ACAN Americann Inc (PK)

1.

Tenant acknowledges and agrees that, as of March 31, 2024, Tenant owed a past due balance in the sum of $623,244.39 to Landlord (the “Outstanding Balance”) pursuant to the Lease. Tenant agrees to pay the Outstanding Balance due to Landlord, with certain deductions as agreed to by the Parties, as set forth below.

2.

In lieu of additional payments under the Lease, Tenant shall make payments to Landlord as set forth in this Agreement.

a.

Tenant shall pay to the Landlord a total of Fifty-Seven Thousand Five Hundred Eighty-Seven and 78/100 Dollars ($57,587.78) on or before April 25, 2024. Tenant shall then make monthly payments to Landlord in the amount of Fifty-Seven Thousand Five Hundred Eighty-Seven and 78/100 Dollars ($57,587.78) each on May 15, 2024, on June 15, 2024, on July 15, 2024, and on August 15, 2024.

b.

Upon approval from the Cannabis Control Commission, Tenant agrees to transfer its provisional Cultivation (Cultivation (MCN282211) and provisional Product Manufacturing (MPN281702) licenses (“Bask Provisional Licenses”) at a value of Forty Thousand Dollars ($40,000) for each license, for a total of Eighty Thousand Dollars ($80,000) to Landlord, or its assignee. Tenant and Landlord’s assignee have executed a Binding Letter of Intent to Pursue Change of Control with the Cannabis Control Commission (attached as Exhibit A) for the licenses. The Eighty Thousand Dollars ($80,000) payment will be in the form of a reduction to the Outstanding Balance and will be specifically contingent upon approval of a Change of Control by the Cannabis Control Commission (“License Transfer Credit”). Tenant has been in communication with the Cannabis Control Commission regarding the change of control and shall immediately commence the change of control application to obtain permission for the contemplated transfer from the Cannabis Control Commission for the Cultivation (MCN282211) and Product Manufacturing (MPN281702) licenses from Tenant to Landlord, or its assignee. The License Transfer Credit shall be applied to the then amount due under an Amended and Restated Promissory Note to be executed by the Parties on or before July 31, 2024, as set forth below. Should the Cannabis Control Commission refuse to approve the transfer, and such refusal is not due to an act or omission of Landlord or the proposed transferee, the Eighty Thousand Dollars shall be added to the amount due to Landlord and Tenant agrees to execute an amendment to the Amended and Restated Promissory Note to include the repayment of the Eighty Thousand Dollars ($80,000) due to Landlord. Any balance due with respect to each license for any outstanding balance, penalty, or fees will remain the responsibility of the Tenant.

c.

In an effort to support Landlord’s use of the Bask Provisional Licenses, Tenant shall make available for purchase by Landlord certain furniture and equipment located in the Premises (“Personal Property”). Landlord and Tenant shall agree on the Personal Property items that Landlord intends to purchase on or before June 1, 2024. Landlord agrees to engage a third-party to provide its best estimate of the fair market value (“FMV”) of each item. Following such valuation, Landlord and Tenant agree to work in good faith to decide on a mutually agreed upon value for each item, which may or may not be the FMV assigned by the third-party. In the event the Parties are unable to agree on the FMV on any item, the third-party valuation shall become the value assigned to such item, Tenant agrees to transfer the item to the Landlord, and the Outstanding Balance shall be reduced by said value (“Personal Property Credits”). In the event any Personal Property item becomes part of a superior claim made by another creditor, Tenant agrees to execute an amendment to the Amended and Restated Promissory Note to reflect the value of the Personal Property item (as determined at the time purchased by Landlord) as an addition to the principal amount due under the Amended and Restated Promissory Note.

d.

Tenant acknowledges and confirms its obligations to Landlord under the terms of a Promissory Note dated September 30, 2023, in the amount of Four Hundred Thousand Dollars ($400,000) (“Existing Promissory Note”). Tenant shall continue to pay to Landlord the amount of Eight Thousand Eight Hundred and Ninety-Seven 78/100 Dollars ($8,897.78) per month on the first day of each month as required by the terms of the Existing Promissory Note, through July, 2024.

e.

 On or about July 31^st, 2024, or as soon as the Parties agree on the value of the Personal Property Credits, the Tenant shall execute an Amended and Restated Promissory Note in favor of Landlord with a principal balance equal to the Outstanding Balance plus the balance due on the Existing Promissory Note, reduced by the Personal Property Credits and the License Transfer Credit (the “New Principal Balance”). The Amended and Restated Promissory Note reflecting the New Principal Balance shall be repaid in twenty-four (24) equal monthly payments of principal with no interest.

f.

Tenant hereby grants to Landlord a Security Interest in certain collateral, as set forth in the financing statement attached hereto as Exhibit B, as continued security for the repayment of the Amended and Restated Promissory Note, and all obligations set forth in this Agreement, and authorizes Landlord to file any financing statement, lien or other documents as Landlord may deem necessary to perfect Landlord’s security interest in the collateral, and Tenant agrees to cooperate to promptly accomplish said filings and to take reasonable steps and execute reasonable documents as may be determined by Landlord to perfect its security interest in the collateral described in the filings.

3.

Tenant shall vacate and peaceably surrender the Premises on or before August 31, 2024 in an “as is, where is” condition as of the date of this Agreement. Any Personal Property item that is not to be purchased by Landlord shall be removed by Tenant prior to August 31, 2024.

4.

All payments due hereunder shall be made by Tenant to Landlord by electronic funds transfer or bank check.

5.

Subject to a cure period of 10 business days, Tenant agrees that its failure to comply with any or all provisions of this Agreement shall constitute an Event of Default and no further notice of default from Landlord under the terms of the Lease or this Agreement will be required, time being of the essence of all terms of this Agreement. Upon an Event of Default, Landlord shall be entitled to exercise any and all rights available to it under the Lease and/or under applicable laws.

6.

For and in consideration of the full performance by Tenant of all the requirements set forth in this Agreement, the Parties mutually acknowledge and agree that on August 31, 2024 the Lease shall fully terminate, and the following Releases shall become effective:

a.

Tenant herein, on behalf of itself, its Manager(s), Member(s), officers, transferees, agents, attorneys, successors and/or assigns hereby release Landlord and its respective current and former trustees, beneficiaries, principals, agents, employees, representatives, attorneys, successors and assigns, property management company its officers, directors, shareholders, employees, representatives, attorneys, affiliates, subsidiaries, and successors and assigns of and from any and all claims, demands, obligations, actions, liabilities, defenses, counterclaims or damages of every kind and nature whatsoever, in law or in equity whether known or unknown, from the beginning of time to the date hereof arising out of the Lease.

b.

Landlord herein, on behalf of itself, its Manager(s), Member(s), officers, transferees, agents, attorneys, successors and/or assigns hereby release Tenant and its respective current and former trustees, beneficiaries, principals, agents, employees, representatives, attorneys, successors and assigns, property management company its officers, directors, shareholders, employees, representatives, attorneys, affiliates, subsidiaries, and successors and assigns of and from any and all claims, demands, obligations, actions, liabilities, defenses, counterclaims or damages of every kind and nature whatsoever, in law or in equity whether known or unknown, from the beginning of time to the date hereof arising out of the Lease.

7.

Each and every party to this Agreement acknowledges that he or she has had a reasonable opportunity to consult with counsel of his or her choice prior to executing this Agreement and that each such party executes this Agreement voluntarily with full knowledge as to the conditions, terms, reasonableness and effect of this Agreement, and with full authority to execute same on behalf of the entity for which they have executed same.

8.

Until August 31, 2024, except for the financial terms (Base Rent, Turnover Rent, Impact Fee) which have been superseded by the payments under this Agreement, Tenant and Landlord agree to remain bound by all non-financial terms of the Lease, attached hereto as Exhibit C.

9.

Landlord and Tenant each warrant to the other that the person or persons executing this Agreement on its behalf has or have authority to do so and that such execution has fully obligated and bound such Party to all terms and provisions of this Agreement. The signatories for the Landlord and the Tenant set forth below represent and warrant, each to the other, that they are the duly elected and appointed representatives of Landlord and Tenant respectively, that they have by trust and corporate procedure and action obtained full power and authority to enter into this Agreement and execute the same on behalf of the respective Parties.

10.

The Parties agree that, in entering into this Agreement, they are relying upon their own judgment, belief, and knowledge as to all phases of any claims and further acknowledge that no promise, inducement or agreement or any representations and warranties not expressed herein have been made to procure their agreement hereto. The Landlord and Tenant further acknowledge that they have read, understand, and fully agree to the terms of this Agreement.

11.

This Agreement shall be governed by and construed under the laws of the Commonwealth of Massachusetts without regard to any conflict of law principles that would cause the application of laws of any jurisdiction other than the Commonwealth of Massachusetts. The Landlord and the Tenant, and each officer, director and member of the Landlord and the Tenant hereby submit to personal jurisdiction in the Commonwealth of Massachusetts for the enforcement of this Agreement. The Parties acknowledge that marijuana is illegal under federal law, including consumption, possession, cultivation, distribution, manufacturing and possession with the intent to distribute and federal law supersedes Massachusetts law. The Parties expressly waive any defense to enforcement of the terms or conditions of this Agreement based upon nonconformance with federal law regarding marijuana.

12.

This Agreement may be executed in two or more counterparts, each of which shall have the same force and effect as the other, and all shall be considered as one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.

13.

This Agreement shall inure to the benefit of, and shall be binding upon, the Parties hereto and their respective legal representatives, successors and assigns.

14.

Landlord and Tenant hereby agree to execute such further documents or instruments as may be necessary or appropriate to carry out the intention of this Agreement.

AMERICANN, INC.

BASK, INC.

By:

By:

Name: Ben Barton

Name: Chapman Dickerson

Title: Chief Financial Officer

Title: Chief Executive Office

BUYER

Americann Brands, Inc.

SELLER

Bask, Inc.

LICENSES

Those two (2) Adult-Use Provisional Licenses issued by the CCC, including (i) Provisional Cultivation License No. MCN282211 and (ii) Provisional Product Manufacturing License No. MPN281702 (collectively, the “Licenses”)

TRANSACTION

Buyer will purchase one hundred percent (100%) of the ownership and control the Licenses. In connection with this LOI, Americann Parent and Seller shall execute the Mutual Lease Modification Agreement and Buyer and Seller shall cooperate on the execution and filing of a change of control and ownership application with the CCC to approve the transfer of the Licenses from Seller to Buyer (the “CHOW Application” and together with the Mutual Lease Modification Agreement, the “Transaction Documents”).

DUE DILIGENCE PERIOD

The due diligence period will commence upon the execution of this letter of intent and continue for a period of forty-five (45) calendar days (“Due Diligence Period”).

DUE DILIGENCE MATERIALS

Seller and Buyer agree to provide documents and information requested by the other party as soon as possible after the signing of this letter of intent.

CLOSING

The closing shall occur on the first day of the month following the Commission’s approval of the Buyer’s acquisition of the Seller’s Licenses (“Commission Approval”) and satisfaction of any other closing conditions set forth in the Transaction Documents (“Closing”), unless otherwise agreed to in writing by the parties.

EXISTING INDEDBTEDNESS

Seller acknowledges and agrees that (i) as of March 31, 2024, Seller owes a past due balance in the sum of $623,244.39 to Americann Parent for failure to make certain monetary payments due under that certain Commercial Lease dated as of August 2, 2019, by and between Seller and Americann Parent. In addition, Seller acknowledges and confirms its obligations to Americann Parent under the terms of a Promissory Note dated September 30, 2023 in the amount of $400,000 (collectively, the “Indebtedness”).

PURCHASE PRICE

The purchase price shall be Eighty Thousand Dollars ($80,000.00), of which Forty Thousand Dollars ($40,000.00) shall be allocated to each of the Licenses (the “Purchase Price”).

CLOSING COVENANTS

Each of the Parties shall use commercially reasonable efforts to (i) obtain from any governmental body any consents, licenses, permits, waivers, clearances, approvals, authorizations or orders required to be obtained or made by Buyer or Seller in connection with the authorization, execution and delivery of this LOI and the other Transaction Documents and the consummation of the transactions contemplated herein and therein and (ii) make or cause to be made the applications or filings required to be made by Buyer or Seller or any of their respective Affiliates under or with respect to any applicable laws in connection with the authorization, execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated herein and therein, as promptly as is reasonably practicable, including but not limited to the filings necessary to obtain the Commission Approval. Seller and Buyer shall, and shall cause their respective Affiliates and Representatives to, furnish to the other Party all information necessary for any application or filing to be made in connection with the transactions contemplated herein and therein. Seller and Buyer shall promptly inform the other of any material communication with, and any proposed understanding, undertaking or agreement with, any governmental body regarding any such application or filing.

PURCHASE PRICE PAYMENT TIMING

The Purchase Price shall be paid in the form of a reduction to be applied to the amount of Indebtedness then owed by Seller to Americann Parent as further set forth in the Mutual Lease Modification Agreement.

CLOSING COSTS

Each Party shall be responsible for its own legal and other expenses related to the Transaction.

CONTINGENCIES

The Closing shall be contingent upon the following:

(i) the execution of the Mutual Lease Modification Agreement;

(ii) Commission approval; and

(iii) No material breach of the Transaction Documents by either party prior to the Closing.

INDEMNIFICATION

Seller shall indemnify Buyer against: (i) breaches of representations, warranties and covenants of Seller and (ii) liabilities of the Seller not assumed by the Buyer. The Buyer shall indemnify Seller against breaches of representations, warranties and covenants of the Buyer.

REPRESENTATIONS, WARRANTIES AND COVENANTS

Seller represents, warrants, and agrees to the following in connection with the Transaction:

1.    Seller is and has been in compliance in all material respects with each law, License and governmental authorization that is or was applicable to Seller or to the conduct or operation of the Business;

2.    The execution, delivery and performance by Seller of this LOI and each of the Transaction Documents to which Seller is or will be a signatory has been or shall be, on or prior to its execution and delivery, duly authorized by all necessary corporate action on the part of Seller. This LOI has been, and each other Transaction Documents to which Seller is to be a party will be, upon its execution and delivery, duly executed and delivered by Seller, this LOI constitutes, and each other Transaction Agreement to which SELLER is to be a party, when so executed and delivered, will constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with its terms;

3.    To the Knowledge of Seller, no event has occurred, or circumstance exists that (with or without notice or lapse of time) may constitute or result in a material violation by Seller of, or a failure on the part of Seller to comply with, any law, License or any governmental authorization related to the operation of the Business; and

4.    Buyer shall not assume any employment-related liabilities of Seller, including but not limited to liabilities for any action resulting from the Seller’s separation of employment, liabilities arising out of or relating to any employment contract, consulting contract, payroll and payroll taxes, misclassification of any Employee, liabilities for vacation, sick leave, parental leave, and other paid-time off accrued by Employees of Seller as a result of Seller entering into this LOI.