8.1 Dispute Resolution

(a) Any controversy or dispute arising out of or relating to this Agreement, including its validity, existence, breach, termination, construction or application, or the rights, duties or obligations of any Party or any other legal relationship associated with or arising from this Agreement (a “Dispute”) shall be resolved in the manner set forth in this Section 8.1.

(b) A Party claiming that a Dispute has arisen shall provide Notice of such Dispute to the other party or parties to the Dispute (collectively, the “Dispute Parties”). The Notice shall include a concise description of the Dispute and the position of the party providing the Notice. The Dispute Parties shall discuss and negotiate the potential resolution of the Dispute in good faith with the intent of reaching an equitable solution for each such Dispute Party, acting reasonably, within 30 days of such Notice.

(c) All rights and obligations of the Parties under this Agreement shall continue during any Dispute resolution proceedings pursuant to this Section 8.1.

(d) Any Dispute not resolved in its entirety pursuant to the process set forth in Section 8.1(b) within the 30-day period specified in that Section shall be referred to and determined by arbitration before a single arbitrator in accordance with the Arbitration Act, 1991 (Ontario) (or the International Commercial Arbitration Act (Ontario), as applicable) and the procedures set out in Schedule 8.1 to this Agreement.

(e) A Dispute Party may apply to the Ontario Superior Court of Justice for interim measures of protection at any time prior to the appointment of an Arbitration Tribunal pursuant to Section 8.1(d) and Schedule 8.1 to this Agreement.

8.2 Enurement

This Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors (including any successor by reason of amalgamation of any Party).

8.3 Entire Agreement

This Agreement together with the other New Beer Agreements constitutes the entire agreement between the Parties pertaining to the subject matter of this Agreement and sets out all the covenants, promises, warranties, representations, conditions, understandings and agreements between the Parties pertaining to that subject matter and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, pertaining to that subject matter. There are no covenants, promises, warranties, representations, conditions, understandings or other agreements, oral or written, express, implied or collateral between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement and the other New Beer Agreements.

8.4 Term

The New Beer Agreements shall be in effect for an initial period of 10 years (the “Initial Term”), subject to renewal for successive five year renewal terms (each, a “Renewal Term”) unless terminated in accordance with Section 8.5(a) or unless terminated earlier in accordance with Section 8.5(b).

8.5 Termination

(a) Either of the Corporation or the Province may terminate each of the New Beer Agreements at the end of the Initial Term or any Renewal Term by giving a Notice to that effect to the other at least two years prior to the end of such Initial Term or Renewal Term.

(b) This Agreement shall also terminate prior to the end of the Term upon:

(i) the written agreement of the Corporation and the Province;

(ii) the dissolution or bankruptcy of the Corporation or the making by the Corporation of an assignment under the provisions of the Bankruptcy and Insolvency Act (Canada); or

(iii) Notice of termination for material breach pursuant to Section 8.6(c)(i) or 8.6(d);

except that the provisions of Sections 8.1, 8.6 and 8.7 shall continue in the event of a termination.

8.6 Remedies for Breach

(a) Any allegation of material breach of this Agreement (or with respect to Section 8.6(d), the Shareholders Agreement) shall be resolved pursuant to Sections 8.1 and 8.6, including the requirement in Section 8.1(b) of a Notice of Dispute. In determining whether such a material breach has occurred, an Arbitration Tribunal appointed pursuant to Section 8.1(d) and Schedule 8.1 shall treat all obligations in this Agreement, including post-termination obligations in Section 8.7, as binding and enforceable against the Province despite its status as the Crown, even where the alleged breach results from a change in legislation or public policy.

(b) If an Arbitration Tribunal appointed pursuant to Section 8.1(d) and Schedule 8.1 has issued a final award (having been affirmed on appeal, or the appeal period having expired, a “Final Award”) declaring that a material breach of this Agreement (or with respect to Section 8.6(d), the Shareholders Agreement) has occurred, the Party found to have been in breach shall have 90 days within which to cure the breach, if it is capable of being cured (or, if the Party found to have been in breach is the Province, and to cure such breach would require that legislation be adopted, such longer period of time as is reasonably required to account for any relevant period during which the Legislature of Ontario is not in session). In awarding such a declaration, the Arbitration Tribunal shall determine whether the material breach is also a Critical Breach as defined in Section 8.6(c)(iii).

(c) If a material breach of this Agreement is incapable of being cured, or the breaching party has failed to cure it within the period specified in Section 8.6(b), the Party or Parties that obtained the declaration of material breach shall elect one of the following three remedies:

(i) termination of this Agreement and of the other New Beer Agreements (except for the Termination Agreement), on Notice, subject to a transitional period of 90 days or such longer period as may be agreed by the Parties;

(ii) payment by the breaching Party or Parties of a monetary award in an amount to be assessed on a several (not joint or joint and several) basis by the same Arbitration Tribunal that granted the declaration in Section 8.6(b). Such an award shall be calculated on the basis of the normal principles of damages for breach of contract, even if the Arbitration Tribunal finds that damages would not be available in law due to the status of the Province as the Crown. The Arbitration Tribunal shall also award costs of the arbitration and interest as set out in Schedule 8.1;

(iii) if a breach by the Province or the LCBO was found by the Arbitration Tribunal to also be a Critical Breach, and such Critical Breach occurred on or before June 30, 2018, the Corporation may terminate its obligations to continue to make further capital expenditures under Section 6.1(b). A “Critical Breach” is a material breach of any of the provisions of this Agreement relating to the following:

(A) sale of Beer to Licensees by the LCBO contrary to Section 6.7(c) with knowledge by the LCBO of such breach, or authorization of New Outlets to sell beverage alcohol to a Licensee contrary to Section 6.5(a);

(B) authorization of New Outlets in excess of the maximums set out in Section 6.5;

(C) a breach by the Province of paragraph (h) of Schedule 6.5;

(D) sale of Beer by the LCBO (other than in Combination Stores), or authorizing New Outlets to sell Beer, in formats larger than Six- Packs or with Pack-up Pricing contrary to Section 6.4 or paragraph (f) of Schedule 6.5; or

(E) a breach by the Province of paragraphs (k) or (q) of Schedule 6.5.

For clarity, the list of material breaches that would constitute a Critical Breach is not intended to be an exhaustive list of what could constitute a material breach of this Agreement; or

(iv) if a breach by the Province or the LCBO was found by the Arbitration Tribunal to also be a Critical Breach, and such Critical Breach occurred after June 30, 2018, the Corporation may terminate the ODRP Agreement effective as of a specified date that is at least two years after the date on which the Corporation provides Notice to the Province of such termination (for clarity, such Notice may not be provided prior to the Final Award declaring that such Critical Breach has occurred and the expiry of the period to cure such Critical Breach as contemplated by Section 8.6(b)).

For clarity, if the breach is not a Critical Breach, the election is between one of (i) or (ii) above; and if it is a Critical Breach, the election is between one of (i), (ii), (iii) or (iv) (depending upon when the Critical Breach was found to have occurred).

(d) If a material breach by the Corporation of the Shareholders Agreement or by one or more of the Original Owners of the representation set out in section 3.4 of the Shareholders Agreement or to vote their shares to elect or remove Directors as required by section 4.1(b) or 4.4 of the Shareholders Agreement, is incapable of being cured, or the breaching party has failed to cure it within the period specified in Section 8.6(b), and no party to the Shareholders Agreement has already obtained a Final Award from an Arbitration Tribunal under that Agreement in respect of the same breach or such Final Award has not yet been satisfied by the Corporation or the Original Owners, as the case may be, the Province may elect to terminate this Agreement and the other New Beer Agreements (except for the Termination Agreement) on Notice, subject to a transitional period of 180 days or such longer period as may be agreed by the Parties.

8.7 Effect of Termination

Following termination:

(a) in accordance with applicable law, the Original Owners shall be allowed to distribute or arrange to have distributed their products in Ontario on a basis similar to that of other Brewers;

(b) the Corporation shall, subject to applicable law:

(i) be authorized to continue to distribute and sell Beer at the locations at which it then operates for a period of at least seven years from the date of such termination, subject to compliance with any requirements established by the Regulator from time to time that are applicable as well to other distributors and retailers of Beer (for clarity, following such termination there shall be no restrictions on the nature or number of other outlets or distribution channels that may be authorized by the Province to distribute or sell Beer in Ontario); and

(ii) provide transitional distribution services over a reasonable period of time sufficient to enable Brewers to obtain alternative distribution services, at rates determined on a cost recovery basis;

(c) the Termination Agreement will remain in effect;

(d) the Corporation and the Original Owners waive any right to bring any claim or to seek or obtain any compensation or other remedy of any kind, including for breach of contract, for restitution, under tort or trust law or in respect of expropriation under domestic law, against the Province or the LCBO: (i) in connection with such termination; (ii) based upon rights that the Corporation and the Original Owners have or had under the New Beer Agreements or the 2000 Framework Agreement; or (iii) based upon preferential sales or distribution rights that the Corporation and the Original Owners have or had under or in connection with other agreements or accommodations with the LCBO or the Province (including any such agreements or accommodations that predate the 2000 Framework Agreement); and

(e) the Corporation and the Original Owners waive any right to bring any claim or to seek or obtain any compensation or other remedy of any kind under international law or under any international trade agreements to which Canada is a Party, including the North American Free Trade Agreement (“NAFTA”), against the Province, the LCBO or Canada: (i) in connection with such termination; (ii) based upon rights that the Corporation and the Original Owners have or had under the New Beer Agreements or the 2000 Framework Agreement; or (iii) based upon preferential sales or distribution rights that the Corporation and the Original Owners have or had under or in connection with other agreements or accommodations with the LCBO or the Province (including any such agreements or accommodations that predate the 2000 Framework Agreement). With respect to the rights waived in this Section 8.7(e), the Corporation and the Original Owners will not provide their consent to arbitrate pursuant to Article 1121 of NAFTA, nor provide their consent to arbitrate under any similar provision in other applicable trade agreements.

For clarity, neither clause (d) nor (e) of this Section 8.7 is intended to limit:

(f) any rights or claims of the Corporation or the Original Owners in respect of any new actions or measures taken by the Province or the LCBO after the termination of this Agreement provided that the subject-matter of the claim advanced or remedy sought is not based upon rights that the Corporation and the Original Owners have or had under the New Beer Agreements or the 2000 Framework Agreement or preferential sales or distribution rights that the Corporation and the Original Owners have or had under or in connection with other agreements or accommodations with the LCBO or the Province (including any such agreements or accommodations that predate the 2000 Framework Agreement). For further clarity, the Corporation and the Original Owners do not waive in relation to any such new actions or measures:

(i) any rights or claims for direct expropriation of real property;

(ii) any rights or claims if the Corporation were precluded from or subject to discrimination with respect to the sale or distribution of beer in Ontario;

(iii) any rights or claims of the Original Owners with respect to nondiscriminatory treatment for all brewers in connection with the sale and distribution of beer in Ontario consistent with domestic and international trade law norms; or

(g) any rights or claims of the Parties to contribution or indemnity or a claim over against each other (including by the Corporation or an Original Owner against agents of the Province, such as the LCBO), if a third party has brought a claim against one or more of the Parties.

8.8 Independent Legal Advice

The Parties acknowledge that they have entered into this Agreement willingly with full knowledge of the obligations imposed by the terms of this Agreement. The Parties acknowledge that they have been afforded the opportunity to obtain independent legal advice and confirm by the execution of this Agreement that they have either done so or waived their right to do so, and agree that this Agreement constitutes a binding legal obligation and that they are estopped from raising any claim on the basis that they have not obtained such advice.

8.9 Notices

Any notice, consent or approval required or permitted to be given in connection with this Agreement (a “Notice”) shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile or e-mail:

(a) in the case of a Notice to the Corporation at:

Brewers Retail Inc.
5900 Explorer Drive
Mississauga, Ontario, L4W 5L2

Attention: President
Fax: (905) 361-4240

(b) in the case of a Notice to Labatt at:

Labatt Brewing Company Limited
207 Queen’s Quay West
Suite 299, P.O. Box 133
Toronto, Ontario
M5J 1A7

Attention: General Counsel
Fax: (416) 681-4087

(c) in the case of a Notice to Molson at:

Molson Canada 2005
33 Carlingview Drive
Etobicoke, Ontario
M9W 5E4

Attention: Vice President, General Counsel
Fax: (416) 679-0630

(d) in the case of a Notice to Sleeman at:

Sleeman Breweries Ltd.
551 Clair Road
Guelph, Ontario
N1L 1E9

Attention: President and Chief Executive Officer

Fax: (519) 822-3164

(e) in the case of a Notice to the Province at:

Ministry of Finance
Frost Building South
7 Queen’s Park Crescent, 7th floor
Toronto, Ontario
M7A 1Y7

Attention: Deputy Minister of Finance
Fax: 416-325-1595

Copy to: Director, Ministry of Finance Legal Services Branch
Address: College Park 777 Bay Street, 11th floor, Toronto, Ontario M5G 2C8
Fax: 416-325-1460

Any Notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if the Notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a Business Day then the Notice shall be deemed to have been given and received on the next Business Day.

Any Party may, from time to time, change its address by giving Notice to the other Parties in accordance with the provisions of this Section.

8.10 Amendments and Waivers

No amendment to this Agreement shall be valid or binding unless approved in accordance with this Agreement, set forth in writing and duly executed by each of the Parties. No waiver of any breach of any provision of this Agreement shall be effective or binding unless made in writing and signed by the Party purporting to give such waiver and, unless otherwise provided in the written waiver, shall be limited to the specific breach waived.

8.11 Assignment

Except as may be expressly provided in this Agreement, none of the Parties to this Agreement may assign its rights or obligations under this Agreement without the prior written consent of all of the other Parties.

8.12 Execution and Delivery

This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile and all such counterparts and facsimiles shall together constitute one and the same agreement.

[Signature pages follow]

IN WITNESS OF WHICH the Parties have duly executed this Agreement.

LABATT BREWING COMPANY LIMITED

By:
Name:
Title:

By:
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MOLSON CANADA 2005

By:
Name:
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By:
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SLEEMAN BREWERIES LTD.

By:
Name:
Title:

By:
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BREWERS RETAIL INC.

By:
Name:
Title:

By:
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HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by the Minister of Finance

By:
Name:
Title: