This indemnity agreement is made by and between One Trading Ltd. of 1111 Flint Road, Unit 29, North York, ON M3J 3C7 and customers (collectively referred to as "Parties" and singularly as "Party"), effective upon the latest date of execution of the Agreement by the Parties hereto October 1, 2024.
WHEREAS the Retailer is in the business of operating brick and mortar retail stores, ecommerce websites, wholesale distribution channels, or any combination of these and in conducting such business offers for consumption, use or sale certain vaping products manufactured in Canada or imported to Canada which are subject to the Excise Act 2001 (the "Act");
AND WHEREAS the Parties have a non-exclusive retailer-supplier relationship which includes the sale by One Trading Ltd. to the Retailer of vaping products which are subject to the Act and the Customs Act (the "Products");
AND WHEREAS the Retailer has agreed to be liable under the Act and the Customs Act to pay duties levied on the Products and acknowledges that it is required to pay the vaping duty and the additional vaping duty imposed at the time of accounting to the applicable governmental authority and the Parties wish to confirm the indemnity provided to One Trading Ltd. by the Retailer for the additional vaping duty in respect of specified vaping provinces imposed under the Act for the Additional Duty Provinces (as defined below);
NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, the sale of Products by One Trading Ltd. to the Retailer, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the Parties, the Parties covenant and agree as follows:
Acknowledgement regarding Additional Excise Duty. The Retailer acknowledges that pursuant to the Act, including, without limitation, Section 158.58 of the Act, and Section 3 of the Excise Duties on Vaping Products Regulations (the "Regulations"), vaping products intended for consumption, use, or sale to consumers in Ontario, Quebec, Northwest Territories, Nunavut, and any other province prescribed in Section 2 of the Regulations ("Additional Duty Provinces") are subject to an additional excise duty pursuant to Section 158.58 of the Act and must be stamped as duty-paid for the applicable Additional Duty Province. By ordering Products from One Trading Ltd, the Retailer (a) acknowledges that the Retailer has read and understands this Agreement; (b) represents and warrants to One Trading Ltd. that the Retailer has the right, power, and authority to enter into this Agreement and, if entering into this Agreement for an organization, that the Retailer has the legal authority to bind that organization; and (c) accepts this Agreement and agrees that it is legally bound by its terms. If the Retailer does not comply with this Agreement, the Retailer acknowledges that it cannot order Products from One Trading Ltd. and that One Trading Ltd. further reserves the right to cancel any Product orders currently submitted by the Retailer to One Trading Ltd. without liability to One Trading Ltd.
Representation and Warranty. The Retailer hereby represents and declares to One Trading Ltd. that it has not ordered, and throughout the supplier relationship with One Trading Ltd. will not order vaping products from One Trading Ltd. for consumption, use or sale to consumers in Additional Duty Provinces unless they are stamped as duty-paid for the particular Additional Duty Province where the vaping products are to be consumed, used or sold. The Retailer acknowledges that the Excise Duties on Vaping Products Regulations has come into force on July 1, 2024 and allows for a transition period between July 1, 2024 and September 30, 2024. The Retailer acknowledges that its entire inventory of vaping products intended for consumption, use, or sale in Additional Duty Provinces must be stamped as duty-paid for the applicable Additional Duty Province after September 30, 2024. The Retailer agrees to comply with the provisions of the Act, the Customs Act, the Customs Tariffs and the Regulations together with all other legislative and regulatory requirements in respect of its purchase of the Products and consumption, use or sale to consumers in Additional Duty Provinces (the "Regulatory Requirements"), when and after purchasing vaping Products from One Trading Ltd. The Retailer acknowledges that the Retailer has read and understands the Regulatory Requirements and covenants to comply in all respect with the the Retailer to comply with any amendments, variations or replacements to the Regulatory Requirements.
Indemnity. The Retailer acknowledges that One Trading Ltd. relies on this Agreement and agrees to indemnify, release, defend, save and hold harmless One Trading Ltd. for all claims, losses, liabilities, damages, deficiencies, actions, judgments, settlements, interest, awards, penalties, fines, fees, expenses or costs (including without limitation, reasonable legal costs) of any kind whatsoever, resulting from, or in connection with, the Retailer's use, sale or distribution of Products in Additional Duty Provinces or any non-compliance by the Retailer with the Regulatory Requirements or for any consequence that results from the undersigned's deviation from the Regulatory Requirements. The Parties agree that in no event will One Trading Ltd. be liable under or in connection with this Agreement under any legal or equitable theory, including breach of contract, to including negligence), strict liability, or otherwise, for any: (a) consequential, incidental, indirect, exemplary, special, aggravated, or punitive damages; (b) increased costs, diminution in value or lost business, production, revenues, or profits; (e) loss of goodwill or reputation; (d) any amount owing under the Regulatory Requirements; or (e) compliance with the Regulatory Requirements, in each case regardless of whether One Trading Ltd. was advised of the possibility of such losses or damages or such losses or damages were otherwise foreseeable.
Disclosure. The Retailer agrees to provide One Trading Ltd. with appropriate information such as distribution records that substantiate the Retailer's compliance with the Regulatory Requirements if requested by One Trading Ltd. as a result of any investigation or penalty imposed by Canada Revenue Agency, Canada Border Services Agency, or any government authority. The Retailer shall deliver to One Trading Ltd. from time to time promptly upon request (i) any documents of title, bills of sale, conveyancing documents, instruments, stamps, and chattel paper constituting. representing, or relating to the Products; (ii) all books of account and all records, ledgers, reports, correspondence, schedules, documents, statements, lists, and other writings relating to the Products for the purpose of inspecting, auditing, or copying; and (iii) any information concerning the Products, the undersigned, and the undersigned's business and affairs as it relates to the Regulatory Requirements. One Trading Ltd. reserves the right to cancel or terminate sales to the undersigned at the sole discretion of One Trading Ltd.
Binding Nature and Severability. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, successors, assigns, affiliates, related entities and legal representatives, together with their respective officers, directors, employees, partners, representatives, shareholders and owners, as applicable. Should any term or provision hereof be decmed invalid, void or of no effect by a court or forum of competent jurisdiction, such term or provision shall be deemed severable without prejudice to the remaining terms and provisions of this Agreement, all of which shall continue in full force and effect. This Agreement shall remain in full force and effect for so long as the parties are engaged in a retailer-supplier relationship, provided that the indemnity shall survive the termination of the retailer-supplier relationship.
Independent Legal Advice. Each of the Parties hereby acknowledges that it has been afforded the opportunity to obtain independent legal advice and confirms by the execution and delivery of this Agreement that they have either done so or waived their right to do so in connection with the entering into of this Agreement.
Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the Province of Ontario and the laws of Canada.
Counterparts. This Agreement may be executed in multiple counterparts, including those in electronic or digital form, each of which shall be deemed an original and all of which shall constitute the same document.