This Indemnity Agreement (the "Agreement") is entered into by and between Giant Distribution ("GD"), with its principal place of business at 5700 125A Ave Edmonton, AB T5W 5H2, and the undersigned retailer (the "Retailer"), collectively referred to as the "Parties" and individually as a "Party." This Agreement is effective as of the date of the Retailer’s signature below (the "Effective Date"). WHEREAS, the Retailer is engaged in the sale, distribution, or resale of vaping products, whether through physical retail, ecommerce, or wholesale channels. WHEREAS, under Canadian federal law, including the Excise Act, 2001 and related Excise Duties on Vaping Products Regulations (the "Regulations"), specific excise duty and additional duties apply to vaping products manufactured in or imported into Canada. WHEREAS, additional excise duty ("Additional Duty") applies in specified provinces and territories including Ontario, Quebec, Northwest Territories, and Nunavut, as well as any future provinces listed in the Regulations ("Additional Duty Provinces"). WHEREAS, federal excise-stamped products must be properly marked and duty-paid for distribution and sale within the provinces and territories that enforce such requirements. NOW THEREFORE, in consideration of the mutual covenants herein, the Retailer agrees as follows: Acknowledgment of Excise Duty ComplianceThe Retailer acknowledges and agrees that all vaping products sold by GD are subject to excise duty under the Excise Act, 2001. The Retailer shall ensure that all such products are distributed and sold in accordance with applicable federal and provincial laws. This includes the responsibility to comply with the Additional Duty where required, and to only resell products within the intended jurisdiction of excise stamping. Limitation on Federal Excise-Stamped ProductThe Retailer understands and agrees that federally excise-stamped products are currently permitted for legal resale and distribution only within specific provinces or territories that have adopted the federal excise stamping regime. As of the Effective Date, only Saskatchewan, British Columbia, Nova Scotia, and Newfoundland and Labrador are recognized as allowing resale of federal excise-stamped product. As of June 2025, the following provinces and territories in Canada participate in the federal coordinated vaping excise duty system, meaning they impose both federal and matching provincial excise duties on vaping products. Participating Provinces and Territories Initial Participants (since July 1, 2024): Ontario Quebec Northwest Territories Nunavut Additional Participants (effective January 1, 2025): Alberta Manitoba New Brunswick Prince Edward Island Yukon In these jurisdictions, vaping products are subject to both federal and provincial excise duties. The combined duty rate is $2.24 per 2 mL for the first 10 mL of vaping liquid and $2.24 per 10 mL thereafter. This includes $1.12 in federal duty and $1.12 in provincial duty. Starting April 1, 2025, all vaping products sold in these provinces and territories must bear a province-specific excise stamp. Products with only the federal (peach-colored) excise stamp are no longer permitted for sale in these jurisdictions. Non-Participating Provinces The following provinces have not entered the coordinated vaping duty system and only impose the federal excise duty: British Columbia Saskatchewan Nova Scotia Newfoundland and Labrador These provinces may have their own provincial taxes on vaping products, but they are separate from the federal coordinated system. In summary, nine provinces and territories currently participate in the federal coordinated vaping excise duty system, requiring both federal and provincial excise duties and province-specific excise stamps on vaping products. Accordingly, by signing this Agreement, the Retailer affirms that any federal excise-stamped vaping products purchased from GD will only be distributed or sold in provinces that have formally adopted the federal excise regime. The Retailer shall indemnify and hold harmless GD from any liability, fines, penalties, or enforcement action arising from the sale, use, or transfer of such products in non-compliant jurisdictions. Indemnification ClauseThe Retailer agrees to indemnify, defend, and hold harmless GD, its officers, directors, employees, and affiliates, from all claims, liabilities, damages, losses, fines, penalties, or legal costs arising out of or related to: Misuse or unauthorized distribution of federally stamped products. Breach of federal or provincial excise laws. Non-compliance with Regulatory Requirements; or Any resale of products outside approved jurisdictions. Inspection Rights and DocumentationThe Retailer agrees to provide GD with necessary documentation, access to sales records, and any other information that substantiates its compliance with the Regulations and this Agreement, upon reasonable request. TerminationThis Agreement may be terminated by either Party upon written notice. However, all indemnity obligations of the Retailer shall survive termination. Severability and Binding EffectIf any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall remain in full force. This Agreement shall bind and benefit the Parties and their respective successors and assigns. Independent Legal AdviceEach Party acknowledges having had the opportunity to obtain independent legal advice before signing this Agreement. Governing LawThis Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein. IN WITNESS WHEREOF, the Retailer has read, understood, and voluntarily agreed to the terms of this Agreement as of the Effective Date.
