Standard Terms and Conditions of Purchase

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					                                                      Updated: September 22, 2010   Page 1 of 10

                     Standard Terms and Conditions of Purchase

1.     Acceptance

The date the Buyer sends this Purchase Order to the Seller is defined herein as the Order

This Purchase Order is not binding upon Westport Power Inc. (“Buyer”) until accepted by the
Seller. The acceptance date of this Purchase Order will be the earlier of: (i) the date Seller
confirms acceptance in writing; (ii) the date Seller delivers the ordered items; (iii) five days
after the Order Date unless Seller first rejects this Purchase Order in writing.


2.     Price

Seller agrees that:
(a) if the price is omitted from this Purchase Order or any attachments or schedules
    thereof, Seller’s price will not be higher than Seller’s lowest prevailing price for
    corresponding items as of the Order Date hereof, and
(b) if in the intervening time between the Order Date and the time of delivery, the
    prevailing price for any item covered by this Purchase Order is lower than the price
    as of the Order Date or the price set out in this Purchase Order, the sale price shall
    be adjusted to the lower price.

3.     Extra Charges

No extra charges of any kind, including charges for packing or cartage will be allowed
unless specifically agreed to by Buyer in advance.
                                                    Updated: September 22, 2010   Page 2 of 10

4.     Over-Shipments

Buyer will pay only for maximum quantities ordered. Excess quantities of items

resulting from over-shipments will be held at Seller’s risk and expense for a reasonable

time awaiting shipping instructions. Return of excess quantities will be at Seller’s

expense and risk. Any provision herein this Purchase Order (if any) for delivery of items

by installment shall not be construed as rendering the obligations of the Seller


5.     Installments

Any provision herein for delivery of items by installment shall not be construed as
rendering the obligations of Seller severable.

6.     Packing and Shipment

Unless otherwise specified, when the price of the items set out in this Purchase Order is

based on the weight of the ordered items, such price is to cover net weight of the items

ordered only, and no charges will be allowed for boxing, crating, carting, storage or

other packing requirements.

Unless otherwise specified, all items shall be packed, packaged, marked and otherwise
prepared for shipment in a manner which is: (a) in accordance with good commercial
practice; (b) in accordance with any applicable laws or regulations; (c) acceptable to
common carriers for shipment at the lowest rate for the particular items; and (d)
adequate to insure safe arrival of the items at the named destination. Seller shall mark
all containers with necessary lifting, handling and shipping information, purchase order
numbers, date of shipment and the names of the consignee and consignor.

An itemized packaging sheet must accompany each shipment. No partial or complete
delivery shall be made hereunder prior to the date or dates specified in this Purchase
Order unless Buyer has given prior written consent.
                                                      Updated: September 22, 2010   Page 3 of 10

7.      Delivery

Unless otherwise specifically provided on the face of this order, the items called for

hereunder shall be delivered on a Free Carrier (F.C.A.) basis.

8.      Warranties

     (a) By accepting this Purchase Order, Seller warrants that the items to be furnished
     hereunder will be (i) in full compliance with Buyer’s specifications, blueprints,
     drawings and data or Seller’s samples, if any; (ii) of merchantable quality; (iii) free
     from any defect in material or workmanship; (iv) fit for the use intended by Buyer;
     and, (v) free from any actual (or claim of) infringement of intellectual property rights,
     including, without limitation, patent, copyright, trademark, trade secret, or mask work
     rights. Seller further warrants title to the items, free and clear of all liens,
     encumbrances and security interests.
     (b) Upon acceptance of this Purchase Order, Seller warrants and represents that it
     has complied with and will continue, during the performance of its obligations
     hereunder, to comply with, all laws and conform to all requirements of each
     applicable governmental authority pertaining to the manufacture and supply of the
     ordered materials or items, including those laws and regulations applicable at the
     point of manufacture concerning the packaging, storage, shipment and exportation
     of all or any part thereof, the protection of the environment, workplace safety,
     conditions and standards. Seller hereby agrees to grant access to Buyer or its
     designated agent to inspect Seller’s manufacturing facilities during normal business
     hours and upon reasonable notice, to verify compliance with local laws and
     regulations. The right to such inspections will not relieve the Seller of sole
     responsibility for ensuring compliance with all local laws and regulations. Seller
     further warrants and represents that any chemical substance delivered hereunder
     shall not be on the list of prohibited substances detailed in the applicable
     environmental laws or regulations that are in force in the jurisdiction of manufacture
     or delivery. When the laws or regulations of more than one jurisdiction apply, Seller
     shall only act in conformity with the laws or regulations that are more stringent with
     respect to the matter concerned.

(c) Seller agrees that the warranties contained shall constitute conditions precedent, and
    shall: (i) be in addition to any warranties either express or implied in law or expressly
    made by Seller other than hereunder (collectively, the “Warranty”); and (ii) survive
    delivery by Seller and inspection, acceptance and payment by Buyer.
                                                       Updated: September 22, 2010   Page 4 of 10

(d) Unless a different time period is specified in this Purchase Order, the Warranty for
    each item shall be in effect for a time period that is the lesser of twenty four months
    commencing from installation and commissioning of that item, or 30 months after
    delivery of same.

(e) If any item delivered pursuant to this Purchase Order is in breach of the Warranty,
   Buyer may, at its option: (i) require Seller to correct at no cost to Buyer any
   defective or non-conforming item by repair or replacement; or (ii) return such
   defective or non-conforming item at Seller’s expense and risk to Seller and recover
   from Seller the sale price thereof; or (iii) correct the defective or non-conforming
   item itself and charge Seller with the cost of such correction. The foregoing
   remedies are in addition to all other remedies at law or in equity or under this
   Purchase Order, and shall not be deemed to be exclusive. The Warranty shall be
   for the benefit of the Buyer and the Buyer’s customers and subsequent owners of
   the item during the period during which the Warranty is in effect.

(f) Waiver by Buyer of any drawing or specification requirement for one or more of the
    items shall not relieve Seller of the Warranty and shall not constitute a waiver of such
    requirements for the remaining items to be delivered hereunder unless so stated by
    Buyer in writing. The provisions of this clause shall not limit or affect the rights of Buyer
    under the clause entitled ‘INSPECTION”.

9.    Invoices

Each invoice issued as a result of this Purchase Order: (a) shall be rendered separately

for each delivery; (b) shall not cover more than one Purchase Order; (c) shall contain

the Purchase Order number under which it is issued; and (d) shall be rendered to the

proper Accounts Payable Department of Buyer as set forth on this Purchase Order.

Invoice payment term will be calculated from the later of delivery date or date the

invoice is received by the proper Accounts Payable Department of Buyer.

10.    Inspection

Each and every item purchased hereunder is subject to Buyer’s inspection and approval
at any place the Buyer may reasonably designate. Buyer expressly reserves the right,
                                                    Updated: September 22, 2010   Page 5 of 10

without liability hereunder or otherwise, to reject and refuse acceptance of items which
do not conform in all respects to: (a) any instructions contained herein; (b) Buyer’s
specifications, drawings, blueprints and data; and (c) The Warranty. Buyer may, in
Buyer’s sole discretion, hold such rejected items for Seller’s inspection at Seller’s risk
upon notification to Seller or return such items to Seller at Seller’s expense and risk and
recover from seller the sale price paid therefore. No rejected items shall be replaced
without a new purchase order. Payment for any items shall not be deemed an
acceptance thereof.

11.    Changes

Buyer reserves the right at any time to change any one or more of the following:
(a) specifications, drawings, blueprints and data incorporated in this Purchase Order
    where the items to be purchased are to be specifically manufactured for the Buyer;
(b) method of packaging, packing or shipment; and,
(c) place and/or time of delivery.

If any such change causes an increase or decrease in the cost of, or the time required
for the performance hereunder, an equitable adjustment shall be made in the price or
delivery schedule, or both. Any claim for adjustment by the Seller shall be deemed
waived unless asserted in writing within 30 days from the receipt by Seller of the
change. Nothing contained in this clause shall relieve Seller from proceeding without
delay in the performance or this order as changed.

12.   Indemnification

Seller shall indemnify and hold Buyer harmless from any claim, demand, cause of action or
damage for which Buyer might become liable arising from or in connection with Seller’s
performance hereunder. In addition to any indemnification as provided hereunder, if by
virtue of a patent infringement suit an injunction issues against Buyer, which prohibits or
limits the use of any items purchased hereunder, Seller at Buyer’s request shall supply
Buyer with non-infringing replacement items of a similar kind and quality.

13.   Patents

Seller agrees to defend at Seller’s own expense, all suits, actions or proceedings in

which Buyer, any of the Buyer’s distributors or dealers, or the users, lessees or

customers of any of Buyer’s products, are made defendants for actual or alleged
                                                    Updated: September 22, 2010   Page 6 of 10

infringement of any copyright, trademark, trade secret, mask work right or Canadian,

U.S. or other foreign patent resulting from the use or sale of the items purchased


14.    Non-Publicity

Without the prior written consent of Buyer, Seller shall neither: (a) make any news

release, public announcement, denial or confirmation of this Purchase Order or its

subject matter; nor (b) in any manner advertise or publish the fact that the Buyer has

placed this order.

15.    Buyer’s Property

Unless otherwise agreed to in writing, all tooling, equipment or material of every

description furnished to Seller by Buyer or specifically paid for by Buyer and any

replacement thereof, shall remain the property of Buyer (“Buyer’s Property”). Buyer’s

property, and whenever practical, each individual item thereof, shall be plainly marked

or otherwise adequately identified as “Property of Westport Power Inc.” and shall be

safely stored separately and apart from Seller’s property. Seller shall not substitute any

property for Buyer’s Property and shall not use Buyer’s property , except in filling

Buyer’s orders. Buyer’s Property while in Seller’s custody or control shall be held at

Seller’s expense, and will be insured by Seller in an amount equal to the replacement

cost with loss payable to Westport Power Inc. Buyer’s Property shall be prepared for
                                                     Updated: September 22, 2010   Page 7 of 10

shipment and delivered in good condition, normal wear and tear excepted to Buyer,

F.C.A. Seller’s plant, immediately upon request by Buyer.

16.    Title To Intellectual Property

Seller agrees that all new developments, whether patented or not, which are made,

discovered, conceived, reduced to practice, or otherwise invented or improved by

reason of actions taken pursuant to this Purchase Order shall be the sole, exclusive and

absolute property of Buyer with no obligation to Seller in respect thereof and will be

promptly disclosed by Seller to Buyer. Seller shall, when so requested by Buyer,

execute all documents as may be required by Buyer to fully and effectively vest in Buyer

or any person or entity designated by Buyer the proprietary rights in any development.

Seller will immediately deliver to Buyer all documents, other recordings and things,

including prints, drawings, dies, prototypes and specifications, relating to such

developments. Seller shall return Buyer’s confidential or proprietary information upon

fulfillment of or termination of this order, or upon Buyer’s request.

17.    Confidential Relationship

Seller shall treat as confidential all proprietary information disclosed or supplied to Seller

by Buyer, including, without limitation, specifications, drawings, blueprints and data.

Seller shall not disclose any such proprietary information to any third person that is not

entitled to receive it.
                                                      Updated: September 22, 2010   Page 8 of 10

18.   Termination

Buyer may terminate work under this Purchase Order in whole or in part at any time by
notice to Seller in writing. Seller will thereupon immediately stop work on this Purchase
Order, or the terminated portion thereof, and notify its subcontractors to do likewise.
Except for such termination as is caused by a default or delay of Seller, Seller shall be
entitled to reimbursement for its actual costs applicable to the termination incurred up to
and including the date of termination and determined in accordance with generally
recognized accounting practices. Seller shall also be entitled to reasonable profit on the
work done prior to such termination at a rate not exceeding the rate used in establishing
the original purchase price. The total of such claim shall not exceed the cancelled
commitment value of this Purchase Order.

19.    Termination for Default

(a) Time is of the essence under this Purchase Order. Buyer may, by written notice,
   terminate this Purchase Order in whole or in part if the Seller fails: (i) to make
   delivery of the items or to perform the services within the time specified herein, or
   any extension thereof by written change order or amendment; or (ii) to replace or
   correct defective items in accordance with the provisions of those clauses hereof
   entitled ‘WARRANTIES” and “INSPECTION”’, or (iii) to perform any of the other
   provision of this Purchase Order or so fails to make progress as to endanger
   performance in accordance with its terms. The Buyer is the sole judge under such

(b) In the event of termination pursuant to this clause, Buyer may procure from a third
   party, upon such terms and in such manner as Buyer may deem appropriate items
   or services similar or substantially similar to those so terminated, and the Seller
   shall be liable to Buyer for any excess costs occasioned Buyer thereby.

(c) In the event of termination of this Purchase Order in part, and Seller shall continue

the performance of this order to the extent not terminated.

(d) If this Purchase Order is terminated pursuant to paragraph (a), Buyer, in addition to any
    other rights provided herein, may require Seller to transfer title and deliver to Buyer, in
    the manner and to the extent directed by Buyer: (i) any completed items; and (ii) such
    partially completed items and materials as the Seller has produced or acquired for the
    performance of the terminated part; and Seller shall, upon direction of Buyer, protect
    and preserve such property in the possession of Seller. Payment for completed items
                                                      Updated: September 22, 2010   Page 9 of 10

      delivered to and accepted by Buyer shall be in an amount agreed upon by Seller and
      Buyer (not to exceed the contract price set out in this Purchase Order). Seller’s
      obligations hereunder to carry out Buyer’s direction as to delivery, protection and
      preservation shall not be contingent upon prior agreement as to such amount.

(e) Failure of Buyer to enforce any right under this clause shall not be deemed a
   waiver of any right hereunder. The rights and remedies of Buyer under this clause
   shall not be exclusive and are in addition to any other rights and remedies provided
   by law or under this Purchase Order.

20.      Attorney’s Fees

If Seller and Buyer are unable to resolve any dispute arising under this Purchase Order

and any suit or other judicial proceeding is instituted with reference thereto, the

successful party in any such suit or other judicial proceedings shall be paid promptly by

the other party an additional amount equal to the successful party’s reasonable

attorney’s fees and costs incurred.

21.      General

      (a) If this Purchase Order is given pursuant to an existing contract, it is also subject

      to the terms of such contract and, in the event of such conflict with the provisions

      hereof; the contract terms shall control.

(b) Waiver by other party of any default by the other hereunder shall not be deemed a
   waiver by such party of any other default.

(c) Seller shall not change this Purchase Order nor ship non-conforming items without
    first obtaining the written consent of Buyer.
                                                   Updated: September 22, 2010   Page 10 of 10

22.     Assignments

(a) Seller shall not assign this Purchase Order nor any rights or obligations hereunder,
    nor delegate its performance hereunder without the prior written consent of Buyer.
    Any purported assignment without consent shall be void.

(b)     Buyer may assign this order at any time if such assignment is considered
      necessary by Buyer in connection with a sale of Buyer’s assets or a transfer of its

(c) No rights or obligations under this Purchase Order (including the right to receive
   monies due hereunder) shall be assigned by Seller without the prior written consent
   of Buyer, and any purported assignment without such consent shall be void.

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