Document:

Exhibit 10.2

  
 Exhibit 10.2
 

 Escrow Agreement
 THIS ESCROW AGREEMENT made effective as of this 27th day of March, 2017.
 AMONG:
 Avonlea Ventures Inc., an Ontario Corporation (AV)
 - and –
 Avonlea-Drewry Holdings Inc., an Ontario Corporation (ADH)
 -and-
 Canadian Cannabis Corp., a Delaware Corporation (CCC)
 - and –
 Canada Cannabis Corp., an Ontario Corporation (CCCSub)
 -and-
 2264973 Ontario Inc., an Ontario Corporation (226)
 -and-
 The Clinic Network Inc., an Ontario Corporation (TCN)
 -and-
 Norton Rose Fulbright Canada LLP, a limited liability partnership carrying on the practice of law in the Province of Alberta (the Escrow Agent)
 WHEREAS:
 A.
 AV, ADH, CCC, CCCSub, 226 and TCN have entered into a settlement agreement dated March 27, 2017 (the Settlement Agreement) pursuant to which the Parties have agreed to resolve and settle certain claims amongst them, subject to the terms and conditions of the Settlement Agreement. 
 B.
 Pursuant to the Settlement Agreement, the Parties have agreed to appoint the Escrow Agent to receive, hold and administer the Additional Amount (the Escrow Amount) and the Deliverables (the Escrow Documents) pursuant to and in accordance with this Escrow Agreement. 
 
  
 C.
 The Escrow Agent is willing to act as escrow agent for the sole purposes of dealing with the Escrow Amount and the Escrow Documents. 
 NOW THEREFORE THIS ESCROW AGREEMENT WITNESSES that in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the Parties hereto have agreed as follows:
 ARTICLE 1 
DEFINITIONS AND INTERPRETATION
 1.1 Definitions
 Capitalized terms used but not otherwise defined herein shall have the meaning provided in the Settlement Agreement.
 Affiliate means any person which, directly or indirectly, controls, is controlled by or is under common control with another person; and, for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” or “under common control with”) means the power to direct or cause the direction of the management and policies of any person, whether through the ownership of shares or other economic interests, the holding of voting rights or contractual rights or otherwise. 
 Business Day means any day other than a Saturday, Sunday or statutory or civic holiday in Calgary, Alberta.  
 Person means a natural person, partnership, limited partnership, limited liability partnership, syndicates, sole proprietorship, corporation or company (with or without share capital), limited liability company, trust, unincorporated association or other entity. 
 1.2 Headings
 The headings of Articles and Sections in this Escrow Agreement are for convenience of reference only and shall not affect the construction or interpretation of this Escrow Agreement.
 1.3 Included Words
 Words importing the singular number only shall include the plural and vice versa, and words importing the use of any gender shall include all genders.
 1.4 Business Day
 Whenever any payment to be made or action to be taken under this Escrow Agreement is required to be made or taken on a day other than a Business Day, such payment shall be made or action taken on the next Business Day following.
 
  
 1.5 Schedules
 There are appended to this Escrow Agreement the following schedules pertaining to the following matters:
 Schedule “A”
 -
 Form of Initial Instruction
 Schedule “B”
 -
 Form of Termination and Release Instruction 
 Schedule “C”
 -
 Form of Escrow Release Instruction 
 
ARTICLE 2 
APPOINTMENT OF ESCROW AGENT
 2.1 Appointment of Escrow Agent
 The Parties hereby appoint the Escrow Agent as the escrow agent to receive, hold and administer the Escrow Amount and the Escrow Documents subject to the terms and conditions of this Escrow Agreement.
 2.2 Acceptance of Appointment
 The Escrow Agent hereby accepts such appointment subject to the terms and conditions of this Escrow Agreement. The Escrow Agent acknowledges receipt from the Parties of the Escrow Documents and agrees to hold the Escrow Documents in escrow subject to the terms of this Escrow Agreement. 
 ARTICLE 3 
DEPOSIT IN ESCROW 
 3.1 Deposit in Escrow and Investment of Escrow Amount
 (a)     The Escrow Documents shall be delivered to the Escrow Agent by the Parties, as applicable. 
 (b)     On or prior to the Outside Date, ADH or its nominee shall at its option, deliver the Escrow Amount to the Escrow Agent. The Escrow Agent shall deposit the Escrow Amount in an interest bearing trust account at a Canadian chartered bank.  All interest earned on the Escrow Amount and the interest accruing on the Escrow Amount shall, for the purposes of any taxes payable in respect of such interest, be deemed to accrue for the benefit of CCC.
 ARTICLE 4 
TERMS OF ESCROW
 4.1 Operation of Escrow
 (a)     Upon receipt by the Escrow Agent of all of the Escrow Documents, the Escrow Amount and any other necessary related documentation to the satisfaction of ADH, ADH shall direct the Escrow Agent: 
 
  
 (i)       to release from escrow to ADH the Escrow Documents (excluding the Termination and Release Agreement and the Escrow Agreement); 
 (ii)      to release from escrow and to remit (i) $500,000 of the Escrow Amount to ADH; (ii) $10,000 of the Escrow Amount to AV; (iii) $20,000 of the Escrow Amount to Beadle Raven LLP; (iv) $60,000 of the Escrow Amount to the Escrow Agent; (v) the Remaining Fees, the Settlement Costs and the Outstanding Fees from the Escrow Amount to the Escrow Agent; (vi) the Dispute Amount and the Restructuring Amount from the Escrow Amount to be deposited with the Escrow Agent pursuant to the Post-Closing Escrow Agreement; (vii) the remainder of the Escrow Amount to CCCSub; pursuant to the instructions set forth in Schedule “A” attached hereto (the Initial Instruction), and such amounts shall be delivered by the Escrow Agent to the respective parties not later than the end of the Business Day next following the date of receipt of the Initial Instruction (or the end of the second Business Day next following the date of receipt of Initial Instruction, if such Initial Instruction is received after 11 a.m., Calgary time).  
 (b)      Upon release by the Escrow Agent of the items set forth in Section 4.1(a) of this Escrow Agreement, the TCN Closing shall have occurred. 
 (c)      Upon (i) CCC’s closing of the private placement pursuant to the PubCo Agreement, or (ii) a PubCo Arrangement, ADH or its nominee shall instruct the Escrow Agent to release from escrow to CCC, CCCSub and 2264793, the Termination and Release Agreement pursuant to the instructions set forth in Schedule “B” attached hereto (the Termination and Release Instruction).  
 (d)      Upon release by the Escrow Agent of the Termination and Release Agreement, the PubCo Closing shall have occurred. 
 (e)      If neither the TCN Closing nor the PubCo Closing has occurred by the Outside Date, the Settlement Agreement shall terminate and the Parties shall direct the Escrow Agent to return to the respective parties any items deposited by such party that are held by the Escrow Agent pursuant to this Escrow Agreement, pursuant to the instructions set forth in Schedule “C” attached hereto (the Escrow Release Instruction).  
 ARTICLE 5 
CONCERNING THE ESCROW AGREEMENT
 5.1 Duties, Liability and Indemnification of Escrow Agent
 The acceptance by the Escrow Agent of its duties and obligations under this Escrow Agreement is subject to the following terms and conditions, which the Parties agree will govern and control the Escrow Agent with respect to its rights, duties, liabilities and immunities with respect to the Escrow Amount and the Escrow Documents:
 
  
 (a)      neither the Escrow Agent nor its employees, servants, agents and associates will be liable or accountable for any loss or damage whatsoever to any Person, including but not limited to the Parties and each of their officers, directors, shareholders and Affiliates, caused by its performance of or its failure to perform its duties and responsibilities under this Escrow Agreement, save only to the extent that such loss or damage is attributable to the gross negligence or wilful misconduct of the Escrow Agent, having regard to the fact, which is hereby acknowledged by each of the Parties, that the Escrow Agent is not engaged in the business of providing escrow services;
 (b)      the Escrow Agent will have no duties or responsibilities except those which are expressly set forth herein, and the rights, duties, liabilities and immunities of the Escrow Agent may not be altered without its prior written consent;
 (c)      upon the earlier of either (A) release and delivery by the Escrow Agent of (i) all of the Escrow Amount; (ii) the items pursuant to Section 4.1(a)(i) of this Escrow Agreement; and (iii) the Termination and Release or (B) release and delivery by the Escrow Agent of any deposited items pursuant to the Escrow Release Instruction, the Escrow Agent will be released and forever discharged from all of its duties and responsibilities hereunder. 
 (d)      in acting hereunder, the Escrow Agent will be severally indemnified and saved harmless by the Parties (each as to an equal share) from all expenses, liabilities, claims, suits, damages, costs (including any costs incurred by the Escrow Agent pursuant to paragraph (e) below) and demands whatsoever and howsoever arising (collectively, the Expenses) in connection with the performance by it of its duties and responsibilities under this Escrow Agreement, save only to the extent that the Expenses arise directly from the gross negligence or wilful misconduct of the Escrow Agent, its servants, agents and associates, having regard to the fact that the Escrow Agent is not engaged in the business of providing escrow services. This indemnity shall survive the termination of the escrow arrangements provided for in this Escrow Agreement;
 (e)      the Escrow Agent may retain and act on the opinion or advice obtained from its counsel or other professional advisors (who may be partners or employees of the Escrow Agent) and will not be responsible for any loss occasioned by doing so, nor will it incur any liability or responsibility for deciding in good faith not to act upon such opinion or advice; and
 (f)      the Escrow Agent may rely upon any direction, document or instrument delivered to it in compliance or purporting to be in compliance with any provision of this Escrow Agreement without any obligation whatsoever for it to make any inquiry as to its genuineness or the correctness of any statement made therein or as to whether amounts are actually due or payable by any other Party to another Party.
 

 
  
 
 5.2 Resignation of the Escrow Agent
 The Escrow Agent may resign and be discharged from any further duties or liabilities hereunder by giving five (5) Business Days' written notice to the Parties or such shorter notice as the Parties may accept. Upon the resignation of the Escrow Agent, its successor will be forthwith appointed by the Parties jointly, and failing such appointment, the Escrow Agent may apply to the Court of Queen's Bench of Alberta, Judicial District of Calgary, on such notice as such court may direct for the appointment of a new escrow agent and upon such appointment, the Escrow Amount will be transferred to the successor and the successor will be vested with the same powers, rights, duties and responsibilities as if the successor had been originally named as the escrow agent herein.
 5.3 Actions Instituted by Escrow Agent
 The Escrow Agent may, but is not obliged to, institute an action in any court of competent jurisdiction seeking instructions, inter alia, as to the release or retention of the Escrow Amount and/or the Escrow Documents and shall be entitled in its sole and arbitrary discretion, in the event of a dispute arising in respect of the Escrow Amount and/or the Escrow Documents, or any portion thereof, or otherwise in respect of this Escrow Agreement, to interplead any such dispute at the Court of Queen's Bench in Calgary, Alberta.
 5.4 Acknowledgement Respecting the Escrow Agent
 CCC, CCCSub and 226 each acknowledge that: (a) the Escrow Agent or its servants, agents or associates may have provided legal advice and related services to each of AV and ADH in connection with the transactions contemplated in this Escrow Agreement and agrees that the Escrow Agent may continue to provide legal advice and related services to each of AV and ADH in connection with such agreements; (b) the duties of the Escrow Agent hereunder are purely mechanical; and (c) the Escrow Agent is acting hereunder for the convenience of the Parties and shall not be impeached or accountable because of any conflicting or potentially conflicting duties to each of AV and ADH or any advice provided to either of them.  Further, (i) all costs and expenses incurred by the Escrow Agent in performing its duties hereunder shall be paid by the Parties on a joint and several basis, and will be those usually charged in performing legal services which will be based on the Escrow Agent's standard hourly rates in effect from time to time, and (ii) all Expenses for which the Parties are made severally liable pursuant to Section 5.1(d) shall, as between the Parties, be paid by the Parties on a joint and several basis (in each case, without prejudice to any arrangements between the Parties as to expenses and indemnities between them).
 Notwithstanding the first paragraph in this Section 5.4, in the event of a dispute between the Parties with respect to the transactions contemplated in this Escrow Agreement, the Escrow Agent may, at its option, cease to provide advice to each of AV and ADH and each of AV and ADH would be required to seek new counsel.
 
  
 5.5 Compliance with Judgements
 If any dispute arises out of this Escrow Agreement or any process is commenced against the subject matter of this Escrow Agreement, including court orders, garnishees or any other processes, the Escrow Agent is hereby empowered and entitled to comply with any orders, writs, judgements or decrees or, if it sees fit, to deliver the subject matter of the escrow to the Court of Queen's Bench of Alberta.
 ARTICLE 6 
OTHER MATTERS
 6.1 Governing Law
 This Escrow Agreement shall, in all respects, be subject to, interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and the laws of Canada applicable therein and shall, in all respects, be treated as a contract made in the Province of Alberta. The Parties irrevocably attorn and submit to the exclusive jurisdiction of the courts of the Province of Alberta and courts of appeal therefrom in respect of all matters arising out of or in connection with this Escrow Agreement.
 6.2 Enurement
 This Escrow Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their respective administrators, trustees, receivers, successors and permitted assigns and transferees.
 6.3 Assignment
 This Escrow Agreement and the rights and obligations hereunder will not be assignable, in whole or in part, by the Parties (excluding ADH and AV) without the prior written consent of ADH. Each of ADH and AV may, upon giving written notice to the other Parties, shall have the right to assign its rights and obligations hereunder to any person in its sole discretion.
 
  
 6.4 Notices
 The addresses for service and the fax numbers of the parties hereto shall be as follows:
 	 	 	
	 ADH or AV
	 Avonlea-Drewry Holdings Inc. 
 Avonlea Ventures Inc.
 15466 The Gore Road
 Caledon, ON L7C 3E5
 Attention:
   Michael Steele

	 

	 Fax:
	 (905) 880-7866

	  
	 Email:
	 steeleconsult@aol.com

	 CCC, CCCSub or 226:
	 Canadian Cannabis Corp.
 2368 Lakeshore Road West, Suite 205
 Oakville, ON  L6L 1H5
 Attention:
   Scott Kevil

	 

	 Fax:
  (416) 596-0907
	 

	 Email:
	 scott.kevil@gmail.com 

	 TCN
	 The Clinic Network Inc.
 5025 Orbiter Drive – Building 1 – Suite 401
 Mississauga, Ontario
 L4W 4Y5
 

	 

	 Fax: (905) 233-2421

	 

	 Email:
   kim@theclinicnetwork.ca

	 Escrow Agent:
	 Norton Rose Fulbright Canada LLP
 Suite 3700
 400 3rd Ave SW
 Calgary AB  T2P 4H2
 Canada
 Attention:            James O'Sullivan

	 

	 Fax:
	 (403) 264-5973

	 

	 Email:
	 james.osullivan@nortonrosefulbright.com

 
  
 All notices, communications and statements required, permitted or contemplated hereunder shall be in writing, and shall be delivered as follows:
 (a)      by personal service on a party at the address of such party set out above, in which case the item so served shall be deemed to have been received by that party when personally served;
 (b)      by confirmed facsimile transmission to a party to the fax number of such party set out above, in which case the item so transmitted shall be deemed to have been received by that party when transmitted; or
 (c)      except in the event of an actual or threatened postal strike or other labour disruption that may affect mail service, by mailing first class registered post, postage prepaid, to a party at the address of such party set out above, in which case the item so mailed shall be deemed to have been received by that party on the third Business Day following the date of mailing.
 A party may from time to time change its address for service or its fax number or both by giving written notice of such change to the other parties in accordance with the provisions hereof.
 6.5 Counterpart and Facsimile
 This Escrow Agreement may be executed in any number of separate counterparts and all such signed counterparts constitute one and the same agreement. Delivery by facsimile or other electronic means of an originally executed signature page to this Escrow Agreement by any party shall be binding on all parties hereto. 
 [signatures on following page]
 

 

 
  
 IN WITNESS WHEREOF the parties hereto have executed this Escrow Agreement as of the day and year first above written.
 

 	 	 	 	 	
	 AVONLEA VENTURES INC.
	 

	 AVONLEA-DREWRY HOLDINGS INC. 

	 Per:
	 /s/ Michael Steele
	 

	 Per:
	 /s/ Michael Steele

	 

	 Name: Michael Steele
 Title:   President and CEO
	 

	 

	 Name: Michael Steele
 Title:   President and CEO

	 CANADIAN CANNABIS CORP.
	 

	 CANADA CANNABIS CORP. 

	 	 	 	 	 

	 Per:
	 /s/ Scott Keevil
	 

	 Per:
	 /s/ Scott Keevil

	 

	 Name: Scott Keevil
 Title: Director
 

	 

	 

	 Name: Scott Keevil
 Title: Director
 

	 2264793 ONTARIO INC. 
	 THE CLINIC NETWORK INC. 

	 Per:
	 /s/ Scott Keevil
	 

	 Per:
	 Kim Wei

	 

	 Name: Scott Keevil
 Title: Director
 

	 

	 

	 Name: Kim Wei
 Title:  Managing Director

	 

	 

	 

	 

	 

	 NORTON ROSE FULBRIGHT CANADA LLP
	 

	 Per:
	 /s/ James O’Sullivan
	 

	 

	 

	 

	 Name: James O’Sullivan
 Title: Partner
 

	 

	 

	 

	 

	 

	 

	 

	 

 

 [signature page to Escrow Agreement]
 

 

 
  
 SCHEDULE “A”
 INITIAL PAYMENT INSTRUCTION
 TO:
 Norton Rose Fulbright Canada LLP
 Suite 3700, 400 3rd Ave SW
 Calgary AB  T2P 4H2, Canada
 Attention:  James O'Sullivan
 RE:     Escrow Agreement dated as of March 27th, 2017 between Avonlea Ventures Inc., Avonlea-Drewry Holdings Inc., Canadian Cannabis Corp., Canada Cannabis Corp., 2264793 Ontario Inc., The Clinic Network Inc. and Norton Rose Fulbright Canada LLP (the “Escrow Agreement”)
 ______________________________________________________________________________________________________
 All capitalized terms used herein will have the meaning ascribed to such terms in the Escrow Agreement.
 The undersigned hereby unconditionally and irrevocably direct you as Escrow Agent, in accordance with the Escrow Agreement, that (i) $500,000 is to be released to ADH; (ii) $10,000 to be released to AV; (iii) $20,000 is to be released to Beadle Raven LLP; (iv) $60,000, the Remaining Fees, the Settlement Costs and the Outstanding Fees is to be released to the Escrow Agent in payment of legal fees; (v) the Dispute Amount and the Restructuring Amount is to be released to the Escrow Agent for deposit with the Escrow Agent pursuant to the Post-Closing Escrow Agreement; and (vi) the remainder of the Escrow Amount is to be released to CCCSub (or at its direction); all in accordance with Section 4.1(a) of the Escrow Agreement and the instructions set forth below.
 Beadle Raven LLP
 CIBC
Institution #010
Swift Address: CIBCCATT
Transit #00010
400 Burrard Street
Vancouver BC Canada
 Beneficiary Name and Account Number: Beadle Raven LLP, in trust
Account Number: 14-13716
 Canada Cannabis Corp. 
 Bank of Montreal
 200 King Street West
 Toronto, Ontario
 Institution #0001
 Transit #24182
 
  
 Beneficiary Name:  William Harvey Jones 
Account Number: 1032-867
 Swift: BOFMCAM2
 Avonlea Drewry-Holdings Inc. 
 Bank Name: CIBC 
 Swift Code: CIBCCATT
 

 Bank Address: 1 QUEEN ST. E. 
                         TORONTO, ON  M5C 2W5
                         CANADA
 Account Number: 009020106756212
 

 Beneficiary Name:      AVONLEA-DREWRY HOLDINGS INC. 
 Beneficiary Address:  15466 THE GORE ROAD
                                   CALEDON, ON  L7C 3E5
 

 Avonlea Ventures Inc. 
 Bank Name: CIBC 
 Swift Code: CIBCCATT
 Bank Address:  1 QUEEN ST. E. 
                         TORONTO, ON  M5C 2W5
                         CANADA
 Account Number: 009020108322015
 

 Beneficiary Name:    AVONLEA VENTURES INC. 
 Beneficiary Address:   15466 THE GORE ROAD
                                   CALEDON, ON  L7C 3E5
                                   CANADA
 

 Norton Rose Fulbright Canada LLP
 TD Bank
 340 – 5th Avenue SW Calgary, Alberta T2P 0L3
 Transit: 80609
 Bank code (Institution #): 004
 Account: 0637591
 Account name: Norton Rose Fulbright Canada LLP Trust Account
 Swift Code: TDOMCATTTOR
 
  
 

 DATED this ___ day of ________________, 20__.
 	 	 	 	 	 	 	
	 AVONLEA-DREWRY HOLDINGS INC. 
	 

	 

	 Per:
	 

	 

	 

	 

	 

	 Name: 
 Title:   
 

 

	 

	 

	 

	 Acknowledged by:
	 

	 

	 NORTON ROSE FULBRIGHT CANADA LLP as Escrow Agent
	 

	 

	 Per:
	 

	 

	 

	 

	 

	 Name: James O’Sullivan 
 Title: 
 Partner
	 

	 

	 

	 

	 

	 

	 

	 

 

 
  
 SCHEDULE “B”
 TERMINATION AND RELEASE INSTRUCTION
 TO:
 Norton Rose Fulbright Canada LLP
 Suite 3700, 400 3rd Ave SW
 Calgary AB  T2P 4H2, Canada
 Attention:  James O'Sullivan
 RE:     Escrow Agreement dated as of March 27th, 2017 between Avonlea Ventures Inc., Avonlea-Drewry Holdings Inc., Canadian Cannabis Corp., Canada Cannabis Corp., 2264793 Ontario Inc., the Clinic Network Inc. and Norton Rose Fulbright Canada LLP (the “Escrow Agreement”)
 ______________________________________________________________________________
 All capitalized terms used herein will have the meaning ascribed to such terms in the Escrow Agreement.
 The undersigned hereby unconditionally and irrevocably direct you as Escrow Agent, in accordance with the Escrow Agreement, to release to CCC, CCCSub and 2264793, the Termination and Release Agreement, all in accordance with Section 4.1(c) of the Escrow Agreement. 
 DATED this ___ day of ________________, 20__.
 	 	 	 	 	 	 	
	 AVONLEA-DREWRY HOLDINGS INC. 
	 

	 

	 Per:
	 

	 

	 

	 

	 

	 Name: 
 Title:   
	 

	 

	 

	 Acknowledged by:
	 

	 

	 NORTON ROSE FULBRIGHT CANADA LLP as Escrow Agent
	 

	 

	 Per:
	 

	 

	 

	 

	 

	 Name: James O’Sullivan 
 Title: 
 Partner
	 

	 

	 

	 

	 

	 

	 

	 

 

 
  
 SCHEDULE “C”
 ESCROW RELEASE INSTRUCTION
 TO:
 Norton Rose Fulbright Canada LLP
 Suite 3700, 400 3rd Ave SW
 Calgary AB  T2P 4H2, Canada
 Attention:  James O'Sullivan
 RE:     Escrow Agreement dated as of March 27th, 2017 between Avonlea Ventures Inc., Avonlea-Drewry Holdings Inc., Canadian Cannabis Corp., Canada Cannabis Corp., 2264793 Ontario Inc., The Clinic Network Inc. and Norton Rose Fulbright Canada LLP (the “Escrow Agreement”)
 ______________________________________________________________________________
 All capitalized terms used herein will have the meaning ascribed to such terms in the Escrow Agreement.
 The undersigned hereby unconditionally and irrevocably direct you as Escrow Agent, in accordance with the Escrow Agreement, to release to the respective Parties any items deposited by the Party held by the Escrow Agent, all in accordance with Section 4.1(e) of the Escrow Agreement. 
 DATED this ___ day of ________________, 20___.
 	 	 	 	 	 	 	 	 	
	 AVONLEA-DREWRY HOLDINGS INC. 
	 

	 AVONLEA VENTURES INC. 

	 Per:
	 

	 Per:
	 

	 

	 Name: 
 Title:   
	 

	 Name:
 Title: 

	 CANADIAN CANNABIS CORP. 
 

	 CANADA CANNABIS CORP. 

	 Per: 
	 

	 Per: 
	 

	 

	 

	 Name:
 Title: 
 

	 

	 

	 Name: 
 Title: 

	 2264793 ONTARIO INC. 
	 THE CLINIC NETWORK
 

	 Per: 
	 

	 Per:
	 

	 

	 

	 Name: 
 Title: 
 

 

 

 

	 Name
 Title: 
	 

	 Name:
 Title:

	 Acknowledged by:
	 

	 

	 NORTON ROSE FULBRIGHT CANADA LLP as Escrow Agent
	 

	 

	 Per:
	 

	 

	 

	 

	 

	 Name: James O’Sullivan 
 Title: 
 PartnerExhibit 10.3

   
 Exhibit 10.3
  
  
  	 	 J. Proust & Associates Inc.
	
	 	 Suite 3123
	 
	 	 595 Burrard Street
	
	 	 Vancouver, BC Canada V7X 1J1
	 
	 December 6, 2016
	 	
	 	 	                                                 CONFIDENTIAL

   
  	 Michael Steele
	 Avonlea - Drewry Holdings Inc.

	 	 15466 The Gore Rd

	 	 Caledon, Ontario, Canada

	 	 L7C- 3E5

 
Mike,
 
Re:       Proposed transaction with Canadian Cannabis Corp. ("CCAN")
  
 This letter of intent (this "Letter Agreement") sets out the terms (the "Transaction Terms") of which J. Proust & Associates Inc. ("JPA") is authorized to negotiate an agreement (the "Transaction Agreement") on behalf of a company listed on a Canadian stock exchange (the "Listed Company") with CCAN as described below. The Listed Company is entering into this LOI with Michael Steele ("Steele") and Avonlea - Drewry Holdings Inc. ("Avonlea") in order to provide Steele and Avonlea with the opportunity to work with CCAN and the Listed Company in order to finalize the Transaction Agreement pursuant to which CCAN will agree to sell its wholly owned subsidiary, The Clinic Network Inc. ("TCN") to the Listed Company. If the Listed Company and CCAN enter into the Transaction Agreement, then this Letter Agreement will become null, void and of no further force and effect. Subject to and in accordance with the terms and conditions hereinafter contained, this Letter Agreement is intended to constitute a binding agreement between JPA, Steele and Avonlea.
 
This Agreement will terminate on the earlier of the date on which the Listed Company and CCAN enter into the Transaction Agreement or January 31, 2017. The Transaction Terms are as follows:

1.  The Transaction Terms.
  
  	     Purchase of TCN: 	 	 CCAN owns all of the issued and outstanding shares of Canada Cannabis Corp. which owns all of the issued and outstanding shares of TCN (the "TCN Shares"). The Listed Company will either acquire all of the issued shares of TCN or all of TCN's assets (the “Assets") from CCAN (the "Acquisition"). The Acquisition will be structured based on the advice of tax and legal advisors for the Listed Company and CCAN.

	                                                        
	  
	  

	  
	  
	 The Acquisition will constitute a reverse takeover (the "TO") for the Listed Company pursuant to the policies of the TSX Venture Exchange (the "TSX-V").

	  
	  
	  

	      Consideration:
	  
	 The Listed Company will issue a total of 45,000,00 post-consolidated common shares (the "Consideration Shares") to CCAN in consideration for the TCN Shares or the Assets. Steele and Avonlea acknowledge that the Listed Company may need to effect a share consolidation prior to issuing the Consideration Shares. If a share consolidation is required, then shareholders of the Listed Company owing more than 60% of the issued and outstanding common shares of the Listed Company will sign support agreements agreeing to vote in favour of the share consolidation.

	  
	  
	  

	  
	  
	 On closing of the Acquisition, the Listed Company will pay a finder's fee equal to 5% of the Consideration Shares in either cash or shares of the Listed Company.

	 	 	
	 	 	

 
  
 2.  Conditions to the Transaction Agreement:  The closing of the Acquistion will be subject to the following conditions precedent:
  	     Due Dilligence:	 	 The Listed Company and  CCAN each having complete to its satisfaction a due diligence review of the other party's business, assets, prospects, financial condition and affairs by 4:OO pm (Vancouver time) on January 31, 2017 (the "Due Diligence Period"), and all issues arising therefrom having been addressed to each party's satisfaction or waived by the Listed Company and CCAN, respectively.

	                                                        
	  
	  

	  
	  
	 This condition is for the mutual benefit of the Listed Company and CCAN and may be waived, in whole or in part, by mutual consent in writing.

	  
	  
	  

	  
	  
	 During the Due Diligence Period, the Listed Company and CCAN agree to permit each other and their auditors, agents and legal counsel to conduct such investigations as either the Listed Company or CCAN may deem reasonably necessary or advisable in order to ensure that each of the representations, warranties, covenants and agreements of the other party are true and accurate.

	  
	  
	  

	  
	  
	 On closing of the Acquisition, the Listed Company will pay a finder's fee equal to 5% of the Consideration Shares in either cash or shares of the Listed Company.

	 	 	 
	      Share Consolidation:
	 	 The Listed Company having completed a consolidation (the "Consolidation") of its issued and outstanding common shares in order for it to have the capital structure described in Schedule "A" hereto on closing of the Acquisition. All references in this Letter Agreement are to post-Consolidation Common Shares unless otherwise noted.

	 	 	 
	 	 	 This condition is for the benefit of CCAN and may be waived, in whole or in part by CCAN, in writing, at any time.

	 	 	 
	      Private Placement
	 	 CCAN arranging for a private placement of units (the "units") of the Listed Company for gross minimum proceeds of CDN$ 6,000,000 and gross maximum proceeds of CDN$ 15,000,000 at a price of $1.00 per Unit, by the closing of the Acquisition (the "Private Placement").

	 	 	 
	 	 	 This condition is for the benefit of the Listed Company and may be waived, in whole or in part, in writing, at any time.

	 	 	 
	 	 	 CCAN agrees to complete the Private Placement by the closing of the Acquisition on the following terms:

	 	 	  

  	                                                                      	(i)	   	 each Unit will consist of one post-consolidated common share and one common share  purchase  warrant  (a "Warrant") exercisable at a price of no less than $1 .00 for a period of time to be determined by CCAN;

	  
	  
	  
	  

	  
	 (ii)
	  
	 upon exercise, each Warrant will entitle the holder hereof to purchase one common share of the Listed Company; and

	  
	  
	  
	  

	  
	 (iii)
	  
	 The Listed Company will pay commissions in the form of cash or shares and/or warrants in connection Private Placement.

	 	 	 	
	 	 	 	 
	 	 	 	

 

 2 
 
  
 	     Listed Company 
     Capital Structure:
	 	 The Listed Company having the capital structure set out in Schedule “A " hereto immediately prior to the Consolidation and the closing of the Acquisition.

	                                                        
	  
	  

	  
	  
	 This condition is for the benefit of CCAN and may be waived, in whole or in part by CCAN, in writing.

	  
	  
	  

	      Listed Company 
     Shareholder Approval:

	  
	 The Listed Company having obtained the approval of at least 50% of its shareholders to the Acquisition and the Consolidation (the "Shareholder Approval”) either by written consent or at a meeting of its shareholders (the "Shareholders' Meeting"), in accordance with applicable TSX-V policies and applicable securities policies and laws.

	  
	  
	  

	  
	  
	 This condition is for the benefit of each of CCAN and may be waived, in whole or in part by the consent of CCAN, in writing.

	 	 	   
	  
	  
 	 CCAN agrees to make available to the Listed Company all necessary information, records, personal, financial statements, studies and other information as the Listed Company may require in connection with the preparation of the filing statement or the information circular (the "Disclosure Document"), as applicable, for the Shareholder Approval and filings with the TSX-V. After review of the Disclosure Document, CCAN agrees to certify that the information in the Disclosure Document with respect to CCAN constitutes full, true and plain disclosure regarding CCAN.

	  
 	  
 	 

	      TSX-V Approval:
 	  
 	 The Listed Company having obtained final acceptance of the TSX-V to the Acquisition and related transactions, as required by TSX-V policies (the "TSX-V Approval").

	  
 	  
 	 

	      No Material Adverse Change:
	  
 	 There will not have been any event or change that has had or would reasonably  be likely to have a materially adverse effect on  TCN and/or the Assets and for the purposes  hereof,  material adverse effect means an effect that reasonably, individually or collectively  with  another  state  of  facts  or  effects  is materially adverse or may be expected to be materially adverse on the business, operations, results of operations, liabilities or financial condition of TCN and/or the Assets other than any change, effect, event or occurrence relating to the global economy or securities markets in general.

	  
 	  
 	 

	  
 	  
 	 This condition is for the mutual benefit of the Listed Company and CCAN and may be waived, in whole or in part, by the mutual consent of the Listed Company and CCAN, in writing.
  

	  
 	  
 	  

  
 3 
 
  
 3.  Covenants.  The Listed Company will make the following covenants:
  	     Board Reconstitution:	 	 Upon completion of the Acquisition, the board of director of the Listed Company will be reconstituted to directors to be determined by CCAN provided the TSX-V does not object to such nominations and such persons are eligible to act as directors pursuant to the Business Corporations Act (British Columbia).

	                                                        
	  
	  

 4.  Representations of CCAN. CCAN will make the following representations and waranties in the Transaction Agreement:
  	      Incorporation:

	  
 	 CCAN is duly incorporated and validly existing and in good standing under the laws of its jurisdiction of incorporation and no proceedings have been instituted or are pending for the dissolution or winding up of CCAN. CCAN has the corporate power to own and operate the Assets, carry on its business and enter into and perform its obligations under the Transaction Agreement.

	                                                        
	  
	 

	  
	  
	 The Transaction Agreement constitutes a legal, valid and binding agreement of CCAN and is enforceable against CCAN in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, reorganization, moratorium another similar laws affecting the rights and remedies of creditors and the general principles of equity.

	  
	  
	  

	      Corporate Authority:
	  
	 The execution, delivery and performance by CCAN of the Transaction Agreement and the completion of the Acquisition have been duly authorized by all necessary corporate action on the part of CCAN.

	  
	  
	  

	      Conduct of Business:
	  
	 Until the closing of the Acquisition and as it relates to TCN, CCAN agrees to use its reasonable commercial efforts to (a) preserve intact its business organization and other business relationships; (b) operate in the ordinary course of business and maintain its books, records and accounts in accordance with generally accepted accounting principles, consistent with past practice (c) maintain and preserve the current financial condition of TCN and the Assets and (d) not enter into any material agreements, other than in the ordinary course of business, or agreements with related parties (as defined in securities laws).

	  
	  
	  

	      Financial Condition:
	  
	 All financial information of CCAN as it relates to the TCN is true and correct in every material respect and present fairly and accurately the financial position and results of operations of the TCN for the periods reported upon as at the date thereof.

 4 
 
  

 	      Consents:

	  
 	 Other than as contemplated in the Transaction Agreement, there are no regulatory, corporate or contractual consents or approvals required to effect the Acquisition.

	                                                        
	  
	  

	     No Litigation:	  
	 There is no material action, suit, litigation, arbitration, investigation, inquiry or other proceeding in progress, or to the best of CCAN's knowledge, pending or threatened against or relating to the TCN and/or the Assets and there is not outstanding against CCAN any judgment, decree, injunction, rule or order of any court, government department, commission, agency or arbitrator which affects TCN and/or the Assets.

 5. Representations of the Listed Company. The Listed Company will make the following representations and warranties in theTransaction Agreement:
  	      Incorporation:

	  
 	 The Listed Company is duly incorporated and validly existing and in good standing under the laws of its jurisdiction of incorporation and no proceedings have been instituted or are pending for its dissolution or winding up. The Listed Company has the corporate power to own and operate its property, carry on its business and enter into and perform its obligations under the Transaction Agreement.

	                                                        
	  
	  

	  
	  
	 The Transaction Agreement constitutes a legal, valid and binding agreement of the Listed Company and is enforceable against the Listed Company in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights and remedies of creditors and the general principles of equity.

	  
	  
	  

	      Reporting Issuer:
	  
	 The execution, delivery and performance by CCAN of the Transaction Agreement and the completion of the Acquisition have been duly authorized by all necessary corporate action on the part of CCAN.

	  
	  
	  

	      Capital Structure:
	  
	 Schedule "A" to this Letter Agreement sets forth the approximate.

 5 
 
  
 	      Corporate Records:

	  
 	 The corporate records, including all constating  documents, minutes of meetings and resolutions of shareholders, directors and any committees, the share certificates, securities registers and register of directors of the Listed Company are complete and accurate and all corporate proceedings and actions reflected in such corporate records have been conducted or taken in compliance with all applicable laws and with the constating documents of the Listed Company. The Listed Company’s constating documents are in the form contained in its minute book and no modifications or alterations have been proposed or approved by its shareholders.

	                                                        
	  
	  

	     Books and Records:  
	  
	 To the best knowledge of the Listed Company, the books and records of the Listed Company disclose all material agreements and material financial transactions of the Listed Company, and such transactions have been fairly and accurately recorded.

	  
	  
	  

	      Disclosure Documents:
	  
	The Listed Company has filed all required disclosure documents (the "Continuous Disclosure Documents") with governmental authorities in accordance with the applicable policies of the TSX-V and applicable laws. As of the time the Continous Disclosure Documents were filed with the governmental authorities and on SEDAR (System for Electronic Document Analysis and Retrieval) (or, if amended or superseded by a filing prior to the date of this Letter Agreement, then on the date of such filing): (i) each of the Continous Disclosure Documents complies in all material respects with the requirements of the policies of the TSX-V and applicable laws; and (ii) none of the Continuous Disclosure Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
	  
	  
	  

	     Conduct of Business:	  
	 Until the closing of the Acquisition, the Listed Company agrees to use its reasonable commercial efforts to (a) preserve intact its business organization and other business relationships; (b) operate in the ordinary course of business and maintain its books, records and accounts in accordance with generally accepted accounting principles, consistent with past practice; and (c) maintain its current financial condition. Other than as contemplated herein, the Listed Company will not enter into any material agreements, or agreements with related parties (as defined in securities laws), make any changes to its corporate articles, or amend any stock options or warrants, without the prior consent of CCAN.

  
 6
 
  
 	      Consents:

	  
 	 Other than as contemplated in this Letter Agreement, there are no regulatory, corporate or contractual consents or approvals required to effect the transactions contemplated herein.

	                                                        
	  
	  

	     No Litigation:	  
	 There is no material action, suit, litigation, arbitration, investigation, inquiry or other proceeding in progress, or, to the best of the Listed Company’s knowledge, pending or threatened against or relating to the Listed Company or its other material assets and there is not outstanding against the Listed Company any judgment, decree, injunction, rule or order of any court, government department, commission, agency or arbitrator.

  
6.  Other Matters.   
  	      Confidentiality:

	  
 	 Steele and Avonlea jointly acknowledge that JPA will be providing to Steele, Avonlea and CCAN information that non­public, confidential, and proprietary in nature (the “Confidential Information"). Steele and Avonlea will and will cause CCAN (and their respective affiliates, representative, agents, lawyers, accountants and employees) to keep the Confidential information confidential and will not, except as otherwise provided below, disclose such information or use such information for any purpose other than for negotiation of the Transaction Agreement and the evaluation and consummation of the Acquisition, provided that this provision will not apply to information that:

	                                                        
	  
	  

	  
	  
	 (i)           becomes generally available  to the public absent any breach of this provision;

	  
	  
	  

	  
	  
	 (ii)      was available on a non-confidential basis to a par prior to its disclosure pursuant to this Letter Agreement or

	  
	  
	  

	 	 	 (iii)     becomes available on a non-confidential basis from a third party who is not bound to keep such information confidential.

	 	 	 
	 	 	 JPA , Steele and Avonlea agree that they will not make any public disclosure of the existence of this Letter Agreement (or the Transaction Agreement as applicable) or of any of its terms unless such disclosure is required by applicable law  or regulation including in accordance with the policies of the TSX-V, and in any event the party contemplating disclosure will inform the other party of and obtain its consent to the form and content of such disclosure, which consent will not be unreasonably withheld or delayed.

	 	 	 
	 	  
	 Steele and Avonlea will cause CCAN to agree CCAN will not make any public disclosure of the existence of this Letter Agreement (or the Transaction Agreement as applicable) or of any of its terms without the prior written consent of JPA.

 7 
 
  
 	      Timing:

	  
 	 JPA, Steele and Avonlea agree to use reasonable commercial efforts to proceed with the Acquisition and related transactions in accordance with the following timetable of key events:

	                                                        
	  
	  

	  
	  
	 December 5, 2016          Execution of this Letter Agreement

	  
	  
	  

	  
	  
	 December 5, 2016          Commencement of the Due Diligence Period by the Listed Compay and CCAN on each other

	  
	  
	  

	 	 	 December 5, 2016          Negotiation of the Transaction Agreement

	 	 	 
	 	 	 Janary 31, 2017              Execution of Transacon Agreement

	 	 	 
	      Termination:
	  
	 This Letter Agreement will terminate automatically without further action by JPA, Steele or Avonlea if the Listed Company and CCAN do not enter into the Transaction Agreement by 4:00 p.m., (Vancouver time) on January 31, 20 17.

  
 7.   General.
  
  	      Binding:

	  
 	 This Letter Agreement is intended to create and will create legally binding obligations between JPA, Steele and Avonlea with respect to this Letter Agreement but not for the Listed Company and CCAN with respect to the Acquisition.

	                                                        
	  
	  

	      Independent Legal Advice:
	  
	 Each of JPA, Steele and Avonlea acknowledge that they have been advised to seek independent legal advice with respect to this Letter Agreement. Mo1ton Law acts for the Listed Company but does not act for JPA, Steele or Avonlea with respect to this Letter Agreement.

	  
	  
	  

	      Expenses:
	  
	 JPA, the Listed Company, Steele, Avonlea and CCAN will each be responsible for payment of its own expenses related to this Letter Agreement, the Transaction Agreement, the Acquisition and all related filings, documents and matters.

	  
	  
	  

	      Governing Law:
	 	 This Letter Agreement and all matters arising hereunder will be governed by, construed and enforced in accordance with the laws of British Columbia, and JPA, Steele and Avonlea hereby irrevocably submit to the exclusive jurisdiction of the courts of British Columbia.

  
 8 
 
  
 	      Currency:

	  
 	 Unless otherwise indicated, all references to "CDN$" and dollar amounts are to the lawful currency of Canada.

	                                                        
	  
	  

	      Execution in Counterparts:
	  
	 JPA, Steele and Avonlea may execute this Letter Agreement in one or more counterparts, and may deliver such execution  by mail or by other electronic means, each of which is deemed to be an original and all of which will constitute one agreement, effective as of the date given above.

  
 
 [Signature Page Follows]

  9
 
  
 Please indicate your agreement to this Letter Agreement by signing and returning a copy to JPA, Attention: John G. Proust by 4:00 pm (Vancouver time) on December 5, 2016. If you have any questions or would like to discuss this proposal further, please feel free to call me at 604-644-1470.
  
 Yours truly,
  
 	 J.   PROUST & ASSOCIATES INC.
	 	
	  
	  
	  

	 /s/ John G. Proust
	  
	  

	 John G. Proust
	 	

  
 The undersigned here by accepts the foregoing this____day of December , 2016.
  
 	 /s/Michael Steele
	  
	  

	 Michael Steele
	 	

  
 	 AVONLEA-DREWRY HOLDINGS INC.
	 	
	  
	  
	  

	 /s/ Michael Steele
	  
	  

	 Authorized Signatory
	 	

  
 	 The Clinic Network Inc.
	 	
	  
	  
	  

	 /s/ Kim Wei
	  
	  

	 Authorized Signatory
	 	

  
 	 Canada Cannabis Inc.
	 	
	  
	  
	  

	 /s/ Scott Keevil
	  
	  

	 Authorized Signatory
	 	

  
 	 Canadian Cannabis Corp
	 	
	  
	  
	  

	 /s/ Scott Keevil
	  
	  

	 Authorized Signatory
	 	

  
  
      
  
             r••

  10
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 SCHEDULE"A"
  
 LISTED COMPANY CAPITAL STRUCTURE (1)
  
 Capital Structure Immediately after completing the Consolidation and Closing the Acquisition
  
  	 Common Shares Issued and Outstanding 
	 	 2.6 million

	 	 	
	 Warrants
	 	 l.1  million  @ $0.15 expiring in 5 years (2)

	 	 	
	 Other Convertible Securities 
	 	 Nil

	 	 	
	 Stock Options
	 	 Nil

	 	 	
	 Consideration Shares
	 	 45 million

	 	 	
	 Private Placement Shares
	 	 6 to 15 million

	 	 	
	 Total Issued and Outstanding Common 
 Shares ( Fully Diluted)
	 	 54.7 million (3) (assuming completion of the
 minimum  Private Placement offering)

	
	 	 	 
	 	 	 to

	 	 	
	 	 	 63.7 million (3) (assuming completion  of the maximum Private Placement offering)

  
 Notes:
 (1)    All figures approximate_
 (2)      To be exercised prior to closing of the Acquisition_
 (3)      Not including (a) Warrants or tinder's warrants under the Private Placement; or (b) shares to be issued as tinder's fees in connection with the Acquisition.
  
  
  
  
 11

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