Organigram Inc.,

Purchase Order Terms and Conditions

1. Applicability.

  1. All purchase orders made by Organigram Inc., (the “Buyer”) made to providers of goods and services (the “Seller”) for the purchase of the goods specified on the face of such purchase order (the “Goods”), shall be made in accordance with and subject to these terms and conditions (the “Terms”; together with the terms and conditions on the face of the purchase order, an “Order”). An Order, together with any documents incorporated herein by reference, constitutes the sole and entire agreement of the parties with respect to an Order, and supersedes all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral, with respect to the subject matter of the Order. These Terms prevail over any terms or conditions contained in any other documentation and expressly exclude any of Seller’s general terms and conditions of sale or any other document issued by Seller in connection with the Order.

  1. These Terms apply to any repaired or replacement Goods provided by Seller hereunder.

  1. Buyer is not obligated to any minimum purchase or future purchase obligations under this Order.

2. Acceptance.

  1. An Order will be deemed binding unless Seller provides a Notice indicating that it cannot fulfill the Order within three (3) Business Days (defined herein) following Seller’s receipt of such Order.

  1. For the purposes of this Agreement, a “Business Day” means any day except Saturday, Sunday or any statutory or civic holiday in the Province of New Brunswick.

3. Delivery Date. Seller shall deliver the Goods in the quantities and on the date(s) specified in the Order or as otherwise agreed in writing by the parties (the “Delivery Date”). If no delivery date is specified, Seller shall deliver the Goods within thirty (30) days of Seller’s receipt of the Order. Timely delivery of the Goods is of the essence. If Seller fails to deliver the Goods in full on the Delivery Date, Buyer may terminate the Order immediately by providing written notice to Seller and Seller shall indemnify Buyer against any and all losses, claims, damages, and reasonable costs and expenses directly attributable to Seller’s failure to deliver the Goods on the Delivery Date. Seller shall also reimburse Buyer for any and all amounts already paid to Seller for such Goods.

4. Quantity. If Seller delivers more than one hundred and ten percent (110%) or less than ninety percent (90%) of the quantity of Goods ordered, Buyer may reject all or any excess Goods. Any such rejected Goods shall be returned to Seller at Seller’s risk and expense. If Buyer does not reject the Goods and instead accepts the delivery of Goods at the increased or decreased quantity, the Price for the Goods shall be adjusted on a pro-rata basis.

5. Re-order. Seller shall use commercially reasonable efforts to ensure that it is able, within a period of six (6) months from the acceptance of this Order, to supply future orders of the Goods with the same specifications and of similar volume to the Order, subject only to the standard lead time applicable to orders of Goods. In the event of a scarcity or shortage of Goods, the Buyer shall be threated equitably with respect to Seller’s allocation of Goods.

6. Inventory. In cases where Goods warehousing by Seller is requested by Buyer, inventory carry terms are a maximum of ninety (90) days from the requested ready date of Goods. All Orders that anticipate Seller holding any portion of the total order quantity requested be held in inventory at Seller must be accompanied by a release schedule. Seller requires a minimum order quantity of 50,000 impressions in order to offer it’s aforementioned inventory terms. Any inventory remaining at ninety (90) days will be shipped and invoiced at that time.

7. Delivery Location. All Goods shall be delivered to the address specified in the Order (the “Delivery Location”) during Buyer’s normal business hours or as otherwise instructed by Buyer.

8. Shipping Terms. Unless otherwise specified in the Order, delivery shall be made FOB Seller’s facility in Winnipeg INCOTERMS® RULE. Seller shall give Notice of shipment to Buyer when the Goods are delivered to a carrier for transportation. Seller shall provide Buyer all shipping documents, including the commercial invoice, packing list, air waybill/bill of lading, and any other documents and information necessary to release the Goods to Buyer within two (2) Business Days after Seller delivers the Goods to the transportation carrier. The Seller shall comply with, and shall cause each of its subcontractors to comply with, all applicable export laws and regulations of the country of export and of Canada. The Order number and any other required information as reasonably requested by the Buyer must appear on all shipping documents, shipping labels, bills of lading, air waybills, invoices, correspondence and any other documents pertaining to the Order.

9. Title and Risk of Loss. Title and risk of loss passes to Buyer upon delivery of the Goods to the carrier for transportation.

10. Packaging. All goods shall be packed for shipment according to Buyer’s instructions or, if there are no instructions, in a manner sufficient to ensure that the Goods are delivered in undamaged condition and in accordance with applicable law and industry standards. Seller shall provide Buyer with shipment documentation showing the Order number, an itemized packing list including the description of the items, quantity of pieces in the shipment, the number of cartons or containers in the shipment, the weight and volume of the items, Seller’s name, the bill of lading number and the country of origin. Seller must provide Buyer prior Notice if it requires Buyer to return any packaging material. Any return of such packaging material and such delivery shall be made at Seller’s sole cost and expense.

11. Amendment and Modification. No change to an Order is binding upon Buyer unless it is in writing, specifically states that it amends such Order and is signed by an authorized representative of Buyer.

12. Inspection and Rejection of Non-Conforming Goods. The Buyer has the right to inspect the Goods before, on or after the Delivery Date. Buyer, at its sole option, may inspect all or a sample of the Goods, and may reject all or any portion of the Goods if it determines the Goods are non-conforming or defective. For greater clarity, a shipment falls outside the range set out in section 4, the Order will be deemed non-conforming. If Buyer rejects any portion of the Goods, Buyer has the right, effective upon Notice to Seller, to: (a) rescind the Order in its entirety and obtain a full refund; (b) accept the Goods at a reasonably reduced Price agreed to by both parties; or (c) reject the Goods and require replacement of the rejected Goods. If Buyer requires replacement of the Goods, Seller shall, at its expense, immediately replace the non-conforming Goods and pay for all related, including, but not limited to, transportation charges for the return of the defective goods and the delivery of replacement Goods. Any inspection or other action by Buyer under this Section shall not reduce or otherwise affect Seller’s obligations under the Order, and Buyer shall have the right to conduct further inspections after Seller has carried out its remedial actions.

13. Price. The price of the Goods is the price stated in the Appendix “A” below (the “Price”). Unless otherwise specified in the Order, the Price includes all packaging, transportation costs to the Delivery Location, insurance, customs, tariffs, duties, and fees and applicable taxes including, but not limited to, all, harmonized sales tax, goods and services tax, provincial sales tax, value added tax, use or excise taxes.

14. Payment Terms. Seller shall issue an invoice to Buyer on or any time after the completion of delivery of the Goods and only in accordance with the Terms. Buyer shall pay all properly invoiced amounts due to Seller within thirty (30) days after Buyer’s receipt of Goods, except for any amounts disputed by Buyer in good faith. All payments hereunder must be in Canadian dollars . All invoices must clearly show whether they cover “part order”, “balance order”, or “complete order”. In the event of a payment dispute, the parties shall seek to resolve all such disputes expeditiously and in good faith. Seller shall continue performing its obligations under the Order notwithstanding any such dispute.

15. Set-Off. Without prejudice to any other right or remedy it may have, Buyer reserves the right to set off at any time any amount owing to it by Seller against any amount payable by Buyer to Seller.

16. Conditions and Warranties. Seller represents, warrants and covenants that:

  1. It is a corporation duly formed, validly existing and in good standing, and has all the requisite power and authority to execute, deliver and perform its obligations under an Order;

  1. It’s execution of the Terms shall not create any conflict of interest in relation to any other party;

  1. It and its subcontractors have the necessary resources (including financial resources), qualified personnel, skills and expertise to execute an Order and supply the Goods in accordance with the Order;

  1. It has familiarized itself with all provisions of the Order, the specifications for the Goods and the performance thereof;

  1. the Seller shall comply with all laws, requirements, obligations, technical standards, health and safety procedures and all other policies and procedures that are applicable to the Seller, the Goods or the execution of the Order;

  1. the Goods shall be supplied in a safe, professional, efficient, timely and good and workmanlike manner, using only qualified, skillful and careful workers, in strict accordance with the Order and the schedule, and in strict accordance with sound and currently accepted practices and principles normally employed by a prudent, competent, reputable Seller performing similar work, and in the event of a conflict of such practices or principles, the higher practice or principle shall take precedence;

  1. For a period of twelve (12) months from the Delivery Date and provided that the Goods are properly stored by the Buyer in accordance with industry practices, all Goods will: (a) be free from any defects in workmanship, material and design; (b) conform to applicable specifications, drawings, designs, samples and other requirements specified by Buyer; (c) be fit for their intended purpose and operate as intended; (d) be merchantable; (e) be free and clear of all liens, security interests or other encumbrances; and (f) not infringe or misappropriate any third party’s patent or other intellectual property rights. These warranties survive any delivery, inspection, acceptance or payment of or for the Goods by Buyer. These warranties are cumulative and in addition to any other warranty provided by law or equity. Any applicable statute of limitations runs from the date of Buyer’s discovery of the non-compliance of the Goods with the foregoing warranties. If Buyer gives Seller Notice of non-compliance with this Section, Seller shall, at its own cost and expense, promptly replace or repair the defective or non-conforming Goods and pay for all related expenses, including, but not limited to, transportation charges for the return of the defective or non-conforming goods to Seller and the delivery of repaired or replacement Goods to Buyer. Repair or replacement required under warranty shall be carried out by the Seller within ten (10) Business Days of the date of the Buyer’s Notice to the Seller of the defect. If the repair or replacement is not performed by the Seller within such period, or such other period as may be approved by the Buyer acting reasonably, the Buyer may take whatever action is necessary to have the repair or replacement performed, and the Seller shall reimburse the Buyer for all costs incurred by the Buyer in respect thereof. The Seller further warrants that all corrective actions taken as a result of defects in design, equipment materials or workmanship shall be subject to the same warranties for a further period of twelve (12) months following acceptance by the Buyer of the replaced or repaired Goods.

17. General Indemnification. Seller shall defend, indemnify and hold harmless Buyer and Buyer’s parent company, their subsidiaries, affiliates, successors or assigns and their respective directors, officers, shareholders and employees and Buyer’s customers (collectively, “Indemnitees”) against any and all loss, injury, death, damage, liability, claim, deficiency, action, judgment, interest, award, penalty, fine, cost or expense, including reasonable legal and professional fees and costs, and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers (collectively, “Losses”) relating to, arising out of or occurring in connection with the products purchased from Seller or Seller’s negligence, wilful misconduct or breach of the Terms. Seller shall not enter into any settlement without Buyer’s or Indemnitee’s prior written consent. Neither Party shall be liable to the other Party, or to its respective subcontractors or to any other party beneficially entitled under or pursuant to this Order, under any cause or causes of action, whether in tort, Order or otherwise (including but not limited to claims and liability under or for breach of Order, negligence, professional errors or omissions, strict liability, indemnity, and breach of express or implied warranty) for: (i) loss of actual or anticipated revenue or profits, business interruption, loss of use of property, loss by reason of shutdown or non-operation, loss of business opportunity or productivity, increased capital or operating costs or increased financing costs; (ii) any type or amount of indirect, special or consequential damages, howsoever claimed, calculated or characterized; and/or (iii) any punitive or exemplary damages.

18. Insurance. During the term of the Order and for a period of twelve months thereafter, Seller shall, at its own expense, maintain and carry insurance in full force and effect which includes, but is not limited to, a) Commercial General Liability (including product liability) in a sum no less than two million dollars ($2,000,000) and b) Motor Vehicle Insurance for all owned, rented or leased vehicles used in the supply of the Goods, with a policy limit of no less than two million dollars ($2,000,000) third party liability, with financially sound and reputable insurers. Upon Buyer’s request, Seller shall provide Buyer with a certificate of insurance from Seller’s insurer evidencing the insurance coverage specified in the Order. Upon Buyer’s request, the certificate of insurance shall name Buyer as an additional insured. Seller shall provide Buyer with forty-five (45) Business Days’ advance Notice in the event of a cancellation or material change in Seller’s insurance policy. Except where prohibited by law, Seller shall require its insurer to waive all rights of subrogation against Buyer’s insurers and Buyer or the Indemnitees. The Seller shall, and shall cause each of its subcontractors to, comply with the applicable workers compensation legislation and regulations and shall pay all assessments and compensation required to be paid thereunder.

19. Compliance with Law. Seller is in compliance with and shall comply with all applicable laws, regulations and ordinances. Seller has and shall maintain in effect all the licenses, permissions, authorizations, consents and permits that it needs to carry out its obligations under the Order. Seller shall comply with all export and import laws of all countries involved in the sale of Goods under the Order. Seller assumes all responsibility for shipments of Goods requiring any government import clearance. Buyer may terminate an Order if any government authority imposes antidumping duties, countervailing duties or any retaliatory duties or any other penalties on the Goods.

20. Termination. Buyer may terminate an Order, in whole or in part, at any time with or without cause for undelivered Goods on two (2) Business Days’ prior Notice to Seller. In addition to any remedies that may be provided under these Terms, Buyer may terminate an Order with immediate effect upon Notice to the Seller, either before or after the acceptance of the Goods, if Seller has not performed or complied with any of these Terms, in whole or in part. If the Seller becomes insolvent, is generally unable to pay, or fails to pay, its debts as they become due, files a petition for bankruptcy or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization, arrangement or assignment for the benefit of creditors, then the Buyer may terminate the Order upon Notice to Seller. If Buyer terminates the Order for any reason, Seller’s sole and exclusive remedy is payment for the Goods received and accepted by Buyer prior to the termination.

21. Waiver. No waiver by Buyer of any of the provisions of the Order shall be effective unless explicitly set forth in writing by Buyer. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from the Order shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

22. Confidential Information. All non-public, confidential or proprietary information of the Buyer, including, but not limited to, specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, customer lists, pricing, discounts or rebates, disclosed by Buyer to Seller, whether disclosed orally or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential,” in connection with the Order is confidential, solely for the use of performing the Order and may not be disclosed or copied unless authorized by Buyer in writing. Upon Buyer’s request, Seller shall promptly return all documents and other materials received from Buyer. Buyer shall be entitled to injunctive relief for any violation of this Section. This Section shall not apply to information that is: (a) in the public domain; (b) known to the Seller at the time of disclosure; or (c) rightfully obtained by the Seller on a non-confidential basis from a third party.

23. Force Majeure. Neither party shall be liable to the other for any delay or failure in performing its obligations under the Order to the extent that such delay or failure is caused by an event or circumstance that is beyond the reasonable control of that party, without such party’s fault or negligence, and which by its nature could not have been foreseen by such party or, if it could have been foreseen, was unavoidable and could not have reasonably been prevented by employing practices of a prudent person in similar circumstances (”Force Majeure Event”) as long as it provides notice to the other party immediately upon the occurrence of a Force Majeure Event. Force Majeure Events are limited to: acts of God or the public enemy, government restrictions, floods, fire, earthquakes, explosion, war, embargoes and industrial disturbances. Seller’s economic hardship or changes in market conditions are not considered Force Majeure Events. Seller shall use all diligent efforts to end the failure or delay of its performance, ensure that the effects of any Force Majeure Event are minimized and resume performance under the Order. If a Force Majeure Event prevents Seller from carrying out its obligations under the Order for a continuous period of more than thirty (30) days, Buyer may terminate this Order immediately by giving Notice to Seller.

24. Assignments and Subcontractors. Seller shall not assign, transfer, delegate or subcontract any of its rights or obligations under the Order without the prior written consent of Buyer. Any purported assignment or delegation in violation of this Section shall be null and void. No assignment, transfer, delegation or subcontract shall relieve the Seller of any of its obligations or liabilities hereunder. Buyer may at any time assign, transfer or subcontract any or all of its rights or obligations under the Order without Seller’s prior written consent to any affiliate or to any person acquiring all or substantially all of Buyer’s assets.

25. Relationship of the Parties. The relationship between the parties is that of independent contractors. Nothing contained in the Order shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever. No relationship of exclusivity shall be construed from this Order.

28. No Third-Party Beneficiaries. This Order is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of these Terms.

29. Governing Law. All matters arising out of or relating to this Order shall be governed by and construed in accordance with the laws of the Province of New Brunswick, and the federal laws of Canada applicable therein, without giving effect to any choice or conflict of law provision or rule (whether of any jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the Province of New Brunswick. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods does not apply to an Order.

30. Choice of Forum. Any legal suit, action, litigation or proceeding of any kind whatsoever in any way arising out of, from or relating to this Order, including all exhibits, schedules, attachments, and appendices attached to the Order, and all contemplated transactions, shall be instituted in the courts of the Province of New Brunswick, and each party irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action, litigation or proceeding. Service of process, summons, notice, or other document by mail to such party’s address set forth herein shall be effective service of process for any suit, action, litigation or other proceeding brought in any such court. Each party agrees that a final judgment in any such suit, action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The parties irrevocably and unconditionally waive any objection to the venue of any action or proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

31. Anti-Corruption. The Seller represents and warrants that neither it nor any of its related entities or its personnel authorized, offered, promised or gave or will, authorize, offer, promise or give anything of value to (a) any individual who is employed or acting on behalf of any authority, government, government-controlled entity or public international organization; political party, party official or candidate; individual who holds or performs the duties of an appointment, office or position created by custom or convention; or individual who holds him or herself out to be the authorized intermediary of any of these persons (each, a Government Official) in order to influence official action relating to either or both the Buyer or an Order; (b) any person (whether or not a Government Official) to influence that person to act in breach of a duty of good faith, impartiality or trust (acting improperly) in relation to either, or both, the Buyer or an Order, to reward the person for acting improperly or in circumstances where the recipient would be acting improperly by receiving things of value; (c) any other person while knowing or while he or she ought reasonably have known, that all or any portion of the money or other thing of value that was authorized, offered, promised or given or will be offered, promised or given to: (i) a Government Official in order to influence or reward official action relating to either or both, the Buyer or an Order; or (ii) any person in order to influence or reward such person for acting improperly. The Buyer may terminate this Order for default, if the Seller breaches this Section or any Applicable Anti-corruption Laws in performing its obligations under an Order.

32. Public and Press Announcements. The Seller shall not speak to media or respond to inquiries from the media or members of the public in relation to the Order without express written consent of the Buyer. All media and public inquiries shall be forwarded immediately to the Buyer.

33. Cumulative Remedies. The rights and remedies under an Order are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

34. Notices. All notices, request, consents, claims, demands, waivers and other communications hereunder (each, a “Notice”) shall be in writing and addressed to: agreements@organigram.ca for the Buyer, and to the address set forth on the face of the Order for the Seller or to such other address that may be designated by the Seller in writing. Except as otherwise provided in an Order, a Notice is effective only (a) upon receipt of the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.

35. Severability. If any term or provision of an Order is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

36. Survival. Provisions of an Order which by their nature should apply beyond their terms will remain in force after any termination or expiration of this Order including, but not limited to, the following provisions: Set-off, Warranties, General Indemnification, Intellectual Property, Indemnification, Insurance, Compliance with Laws, Confidentiality, Governing Law, Choice of Forum and Survival.