Document:

gcc_ex1017.htm

EXHIBIT 10.17

 

 

July 14, 2017

 

PERSONAL & CONFIDENTIAL

 

Dear Wayne Anderson:

 

MCAP, LLC ("MCAP") is pleased to act as OTCQB/OTCQX Advisor (“Advisor”) to The Greater Cannabis Company, Inc. (the “Company”) in connection with quoting the Company’s securities on OTCQB or OTCQX, depending on which tier the Company qualifies. We will provide Advisory services to the Company which includes rendering advice to the Company with respect to eligibility for becoming quoted on the OTCQB/OTCQX and educating, advising and assisting the Company in complying with its ongoing OTCQB/OTCQX disclosure obligations under current federal and state securities laws. 

 

	
 
	
1.
	Services: In connection with this engagement, MCAP will perform the following services:
	
 
	
 
	
 
	
 

	
 
	
 
	a.	Review the business of the Company and its securities to determine whether the securities satisfy the eligibility criteria and are otherwise suitable for admission to the applicable OTC tier;
	
 
	
 
	
 
	
 

	
 
	
 
	b.	Provide continuing advice to the Company and educating its management and board of directors to enable them to understand their responsibilities under the OTC Markets Group Rules and OTC Markets Group’s Guidelines for Providing Adequate Current Information;
	
 
	
 
	
 
	
 

	
 
	
 
	c.	Conduct a review of the information contained on the OTC Markets Group News Service to refresh the information provided at the time of initial application;
	
 
	
 
	
 
	
 

	
 
	
 
	d.	Respond to requests from OTC Markets Group from time to time to refresh the information provided by the issuer, or responding to specific inquiries from OTC Markets Group that requires additional disclosures;
	
 
	
 
	
 
	
 

	
 
	
 
	e.	Submit a letter to OTC Markets Group to initiate quoting the Company’s securities on OTCQB/OTCQX (a “Letter of Introduction”).
	
 
	
 
	
 
	
 

	
 
	
 
		No other services are offered and MCAP is being compensated solely for the above referenced advisory services.
	
 
	
 
	
 
	
 

	
 
	
2.
	Information Provided to MCAP: In connection with our engagement, the Company has agreed to furnish to MCAP, on a timely basis, all relevant information needed by MCAP to perform its services under the terms of this agreement. During our engagement, it may be necessary for us: to interview the management of, the auditors for, and the consultants and advisors to, the Company; to rely (without independent verification) upon data furnished to us by them; and to review any financial and other reports relating to the business and financial condition of the Company as we may determine to be relevant under the circumstances. The Company agrees to facilitate at least quarterly meetings (in person or telephonically, at the discretion of MCAP) between MCAP and employees of the Company who have had roles in preparing the disclosures required by OTC Markets Group, for the purpose of discussing disclosures. Such meetings may be conducted if, in our judgment, there are items in the financial statements that should be clarified for the benefit of existing or potential shareholders. We agree that all nonpublic information obtained by us in connection with our engagement will be held by us in strict confidence and will be used by us solely for the purpose of performing our obligations relating to our engagement.

 

	 
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		We do not assume any responsibility for, or with respect to, the accuracy, completeness or fairness of the information and data supplied to us by the Company or its representatives. In addition, the Company acknowledges that we will assume, without independent verification, that all information supplied to us with respect to the Company will be true, correct and complete in all material respects and will not contain any untrue statements of material fact or omit to state a material fact necessary to make the information supplied to us not misleading. If at any time during the course of our engagement the Company becomes aware of any material change in any of the information previously furnished to us, it will promptly advise us of the change. Notwithstanding the foregoing, MCAP may conduct limited due diligence concerning the Company’s disclosure regarding certain material events, material contracts, officers, directors and control persons and dilutive events for the sole purpose of enabling MCAP to provide, to the extent MCAP, in its sole discretion, deems appropriate, a PAL Letter of Introduction and PAL Annual Letters for so long as MCAP is engaged as an Advisor pursuant to this letter agreement. Pursuant to the OTCQB/OTCQX Rules, the Letter of Introduction and the Annual Letters will be provided only to OTC Markets Group and the Company will not be given access to these documents, nor will the Company be entitled to rely on any of the information contained in these documents.
	
 
	
 
	
 

	
 
		Prior to the issuance of the Letter of Introduction or the PAL Annual Letters, the Company will provide to MCAP a certificate (each, a “Factual Back-Up Certificate”), signed by an executive officer of the Company, certifying as to the accuracy of certain information that MCAP determines, in its sole discretion, is necessary for MCAP to issue a Letter of Introduction and Annual Letters. In each Factual Back-Up Certificate the Company shall also disclose any facts or circumstances that (i) would cause MCAP, as the Company’s Advisor, to not be independent from the Company under the OTCQB/OTCQX rules and (ii) would reasonably be determined to cause a conflict of interest between MCAP and the Company that may affect the advice given by MCAP
	
 
	
 
	
 

	
 
	3.	Scope of Engagement: The Company acknowledges that we will not make, or arrange for others to make, an appraisal of any physical assets of the Company. Nonetheless, if we determine after review of the information furnished to us that any such appraisal or appraisals are necessary or desirable, we will so advise the Company and, if approved by the Company in writing, the costs incurred in connection with such appraisal(s) will be borne by the Company.
	
 
	
 
	
 

	
 
		MCAP has been engaged by the Company only in connection with the matters described in this letter agreement and for no other purpose. We have not made, and will assume no responsibility to make any representation in connection with our engagement as to any legal matter. Except as specifically provided in this letter agreement, MCAP shall not be required to render any advice or reports in writing or to perform any other services.
	
 
	
 
	
 

	
 
	4.	Term of Engagement: Our representation on an basis will continue for twelve (12) months from the date first set forth above, subject to automatic twelve (12) month extensions. Such extensions shall be automatic unless the Company notifies MCAP in writing, with at least thirty (30) days prior notice, of its clear intent to terminate the relationship at the end of each twelve month period. However, either party may terminate the relationship at any time by providing thirty (30) calendar days written notice to the other party. In addition, this letter agreement will terminate automatically upon (i) the revocation of MCAP’s status as a PAL by OTC Markets Group or (ii) notification that OTC Markets Group has terminated the Company’s quotation on OTCQB/OTCQX. Notwithstanding the foregoing, in the event the Company terminates the representation or causes for the representation to be terminated prior to the completion of one year, Engagement fees incurred at the time of termination will be payable in full. In the event MCAP terminates the representation or causes the representation to be terminated, the annual PAL Engagement fees will be pro-rated on the basis of the portion of the year during which MCAP served as the Advisor and the unused portion will be returned to the Company. In the event that either party terminates the relationship, MCAP may notify OTC Markets Group of the termination. In the event that MCAP terminates the relationship, MCAP will provide a written letter to the Company, but not to OTC Markets Group, that describes the reasons for its resignation as an Advisor to the Company. The Company may provide the resignation letter to OTC Markets Group or any other person.

 

	 
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	5.	Engagement Fees: As compensation for our professional services pursuant to the Agreement, the Company shall pay MCAP a fee of $10,000. The fee will be paid in the following installments. A non-refundable due diligence fee of $5,000 to be paid upon signature of this agreement. The second installment of $5,000 will be due August 2th, 2017, and a cash fee of $5,000 upon the Company’s acceptance on OTCQB/OTCQX. Compensation is solely for the advisory services listed above and there is no other service offered in exchange for the Engagement Fee.
	
 
	
 
	
 

	
 
	6.	Indemnity and Contribution: The parties agree to the terms of MCAP’s standard indemnification agreement, which is attached hereto as Appendix A and incorporated herein by reference. The provisions of this paragraph shall survive any termination of this agreement.
	
 
	
 
	
 

	
 
	7.	Other MCAP Activities: MCAP is a securities firm engaged in securities trading and brokerage activities as well as investment banking and financial advisory services. In the ordinary course of our trading and brokerage activities, MCAP or its affiliates may hold positions, for its own account or the accounts of customers, in equity, debt or other securities of the Company. The Company also acknowledges that MCAP and its affiliates are in the business of providing financial services and consulting advice to others. Nothing herein contained shall be construed to limit or restrict MCAP in conducting such business with respect to others, or in rendering such advice to others, except as such advice may relate to matters relating to the Company’s business and properties and that might compromise confidential information delivered by the Company to MCAP.
	
 
	
 
	
 

	
 
	8.	Compliance with Applicable Law: In connection with this engagement, the Company and MCAP will comply with all applicable federal, state and foreign securities laws and other applicable laws and regulations.
	
 
	
 
	
 

	
 
	9.	Independent Contractor: MCAP is and at all times during the term hereof will remain an independent contractor, and nothing contained in this letter agreement will create the relationship of employer and employee or principal and agent as between the Company and MCAP or any of its employees. Without limiting the generality of the foregoing, all final decisions with respect to matters about which MCAP has provided services hereunder shall be solely those of the Company, and MCAP shall have no liability relating thereto or arising there from. MCAP shall have no authority to bind or act for the Company in any respect. It is understood that MCAP responsibility to the Company is solely contractual in nature and that MCAP does not owe the Company, or any other party, any fiduciary duty as a result of its engagement.
	
 
	
 
	
 

	
 
	10.	Successors and Assigns: This letter agreement and all obligations and benefits of the parties hereto shall bind and shall inure to their benefit and that of their respective successors and assigns. The indemnity and contribution provisions incorporated into this letter agreement are for the express benefit of the officers, directors, employees, consultants, agents and controlling persons of MCAP and their respective successors, assigns and parent companies.
	
 
	
 
	
 

	
 
	11.	Announcements: The Company grants to MCAP the right to place customary announcement(s) of this engagement in certain newspapers and to mail announcement(s) to persons and firms selected by MCAP, and all costs of such announcement(s) will be borne by MCAP
	
 
	
 
	
 

	
 
	12.	Governing Law and Arbitration: This agreement shall be governed by and construed under the laws of the State of Florida applicable to contracts made and to be performed entirely within the State of Florida. Any dispute, claim or controversy arising out of or relating to this agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by binding arbitration in the City and County of Orange, before one arbitrator. The arbitration shall be administered by the American Arbitration Association and the arbitration shall be in English. Judgment on the award may be entered in any court having jurisdiction. This clause shall not preclude the parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. Each party will bear its own costs for arbitration. The prevailing party in arbitration shall be entitled to reasonable attorneys’ fees. The provisions of this paragraph shall survive any termination of this agreement.

 

	 
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	13.	General Provisions: No purported waiver or modification of any of the terms of this letter agreement will be valid unless made in writing and signed by the parties hereto. Section headings used in this letter agreement are for convenience only, are not a part of this letter agreement and will not be used in construing any of the terms hereof. This letter agreement constitutes and embodies the entire understanding and agreement of the parties hereto relating to the subject matter hereof, and there are no other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof. No representation, promise, inducement or statement of intention has been made by either of the parties hereto which is to be embodied in this letter agreement, and none of the parties hereto shall be bound by or liable for any alleged representation, promise, inducement or statement of intention, not so set forth herein. No provision of this letter agreement shall be construed in favor of or against either of the parties hereto by reason of the extent to which either of the parties or its counsel participated in the drafting hereof. If any provision of this letter agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the remaining provisions hereof shall in no way be affected and shall remain in full force and effect. This letter agreement may be executed in any number of counterparts and by facsimile signature.

 

If the foregoing correctly sets forth your understanding of our agreement, please sign the enclosed copy of this letter and return it to MCAP. 

 

Very truly yours,

 

MCAP, LLC

 

	 	 	 	 
		By:	/s/ Stefan Spath	
	
 
	
 
		 
	 	[Stefan Spath]	 

 

The undersigned hereby accepts, agrees to and becomes party to the foregoing letter agreement, effective as of the date first written above. 

 

 

	The Greater Cannabis Company, Inc.	
	 	 	 
	By:	/s/ Wayne Anderson	
	
 
	Wayne Anderson, as President 	 

 

	 
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APPENDIX A—INDEMNIFICATION AGREEMENT

 

The Company agrees to indemnify and hold harmless MCAP and its officers, directors, employees, consultants, attorneys, agents, affiliates, parent company and controlling persons (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended) (MCAP and each such other persons are collectively and individually referred to below as an "Indemnified Party") from and against any and all loss, claim, damage, liability and expense whatsoever, as incurred, including, without limitation, reasonable costs of any investigation, legal and other fees and expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted, to which the Indemnified Party may become subject under any applicable federal or state law (whether in tort, contract or on any other basis) or otherwise, (i) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any private placement memorandum, registration statement (including documents, incorporated by reference) (the “Registration Statement”) or in any other written or oral communication provided by or on behalf of the Company to any actual or prospective purchaser of the securities or arising out of or based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) related to the performance by the Indemnified Party of the services contemplated by this letter agreement (including, without limitation, the offer and sale of the securities) and will reimburse the Indemnified Party for all expenses (including legal fees and expenses) in connection with the investigation of, preparation for or defense of any pending or threatened claim or any action or proceeding arising there from, whether or not the Indemnified Party is a party and whether or not such claim, action or proceeding is initiated or brought by the Company. The Company will not be liable under clause (ii) of the foregoing indemnification provision to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court or arbitrator, not subject to appeal or further appeal, to have resulted directly from the Indemnified Party's willful misconduct or gross negligence. The Company also agrees that the Indemnified Party shall have no liability (whether direct or indirect, in contract, tort or otherwise) to the Company related to, or arising out of, the engagement of the Indemnified Party pursuant to, or the performance by the Indemnified Party of the services contemplated by, this letter agreement except to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court or arbitrator, not subject to appeal or further appeal, to have resulted directly from the Indemnified Party's willful misconduct or gross negligence. 

 

If the indemnity provided above shall be unenforceable or unavailable for any reason whatsoever, the Company, its successors and assigns, and the Indemnified Party shall contribute to all such losses, claims, damages, liabilities and expenses (including, without limitation, all costs of any investigation, legal or other fees and expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted) (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and MCAP under the terms of this letter agreement or (ii) if the allocation provided for by clause (i) of this sentence is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i), but also the relative fault of the Company and MCAP in connection with the matter(s) as to which contribution is to be made. The relative benefits received by the Company and MCAP shall be deemed to be in the same proportion as the fee the Company actually pays to MCAP bears to the total value of the consideration paid or to be paid to the Company. The relative fault of the Company and MCAP shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by MCAP and the Company’s and MCAP’s relative intent, knowledge, access to information and opportunity to correct. The Company and MCAP agree that it would not be just or equitable if contribution pursuant to this paragraph were determined by pro rata allocation or by any other method of allocation which does not take into account these equitable considerations. Notwithstanding the foregoing, to the extent permitted by law, in no event shall the Indemnified Party's share of such losses, claims, damages, liabilities and expenses exceed, in the aggregate, the fee actually paid to the Indemnified Party by the Company. The Company further agrees that, without MCAP’s prior written consent, which consent will not be unreasonably withheld, it will not enter into any settlement of a lawsuit, claim or other proceeding arising out of the transactions contemplated by this agreement unless such settlement includes an explicit and unconditional release from the party bringing such lawsuit, claim or other proceeding of all such lawsuits, claims, or other proceedings against the Indemnified Parties. 

 

	 
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The Indemnified Party will give prompt written notice to the Company of any claim for which it seeks indemnification hereunder, but the omission to so notify the Company will not relieve the Company from any liability which it may otherwise have hereunder except to the extent that the Company is damaged or prejudiced by such omission or from any liability it may have other than under this Appendix A. The Company shall have the right to assume the defense of any claim, lawsuit or action (collectively an "action") for which the Indemnified Party seeks indemnification hereunder, subject to the provisions stated herein with counsel reasonably satisfactory to the Indemnified Party. After notice from the Company to the Indemnified Party of its election to assume the defense thereof, and so long as the Company performs its obligations pursuant to such election, the Company will not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation. The Indemnified Party shall have the right to employ separate counsel in any such action and to participate in the defense thereof at its own expense; provided, however, that the reasonable fees and expenses of such counsel shall be at the expense of the Company if (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnified Party and the Company and the Indemnified Party shall have reasonably concluded, based on advice of counsel, that there may be legal defenses available to the Indemnified Party which are different from, or in conflict with, any legal defenses which may be available to the Company (in which event the Company shall not have the right to assume the defense of such action on behalf of the Indemnified Party, it being understood, however, that the Company shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all Indemnified Parties in each jurisdiction in which counsel is needed). Despite the foregoing, the Indemnified Party shall not settle any claim without the prior written approval of the Company, which approval shall not be unreasonably withheld, so long as the Company is not in material breach of this Appendix A. Also, each Indemnified Party shall make reasonable efforts to mitigate its losses and liabilities. In addition to the Company's other obligations hereunder and without limitation, the Company agrees to pay monthly, upon receipt of itemized statements therefore, all reasonable fees and expenses of counsel incurred by an Indemnified Party in defending any claim of the type set forth in the preceding paragraphs or in producing documents, assisting in answering any interrogatories, giving any deposition testimony or otherwise becoming involved in any action or response to any claim relating to the engagement referred to herein, or any of the matters enumerated in the preceding paragraphs, whether or not any claim is made against an Indemnified Party or an Indemnified Party is named as a party to any such action.

 

  

	
6gcc_ex1018.htm

EXHIBIT 10.18

 

CONVERTIBLE PROMISSORY NOTE AND WARRANT

 

FOR U.S. INVESTORS:

 

NEITHER THE SECURITIES REPRESENTED HEREBY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) INSIDE THE UNITED STATES (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, (2) IN ACCORDANCE WITH RULE 144, RULE 145 OR RULE 144A UNDER THE SECURITIES ACT, IF APPLICABLE, AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS OR (3) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE U.S. STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES. 

 

FOR FLORDIA INVESTORS:

 

THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN REGISTERED WITH THE FLORIDA DIVISION OF SECURITIES AND INVESTOR PROTECTION UNDER THE FLORIDA SECURITIES ACT. THE SECURITIES REFERRED TO HEREIN MAY ONLY BE SOLD TO, AND ACQUIRED BY THE HOLDER IN A TRANSACTION EXEMPT UNDER THE APPLICABLE PROVISIONS OF SAID ACT. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN ADDITION, ALL OFFEREES WHO ARE FLORIDA RESIDENTS SHOULD BE AWARE THAT SECTION 517.061(11)(a)(5) OF THE ACT PROVIDES, IN RELEVANT PART, AS FOLLOWS: "WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA, ANY SALE IN FLORIDA MADE PURSUANT TO THIS SECTION IS VOIDABLE BY THE PURCHASER IN SUCH SALE EITHER WITHIN 3 DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY THE PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER OR AN ESCROW AGENT OR WITHIN 3 DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER." THE AVAILABILITY OF THE PRIVILEGE TO VOID SALES PURSUANT TO SECTION 517.061(11) IS HEREBY COMMUNICATED TO EACH FLORIDA OFFEREE TO THE EXTENT SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA. EACH PERSON ENTITLED TO EXERCISE THE PRIVILEGE TO AVOID SALES GRANTED BY SECTION 517.061 (11)(A)(5) AND WHO WISHES TO EXERCISE SUCH RIGHT, MUST, WITHIN 3 DAYS AFTER THE TENDER OF ANY AMOUNT TO THE COMPANY OR TO ANY AGENT OF THE COMPANY (INCLUDING THE SELLING AGENT OR ANY OTHER DEALER ACTING ON BEHALF OF THE PARTNERSHIP OR ANY SALESMAN OF SUCH DEALER) OR AN ESCROW AGENT CAUSE A WRITTEN NOTICE OR TELEGRAM TO BE SENT TO THE COMPANY AT THE ADDRESS PROVIDED IN THIS PLACEMENT MEMORANDUM. SUCH LETTER OR TELEGRAM MUST BE SENT AND, IF POSTMARKED, POSTMARKED ON OR PRIOR TO THE END OF THE AFOREMENTIONED THIRD DAY. IF A PERSON IS SENDING A LETTER, IT IS PRUDENT TO SEND SUCH LETTER BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ASSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME IT WAS MAILED. SHOULD A PERSON MAKE THIS REQUEST ORALLY, HE MUST ASK FOR WRITTEN CONFIRMATION THAT HIS REQUEST HAS BEEN RECEIVED. 

 

FOR CANADIAN INVESTORS: 

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF: (i) NOVEMBER 18, 2017, AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA,

 

NEITHER THE SECURITIES REPRESENTED HEREBY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY OF THE PROVINCES OF CANADA AND NO PROSPECTUS RELATING TO SUCH SECURITIES HAVE BEEN FILED IN ANY JURISDICTION.

 

	 
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XERAFLOP TECHNOLOGIES INC.

 

CONVERTIBLE PROMISSORY NOTE

 

	
USD$100,000 
	
JULY 17, 2017

 

Vancouver, BC

 

For value received, XeraFlop Technologies Inc., a British Columbia corporation (the "Company"), promises to pay to the undersigned (the "Holder"), the principal sum set out above (the “Principal”).

 

	1.	Interest and Maturity

 

Interest shall accrue from the date of July 17, 2017 on the unpaid Principal amount at a rate equal to 12%, (“Interest”). Subject to Section 2, the Principal and any accrued but unpaid interest under this Note shall be due and payable upon demand by the Holder at any time after June, 30, 2018 (the "Maturity Date"); provided, however, that in the event that, prior to the Maturity Date, the Company consummates any merger, consolidation, sale of all or substantially all of the property or stock, liquidation or other reorganization of the Company, as a result of which the stockholders of the Company receive cash, stock or other property in exchange for their shares of capital stock and the holders of the Company’s voting equity securities immediately prior to such consummation together own less than a majority interest of the voting equity securities of the successor corporation following such change of control transaction (a “Change of Control Transaction”), then (i) an amount equal to the outstanding Principal amount and any accrued but unpaid Interest under this Note shall be due and payable on the closing date of such Change of Control Transaction and (ii) this Note shall terminate immediately upon payment of such Principal and accrued interest. 

 

	2.	Conversion and Early Repayment

 

	
 
	(a)	Conversion by the Holder

 

On the Maturity Date, unless repaid as described below, the Holder may convert the entire Principal together with accured Interest into Series 2 Common Shares of the Company by providing the Company with written notice that the Holder wishes to convert this Note (the “Conversion Notice”). On the date on which the Conversion Notice is received by the Company (the “Conversion Date”), the Principal and accrued Interest shall be converted into that number of Series 2 Common Shares of the Company (the “Conversion Shares”) at a price per share equal to the most recent round price in which the Company sold an aggregate of at least $10,000,000 in equity. The Holder shall be deemed to be the holder of the Conversion Shares as of the Conversion Date. As soon as practicable after the Holder surrenders this Note to the Company for conversion into Conversion Shares, the Company shall issue and deliver to the Holder the Conversion Shares.

 

	 
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	(b)	Repayment by Company

 

	
 
	(i)	The Holder has the option to demand repayment of the Principal plus a Redemption Premium in the amount of 20% of the Principal less any accrued but unpaid Interest (the “Redemption Premium”), within five (5) days following the date of completion of the Next Equity Financing by providing the Company with written notice (the “Repayment Notice”) that the Holder wishes to elect to have the Principal plus the Redemption Premium repaid prior to the Due Date.
	
 
	
 
	
 

	
 
	(ii)	The Company has the option to repay the Principal plus a Redemption Premium in the amount of 20% of the Principal less any accrued but unpaid Interest (the “Redemption Premium”), within five (5) days following the date of completion of the Next Equity Financing by providing the Holder with written notice (the “Repayment Notice”) that the Company wishes to elect to repay the Principal plus Redemption Premium repaid prior to the Due Date.
	
 
	
 
	
 

	
 
	(iii)	Upon receipt of the Repayment Notice, the Company shall repay to the Holder, within fifteen (15) days of receiving the Repayment Notice, the amount owing under this Note to the Holder. Upon repayment, the Holder shall surrender the Note to the Company. “Next Equity Financing” means the completion of the sale of shares of the Company's equity securities (the "Equity Securities") issued and sold in a private equity financing yielding aggregate proceeds to the Company of at least USD$10,000,000 (including conversion of this Note and all other promissory notes issued as part of this financing) (the "Next Equity Financing").

 

	
 
	(c)	Mechanics and Effect of Conversion

 

No fractional shares of the Company's capital stock will be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted Principal and interest balance of this Note that would otherwise be converted into such fractional share. Upon conversion of this Note pursuant to this Section 2, the Holder shall surrender this Note, duly endorsed, at the principal offices of the Company or any transfer agent of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Holder, at the address of the Holder most recently furnished in writing to the Company, a certificate or certificates for the number of shares to which such Holder is entitled upon such conversion, together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note, including a cheque payable to the Holder for any cash amounts payable as described herein. Upon conversion of this Note, the Company will be forever released from all of its obligations and liabilities under this Note with regard to that portion of the Principal amount and accrued Interest being converted including without limitation the obligation to pay such portion of the Principal amount and accrued Interest.

 

	 
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	3.	Payment

 

All payments shall be made in lawful money of US Dollars at such place as the Holder hereof may from time to time designate in writing to the Company. Payment shall be credited first to the accrued Interest then due and payable and the remainder applied to Principal.

 

	4.	Warrants

 

The Company also grants the Holder the right (the “Warrants”), subject to the terms set forth below, to purchase from the Company, at any time on or before the Expiration Date (as defined below), 20% warrant coverage, based on the principal investment totaling $100,000 USD, with a strike price equivelant to the equity round financing. This Warrant (and the right to purchase securities upon exercise hereof) shall terminate upon the earliest to occur of the following (the "Expiration Date"): (a) the date seven (7) years after the date of issuance of this Warrant, (b) the closing of a Change of Control Transaction or (c) the closing of a firm commitment underwritten public offering pursuant to a registration statement under applicable Securities legislation. Next Equity Financing means the completion of the sale of shares of the Company's equity securities (the "Equity Securities") issued and sold in a private equity financing yielding aggregate proceeds to the Company of at least USD$10,000,000 (including conversion of this Note) (the "Next Equity Financing"). The Holder will be able to retain the Warrrants even if it has exercised the repayment or redemption options set out above.

 

	5.	Exercise of Warrants

 

These Warrants may be exercised by the Holder, in whole or in part, by delivering to the Company at the principal office of the Company, or at such other office or agency as the Company may designate: (a) this Note; (b) a written notice of exercise and (c) cash, check, wire transfer, or cancelled promissory notes or other instruments representing indebtedness of the Company to the Holder in an amount equal to (i) the Per Share Price multiplied by (ii) the number of common shares purchased upon such exercise of the Warrants.

 

	6.	Transfer; Successors and Assigns

 

The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer this Note without the prior written consent of the Company, except for transfers to affiliates, and, in any event, in compliance with applicable securities laws. Subject to the preceding sentence, this Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, a new note for the same Principal amount and interest will be issued to, and registered in the name of, the transferee. Interest and Principal are payable only to the registered holder of this Note.

 

	 
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	7.	Stockholders, Officers and Directors

 

In no event shall any stockholder, officer or director of the Company be liable for any amounts due or payable pursuant to this Note.

 

	8.	Notices

 

Any notice required or permitted by this Note shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by a nationally-recognized delivery service or forty-eight (48) hours after being deposited in the mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at such party's address as set forth below or as subsequently modified by written notice.

 

	9.	Amendments and Waivers

 

Any term of this Note may be amended only with the written consent of the Company and the Holder. Any amendment or waiver effected in accordance with this Section 9 shall be binding upon the Company, the Holder and each transferee of the Note.

 

	10.	Governing Law

 

This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the Province of British Columbia, without giving effect to principles of conflicts of law.

 

[Signature page follows]

 

	 
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XERAFLOP TECHNOLOGIES INC.
	
	 	 	 
	Per:	
/s/ David Edmunds
	
	
 
	
David Edmunds, CFO
	 
	 	 	 
	AGREED AND ACCEPTED:	 
	
 
	
 
	
 

	
 
	
/s/ Wayne Anderson
	
 

	
 
	
Wayne Anderson, President
	
 

	
 
	
 
	
 

	
The Greater Cannabis Company, Inc.

244 2nd Avenue N., Suite 9

St. Petersburg, FL 33701
	
 

 

 

(727) 482-1505

TELEPHONE

 

info@greatercannabiscompany.com

EMAIL

 

 

	
6

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