GENERAL CONDITIONS OF PURCHASE

THESE GENERAL TERMS AND CONDITIONS OF PURCHASE CONSTITUTE WATTCO INC.’S (THE “BUYER“) PROPOSAL TO PURCHASE PRODUCTS (THE “PRODUCTS“) FROM ITS SUPPLIERS (“SUPPLIERS”) AND ARE INTENDED TO DEFINE THE PURCHASE AND SALE OPERATIONS APPLICABLE BETWEEN ITS SUPPLIERS (THE “GENERAL TERMS AND CONDITIONS”). THESE GENERAL TERMS AND CONDITIONS BECOME BINDING (A) ONCE THE BUYER RECEIVES AN ACKNOWLEDGEMENT OF RECEIPT OR AN ORDER FROM THE SUPPLIER, OR (B) UPON DELIVERY OF THE PRODUCTS, WHICHEVER IS EARLIER.

  1. ORDERS

    1. All purchases made by the Buyer are subject to an order (each, an “Order“), which shall include a description, a quantity, a price, a deadline for delivery and a method of payment. Any modification of the terms of the Order must be subject to an amendment confirmed by both parties. 
    2. The Order will only become final after the Supplier has sent an acknowledgement of receipt or an order within a maximum of 5 days without modification or reservation of any kind, the Buyer being entitled to cancel the Order without penalty if the Supplier’s acknowledgement of receipt has not been received within this period. 
    3. The Supplier undertakes to inform the Buyer of any changes in its manufacturing processes or in the specifications of the Products. In the event of a change affecting the quality of the Products, in the opinion of the Buyer, the Buyer shall be entitled to cancel the Order with immediate effect and without penalty.
    4. The Supplier is deemed to have renounced to its general terms and conditions and to any special condition, which has not been agreed upon in writing by the Buyer, including any stipulation to the same effect as the present subsection, which are hereby excluded. Any order made by the Buyer is made upon the assumption that such a renunciation has been given by the Buyer. Such renunciation will be irrevocably deemed to have been given by the Supplier if the latter does not advise the Buyer in writing of its refusal to renounce to its general terms and conditions prior to the Buyer placing an Order with the Supplier.
  2. PRICING
    1. The prices quoted on the Order shall include all extra charges, including [packaging, containers, insurance, transportation and any other costs, risks or charges incurred in connection with the execution of the Order. All taxes imposed on the Order shall be shown separately on Supplier’s invoice. Any additional costs, of any nature whatsoever, shall be subject to the prior written consent of the Buyer. 
    2. Unless otherwise agreed in writing between the parties, the Buyer’s Orders shall not give rise to any payment of advances, deposits or down payments and payments shall be made 60 days after the invoice is issued. 
    3. [Notwithstanding the above, the Supplier agrees that the prices for the Products shall not be less favourable than to any other customer of the Supplier for similar Products in similar quantities. If prices of similar Products are reduced prior to the delivery of the Products, the prices of the Order shall be reduced correspondingly.] 
  3. SHIPPING, DELIVERY AND PRODUCT QUALITY
    1. The Products and the delivery shall comply with all international and local regulations regarding respect for the environment, environmental safety, export regulations, traceability, labelling, as well as any other regulations applicable to the Products in force at the time of delivery (the “Regulations”). Supplier shall comply with best commercial practice to ensure safe arrival at destination at the lowest transportation cost. Unless otherwise agreed in writing between the parties, ownership title, and risk of loss shall pass to the Buyer upon delivery of the Product in accordance with Section 3c) hereof. 
    2. Delivery times requested by the Buyer and accepted by the Supplier are of the essence. The Supplier shall be fully responsible for any delay in delivery, and shall bear all damage, direct or indirect, without prejudice to the Buyer’s rights, and the Buyer may, at its option and at the Supplier’s expense, either (i) approve the revised delivery schedule, (ii) reduce the total quantity of Products on the Order or (iii) terminate the Order by notice to Supplier. 
    3. Receipt means acceptance of the Products following a validated conformity inspection of the Products carried out by the Buyer. In case the Products are defective in material or workmanship or otherwise not in conformity with the drawings, specifications, samples, or other descriptions of the Order, such Products or a part thereof shall be returned to Supplier for a refund or, upon written instructions from the Buyer, shall be replaced or repaired by Supplier, excepting, however, if the parties agree in writing that such Products shall be repaired by Buyer at Supplier’s expense. Any return goods shall be shipped transportation collect (declared at full value, unless Supplier advises otherwise), and Supplier shall have all risk of loss from and after the time of shipment. In addition, the Supplier shall be deemed to be fully liable to the Buyer for all damage caused by any lack of conformity and quality of the goods, both qualitatively and quantitatively, and undertakes to compensate the Buyer for any damage resulting therefrom. The Supplier shall indemnify and hold the Buyer harmless from and against any claim, proceeding, action, fine, loss, cost and/or damage arising from any breach by the Supplier of the foregoing or related clauses.
    4. Neither Buyer’s payment of nor its inspection of the Products prior to delivery shall in any way waive Buyer’s right to make final inspection of the Products. The inspection rights of Buyer are in addition to any other rights and remedies under applicable law and the failure by Buyer to exercise its right to reject any Product shall not cause a waiver of any such rights or remedies.
  4. WARRANTY, LIABILITY AND INDEMNIFICATION 
    1. Supplier expressly warrants that the Products (i) are of sound, fair and merchantable quality, (ii) are free from defects in material, workmanship and packaging, (iii) comply with all applicable specifications, appropriate standards and Regulations, (iv) are free from any lien or charge, (v) are fit for their intended use, and (vi) do not infringe any rights of third parties. 
    2. Supplier further warrants that it has obtained all permits, licences, and certifications necessary for the Products to be exported out of the country of origin and imported in its country of destination, delivered to Buyer and used or sold within its country of destination.
    3. Supplier shall indemnify and hold Buyer harmless for all damages arising out of any breach of these warranties and against any defect, apparent or hidden, arising from a design, material or manufacturing error or omission, for a period of 3 years from the delivery of the said Products and shall indemnify the Buyer against any loss, material or immaterial, direct and indirect damage (including costs incurred, such as defence costs) resulting therefrom and in particular against any damage of any kind (i) caused to persons, (ii) resulting from noncompliance with any obligation of Supplier under these General Terms and Conditions and (iii) claims by third parties to Buyer arising out of or relating to the Products provided under these General Terms and Conditions. Breach of these warranties, or any other term of these General Terms and Conditions or the Order, shall entitle Buyer to all available remedies, including those under applicable law.
    4. Supplier shall extend all warranties from its vendors and suppliers to Buyer, as applicable, and to Buyer’s customers and Supplier’s warranties herein shall survive any resale by Buyer. 
  5. SUBCONTRACTING
    1. Supplier shall not subcontract any work or any goods to be supplied under an Order without the prior written approval of Buyer.
  6. INTELLECTUAL PROPERTY AND CONFIDENTIALITY
    1. The mention or use of the Buyer’s name and/or trademarks may only be made with the prior written approval of the Buyer. The Supplier guarantees the Buyer against any action by third parties relating to industrial property rights or intellectual property rights relating to the Products or their processes. The Supplier shall bear the full costs of these actions. If the Buyer suffers from a disturbance of use or enjoyment, the Supplier shall immediately take, and at its own expense, the appropriate measures to put an end to the disturbance. In addition, it will have to modify or replace the disputed Products.
    2. Supplier warrants that the Products does not infringe on any invention, patent, trademark, trade name, industrial design, copyrightable document or object as well as any know-how or trade secret (the “Intellectual Property”) of any third party.
    3. Supplier shall indemnify Buyer and hold Buyer harmless from and against all liability, loss, loss of profits, damage and expense, including reasonable counsel fees and costs of litigation, resulting from any claim of infringement of Intellectual Property and any litigation relating thereto. In the case where the Products or a part thereof are held to constitute infringement, Supplier shall, at its expense, either (i) procure for the Buyer the rights to continue to use the Products, (ii) replace the Products so that the it becomes non-infringing, or (iii) retake the Products and refund the full amount of the purchase price, transportation and installation cost of not only of the Products that are infringing, but all other Products sold by the Supplier to the Buyer whose use depends upon the availability of the infringing Intellectual Property. Such obligations shall survive acceptance of the Products and payment therefore by Buyer.
  7. CONFIDENTIALITY
    1. The Supplier will hold in confidence all information and data of which the Supplier may become aware, including any Intellectual Property, except that which now is or in the future becomes public knowledge through no fault of the Supplier and/or any person under its control and more particularly, the Supplier will take all necessary measures to maintain the confidentiality of such information and data.
  8. NON-SOLICITATION
    1. Except with the prior written consent of the Buyer, the Supplier agrees that for a period of 3 years after the date of the Order, the Supplier nor any of its affiliates or representatives (each, a “Restricted Person”) shall directly or indirectly, for itself or on behalf of another person or entity solicit for employment or otherwise induce, influence or encourage terminating employment with the Buyer or any of its affiliates/subsidiaries, or employ or engage as an independent contractor/consultant, any employee of the Buyer or any of its affiliates/subsidiaries (each, a “Covered Employee”), except (i) pursuant to a general solicitation through the media that is not directed specifically to any employees of the Buyer, unless such solicitation is undertaken as a means to circumvent the restrictions contained in or conceal a violation of this Section 8 or (ii) if the Buyer terminated the employment of such Covered Employee prior to the Restricted Person having solicited or otherwise contacted such Covered Employee or discussed the employment or other engagement of the Covered Employee.
  9. TERMINATION
    1. Buyer may terminate all or any part of the Order at any time, for convenience, by written notice to the Supplier. Supplier shall submit its termination claim to Buyer within thirty (30) days from the effective date of termination. 
    2. Buyer shall have the right to terminate the Order or any part thereof without further cost or liability in the following situations: (i) filing of a voluntary petition in bankruptcy by Supplier, (ii) filing of an involuntary petition to have Supplier declared bankrupt, (iii) the appointment of a receiver or trustee for Supplier, (iv) the execution by Supplier of an assignment for the benefit of creditors, (v) Supplier’s failure to make or delay in making deliveries hereunder or any other failure of Supplier to perform in accordance with these General Terms and Conditions or the Order, without excluding any other remedies available to Buyer. 
    3. In the event Buyer terminates the Order, in whole or in part as provided in paragraph 9b), the Buyer will have the right to purchase substitute goods or services from any third party at the Supplier’s expense, without incurring any liability whatsoever for any such revision, reduction or termination. In addition, Buyer may, at its option, require Supplier to immediately transfer to Buyer all materials, work in process, completed goods, tooling, plans, and specifications allocable to the cancelled portion of this order.
  10. BUSINESS CONTINUITY
    1. Supplier agrees to take commercially reasonable efforts to mitigate the risk of business interruption, including, without limitation, the creation and implementation of a disaster recovery plan, periodic testing of such plan, and supply chain analysis to eliminate exposure to points of failure including tooling, materials, and any other critical elements to manufacturing of the Products. 
  11. APPLICABLE LAW AND JURISDICTION
    1. These General Terms and Conditions and the Order shall be construed and enforced in accordance with and governed by the laws of the jurisdiction of Ontario, Canada, without reference to any choice-of-law rules that would otherwise require the application of the laws of any other jurisdiction. The United Nations Convention on Contracts for the International Sales of Goods shall not apply to this order.
    2. Any proceeding arising out of or relating to these General Terms and Conditions and the Order may be brought in the courts of Ontario, and Supplier irrevocably submits to the exclusive jurisdiction of such court in any such proceeding, waives any objection it may now of hereafter have to venue or to convenience of forum, agrees that all claims in respect of the proceeding shall be heard and determined only in any such court and agrees not to bring any proceeding arising out of or relating to this Agreement in any other court. 
  12. FORCE MAJEURE 
    1. If the Supplier or the Buyer is prevented from carrying out the provisions hereof by reason of any act of God, war, revolution, blockade, riot, earthquake, cyclone, fire, flood, embargo, interference of civil or military authority or other providential, governmental or physical cause, existing or future, beyond the reasonable control of the parties, interfering with the production or receipt of Products as herein contemplated, the party which shall make or take the delivery, shall be excused from making or taking deliveries to the extent of such interference.
    2. Notwithstanding anything contained herein, neither a case of lockout nor a case of strike shall be considered a case of force majeure. Should any such event occur, the Supplier shall at its own expense, make alternate plans, including arranging for supply by affiliated or non-affiliated companies, to allow the Supplier to continue to comply with the Order, and shall deliver to the Buyer such alternate production and delivery plans as are acceptable to the Buyer.
  13. GENERAL PROVISIONS
    1. In case any one or more provisions of these General Terms and Conditions shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions hereof, and such other provisions shall be construed as if such invalid, illegal or unenforceable provision had never been conformed herein.
    2. This document and any related Order sets forth the entire agreement and understanding between the parties with respect to the subject matter hereof and merges and supersedes all prior discussions, representations, understandings and agreements, whether oral or in writing between the parties with respect to the said subject matter, including any term or condition appearing on the Buyer’s purchase orders. This document and any related agreement may be altered, modified or amended only by a written document signed by both parties.
    3. Supplier shall not assign this order or any contract resulting here from, or any rights hereunder, without first obtaining the written consent of Buyer.
    4. Buyer shall be entitled at all times to set off any amount owing at any time from Supplier to Buyer
    5. The provisions of these General Terms and Conditions and of the Order that by their nature may reasonably be presumed to have been intended to survive any termination or expiration of these General Terms and Conditions or the Order, shall survive any termination or expiration of these General Terms and Conditions or the Order. 
    6. The Supplier expressly confirms that it has had the opportunity to review and discuss with the Buyer each of the clauses hereunder, that it has had the opportunity to ask all any questions relating to its understanding, that it has obtained satisfactory answers to the said questions, has read and understood these General Terms and Conditions, has received a copy thereof and that it has had the opportunity to consult a lawyer before accepting the Order. 
    7. The parties hereto expressly requested that this document be drafted in English. Les parties aux présentes confirment leur volonté que cette convention de même que tous les documents, y compris tous avis s’y rattachant, soient rédigés en anglais seulement.

 

MTL01: 5110539: v3