Common use of Excess Capacity Clause in Contracts

Excess Capacity. i. In the event that Aphria Diamond, in its reasonable opinion, believes there will be un-utilized cultivation capacity at the Aphria Diamond Facility (“Excess Capacity”), then Aphria Diamond, acting reasonably, may elect to allocate Excess Capacity to cultivate and produce additional cannabis products at the Aphria Diamond Facility (“Excess Products”). Aphria covenants and agrees that it will allocate capacity for the cultivation of Products at the Aphria Diamond Facility in priority over capacity at any other Aphria cultivation facility, except if any of the following apply: (a) Aphria Diamond does not possess a Cannabis Licence or Canadian Regulatory Approval required for the cultivation, propagation, processing, possession, sale or distribution of such Product at the Aphria Diamond Facility or by Aphria Diamond or any certification; or (b) the Product is derived from a specific strain being grown, as of the Amendment Effective Date, for production at Redecan’s indoor growing facility located at ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, Ontario, L0S 1C0. ii. Aphria Diamond may source Rooted Cuttings to support cultivation to fill any Excess Capacity from one or more third parties so long as doing so does not adversely impact the quality of or contaminate any cultivation or production allocated to the Products to be sold to Aphria hereunder. iii. Aphria will not be obligated to purchase any Excess Products from Aphria Diamond. Any Excess Products supplied to Aphria by Aphria Diamond will be deemed to be “Products” for purposes of the representations, warranties and covenants set forth in Sections 4, 5, 6, 7, 8.3, 9, 10, 13 and 16.7 of this Agreement. iv. Notwithstanding Section 2.1(i), Aphria Diamond may from time to time sell Excess Products to third parties on the open market so long as doing so does not impede, interfere with or otherwise derogate from the performance of its obligations hereunder, including, without limitation, its obligation to supply Aphria with Products conforming to the Specifications.

Excess Capacity. i. In 16.1 This section does not apply to water and waste water Municipal Improvements. 16.2 Prior to the event that Aphria Diamond, in its reasonable opinion, believes there will be un-utilized cultivation capacity at City signing the Aphria Diamond Facility (“Excess Capacity”), then Aphria Diamond, acting reasonably, may elect "Consent to allocate Excess Capacity to cultivate and produce additional cannabis products at the Aphria Diamond Facility (“Excess Products”). Aphria covenants and agrees that it will allocate capacity Register Plan" form for the cultivation of Products at subdivision plan and issuing any building permits for the Aphria Diamond Facility in priority over capacity at any other Aphria cultivation facilityDevelopment Area, except if any of the following apply: Developer shall pay to the City (a) Aphria Diamond does not possess a Cannabis Licence the Servicing Amounts set out in Schedule "E" to this Agreement as reimbursement for some or Canadian Regulatory Approval required for all of the cultivationcosts of installation and construction of Municipal Improvements incurred by the City, propagation, processing, possession, sale or distribution of such Product at the Aphria Diamond Facility or by Aphria Diamond or any certificationif any; or and (b) the Product Excess Capacity Amount set out in Schedule "G" to this Agreement as reimbursement for the Developer's proportionate share of payments made or costs incurred by other developers in respect of excess capacity of Municipal Improvements, if any. 16.3 The City may require the Developer to construct or pay for an improvement with an excess capacity. Where such is derived from a specific strain being grownthe case, as the City may provide for the reimbursement to the Developer of the Amendment Effective Datecost incurred or payment made in respect of the excess capacity, for production at Redecan’s indoor growing facility located at ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, Ontario, L0S 1C0together with reasonable interest on the cost in an amount to be fixed by the City (collectively "Excess Capacity Reimbursement"). ii16.4 The Developer acknowledges and agrees that its entitlement to an Excess Capacity Reimbursement, if any, is set out in Schedule "G" and it shall not make any claim for excess capacity from the City, and does not expect nor shall it require the City to seek any reimbursement for or on behalf of the Developer for any excess capacity except to the extent set out in Schedule "G". Aphria Diamond may source Rooted Cuttings to support cultivation to fill If Schedule “G” does not set out any Excess Capacity from one or more third parties so long as Reimbursement, the Developer acknowledges and confirms that it is not being obliged by the City to construct excess capacity Municipal Improvements and that, to the extent it is doing so, it is doing so at its own volition, for its own reasons, at its own costs and without any right of reimbursement, indemnity or any payment of any kind. 16.5 Notwithstanding anything in this Agreement, the City will endeavor to assist the Developer in receiving Excess Capacity Reimbursement by making reasonable efforts to enter into agreements for the recovery of the Excess Capacity Reimbursement with the developers of lands benefiting from the excess capacity Municipal Improvements when those lands are developed or subdivided for development. The City shall only be responsible to the Developer for any Excess Capacity Reimbursement actually collected by it, and the City does not adversely impact the quality of guarantee such collection. The City shall not be liable or contaminate any cultivation or production allocated responsible to the Products Developer for its failure or inability to be sold to Aphria hereundercollect the Excess Capacity Reimbursement or any portion thereof for any reason. iii16.6 Nothing herein shall preclude the Developer from entering into private agreements with other landowners or developers for the sharing or reimbursement of excess capacity Municipal Improvement costs. Aphria will However, the Developer acknowledges that the City is not be obligated party to purchase any Excess Products from Aphria Diamond. Any Excess Products supplied to Aphria by Aphria Diamond will be deemed to be “Products” for purposes such agreements and has no obligations thereunder, including and without limiting the generality of the representationsforegoing, warranties and covenants set forth in Sections 4, 5, 6, 7, 8.3, 9, 10, 13 and 16.7 of this Agreement. iv. Notwithstanding Section 2.1(i), Aphria Diamond may from time to time sell Excess Products to third parties on the open market so long as doing so does not impede, interfere with or otherwise derogate from the performance of its obligations hereunder, including, without limitation, its no obligation to supply Aphria with Products conforming seek reimbursement for the Developer or other parties to such agreements, or to assist the SpecificationsDeveloper in effecting cost recovery from any person.

Excess Capacity. i. CIRRUS shall use its best efforts to coordinate its orders from its various third-party suppliers so as to permit the full utilization by CIRRUS of the CIRRUS Capacity Allocation. In the event that Aphria Diamondafter exercising such best efforts [*], in its reasonable opinionCIRRUS remains unable to fully utilize the CIRRUS Capacity Allocation, believes there will be un-utilized cultivation capacity at the Aphria Diamond Facility (“Excess Capacity”), then Aphria Diamond, acting reasonably, may elect to allocate Excess Capacity to cultivate and produce additional cannabis products at the Aphria Diamond Facility (“Excess Products”). Aphria covenants and agrees that it will allocate capacity for the cultivation of Products at the Aphria Diamond Facility in priority over capacity at any other Aphria cultivation facility, except if any of the following provisions apply: : (a) Aphria Diamond does not possess a Cannabis Licence or Canadian Regulatory Approval required for the cultivation, propagation, processing, possession, sale or distribution of such Product at the Aphria Diamond Facility or by Aphria Diamond or CIRRUS shall first offer to IBM any certification; or Unutilized Capacity. (b) If IBM decides not to use the Product Unutilized Capacity, CIRRUS shall be permitted to manufacture for resale to a CIRRUS Customer Semiconductor Wafers to be manufactured using such Unutilized Capacity that include Semiconductor Chips (other than RMM Chips), Subassembly Chips or CIRRUS Chips only if the following conditions are satisfied: (i) CIRRUS is derived from a specific strain being grown, as under contract to sell such other wafers to such Customer for delivery within the [*]; (ii) CIRRUS may not use more than [*] of the Amendment Effective Date, total CIRRUS Capacity Allocation for production at Redecan’s indoor growing facility located at ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, Ontario, L0S 1C0. ii. Aphria Diamond may source Rooted Cuttings the manufacture of such other wafers; and (iii) the price to support cultivation to fill any Excess Capacity from one or more third parties so long as doing so does not adversely impact the quality of or contaminate any cultivation or production allocated be paid to the Products Seller by CIRRUS for such other wafers shall be not less than the equivalent price that CIRRUS offers to be sold IBM pursuant to Aphria hereunder. iii. Aphria will not be obligated Section 6.04(a) plus applicable per wafer charges pursuant to purchase any Excess Products from Aphria Diamond. Any Excess Products supplied to Aphria by Aphria Diamond will be deemed to be “Products” for purposes Section 8.4 of the representations, warranties and covenants set forth in Sections 4, 5, 6, 7, 8.3, 9, 10, 13 and 16.7 of this CIRRUS Sales Agreement. iv. Notwithstanding (c) CIRRUS shall be entitled to exercise the foregoing right to engage in alternative production [*]. (d) If CIRRUS does not, within [*] following IBM's rejection of the offer to use the Unutilized Capacity, enter into an agreement with a customer referred to in Section 2.1(i6.04(b)(i), Aphria Diamond may from time CIRRUS must again offer the Unutilized Capacity to time sell Excess Products IBM. (e) CIRRUS shall continue to third parties on be obligated under the open market so long as doing so does not impede, interfere with or otherwise derogate from the performance of its obligations hereunder, including, without limitation, CIRRUS Sales Agreement in all respects other than in its obligation to supply Aphria with Products conforming cause the Partnership to the Specificationsmanufacture only CIRRUS Chips, RMM Chips and Subassembly Chips.