Exhibit
10.2


 


THIS
LOAN AGREEMENT dated as of the 21st day of November, 2014,


 


B
E T W E E N :


 


CANADIAN
CANNABIS CORP. and CANADA CANNABIS CORP. (collectively, the “Borrower”)


 


and


 


CRIMSON
CAPITAL, LLC (the “Lender”)


 


and


 


2264793
ONTARIO INC. (“2264793”)


 


RECITALS:


 


	A.	The
                                         Borrower wishes to borrow monies from the Lender in the principal sum of $600,000 in
                                         lawful money of Canada.






 


NOW
THEREFORE the parties agree as follows:


 


	1.	The
                                         Loan



 


		(a)	The
                                         Lender shall, on the terms and conditions of this Agreement, lend monies to the Borrower
                                         in the amount of $600,000 in lawful money of Canada (the “Loan”).



 


	2.	Repayment
                                         of the Loan



 


		(a)	Subject
                                         to this Section, the Borrower shall repay the entire principal sum on February 21, 2015
                                         (the “Maturity Date”).
	 	 	 
		(b)	Subject
                                         to this Section, the Borrower shall pay interest on the entire outstanding principal
                                         advanced from time to time under the Loan, to be paid on the Maturity Date, at a rate
                                         which is equal to fifty four per cent (54%) per annum, both before and after maturity
                                         and both before and after default, if any, together with interest on overdue interest
                                         at the rate set out above. In the event that the rate of interest hereunder is considered
                                         a “criminal rates of interest” pursuant to the Criminal Code (Canada), then
                                         the interest rate shall be deemed to be the highest rate permitted by law. The entire
                                         Loan shall be deemed advanced on the date hereof notwithstanding the payments to be made
                                         after the date hereof under 2(d)(iv) below.



 




    	 		 



     

    

 


		(c)	After
                                         a period of 2 months from the date hereof the Borrower shall have the privilege, when
                                         not in default in any of its obligations contained in this Agreement, without premium
                                         or penalty, of prepaying all or any part of the moneys advanced pursuant to the Loan.
                                         Before the date that is 2 months from the date hereof the Borrower may still prepay the
                                         Loan provided that the Borrower pays a penalty so that the total interest paid is equal
                                         to two months interest.
	 	 	 
		(d)	The
                                         proceeds of the Loan shall be disbursed by the Lender as follows:



 


		(i)	the
                                         Lender will pay the Borrower’s insurance company [insert] the sum of $116,923.67
	 	 	 
		(ii)	the
                                         Lender will pay the Borrower’s gas bill of $45,481.50
	 	 	 
		(iii)	the
                                         Lender will pay the tax bill for the Property in the amount of $27,205.59
	 	 	 
		(iv)	the
                                         Lender will make the payments due in November, December and January under the First Mortgage,
                                         each in the amount of $104,788
	 	 	 
		(v)	the
                                         Lender will deduct the amount of $30,000 from the Loan to cover the Lender’s costs
                                         which shall include the Lender’s legal fees
	 	 	 
		(vi)	the
                                         Lender will advance the balance in the sum of $66,025.24 to the Borrower



 


		(e)	The
                                         Borrower shall have the option to extend the term of the Loan on a month by month basis
                                         for an additional period until July 1, 2015 (an “Extension”) subject
                                         to the following:



 


		(i)	for
                                         each month (or part of a month) Extension the Borrower provides at least 15 days prior
                                         written notice,
	 	 	 
		(ii)	the
                                         Lender has yet to trigger the Option to Purchase (as described in Section 8); and
	 	 	 
		(iii)	no
                                         Event of Default has occurred.



 


		(f)	The
                                         Borrower agrees that the term of the Loan shall not be extended past July 1, 2015.



 


	3.	The
                                         Security



 


As
a continuing collateral security for the payment of all advances made under the Loan and interest and all other moneys payable
pursuant to this Agreement the Borrower and guarantors shall execute and deliver to the Lender the following, all in form and
content satisfactory to the Lender:


 


		(a)	an
                                         unlimited guarantee from each of 2264793 and Benjamin A. Ward;



 




    	 	2	 



     

    

 


		(b)	a
                                         second in priority mortgage from 2264793 of the property municipally known as 98-102
                                         Rutherford Rd., S., Brampton, ON and legally described as PIN 14032-0123 (LT), PT LT
                                         4 CON 2 E.H.S. CHINGUACOUSY PTS 1 TO 4, 43R17742; T/W BR48239 ; S/T BR51139; TOGETHER
                                         WITH AN EASEMENT AS IN VS121670; CITY OF
BRAMPTON (the “Property”); and






 


		(c)	such
                                         other security as reasonably requested by the Lender or its lawyers.



 


	4.	Representations
                                         and Warranties of the Borrower



 


Each
of the Borrower and 2264793 represents and warrants to the Lender that:


 


		(a)	It
                                         is a corporation legally incorporated, duly organized and validly existing, in good standing
                                         under the laws of the jurisdiction of its incorporation and is qualified to carry on
                                         its business in all jurisdictions where the nature of its business or the character of
                                         its properties make such qualification necessary.
	 	 	 
		(b)	The
                                         borrowing of money and the execution, delivery and performance of this Agreement and
                                         the security set forth in Section 3 are within their corporate powers and capacities
                                         and have been duly authorized by proper corporate proceedings.
	 	 	 
		(c)	There
                                         are no actions, suits or proceedings pending or to the knowledge of the Borrower and
                                         2264793 threatened against or adversely affecting the Borrower in any court or before
                                         or by any federal, provincial, municipal or other governmental department, commission,
                                         board, bureau or agency, Canadian or foreign, which might materially affect the financial
                                         condition of the Borrower or 2264793 or the title to its property or assets.
	 	 	 
		(d)	The
                                         execution and delivery of this Agreement, the consummation of the transactions contemplated
                                         by this Agreement, the execution and delivery to the Lender of the security set forth
                                         in Section 3, and the compliance with the covenants, terms, provisions and conditions
                                         of this Agreement will not conflict with or result in a breach of any of the terms or
                                         provisions of the constating documents or by-laws of the Borrower and 2264793, or any
                                         resolution of the directors or shareholders of the Borrower and 2264793, any laws of
                                         Canada, or the Province of Ontario, or any agreement or instrument to which it is now
                                         a party.
	 	 	 
		(e)	This
                                         Agreement and all other deeds, documents or instruments to be delivered pursuant to this
                                         Agreement will, when executed and delivered, constitute valid and binding obligations
                                         of the Borrower and/or 264793 enforceable against it in accordance with their respective
                                         terms, except as may be limited by other deeds, documents or instruments delivered pursuant
                                         to this Agreement, or by applicable bankruptcy, reorganization, insolvency, moratorium
                                         and other laws affecting the enforcement of creditors' rights.



 




    	 	3	 



     

    

 


		(f)	The
                                         borrowing of money under this Agreement and the execution and delivery of this Agreement
                                         do not require the consent or approval of, or registration of any other party.
	 	 	 
		(g)	All
                                         balance sheets, earnings statements and other financial data, which have been or shall
                                         be furnished to the Lender to induce the Lender to enter into this Agreement or otherwise
                                         in connection with this Agreement have been or will be prepared in accordance with generally
                                         accepted accounting principles and do or will fairly present the financial condition
                                         and the results of the operations, and all other information, certificates, schedules,
                                         reports and other papers and data furnished to the Lender are or will be at the time
                                         they are so furnished, accurate and complete in all material respects.
	 	 	 
		(h)	The
                                         Property is not in violation of any zoning, building, health, fire, traffic, environmental,
                                         wetlands, coastal or other rules, regulations, ordinances, statutes and requirements
                                         applicable thereto, and there are no outstanding work orders.
	 	 	 
		(i)	No
                                         hazardous material is now, or was formerly, used, stored, generated, manufactured, installed,
                                         disposed of or otherwise present at or about the Property or any property adjacent to
                                         the Property (except for cleaning and other products currently used in connection with
                                         the routine maintenance or repair of the Property in full compliance with all federal,
                                         provincial and local environmental laws (“Environmental Laws”)).
	 	 	 
		(j)	All
                                         permits, licenses, approvals and filings required by Environmental Laws have been obtained,
                                         and the use, operation and condition of the Property do not, and did not previously,
                                         violate any Environmental Laws.
	 	 	 
		(k)	No
                                         civil, criminal or administrative action, suit, claim, hearing, investigation or proceeding
                                         has been brought or been threatened, nor have any settlements been reached by or with
                                         any parties or any liens imposed in connection with the Property concerning hazardous
                                         materials or Environmental Laws.
	 	 	 
		(l)	It
                                         has paid when due and in full all employee pensions and benefits payable by it, including
                                         without limitation Workers’ Compensation Board premiums, Employer Health Tax premiums,
                                         Canada Pension Plan contributions and Employment Insurance Commission premiums, and has
                                         remitted when required and in full all source deductions for income tax, Canada Pension
                                         Plan contributions and Employment Insurance Commission premiums of its employees and
                                         all goods and services tax and retail sales tax paid and received by it.



 




    	 	4	 



     

    

 


		(m)	All
                                         realty taxes due have been paid in full. There are no pending or, to the Borrowers' best
                                         knowledge, proposed, special or other assessments for public improvements or otherwise
                                         affecting the Property, nor are there any contemplated improvements to the Property that
                                         may result in such special or other assessments.
	 	 	 
		(n)	As
                                         of the date hereof, the only tenants of the Property are Trans Connect Logistics Inc.,
                                         Butcher Industrial Finishings Inc., C & J Paving Ltd. and Pattison Outdoor Advertising
                                         LP (by its general partner, Pattison Outdoor Advertising Ltd). All such leases are in
                                         good standing with no defaults thereunder.
	 	 	 
		(o)	All
                                         tenants of the Property deal at arm’s length with the Borrower and 2264793 and
                                         neither the Borrower nor 2264793 Ontario Inc., nor any of their respective agents or
                                         affiliates have any written or unwritten lease or sublease in connection with the Property.
	 	 	 
		(p)	No
                                         tenant of the Property or any other party has an option to purchase all or any portion
                                         of the Property.



 


	5.	Affirmative
                                         Covenants



 


Each
of the Borrower and 2264793 covenants with the Lender that so long as any amounts advanced under the Loan together with interest
remain outstanding:


 


		(a)	It
                                         will deliver financial statements and any other financial information or reports upon
                                         request by the Lender.
	 	 	 
		(b)	It
                                         will permit any person designated by the Lender in writing to visit and inspect the Property,
                                         corporate books and financial records and to discuss the affairs, finances and accounts
                                         of the Borrower and 2264793 at all reasonable times and as often as the Lender may reasonably
                                         request.
	 	 	 
		(c)	It
                                         will insure and keep insured all of its property with extended coverage against loss
                                         or damage by fire, theft, collision or other insurance hazards commonly insured against
                                         to the full insurable value. All insurance shall be maintained with an insurer or insurers
                                         as may be approved by the Lender. The loss under all insurance will be payable to lenders
                                         in order of priority and each policy will contain a mortgage clause providing for a minimum
                                         of 15 days’ notice to the Lender of cancellation or lapse.



 




    	 	5	 



     

    

 


		(d)	It
                                         will give the Lender prompt written notice of any material adverse change in its business
                                         or of any material loss, destruction or damage of or to any of its property.
	 	 	 
		(e)	It
                                         will pay or reimburse the Lender for all costs, charges and expenses (including legal
                                         fees) of or incurred by the Lender in connection with this Agreement or any security
                                         taken in pursuance of this Agreement, including all costs, charges and expenses in connection
                                         with the recovery or enforcement of payment of moneys advanced under the Loan, together
                                         with interest.
	 	 	 
		(f)	It
                                         will maintain at all times proper records and books of account and make true and correct
                                         entries in the records of all dealings and transactions relating to its business.
	 	 	 
		(g)	It
                                         will do, observe and perform all of its obligations and all matters and things necessary
                                         or expedient to be done, observed or performed under any law or regulation of Canada,
                                         the Province of Ontario, or any other province where its assets may be located, or any
                                         municipality, for the purpose of creating and maintaining the security provided for in
                                         this Agreement.
	 	 	 
		(h)	It
                                         will give the Lender written notice of any event of default immediately on the occurrence
                                         of such an event.
	 	 	 
		(i)	It
                                         will give the Lender written notice of the occurrence of any material litigation, proceeding
                                         or dispute affecting the Borrower and will provide to the Lender all reasonable information
                                         requested by the Lender concerning the status of the litigation, proceeding or dispute.
	 	 	 
		(j)	If
                                         the Borrower or 2264793 receives additional financing or funding, including but not limited
                                         to from a loan or line of credit then such funds shall be used to prepay the Loan.



 


	6.	Negative
                                         Covenants



 


Each
of the Borrower and 2264793 covenants with the Lender that it will not, without the prior written consent of the Lender:


 


		(a)	Redeem,
                                         purchase or otherwise acquire, either directly or indirectly any of its shares, or declare
                                         or pay any dividend on any of its shares of whatever class, or in any other manner make
                                         payments to its shareholders except for usual remuneration or reimbursement in respect
                                         of employment.
	 	 	 
		(b)	Lend
                                         money to, invest in, or become contingently liable by guarantee or otherwise for the
                                         obligations of, any person, firm or body corporate.



 




    	 	6	 



     

    

 


		(c)	Consolidate,
                                         amalgamate or merge with any other corporation or acquire the shares or assets of any
                                         corporation, firm or partnership, or sell, lease or transfer or otherwise dispose of
                                         all or a substantial part of its assets.
	 	 	 
		(d)	Enter
                                         into any partnership, joint venture or similar agreement or arrangement with any other
                                         person, firm or corporation.
	 	 	 
		(e)	Create,
                                         suffer or permit to exist any mortgage, pledge, lien, charge, assignment by way of security,
                                         hypothecation, security interest, security agreement, trust or arrangement having the
                                         effect of security, any type of preferential arrangement or other encumbrance of any
                                         kind whether or not similar to the foregoing to exist on or with respect to its assets,
                                         except those that already exist as of the date hereof.
	 	 	 
		(f)	Enter
                                         into any offer to lease, agreement to lease, lease, sublease, renewal of lease or sublease
                                         in connection with the Property, including any parking agreements and storage space leases.



 


	7.	Events
                                         of Default



 


The
principal advanced under the Loan and all interest payable together with all of the moneys payable pursuant to this Agreement
shall, at the option of the Lender, become immediately due and payable and any security held by the Lender for the payment thereof
shall, at the option of the Lender, become immediately enforceable and the Lender may exercise its rights under Section 8 herein,
in each and every of the following events (each an “Event of Default”):


 


		(a)	If
                                         the Borrower defaults in the repayment of any instalment of principal or interest under
                                         the Loan when it becomes due and payable.
	 	 	 
		(b)	If
                                         the Borrower fails to perform or observe any of the covenants contained in this Agreement
                                         or in any of the security delivered pursuant to this Agreement and any failure shall
                                         not be remedied within 10 days following notice being given to the Borrower.
	 	 	 
		(c)	If
                                         any representation, warranty, certificate, statement or report made in connection with
                                         this Agreement or in connection with advances under the Loan is false or erroneous in
                                         any material respect.
	 	 	 
		(d)	If
                                         any indebtedness of the Borrower or 2264793 for liabilities other than to the Lender
                                         becomes due prior to the stated maturity date, unless and to the extent that the same
                                         shall be contested in good faith and by appropriate proceedings.



 




    	 	7	 



     

    

 


		(e)	If
                                         the Borrower becomes insolvent or bankrupt or subject to the provisions of the Bankruptcy
                                         and Insolvency Act (Canada), or goes into liquidation, either voluntarily or under
                                         an order of a court of competent jurisdiction, or makes a general assignment for the
                                         benefit of its creditors or otherwise acknowledges itself insolvent.
	 	 	 
		(f)	If
                                         the Borrower removes from the Province of Ontario or sells any material part of its undertaking,
                                         property and assets.
	 	 	 
		(g)	If
                                         the Borrower abandons all or any part of its undertaking and property and assets or ceases
                                         or threatens to cease to carry on its business, or threatens to commit any act of bankruptcy.
	 	 	 
		(h)	If
                                         any execution, sequestration, extent, or any other process of any court becomes enforceable
                                         against the Borrower or if a distress or analogous process is levied on the property
                                         and assets of the Borrower, and the execution, sequestration, extent, distress or process,
                                         remains unsatisfied for a period as would permit the property or a part of it to be sold.
	 	 	 
		(i)	If
                                         there is a default under the first mortgage loan registered against the Property as Instrument
                                         No. PR2560468, and transferred pursuant to Instrument No. PR2566032 (the “First
                                         Mortgage”).



 


	8.	Option
                                         to Purchase



 


		(a)	Upon
                                         the occurrence of an Event of Default or upon the extension of the term of the Loan pursuant
                                         to any Extension described in Section 2(e), the Lender, shall have the immediate right
                                         to purchase the Property from 2264793 for the sum of $9,400,000 CDN (the “Option
                                         to Purchase”).
	 	 	 
		(b)	The
                                         Lender and 2264793 will enter into a form of purchase agreement for the Option to Purchase
                                         by December 5, 2014. Failure to agree to the form of purchase agreement by December 5,
                                         2014 will be considered a Event of Default under this Agreement.
	 	 	 
		(c)	If
                                         the Lender chooses to exercise the Option to Purchase then the Lender shall deliver written
                                         notice to the Borrower and upon delivery of such notice the purchase agreement shall
                                         be released from escrow and become immediately effective.



 




    	 	8	 



     

    

 


	9.	General



 


		(a)	The
                                         Borrower covenants that it will execute or cause to be made, done or executed, all further
                                         and lawful acts, deeds, things, devices, conveyances and assurances whatsoever for effecting
                                         the purposes and intent of this Agreement as counsel for the Lender shall reasonably
                                         advise or request.
	 	 	 
		(b)	The
                                         Lender may from time to time appropriate any moneys received by it from the Borrower
                                         or from the proceeds of security given by the Borrower in or towards payment of the liabilities
                                         intended to be secured, as it in its sole discretion may see fit and the Borrower shall
                                         not have the right to require any other appropriation, and it is agreed that the taking
                                         of a judgment or judgments or any other action or dealing whatsoever by the Lender with
                                         respect to the securitites shall not operate as a merger of any debt owing by the Borrower
                                         to the Lender or any part.
	 	 	 
		(c)	Notice
                                         to be given shall be in writing and be delivered by courier to the following addresses
                                         (effective on the date of delivery):



 


		(i)	As
                                         to the Borrower or 2264793:
	 	 	 
		(ii)	As
                                         to the Lender:



 


489
South Riverview Drive, Totowa, New Jersey 07512


Attention: Joseph R. Prestifilippo


 


with
a copy to:


Gardiner Roberts LLP


40
King Street West, Suite 3100


Toronto, ON M5H 3Y2


Attention: David Epstein


 


or
any other addresses as the parties from time to time may notify the other.


 


		(d)	This
                                         Agreement and all other agreements, security and documents to be delivered in connection
                                         with this Agreement shall be governed by and construed in accordance with the applicable
                                         laws of the Province of Ontario and of Canada.
	 	 	 
		(e)	This
                                         Agreement shall be binding on and enure to the benefit of the Borrower, the Lender and
                                         their respective successors and assigns, except that the Borrower shall not, without
                                         the prior written consent of the Lender, assign any rights or obligations with respect
                                         to this Agreement. The Lender may transfer, assign or grant participation in its rights
                                         and obligations with respect to this Agreement.



 




    	 	9	 



     

    

 


		(f)	Any
                                         provision of this Agreement which is or becomes prohibited or unenforceable in any jurisdiction
                                         shall not invalidate or impair the remaining provisions of this Agreement which shall
                                         be deemed severable from the prohibited or unenforceable provision and any prohibition
                                         or unenforceability in any jurisdiction shall not invalidate or render unenforceable
                                         that provision in any other jurisdiction.
	 	 	 
		(g)	No
                                         amendment supplement or waiver of any provision of this Agreement or any other agreements
                                         provided for or contemplated, nor any consent to any departure by the Borrower, shall
                                         in any event be effective unless it shall be in writing and signed by the Lender and
                                         then the waiver or consent shall be effective only in the specific instance for the specific
                                         purpose for which it has been given.
	 	 	 
		(h)	No
                                         waiver or act or omission of the Lender shall extend to or be taken in any manner whatsoever
                                         to affect any subsequent event of default or breach by the Borrower of any provision
                                         of this Agreement or the results or the rights resulting from it.
	 	 	 
		(i)	Time
                                         shall be of the essence of this Agreement.
	 	 	 
		(j)	This
                                         Agreement shall remain in full force and effect until the payment and performance in
                                         full of all of the Borrower's obligations under this Agreement.
	 	 	 
		(k)	This
                                         Agreement constitutes the entire agreement among the parties and cancels and supersedes
                                         any prior agreements, undertakings, declarations or representations, written or verbal
                                         in respect of it.



 


[SIGNATURE
PAGES FOLLOWS]


 




    	 	10	 



     

    

 


IN
WITNESS OF WHICH the
parties
have caused this
Agreement
to be
executed
by their
respective
officers
duly
authorized.


 


	 	CANADIAN
    CANNABIS CORP.
	 	 	 
	 	Per:	/s/
    John Esteireiro
	 	Name:	John
    Esteireiro
	 	Title:	Chief
    Operating Officer
	 	 	 
	 	Per:	/s/
    Benjamin Ward
	 	Name:	Benjamin
    Ward
	 	Title:	President
    & CEO
	 	 	 
	 	I/We
    have authority to
    bind the Corporation 
	 	 
	 	CANADIAN CANNABIS CORP.
	 	 	 
	 	Per:	/s/
    John Esteireiro
	 	Name:	John
    Esteireiro
	 	Title:	Chief
    Operating Officer
	 	 	 
	 	Per:	/s/
    Benjamin Ward
	 	Name:	Benjamin
    Ward
	 	Title:	President
    & CEO
	 	 	 
	 	I/We
    have authority to
    bind the Corporation 
	 	 
	 	2264793 ONTARIO INC.
	 	 	 
	 	Per:	/s/
    Scott Keevil
	 	Name:	Scott
    Keevil
	 	Title:	 
	 	 	 
	 	Per:	/s/
    Benjamin Ward
	 	Name:	Benjamin
    Ward
	 	Title:	Secretary
	 	 	 
	 	I/We
    have authority to bind the Corporation


 


SIGNATURE
PAGE TO LOAN AGREEMENT  


 




    	 	S-1	 



     

    

 


	 	 
	 	CRIMSON
    CAPITAL, LLC
	 	 	 
	 	Per:	/s/
    Stephen R. Malley
	 	Name:	Stephen
    R. Malley
	 	Title:	Managing
    Member
	 	 	 
	 	Per:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	I/We
    have authority to bind the Corporation


 


SIGNATURE
PAGE TO LOAN AGREEMENT




 


 


S-2