(a) For purposes of Schedule 6.5, Small Brewer is defined as follows:

“Small Brewer” means, in respect of a Sales Year, a Brewer that meets each of the following qualifications in respect of the prior Production Year:

(i) it has worldwide production of Beer in the previous Production Year that was not more than 400,000 hectolitres or, if this is the first Production Year in which it manufactures Beer, worldwide production of Beer for the Production Year that is not expected to be more than 400,000 hectolitres;

(ii) any Affiliate it has that manufactures Beer meets the qualifications set out in (i) above.

For purposes of this definition:

(iii) the following will be included in determining the amount of a Small Brewer’s worldwide production of Beer for a particular Production Year:

(A) all Beer manufactured during the Production Year by the Small Brewer, including Beer that is manufactured under contract for another Brewer, whether or not that other Brewer is a Small Brewer;

(B) all Beer manufactured during the Production Year by an Affiliate of the Small Brewer, including Beer manufactured by the Affiliate under contract for another Brewer, whether or not that other Brewer is a Small Brewer; and

(C) all Beer manufactured during the Production Year by another Brewer under contract for the Brewer or for an Affiliate of the Brewer.

(iv) A contract referred to in clause (iii) does not include a contract, agreement or arrangement that provides only for the final bottling or other packaging by a Brewer, including any incidental processes such as final filtration and final carbonation or the addition of any substance to the Beer that, if added, must be added at the time of final filtration.

(b) New Outlets will be either Grocery Stores or Standalone Outlets. For the avoidance of doubt, none of the following shall be considered to be New Outlets:

(i) existing or future LCBO stores;

(ii) existing or future stores operated by the Corporation;

(iii) existing or future LCBO agency stores;

(iv) existing or future on-site (primary or secondary) manufacturer retail stores;

(v) existing or future duty-free stores; and

(vi) existing off-site Ontario winery retail stores (to the extent that they are not authorized to sell Beer).

(c) The Province shall mandate that the aggregate annual Beer sales of all such operating New Outlets shall be subject to an annual cap, which if exceeded, will give rise to the payment of a Cost of Service Rebate as described below. The annual cap will be established as follows:

(i) from and after May 1, 2017, 1,012,500 hectolitres of Beer (which limit shall be increased or decreased by any percentage change in aggregate Beer sales in Ontario from the Effective Date, provided that such limit shall never be less than 1,012,500 hectolitres) (the “Final Annual Volume Cap”); or

(ii) from the Effective Date to April 30, 2017, an amount equal to 60% of the Final Annual Volume Cap (the “Initial Annual Volume Cap”) (the Final Annual Volume Cap and the Initial Annual Volume Cap are each referred to as an “Annual Volume Cap”). The applicable Annual Volume Cap will be pro-rated for any applicable period that is less than one calendar year.

(d) To the extent that the applicable Annual Volume Cap is exceeded in any calendar year, or in any period that is less than one calendar year, the Province shall, or shall cause the LCBO to, pay to Brewers selling Beer Through the Corporation, in proportion to their respective share of the total volume of Beer sold Through the Corporation during the same time period, a cost of service rebate determined in accordance with paragraph (e) (the “Cost of Service Rebate”), and such cash payment shall be made by the LCBO to each Brewer no later than the later of:

(i) 60 days from the end of such period; or

(ii) 30 days after the Corporation has provided to the LCBO the proportions of such Cost of Service Rebate to be paid to each such Brewer.

(e) The Cost of Service Rebate shall be the following amount per hectolitre sold through operating New Outlets in excess of the applicable Annual Volume Cap:

(i) $5.00, during any applicable period prior to May 1, 2017; and

(ii) for any applicable period following May 1, 2017, the amount that is equal to:

(1) the amount, if any, by which:

(a) the LCBO in-store cost of service charge in effect in respect of such period, expressed as a per hectolitre rate; exceeds

(b) the volume-weighted average TBS basic service fee for packaged Beer sold at retail (including all subsequent adjustments to such fee made in respect of such fiscal year), expressed as a per hectolitre rate, (the “TBS Average Service Fee”) in effect in respect of such period; multiplied by

(2) the percentage that is equal to the amount that $5.00 represents in percentage terms of the difference between the TBS Average Service Fee and the LCBO in-store cost of service charge, expressed as a per hectolitre rate, each as of April 1, 2016.

(f) The Province shall not authorize New Outlets to sell Beer in formats larger than Six-Packs and shall not authorize New Outlets to provide Pack-up Pricing.

(g) Except as specifically set out in the New Beer Agreements, the Province shall mandate that New Outlets be subject to the same laws, regulations and policies of the Regulator to which the Corporation is subject, with respect to permissible hours of sale, permissible days of operation, minimum retail price and uniform retail price as described in paragraph (h) of this Schedule. The New Outlets shall also be required to ensure that any public communication of the Consumer Retail Price of Beer shall be inclusive of all commodity and sales taxes and any applicable refundable container deposit. Subject to any rights of the Province under the ODRP Agreement, the Province shall not permit New Outlets to accept returns of empty Beer containers.

(h) Consistent with the Liquor Control Act (Ontario), the Province shall mandate that the Consumer Retail Price of Beer shall be uniform across all retail outlets authorized or licensed to sell beverage alcohol in Ontario, which, for clarity, excludes sales to Licensees but includes sales by the New Outlets to retail consumers.

(i) The Province shall prohibit electronic ordering of Beer by retail consumers and licensees at or through New Outlets. However, arrangements allowing electronic ordering and home delivery in existence as of April 16, 2015 shall not be terminated or curtailed. No New Outlet shall be permitted to offer Beer for sale pursuant to click-and-collect services whereby a customer places an order electronically (i.e., including placing an order on-line through the internet, telephone, hand-held device or other means of communication) and picks up the order from the New Outlet.

(j) The Province shall mandate that operators of New Outlets holding, directly or indirectly, a liquor delivery service licence issued by the Regulator purchase all Beer for delivery under such liquor delivery service licence from a Government Store. A New Outlet that acquires, directly or indirectly, a liquor delivery service licence will be mandated not to purchase Beer in formats larger than Six-Packs from New Outlets or from the LCBO other than from Combination Stores (and may not fill such orders from its inventory otherwise held) for delivery under such liquor delivery service licence. The trade spend prohibitions set out in paragraph (q) of this Schedule shall apply when the holder of a liquor delivery service licence obtains a licence to sell Beer in its Grocery Stores or Stand-alone Outlets. The Province shall also mandate that each New Outlet holding, directly or indirectly, a liquor delivery service licence comply with the Beer brand assortment parameters described in paragraph (l) of this Schedule.

(k) The Province shall permit in-store tastings of Beer to consumers at the New Outlets, either by the operator of the New Outlet or a Brewer. However, the Province shall prohibit the operator of a New Outlet from charging or accepting from a Brewer any form of consideration, including monetary and non-monetary consideration, for the provision of or ability to provide in-store tastings. Where the Brewer conducts an in-store tasting the operator of the New Outlet may require that the Brewer provide its own staff to conduct the tasting.

(l) The Province shall mandate that the operator of each New Outlet shall offer for sale at each of its applicable retail outlets a variety of brands of Beer from manufacturers with a variety of annual production amounts. The Province shall not mandate that any New Outlets exclude any Brewer based on ownership or production volumes.

(m) Each New Outlet shall ensure that not less than 20% of the Beer on display for sale to consumers, measured by Single Containers or equivalents, is produced by Small Brewers. The Province shall not require that New Outlets meet minimum sales or purchase requirements for the products of any Brewer or the products of any class of Brewers.

(n) The Province shall mandate that no New Outlet or Brewer be permitted to enter into any agreement or arrangement with each other, or exchange any form of consideration, in respect of the provision of any amount of shelf space, product listings or any merchandising, marketing or promotional opportunity.

(o) The Province shall prohibit New Outlets from selling Beer where they, or any of their Affiliates, owns the brand or has any commercial interest in the brand or a trademark with which the brand is marketed whether the Beer is manufactured by them or by another Beer manufacturer. Other than the foregoing, New Outlets may select the brands of Beer that they offer for sale from the full assortment of brands of Beer sold by the Corporation and the LCBO subject to certain exclusions that may be implemented from time to time by the Regulator based on public policy considerations.

(p) The LCBO shall be the wholesaler of record to the New Outlets and all Beer sold through the New Outlets shall be ordered and purchased through the LCBO. Beer wholesaled by the LCBO to New Outlets will be subject to LCBO mark-ups and cost of service charges in effect from time to time. The Province shall cause the LCBO to ensure that such LCBO mark-ups will be equal to the Beer taxes levied from time to time under AGRPPA and any LCBO cost of service charge will be applied equally to all Brewers for each specified service for which a cost of service charge is established. Any margin, commission or discount provided to the operators of the New Outlets shall be funded exclusively by the LCBO. Notwithstanding the LCBO’s role as the wholesaler of record, the Province shall permit Brewers to work directly with New Outlets with respect to demand planning, forecasting and category management.

(q) The Province shall prohibit New Outlets from requesting or receiving from Brewers, and Brewers from offering or providing to New Outlets, directly or indirectly:

(i) supplier monies, non-monetary consideration and any other form of trade inducement;

(ii) supplier monies, non-monetary consideration and any other form of trade inducement in another jurisdiction in connection with the sale of Beer in Ontario or in connection with multi-jurisdictional sales agreements or arrangements; and

(iii) supplier monies and non-monetary consideration for any form of in-store or outof- store advertising, promotion or marketing, loyalty program or rewards, discounts on non-Beer products and other cross-promotions (including electronic and print), flyers (including electronic and print), preferential shelf space including at the end of aisles, promotional material including signage and displays, and other marketing, merchandising and promotional matters, other than the provision of Brewer staff to conduct in-store tastings as set out in paragraph (k) of this Schedule.

(r) The Province may enable New Outlets to warehouse and distribute Beer through their own warehousing and distribution networks. The Province will further mandate that where a New Outlet operates its own warehousing and distribution services for Beer, such services must be offered to all Brewers at reasonable fees that are calculated in the same manner for all Brewers, and such information must be publicly available. No New Outlet operator shall be permitted to charge a Brewer any charge for warehousing and distribution services other than these publicly available fees.

(s) Notwithstanding the LCBO’s role as the wholesaler of record and the ability of New Outlets to offer their own warehousing and distribution services, Brewers licensed by the Regulator shall have the right to decline the use of a New Outlet’s warehousing and distribution services and Brewers licensed by the Regulator shall have the right to make deliveries of Beer directly to the individual retail store of such New Outlet, either individually or collectively through the Corporation or as may be otherwise permitted by the Regulator, to the extent ordered by such New Outlets for such retail store (and New Outlets must accept such deliveries), subject only to a reasonable minimum order and reasonable delivery frequency standards established by the New Outlet in respect of direct deliveries by Brewers.

(t) The Province shall mandate New Outlets to not preclude or restrict the use of the standard pallet of the Corporation, which is marked as being the property of the Corporation, to deliver Beer to New Outlets.

(u) The Province shall direct the LCBO to make commercially reasonable efforts to reach a service level agreement with the Corporation and Brewers with the goal of improving inventory levels and fill rates related to the delivery of imported Beer.

(v) The Province shall mandate New Outlets to keep and dispose of any Beer that becomes damaged subsequent to receipt by a New Outlet and bear any related costs. If the Beer is damaged at the time of receipt by a New Outlet, the Person that delivered such Beer shall dispose of any such Beer and bear any related costs.

(w) The Province acknowledges that the Corporation may charge Brewers empty container handling fees for all Beer sold in New Outlets that is also listed for sale at the Corporation.