AusCann Group Holdings Ltd. announced that it has entered into a secured commercial loan facility with Eurocann to advance up to $5 million to supply capital expenditure to Eurocann for the construction of additional greenhouses, expansion of manufacturing capabilities, and exclusivity for the commercialization of medicinal cannabis products for the Australian and New Zealand markets. This will expand the Company's EU-GMP medicinal cannabis cultivation and manufacturing capabilities to support the strategic collaboration. The loan facility is to be secured against the assets of Eurocann including the shares it holds in HAPA Pharm B.V. Other key terms of the load facility include: $5 million loan limit; Interest rate on drawn funds of 7.5% per annum; interest to be paid annually; Default rate of 9.5% per annum; and A repayment of $1,000,000 on each of the first anniversary and the second anniversary of the date of drawdown, with the balance of the amount owing to be paid on the third anniversary of the date of drawdown.

Drawdown under the loan is subject to and conditional on: (Finance Documents) the execution and delivery of originals of the loan agreement and any security or collateral security duly stamped and in registrable form together with all executed documents and other actions necessary to register them and perfect any security interest created under these documents; (Term Sheet) an original of the term sheet duly executed by the parties; (Event of Default) evidence that no event of default is subsisting under the loan; (Due diligence) AusCann having satisfactorily completed its due diligence in respect of Eurocann; (Approved Purpose) evidence that the proceeds of the loan will be used for the Approved Purpose, including copies of invoices and any other documents or information requested by AusCann; and (Additional Information) any other documents or information as may be requested by AusCann in writing (acting reasonably). The loan agreement also contains standard terms for a transaction of this nature including conditions for repayment, cancellation and termination of the facility, indemnity provisions, representations and warranties made by each party, information undertakings, and events of default such as non-payment, insolvency and breach of the term sheet and loan agreement.