This Retailer Agreement is between:

ONTARIO CANNABIS RETAIL CORPORATION,

doing business as the Ontario Cannabis Store (the “OCS”)

– and –

the “Vendor”

 

WHEREAS the OCS has the power, pursuant to the Ontario Cannabis Retail Corporation Act, 2017, to sell Cannabis and Cannabis Accessories and to control the sale, transportation and delivery of Cannabis and Cannabis Accessories in Ontario;

 

AND WHEREAS the AGCO has the power to issue Authorization(s) for the sale of certain Cannabis products and Cannabis Accessories to the public;

 

AND WHEREAS upon receipt of the Authorization(s) issued by the AGCO to permit the Vendor to sell the identified Cannabis products and Cannabis Accessories, from the retail store(s) identified therein, the Vendor may purchase such Cannabis products and Cannabis Accessories from the OCS to sell at such authorized store(s) in accordance with the terms and conditions of this Agreement;

 

NOW THEREFORE, the Vendor shall purchase Cannabis products exclusively from the OCS as wholesaler of record for Cannabis, and the Vendor may purchase Cannabis Accessories from the OCS on a non-exclusive basis, for the sale of the Cannabis products and Cannabis Accessories by the Vendor to the public from the Authorized Store(s) solely in accordance with the terms and conditions of this Agreement, as follows:

 

1. DEFINITIONS AND INTERPRETATION

 

In this Agreement, unless the subject matter or context is inconsistent therewith, the following expressions shall have the following meanings:

 

1.1         “AGCO” means the Alcohol and Gaming Commission of Ontario.

 

1.2         “Agreement” means this retailer agreement, including all Schedules.

 

1.3         “Applicable Laws” means: (a) any domestic or foreign statute, law, treaty, code, ordinance, rule, regulation, restriction or by-law (zoning or otherwise) including but not limited to laws in respect of product regulatory regimes, packaging and labelling regimes, and marketing and advertising regimes; (b) any judgment, order, writ, injunction, decision, ruling, decree or award, guideline, policy, standard, directive or bulletin, in each case, of any Governmental Authority; and (c) any Authorization; in each of cases (a), (b) and (c), having the force of law and binding on the person referred to in the context in which the term is used, or any provisions of any of the foregoing, including general principles of common law, civil law and equity.

 

1.4         “Authorizations” means all authorization(s) or licence(s) to sell Cannabis products and Cannabis Accessories from the retail store(s) identified therein issued by the AGCO under the Cannabis Licence Act, 2018. Each, an “Authorization”.

 

1.5         “Authorized Store” means each of the retail stores identified at Schedule “A” hereto in respect of the listed Products, which includes any Farmgate Store(s), as the same may be amended or updated from time to time by the OCS as provided in this Agreement.

 

1.6         “Bill of Lading” means a proof of shipment document prepared on the OCS’s electronic waybill system, or on such form as may be approved by the OCS from time to time.

1.7         “Business Day” means any working day, Monday to Friday inclusive, but excluding statutory and other holidays, namely: New Year’s Day; Family Day; Good Friday; Easter Monday; Victoria Day; Canada Day; Civic Holiday; Labour Day; Thanksgiving Day; Remembrance Day; Christmas Day; Boxing Day and any other day which the province of Ontario has elected to be closed for business.

1.8         “Cannabis” has the meaning set out in the Cannabis Act (Canada), as it may be amended from time to time.

1.9         “Cannabis Accessory” has the meaning set out in the Cannabis Act (Canada), as it may be amended from time to time

 

1.10       “Cannabis Licence Act, 2018” means the Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2, as amended from time to time.

 

1.11       “Claim” shall have the meaning attributed to it in Section 17.4.

 

1.12       “Conflict of Interest” includes, but is not limited to, any situation or circumstance where, in relation to the performance of its contractual obligations in an OCS contract (including, without limitation, this Agreement), the Vendor’s other commitments, relationships or financial interests (i) could or could be seen to exercise an improper influence over the objective, unbiased and impartial exercise of its independent judgement; or (ii) could or could be seen to compromise, impair or be incompatible with the effective performance of its contractual obligations.

 

1.13       “Control” means, in respect of a person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ability to exercise voting power, by contract, or otherwise, and “Controls” and “Controlled” will have corresponding meanings. Without limiting the generality of the foregoing: (a) a person Controls a corporation if securities of the corporation to which are attached more than 50% of the votes that may be cast to elect directors of the corporation are beneficially owned by that person and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the corporation; (b) a person Controls an unincorporated person other than a limited partnership if more than 50% of the ownership interests, however designated, into which the unincorporated person is divided are beneficially owned by that person and the person is able to direct the business and affairs of the unincorporated person; (c) the general partner of a limited partnership Controls the limited partnership; and (d) a person who Controls a second person is deemed to Control any other person that is Controlled, or deemed to be Controlled, by the second person.

 

1.14       “Data Subscription Program” has the meaning ascribed thereto in Section 22.1.

 

1.15       “Data Subscription Program Information” means the point-of-sale data and related information provided or made available by the OCS through the Data Subscription Program pursuant to this Agreement

 

1.16       “Dedicated Representative” means a person(s) that is assigned to the OCS account by the Vendor and shall act as the single point of contact between the OCS and the Vendor.

 

1.17       “Effective Date” means the date of this Agreement.

 

1.18       “Eligible Products” means those Products listed in the OCS’s Products Catalogue that are Products eligible to the Vendor for ordering and delivery to Authorized Stores, as such may be amended from time to time by the OCS.

 

1.19       “Expiry Date” means the date of termination of this Agreement in in accordance with the terms of the Agreement.

 

1.20       “Farmgate Handbook” means the manual provided by OCS to a Licensed Producer operating a Farmgate Store setting out standards, policies and procedures to which a Vendor operating a Farmgate Store is expected to adhere to in the conduct of their business with the OCS, as such manual may be amended from time to time by OCS upon notice to the Vendor, in the OCS’s discretion.

 

1.21       “Farmgate Store” means any store operated on or within the site set out in the Licensed Producer’s cannabis licence for which a retail store Authorization has been issued pursuant to section 4 of the Cannabis Licence Act, 2018 and any regulations made under that Act.

 

1.22       “Fiscal Year” means the twelve (12) month period commencing April 1 and ending March 31.

 

1.23       “FIPPA” means the Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. F.31.

 

1.24       “Governmental Authority” means the government of Canada or of any other nation, or any political subdivision thereof, whether provincial, territorial, state, municipal or local, or any governmental, executive, legislative, judicial, administrative or regulatory agency, department, ministry, authority, instrumentality, commission, board, bureau or similar body, whether federal, provincial, territorial, state, municipal or local, and whether foreign or domestic, in each case, having jurisdiction in the relevant circumstances.

 

1.25       “Initial Term” shall have the meaning attributed to it in Section 3.1.

 

1.26       “Intellectual Property” means any intellectual, industrial or other proprietary right of any type in any form protected or protectable under the laws of Canada, any foreign country, or any political subdivision of any country, including, without limitation, any intellectual, industrial or proprietary rights protected or protectable by legislation, by common law or at equity.

 

1.27       “Licensed Producer” means an entity with a standard processing license (or a micro-processing license, where applicable) and, where applicable, a standard cultivation license (or a micro-cultivation license, where applicable), in each case, granted pursuant to the Cannabis Act (Canada).

 

1.28       “OCS Confidential Information” means all information of the OCS that is of a confidential nature, including all confidential information in the custody or control of the OCS, regardless of whether it is identified as confidential or not, and whether recorded or not, and however fixed, stored, expressed or embodied, that comes into the knowledge, possession or control of the Vendor in connection with the Agreement.  For the purposes of greater certainty, OCS Confidential Information shall:

1. a) include: (i) all new information derived at any time from any such information whether created by the OCRC, the Vendor or any third-party; (ii) all information that the OCRC (as the case may be) is obliged, or has the discretion, not to disclose under provincial or federal legislation; and (iii) all Data Subscription Program Information; and
2. b) not include information that: (i) is or becomes generally available to the public without fault or breach on the part of the Vendor of any duty of confidentiality owed by the Vendor to the OCRC or to any third-party; (ii) the Vendor can demonstrate to have been rightfully obtained by the Vendor, without any obligation of confidence, from a third-party who had the right to transfer or disclose it to the Vendor free of any obligation of confidence; (iii) the Vendor can demonstrate to have been rightfully known to or in the possession of the Vendor at the time of disclosure, free of any obligation of confidence when disclosed; or (iv) is independently developed by the Vendor.

 

1.29       “OCS Corporate Security” means the corporate security group at OCS, which administers the OCS anti-diversion programs, including the OCS incident reporting system, as more particularly described in the Retailer Handbook.

 

1.30       “OCS Period” means the four-week reporting period used by OCS from time to time for fiscal reporting, subject to OCS’s adjustments to the length of such reporting period at the beginning and the end of each OCS Fiscal Year.

 

1.31       “Ontario Cannabis Retail Corporation Act, 2017” means the Ontario Cannabis Retail Corporation, 2017, S.O. 2017, c.26, Sched. 2, as amended from time to time.

 

1.32       “Party” means the OCS or the Vendor individually, and “Parties” means the OCS and the Vendor collectively.

 

1.33       “Personal Information” means recorded information about an identifiable individual or that may identify an individual and includes all such information obtained by the Vendor pursuant to this Agreement.

 

1.34       “Product” or “Products” means Cannabis and/or Cannabis Accessories and/or related products.

 

1.35       “Product Catalogue” means the catalogue of Eligible Products made available to the Vendor by the OCS on the Reference Website or otherwise, and as may be amended by the OCS from time to time in its sole discretion.

 

1.36       “Product Hold” shall have the meaning attributed to it in Section 14.1.

 

1.37       “Protected Person” shall have the meaning attributed to it in Section 17.4.

 

1.38       “Purchase Price” means the amount to be paid from time to time by the Vendor to the OCS under this Agreement for Products purchased by the Vendor from the OCS, calculated in accordance with Section 5.

 

1.39       “Record” for the purposes of the Agreement, means any Sales Data and any other recorded information, including any Personal Information, in any form: (i) provided by the OCS to the Vendor, or (ii) provided by the Vendor to OCS for the purposes of this Agreement.

 

1.40       “Reference Website” means the OCS’s trade resource website currently found at www. ocswholesale.ca, or such other website of which the OCS notifies the Vendor from time to time.

 

1.41       “Renewal Option” shall have the meaning attributed to it in Section 3.2.

 

1.42       “Renewal Term” shall have the meaning attributed to it in Section 3.2.

 

1.43       “Retailer Handbook” means the OCS’s manual setting out standards, policies and procedures to which owners and operators of Authorized Stores are expected to adhere in the conduct of their business with the OCS, as such manual may be amended from time to time by OCS upon notice to the Vendor by way of notice on the Reference Website or otherwise, in the OCS’s discretion.

 

1.44       “Saleable Condition” means, in respect of any Product, that the Product (i) is unopened with the prescribed seal intact; (ii) is in its original condition; (iii) is in its original selling unit; (iv) has no evidence of deterioration with age; and (v) is not stale dated.

 

1.45       “Sales Data” shall have the meaning attributed to it in Section 12.1.

 

1.46       “Security Deposit” shall have the meaning attributed to it in Section 18.1.

 

1.47       “SKU” means the OCS stock-keeping unit (that is, a unit or package format in which Products are sold), of an individual Product of a specified supplier or Licensed Producer.

 

1.48       “Term” shall have the meaning attributed to it in Section 3.2.

 

1.49       “UPC” means the universal product code applicable to a particular size/format of a particular SKU.

 

 

2. CONDITIONAL UPON RECEIPT OF AUTHORIZATION TO SELL PRODUCTS

 

Notwithstanding the Effective Date, this Agreement shall not take effect in respect of any Authorized Store(s) or any Product, until such time as the Vendor receives an Authorization issued by the AGCO to the Vendor to sell Products identified therein at the Authorized Store(s) identified therein.

 

3. TERM

 

3.1         Initial Term

The initial term of this Agreement will commence on the Effective Date and, unless earlier terminated as provided under this Agreement, will continue until the Expiry Date (the “Initial Term”).

 

3.2         Renewal Terms

Unless either Party has delivered a notice of its intention not to renew this Agreement no later than 180 days prior to the expiry of the Initial Term or the then current Renewal Term (as hereinafter defined), the Vendor will have two (2) options (each, a “Renewal Option”), each exercisable in the Vendor’s sole and absolute discretion subject to the terms hereof, to extend the Initial Term or the Term, as applicable, for consecutive renewal terms of two (2) years each (each, a “Renewal Term” and any and all Renewal Terms together with the Initial Term, the “Term”) by providing to the OCS notice of each exercise of a Renewal Option no later than the date that is 90 days prior to the last day of the Initial Term or of the then current Renewal Term, as applicable. Unless otherwise agreed in writing between the Parties, all of the same terms and conditions of this Agreement will apply during each Renewal Term, as such terms may be amended in accordance with this Agreement.

 

4. AGREEMENT PREVAILS FOR ALL PRODUCT PURCHASES BY VENDOR

 

The Vendor expressly agrees that the terms and conditions of this Agreement, as amended from time to time, apply to any and all purchases of Products by the Vendor ordered on or after the Effective Date and prevail over the terms and conditions of any purchase order or order issued by the Vendor to the OCS for the supply of any Products to the Vendor under this Agreement.  The addition or modification of any terms and conditions set out with respect to any purchase of Products from the OCS by the Vendor shall be void and of no effect unless specifically agreed to by the OCS in writing.

 

5. PURCHASE PRICE

 

5.1         Products will be sold by the OCS to the Vendor at the price indicated in OCS’s Product Catalogue that are eligible to the Vendor for ordering and delivery to Authorized Stores, as such catalogue may be updated from time to time by the OCS in its sole and absolute discretion (including Product prices) and made available to the Vendor on the Reference Website or otherwise.

 

5.2         For each order placed by the Vendor for Eligible Products, the cost of delivery and transportation, as applicable, including any applicable surcharges, and all applicable taxes will be added to the purchase price for such Products and charged to the Vendor, which, together with the price indicated in the Product Catalogue, shall constitute the Purchase Price.

 

5.3         The cost of delivery and transportation shall be specified by the OCS and is subject to change from time to time throughout the Term. For clarity, the cost of delivery and transportation for Eligible Products delivered to a Farmgate Store will be adjusted accordingly as further outlined in the Farmgate Handbook. The frequency of changes to the cost of delivery and transportation may be limited as further described in the Retailer Handbook.

 

6. PROCEDURES FOR PURCHASES FROM THE OCS

 

6.1         Any and all purchases of Products by the Vendor from the OCS, to be made available for sale in the Authorized Store(s), will be made in accordance with this Agreement.

 

6.2         The OCS will sell to the Vendor only the Products which are listed as Eligible Products and the Vendor will only sell the Products in the same SKUs as supplied to the Vendor hereunder.

 

6.3         The Vendor will order and purchase Products in accordance with the procedures described in the Retailer Handbook. The Vendor shall make individual orders for each Authorized Store under this Agreement.  For each order, the Vendor shall identify the SKU and quantity of Products ordered for each Authorized Store.

 

6.4         The OCS will endeavour to process and fill the Vendor’s product orders as quickly as possible, except in the case of the Vendor’s initial order following execution of this Agreement, which will not be processed until the Vendor’s certificate of insurance has been received as contemplated in Section 16.3 hereof.  The OCS will charge the Vendor for payment when the order is shipped from OCS. The Vendor will not be permitted to place a subsequent order with OCS until payment for the previous order is made in full. If the OCS cannot fill an order or if there will be a delay, other than on account of the Vendor’s failure to make payment when required or its failure to provide the required certificate(s) of insurance, the OCS will notify the Vendor.  The Vendor will not be entitled to any claim, demand or legal remedy of any kind as a consequence of any such delay or failure to supply.

 

6.5         The Vendor is solely responsible for all purchasing decisions on SKU and quantity of Products ordered for sale in the Authorized Store(s).   Products purchased may not be returned to the OCS due to poor sales by the Vendor or errors in ordering by the Vendor.

 

6.6         The Vendor acknowledges and agrees that: (i) the OCS has not made any representations, warranties, covenants, promises or guarantees as to any potential or minimum volumes of sales of Products by the Vendor or sales generally at the Authorized Store(s) or the availability of any Products; and (ii) the OCS may enter other agreements for the supply of Products to other vendors and this Agreement is not an exclusive arrangement for the supply of Products by the OCS to the Vendor. For greater clarity, under no circumstances shall the OCS have any liability to the Vendor, nor shall the OCS be deemed to be in breach of this Agreement, if the OCS is unable to supply Products to the Vendor due to a failure of Licenced Producers or other suppliers to provide such Products to the OCS.

 

7. PAYMENT AND SET OFF

 

7.1         Full payment for all Products plus the cost of delivery and transportation, as applicable, including any applicable surcharges, and all applicable taxes, in accordance with the Retailer Handbook, must be received by OCS at time of shipment of any Products to the Authorized Store(s). The Vendor shall ensure that it has sufficient funds in its account for the full amount due to the OCS in connection with its order of Products. The OCS will issue to the Vendor an invoice in the amount owed by the Vendor for the purchased Products.

 

7.2         The OCS shall have the right, from time to time, to set off or deduct against any monies owing to Vendor by the OCS, any monies that may then be due and owing by Vendor to OCS.

 

7.3         Any fees, charges or expenses incurred by the OCS as a result of the Vendor’s failed, cancelled or modified payment shall be charged back to the Vendor. The OCS may charge a fee to the Vendor in the event the Vendor fails to make payment for Products on the stipulated payment date.

 

7.4         Upon execution of this Agreement, the Vendor shall complete and return to the OCS the banking information form or pre-authorized debit agreement attached hereto as Schedule “B”. The Parties acknowledge and agree that the bank account for which the banking information form or pre-authorized debit agreement (as the case may be) is completed, and from which payment for Products is to be made, shall be in the name of the Vendor.

 

8. RISK AND TITLE

 

8.1         Risk of loss of the Products shall pass to the Vendor upon: (a) delivery at the point specified in an order; and (b) written acknowledgement of receipt by the Vendor, or its authorized agent, at the Authorized Store(s) of such Products.

 

8.2         Notwithstanding delivery and the passing of risk in the Products, title to the Products shall not pass to Vendor until OCS has received payment in full for the Products, and until such time, the Vendor shall hold the Products as OCS’s fiduciary agent and bailee.

 

9. DELIVERY

 

9.1         Products shall be delivered in accordance with the Retailer Handbook.

 

9.2         Deliveries of Products may be made by the OCS or by OCS’s contracted carrier, which may include any OCS approved third-party, or any combination thereof.

 

9.3         Upon arrival of deliveries from the OCS, the Vendor shall prioritize acceptance of the Products from OCS or its contracted carrier, as the case may be, to reasonably limit the time during which the Products are at the Vendor’s premises awaiting acceptance.

 

9.4         The Vendor shall notify the OCS within seven (7) days of receipt of any deliveries from the OCS of any discrepancies between Products ordered and paid for versus delivered as shown on the applicable Bill of Lading, including breakages of Products.

 

9.5         The Vendor shall follow the procedures set out in the Retailer Handbook for delivery related claims. For the avoidance of doubt, the Vendor shall not refuse any deliveries of Products from the OCS for any reason.

 

9.6         The Vendor must, at all times, accept deliveries on pallets used by the OCS (whose pallet standards may change from time to time). In addition, if applicable, the Vendor agrees to follow the procedures of any OCS pallet exchange program provided in the Retailer Handbook, including without limitation, returning empty pallets as directed by the OCS.

 

9.7         In the event the Vendor is unable to accept deliveries from OCS in the manner specified in the Retailer Handbook, the OCS shall use commercially reasonable efforts to complete the deliveries in the manner requested by the Vendor, and any additional costs incurred by the OCS for such accommodation shall be for the account of the Vendor. The Vendor will permit the OCS or its contracted carrier to access the Vendor’s premises at each Authorized Store where such access is required for completion of the delivery of the Products.

 

9.8         The Vendor agrees to handle all pallets received from the OCS in a commercially reasonable manner. The Vendor acknowledges and agrees that the pallets used by the OCS are either owned by the OCS or a third party and that the Vendor will do nothing that is inconsistent with that ownership, including altering, disposing of or transferring the pallets to any other party except where expressly authorized by OCS.

 

9.9         OCS reserves the right to invoice the Vendor for the OCS’s cost where such pallets are not returned within a reasonable period time after OCS issues a notice to the Vendor.  The invoice shall be payable upon receipt.

 

9.10       The Vendor will not impose on the OCS any penalties, fees, charges or surcharges for late delivery, non-compliant deliveries, breakages, non-compliant pallets or fill rates.

 

 

10. AUTHORIZATION TO STORE PRODUCTS

 

10.1       Subject to all Applicable Laws, the Vendor is hereby authorized to store Products purchased by the Vendor from the OCS under this Agreement, at its sole cost and expense, in the storage area or warehouse area of the Authorized Store(s).  Products may not be stored or warehoused at any other locations without prior written approval of the OCS.

 

 

11. ADDITIONAL AUTHORIZED STORES

 

11.1       In the event that the Vendor receives an Authorization from the AGCO to operate a new retail store location, the Vendor shall provide a copy of the valid Authorizations for any additional store(s) to the OCS. Upon receipt of valid Authorizations from the Vendor, the OCS shall amend Schedule “A” of this Agreement to include the additional Authorized Store(s), including the name(s) and location(s) of the additional Authorized Store(s) and the Authorization number(s).

 

 

12. REPORTS, RECORDS, TAX

 

12.1       In the manner and frequency specified in the Retailer Handbook, the Vendor will report daily sales and inventory information to the OCS, such information to include (without limiting or derogating from any other reporting requirements set out in this Agreement):

–              retail price at which the Products were sold;

–              retail sales in units;

–              retail sales in dollars;

–              markdowns by units;

–              markdowns in dollars; and

–              on hand units;

reported by (i) Authorized Store(s), (ii) UPC, and (iii) sales date (collectively, the “Sales Data”).

 

12.2       The Vendor will provide the Sales Data in a format approved by the OCS.

 

12.3      [INTENTIONALLY OMITTED]

 

12.4       On an ongoing basis, the Vendor will promptly report:

 

(a)          to OCS Corporate Security all incidents and suspected incidents, as further specified in the Retailer Handbook; and

(b)          to the OCS any serious product quality issues or concerns identified by the Vendor or a customer of the Vendor. For the avoidance of doubt, unless due to a serious product quality concern, the Vendor will not report customer product complaints to OCS.

 

12.5       Unless the OCS provides the Vendor with other written instructions and unless otherwise specified in this Agreement, the reports listed in this Section 12 shall be submitted by the Vendor at the frequency and timing and in the manner prescribed by the OCS in the Retailer Handbook.

 

12.6       Upon request of the OCS, the Vendor will collaborate with the OCS to create demand forecasts for all Products by week and by UPC for the upcoming nine (9) month period. The Vendor will provide its demand forecasts to the OCS in the manner and with the frequency specified in the Retailer Handbook. Unless the OCS provides the Vendor with other instructions, forecasts will be provided by the Vendor by the first Sunday in each month.

 

12.7       The Vendor will maintain and keep invoices, books of account and records showing all Products purchased by the Vendor from the OCS under this Agreement, all Products inventory on hand, the date of sale and amount paid for all Products sold by the Vendor, and any other information directed to be kept by the OCS, for a period of seven (7) years from the end of the Fiscal Year in which the applicable transaction occurred.

 

12.8       The Vendor shall collect all applicable taxes on all sales of Products and will remit such taxes directly to the applicable government authorities.  The Vendor will obtain all required permits and maintain all records required by such authorities. The OCS will not be responsible for non-remittance or errors in remittance of applicable taxes, interest or penalties in the event of an audit of the Vendor’s sales of Products.

 

12.9       The OCS and/or its designates shall have the right to enter the Authorized Store(s) or any other premises under the Vendor’s control, and inspect the Vendor’s books and records relating to the sale of Products under this Agreement, for the purposes of assessing compliance with the terms and conditions of this Agreement and for taking extracts therefrom.  All such audits will be conducted during regular hours of operation, with such frequency as the OCS determines necessary.  Any audit conducted by the OCS or its designate is subject to the following conditions:

 

(a)          the audit must not be disruptive to the Vendor’s business and must take place at a mutually agreed time during the Vendor’s regular business hours;

(b)          while under normal circumstances the OCS shall provide to the Vendor at least two (2) weeks’ prior written notice of an audit, the OCS reserves the right to audit the Vendor on an unannounced basis;

(c)          after the initial audit of the books and records, subsequent audit may only cover the books and records relating to the sale of Products since the last audit commenced (if any) and during the twenty-four (24) months prior to the date such subsequent audit commenced;

(d)          an audit must be completed within thirty (30) days from commencement; and

(e)          an audit must be conducted by the OCS and/or its designates alone and not in conjunction or cooperation with any other party.

 

13. RETURNS

 

13.1       The Vendor may accept customer returns of Products purchased at the Authorized Store(s) and refund customers in accordance with its own return policies.  The OCS will not be liable for any costs incurred by the Vendor in connection with its acceptance of Product returns. Subject to Applicable Laws, the Vendor shall ensure that any Products which are returned and subsequently offered for sale to customers are in Saleable Condition.

 

13.2       Where the OCS has approved a return of Products from the Vendor to the OCS, the OCS will only credit the Vendor for the value of the Products returned, subject to Section 13.3 and the Retailer Handbook.

13.3       Unless otherwise specified in this Agreement or the Retailer Handbook, all costs and expenses incurred by the Vendor or the OCS associated with any returns (other than the cost of Product returned to the OCS for credit) shall be the responsibility of the Vendor. Without limiting the generality of the foregoing, the Vendor acknowledges that the OCS may charge the Vendor a re-stocking fee for Products returned to the OCS for reasons other than OCS error. Any such re-stocking fee will be specified in the Retailer Handbook.

 

13.4       For the avoidance of doubt, any Cannabis Accessories or other Products purchased by the Vendor from a third party or in any manner other than pursuant to this Agreement may not be returned to the OCS, and the provisions of this Section 13 shall not apply to such Cannabis Accessories and Products.

 

14. RECALLS AND HOLDS

 

14.1       The Vendor shall:

(a)          follow the OCS policies and procedures outlined in the Retailer Handbook regarding product recalls;

(b)          have in place throughout the Term its own standard operating procedures for managing product recalls, product destruction and product holds;

(c)          where there is a conflict between the OCS policies and procedures and Vendor’s standard operating procedures, comply with the more stringent standard;

(d)          immediately comply with all product recalls concerning the Products, issued by the OCS, by Health Canada or by the Licensed Producer of the Product(s) that is the subject of the recall; and

(e)          when ordered by the OCS, shall cease selling any specified brand of Products or individual UPCs where the OCS has determined, in its sole discretion, that continued sale may put the health or safety of the public at risk or as a result of any other product quality investigation (a “Product Hold”).

 

Unless otherwise specified in this Agreement or the Retailer Handbook, all costs and expenses incurred by the Vendor associated with any recalls (other than the cost of Products returned to the OCS for credit) or a Product Hold shall be the responsibility of the Vendor.

 

15. REPRESENTATIONS AND WARRANTIES AND COVENANTS

 

15.1      The Vendor represents and warrants to, and covenants with, the OCS that:

 

(a)        [INTENTIONALLY OMITTED]

(b)          it will comply at all times with the terms and conditions of each Authorization;

(c)          it shall notify the OCS immediately if an Authorization is suspended or revoked by the AGCO;

(d)          it will comply with all Applicable Laws;

(e)          it will only offer Products that constitute Eligible Products for sale in Authorized Store(s);

(f)           it will offer Products for sale in the packaging in which they were purchased from the OCS;

(g)          it will not offer Products for sale that are not in Saleable Condition;

(h)          it will inform OCS of any product quality issues, concerns or findings that are identified or recognized by the Vendor or a customer of the Vendor;

(i)           it will not grant any lien, encumbrance, pledge or security interest in any Products received under this Agreement or in the Agreement itself;

(j)           it will comply with the Retailer Handbook;

(k)          it will comply with the Supplier Code of Conduct, including any anti-diversion measures required by the OCS as more particularly described therein, as such has been provided to the Vendor prior to the Effective Date and as may be amended by the OCS from time to time in its sole discretion with notice to the Vendor;

(l)           it will not sell, transfer or otherwise provide, in any form or manner, the Sales Data to a third party;

(m)         other than Cannabis Accessories purchased by the Vendor from a third party as permitted by this Agreement and Applicable Laws, all products sold by the Vendor to consumers at its Authorized Store(s) shall be Eligible Products purchased by the Vendor from the OCS pursuant to this Agreement;

(n)          it will only order Products that are Eligible Products in accordance with the conditions of the Authorization; and

(o)          the Vendor shall (i) avoid any Conflict of Interest in the performance of its contractual obligations; (ii) disclose without delay any actual or potential Conflict of Interest that arises during the performance of its contractual obligations; and (iii) comply with any requirements prescribed by the OCS to resolve any Conflict of Interest.

 

15.2       The OCS represents and warrants to, and covenants with, the Vendor that:

 

(a)          the OCS has all rights necessary to sell Products supplied under this Agreement;

(b)          the Products are of good and merchantable quality;

(c)          the Products are fit for the purposes for which the Products are intended to be used;

(d)          the Products shall be delivered to the Vendor free from any lien, claim, encumbrance or security interest of any kind; and

(e)          the Products, including packaging and/or labeling, do not, and will not, violate or infringe any patent, industrial design, trade-mark, copyright, trade name, trade dress, trade secret or any other intellectual property right or proprietary right belonging to any third party.

 

16. INSURANCE

 

16.1       The Vendor must maintain in full force and effect and at its sole expense, throughout the term of the Agreement, all the necessary and appropriate insurance that a prudent person in the business of the Vendor would maintain, including but not limited to Commercial General Liability Insurance in the amount of not less than Five Million Dollars ($5,000,000) per occurrence including bodily injury and death, personal and advertising liability, and property damage including loss of use thereof, with coverage including the activities and operations of the Vendor and those for whom it is responsible in law. This policy must also include contractual liability, employers’ liability, non-owned automobile liability, products and completed operations coverage as well as severability of interests and cross liability clauses. This policy must be endorsed to add the OCS as an additional insured with respect to liability arising from the operations of the Vendor.  Notwithstanding the foregoing, the Vendor may satisfy the minimum limits of insurance by any combination of deductible or self-insured retention and of primary and excess/umbrella liability insurance policies.  For greater clarity, the Vendor remains responsible for payment of any loss or losses and associated defence and other costs within the deductible or self-insured retention.

 

16.2       The policy set out in Section 16.1 will:

 

(a)          be placed with financially sound and reputable insurance companies licensed to operate in the Province of Ontario;

(b)          include an undertaking to endeavour to provide the OCS with 30 days’ notice of cancellation or change that reduces coverage; and

(c)          act as primary insurance and not excess to any other insurance available to the OCS.

 

16.3       As applicable, certificate(s) of insurance evidencing the insurance coverage required above should be submitted along with a signed copy of this Agreement, and in any event prior to the Vendor’s first order of Products being shipped, and thereafter annually at expiry of the applicable policy or upon request. The insuring company or authorized broker or agent must originally sign the certificate(s).

 

17. INDEMNITIES AND LIMITATIONS ON LIABILITY

 

17.1       Subject to Section 17.3. the Vendor will, at all times, protect, indemnify and save harmless the OCS, its board members, directors, officers, and employees from and against all loss, damages, costs, liabilities, expenses (including legal expenses), claims, actions, demands and proceedings, including, without limitation, claims for personal injury or property damage, which are caused by or arise out of, or in any way related to any breach of representation or warranty or covenant of the Vendor contained in this Agreement.

 

17.2       In no circumstances will the OCS be responsible for damages, liabilities, costs and expenses (including legal expenses), claims, actions, demands and proceedings, including, without limitation, claims for personal injury or property damage, (i) caused by the negligence or wilful misconduct of the Vendor (which shall include its directors, officers, employees, agents and subcontractors); or (ii) arising from circumstances for which coverage is provided under an insurance policy or claims fund to the extent that the Vendor (which shall include its directors, officers, employees, agents and subcontractors) is indemnified or covered under such policy or fund.

 

17.3       In no circumstances will either Party (including its affiliates or any of their respective directors, officers, employees, agents or subcontractors), be liable to the other Party (including its affiliates or any of their respective directors, officers, employees, agents or subcontractors) under any theory or tort, contract, strict liability or other legal theory for lost profits, lost revenues, lost business opportunities, loss of goodwill, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby excluded by agreement of the Parties, regardless of whether such damages were foreseeable or whether any party or any entity has been advised of the possibility of such damages.

 

17.4       The OCS agrees that in order to be entitled to indemnification from the Vendor under Section 17.1 of this Agreement in respect of any matter referred to therein (a “Claim”), each Person seeking indemnification (a “Protected Person”) shall comply with the following terms and conditions:

(a)          if a Protected Person receives a notice of Claim or Claims, whether actual or threatened, such Protected Person shall promptly deliver to the Vendor written notice setting forth in reasonable detail all available particulars of the Claim(s);

(b)          upon the written request of the Vendor, each Protected Person shall furnish to the Vendor copies of all documents and provide any other information relating to the Claim(s) that is in the possession or under the control the Protected Person;

(c)          each Protected Person shall take all reasonable steps necessary to secure and preserve such Protected Person’s rights in respect of the Claim(s)  and, to the extent that the Protected Person has a right to commence a proceeding against another person (whether for damages or indemnification or otherwise) in respect of a matter for which the Protected Person claims indemnification from the Vendor hereunder, the Protected Person shall assign that right to the Vendor and subrogate the Vendor to that right to the extent of the amounts paid by the Vendor or for which the Vendor is liable hereunder;

(d)          each Protected Person shall not voluntarily assume any liability in respect of or settle or compromise a Claim(s) or any proceeding relating thereto without obtaining the Vendor’s prior written consent;

(e)          the Vendor shall have the right to participate in the negotiation, settlement or defence of the Claim(s) and any proceedings relating thereto or appeal thereof, but the Vendor may not settle any action commenced against a Protected Person without the written consent of that Protected Person;

 

(f)           if the Vendor elects to participate in or assume control of the negotiation, settlement or defence of the Claim(s) and any proceedings relating thereto or appeal thereof, each Protected Person shall cooperate fully with the Vendor in connection with the same, and each Protected Person shall agree to be represented by legal counsel chosen by the Vendor, unless, in the opinion of such legal counsel, there would arise a conflict of interest preventing such legal counsel from representing the Protected Person, and, where it is such legal counsel’s opinion that a conflict of interest prevents their representing a Protected Person, that Protected Person shall be entitled, subject to the Vendor’s prior written approval, to retain legal counsel of such Protected Person’s choice, and the fees and expenses of the Protected Person’s counsel incurred in its representation shall be costs to which this indemnity extends;

 

(g)          if the Vendor is not also a party to the Claim, the Protected Party shall consent to any order or leave that may be applied for by the Vendor to be added as a party or to be allowed to make representations on its own behalf without being a party;

(h)          the expenses incurred by a Protected Person in investigating, defending or appealing any Claim(s) shall, at the Protected Person’s request, be paid by the Vendor as may be appropriate to enable the Protected Person to properly investigate, defend or appeal such Claims(s), with the understanding that if it is ultimately determined that the Protected Person is not entitled to be indemnified hereunder, the Protected Person shall immediately repay such amount(s) so paid, which shall become payable as a debt due to the Vendor.

 

17.5       Notwithstanding anything contained in this Agreement in any statutory provision or under any rule of law to the contrary, and notwithstanding the OCS’s status as a Crown Agent, the Parties acknowledge and agree that no financial commitment, guarantee, indemnity, hold harmless provision, release or exclusion of liability provided by the OCS to the Vendor or to any other person or corporation pursuant to any term(s) or provision(s) contained in this Agreement shall be in any way be binding against His Majesty the King in right of Ontario.  The Vendor acknowledges and agrees that it shall have no recourse against His Majesty the King in right of Ontario with respect to any financial commitment, covenant, guarantee, indemnity, hold-harmless provision, release or exclusion of liability provided by the OCS as contained herein.  The Vendor further agrees that it shall be estopped from making any claim(s) against His Majesty the King in right of Ontario and that it shall be estopped from commencing any legal proceeding against His Majesty the King in right of Ontario with respect to the enforcement of any financial commitment, guarantee, indemnity, hold-harmless provision, release or exclusion of liability provided to it by the OCS pursuant to any term or provision contained in this Agreement.  The Parties further agree that in the event of a conflict between the terms of this provision and any other term or provision within this Agreement, the terms of this provision will prevail to the extent of such conflict.

 

18. SECURITY DEPOSIT

 

18.1       The OCS may, in its sole discretion, require that the Vendor pay to the OCS a security deposit in an amount determined by the OCS as an estimated cumulative average of weekly purchases by the Vendor for each Authorized Store subject to this Agreement (the “Security Deposit”).

18.2       If the Vendor has demonstrated a pattern of cancelling, reducing or disputing payments made to the OCS for Product orders, maliciously, negligently or arbitrarily, or if the Vendor’s credit risk increases for any other reason, as determined by the OCS acting reasonably, the OCS may require the Vendor to increase its Security Deposit on five (5) Business Days’ prior written notice to the Vendor.

The Security Deposit shall be held by the OCS for the Term of this Agreement and thereafter promptly returned to the Vendor without interest, subject to the OCS’s set-off rights for any outstanding balance.

18.3       Where the OCS determines that the Security Deposit is to be increased or additional Authorized Stores are added to this Agreement, the Vendor will provide the increased Security Deposit to the OCS within ten (10) Business Days of written notification by the OCS that such increased Security Deposit is required.

 

19. CONFIDENTIALITY

 

19.1       During and following the term of this Agreement, the Vendor shall (a) keep all OCS Confidential Information confidential and secure; (b) limit the disclosure of OCS Confidential Information to only those employees who have a need to know it and who have been specifically authorized to have such disclosure; (c) not directly or indirectly disclose, destroy, exploit or use any OCS Confidential Information (except if required by order of a court of tribunal), without first obtaining: (i) the written consent of the OCS and (ii) in respect of any OCS Confidential Information about any third-party; (d) provide OCS Confidential Information to the OCS on demand; and (e) return all OCS Confidential Information to the OCS before the termination or completion of this Agreement, with no copy or portion kept by the Vendor.

 

19.2       The Vendor shall not copy any OCS Confidential Information, in whole or in part.

 

19.3       The Vendor acknowledges that breach of any provisions of this Section may cause irreparable harm to the OCS, and that the injury to the OCS may be difficult to calculate and inadequately compensable in damages.  The Vendor agrees that the OCS is entitled to obtain injunctive relief (without proving any damage sustained by it or by any third-party) or any other remedy against any actual or potential breach of the provision of this Section.

 

19.4       If the Vendor or any of its directors, officers, employees, agents, representatives or advisors become legally compelled to disclose any OCS Confidential Information, the Vendor will provide the OCS with prompt notice to that effect in order to allow the OCS to seek one or more protective orders or other appropriate remedies to prevent or limit such disclosure, and it shall co-operate with the OCS and its legal counsel to the fullest extent. If such protective orders or other remedies are not obtained, the Vendor will disclose only that portion of OCS Confidential Information which the Vendor is legally compelled to disclose, only to such person or persons to which the Vendor is legally compelled to disclose, and the Vendor shall provide notice to each such recipient (in co-operation with legal counsel for the OCS) that such OCS Confidential Information is confidential and subject to non-disclosure on terms and conditions equal to those contained in the Agreement and, if possible, shall obtain each recipient’s written agreement to receive and use such OCS Confidential Information subject to those terms and conditions.

 

20. CONFIDENTIALITY AND FIPPA

 

20.1       The Vendor and the OCS acknowledge and agree that FIPPA applies to and governs all records of the OCS pertaining to this Agreement, including confidential records and information supplied by the Vendor to the OCS, and may require the disclosure of such records to third parties.  Furthermore, the Vendor agrees that it will not share any Personal Information of its customers or any other third party with the OCS in connection with this Agreement.

20.2       The Vendor and OCS acknowledge and agree that:

(a)          the information supplied to the OCS by the Vendor pursuant to Section 12.1 and any Sales Data shall be considered confidential information, maintained in confidence by the OCS and the Vendor and that disclosure of such confidential information shall be limited by the OCS to its officials and employees who require such information in the course of their duties;

 

(b)          notwithstanding the foregoing, the OCS may use the Sales Data to aggregate retail sales information in the Province of Ontario and make available, sell or otherwise transfer such aggregated data to third parties without liability or compensation to the Vendor, provided that any such third party shall be required to treat such data as confidential;

 

(c)          any confidential information supplied to the OCS may be disclosed by the OCS where it is obligated to do so under FIPPA, by an order of a court or tribunal or pursuant to a legal proceeding or Applicable Laws, provided that in the case of the OCS, the OCS provides the Vendor with reasonable notice of any such obligation, order or legal proceeding in order to enable the Vendor to seek an appropriate protective order or other remedy;

 

(d)          any confidential information supplied to the OCS may be disclosed by the OCS upon request to representatives of the Ministry of Finance (Ontario) without notice to the Vendor; and

 

(e)          any information supplied to the OCS, other than the Sales Data, may be disclosed by the OCS to the AGCO, law enforcement agencies or other governmental authorities without notice to the Vendor;

 

and the provisions of this paragraph shall prevail over any inconsistent provisions in this Agreement.

 

21. INTELLECTUAL PROPERTY

 

21.1       The Vendor agrees that all Intellectual Property and every other right, title and interest in and to all concepts, techniques, ideas, information and materials, however recorded (including images and data) provided by the OCS to the Vendor shall remain the sole property of the OCS at all times.

 

21.2       The Vendor shall not use any mark or logo of the OCS without the prior written permission of the OCS to do so.

 

21.3       The OCS shall be the sole owner of all Intellectual Property rights and all right, title and interest in any Data Subscription Program Information and no use of the same shall be made, nor any ideas obtained therefrom be used except with written approval from the OCS.  All Intellectual Property rights in the Data Subscription Program Information shall accrue continuously to the OCS as the same are continuously created. The Vendor irrevocably assigns to and in favour of the OCS and the OCS accepts all Intellectual Property rights and every right, title and interest in and to all Data Subscription Program Information, immediately following the creation thereof, for all time.

 

21.4       Without limiting the generality of Section 19.2, the Vendor shall not modify, publish, transmit, participate in the transfer or sale, create derivative works, or in any way exploit or use the Data Subscription Program Information, in whole or in part without the prior written consent of the OCS. The Data Subscription Program Information is provided strictly for the Vendor’s own use and may not be duplicated, transferred or provided in any medium or format, in whole or in part, to any third party without the prior written consent of the OCS. The prior written permission of the OCS is required for any form of publication or distribution of the information or any part thereof.

 

21.5       The OCS reserves the right to prescribe the specific manner in which the Vendor shall perform its obligations relating to this Section.

 

22. DATA SUBSCRIPTION PROGRAM

 

22.1       On or following the Effective Date, the Vendor will enter into and maintain with the OCS a subscription program (the “Data Subscription Program”) pursuant to which the Vendor will, among other things, have access to certain Data Subscription Program Information.  Subject to the Vendor’s material compliance with the terms and conditions of this Agreement, OCS agrees to provide or make available to the Vendor such Data Subscription Program.  Unless earlier terminated in accordance with its terms, the Data Subscription Program will continue until the expiry or earlier termination of this Agreement.

 

22.2       The OCS may provide or make available the Data Subscription Program Information in any manner and in any format, at its sole discretion, including by e-mail to the Dedicated Representative.  If the OCS makes the Data Subscription Program Information available by granting the Vendor with access to an electronic website or portal, the Vendor’s use of the website or portal, as the case may be, shall be subject to the general terms and conditions of use set out in this Schedule “C”.

 

22.3       The OCS grants to the Vendor a non-exclusive, non-assignable, non-transferable licence to receive and use the Data Subscription Program Information for its information and analytical purposes only, on the terms and conditions specified herein.

 

22.4       Notwithstanding anything to the contrary, the OCS reserves the right to terminate the Data Subscription Program, without cause or penalty, at any time upon thirty (30) days’ written notice to the Vendor. Subject to Section 23 of the Agreement, the Parties’ rights and obligations under this Agreement will survive the termination of the OCS Data Subscription Program, except those rights and obligations outlined in Section 22 and Schedule “C”.

 

23. SUSPENSION AND TERMINATION

 

23.1       The OCS may immediately suspend the Vendor’s rights under this Agreement with respect to the ordering of Products by or for any Authorized Store(s), and delivery of Products to such Authorized Store(s) upon written notice to the Vendor, where there is a suspension or revocation of the Authorization for such Authorized Store(s) by the AGCO.

 

In such instance, suspension of the Vendor’s rights under this Agreement shall be for the duration of the suspension or revocation of the Authorization by the AGCO.

 

23.2       The OCS may, upon written notice to the Vendor, suspend the Vendor’s rights to order any Products under Section 6 where the Vendor is:

(a)          in default of (i) its payment obligations where any such default is not remedied to the satisfaction of the OCS within five (5) Business Days of notice of default or (ii) its obligation to increase the Security Deposit as set out in Section 18; or

(b)          in material breach of any warranty, representation or provision of this Agreement,

where any such default or breach is not remedied to the satisfaction of the OCS within ten (10) Business Days of notice of default or breach. If any default or breach noted above remains unremedied by the Vendor to the satisfaction of the OCS within twenty (20) Business Days of the notice of default or breach, then, in any such event, in addition to the OCS’s other rights and remedies under this Agreement, OCS shall have the right to terminate this Agreement, by giving notice of termination to the Vendor to that effect at the end of such twenty (20) Business Day period and such termination shall take effect immediately.

 

23.3       Either Party, without liability, cost or penalty, may terminate this Agreement immediately upon notice to the other Party if any of the following occur:

 

(a)          there has been a material breach of any warranty, representation, or provision of this Agreement by the other Party (other than the Vendor breaches set out in Section 23.2(a) above), subject to the provisions set out in Section 23.4; or

 

(b)          if the other Party ceases to carry on business, or if the other Party becomes insolvent by reason of inability to meet its obligations as they become due, commences winding-up or liquidation proceedings or has such proceedings commenced against it, ceases to carry on business in the ordinary course, makes an assignment for the general benefit of creditors, or if a petition in bankruptcy is made against the other Party which is not successfully opposed by it within thirty (30) days, or if the other Party is otherwise adjudicated bankrupt by a court of competent jurisdiction, or where any proceedings are commenced by or against the other Party under any other insolvency laws or where proceedings for the appointment of a trustee, custodian, receiver or receiver-manager or any other person with similar powers are commenced pursuant to any contractual relationship or otherwise by or against the other Party.

 

23.4       Without limiting the rights and remedies available to the OCS under Section 23.2(b), in the event that either Party materially breaches a term of this Agreement (other than the Vendor breaches set out in Section 23.2(a) above), the injured Party may provide written notice to the offending Party, including the particulars of the material breach, and thereafter the offending Party shall have ten (10) Business Days in which to cure the material breach.  If:

 

(a)          such material breach is not cured within ten (10) Business Days after such notice; or

 

(b)          if the said material breach is of such a nature that the same cannot be completely cured or remedied within ten (10) Business Days of such notice, and the offending Party is not proceeding to cure such breach in the manner agreed between the Parties;

then, in any such event, in addition to the injured Party’s other rights and remedies under this Agreement, the injured Party shall have the right to terminate this Agreement, by giving notice of termination to the offending Party to that effect at the end of such ten (10) Business Day period and such termination shall take effect immediately.

 

23.5       The OCS may immediately terminate this Agreement, upon written notice to the Vendor if all Authorizations applicable to the Authorized Stores are revoked or expire.

 

23.6       The OCS may terminate this Agreement if the Vendor is in default of its payment obligations where any such default is not remedied to the satisfaction of the OCS within ten (10) Business Days of notice of default.

 

23.7       The Vendor may terminate the Vendor’s rights under this Agreement with respect to any Authorized Store(s) upon one hundred and eighty (180) days written notice to the OCS. In the event of such termination, Schedule “A” shall be amended by the OCS to remove such Authorized Store(s) as of the date of termination.

 

23.8       The OCS may terminate the Vendor’s rights under this Agreement with respect to any Authorized Store(s) immediately upon written notice where there has been a revocation or upon the expiration of, the Authorization(s) for such Authorized Store(s) and Schedule “A” shall be amended to remove such Authorized Store(s).

 

23.9       If this Agreement is terminated or expires,

 

(a)          the Vendor will immediately pay to the OCS all amounts owing by the Vendor to the OCS (net of any amounts and credits owing by the OCS to the Vendor);

(b)          the OCS shall have the right, but not the obligation to purchase any of the Vendor’s remaining inventory of Products at its Purchase Price and subject to a reasonable restocking fee; and

(c)          the Vendor will follow the OCS or AGCO’s instructions, if any, to destroy and dispose of any remaining inventory of Products.

 

23.10    The OCS will not be responsible for any losses, costs, damages or any other type of compensation arising by virtue of the operation, suspension or termination of this Agreement or of any right or obligation contained herein. The OCS shall not, by reason of the suspension, termination or expiration of the Agreement, be responsible to the Vendor for any loss, compensation, reimbursement, or damages (i) on account of loss of prospective profits on anticipated sales nor on account of expenditures, investments, leases or commitments made in connection with the business or goodwill of the Vendor; or (ii) arising by virtue of the operation or cessation of operation of this Agreement, any right or obligation contained herein.

 

23.11    Where there has been a material breach of this Agreement by the Vendor, or the Agreement has been suspended or terminated by the OCS in respect of any Authorized Store(s) in accordance with this Agreement, the OCS may provide notice to the AGCO.

 

24. GENERAL

 

24.1       Materials Forming Part of the Agreement. This Agreement consists of: (i) the terms stated herein; (ii) any Schedules to the Agreement; and (iii) the Retailer Handbook. This Agreement constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and cancel and supersede any prior communications, understandings and agreements, oral or written, between the Parties hereto with respect thereto. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the Parties other than as expressly set out in this Agreement.

24.2       Interpretive Value of Agreement Documents. In the event of a conflict or inconsistency in any provisions in the Agreement (a) the main body of the Agreement shall govern over the schedules to the Agreement; and (b) the Agreement (including its Schedules) shall govern over the Retailer Handbook (except with respect to Price changes).

 

24.3       Waiver.  No waiver of any breach of any provision of this Agreement shall be effective unless expressed in writing and signed by the non-breaching Party.  Unless otherwise expressly provided, the extent of any waiver granted shall be restricted to the specific breach waived and shall not extend to any further occurrence of such breach.

 

24.4       Assignment.  This Agreement and the rights and obligations of the Vendor hereunder may not be assigned, subcontracted, transferred or ceded by operation of law or otherwise, either directly or indirectly without the prior written consent of the OCS, which consent may be withheld at the OCS’s sole discretion.

 

24.5       Change of Control.  The Vendor will, within five Business Days after the occurrence of any direct or indirect change of control of the Vendor, give notice to the OCS of such change of Control, including reasonable details of the nature of the transaction or transactions giving rise to such change of Control and the identity of the person having Control of Vendor as a result thereof.

 

24.6       Amendments.  Subject as provided below, additions, deletions or modifications to the provisions of this Agreement shall not be effective unless expressed in writing and duly signed by the Parties to this Agreement.  The OCS may at any time, and from time to time, in its sole discretion, amend (i) the ordering procedures for Products; (ii) Eligible Products; (iii) the procedures for recalls, returns and refunds; and (iv) the Retailer Handbook.

 

24.7       Rights and Remedies.  The rights and remedies of the Parties under this Agreement are cumulative and are in addition to and not in substitution for any rights or remedies provided by law.  Any single or partial exercise by any Party of any right or remedy for default or breach of any term, covenant, condition or provision herein contained shall not affect the rights of such Party and shall not be deemed to be a waiver of, or alter, affect or prejudice any other right or remedy or other rights or remedies to which such Party may be lawfully entitled in respect of the same default or breach.

 

24.8       Severability.  If any provision in this Agreement or the Retailer Handbook is deemed illegal, invalid or unenforceable, then, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either of the Parties, to the fullest extent permitted by Applicable Laws: (a) all other provisions will remain in full force and effect and will be liberally construed in order to carry out the intent of the Parties as nearly as possible; (b) such invalidity, illegality or unenforceability will not affect the validity, legality or enforceability of any other provision of this Agreement or the Retailer Handbook; and (c) any court having jurisdiction will have the power to reform such invalid, illegal or unenforceable provision to the extent necessary for such provision to be enforceable under Applicable Laws.

 

24.9       Expenses. Except as otherwise expressly provided in this Agreement, each party will pay for its own costs and expenses incurred in connection with the negotiation, preparation, execution and performance of this Agreement, the agreements contemplated herein and the transactions contemplated herein and therein, including professional fees.

 

24.10    Notice.  Any notices to be given or required under this Agreement shall be in writing and shall be deemed to have been given when personally delivered, transmitted by email or other electronic means of communication or mailed by registered or certified mail, postage fee paid at addresses set out on the signature pages to this Agreement.

 

Notice may be given by any of the methods prescribed as follows:

 

(a)          by delivery, effective at the time of actual delivery;

(b)          by email or other form of electronic communication, effective on the next business day; or

(c)          by registered or certified mail, effective on the third business day following the deposit of a properly addressed form of notice in the mail; provided however, in the event of a disruption of regular postal service notice shall not be given by mail.

24.11    Parties Independent.  The Parties to this Agreement are mutually independent and this Agreement shall not be deemed to create or constitute a partnership, joint venture, agency or other form of joint enterprise between the Parties.  Neither Party shall have the right or authority or shall represent that it has the right or authority to undertake any obligations of any nature on behalf of the other Party.

 

24.12    Force Majeure.   The OCS shall not be liable for damages caused by delay or failure to perform its obligations under this Agreement where such delay or failure is caused by an event beyond its reasonable control.  The Parties agree that an event shall not be considered beyond one’s reasonable control if a reasonable business person applying due diligence in the same or similar circumstances under the same or similar obligations as those contained in the Agreement would have put in place contingency plans to either materially mitigate or negate the effects of such event. Without limiting the generality of the foregoing, the Parties agree that force majeure events shall include natural disasters and acts of war, insurrection and terrorism, embargoes, strikes, lockouts, and riots.  If the OCS seeks to excuse itself from its obligations under this Agreement due to a force majeure event, it shall notify the other Party of the delay or non-performance as soon as reasonably practicable following such force majeure event, the reason for such delay or non-performance and the anticipated period of delay or non-performance.

 

24.13    Survival.  The provisions contained in Sections 5, 7, 12.7, 16, 17, 18, 19, 21, 23.9 and any payment obligation contained in this Agreement and the Retailer Handbook shall survive the suspension, termination or expiration of this Agreement.

 

24.14    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

24.15    Attornment.   The Parties irrevocably submit and attorn to the exclusive jurisdiction of the courts of the Province of Ontario, Canada for the resolution of any disputes.

24.16    Independent Legal Advice.  The Vendor hereby declares that it has had the opportunity to seek independent legal advice with respect to this Agreement and the Vendor fully understands this Agreement.

 

24.17    Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement.  In the event that any signature is delivered by facsimile transmission or by electronic delivery of a scanned image, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or scanned image were an original thereof.

 

24.18    Language. The Parties have required that this Agreement and all documents and notices resulting from it be drawn up in English. Les Parties aux présents ont exigé que la présente convention ainsi que tous les documents et avis qui s’y rattachent ou qui en découleront soient rédigés en anglais.

 

SCHEDULE “C”

to the Retailer Agreement between the OCS and the Vendor

DATA SUBSCRIPTION PROGRAM TERMS AND CONDITIONS
SUBSCRIPTION OVERVIEW

Scope:

• Retail store level data pertaining to Vendor’s own retail sales of products purchased from the OCS pursuant to the Retailer Agreement for each Authorized Store, as outlined in Schedule A of the Agreement; and
• Aggregated data pertaining to all retail sales in the Province of Ontario

Price: $0

 

PRICE, INVOICING, AND PAYMENT

 

Price:

i. The Vendor agrees to pay to the OCS, for the provision of the Data Subscription Program Information, the price set out in this Schedule “C”, as applicable (the “Price”).

ii. The OCS may make changes to the Price in its sole discretion by providing ninety (90) days’ advance written notice to the Vendor, as applicable. The Price shall be revised by amendment to this Schedule and shall have immediate effect following the aforesaid notice period. Any change in Price to the Data Subscription Program shall apply to all Vendors. The OCS may not change the Price more than once per calendar year.

iii. All Prices and Rates are in Canadian Dollars and exclude applicable taxes.

Invoicing: The OCRC shall invoice the Vendor for the Price once per calendar year in respect of any annual fees included in the Price, as applicable. For ad hoc requests, the OCRC shall invoice the Vendor for each such request.

Payment: Payment shall be made by the Vendor within thirty (30) days of receipt of the invoice from the OCS or as otherwise provided herein, as applicable.

 

GENERAL TERMS AND CONDITIONS OF SUBSCRIPTION

Limitations: Without limiting the generality of Section 22 of the Agreement, the OCS reserves the right in its sole discretion: (i) to limit the time period during which access to the Data Subscription Program Information will be made available; (ii) to modify the manner in which it makes Data Subscription Program Information available; (iii) to modify the manner in which it reports and presents Data Subscription Program Information; (iv) to modify the type of Data Subscription Program Information that it makes available; (v) to discontinue providing Data Subscription Program Information; and (vi) to cancel the Data Subscription Program at any time. The OCS reserves the right in its absolute discretion to modify in all respects its general categories of data and the sub-sets within each category. The OCS further reserves the right to terminate the Vendor’s access to the Data Subscription Program Information if the Vendor is a purchaser from the OCRC under the Retailer Agreement and ceases the purchase of products from the OCRC in the ordinary course, irrespective of whether the Retailer Agreement has terminated.

No representations: The OCS will make reasonable efforts to ensure the accuracy and quality of the Data Subscription Program Information. The Vendor acknowledges that the OCS makes no representations, express or implied, about the accuracy, completeness, timeliness, availability, quality or suitability for a particular purpose of the Data Subscription Program Information. The OCS will not be responsible for any error, interpretive error or erroneous conclusions drawn as a result of the Vendor’s use of Data Subscription Program Information.

No Liability: The OCS shall not be liable for any delay or failure to provide access to the Data Subscription Program Information or any reason whatsoever including, without limitation, systems failure or technological failure or any other failure outside of the OCS’s control. In no event will the OCS be liable for damages in respect of special, indirect or consequential loss, even if the OCS has been advised of the possibility of such loss, including but not limited to lost profits, lost business revenues, failure to realize expected BUSINESS OPPORTUNITIES or any claim against the Vendor by any third party. The warranties of the OCS hereunder are in lieu of all other warranties or conditions of merchantable quality or fitness for a particular purpose and those arising by statute or otherwise in law or from a course of dealing or usage of trade.

GENERAL TERMS AND CONDITIONS OF USE OF DATA PLATFORM

 

The following terms and conditions govern your use of the sale of data website (the “Website”) which is owned by Ontario Cannabis Retail Corporation, doing business as the Ontario Cannabis Store (the “OCS”). The OCS reserves the right to change these Terms and Conditions of Use at any time without prior notice by posting changed Terms and Conditions of Use on the Website, and you are advised to review the Website regularly for any changes. These Terms and Conditions of Use were last updated on December 1, 2020. In any event, you agree that by accessing and using the Website you are bound by these terms and conditions as may be changed from time to time.

Copyright, Ownership and Use of Intellectual Property

The materials (the “Materials”) contained in the Website including, without limitation, information, videos, software, photos, graphics and sound are owned by, and protected by copyrights and other proprietary rights in favour of, OCS and third parties. All rights reserved.

YOU SHALL NOT MODIFY, PUBLISH, TRANSMIT, PARTICIPATE IN THE TRANSFER OR SALE, CREATE DERIVATIVE WORKS, OR IN ANY WAY EXPLOIT OR USE THE MATERIALS, IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF OCS.

Information Presented on Website

The OCS reserves the right, in its sole discretion, to modify the manner in which it provides information presented on this Website (“Information”) or the format in which it presents Information or to modify the type of information it makes available or to discontinue providing Information. The OCS will make reasonable efforts to ensure the accuracy of the Information. The OCS does not warrant that the Information is free of error. The OCS will not be responsible for any error in the Information. The OCS will not be responsible for any error, interpretive error or erroneous conclusions drawn as a result of your use of the Information.

INFORMATION IS PROVIDED TO YOU STRICTLY FOR YOUR OWN USE AND MAY NOT BE DUPLICATED, TRANSFERRED OR PROVIDED IN ANY MEDIUM OR FORMAT, IN WHOLE OR IN PART, TO ANY THIRD PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF THE OCS. FOR CLARITY, THE PRIOR WRITTEN PERMISSION OF THE OCS IS REQUIRED FOR ANY FORM OF PUBLICATION OR DISTRIBUTION OF THE INFORMATION OR ANY PART THEREOF.

Trade-marks

“OCRC”, “Ontario Cannabis Store”, “OCS” and related words and logos are official marks, trade-marks or trade-names of OCS in Canada. OCS is also the owner in Canada of additional official marks, trade-marks and trade names, registered and unregistered. Nothing in this Agreement or on the Website shall be construed as granting or conferring, either expressly, by implication, by estoppel or otherwise, a licence or other right to you to use any of the marks or names or any other intellectual property right of OCS. The names of other companies, products and services referred to on the Website may be trade-marks or trade-names of their respective owners. Any use of the trade-marks or trade-names of OCS or of third parties without the prior written consent of the applicable party is strictly prohibited.

Compliance with Laws

In addition to complying with these Terms and Conditions of Use, you agree to use the Website and Materials for lawful purposes only and in a manner consistent with local, national or international laws and regulations. Some jurisdictions may have restrictions on the use of the Internet by their residents.

Potential users of the Website, in any jurisdiction of the world whose laws (common, statutory, regulatory or codified) would: (i) void these Terms and Conditions of Use in whole or in any essential part (the essential parts being at least, but not only, the provisions relating to governing law, and limitation of liability); or (ii) render accessing the Website illegal, are unauthorized to use the Website.

Outbound Linking Policy

Any link, (including hyperlinks, buttons or referral devices of any kind) used on the Website is provided for your convenience only, and you access any link at your own risk. The appearance of a link on the Website does not constitute an endorsement, recommendation or certification by OCS, nor should the presence of a link in any way be construed as a suggestion that the site has any relationship with OCS.

Inbound Linking Policy

You may not create links to the Website from third party sites unless you have obtained the prior written approval of the OCS to do so.

Indemnity

You agree to indemnify, defend and hold OCS harmless from and against any and all claims, liabilities, damages, demands, suits, actions, losses or expenses (including all legal fees) (collectively “Claims”) arising out of:

a. your infringement of any OCS or third party official mark, trade-mark, trade secret, copyright, patent or other intellectual property rights and from any Claims which may arise, now or in the future as a result of your use of the Website;

b. any act or omission by you, your employees or agents which results in: (i) loss, damage, interference with or disruption to, the Website; (ii) use of the Website for any illegal purpose; or (iii) use of the Website to achieve any unauthorized or prohibited access to computer systems and data;

c. your use of the Website; and

d. your breach of any of these Terms of Use, or any rule, regulation, guideline or policy of OCRC as may be established and changed from time to time and posted on the Website.

Disclaimers

YOU UNDERSTAND AND AGREE THAT:

i. USE OF THE WEBSITE IS AT YOUR SOLE RISK. THE WEBSITE IS PROVIDED STRICTLY ON AN “AS IS”, “AS AVAILABLE” BASIS. OCRC DOES NOT WARRANT, REPRESENT, GUARANTEE OR COVENANT THAT THE WEBSITE WILL BE UNINTERRUPTED OR ERROR FREE; NOR DOES OCRC MAKE ANY GUARANTEE, WARRANTY, REPRESENTATION OR COVENANT AS TO THE RESULTS THAT MAY BE OBTAINED FROM THE USE OF THE WEBSITE, OR AS TO THE ACCURACY, RELIABILITY OR CONTENT OF ANY INFORMATION OR SERVICE ON THE WEBSITE. OCRC WILL NOT BE RESPONSIBLE FOR YOUR INABILITY TO EXECUTE A TRANSACTION OR OBTAIN GOODS RELATED TO ANY SUCH TRANSACTION, FOR WHATEVER REASON.

ii. THE DOWNLOADING OF MATERIALS FROM THE WEBSITE IS DONE AT YOUR OWN RISK. OCRC DOES NOT AT ANY TIME REPRESENT, COVENANT, GUARANTEE OR WARRANT THAT SUCH MATERIALS ARE FREE OF VIRUSES, WORMS, TROJAN HORSES OR OTHER DESTRUCTIVE CODE. YOU ARE RESPONSIBLE FOR IMPLEMENTING SAFEGUARDS TO PROTECT YOUR COMPUTER SYSTEM AND DATA AND YOU ARE RESPONSIBLE FOR THE ENTIRE COST OF ANY SERVICE, REPAIRS OR CORRECTIONS NECESSARY AS A RESULT OF THE USE OF THE WEBSITE.

Limitations

IN NO EVENT SHALL OCRC BE LIABLE TO YOU FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL, COMPENSATORY OR PUNITIVE DAMAGES OR LOSSES, OR DAMAGES FOR LOSS OF INCOME, LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF DATA OR BUSINESS INFORMATION, OR LOSS OF OR DAMAGE TO PROPERTY, OR CLAIMS OF THIRD PARTIES, OR OTHER PECUNIARY LOSS, ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE USE OF THE WEBSITE, THE USE OF ANY OTHER SITE OR PAGE ACCESSIBLE FROM THE WEBSITE OR THE ACQUISITION OR USE OF ANY INFORMATION MADE AVAILABLE THROUGH THE WEBSITE. IN NO EVENT WILL THE CUMULATIVE LIABILITY OF OCRC ARISING OUT OF OR RELATED TO THIS AGREEMENT OR TO ANY SUCH USE OR ACQUISITION EXCEED THE REPLACEMENT COST OF ANY SUCH INFORMATION. To the extent that some jurisdictions do not allow exclusions or limitations on some categories of damages, these exclusions or limitations may not apply to you.

THE FOREGOING DISCLAIMERS AND LIMITATIONS OF LIABILITY APPLY REGARDLESS OF THE CAUSES, CIRCUMSTANCES OR FORM OF ACTION GIVING RISE TO THE LOSS, DAMAGE, CLAIM OR LIABILITY, EVEN IF SUCH LOSS, DAMAGE, CLAIM OR LIABILITY IS BASED UPON BREACH OF CONTRACT (INCLUDING, WITHOUT LIMITATION, A CLAIM OF FUNDAMENTAL BREACH OR BREACH OF A FUNDAMENTAL TERM), TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE), STRICT LIABILITY OR ANY OTHER LEGAL OR EQUITABLE THEORY, AND EVEN IF ADVISED OF THE POSSIBILITY OF THE LOSS, DAMAGE, DELAY, CLAIM OR LIABILITY.