately preceding the respective Interest Payment Date
	Redeemable: Yes [X] No [  ]
Redemption Date: At any time.
Redemption Price: on any date prior to September 1, 2047 at a price equal to the greater of (i) 100% of the principal amount of this Security or the portion hereof to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on this Security or the portion thereof to be redeemed that would be due if this Security matured on September 1, 2047 but for the redemption (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis at the applicable Treasury Rate plus 15 basis points; plus, in each case, accrued and unpaid interest to the Redemption Date on the principal amount being redeemed; or on or after September 1, 2047, at a price equal to 100% of the principal amount of this Security or the portion thereof to be redeemed plus accrued and unpaid interest to the Redemption Date on the principal amount being redeemed.

This Security is not an Original Issue Discount Security 
within the meaning of the within-mentioned Indenture. 
_____________________________
Principal Amount    Registered No. T-1
 
$400,000,000*    CUSIP  15189X AS7
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a limited liability company duly organized and existing under the laws of the State of Texas (herein called the “Company,” which term includes any successor under the Indenture referred to below), for value received, hereby promises to pay to 
***CEDE & Co.***
____________________
*Reference is made to Schedule A attached hereto with respect to decreases and increases in the aggregate principal amount of Securities evidenced hereby.

, or its registered assigns, the principal sum of FOUR HUNDRED MILLION DOLLARS, on the Stated Maturity specified above, and to pay interest thereon from the Original Interest Accrual Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on the Interest Payment Dates specified above in each year, commencing on September 1, 2018, and at Maturity, at the Interest Rate per annum specified above, until the principal hereof is paid or duly provided for.  The interest so payable, and paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date specified above (whether or not a Business Day) next preceding such Interest Payment Date.  Notwithstanding the foregoing, interest payable at Maturity shall be paid to the Person to whom principal shall be paid.  Except as otherwise provided in said Indenture, any such interest not so paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and premium, if any, on this Security and interest hereon at Maturity shall be made upon presentation of this Security at the office of the Corporate Trust Administration of The Bank of New York Mellon Trust Company, National Association, located in New York, New York or at such other office or agency as may be designated for such purpose by the Company from time to time.  Payment of interest on this Security (other than interest at Maturity) shall be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, except that if such Person shall be a securities depositary, such payment may be made by such other means in lieu of check, as shall be agreed upon by the Company, the Trustee and such Person. Payment of the principal of and premium, if any, and interest on this Security, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and issuable in one or more series under and equally secured by a General Mortgage Indenture, dated as of October 10, 2002, as supplemented and amended (such Indenture as originally executed and delivered and as supplemented or amended from time to time thereafter, together with any constituent instruments establishing the terms of particular Securities, being herein called the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, National Association (successor in trust to JPMorgan Chase Bank), trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the property mortgaged, pledged and held in trust, the nature and extent of the security and the respective rights, limitations of rights, duties and immunities of the Company, the Trustee and the Holders of the Securities thereunder and of the terms and conditions upon which the Securities are, and are to be, authenticated and delivered and secured.  The acceptance of this Security shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture.  This Security is one of the series designated above.
If any Interest Payment Date, any Redemption Date or the Stated Maturity shall not be a Business Day (as hereinafter defined), payment of the amounts due on this Security on such date may be made on the next succeeding Business Day; and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on such amounts for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.
This Security is subject to redemption, at the option of the Company, at any time or from time to time, in whole or in part, on any date prior to September 1, 2047 at a price equal to the greater of (i) 100% of the principal amount of this Security (or the portion hereof to be redeemed) or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on this Security (or such portion to be redeemed) that would be due if this Security (or such portion to be redeemed) matured on September 1, 2047 but for the redemption (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 15 basis points; 

plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the Redemption Date.  On or after September 1, 2047, the Company may redeem this Security, at any time or from time to time, in whole or in part, by paying 100% of the principal amount of this Security (or such portion to be redeemed) plus accrued and unpaid interest on the principal amount being redeemed to the Redemption Date.  The Trustee shall have no responsibility for the calculation of such amount.
“Treasury Rate” means, with respect to any Redemption Date the yield calculated on the third business day preceding the redemption date, as follows: for the latest day that appears in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor publication) (“H.15”) under the caption “Treasury Constant Maturities - Nominal”, the independent investment banker shall select two yields – one for the maturity immediately before and one for the maturity immediately after the remaining maturity of the notes (assuming the notes matured on September 1, 2047) – and shall interpolate on a straight-line basis using such yields; if there is no such maturity either before or after, the independent investment banker shall select the maturity closest to September 1, 2047 that appears on the release; or if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated by the Independent Investment Banker using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.  The Treasury Rate will be calculated by the Independent Investment Banker on the third Business Day preceding the Redemption Date.
“Comparable Treasury Issue” means the U.S. Treasury security selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term (“remaining life”) of this Security to be redeemed (assuming for this purpose that this Security matured on September 1, 2047) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of this Security.
“Comparable Treasury Price” means (1) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means one of Mizuho Securities USA LLC, RBC Capital Markets, LLC or Wells Fargo Securities, LLC, as specified by the Company, or if these firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing selected by the Company.
“Reference Treasury Dealer” means each of (1) Mizuho Securities USA LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities dealer in the United States of America (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by the Company after consultation with the Independent Investment Banker.
“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.
The Trustee, at the written direction of the Company, will send a notice of redemption to each Holder of Securities to be redeemed by first-class mail (or in accordance with the procedures of The Depository Trust Company with respect to Securities registered in the name of Cede & Co.) at least 15 and not more than 60 days prior to the date fixed for redemption. Unless the Company defaults on payment of the redemption price, interest will cease to accrue on the Securities or portions thereof called for redemption on the Redemption Date. If fewer than all of the Securities of this series are to be redeemed, not more than 60 days prior to the Redemption Date, the particular Securities of this series 

or portions thereof for redemption will be selected from the outstanding Securities of this series not previously called by such method as the Trustee deems fair and appropriate.  The Trustee may select for redemption Securities of this series and portions of Securities of this series in amounts of $1,000 or whole multiples of $1,000.  In the case of a partial redemption of Securities registered in the name of Cede & Co, the Securities to be redeemed will be determined in accordance with the procedures of The Depository Trust Company.
The Indenture permits, with certain exceptions as therein provided, the Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under the Indenture, considered as one class; provided, however, that if there shall be Securities of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that the Indenture permits the Trustee to enter into one or more supplemental indentures for limited purposes without the consent of any Holders of Securities.  The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities then Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in the Indenture and subject to certain limitations therein set forth, this Security or any portion of the principal amount hereof will be deemed to have been paid for all purposes of the Indenture and to be no longer Outstanding thereunder, and, at the election of the Company, the Company’s entire indebtedness in respect thereof will be satisfied and discharged, if there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which when due, without regard to any reinvestment thereof, will provide moneys which, together with moneys so deposited, will be sufficient to pay when due the principal of and interest on this Security when due.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the Corporate Trust Office of The Bank of New York Mellon Trust Company, National Association in New York, New York, or such other office or agency as may be designated by the Company from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series of authorized denominations and of like tenor and aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only as registered Securities, without coupons, and in denominations of $1,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of the same series and Tranche, of any authorized denominations, as requested by the Holder surrendering the same, and of like tenor upon surrender of the Security or Securities to be exchanged at the office of The Bank of New York Mellon Trust Company, National Association in New York, New York, or such other office or agency as may be designated by the Company from time to time.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
The Securities are not entitled to the benefit of any sinking fund.
As used herein, “Business Day” shall mean any day, other than Saturday or Sunday, on which commercial banks and foreign exchange markets are open for business, including dealings in deposits in U.S. dollars, in New York, New York.  All other terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
As provided in the Indenture, no recourse shall be had for the payment of the principal of or premium, if any, or interest on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be incurred by, any incorporator, member, manager, stockholder, officer, director or employee, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Securities are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been executed by the Trustee or an Authenticating Agent by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
[The remainder of this page is intentionally left blank.]

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
	
		
	

Attest: _____________________________
Vincent A. Mercaldi 
Secretary
	CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
By: ______________________________________________ 
Kristie L. Colvin  
Senior Vice President and Chief Accounting Officer

(SEAL)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
Date of Authentication: ______________, 2018
	
	
	THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee

By:  _________________________________________

SCHEDULE A

         The initial aggregate principal amount of Securities evidenced by the Certificate to which this Schedule is attached is $400,000,000.  The notations on the following table evidence decreases and increases in the aggregate principal amount of Securities evidenced by such Certificate. 
	
									
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Decrease in Aggregate
	 
	Increase in Aggregate
	 
	Aggregate Principal
Amount of
Securities
Remaining After
	 
	Notation by

	Date of
	 
	Principal Amount of
	 
	Principal Amount of
	 
	Such Decrease or
	 
	Security

	Adjustment
	 
	Securities
	 
	Securities
	 
	Increase
	 
	Registrarex_110074.htm

 

 

 

 

 

EXHIBIT 10.13

 

 

 

 

 

 

 

 

AMENDMENT TO 

GROUND LEASE

 

1.     The Parties agree that the third and fourth sentences of Section 9.2 of the Ground Lease entered into as of October 17, 2016 by and between Massachusetts Medical Properties LLC (“MMP”) and AmeriCann, Inc. (“AmeriCann”) are amended to read as follows:

 

“Tenant will have until twenty (20) months from the Commencement Date to raise the $2.6 million dollars, referred to in the first sentence of this Section 9.2, provided that Tenant has paid Base Rent in accordance with Section 4.1.  If Tenant is unable to raise such funds on or before twenty (20) months from the Commencement Date, this Lease shall terminate and all obligations of the parties shall cease without recourse of either party to the other except for any obligations which accrued prior to such termination date and remain unsatisfied.” 

 

2.     All other provisions of the Ground Lease not amended as provided above remain in full force and effect.

 

3.     As further consideration for this Amendment, AmeriCann will issue a warrant, in the form of Exhibit A, which will allow MMP to purchase 50,000 shares of AmeriCann’s common stock at a price of $1.50 per share. The warrant will expire on October 17, 2022.

 

Agreed to and accepted as of April 17, 2018.

 

 

	
			 

				
			MASSACHUSETTS MEDICAL PROPERTIES LLC

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ J. Fred Barton, III

				
			 

			
	
			 

				
			Name: J. Fred Barton, III

			Title: Manager

				
			 

			

 

 

 

	
			 

				
			AMERICANN, INC.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Timothy Keogh

				
			 

			
	
			 

				
			Name: Timothy Keogh

			Title: Chief Executive Officer

				
			 

			

 

 

 

 

 

 

AmeriCann Amend.#2 to Ground Lease Mass. Medical 2-27-18

 

2

 

 

 

 

 

 

EXHIBIT A

 

 

 

 

 

 

 

 

WARRANT

 

To Purchase Common Stock of

AMERICANN, INC. 

Dated April 17, 2018

 

 

4

 

 

TABLE OF CONTENTS

 

Page

 

	
			SECTION 1.

				
			Term; Exercise of Warrant

				
			1

			
	
			1.1

				
			Time of Exercise

				
			1

			
	
			1.2

				
			Manner of Exercise

				
			1

			
	
			1.3

				
			Exchange of Warrant

				
			2

			
	
			SECTION 2.

				
			Adjustment of Exercise Price and Number of Warrant Shares Purchasable upon Exercise

				
			3

			
	
			2.1

				
			Stock Dividends, Subdivisions and Combinations

				
			3

			
	
			2.2

				
			Recapitalization or Reclassification

				
			3

			
	
			2.3

				
			Distributions

				
			4

			
	
			2.4

				
			Notice

				
			4

			
	
			SECTION 3.

				
			Representations, Warranties and Covenants of the Company

				
			5

			
	
			3.1

				
			Representations and Warranties

				
			5

			
	
			3.2

				
			Covenants of the Company

				
			6

			
	
			SECTION 4.

				
			Representations and Warranties of the Holder

				
			7

			
	
			4.1

				
			Acquisition of Warrant for Personal Account

				
			7

			
	
			4.2

				
			Rule 144

				
			7

			
	
			4.3

				
			Accredited Investor

				
			7

			
	
			4.4

				
			Opportunity to Discuss; Information

				
			7

			
	
			SECTION 5.

				
			Other Matters

				
			8

			
	
			5.1

				
			Withholding

				
			8

			
	
			5.2

				
			Binding Effect

				
			8

			
	
			5.3

				
			Notices

				
			8

			
	
			5.4

				
			Governing Law; Consent to Jurisdiction; Waiver of Jury Trial

				
			8

			
	
			5.5

				
			Parties Bound and Benefited

				
			9

			
	
			5.6

				
			Confidentiality

				
			9

			
	
			5.7

				
			Identity of Transfer Agent

				
			9

			
	
			5.8

				
			Amendment; Waiver

				
			9

			
	
			5.9

				
			Assignment

				
			9

			
	
			5.10

				
			Holder as Owner

				
			9

			
	
			5.11

				
			Rights of Holder

				
			9

			
	
			5.12

				
			Indemnification

				
			10

			
	
			5.13

				
			Remedies

				
			10

			
	
			5.14

				
			Lost Certificates

				
			10

			
	
			5.15

				
			Severability

				
			10

			

 

i

 

 

	
			5.16

				
			Nonwaiver and Expenses

				
			10

			
	
			5.17

				
			Office of the Company; Maintenance of Books

				
			10

			
	
			5.18

				
			Section Headings

				
			11

			

 

Appendix A    -     Assignment of Warrant

Appendix B     -     Warrant Exercise Form

 

ii

 

 

THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED OR SOLD UNLESS (I) REGISTERED AND QUALIFIED PURSUANT TO THE APPLICABLE PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS, (II) PURSUANT TO RULE 144 OF THE ACT OR (III) AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION APPLIES.  THEREFORE, NO SALE OR TRANSFER OF THIS SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION HAS BEEN DULY REGISTERED UNDER THE ACT AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE SECURITIES LAWS OR (B) THIS SECURITY MAY BE SOLD PURSUANT TO RULE 144 OF THE ACT.

 

No. of Shares of Common Stock, par value $0.0001 per share: 50,000

 

WARRANT

 

To Purchase Common Stock of

 

AMERICANN, INC.

 

THIS IS TO CERTIFY, that, for value received, Massachusetts Medical Properties, LLC, a Delaware limited liability company, or its successors or registered assigns (the “Holder”), is entitled, subject to the terms and conditions hereinafter set forth, to purchase 50,000 shares (the “Warrant Shares”) of common stock, par value $0.0001 per share (the “Common Stock”), of AmeriCann, Inc., a Delaware corporation (the “Company”), from the Company (the “Warrant”) at an exercise price per share equal to $1.50 per share at the Issue Date (the exercise price in effect being herein called the “Exercise Price”).  The number of Warrant Shares purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as described herein.

 

Term; Exercise of Warrant.

 

Time of Exercise.  This Warrant may be exercised at any time and from time to time during the period commencing as of 9:00 a.m., Central Time, on October 17, 2022 (the “Issue Date”) and ending as of 5:00 p.m., Central Time, on October 17, 2022, at which time this Warrant shall become void and all rights hereunder shall cease, unless extended by the parties.

 

Manner of Exercise.

 

The Holder may exercise this Warrant, in whole or in part, upon surrender of this Warrant, with the duly executed exercise notice, in the form attached hereto as Appendix B, to the Company at its corporate office in Denver, Colorado, and upon payment to the Company of the Exercise Price for each Warrant Share to be purchased in lawful money of the United States, or by certified or cashier’s check, or wired funds.

 

 

 

 

Upon receipt of this Warrant with the duly executed exercise notice and accompanied by payment of the aggregate Exercise Price for the Warrant Shares for which this Warrant is then being exercised, the Company shall cause to be issued and delivered to the Holder, within a reasonable time, not exceeding three (3) trading days after this Warrant shall have been so exercised, including the delivery of the duly executed exercise notice and payment of the aggregate Exercise Price, by (a) causing the Company’s transfer agent to credit the Warrant Shares in book-entry form to an account to be designated by the Holder or (b) if electronic delivery is unavailable, delivering at the address designated by the Holder certificates representing the total number of whole Warrant Shares for which this Warrant is being exercised.  

 

In case the Holder shall exercise this Warrant with respect to less than all of the Warrant Shares that may be purchased under this Warrant, the Company shall execute a new Warrant in substantially identical form (other than the number of Warrant Shares) for the balance of the Warrant Shares that may be purchased upon exercise of this Warrant and deliver such new Warrant to the Holder.

 

The Company covenants and agrees that it will pay when due and payable any and all taxes and governmental charges (other than any income tax due under federal, state or other law as a result of owning this Warrant or any Warrant Shares issued upon the exercise of this Warrant) which may be payable in respect of the issue of this Warrant, or the issue of any Warrant Shares upon the exercise of this Warrant.  The Company shall not, however, be required to pay any stamp, transfer or similar tax which may be payable in respect of any transfer involved in the issuance of this Warrant or of the Warrant Shares in a name other than that of the Holder at the time of surrender or an affiliate thereof; in the event any such transfer is involved and any such tax is payable, the Company shall not be required to issue such Warrant Shares until the payment of such tax (or the payment to the Company of an amount sufficient to reimburse it for the payment of any such tax).

 

Exchange of Warrant.  Upon the request of the Holder, this Warrant may be divided into, combined with or exchanged for another warrant or warrants of like tenor (collectively, the “Warrants”) to purchase a like aggregate number of Warrant Shares.  If the Holder desires to divide, combine or exchange this Warrant, the Holder shall make such request in writing delivered to the Company at its corporate office and shall surrender this Warrant and any other Warrants to be so divided, combined or exchanged.  The Company shall execute and deliver to the person or persons entitled thereto a Warrant or Warrants, as the case may be, as so requested.  The Company shall not be required to effect any division, combination or exchange which will result in the issuance of a Warrant entitling the Holder to purchase upon exercise a fraction of a Warrant Share. As to any fraction of a share which a Holder of one or more Warrants, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to the same fraction of the Market Price per share of Common Stock on the date of exercise, computed to the nearest whole U.S. cent. The Company shall prepare, issue and deliver at its own expense the new Warrant or Warrants under this Section 0.

 

“Market Price” on any date means the VWAP of one share of Common Stock for the 10 consecutive trading days ending on the trading day immediately preceding the specified date. If the Common Stock is not listed on The Nasdaq Stock Market LLC, the New York Stock Exchange or another national securities exchange, “Market Price” of the Common Stock on any date means the fair value per share of Common Stock as of a date not earlier than 10 business days preceding the specified date as agreed upon by the Company and the Holder or, if the parties cannot agree within five (5) business days of the date on which the Holder delivers notice pursuant to 0, by a third party independent appraiser having experience in such matters who is selected by the Holder.

 

2

 

 

“VWAP” means, for any trading day, the price for shares of Common Stock determined by the daily volume weighted average price per share for such trading day on the trading market on which such shares are then listed or quoted, in each case, for the regular trading session (including any extensions thereof, without regard to pre-open or after hours trading outside of such regular trading session) as reported on The Nasdaq Stock Market LLC or the New York Stock Exchange, or the principal national securities exchange on which such shares are then listed or quoted, whichever is applicable, as published by Bloomberg L.P. at 4:15 P.M., New York City time, on such trading day.

 

Adjustment of Exercise Price and Number of Warrant Shares Purchasable upon Exercise.

 

Subject and pursuant to the provisions of this Section 0, the Exercise Price and the number of Warrant Shares subject to this Warrant shall be subject to adjustment from time to time as set forth hereinafter.

 

Stock Dividends, Subdivisions and Combinations.  If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing entity), then (A) the Exercise Price in effect immediately prior to the date on which such change shall become effective shall be adjusted by multiplying such Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such change and (B) the number of Warrant Shares purchasable upon exercise of this Warrant shall be adjusted by multiplying the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior to the date on which such change shall become effective by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the Exercise Price in effect immediately after giving effect to such change, calculated in accordance with clause (A) above.  Such adjustments shall be made successively whenever any event listed above shall occur.

 

Recapitalization or Reclassification.  If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another entity in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company’s assets to another entity shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Exercise Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof.  

 

3

 

 

Distributions.  In case the Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing entity) of evidences of indebtedness or assets (other than dividends or distributions referred to in Section 0), or subscription rights or warrants, the Exercise Price to be in effect after such payment date shall be determined by multiplying the Exercise Price in effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price per share of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Company and the Holder or, if the parties cannot agree within five (5) business days, a third party independent appraiser having experience in such matters as agreed upon by the Holder) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately prior to such payment date.

 

Notice.

 

If at any time (A) the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend (other than a cash dividend payable out of earnings or earned surplus legally available for the payment of dividends under the laws of the corporate domicile of the Company) or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, (B) there shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation or entity, or (C) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of such cases, the Company shall give to the Holder at least 30 days’ prior written notice of the date on which a record date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, and, in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 30 days’ prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (Y) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (Z) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to the Holder at the last address of the Holder appearing on the books of the Company and delivered in accordance with Section 0.

 

4

 

 

The Holder shall be entitled to the same rights to receive notice of corporate action as any holder of Common Stock.

 

Representations, Warranties and Covenants of the Company.

 

Representations and Warranties. As of the date hereof, the Company represents and warrants to the Holder that:

 

it has the corporate power to enter into, perform and deliver, and has taken all necessary action to authorize its entry into, and performance and delivery of, this Warrant and the transactions contemplated by this Warrant;

 

this Warrant constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to (i) the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereinafter in effect relating to or affecting the rights and remedies of creditors and (ii) the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief regardless of whether considered in a proceeding in equity or at law;

 

the execution of this Warrant and the performance of the Company’s obligations hereunder do not conflict with, result in a breach or violation or imposition of any lien, charge or encumbrance upon any property or assets of the Company’s or any of its subsidiaries pursuant to: (i) the Company’s organizational documents; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of its subsidiaries is a party or bound or to which its or their property is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over it or any of its subsidiaries or any of its or their properties; and

 

assuming the accuracy of the representations and warranties of the Holder contained in this Warrant, the sale and issuance of the Warrant Shares pursuant to this Warrant is intended to be exempt from the registration requirements of the Act, and neither the Company nor any person acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption.

 

5

 

 

Covenants of the Company. The Company covenants and agrees as follows:

 

at all times the Company shall reserve and keep available for the exercise of this Warrant such number of authorized shares of Common Stock as are sufficient to permit the exercise in full of this Warrant;

 

all Warrant Shares, when issued upon the exercise of this Warrant, will be duly and validly issued, fully paid, nonassessable and free of preemptive rights;

 

the Company shall, for so long as the Warrant remains outstanding, timely file all reports and other documents required to be filed by it pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In the event the Company no longer has reporting obligations under the Exchange Act, then the Company will deliver to the Holder:

 

as soon as available, but in any event within 90 days after the end of each fiscal year of the Company, a copy of the audited consolidated balance sheet of the Company and its subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures as of the end of and for the previous year, together with a narrative discussion and analysis of the financial condition and results of operations of the Company and its subsidiaries for such fiscal year as compared to the previous year, and reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by the Company’s independent accountants;

 

as soon as available, but in any event not later than 60 days after the end of each quarterly period of each fiscal year of the Company, the unaudited consolidated balance sheet of the Company and its subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures as of the end of and for the corresponding period in the previous year, together with a narrative discussion and analysis of the financial condition and results of operations of the Company and its subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, as compared to the comparable periods of the previous year; and

 

within 10 business days after the time periods specified by the rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”), information substantively of the type that would be required to be filed with the Commission in a Current Report on Form 8-K.

 

6

 

 

All such financial statements and information delivered pursuant to this Section 0 shall be complete and correct in all material respects and to be prepared in reasonable detail and in accordance with generally accepted accounting principles in the United States of America applied consistently throughout the periods reflected therein and with prior periods (except as approved by the Company’s independent accountants or chief financial officer, as the case may be, and disclosed therein, and quarterly financial statements shall be subject to normal year-end audit adjustments and need not be accompanied by footnotes); and

 

the Company shall not, for so long as any Warrants remain outstanding, by any action, including amending its organizational documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant. The Company will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company will use its commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

Representations and Warranties of the Holder.

 

Each Holder of a Warrant represents and warrants to the Company as follows:

 

Acquisition of Warrant for Personal Account. The Holder is acquiring this Warrant and the Warrant Shares (collectively the “Securities”) for investment for its own account and not with a present view to, or for resale in connection with, any public resale or distribution thereof. The Holder understands that the Securities have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein. The Holder further understands that the Securities have not been passed upon or the merits thereof endorsed or approved by any state or federal authorities.

 

Rule 144. The Holder acknowledges that the Securities it is purchasing are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and must be held indefinitely unless an exemption from registration is available. The Holder represents that it is knowledgeable with respect to Rule 144 promulgated under the Act.

 

Accredited Investor. As of the date hereof, the Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act. The Holder is sophisticated in financial matters, and is able to evaluate the risks and benefits of an investment in the Securities for an indefinite period of time.

 

Opportunity to Discuss; Information. The Holder has been afforded the opportunity to ask questions of, and receive answers from, the officers and/or directors of the Company acting on its behalf concerning the terms and conditions of this transaction and to obtain any additional information, to the extent that the Company possesses such information or can acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information furnished; and has availed itself of the opportunity to the extent the Holder considers appropriate in order to permit it to evaluate the merits and risks of an investment in the Company.

 

7

 

 

Other Matters.

 

Withholding. If the Company is required by law to deduct or withhold any tax in respect of the Holder as a direct result of any adjustment described in Section 2 being made to Warrants held by such Holder, then the Company shall be entitled to make such deduction or withholding and shall timely pay the full amount withheld or deducted to the relevant taxing authority in accordance with applicable law. Notwithstanding anything to the contrary in this Section 0, the Company shall notify the applicable Holder in writing of its intent to withhold or deduct any tax at least 30 days prior to withholding or deducting any tax, and the Company shall give such Holder a reasonable opportunity to establish (by the provision of applicable tax forms or otherwise) that no withholding or deduction is required. Any amounts withheld by the Company and paid over to the relevant taxing authority by the Company pursuant to this Section 0 shall, to the extent not reimbursed to the Company by the Holder, be treated as payment by the Holder of the exercise price for all purposes of this Warrant. Without limiting the generality of the foregoing, and without duplication, the Holder shall indemnify the Company for the full amount of any taxes (excluding interest, penalties and additions to tax) that the Company is required by law to deduct or withhold in respect of the Holder as a direct result of any adjustment described in Section 2 being made to Warrants held by such Holder.

 

Binding Effect. All the covenants and provisions of this Warrant by or for the benefit of the Company or the Holder shall bind and inure to the benefit of their respective successors and permitted assigns hereunder.

 

Notices. Notices or demands pursuant to this Warrant to be given or made by any Holder to or on the Company shall be sufficiently given or made if sent by certified or registered mail, return receipt requested, postage prepaid, or facsimile and addressed, until another address is designated in writing by the Company, as follows:

 

AmeriCann, Inc.

3200 Brighton Blvd., Unit 144 

Denver, CO 80216  

Attention: Chief Executive Officer

 

Notices to the Holder provided for in this Warrant shall be deemed given or made by the Company if sent by certified or registered mail, return receipt requested, postage prepaid, and addressed to the Holder or each successor at its last known address as it shall appear on the books of the Company.

 

Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Warrant shall be governed by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law provisions thereof.  The Company and, by accepting this Warrant, the Holder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Warrant.  The Company and, by accepting this Warrant, the Holder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  The Company and, by accepting this Warrant, the Holder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

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Parties Bound and Benefited. Nothing in this Warrant expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or entity other than the Company and the Holder any right, remedy or claim under any promise or agreement hereof, and all covenants, conditions, stipulations, promises and agreements contained in this Warrant shall be for the sole and exclusive benefit of the Company and its successors and of the Holder and its successors and registered assigns.

 

Confidentiality. The Holder agrees to maintain, and to require its representatives to maintain, all confidential information obtained from the Company on a confidential basis, which, among other things, precludes the use of such confidential information for the purposes of trading on the Warrant Shares.

 

Identity of Transfer Agent. The transfer agent for the Common Stock is Island Stock Transfer, Inc.  Upon the appointment of any subsequent transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the exercise of the rights of purchase represented by the Warrant, the Company will, within five (5) business days, mail to the Holder a statement setting forth the name and address of such transfer agent.

 

Amendment; Waiver. Any term of this Warrant may be amended or waived upon the written consent of both the Company and the Holder.

 

Assignment. Any assignment or transfer of any portion or all of this Warrant shall be made by surrender of this Warrant to the Company at its principal office with the form of assignment attached as Appendix A hereto duly executed.  In such event, the Company shall, without charge, execute and deliver a new Warrant in substantially identical form (other than the number of Warrant Shares) in the name of the assignee named in such instrument of assignment and the portion of this Warrant assigned to the assignee shall promptly be cancelled.

 

Holder as Owner. Prior to the surrender, transfer or assignment of this Warrant, the Company may deem and treat the Holder as the absolute owner of this Warrant (notwithstanding any notation of ownership or other writing hereon) for the purpose of any exercise hereof and for all other purposes, and the Company shall not be affected by any notice to the contrary.

 

Rights of Holder. Nothing contained in this Warrant shall be construed as conferring upon the Holder, prior to the exercise of this Warrant, the right to vote, consent or, except as provided by Section 0, receive notice as a shareholder in respect of any meetings of shareholders for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company.

 

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Indemnification. The Company agrees to indemnify and hold harmless the Holder from and against any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys’ fees, expenses and disbursements of any kind which may be imposed upon, incurred by or asserted against the Holder (other than any income tax due under federal, state or other law as a result of owning this Warrant or any Warrant Shares issued upon the exercise of this Warrant) in any manner relating to or arising out of (i) the Holder’s exercise of this Warrant or ownership of any Warrant Shares issued in consequence thereof, or (ii) any litigation to which the Holder is made a party in its capacity as a shareholder of the Company; provided, however, that the Company will not be liable hereunder to the extent that any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys’ fees, expenses or disbursements are found in a final non appealable judgment by a court to have resulted from the Holder’s gross negligence, bad faith or willful misconduct in its capacity as a shareholder or warrantholder of the Company.

 

Remedies. The Holder and each holder of Warrant Shares, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

Lost Certificates. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall, on such reasonable terms as to indemnity as it may impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant in substantially identical form as, and in substitution for, this Warrant, which shall thereupon become void.  Any such new Warrant shall constitute an additional contractual obligation of the Company, whether or not the Warrant so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone.

 

Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant.

 

Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of a Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. If the Company fails to make, when due, any payments provided for hereunder, or fails to comply with any other provision of this Warrant, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

Office of the Company; Maintenance of Books. As long as any of the Warrants remain outstanding, the Company shall maintain an office (which shall be the principal executive offices of the Company) where the Warrants may be presented for exercise, registration of transfer, division or combination as provided in this Warrant. The Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants.

 

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Section Headings. The section headings in this Warrant are for the convenience of the Company and the Holder and in no way alter, modify, amend, limit or restrict the provisions hereof.

 

[Signature pages follow.]

 

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IN WITNESS WHEREOF, each of the Company and the Holder has caused this Warrant to be executed and delivered as of the Issue Date by an officer thereunto duly authorized.

 

	
			 

				
			 AMERICANN, INC.

				
			 

			
	 	 	 	 
	 	 	 	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Timothy Keogh

				
			 

			
	
			 

				
			Name: Timothy Keogh

			Title:   Chief Executive Officer

				
			 

			

 

 

 

	
			 

				
			MASSACHUSETTS MEDICAL PROPERTIES, LLC

				
			 

			
	 	 	 	 
	 	 	 	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ J. Fred Barton, III

				
			 

			
	
			 

				
			Name: J. Fred Barton, III

			Title:   Manager

				
			 

			

 

 

 

 

APPENDIX A

ASSIGNMENT OF WARRANT

 

FOR VALUE RECEIVED, _______________________ hereby sells, assigns and transfers unto _____________________________ the Warrant, dated April 17, 2018 (the “Warrant”) and the rights represented thereby, and does hereby irrevocably constitute and appoint _______________________________ Attorney, to transfer said Warrant on the books of AmeriCann, Inc., with full power of substitution.

 

 

Dated: ____________________________________

 

 

Signed: ___________________________________

 

 

 

 

APPENDIX B

WARRANT EXERCISE FORM

 

To AmeriCann, Inc.:

 

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the Warrant, dated April 17, 2018 (the “Warrant”), for, and to purchase thereunder by the payment of the Exercise Price (as defined in the Warrant) and surrender of the Warrant, ___________ shares of common stock, par value $0.0001 (“Warrant Shares”), of AmeriCann, Inc. provided for therein. The undersigned requests that the Warrant Shares be issued in book-entry form by the Company’s transfer agent as follows:

 

 

____________________________________

Name

____________________________________

Address

____________________________________

 

____________________________________

Federal Tax ID or Social Security No.

 

 

and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant in substantially identical form (other than the number of Warrant Shares) for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name set forth below indicated and delivered to the address stated below.

 

____________________________________

Name (please print)

____________________________________

Address

____________________________________

 

____________________________________

Federal Identification or

Social Security No.

 

 

	 	
			Dated: ___________________, ____

			 

			Signature: ______________________________

			

 

 

 

 

AmeriCann Amend. #2 to Ground Lease Mass. Medical 2-27-18

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