TERMS AND CONDITIONS OF SALE (CANADA)

All proposals, quotations and orders for the sale of MAZAK CORPORATION (“MAZAK”) products, or for the rendering of services by MAZAK, are subject to the following terms and conditions.

1. DEFINITIONS. In this Purchase Agreement (the "Agreement"), "PPSA" means the Personal Property Security Act or the Civil Code of Quebec, as applicable, of the province referred to in the "Governing Law" section of this Agreement, as amended, renamed or replaced from time to time; "Non customized Products" means those Products that SELLER determines, in its sole discretion, to be of a standard type routinely manufactured by SELLER or SELLER's affiliates; "Customized Products" means those Products that SELLER determines in its sole discretion to be a non-standard type specially manufactured for a specific number of orders; and the term Electronic Signature means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by an authorized person with the intent to sign the record.
2. PRICES; TAXES; DELIVERY. Prices are subject to change by SELLER without notice to BUYER. Prices do not include taxes which are separately itemized. BUYER shall pay all federal, provincial and/or municipal excise, sales, occupation, use, goods and services, value-added or similar taxes, levies, governmental charges or surcharges applicable to the Products, or the sale or use thereof, whether now in effect or hereafter imposed. Unless otherwise agreed upon in writing, all Products shall be shipped F.C.A. point of origin, except that Products shipped from outside Canada shall be shipped F.C.A. Port of Entry. "Port of Entry" shall mean any place at the borders of Canada at which a customs-house or revenue office is established for the administration of Canadian laws imposing duties on imported goods. Where the delivery of Products is delayed by BUYER or by reason of any contingency referred to in Section 23 hereof, SELLER may deliver such Products by moving them to storage, and BUYER shall be liable for any storage charges or price increases in effect at the date of shipment to BUYER. Should the carrier designated by BUYER fail to pick up the Products within two (2) days after being given notice, SELLER reserves the right to select and make shipment by an alternative carrier and charge BUYER for such shipment.
3. RISK OF LOSS; TITLE. Notwithstanding Section 2 hereof, all risk of loss or damage to the Products shall pass to BUYER, and delivery shall be deemed to be completed, upon delivery of the Products to the carrier, its agents or designee, or upon moving the Products into storage, whichever shall occur first, at the point of shipment but title to the Products shall not pass to BUYER upon delivery and shall remain in SELLER at BUYER's risk until all amounts owing hereunder have been paid in full. As additional security for the prompt payment and performance of Buyer's obligations under this Agreement including the payment of the Principal Balance, BUYER grants to SELLER a continuing security interest (including a purchase money security interest) in, and hypothecates, the Products, including any replacements thereof or substitutions therefor and all attachments, accessories, parts, components and equipment hereafter incorporated in or on the Products by way of addition, accession or replacement, and all proceeds thereof, including all amounts payable under insurance policies with respect thereto and all proceeds of sale, exchange, lease, rental or other disposition or dealing (all of such Products, attachments, accessories, parts, equipment and proceeds being herein collectively called the "Collateral"). Until all amounts due hereunder have been paid in full to SELLER, all proceeds of the Collateral received by BUYER shall be held in trust for SELLER separate and apart from BUYER's other funds or accounts and forthwith paid over to SELLER. SELLER shall remain absolute owner of the Collateral and retains title to the Collateral until all amounts due hereunder have been paid in full to SELLER, notwithstanding delivery of the Collateral to the BUYER or the BUYER's possession of the Collateral. BUYER shall perform such acts as may be necessary to perfect the security interests and the hypothec created hereunder and assure retention of title (reservation of ownership) to the Products by SELLER and, if requested by SELLER, execute any necessary additional documentation with respect thereto. BUYER shall make certain that (i) all Products retain their personal (movable) property character in order not to be characterized as fixtures and (ii) if any Products are placed on any property subject to any mortgage, hypothec, lien or encumbrance, the Products shall be expressly excluded from the terms of such mortgage, hypothec, lien or encumbrance.
4. COMMENCEMENT OF PRODUCTION. BUYER acknowledges that SELLER will not commence production or manufacture of any of the Products until the down payment as specified above has been paid.
5. CURRENCY OF PAYMENT. Except as otherwise provided herein, any and all amounts required to be paid by BUYER hereunder shall be paid in lawful money of the United States in accordance with the terms and provisions hereof, without deductions or withholdings for and free and clear of any and all taxes, levies, duties, withholdings or restrictions of any nature now or hereafter imposed, levied, collected, withheld or assessed with respect to any of the indebtedness owing under this Agreement by Canada or any political subdivisions or taxing authority or other agency thereof ("Canadian Taxes"). If any Canadian Taxes are required to be deducted or withheld from an amount payable to SELLER under this Agreement, such amounts payable shall be increased to yield to SELLER (after payment of all Canadian Taxes) the amounts specified to be paid hereunder. BUYER shall pay to the relevant taxing authority the full amounts required to be deducted or withheld promptly upon the earlier of determining such deduction or withholding is required and the receipt by BUYER of notice that such amounts have been assessed against SELLER. Whenever a Canadian Tax is paid by BUYER on behalf of SELLER, BUYER shall, as promptly as possible, send SELLER an official receipt showing payment thereof, together with such additional evidence of payment as SELLER may reasonably require. BUYER shall indemnify SELLER for the full amount of any Canadian Taxes and liability (including penalties, interest and expenses) arising therefrom or with respect thereto which are paid by SELLER, whether or not such Canadian Taxes or liabilities were correctly or legally asserted, such indemnification to be made forthwith after the SELLER makes written demand thereon. The amount of the hypothec created pursuant to Section 3 shall be the Canadian Dollar equivalent of twice the value of the Principal Balance specified in item 8 of the Terms of Payment on the front section of the Agreement, using the exchange rate (as published in the Wall Street Journal) of Canadian Dollars per U.S. Dollar on the date of the execution of this Agreement, with interest from the date hereof at the rate of Twenty-Five Percent (25%) per annum.
6. INDEMNITY RE: CURRENCY. If any payment under this Agreement is made, pursuant to a judgment or order of any court or tribunal or otherwise, in Canadian Dollars, such payment in Canadian Dollars will discharge the obligation of the party obligated to make the payment (the "Payor") to the extent of the U.S. Dollar equivalent of such Canadian Dollar payment using the exchange rate (as published in the Wall Street Journal) of U.S. Dollars per Canadian Dollar on the date such obligation is paid. Consequently, (a) if such U.S. Dollar equivalent is greater than the U.S. Dollar equivalent of such Canadian Dollar payment using the exchange rate (as published in the Wall Street Journal) of U.S. Dollars per Canadian Dollar on the date the obligation that is the subject of such judgment or order was originally due and payable pursuant to the terms of this Agreement (the "Original Exchange Rate"), then the recipient of such payment (the "Payee") shall repay the excess to the Payor and indemnify and save the Payor harmless from and against any loss or damage arising because of such excess; and (b) if such U.S. Dollar equivalent is less than the U.S. Dollar equivalent of such Canadian Dollar payment using the Original Exchange Rate, the Payor shall pay the difference to the Payee and indemnify and save the Payee harmless from and against any loss or damage arising because of such deficiency. The obligation set forth in the immediately preceding sentence (i) is separate and independent from any other obligation of the parties hereto, (ii) will give rise to a separate and independent cause of action, (iii) will apply irrespective of any indulgence granted by the Payee from time to time, (iv) will continue in full force and effect notwithstanding any judgment in order for a liquidated sum in respect of an amount due under this Agreement or under any judgment or order, and (v) will not merge in any order of foreclosure made in respect of any security given by the Payor or any other person to or for the benefit of the Payee.
7. SHIPMENT AND PRODUCTION ESTIMATES. The shipping date is estimated upon the basis of immediate receipt by SELLER of BUYER'S acceptance of the terms and conditions set out herein and all information required to be furnished by BUYER to SELLER. SELLER shall, in good faith, endeavour to ship the Products to BUYER by the estimated shipping date but reserves the right to vary such date free of any liability to BUYER and SELLER is not liable for any consequential, indirect, special, punitive or other damages resulting from delay, failure in performance or delivery or inability to perform or deliver the Products to BUYER by the estimated shipping date, notwithstanding any commitment or representation to the contrary. Production data, where given, is estimated only based upon the Products being maintained and operated under normal working conditions with competent, trained operators and maintenance personnel and upon SELLER's analysis and understanding of the limits of accuracy, machinability and stability of materials, amount of material to be removed, suitability of designated locating points and handling facilities provided. PRODUCTION ESTIMATES ARE APPROXIMATE AND ARE NOT GUARANTEED OR WARRANTED and BUYER acknowledges and agrees that SELLER shall not be liable for any consequential, indirect, special, punitive or other damages resulting from any failure of BUYER or the Products to meet the production estimates. Unless expressly provided by this Agreement, SELLER makes no representation or warranty regarding part accuracies or specifications, which are the responsibility of BUYER.
8. SUBSTITUTION OF MATERIALS. In the event that SELLER is unable to obtain any specified materials or parts in time to meet the scheduled delivery date, SELLER may substitute other materials or parts which will not in SELLER's judgment impair the essential functions, strength or life of the Products.
9. PHOTOGRAPHS, ETC. BUYER acknowledges and agrees that the Products are not exactly as illustrated in photographs, illustrations, brochures, manuals or advertising materials ("Advertising Materials") relating to the Products and are subject to variation in design. Any statement or depiction made or contained in Advertising Materials are not binding in any way. Any minor deviation shall not invalidate the sale of the Products or entitle BUYER to any price adjustment.
10. WEIGHTS AND SPECIFICATION. BUYER acknowledges and agrees that all weights, measurements and powers given by SELLER are estimates only and are subject to variation. Any minor deviations shall not invalidate the sale of the Products or entitle BUYER to any price adjustment.
11. INSTALLATION AND ACCEPTANCE. Installation by SELLER shall be deemed to have occurred upon the completion of (i) the items referred to in SELLER's Installation Form if the same are required for the performance of this Agreement or (ii) any other installation requirements otherwise agreed to in writing by SELLER. Except as otherwise set forth in this Section 11 or in SELLER's Installation Form, SELLER shall have no obligation to provide any erection or installation services in respect of the Products. BUYER shall be solely responsible for timely site preparation for any erection, installation, warranty or other services that SELLER may provide. Unless BUYER provides SELLER with written notice, within forty-five (45) days after the date of shipment, of (i) any incomplete item with respect to the order of the Products or (ii) any defect in the Products, then BUYER's acceptance of the Products shall be deemed to have occurred on the earlier of BUYER's written acceptance to SELLER or on the forty-fifth (45th) day after the date of shipment. In the case of proper and timely written notice to SELLER from BUYER, then BUYER's acceptance shall be deemed to have occurred on the date SELLER reasonably corrects such incomplete order or defect. otwithstanding the foregoing, any assignment of the Products or granting of security by the BUYER for the purpose of an equipment lease or other financing transaction shall be deemed to be an acceptance of the Products.
12. TERMINATION BY SELLER. At any time prior to the delivery of the Products to BUYER, SELLER may by written notice to BUYER, and without any liability, cancel BUYER's order and terminate this Agreement if: (i) BUYER fails to perform any of the terms and conditions hereof and does not cure such failure within a period of ten (10) days after receipt of written notice from SELLER specifying such failure provided, that, no such cure period shall apply to BUYER's failure to pay in a timely manner; (ii) in SELLER's opinion, BUYER has not established or maintained credit to meet promptly the payment terms set out herein and in SELLER's Standard Terms of Payment; (iii) BUYER ceases or threatens to cease to carry on in the normal course all or any material part of BUYER's business; (iv) BUYER becomes insolvent or bankrupt, or makes or files a proposal, a notice of intention to make a proposal or an assignment for the benefit of creditors under the Bankruptcy and Insolvency Act (Canada) or comparable legislation in Canada or any other jurisdiction; a petition in bankruptcy is filed against BUYER, or, if BUYER is a corporation, proceedings are initiated under any legislation by or against BUYER seeking its liquidation, winding-up, dissolution or reorganization or any arrangement or composition of its debts; (v) a receiver (including a receiver and manager, trustee, custodian or other similar official is appointed in respect of BUYER or any part of its assets; (vi) BUYER dies or becomes legally incompetent if BUYER is an individual; or (vii) BUYER is merged or amalgamated into, or all or a substantial part of its assets are sold to, another company or person. As a nonexclusive alternative to cancellation, SELLER may, for any reason referenced in subsections (i)-(vii) of this Section 12, without any liability, (a) suspend any of its obligations hereunder, (b) physically render the Product unusable and/or (c) exercise any and all of its rights as a secured creditor under the PPSA.
13. TERMINATION BY BUYER. BUYER and SELLER agree that it would be extremely difficult to calculate the damages to be caused to SELLER if BUYER cancels its order prior to delivery of the Products. Therefore, BUYER and SELLER agree that the cancellation charges set out in this Section 13 constitute a good faith effort to pre-estimate the damages, costs, losses and injury SELLER would sustain by reason of cancellation. BUYER acknowledges that none of these charges are a penalty and that they are not unreasonable or disproportionate to the probable losses to be suffered by SELLER in the event of cancellation. At any time prior to delivery of the Products to BUYER, (a) BUYER may, by prior written notice to SELLER, (i) if within thirty (30) days of this Agreement, cancel an order for Non-customized Products and terminate this Agreement, subject to a cancellation charge to be paid to SELLER equal to ten percent (10%) of the purchase price of such Products or (ii) if more than thirty (30) days has elapsed from the date of this Agreement, cancel an order for Non-customized Products and terminate this Agreement, subject to a cancellation charge to be paid to SELLER equal to fifteen percent (15%) of the purchase price of such Products, plus payment of any other costs incurred by SELLER in performing its obligations hereunder, (b) BUYER shall not cancel any order with SELLER for Customized Products (or any order for Non-Customized Products which includes any customized or specialized modifications, tooling, options, parts or accessories or added services or runoff that SELLER has agreed to provide) without SELLER's prior written consent. If SELLER authorizes the cancellation of any such order, then BUYER shall be liable to SELLER for fifteen percent (15%) of the contract price of such order and as follows: (i) for cancellation of an order for such Products for which SELLER's production is within thirty (30) days of the scheduled completion date, SELLER shall complete such production and hold such Products for BUYER's disposition, with BUYER liable to SELLER for full payment within thirty (30) days after completion, and (ii) for cancellation of an order for such Products for which SELLER's production is not within thirty (30) days of the scheduled completion date, BUYER shall pay SELLER; and (i) the actual costs and overhead expenses, determined in accordance with generally accepted accounting principles, for work in progress, order entry expenses, engineering process expenses and costs of materials and supplies procured or for which definite commitments have been made by SELLER in connection with BUYER's order. Unless otherwise agreed by SELLER in writing, under no circumstances shall BUYER have the right to delay shipment, delivery or acceptance of Products hereunder.
14. WARRANTY. SELLER warrants that any Product shall be free from defects in material or workmanship at the time of tender of delivery and for a period of two (2) years from either (a) the date a Product is placed under power or (b) two (2) months from the date of delivery, whichever is earlier. SELLER's obligation is limited to the repair or replacement (at SELLER's option) of any Product (except for consumable wear parts) which is (i) determined by SELLER, in his sole discretion, to be defective and (ii) is returned by BUYER, at BUYER's risk and expense within said two (2) year period to SELLER at its factory at 8025 Production Drive, Florence, Kentucky, U.S.A., or such other place as SELLER may designate in writing, with all transportation charges prepaid by BUYER. Except as otherwise quoted for specialty or high-speed spindles, the spindle part component is warranted for two (2) years or 4,000 hours, whichever is earlier. SELLER's repair or replacement costs are limited only to repair or replacement at SELLER's designated location. Should the services of a field service technician be required, SELLER shall make every reasonable effort to send a technician as soon as practicable at the BUYER's cost. This warranty is also conditional upon BUYER furnishing satisfactory evidence, as determined by the Seller, that the Products alleged to be defective have been properly maintained and correctly operated under normal conditions with competent supervision and within the operating limits for which such Product is offered and sold. This warranty shall also not apply to any Product that has been subjected to misuse, abuse, neglect or improper storage, handling or maintenance. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 14, SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR OTHERWISE, WITH RESPECT TO ANY PRODUCT; OR LABOUR FURNISHED IN CONNECTION WITH THE SALE, DELIVERY OR SERVICING OF ANY PRODUCT, GOODS AND MATERIALS NOT MANUFACTURED BY SELLER CARRY THE STANDARD GUARANTEE OF THE MANUFACTURER THEREOF, IF ANY, AND SELLER SHALL NOT BE RESPONSIBLE FOR ANY DEFECTIVE PART THEREOF. Any claim or action by BUYER arising out of or in connection with this Agreement or the Product, whether in contract, tort or otherwise, must be commenced with one (1) year after the course of action has accrued or such claim or action shall be barred.
15. NO RIGHT OF SET OFF. BUYER has no right to deduct or set off from the purchase price of the Product any damages, costs or expenses incurred by BUYER as a result of any action on the part of SELLER or otherwise.
16. PROPRIETARY INFORMATION. This Agreement and all notes, brochures, technical information concerning processes, devices, machines, marketing strategies and techniques, catalogs, listings, sales forecasts, agreements, know-how, designs, drawings, specifications, data sheets, memoranda, correspondence, or special purpose manufacturing prototypes or samples (collectively, "Proprietary Information") supplied to BUYER by SELLER are, and shall remain, the property of SELLER. BUYER shall not at any time disclose or make available to any person, firm or corporation, other than SELLER, Proprietary Information or use such information for any purpose other than the purposes for which it is supplied hereunder, and shall provide effective security measures to prevent unauthorized persons from obtaining any Proprietary Information. All technical, industrial and commercial information and material that BUYER discloses heretofore and hereafter to SELLER is on a nonconfidential basis. SELLER grants no rights to BUYER under any SELLER intellectual property including patent, design patent, copyright, trademark or know-how.
17. LIMITATION OF LIABILITY. Neither SELLER, its directors, officers, employees, agents, distributors or representatives nor any of its affiliates or their directors, officers, employees, agents, distributors or representatives shall be liable to BUYER for any loss, cost, damage or expense of any kind or nature, whether direct or indirect, consequential, special, punitive or otherwise, whether in contract, tort, negligence, strict liability or otherwise, arising out of or in connection with the Products or the use or maintenance thereof, or by an interruption of service or loss of use thereof, or for any loss of business or damage whatsoever and however caused, including without limitation, damages from injury to person or property, lost profits or revenue, lost sales or loss of use of any Product. BUYER's sole and exclusive remedy against SELLER and its distributors or sales representatives shall be the repair or replacement of defective parts as provided herein. SELLER's (including its directors, officers, employees, agents, distributors and representatives) liability on any claim, whether in contract, tort, negligence, strict liability or otherwise, for any loss or damage arising out of or in connection with the Products, shall in no case exceed the Purchase Price for the Products. For greater certainty, the parties expressly agree that all costs, claims, demands or other liabilities of any nature whatsoever incurred in connection with or arising out of the use, ownership, operation or possession of the Products shall be for the account of BUYER.
18. COSTS. BUYER shall pay all costs incurred in the use and operation of the Collateral, including maintenance, insurance and any and all other expenses of any kind or nature, direct or indirect, in connection with, or related to, the use and operation of the Collateral by BUYER.
19. INDEMNITY. BUYER does hereby assume liability for, and does hereby agree to indemnify, protect, save and keep harmless SELLER, its directors, officers, employees, agents distributors or representatives from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements, including legal fees and expenses on a solicitor and his own client basis, of whatever kind and nature imposed on, incurred by or asserted against SELLER in any way relating to or arising out of: (a) any action or inaction by BUYER in connection with this Agreement and the transactions contemplated hereby; (b) the possession, ownership, use, operation, maintenance, alteration, storage, delivery, return or other disposition of the Products, including liability claims for death, personal injury or property damage; (c) the condition (including latent and other defects with respect thereto, whether or not discoverable by SELLER or BUYER) of the Products; and (d) any act or failure to act by BUYER relating to the Products. Further, without limiting the generality of the foregoing, if the goods delivered hereunder are to be prepared for manufacture according to BUYER's specifications, BUYER shall indemnify, defend and hold SELLER harmless against any claims or liability of any party's intellectual property (including, patent or trademark infringement) on account of such preparation or manufacture.
20. REPRESENTATIONS AND WARRANTIES. BUYER represents and warrants to SELLER that: (a) BUYER's full legal name, and any other name under which it conducts its business and the location where the Collateral will be located, are specified on the reverse side hereof; (b) No security agreement, hypothec, financing statement or other notice with respect to any or all of the Collateral is on file or on record in any public or register office, except for filings in favour of, or permitted in writing by, SELLER; (c) BUYER has full power and authority to grant to SELLER the security interests or hypothecs created by this Agreement and to execute, deliver and perform its obligations under this Agreement. Except for any consent that has been obtained and is in full force and effect, no consent of any party is required, or purports to be required, for the execution, delivery and performance of this Agreement; (d) This Agreement is a valid and binding obligation of BUYER enforceable against BUYER in accordance with its terms, subject only to bankruptcy, insolvency, liquidation, reorganization, and other similar laws generally affecting the enforcement of creditors' rights, and to the fact that equitable remedies are discretionary remedies; (e) BUYER has good and marketable title to any trade-in free and clear of all liens, security interests, hypothecs and other encumbrances and claims of others and all right, title and interest of BUYER in and to such trade-in shall hereby be transferred to SELLER; and (f) Information provided in any credit application is true and was given to induce SELLER to enter into this Agreement. All agreements, representations, warranties and covenants made by BUYER in this Agreement are material, will be considered to have been relied on by SELLER and will survive the execution and delivery of this Agreement until repayment in full of all amounts payable hereunder.
21. BUYER's COVENANTS. BUYER covenants and agrees with SELLER that (a) BUYER will, at its expense, promptly and duly authorize, execute and deliver such further instruments and documents, and take such further action, as SELLER may request for the purpose of obtaining or preserving the full benefits of, and the rights and powers granted by, this Agreement; (including the filing of any financing statements, registration forms or financing change statements under any applicable legislation with respect to the security interests, reservation of ownership and hypothecs created by this Agreement); (b) BUYER will pay on demand, and will indemnify and save SELLER harmless from, any and all liabilities, costs and expenses (i) incurred by SELLER in the preparation, registration, administration or enforcement of this Agreement, (ii) with respect to, or resulting from, any failure or delay by BUYER in paying any taxes or insurance which may be payable with respect to any of the Collateral, or (iii) incurred by SELLER in performing or observing any of the other covenants of BUYER under this Agreement; (c) BUYER shall use the Collateral carefully and lawfully, and shall not use the Collateral for any personal, family or household purposes or for any purposes other than in BUYER's business and shall not permit any of the Collateral to be used by or be in the possession of anyone other than BUYER and its employees. BUYER shall not alter any of the Products or affix any attachment, accessories, parts or equipment to any of the Products if such alteration or affixation would impair the originally intended function or reduce the value of the Products. Any alteration or affixation to any of the Collateral shall be at the sole risk of BUYER; (d) In the performance of any and all of its obligations hereunder, BUYER, its agents, employees and subcontractors shall comply with all federal, provincial and local statutes, or ordinances, codes, rules, regulations, order, by-laws and similar instruments, now existing or hereinafter enacted, adopted or enforced. In addition, BUYER, at its sole expense, shall procure, provide and maintain all licences, registrations and permits required by it for the distribution and resale of any Products to its customers and for the storage and/or disposal of Products in a safe and lawful manner. BUYER shall be responsible for, and shall indemnify SELLER from, all fines or similar charges, and any penalties thereon, that may be duly or lawfully imposed or assessed by any federal, provincial or municipal authorities arising out of BUYER's failure to comply with its obligations under this Section. (e) The Collateral shall remain personalty and moveable and not become part of any realty; (f) SELLER may, without charge, enter the premises of BUYER where any of the Collateral is located for the purpose of inspecting the Collateral, observing its use or otherwise protecting its interests in the Collateral; (g) BUYER will not create, incur or permit to exist, and will defend the Collateral against, and will take such other action as is necessary to remove, any and all security interests, liens, encumbrances, hypothecs and other encumbrances or charges on and claims in respect of the Collateral other than the security interests or the hypothecs created by this Agreement or as permitted in writing by SELLER, and BUYER will defend the right, title and interest of SELLER in and to the Collateral against the claims and demands of all persons; (h) BUYER is not permitted to, without SELLER's prior written consent, sell, lease or otherwise dispose of any of the Collateral or move any of the Collateral outside the jurisdiction referred to in the "Governing Law" section of this Agreement; (i) BUYER will maintain the Collateral in good operating condition, ordinary wear and tear excepted, and BUYER will, subject to Section 14 hereof, provide all maintenance, service and repairs necessary for such purpose; (j) BUYER will prevent the Collateral from being or becoming an accession to other assets of BUYER not covered by this Agreement. In the event of an accession to any of the Collateral, such accession shall form part of the Collateral; (k) BUYER will promptly pay all taxes, assessments, licence fees and other public or private charges levied or assessed against the Collateral or related to this Agreement; (l) BUYER will keep the Collateral insured with financially sound and reputable companies to its full insurable value against loss or damage by fire, explosion, theft and such other risks as are customarily insured against by persons carrying on similar businesses or owning similar property within the vicinity in which BUYER's applicable business or property is located. The applicable insurance policies will be in form and substance satisfactory to SELLER, and will (i) contain a breach of warranty clause in favour of SELLER, (ii) provide that no cancellation, material reduction in amount or material change in coverage will be effective until at least thirty (30) days after receipt of written notice thereof by SELLER, (iii) contain by way of endorsement a mortgagee clause in form and substance satisfactory to SELLER, and (iv) name SELLER as loss payee as its interest may appear. BUYER will, from time to time at SELLER's request, deliver the applicable insurance policies (or satisfactory evidence of such policies) to SELLER. If BUYER does not obtain or maintain such insurance, SELLER may, but need not, do so, in which event BUYER will immediately on demand reimburse SELLER for all payments made by SELLER in connection with obtaining and maintaining such insurance, and until reimbursed any such payment will form part of the indebtedness hereunder by BUYER to SELLER and will be secured by the security interests and the hypothecs created by this Agreement; and (m) BUYER will advise SELLER promptly, in reasonable detail, of (i) any security interest, lien, encumbrance, hypothec or any other charge (other than the security interests and the hypothecs created by this Agreement and any security interest or hypothec permitted in writing by SELLER) on, or claim asserted against, any of the Collateral, (ii) the occurrence of any event, claim or occurrence that could reasonably be expected to have a material adverse effect on the value of the Collateral or on the security interests or the hypothecs created by this Agreement, (iii) any change in the location of any place of business (including additional locations) or the chief executive office of BUYER, (iv) any merger or amalgamation of BUYER with any other person and (v) any material loss of or damage to any of the Collateral. BUYER agrees not to effect or permit any of the changes referred to in clause (iii) above unless all filings have been made that are required in order for SELLER to continue at all times following such change to have a valid and perfected security interest and hypothec in all of the Collateral.
22. TIME OF ESSENCE. Time is of the essence of this Agreement. 
23. FORCE MAJEURE. The SELLER shall not be responsible for failure to perform hereunder or for any loss or damage due to causes beyond its reasonable control, including but not limited to acts of God, fires, civil disobedience, war, acts of terrorism, riots, strikes, work stoppages, floods, water and the elements, changes in governmental requirements or inability to secure equipment, raw materials or transport. Notice to this effect ("Notice of Force Majeure") shall be given to the BUYER forthwith after the occurrence of such event. Performance shall be resumed as soon as practicable after the cessation of the cause of delay, provided, however, that if such period of delay shall exceed sixty (60) days from the receipt of Notice of Force Majeure, the SELLER or the BUYER may terminate this Agreement upon written notification to the other.
24. EVENTS OF DEFAULT. Any one of the following shall constitute an event of default ("Default"): (a) BUYER does not pay when due any indebtedness due hereunder in the manner herein specified; (b) BUYER does not observe or perform any of BUYER's obligations under this Agreement or any other agreement or document existing at any time between BUYER and SELLER; (c) any representation, warranty, financial information or statement made or furnished by or on behalf of BUYER to SELLER, in this Agreement, or otherwise, is untrue in any material respect when made or furnished; (d) BUYER ceases or threatens to cease to carry on in the normal course all or any material part of BUYER's business; (e) BUYER becomes insolvent or bankrupt, or makes or files a proposal, a notice of intention to make a proposal or an assignment for the benefit of creditors under the Bankruptcy and Insolvency Act (Canada) or comparable legislation in Canada or any other jurisdiction; a petition in bankruptcy is filed against BUYER; or, if BUYER is a corporation, proceedings are initiated under any legislation by or against BUYER seeking its liquidation, winding-up, dissolution or reorganization or any arrangement or composition of its debts; (f) a receiver or manager, (hereinafter a "Receiver"), trustee, custodian or other similar official is appointed in respect of BUYER or any of the Collateral; (g) any person holding a lien, security interest, hypothec, other encumbrance or charge in respect of any part of the Collateral takes possession of all or any material part of the Collateral, or a distress, execution or other similar process is levied against all or any material part of the Collateral; (h) the Collateral, or any part thereof, is lost, stolen, damaged or destroyed; (i) any of the Collateral is removed from the location stipulated herein without the express prior written consent of SELLER, or the Collateral has materially deteriorated as determined in the sole and absolute discretion of SELLER; (j) any guarantor, surety or endorser for BUYER defaults in any obligation or liability to SELLER or any guarantee obtained in connection with this transaction is terminated or breached; (k) the death, disability or incompetence of BUYER, if an individual; (l) BUYER fails to pay promptly when due all taxes, liens, fees, charges and assessments upon any of the Collateral; (m) any lien, security interest, hypothec or other encumbrance shall attach to any of the Collateral; (n) BUYER challenges or threatens to challenge the validity or enforceability of this Agreement or the security interests or hypothecs created by this Agreement; or (o) SELLER, acting in good faith and upon commercially reasonable grounds, believes that the prospect of payment or performance of any of the indebtedness of BUYER hereunder is or is about to be impaired or that all or any material part of the Collateral is or is about to be placed in jeopardy.
25. REMEDIES OF DEFAULT. On Default, all of the indebtedness of BUYER hereunder will, at the option of SELLER, become immediately due and payable and the security constituted by this Agreement will become enforceable, and SELLER may, personally or by agent at such time or times as SELLER in its discretion may determine, do any one or more of the following: (a) Exercise all of the rights and remedies granted to secured parties under the PPSA, the Civil Code of Quebec and any other applicable statute, or otherwise available to SELLER at law or in equity (b) Demand possession of any or all of the Collateral in which event BUYER will, at its own expense, immediately cause the Collateral designated by SELLER to be assembled and made available and/or delivered to SELLER at any place designated by SELLER; (c) Enter on any premises where any Collateral is located and take possession of, disable or remove such Collateral; (d) Hold, store and keep idle, or operate, lease or otherwise use or permit the use of, any or all of the Collateral for such time and on such terms as SELLER may determine, and demand, collect and retain all earnings and other sums due or to become due from any person in respect of any of the Collateral; (e) Seize, collect, receive, enforce or otherwise deal with any Collateral in such manner, on such terms and conditions and at such times as SELLER deems advisable; (f) Realize on any or all of the Collateral and sell, lease, assign, or otherwise dispose of and deliver any or all of the Collateral (or contract to do any of the above), in one or more parcels at any public or private sale; (g) Pay any liability secured by any actual or threatened lien, security interest, hypothec or other encumbrance or charge against any Collateral. BUYER will immediately on demand reimburse SELLER for all such payments and such amounts shall bear interest at the applicable rate set forth on the reverse side hereof until paid in full; and (h) Appoint by instrument in writing one or more Receivers over BUYER or any or all of the Collateral with such rights, powers and authority (including any or all of the rights, powers and authority of SELLER under this Agreement) as may be provided for in the instrument of appointment or any supplemental instrument, and remove and replace any such Receiver from time to time. To the extent permitted by applicable law, any Receiver appointed by SELLER will (for purposes relating to responsibility for the Receiver's acts or omissions) be considered to be the agent of BUYER and not of SELLER. SELLER may exercise any or all of the foregoing rights and remedies without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except as required by applicable law) to or on BUYER or any other person, and BUYER by this Agreement waives each such demand, presentment, protest, advertisement and notice to the extent permitted by applicable law. None of the above rights or remedies will be exclusive of or dependent on or merge in any other right or remedy, and one or more of such rights and remedies may be exercised independently or in combination from time to time.
26. APPLICATION OF PROCEEDS. All proceeds of Collateral received by SELLER or a Receiver may be applied to discharge or satisfy any expenses, security interests or hypothecs in favour of persons other than SELLER, borrowings, taxes and other outgoings affecting the Collateral or which are considered advisable by SELLER or the Receiver to protect, preserve, repair, process, maintain or enhance the Collateral or prepare it for sale, lease or other disposition, or to keep in good standing any security interests, liens, hypothecs, encumbrances or charges on the Collateral ranking in priority to any of the security interests or hypothecs created by this Agreement, or to sell, lease or otherwise dispose of the Collateral. The balance of such proceeds may, at the sole discretion of SELLER, be held as collateral security for the amounts owing hereunder or be applied to such amounts (whether or not the same are due and payable) in such manner and at such times as SELLER considers appropriate and thereafter will be accounted for as required by law.
27. LIABILITY FOR DEFICIENCY. BUYER will remain liable for any amounts owing hereunder that are outstanding following realization of all or any part of the Collateral and the application of the proceeds thereof.
28. POWER OF ATTORNEY. BUYER constitutes and appoints SELLER and any officer or agent of SELLER, with full power of substitution, as BUYER's true and lawful attorney-in-fact with full power and authority in the place of BUYER and in the name of BUYER or in its own name, from time to time in SELLER's discretion after a Default, to take any and all appropriate action and to execute any and all documents and instruments as, in the opinion of such attorney acting reasonably, may be necessary or desirable to accomplish the purposes of this Agreement. These powers are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests and the hypothecs created by this Agreement are released. Nothing in this Section affects the right of SELLER as secured party or any other person on SELLER's behalf, to sign and file or deliver (as applicable) all such financing statements, registration forms, reservation of ownership, financing change statements, notices, verification agreements and other documents relating to the Collateral and this Agreement as SELLER or such other person considers appropriate.
29. PERFORMANCE BY SELLER. If BUYER fails to perform or comply with any of its obligations under this Agreement, SELLER may, but need not, perform or otherwise cause the performance or compliance of such obligation, provided that such performance or compliance will not constitute a waiver, remedy or satisfaction of such failure. The expenses of SELLER incurred in connection with any such performance or compliance will be payable by BUYER to SELLER on demand, and until paid, any such expenses will bear interest at the applicable rate set forth on the reverse side hereof and will form part of the amounts owing hereunder and will be secured by the security interests and the hypothecs created by this Agreement.
30. EXERCISE OF RIGHTS. SELLER will not be liable to BUYER or any other person for any failure or delay in exercising any of its rights under this Agreement (including any failure to take possession of, collect, sell, lease or otherwise dispose of any Collateral, or to preserve rights against prior parties). Neither SELLER, a Receiver nor any agent of SELLER (including, in Alberta, any civil enforcement agency, or in British Columbia, any sheriff) is required to take, or will have any liability for any failure to take or delay in taking, any steps necessary or advisable to preserve rights against other persons under any Collateral in its possession. Neither SELLER nor any Receiver will be liable for any, and BUYER will bear the full risk of all, loss or damage to any and all of the Collateral (including any Collateral in the possession of SELLER or any Receiver) caused for any reason other than the gross negligence or wilful misconduct of SELLER or such Receiver.
31. RECOURSE. SELLER will not be obliged to exhaust its recourse against BUYER or any other person or against any other security it may hold in respect of the amounts owing hereunder before realizing upon or otherwise dealing with the Collateral in such manner as SELLER may consider desirable. SELLER may grant extensions of time and other indulgences, take and give up security, accept compositions, grant releases and discharges and otherwise deal with BUYER and any other person, and with any or all of the Collateral, and with other security and sureties, as SELLER may see fit, all without prejudice to the indebtedness of BUYER to SELLER hereunder or to the rights and remedies of SELLER under this Agreement. The powers conferred on SELLER under this Agreement are solely to protect the interests of SELLER in the Collateral and will not impose any duty upon SELLER to exercise any such powers.
32. NOTICES. Any communication required or permitted to be given under this Agreement will be in writing and will be effectively made and given if (i) delivered personally, (ii) sent by courier service, or (iii) sent by facsimile or other similar means of electronic communication, in each case to the address or facsimile number of BUYER or SELLER set out in this Agreement. Any communication so given will be deemed to have been given and to have been received on the day of delivery if so delivered, or on the day of facsimile transmission or sending by other means of recorded electronic communication provided that such day is a business day and the communication is so delivered or sent prior to 5:30 p.m. (local time at the place of receipt). Otherwise, such communication will be deemed to have been given and to have been received on the following business day. BUYER and SELLER may from time to time change their respective addresses or facsimile numbers for notice by giving notice to the other in accordance with the provisions of this Section.
33. DISCLOSURE. BUYER authorizes SELLER to provide a copy of this Agreement and such other information as may be requested of SELLER by persons entitled thereto pursuant to any applicable legislation, and otherwise with the consent of BUYER.
34. WAIVER. To the extent permitted by applicable law, BUYER unconditionally and irrevocably waives (i) all claims, damages and demands it may acquire against SELLER arising out of the exercise by SELLER or any Receiver of any rights or remedies under this Agreement or at law, (ii) all of the rights, benefits and protections given by any present or future statute that imposes limitations on the rights, powers or remedies of a secured party or on the methods of, or procedures for, realization of security, including any "seize or sue" or "anti-deficiency" statute or any similar provision of any other statute, including the Limitation of Civil Rights Act (Saskatchewan), as such statute may be amended, replaced or re-enacted from time to time. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by SELLER. SELLER will not, by any act or delay, be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of SELLER, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by SELLER of any right or remedy hereunder on any one occasion will not be construed as a bar to any right or remedy which SELLER would otherwise have on any future occasion. Neither the taking of any judgment nor the exercise of any power of seizure or sale will extinguish the liability of BUYER to pay the indebtedness of BUYER hereunder, nor will the same operate as a merger or any covenant contained in this Agreement or of any other liability, nor will the acceptance of any payment or other security constitute or create any novation. BUYER agrees to indemnify SELLER from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (except by reason of the gross negligence or wilful misconduct of SELLER or any of its agents or employees) which may be imposed on, incurred by, or asserted against SELLER and arising by reason of any action or inaction or omission to do any act legally required by BUYER. This indemnification will survive the satisfaction, release or extinguishment of the indebtedness of BUYER to SELLER hereinafter and the security interests and the hypothecs created by this Agreement.
35. GOVERNING LAW. This Agreement will be governed by and construed in accordance with the laws of the Province where the Products are located as set forth on the first page hereof and the laws of Canada applicable in such Province and will be treated, in all respects, as a contract of such Province. Without prejudice to the ability of SELLER to enforce this Agreement in any other proper jurisdiction, BUYER irrevocably submits and attorns to the non-exclusive jurisdiction of the courts of such Province. To the extent permitted by applicable law, BUYER irrevocably waives any objection (including any claim of inconvenient forum) that it may now or hereafter have to the venue of any legal proceeding arising out of or relating to this Agreement in the courts of such Province. At the sole option of SELLER, any dispute arising out of or in connection with this Agreement or the Product may be referred to binding arbitration, which shall be administered by, and conducted in accordance with the Arbitration Act, 1991 (Ontario), as amended, modified or replaced from time to time, with the hearing therein to be held in the Province of Ontario. Notwithstanding the above, the hypothecs created herein and the exercise of any recourses or any hypothecary rights under these hypothecs shall be governed by the laws of the Province of Quebec.
36. HEADINGS, ETC. The division of this Agreement into sections and paragraphs, and the insertion of headings, is for convenience of reference only and will not affect the construction or interpretation of this Agreement. Unless the context otherwise requires, words importing the singular include the plural and vice versa, and words importing gender include all genders. When used in this Agreement, the word "including" (or includes) means "including (or includes) without limitation." Any reference in this Agreement to a "Section" means the relevant Section of this Agreement. If more than one BUYER executes this Agreement, their obligations under this Agreement are joint and several.
37. SEVERABILITY. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective to the extend of such prohibition or unenforceability and will be severed from the balance of this Agreement, all without affecting the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
38. ENTIRE AGREEMENT. BUYER acknowledges having read and understood the terms and conditions of this Agreement. This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement and supersedes all prior purchase orders, agreements, understandings, negotiations and discussions, whether oral or written. There are no conditions, warranties, representations or other agreements between the parties in connection with the subject matter of this Agreement (whether oral or written, express or implied, statutory or otherwise) except as specifically set out in this Agreement. Any amendment to this Agreement shall only be binding and enforceable against the parties hereto if in writing and signed by the parties hereto provided however BUYER authorizes SELLER to correct patent errors and to fill in descriptive material in connection with any Collateral, including serial numbers. These terms and conditions of sale shall remain effective as between SELLER and BUYER, regardless of any arrangement or agreement for financing of BUYER's purchase of the Product, whether such financing is provided by SELLER, any subsidiary of SELLER or any entity related to SELLER.
39. FEES. BUYER shall, on demand, reimburse SELLER for all costs and expenses (including, without limitation, all legal fees and expenses) incurred by SELLER in connection with the enforcement of any of SELLER's rights under this Agreement. In addition, BUYER shall pay SELLER's administrative fees for returned cheques. All such costs, expenses and fees shall be the obligation of BUYER under this Agreement and shall be secured by the security interest and the hypothecs created hereunder.
40. ASSIGNABILITY. This Agreement will enure to the benefit of, and be binding on, BUYER and its successors and permitted assigns, and will enure to the benefit of, and be binding on, SELLER and its successors and assigns. BUYER may not assign in any manner whatsoever this Agreement, or any of its rights or obligations under this Agreement, without the prior written consent of SELLER.
41. ACKNOWLEDGMENT OF RECEIPT. BUYER acknowledges receipt of an executed copy of this Agreement and, to the extent permitted by applicable law, waives the right to receive a copy of any financing statement, registration forms, financing change statement or verification statement in respect of any registered financing statement, registration form or financing change statement prepared, registered or issued in connection with this Agreement.
42. LANGUAGE CLAUSE. The parties hereto have requested that these terms and conditions be and all documents relating thereto be drawn up in English. Les parties aux présentes confirment avoir requis que le présent document de même que tous les documents y afférents soient rédigés en langue anglaise.
43. ELECTRONIC CONTRACTING. BUYER agrees that if this Agreement is transmitted electronically BUYER shall not contest the validity thereof, on the basis that this Agreement, acknowledgement or ancillary agreement exists only in electronic form, an electric record was used in its creation or formation, or it contains only an Electronic Signature. Further, BUYER agrees that transmission of this Agreement electronically shall have the same force and effect as delivery of an original signature and that such facsimile signature may be used as evidence of the execution and delivery of the Agreement to the same extent that an original signature could be used.