"Pacific Crest Transformers, Inc"
Power Systems Technology (Eegenco) Ltd. STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 1. Applicable Terms and Conditions The purchase by Customer of the material, equipment, component(s), product(s), supplies, goods, services, and documentation (hereinafter the “Product (s)”) is expressly governed by these Terms and Conditions of Sale, and ONLY these Terms and Conditions of Sale, unless specifically agreed to in writing by Power Systems Technology (Eegenco) Ltd (hereinafter “Power Systems”). Accordingly, any and all other Terms and Conditions of Sale which may be included with Customer’s Purchase Orders are hereby expressly rejected by Power Systems This sale is expressly conditioned upon Customer’s acceptance of the terms and conditions stated below. If not previously given, Customer’s payment or acceptance of Product, whichever occurs first, is conclusive as to this acceptance. 2. Quotations Each quotation is valid for thirty (30) calendar days from its issue date unless otherwise stated in the quotation, or revoked prior to the acceptance of Customer’s purchase order by Power Systems Orders amounting to less than $150.00 net will be billed at $150.00 plus transportation costs. All typographical and clerical errors are subject to correction. 3. Prices With the exception of valid quotations as defined in Section 2 (Quotations) above, prices are subject to change without notice. Unless otherwise specified, prices will be the prices specified in valid quotations, subject to adjustment for subsequent changes directed by the Customer and/or mutually agreed upon escalation formulae. In the event of a price change, the effective date of the change will be the date shown on the revised quotation. Where a price change is made by letter, fax, or email, the effective date may be given as part of the announcement. 4. Taxes The price quoted by Power Systems for the Product does not include any Federal, provincial, territorial or local property, license, privilege, sales, use, excise, gross receipts, or other like taxes which may now or hereafter be applicable. Payment by Power Systems of any such taxes shall be for the account of the Customer, and shall be immediately reimbursed by Customer to Power Systems Where Customer, or the end-user, destination is located outside of Canada, the Customer shall pay all customs duties or taxes, and local customs broker fees or costs (Canadian, and/or non-Canadian), as well as all other non-Canadian taxes of any type whatsoever. 5. Terms of Payment Payment terms are net thirty (30) calendar days from date of invoice unless agreed to otherwise in writing. If, in the judgment of Power Systems, the financial condition, performance, or conduct of Customer at any time prior to shipment is reasonably called into question, then Power Systems may require payment in advance or cancel without any liability or obligation, any outstanding order whereupon Power Systems shall be entitled to receive reasonable cancellation charges in accordance with Section 15 (Termination by Customer). Page 1 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 If shipment is delayed by Customer for any reason whatsoever, Customer hereby expressly consents that invoicing may occur and payment shall become due on the effective order acknowledged shipment date by Power Systems or when Power Systems is prepared to make shipment, whichever occurs later. If payments are not made when due, Customer shall pay, in addition to any overdue penalties, a late charge equal to the greater of 1 ½% per month or the highest applicable rate allowed by law on all such overdue amounts. 6. Delivery/Shipment. Unless otherwise specified, all Products are shipped F.O.B. ex Factory (point of shipment), regardless of transportation costs being “allowed”, “prepaid”, or “collect”, to the accessible common carrier point nearest first destination designated by the Customer. In all circumstances, Power Systems reserves the right to invoice any completed Product up to five (5) business days prior to the effective order acknowledged shipment date by Power Systems, payment terms remaining unchanged. Delivery to Destination- Freight Prepaid and Allowed: When the quotation calls for delivery to Customer’s site, Power Systems will deliver F.O.B ex works, Freight Allowed to a destination or accessible common carrier point nearest first destination designated by the Customer within North America. Delivery to an overseas destination or requiring shipment over an international waterway will be to a designated warehouse at point of Embarkation; additionally, an administrative fee will be added to the net price. Method of Shipment: Shipping dates contained in quotations are approximate and are based upon receipt of complete information with the order. If drawing approval is required, drawings must be returned and released to production per the schedule as stated in the quotation. Upon release to production, an acknowledged shipment date will be provided. Power Systems will determine the point of origin of shipment, the method of transportation and the routing of shipment. Customers requiring shipment by a method or routing other than that of Power Systems ‘selection will be billed any excess or premium in transportation charges. If the actual transportation charges on these shipments are less than such common carrier charges, then no allowance will be made for the difference. In no event will Power Systems be responsible for demurrage or detention charges. Any charges for special services, including but not limited to, special train, lighterage, and coordinated arrival times of multiple trucks or other modes of conveyance, construction, or repair of transportation facilities will be paid or reimbursed by the Customer. Customer Pick-Up: No allowance will be made in lieu of transportation if the Customer accepts shipment at the factory, or the warehouse, or freight station after order acceptance by Power Systems has occurred. Customer hereby expressly consents that Will-Call Orders (e.g. completed orders for which the Customer has previously elected at time of order to arrange for transportation of completed Products) and Bill and Hold Orders (e.g. completed orders for which the Customer and Power Systems have mutually agreed that Power Systems will temporarily store completed Products) shall be invoiced at 1) time of pick-up; or 2) upon the later of the contractually acknowledged shipment date by Power Systems or the date of actual Product completion; or 3) upon such other date as the Customer and Power Systems shall mutually agree in writing (e.g. electronic communication/email shall constitute written agreement). Power Systems shall not be responsible in any way for Customer’s inability to secure timely transportation or for any other delay caused by Customer whatsoever. Any applicable storage charges of completed Products shall be in accordance with Section 17 (Delayed Shipment) herein. Customer hereby expressly acknowledges and agrees that title to any Bill and Hold Product shall pass to Customer as at the invoice date. Furthermore, Customer hereby expressly consents to bear the risk of loss as it pertains to Bill and Hold Products, notwithstanding that the aforementioned Products are in the possession of Power Systems. Any associated insurance costs will be borne by the Customer. Page 2 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 Customer hereby consents to make payment on all invoices for Bill and Hold Products in accordance with the defined contract payment terms, including the full value and within the specified timing, contained herein without any offset, deduction, or counterclaim of any kind arising from the fact that Customer has not yet had delivery of such Bill and Hold Products. Shipment Damage: Except in the event of F.O.B. destination shipments, Power Systems will not participate in any settlement of claims for concealed or other shipment damage. When shipment has been made on an F.O.B. destination basis, the Customer must unpack immediately and, if damage is discovered, must: i) Not move the Product from the point of examination; ii) Retain shipping container and packing material (if applicable); iii) Notify the carrier of any apparent damage in writing on carrier’s delivery receipt and request the carrier to make an inspection; iv) Notify Power Systems within 72 hours of delivery; and, v) Send Power Systems a copy of the carrier’s inspection report. Inspection and Acceptance: Product will be deemed accepted by the Customer upon receipt. Should the Product not comply with technical Specifications, Customer must notify Power Systems, in writing, within twenty (20) calendar days of receipt of any alleged noncompliance. Any notification should cite each specification criteria that is alleged to be non-compliant, with evidence of the deviation. Correction of any confirmed noncompliance shall be in accordance with Power Systems’ obligations as defined in Section 8 (Warranty) herein. 7. Force Majeure Power Systems shall not be liable for failure to perform or for delay in performance due to any cause beyond its reasonable control, including, but not limited to: acts of God; acts or omissions which are substantially attributable to the Customer; unusually severe or harsh weather conditions; fire; flood; hurricanes; tornadoes; strikes or other labor difficulties; any act or failure to act or delay in acting on the part of any governmental authority or entity, including the issuance of or failure to issue government permits and/or export or re-export permits/licenses and/or project milestone release decisions; changes in laws; riots; epidemics; quarantine restrictions; war, insurrection or riot; acts of a civil or military authority; title and environmental issues; embargoes; fuel or energy shortage; blockades; transportation delays or accidents; inability to obtain necessary labor, materials or manufacturing facilities from usual sources; delays of subcontractors. In the event of delay in performance due to any such cause, the date of delivery or time for completion will be extended by a period of time equal to the greater of: (i) the time reasonably necessary to overcome the effect of such delay; or (ii) the time equal to the period of the delay. 8. Warranty Standard Warranty: Power Systems warrants that the Product sold hereunder will be of the kind and quality described in its Specification and will be free of defects in design, workmanship, and material. Such warranty shall be valid ONLY to Customers purchasing directly from Power Systems or directly through one of Power Systems’ duly authorized Manufacturer’s Representatives. All conditions and requirements of this Section 8 (Warranty) must be conveyed by the Customer to the ultimate end-user of the Product, if the end-user is different than the Customer, otherwise the Warranty may be rendered void. In the event that the Product fails to comply with this standard warranty and Power Systems is notified by Customer promptly, in writing, prior to any attempted repair not expressly sanctioned by Power Systems, and within eighteen (18) months from the date of invoice or twelve (12) months from the date of first use (“energization”) by Customer or the end user, whichever occurs first, Power Systems will correct confirmed non-conformities. Given Customer compliance and notification to Power Systems, as described just above, of any failure to conform to this standard warranty within the standard warranty period and delivery of Page 3 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 the defective Product to the location designated by Power Systems, freight prepaid, Power Systems will correct the confirmed non-conformity, solely at its option, repairing or replacing the defective part or parts and delivering the Product to the Customer F.O.B. point of shipment with freight prepaid to the accessible common carrier point within the ten (10) provinces and three (3) territories of Canada nearest the first destination designated by Customer. In the event Power Systems elects to perform a repair on-site, Customer warrants that access to the site shall be granted to Power Systems’ authorized repair personnel to perform the necessary repair work, notwithstanding whether or not the site is a Union Site. The foregoing Product warranty obligation of Power Systems shall be void with respect to any non-conforming Product resulting from the Product having been subjected to negligence, accident, or damage by circumstances beyond Power Systems’ control or when the Product has not been handled, monitored, stored, installed, protected, operated, or maintained in accordance with Power Systems’ specifications, instructions, recommendations, or industry standard practices. The Power Systems’ warranty obligation shall also be void as it relates to any non-conformity resulting from a defect due to the Customer’s design Specifications, the operation of the Product under abnormal conditions or contrary to specifications or instructions of Power Systems and industry standard practices; or where such use results in excessive wear and tear (beyond normal); or where suitable testing (e.g. Megger, resistance, DGA, or other diagnostic tests) with documented results has not been performed prior to re-energization of the Product after an abnormal System trip or System event involving the Product; or where modifications, alterations or repairs have been made by Customer or a third party without the prior written consent of Power Systems Power Systems’ repair or replacement obligations set forth herein are the Customer’s exclusive remedy for any failure of Power Systems to meet the design, material and workmanship standards necessary to meet the Customer’s Specification criteria. As such, correction of any confirmed non-conformity in the manner and for the period of time provided herein shall fully insulate Power Systems from any liability under this warranty section, whether the claims of the Customer are based in contract, tort (including negligence and strict liability), indemnity, or any other legal theory with respect to or arising out of the Product. In connection with the warranty obligations herein, in no event will Power Systems be responsible for gaining access to the Product, nor for disassembly, reassembly, or transportation of the Product or its parts to or from the place of installation. Accordingly, in and out charges, including, but not limited to the cost of removal of the defective Product from its related system, site and/or ancillary equipment, and the cost of its reinstallation in such system, union or customer labor costs, site and/or ancillary equipment, including, as stated above, all transportation costs to Power Systems’ plant or designated repair shop of the Product or parts shall be borne exclusively by the Customer. The Customer shall not return or dispose of any Product or part thereof with respect to which it intends to make a claim under the foregoing warranty, without the prior written authorization of Power Systems If the Product is exported or shipped outside the ten (10) provinces and three (3) territories of Canada for installation or commissioning, Power Systems warrants that the product supplied hereunder will be free from defects in design, workmanship, and materials. If Customer notifies Power Systems of any failure to conform to this warranty within the warranty period and delivers the defective Product to Power Systems’ manufacturing plant or the location designated by Power Systems, freight prepaid, Power Systems will correct confirmed non-conformities, at its option by repair or replacing the defective part or parts and delivering the product to the purchaser F.O.B. point of shipment with freight prepaid to the accessible common carrier point of departure within the ten (10) provinces and three (3) territories of Canada. Customer will be required to accept C.I.F. charges from that point. Customer shall pay all in-bound and out-bound customs duties, taxes and local customs broker fees or costs (Canadian and/or non-Canadian) as well as all other non-Canadian taxes of any type whatsoever. This warranty does NOT include field service trips outside of the ten (10) provinces and three (3) territories of Canada. Power Systems may, at its Page 4 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 sole discretion, issue quotations to customers requesting field service support outside the ten (10) provinces and three (3) territories of Canada and such quotations will be based upon prices in effect at time of request. Alternatively, Customer must use the repair services of Power Systems or those of Power Systems’ affiliates, or those that have been factory trained for such purpose by Power Systems, Power Systems’ affiliates, or have received Power Systems approved training from a third party; otherwise, the warranty protection herein shall not apply. Correction of non-conformities in the manner and for the period of time provided above shall constitute a fulfillment of all liabilities of Power Systems with respect to or arising out of such Products. Any repair or replacement undertaken in accordance with this warranty section shall not renew or extend the warranty period. THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE ARE EXCLUSIVE AND NO OTHER WARRANTIES OF ANY KIND, WHETHER STATUTORY, ORAL, WRITTEN, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE, SHALL APPLY. THE CUSTOMER’S EXCLUSIVE REMEDIES AND POWER SYSTEMS’ ONLY OBLIGATIONS ARISING OUT OF OR IN CONNECTION WITH DEFECTIVE PRODUCT, WHETHER BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE SHALL BE THOSE STATED HEREIN. Products supplied by Power Systems, but manufactured by others, are warranted only to the extent of the manufacturer’s warranty. Extended Warranty: Extended warranty coverage may be purchased separately at the time of order that continues warranty coverage beyond the expiration of the Standard Warranty period, applicable ONLY to the coils and core. All other Terms and Conditions applicable to the Standard Warranty period continue in full force and effect during the Extended Warranty period. As part of the extended warranty coverage, there are additional Customer requirements that must be satisfied. The Customer is required to provide evidence to Power Systems within ten (10) business days that validates the date of first use (“energization”) of the Product for which extended warranty coverage has been purchased. The Customer, at their sole expense, must comply, at a minimum, with the following two preventive maintenance inspection tasks; submitting documented results to Power Systems within ten (10) business days of each of the multiple inspection dates: 1) prior to energization, conduct a physical inspection of the Product for visible leaks and record the readings of each of the gauges (Oil Thermometer, Liquid Level Gauge, Pressure Vacuum Gauge, etc.) to serve as a BASELINE inspection; repeat this physical inspection with each successive Dissolved Gas Analysis sample as described just below; clearly visible photographs are acceptable documentation for these physical inspections; and, 2) prior to energization, take a Dissolved Gas Analysis (DGA) sample to serve as a BASELINE sample; followed by additional preventive maintenance DGA samples at three (3) months, six (6) months, and twelve (12) months following the date of first use (“energization”). Additionally, subsequent DGA samples are then required to be taken by the Customer, at the Customer’s sole expense, every twelve (12) months after the first twelve (12) months following first use (“energization”) until the Extended Warranty period expires. A maintenance log is provided by Power Systems for the Customer’s convenience at the back of the Operation and Maintenance (O&M) Instruction Manual. All DGA sampling must be taken properly by qualified personnel. Power Systems can assist with training for these sampling tasks. Additional DGA samples may be required to be taken by the Customer, at the Customer’s sole expense, if sample results should bring the Product’s condition into question. 9. Limitation of Liability Page 5 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 The total, aggregate, and cumulative liability of Power Systems (including hereinafter for purposes of this Section 9 (Limitation of Liability), its affiliates, parent company, shareholders, subsidiaries, officers, directors, employees, agents, assigns and their respective predecessors and successors) to the Customer, whether by indemnity, or in contract, guaranty, tort (including negligence and/or strict liability), by statute, or under any other legal theory shall in no event exceed the purchase order price of the specific Product in question. Under no circumstances shall Power Systems be liable to Customer, whether by indemnity, or in contract, guaranty, tort (including negligence and/or strict liability), by statute, or under any other legal theory for any special, incidental, indirect or consequential damages or losses of any nature, even if Customer has advised Power Systems in advance of the possibility of such damages. Under no circumstances shall Power Systems be liable to Customer, whether by indemnity, or in contract, guaranty, tort (including negligence and/or strict liability) by statute, or under any other legal theory for loss of profit, loss of production, loss of contract, loss of revenue, loss of use, cost of replacement power or temporary equipment (including additional expenses incurred in using existing facilities); claims or damages of Customer’s customers; cost of money; loss of investment opportunity; loss of business opportunity; increased operating costs; financing costs; or government fines, penalties or sums due, even if Customer has advised Power Systems in advance of the possibility of such economic or financial losses. The remedies of the Customer set forth herein are exclusive with respect to the Product and include anything done in connection with the Product, such as the performance or breach thereof, or from the manufacture, sale, repair or replacement, delivery, resale, or use of the Product; for the avoidance of doubt, the total, aggregate, and cumulative liability of Power Systems whether in contract, in tort (including negligence or strict liability), indemnity, guaranty, by statute, or under any other legal theory for any matter relating to the Product, shall not exceed the purchase order price of the Product. Under no circumstances shall Power Systems be liable to Customer for punitive damages, nor may any arbitrator(s) or court of law award punitive damages against Power Systems No action, regardless of form, arising out of the transactions under this contract may be brought by Customer more than one (1) year after the cause of action has occurred. Power Systems shall be entitled to the payment of its attorneys’ fees and costs in the event that Power Systems is forced to defend a legal action by Customer which claim(s) is covered and/or precluded by this Section 9. 10. Intellectual Property The sale by Power Systems of the Product ordered hereunder does not convey to or grant license, express or implied, to Customer regarding any of Power Systems’ intellectual property, including, but not limited to, patents, copyrights, trademarks, trade secrets, designs, artwork or other proprietary rights, except Customer’s non-exclusive right to use such intellectual property solely for the purpose of, and only to the extent necessary for, use of the Product purchased hereunder in accordance with Power Systems’ published specifications or user documentation. 11. Delay Damages To the extent that Power Systems is responsible for any delays in its performance under these Terms and Conditions of Sale with respect to meeting the final shipment date for the Product, its total liability for such performance delay to the Customer shall not exceed an amount equal to 5% of the value of the individual subject Product order. Compensation for Customer’s delay damages (in no event exceeding the 5% cap) will represent the full and final satisfaction of Power Systems’ liability for delay. Customer shall be obligated to substantiate through appropriate and reliable documents its damages incurred on account of the late performance of Power Systems Customer’s performance delay damages shall not be recovered for any intermediate milestones or deliverables by Power Systems, and covers only the final shipment of the Product. Any amounts payable to Customer by Power Systems hereunder shall be included as part Page 6 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 of the total, aggregate liability cap set forth in Section 9 (Limitation of Liability) herein. Customer shall use all reasonable efforts to mitigate the effect of any delay caused by Power Systems Under no circumstances shall Power Systems be liable for late shipment damages to Customer where such late shipment has been caused by a force majeure event as defined herein (Section 7 – Force Majeure), a suspension of the work, a change order or modification to the Product requested by Customer, or any other act or omission of the Customer, or end-user, which has contributed to or resulted in the delay in question. 12. Transfer In the event Customer transfers to a third party the Product or any right or interest therein, Customer agrees to indemnify, defend and hold Power Systems harmless from any and all liability of Power Systems to such transferee or any subsequent transferee in excess of what Power Systems’ liability would have been if such transferee had been bound by these Terms and Conditions of Sale in the same manner as Customer. 13. Title—Risk of Loss Ownership or legal title to the Product sold by Power Systems to Customer shall pass to the Customer at the earlier of invoicing date or shipment date. Risk of loss of the Product, or any part of same, shall also pass to the Customer at the earlier of invoicing date or shipment date. Until such time as the Customer has paid Power Systems the full value of the purchase order price, Customer agrees to perform all acts which may be necessary to protect and hold the Product free of claims, demands, liens, or encumbrances; or, alternatively, insure the Product for its full replacement value at Customer’s own expense with Power Systems being included under any such policy as an additional insured and/or to the extent that Customer owes Power Systems any amount under the purchase order, holding the proceeds of any insurance claim in respect of the Product in trust for Power Systems Without prejudice to any other remedy or right that Power Systems may legally have, if Customer fails to timely pay all amounts owed under the purchase order for the Product, Power Systems may at any time take possession of the Product delivered to Customer and sell it. If Power Systems takes possession of the Product and sells it, Customer continues to be liable to Power Systems for an amount equal to the aggregate of the unpaid amounts and costs and expenses incurred by Power Systems in taking possession of, transporting, storing, and selling the Product less an amount equal to the proceeds of the sale. If any amount owed under the purchase order is not paid timely by the Customer, the Customer hereby irrevocably authorizes Power Systems or its agents to enter any premises owned, leased, or otherwise occupied by Customer for the purpose of taking possession of the Product. The Customer must provide Power Systems with access to all information necessary to ensure compliance with this Section 13 (Title- Risk of Loss). 14. Contract Variations. Drawing Approval and Changes: If Customer approval of drawings is required, such review, comment or approval must be received by Power Systems no later than thirty (30) calendar days after submittal of drawings by Power Systems to Customer. If either the Customer fails to comply with this thirty-day (30- day) timeliness of review requirement or the Product has not been released to production within sixty (60) calendar days of written order acknowledgement, whichever occurs later, the order shall be subject to renegotiation of price and shipment terms as applicable. If at drawing approval, Power Systems has failed to design the Product in accordance with the Customer’s Specification, Power Systems will, at its own expense, make the appropriate changes. Where Customer’s Specifications are not sufficiently detailed, Power Systems reserves the right to design the Product in accordance with their professional best judgment and good commercial practices. If at any time the Customer makes changes to the Page 7 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 contract design as covered in Customer’s Specifications, the contract shall be subject to renegotiation of the price terms and date of shipment to reasonably cover any additional costs and commitments occasioned by the change. Orders Placed On Hold by Customer: An order placed on hold by the Customer for any reason, or by Power Systems while awaiting payment of overdue invoices, will be taken out of the production schedule. If/when the hold is removed, the order will be rescheduled from that subsequent release date at the then prevailing lead-time. Written notice will be sent to the Customer confirming the hold status. Change Orders by Customer: Change orders submitted by the Customer for previously acknowledged purchase orders are subject to additional charges. Changes to purchase orders that have not been released for production are subject to price adjustments for the costs of technical and administrative services, as well as applicable material and /or restocking costs. Changes made to purchase orders that have already been released to production, are subject to these same price adjustments plus $500 per change for production disruption and inefficiency costs. Lead-time extensions may result depending upon the nature of the change(s). Customer Supplied Material: From time to time, Power Systems may agree to install customer supplied material. Such agreements are subject to the following stipulations: (i) Power Systems will not be held responsible for delays in shipment caused by delays in the receipt of customer supplied material. Such delays will be subject to possible price adjustments due to customer induced delays and disruptions. (ii) Customer is responsible for supplying Power Systems with all applicable technical data and drawings (in sufficient detail as determined by Power Systems) at time of order entry, so as to ensure that the Product design can be made to accommodate form, fit, function, and interface with Customer supplied material. (iii) Errors by Customer to supply the correct material per the detailed technical data supplied at time of order, may result in delays in shipment and price adjustments. (iv) Power Systems will not be held responsible for Customer supplied material that is received damaged in shipment. In such an event, delays in shipment may result and will be subject to price adjustments. Service Conditions: The liquid-filled transformer Products supplied by Power Systems will be suitable for operation within the “usual service conditions” as defined in IEEE Standard C57.12.00, Section 4.1. Specifically, these usual service conditions include the following: (i) The transformer is designed for step down duty. (ii) The transformer is designed for operation at the rated kVA, at 3300 feet altitude, without exceeding temperature limits, provided the average temperature of the ambient air does not exceed the limits as listed below. The dielectric strength of the bushings and arresters will be suitable to allow satisfactory operation at 3300 feet. (iii) The maximum temperature of the ambient air should not exceed 40 degree C and the average temperature of the ambient air, for any 24 hour period, should not exceed 30 degree C. (iv) The input voltage when applied to any rated tap, at rated frequency, should not result in an output voltage greater than 110% at no load, and 105% at rated output load. The output load power factor must be 80% or better. (v) When unusual or special service conditions, such as damaging or explosive vapors, abnormal vibrations, shocks, transportation, storage conditions, poor wave form, unbalanced voltage, or planned regular short circuits exist, or service conditions other than those described in (i), (ii), (iii), and (iv) just above, it is the responsibility of the purchaser to bring these conditions to the attention of Power Systems at the time a quotation is requested by the Customer from Power Systems Failure by Customer to expressly provide advance notice to Power Systems of any unusual or special service conditions which do not meet the above may render the product warranty null and void. 15. Termination by Customer Page 8 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 Any order or contract may be cancelled by the purchaser only by written notice and upon payment of reasonable charges based upon the following: A. Where order is in process, but Product is not released for manufacture, cancellation charges shall be a $2000 flat fee plus the full cost of materials that are not useable on other orders plus 10% of Product price. B. Where order is in process with production space reserved and materials being readied for assembly: After Drawing submittal…………………………………………………………….10% of contract price After all critical materials ordered..................................................................25% of contract price After receipt of critical materials....................................................................50% of contract price After commencement of Assembly.................................................................75% of contract price Within six (6) weeks prior to scheduled date of shipment...............................90% of contract price Within four (4) weeks prior to scheduled date of shipment...........................100% of contract price Any Customer terminating or cancelling an order in accordance with the above termination schedule shall be fully bound and obligated to Power Systems in accordance with these Terms and Conditions of Sale to pay the above agreed termination price within thirty (30) calendar days of such termination or cancellation notice. 16. Suspension by Customer. Any orders held or delayed or rescheduled at the request of the Customer will be subject to the prices and conditions of sale in effect at the time of the release of the hold or the reschedule. Any such order held or delayed beyond thirty (30) calendar days will be treated as a Customer termination. 17. Delayed Shipment When the completed Product is ready for shipment (e.g. no earlier then five (5) business days prior to the contractually acknowledged shipment date by Power Systems unless mutually agreed otherwise by the parties in writing) and shipment cannot be made because of reasons beyond Power Systems’ control, Power Systems shall submit an invoice for the Product due and payable in accordance with the agreed payment terms and shall, upon written notice to the Customer, store such products. In such event, the following conditions shall apply: Notwithstanding Section 13 (Title – Risk of Loss) herein, risk of loss of the Product shall pass to the Customer upon moving such Product to storage. ALL expenses incurred by Power Systems in connection with the storage of products, including but not limited to demurrage, the cost of preparation for storage, storage charges, insurance, and handling charges shall be payable by the Customer upon submission of invoices by Power Systems. Power Systems may at its’ sole discretion, agree to store completed Product(s) for a maximum of two (2) weeks at no additional charge on a space available basis, with the understanding and the hereby expressed consent of the Customer that the date of invoice will be the date that the Product was originally scheduled to ship and that payment terms will not be changed. After such two (2) week timeframe, a storage charge of $250 per Product per week, or part thereof, will be assessed and billed to the Customer. Power Systems reserves the right to require full payment of all storage charges prior to shipment. 18. Cancellation by Power Systems Power Systems shall have the right to cancel at any time by written notice for any material breach of these Terms and Conditions of Sale by Customer. Page 9 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 19. Returning of Product. Product may not be returned except with the prior written agreement of Power Systems and subject to terms specified therein by Power Systems 20. Product Notices Customer shall provide the end-user (including its employees) of the Product with all Power Systems supplied product and patent notices, warnings, instructions, recommendations and similar materials. Under no circumstances shall Customer or the end-user of the Product remove any such information which may be affixed to the Product or to the related materials shipped with the Product. 21. Testing and Acceptance of Goods Testing of the Product before shipment is carried out in accordance with Power Systems’ routine factory test procedures. Upon the Customer’s request, Power Systems shall provide ANSI/IEEE test reports for the Product. In the event Customer requests testing other than Power Systems’ standard factory tests and/or requests witness testing and/or inspections, Customer shall pay for all such additional testing, witness costs, and any and all associated charges. 22. Replacement Parts Power Systems will maintain technical Specification information for each Product for a period of not less than ten (10) years after the date of invoice. Power Systems cannot guarantee the business future of its suppliers but will expend commercially reasonable efforts to supply future replacement parts for Products at prices that are consistent with then-year pricing. 23. Severability Should any provision of these Terms and Conditions of Sale be found to be in violation of law, the remainder of these Terms and Conditions of Sale shall be in full force and effect. 24. No Assignment Neither these Terms and Conditions of Sale nor any rights, interest or benefits of Customer hereunder may be assigned by Customer to any other party without the prior written consent of Power Systems 26. Choice of Law/Venue/Jurisdiction/Agreement to Arbitrate The validity, performance, construction, and effect of any Purchase Order which is subject to these Terms and Conditions of Sale shall be governed by the laws of the province of Ontario, without regard to its choice of law rules or those of any other jurisdiction. In the event of any dispute arising out of or in connection with the present product order, the parties shall attempt in good faith to resolve all disputes promptly by negotiation as follows. Any party may give the other party written notice of any dispute not resolved in the normal course of business. Executives and /or personnel of both parties shall meet at a mutually acceptable time and place within ten (10) business days after delivery of such notice, and thereafter as often as they reasonably deem necessary, to exchange relevant information and to attempt to resolve the dispute. If the matter has not been resolved within sixty (60) calendar days from the referral of the dispute or if no meeting has taken place within thirty (30) calendar days after such referral, either party may initiate mediation as provided hereinafter. If a negotiator intends to be accompanied at a meeting by a legal representative, the other negotiator shall be given at least three (3) business days notice of such intention and may also be accompanied by a legal representative. All negotiations pursuant to this Section are confidential and shall be treated as compromise and settlement negotiations for legal purposes. Page 10 of 11 PST STANDARD TERMS AND CONDITIONS OF SALE Effective Date: November 2011 In the event that any dispute arising out of or relating to these Terms and Conditions of Sale is not resolved in accordance with the procedures established just above, such dispute shall be submitted to private, non-binding mediation to another mutually agreed upon mediator. Such mediator shall be selected from the then current list of approved Canadian mediators. If the mediation process has not resolved the dispute within sixty (60) calendar days of the submission of the matter to mediation or within such longer period as to which the parties may agree, the dispute shall be decided by binding arbitration as set forth below. Any mediation that takes place pursuant to these Terms and Conditions of Sale shall be conducted according to the then current provincial mediation procedures, whichever apply, unless some other process or procedure is mutually agreed upon by the parties. All disputes in question not resolved by non-binding mediation between Power Systems and the Customer, shall be submitted to private, binding arbitration. The arbitration shall be conducted in accordance with the then current Construction Industry Arbitration Rules or Commercial Arbitration Rules, as applicable, then in effect, or a mutually agreed upon set of arbitration rules. This agreement to arbitrate and any other agreement or consent to arbitrate entered into in accordance herewith will be specifically enforceable by any court having jurisdiction. Notice of demand for arbitration must be filed in writing with the other party to this Agreement. The demand must be made within a reasonable time after the dispute has arisen. In no event may the demand for arbitration be made if the institution of legal or equitable proceedings based on such dispute is barred by the applicable statute of limitations, or these Terms and Conditions of Sale. Any arbitration may be consolidated with any other arbitration proceedings. The arbitrator will have no authority to award attorneys’ fees, punitive or treble damages to any party, nor may the arbitrator award any damages or amounts or assess any costs against Power Systems (including its parent company, shareholders, affiliates, subsidiaries, directors, officers, employees, successors and/or assigns) which may be considered as excluded or limited by other Sections of these Terms and Conditions of Sale. The award of the arbitrator shall be specifically enforceable in a court of competent jurisdiction. If the total Dispute, exclusive of interest and arbitration costs, does not equal or exceed ONE Million Canadian dollars, the arbitration shall be heard by one neutral arbitrator. If the total dispute equals or exceeds ONE Million Canadian dollars, then the arbitration shall be heard by three neutral arbitrators. The procedures for the resolution of Disputes set forth herein shall be the sole and exclusive procedures for the resolution of Disputes, however, that a party may seek a preliminary injunction or other preliminary judicial relief if in its judgment such action is necessary to avoid irreparable damage or to preserve the status quo. Despite such action, the parties will continue to participate in good faith as per the procedures specified herein. Page 11 of 11