f8kex10xxvi_pioneer.htm


    Exhibit
10.26

     

    
      THE
COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE
“COMMISSION”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT
WITH “[XX]”.

       

    

     

    TRANSLATION

     

    
      	
              HYDRO
      QUÉBEC

            	
              Contract

            
	 
      	 
      
	
              Supplier
      No.:  OA 104 18850

            	
              Contract:

            	
              4600010831

            
	 
      	 
      	 
      
	
              Supplier

            	
              Call
      for tenders:

            	
              6100098418

            
	 
      	
              Request
      for proposals:

            	
              11954845

            
	
              PIONEER
      TRANSFORMERS LTD.

            	 
      	
              yyyy/mm/dd

            
	
              612
      BERNARD ST., P.O. BOX 272

            	
              Date
      of issue:

            	
              2006/04/01

            
	
              GRANBY
      QC  J2G 8E5

            	 
      
	 
      	 
      
	
              Attention:  Raymond
      Haddad

            	 
      
	
              Phone:  450-378-9018
      #
      309                                                                Fax:  450-378-0626

            
	 
      	 
      
	 
      	 
      
	
              Billing
      must be as stipulated in this document.

            
	 
      	 
      


       

      
        	
                Contract
      term

              	
                Ship
  to:

              
	
                yyyy/mm/dd                      to           yyyy/mm/dd

              
	
                2006/04/01                                2008/03/31

              
	
                FOB Point:

                Destination,
      prepaid

              
	
                Terms
      of payment

                NET
      30 DAYS

                 

              


      

      	 
      	 
      
	
              For
      information                                Phone

              Marc
      Desautels                                514-840-3000
      ext. 6765

            	
               

               

              (sgd)
      Marc Desautels

            
	 
      	
              Authorized
      representative

            


    

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    


     

    GENERAL
CONDITIONS

    


    SUPPLY

    


    (Revised
March 2005)

    


    Table of
Contents

     

    
      	1.	DEFINITIONS
	A.	Request for
      proposals
	B.	Contract
      amendment
	C.	Notice of
      award
	D.	Goods
	E.	Not
used
	
              F.

            	Contract
	G.	Not
used
	H.	Supplier
	
              I.

            	Not
used
	J.	Material
	K.	Equipment
	L.	Contract
    price
	M.	Proposal
	M.	Subcontractor
	O.	Work
	P.	Plant
	
              2. 

            	GENERAL
      PROVISIONS
	A.	Interpretation of
      contract
	B.	Assignment of
      contract
	C.	Standards
	D.	Advertising and
      requests for information
	E.	Place of execution
      of contract
	F.	Representatives of
      the parties and communications
	G.	Confidentiality
	H.	Language of work and
      communications
	I.	Due
  dates
	J.	Notice of
      default
	3.	NOT
USED
	4.	CONTROL OF
      WORK


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    
      	A.	Scope of
      contract
	B.	Subcontracting
	5.	RIGHTS TO USE OF
      GOODS
	6.	AUTHORITY OF
      HYDRO-QUÉBEC REPRESENTATIVE
	A.	Administration of
      contract
	B.	Inspection, control
      and supervision of work
	7.	EXECUTION OF
      WORK
	A.	Not
used
	B.	Not
used
	C.	Drawings and lists
      provided by the supplier
	D.	Technical
      notices
	E.	Rating
    plates
	F.	Not
used
	G.	Delay attributable
      to Hydro-Québec
	H	Changes to
      contract
	I.	Not
used
	J.	Not
used
	K.	Not
used
	L.	Ownership
	M.	Not
used
	N.	Not
used
	O.	Packaging
	P.	Shipping
	8.	NOT
USED
	9.	GOODS, MATERIALS AND
      EQUIPMENT
	A.	Origin, quality and
      implementation of materials
	B.	Not
used
	C.	Goods, materials and
      equipment made available to the supplier by Hydro-Québec
	10.	NOT
USED
	11.	LIABILITY OF THE
      SUPPLIER
	12.	CONTROLLED
      PRODUCTS
	13.	ENVIRONMENTAL
      PROTECTION
	14.	PAYMENT
	15.	GUARANTEE ON LABOUR
      AND MATERIALS
	16.	NOT
USED
	17.	NOT
USED
	18.	DEFAULT –
      TERMINATION


       

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

       

       

      	A.	Default by
      supplier
	B.	Withdrawal of work
      from the supplier
	C.	Contract
      termination
	
              D.

            	Not
used
	19.	NOT
USED
	20.	RELEVANT
      DOCUMENTS
	A.	Accounting
      principles
	B.	Retention
      period
	C.	Right to
      inspect


    

    

      
        
           


        

        
          4

          
            

          

        

        
           


        

      

1.           DEFINITIONS

    


    When used
in this contract, unless the context otherwise requires, the following terms
shall have the following meanings:

    


    (a)           REQUEST
FOR PROPOSALS

     

    The
document remitted by Hydro-Québec for purposes of obtaining a bid or
proposal.

     

    (b)           
CONTRACT AMENDMENT

     

    A
document signed by Hydro-Québec and the supplier the purpose of which is to
amend the contract.

     

    (c)           NOTICE
OF AWARD

     

    The
document by which Hydro-Québec informs the supplier that is has been awarded the
contract.

     

    (d)           GOODS

     

    The goods
the supplier must supply pursuant to the contract.

     

    (e)           NOT
USED

     

    (f)           CONTRACT

     

    The
contract consists of the following documents:

     

    
      	
              -  

            	
              The
      request for proposals document and its
addenda;

            


    

     

    
      	
              -  

            	
              The
      supplier’s proposal accepted by
Hydro-Québec;

            


    

     

    
      	
              -  

            	
              The
      notice of award;

            


    

     

    
      	
              -  

            	
              The
      contract amendments.

            


    

     

    (g)           NOT
USED

     

    (h)           SUPPLIER

     

    The
person to whom the contract is awarded.

     

    (i)           NOT
USED

     

    (j)           MATERIAL

     

    Anything
incorporated in the goods to be supplied or consumed to perform the
contract.

     

    (k)           EQUIPMENT

     

    All of
the tools, plant, instruments, devices, machines, vehicles, structures and
installations required for the performance of the work or the maintenance of the
goods to be supplied and which are not incorporated in the goods.

     

    (l)           CONTRACT
PRICE

     

    All of
the stipulated prices, unit prices and other remuneration provided for in the
contract, subject to such adjustments as may be made pursuant to the provisions
of the contract.

     

    (m)           PROPOSAL

     

    The
supplier’s bid or proposal.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (n)           SUBCONTRACTOR

     

    Any
person to whom the supplier entrusts the performance of work or the supply or
manufacture of materials or equipment.

     

    (o)           WORK

     

    All of
the goods the supplier must supply and the activities it must carry on to
perform the contract, in particular the design, manufacture and delivery of the
goods covered by the contract.

     

    (p)           PLANT

     

    The place
where the goods are manufactured or assembled.

     

    2.           GENERAL
PROVISIONS

     

    A.           INTERPRETATION
OF CONTRACT

     

    In the
event of ambiguity or contradiction between the various documents constituting
the contract, they shall prevail in the following order of
precedence:

     

    
      	
              -  

            	
              The
      notice of award;

            


    

     

    
      	
              -  

            	
              The
      proposal accepted by Hydro-Québec;

            


    

     

    
      	
              -  

            	
              The
      instructions to tenderers;

            


    

     

    
      	
              -  

            	
              The
      specific clauses;

            


    

     

    
      	
              -  

            	
              The
      general clauses;

            


    

     

    
      	
              -  

            	
              The
      specific technical clauses;

            


    

     

    
      	
              -  

            	
              The
      specific drawings;

            


    

     

    
      	
              -  

            	
              The
      general or standardized technical
clauses;

            


    

     

    
      	
              -  

            	
              The
      standardized drawings.

            


    

     

    Large-scale
drawings shall prevail over smaller-scale drawings.

     

    B.           ASSIGNMENT
OF CONTRACT

     

    The
supplier shall not assign the contract without the prior written consent of
Hydro-Québec’s representative.

     

    C.           STANDARDS

     

    Where the
contract refers to standards, such reference shall mean the standards in force
on the date the proposals are submitted.  In the event of ambiguity or
contradiction between the contract and such standards, the more stringent
document shall prevail.

     

    D.           ADVERTISING
AND REQUESTS FOR INFORMATION

     

    The
request for proposals document and all other information communicated to the
supplier in connection with the contract shall remain the property of
Hydro-Québec and shall not be used for any purpose other than the performance of
the contract.

     

    Any
advertising intended by the supplier concerning the contract shall be subject to
approval by Hydro-Québec’s representative.  This shall apply to all
means of advertising, such as signs and billboards, and to all written and
electronic media.

     

    All
requests for information concerning the contract or the work from any written or
electronic media or from any other person shall be forwarded to Hydro-Québec’s
representative.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    E.           PLACE
OF EXECUTION OF CONTRACT

     

    The
parties agree that the contract was executed in Montreal and shall be governed
by the applicable laws of Quebec and that any dispute arising from its
performance shall be under the exclusive jurisdiction of the courts of
Quebec.

     

    F.           REPRESENTATIVES
OF THE PARTIES AND COMMUNICATIONS

     

    Each
party shall appoint a representative who shall have the power to act on its
behalf. The parties shall advise each other in writing of the names of their
respective representatives and of their replacements, as the case may
be.

     

    Each
party’s representative shall have the requisite authority and power to see to
the performance of the contract and to handle and decide any matter related
thereto.

     

    Any
communications between Hydro-Québec and the supplier regarding the contract
shall be in writing and be addressed to the other party’s
representative.

     

    G.           CONFIDENTIALITY

     

    The
supplier shall protect the confidentiality of the information communicated to it
by Hydro-Québec in connection with the performance of the contract.

     

    H.           LANGUAGE
OF WORK AND COMMUNICATIONS

     

    The
language of work shall be French.  All written and oral communications
pertaining to the contract shall be in French.  All documents or
drawings the supplier remits to Hydro-Québec shall be drafted in
French.

     

    I.           DUE
DATES

     

    Unless
otherwise stipulated in the contract, all due dates shall be calculated from the
date the supplier receives the notice of award.

     

    In
computing any due date established under the contract:

     

    
      	
              -  

            	
              The
      day that marks the start date shall not be counted, but the due date
      shall;

            


    

     

    
      	
              -  

            	
              Saturdays,
      Sundays and statutory holidays shall be counted, but if the last day is a
      Saturday, Sunday or statutory holiday, the due date shall be postponed to
      the next business day.

            


    

     

    J.           NOTICE
OF DEFAULT

     

    If the
contract establishes a due date for the performance of an obligation, the
parties shall be put in default by the mere lapse of time.

     

    3.           NOT
USED

     

    4.           CONTROL
OF WORK

     

    A.           SCOPE
OF CONTRACT

     

    In the
framework of this contract, the supplier shall perform all the activities
required for the design, manufacture and delivery of the goods covered by the
contract, except as expressly excluded in the Specific Clauses.

     

    B.           SUBCONTRACTING

     

    The
supplier agrees that any subcontracts shall be subject to the provisions of this
contract.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    5.           RIGHTS TO
USE OF GOODS

     

    The
supplier agrees to obtain and assign to Hydro-Québec all rights required to
permit the use of the goods for the purposes for which they are intended and, as
the case may be, their maintenance, repair or reconditioning.

     

    These
rights shall include copyright and rights contemplated by the laws respecting
industrial drawings, trade-marks, patents and integrated-circuit
topography.

     

    6.           AUTHORITY
OF HYDRO-QUÉBEC REPRESENTATIVE

     

    A.           ADMINISTRATION
OF CONTRACT

     

    Hydro-Québec’s
representative shall be responsible for administering the contract on
Hydro-Québec’s behalf and shall have the authority to do so.

     

    B.           INSPECTION,
CONTROL AND SUPERVISION OF WORK

     

    At any
time, Hydro-Québec’s representative may inspect the supplier’s work and check
its quality.  For such purposes, he shall have access to any place
where the goods are manufactured and to the materials required for the
performance of the contract.

     

    The
trials, tests and checks required under the contract or prescribed by the laws
and regulations in force shall be carried out in the presence of Hydro-Québec’s
representative and the supplier shall be responsible for giving him sufficient
advance notice to be able to attend.

     

    7.           EXECUTION
OF WORK

     

    A.           NOT
USED

     

    B.           NOT
USED

     

    C.           DRAWINGS
AND LISTS PROVIDED BY THE SUPPLIER

     

    The
supplier shall submit to Hydro-Québec’s representative, for his verification,
the detailed or general drawings required to validate the manufacture,
operation, assembly and disassembly, start-up, utilization and maintenance of
the goods.  The supplier shall also give Hydro-Québec the lists
relating to the drawings: e.g. lists of materials, connections, terminations,
settings, spare parts, special tools, etc.

     

    The
supplier shall give Hydro-Québec’s representative the requisite number of
copies.  The drawings and lists shall be submitted on a timely basis
so as not to delay the progress of the work, while allowing Hydro-Québec’s
representative twenty (20) business days from receipt of the drawings and lists
to review them.

     

    Every
drawing or list or copies thereof remitted to Hydro-Québec shall remain the
property of Hydro-Québec, which may utilize them as it sees fit.

     

    Drawings
shall be prepared in accordance with the requirements and recommendations of
sections 1 to 10 of standard B78.5-93 “Computer-Aided Design Drafting
(Buildings)” of the Canadian Standards Association (CSA/ACN).  All
notations on the drawings and lists shall be in French and dimensions shall be
in the SI system.

     

    When
Hydro-Québec’s representative verifies the supplier’s drawings or lists, it
means that Hydro-Québec’s representative has found that the proposed elements
and systems are consistent with the object of the contract. But it in no way
means that the supplier’s drawings or lists that were submitted or provided meet
the requirements of the contract in every respect.

     

    Work
begun without the submission and verification of the drawings and lists as
aforesaid may be refused by Hydro-Québec’s representative.  The costs
incurred shall be borne by the supplier.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    D.           TECHNICAL
NOTICES

     

    To permit
the operation, maintenance and reconditioning of the goods by Hydro-Québec, the
supplier shall, in accordance with the stipulations in the Specific Clauses,
prepare technical notices describing in detail the construction and recommended
methods for the assembly, disassembly, maintenance and operation of the goods
and a list of all spare parts.  The said notices shall include all
appropriate bulletins and the instructions prepared by the manufacturers of the
parts incorporated in the goods.

     

    E.           RATING
PLATES

     

    The
rating plates on the goods shall be in French.  Warning notices shall
be in French and English.

     

    F.           NOT
USED

     

    G.           DELAY
ATTRIBUTABLE TO HYDRO-QUÉBEC

     

    If an
incident attributable to Hydro-Québec causes delay in the performance of the
contract, the supplier shall be entitled to an extension of the performance
period, on the express condition that it makes a written request therefor to
Hydro-Québec’s representative no later than fifteen (15) days after the incident
warranting such a request. The request shall specify the nature of the incident
and its impact on the work performance period.

     

    Absent
such notice within the aforesaid period, the supplier waives the right to an
extension of the performance period.

     

    H.           CHANGES
TO CONTRACT

     

    Hydro-Québec
may, until the end of the contract, make changes to the contract and demand
their performance by the supplier.

     

    The
supplier shall not proceed with any changes before signing a contract amendment
specifying the nature of the change, the method of payment and the performance
period.  However, in the event of an emergency or a disagreement over
the terms of the contract amendment, the supplier shall promptly proceed with
any change demanded by Hydro-Québec’s representative in writing.

     

    Changes
shall not entail any extension of the contractual periods unless expressly
mentioned in the contract amendment. Any change to the size of the contract or
its terms of performance made or authorized by Hydro-Québec shall entitle the
supplier or Hydro-Québec to obtain a revision of the contract prices to account
for the increase or decrease (as the case may be) in costs due to such
change.

     

    I.           NOT
USED

     

    J.           NOT
USED

     

    K.           NOT
USED

     

    L.           OWNERSHIP

     

    All of
the goods covered by the contract shall become the property of Hydro-Québec as
they are progressively fabricated.  However, the supplier shall be
responsible for their custody and control and any liability arising therefrom
until they are received by Hydro-Québec.

     

    M.           NOT
USED

     

    N.           NOT
USED

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    O.           PACKAGING

     

    To
facilitate handling and protect the goods during shipping and storage, the goods
shall be packaged in accordance with Hydro-Québec’s standard SN-1.1 or such
other standard as may replace it.

     

    The goods
shall be identified as required below to facilitate delivery, receiving and
storage.  Each container shall bear the following minimum mandatory
information in easily legible form:

     

    
      	
              -  

            	
              Supplier’s
      name;

            


    

     

    
      	
              -  

            	
              “Hydro-Québec”
      followed by the order number;

            


    

     

    
      	
              -  

            	
              Item
      number of the order;

            


    

     

    
      	
              -  

            	
              Hydro-Québec’s
      article code, if any;

            


    

     

    
      	
              -  

            	
              Delivery
      address.

            


    

     

    If the
container contains several packages, each package shall also bear the
above-mentioned information specific to its contents.  Each container
shall have a hermetically sealed pocket in which the supplier shall deposit at
least four (4) copies of the list of articles.

     

    P.           SHIPPING

     

    No
shipment shall be made without prior specific instructions from Hydro-Québec’s
representative as to the availability of the delivery location.  No
shipment may be made more than two (2) months before the date required, unless
Hydro-Québec’s representative provides his written authorization.

     

    At least
three (3) days before sending any shipment, full or partial, the supplier shall
give written notice to the addressee indicated on the waybill.

     

    For any
shipments coming from outside Canada, the supplier shall remit to the carrier
along with the waybill:

     

    
      	
              -  

            	
              A
      duly completed “Canada Customs Invoice” specifying the
      following:

            


    

     

    
      	
              -  

            	
              vendor’s
      name;

            


    

     

    
      	
              -  

            	
              purchaser’s
      order number;

            


    

     

    
      	
              -  

            	
              name
      and address of the addressee (to whom the goods are being
      shipped);

            


    

     

    
      	
              -  

            	
              name
      and address of the purchaser (to whom the goods are
  sold);

            


    

     

    
      	
              -  

            	
              payment
      currency;

            


    

     

    
      	
              -  

            	
              detailed
      description of the goods, quantity, unit price,
  total;

            


    

     

    
      	
              -  

            	
              total
      amount of the invoice;

            


    

     

    
      	
              -  

            	
              a
      duly completed NAFTA (North American Free Trade Agreement) certificate of
      origin, if the goods were manufactured in the United States and/or
      Mexico.

            


    

     

    8.           NOT
USED

     

    9.           GOODS,
MATERIALS AND EQUIPMENT

     

    A.           ORIGIN,
QUALITY AND IMPLEMENTATION OF MATERIALS

     

    The
materials, their implementation and the execution of the work shall be
consistent with the requirements of the contract.

     

    If the
quality of a material or labour is not specified, the material shall be new and
of the best quality and the labour shall be performed in accordance with
generally accepted standards.

     

    Unless
otherwise stipulated in the contract, the supplier may use a material equivalent
to the one referred to in the contract by a trade-mark, provided the
substitution is previously authorized in writing by Hydro-Québec.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Hydro-Québec’s
representative will accept or refuse the equivalent material within a time frame
which will depend on the information to be obtained and the trials, tests and
checks necessary to evaluate the proposed material.

     

    The
supplier shall submit the equivalent material for approval by Hydro-Québec’s
representative on a timely basis to avoid any delay in the performance of the
work.

     

    B.           NOT
USED

    
       

      C.   GOODS,
MATERIALS AND EQUIPMENT MADE AVAILABLE TO THE SUPPLIER BY
HYDRO-QUÉBEC

    

     

    The
supplier shall be responsible for the maintenance, safekeeping and control of
all goods, materials or equipment made available to it by Hydro-Québec and shall
use same solely for the purposes for which they were intended.

     

    The
supplier must at all times be in a position to report to Hydro-Québec’s
representative on the use and condition of such goods, materials and
equipment.

     

    10.           NOT
USED

     

    11.           LIABILITY
OF THE SUPPLIER

     

    The
supplier shall be liable to Hydro-Québec for the proper performance of the
contract.

     

    It shall
also be liable for any damages resulting from such performance, save damages for
loss of profits or income, loss of use of the goods supplied under this contract
or of any related equipment, interest and other charges on borrowed money and
the costs of any interruption.  However, the supplier’s liability to
Hydro-Québec shall be limited to $[XX] or another sum equivalent to the contract
price if same exceeds $[XX].

     

    It shall
defend Hydro-Québec against any claims or lawsuits stemming from the contract
and the execution of the work and shall indemnify and hold it harmless with
respect to capital, interest and the indemnity stipulated in the Civil Code of
Quebec, costs of expert reports and costs of any other nature, any judgment
pronounced against it and, where applicable, shall obtain a discharge of any
legal hypothec related to the performance of the contract.

     

    12.           CONTROLLED
PRODUCTS

     

    In the
framework of the application of the Hazardous Products Act,
R.S.C. (1985), c. H-3, the supplier is responsible for determining whether the
goods or part thereof are controlled products.

     

    Before
delivery, the supplier shall forward to Hydro-Québec’s representative a list of
the controlled products, in duplicate, and the relevant safety data sheets, in
French, for each such product.

     

    The
supplier shall be liable for all costs incurred due to its failure to provide
the required information on a timely basis.

     

    13.           ENVIRONMENTAL
PROTECTION

     

    The
supplier shall comply with all laws and regulations applicable in Quebec
concerning the protection of the environment. It shall be responsible for
preventing pollution or any nuisance that could be caused by the products,
services and activities arising from this contract.  In that regard it
shall, at its expense, take all necessary steps to protect the environment and
prevent any form of pollution or nuisance.  In addition, it shall
ensure that it has properly trained personnel who can take action in the event
of an environmental emergency.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    The
supplier shall notify Hydro-Québec’s representative as quickly as possible of
any environmental incident, non-compliance or emergency that arises in the
framework of the performance of the obligations under this
contract.

     

    Furthermore,
it shall comply with the environmental provisions set out in the specific
clauses of this contract.

     

    14.           PAYMENT

     

    Payment
of the contract price shall be made thirty (30) days following receipt of the
equipment at the delivery point or receipt of the invoice, whichever is
later.

     

    At any
time, Hydro-Québec may set-off any debt owed to it by the supplier against any
sums it may owe the supplier or any security delivered pursuant to the
contract.

     

    15.           GUARANTEE
ON LABOUR AND MATERIALS

     

    The
supplier shall guarantee to Hydro-Québec that all goods and materials it has
supplied will operate properly and conform to the stipulations of the contract,
which guarantee shall apply for a period of eighteen (18) months following
receipt of the equipment at the delivery point, unless additional guarantees and
different time frames are stipulated elsewhere in the contract.  This
guarantee shall be in addition to the legal warranty.

     

    During
the warranty period, upon request by Hydro-Québec, the supplier undertakes,
within the time frame determined by Hydro-Québec’s representative, to repair,
correct or replace all defective goods and any resulting deterioration or
degradation, at its own expense, including costs of removal, shipment,
replacement and reinstallation of the property required to access such goods,
except, however, costs of removal, shipment, replacement and reinstallation of
property other than the goods that are the subject of the contract.

     

    In the
event of a disagreement between the supplier and Hydro-Québec as to which party
shall be responsible for the costs of repairs, modifications or replacement, the
supplier agrees to perform such repairs, modifications or replacement diligently
in accordance with the decisions of Hydro-Québec’s
representative.  Failing an agreement between Hydro-Québec and the
supplier as to responsibility for costs of repair, Hydro-Québec acknowledges
that the fact that the supplier has performed the work required by
Hydro-Québec’s representative shall not extinguish the supplier’s right to bring
a legal action.

     

    All goods
thus repaired, corrected or replaced by the supplier shall be under a new
guarantee of the same nature and for the same term as the original
guarantee.

     

    Should
the supplier fail to repair, modify or replace the equipment at the request of
Hydro-Québec’s representative, Hydro-Québec shall be entitled to perform such
repairs, modifications or replacements or have them performed by a third party
at the supplier’s expense.

     

    16.           NOT
USED

     

    17.           NOT
USED

     

    18.           DEFAULT –
TERMINATION

     

    A.           DEFAULT
BY SUPPLIER

     

    If the
supplier fails to comply with the provisions of the contract or the instructions
of Hydro-Québec’s representative, the latter shall give it a notice of default
stipulating the time period for the supplier to comply with the requirements of
the contract.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    If the
supplier fails to comply with the notice from Hydro-Québec’s representative
within the stipulated period or becomes insolvent, it shall be in default and
Hydro-Québec may exercise one or all of the remedies stipulated in the clauses
entitled “Withdrawal of Work from the Supplier” and “Contract
Termination”.

     

    B.           WITHDRAWAL
OF WORK FROM THE SUPPLIER

     

    If the
supplier is in default under the contract, Hydro-Québec may withdraw the work
which is as yet uncompleted from the supplier, without thereby releasing it from
its contractual obligations, save the obligation to complete such
work.

     

    The
supplier shall indemnify Hydro-Québec for all losses and damages resulting from
its default and the withdrawal of the work and shall also reimburse Hydro-Québec
for all costs and expenses Hydro-Québec has incurred further to such withdrawal
to arrange for the full completion of the work.

     

    C.           CONTRACT
TERMINATION

     

    Hydro-Québec
shall at all times have the right to terminate the contract in whole or in part
upon written notice.

     

    If
Hydro-Québec terminates the contract unilaterally without any default by the
supplier, the supplier shall be entitled to the value of the work performed and
the materials supplied as of the termination, less such amounts as it may owe
Hydro-Québec, as well as damages, if any.

     

    If the
supplier is in default under the contract, Hydro-Québec may terminate the
contract in whole or in part. The supplier shall then be entitled to the value
of the work performed and the materials supplied as of the termination, less
such sums as it may owe Hydro-Québec. It shall not be entitled to any damages.
The supplier shall remain liable to Hydro-Québec for any loss or damages
resulting from its default.

     

    D.           NOT
USED

     

    19.           NOT
USED

     

    20.           RELEVANT
DOCUMENTS

     

    A.           ACCOUNTING
PRINCIPLES

     

    The
supplier shall keep separate accounts for the cost of the work in accordance
with Canadian generally accepted accounting principles.

     

    B.           RETENTION
PERIOD

     

    The
supplier shall retain all books and accounting records and the documents
pertaining to the contract for three (3) years after the end of the contract.
Upon request by Hydro-Québec, the retention period shall be
extended.

     

    C.           RIGHT
TO INSPECT

     

    Upon
written request, the supplier shall make all books and accounting records and
documents pertaining to the contract available to
Hydro-Québec.  Hydro-Québec may inspect same and make any
copies.

      
        
           


        

        
          13

          
            

          

        

        
           


        

      



    


     

    TRANSLATION

    


    SPECIFIC
CONDITIONS

    


    


    Table of
Contents

    


    


    


    1.          
 TERM OF MASTER AGREEMENT

     

    2.           
CONTRACT REVIEW AND FOLLOW-UP

     

    3.           
APPROVAL STATUS

     

    4.           
NEW SUPPLIER

     

    5.          
 QUALITY MANAGEMENT SYSTEM, ISO 9001:2000
(F1)

     

    6.           
CERTIFICATE OF REGISTRATION
(F15)

     

    7.           
NOTICE OF PROCEDURE (F18)

     

    8.           
QUALITY RECORD (F21)

     

    9.           
HYDRO-QUÉBEC’S QUALITY PLAN REQUIREMENTS
(F61)

     

    10.          DECISION TO UTILIZE (F11)

     

    11.          POST-D.U. DELIVERY AUTHORIZATION

     

    12.          DELIVERY PERIOD

     

    13.          LATE DELIVERY

     

    14.          COMPLIANCE WITH QUANTITIES

     

    15.          DELIVERY PERFORMANCE

     

    16.          PENALTY FOR LATE DELIVERY

     

    17.          DELIVERY ON PALLETS

     

    18.          DELIVERY BY TRUCK

     

    19.          DELIVERY ADDRESS

     

    20.          INDEXING CLAUSE

     

    21.          ENERGY LOSS VALUES

     

    22.          PENALTY ON SURPLUS EFFECTIVE AVERAGE
LOSSES

     

    23.          QUEBEC CONTENT

     

    24.          INVOICING OF TAXES

     

    25.          GUARANTEE

     

    26.          PAYMENT

     

    27.          SUPPLY SECURITY

     

    28.          CONTRACT ADMINISTRATION

     

    29.          CONTRACT DOCUMENTS

    

      
        
           


        

        
          14

          
            

          

        

        
           


        

      



    


     

    1.           TERM
OF MASTER AGREEMENT

     

    


    The
initial term of the master agreement shall be two (2) years commencing on April
1, 2006.

     

    Hydro-Québec
reserves the right to extend the master agreement for a further period of two
(2) years, based on two (2) renewal options of twelve (12) months
each.

     

    For the
extension, no less than three (3) months before the expiration of the master
agreement, Hydro-Québec shall send written notice to the supplier of its
intention to extend or not to extend the master agreement.

     

    Within
five (5) business days of the date of Hydro-Québec’s notice, the supplier shall
send written notice to Hydro-Québec of its acceptance or refusal to extend the
master agreement.

     

    It shall
be understood and agreed that the option to extend shall be under the same terms
and conditions as those prevailing until then under the master
agreement.

     

    


    2.           CONTRACT
REVIEW AND FOLLOW-UP

     

    Hydro-Québec
shall call the supplier to a contract review meeting before production of the
first order is begun.  All of the relevant representatives from
Hydro-Québec shall attend to ensure a mutual understanding of the requirements
stipulated in the master agreement.

     

    Hydro-Québec’s
representatives shall be:  the technical officer for the product, the
quality control officer, the materials-in-stock management officer and the
master agreement administrator.

     

    Further
meetings may be called at the parties’ request.

     

    3.           APPROVAL
STATUS

     

    If any of
the products covered by the master agreement are approved products, any change
to the production of the goods, such as the procurement of materials, the
manufacturing or assembly location, etc. shall require prior approval from
Hydro-Québec, which shall assess the impact of the change on the approval status
of the goods.

     

    Hydro-Québec’s
technical officer shall determine the type testing required to extend the
approval status.  The costs inherent in such tests shall be borne by
Hydro-Québec.  However, if the test results do not meet the
requirements, the costs of retesting shall be borne by the
supplier.

     

    The price
list (taxes extra) for the type testing shall be:

     

    [XX]

    


    4.           NEW
SUPPLIER

     

    Clause
deleted.

     

    5.           QUALITY
MANAGEMENT SYSTEM, ISO 9001:2000 (F1)

     

    The
quality management system of the product’s designer, manufacturer and installer
shall be duly ISO 9001:2000 registered.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    If the
design or development activities form part of the contract, the exclusion of
section 7.3 “Design and
Development” </˃ of ISO 9001:2000 shall not be acceptable for the designer of
the product.

     

    At the
specific request of Hydro-Québec’s representative, the supplier shall send him
the quality manual, quality procedures and quality management system forms for
the product’s designer, manufacturer and installer.

     

    Hydro-Québec
or its representative may visit the premises of the supplier and its
subcontractors at any time to verify that the contract requirements are being
met.

     

    Any
proposal involving the use, alteration or repair of the product which is not
consistent with the contract requirements shall be submitted to Hydro-Québec’s
representative.

     

    6.           CERTIFICATE
OF REGISTRATION (F15)

     

    The
supplier must hold an ISO certificate of registration issued by an accredited
registrar indicating that the manufacturer and designer of the product meet the
above-mentioned quality system standards.

     

    Any
change to their quality system or certification shall be sent to Hydro-Québec’s
quality officer during the term of the contract.

     

    7.           NOTICE
OF PROCEDURE (F18)

     

    Any
request made by the supplier for a quality control procedure shall be made in
writing and sent to Hydro-Québec’s representative.  The request shall
be made in advance within a reasonable period of time, having regard to the
place where the procedure will be carried out.  At least two business
days are requested for local procedures.  That time frame may be
several weeks for a procedure carried out in a foreign country.

     

    The
request shall specify the purpose, date and place of the procedure, the order
number, the item number in the order, the material to be controlled and, where
applicable, the serial number.

     

    Hydro-Québec
shall cover its representative’s costs for such procedures. However, if the
control or testing results do not meet the requirements of the client and the
order, or if the procedure is delayed, the repeat or waiting costs shall be
covered by the supplier.

     

    8.           QUALITY
RECORD (F21)

     

    The
quality records containing any documents or objective proof which can
demonstrate the conformity of the product to the contract requirements shall be
retained for at least three (3) years after delivery or three (3) years after
the guarantee expires, whichever is later.

     

    The
records shall be available for consultation by Hydro-Québec or its
representative at all times during that period at the premises of the supplier
and the subcontractors.

     

    9.           HYDRO-QUÉBEC’S
QUALITY PLAN REQUIREMENTS (F61)

     

    This
clause sets out the minimum requirements for the content of a quality plan and
how it must be submitted to Hydro-Québec and managed.  A quality plan
shall be required for each specific product or family of products listed in the
order.

     

    The
quality plan covers all of the development, monitoring and measurement
activities. In addition to the inspection and testing activities, formerly known
as the “Inspection and Testing Plan” (“ITP” or “PIE”), the review activities for
the requirements pertaining to the product, design and development, purchase,
product preservation, etc. shall be covered therein.

     

    Where the
supplier is not also the designer, manufacturer or installer, it shall be
responsible for ensuring that its subcontractors provide their quality plan in
conformity with the requirements.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    It shall
not be necessary to resubmit a quality plan if it covers a family of products
provided it has already been accepted by Hydro-Québec; and there has been no
change to the product’s material, form, function or manufacturing process.
However, acceptance of the quality plan shall be valid for no more than 3 years
from the date of acceptance.

     

    Upon
request, the supplier shall provide Hydro-Québec with the manual, procedures,
instructions and forms referred to in the quality plans, and those relating to
the quality plans of the subcontractors.

     

    
      	
              1.0  

            	
              GENERAL
      REQUIREMENTS

               

              1.1   
      Issue
      Deadline

               

              At
      least four (4) weeks prior to the commencement of realization, the
      supplier shall submit quality plans prepared in accordance with the
      requirements to Hydro-Québec’s quality officer for
      approval.

               

              1.2    Revision
      of Quality Plan

               

              The
      supplier shall keep the quality plans up to date throughout the term of
      the contract or the order.  Any revision made to a quality plan
      relating to the contract requirements shall be submitted immediately to
      Hydro-Québec’s quality officer for
approval.

            


    

     

     

    
      	
              2.0  

            	
              QUALITY
      PLAN PRESENTATION

               

              The
      quality plan shall include:

               

              2.1  
      A
      cover page with:

            


    

     

    
      	
              -  

            	
              The
      name of the supplier/manufacturer.

            


    

     

    
      	
              -  

            	
              The
      quality plan number.

            


    

     

    
      	
              -  

            	
              The
      revision date and number.

            


    

     

    
      	
              -  

            	
              The
      product description.

            


    

     

    
      	
              -  

            	
              The
      order number, master agreement number or lot number, if
    any.

            


    

     

    
      	
              -  

            	
              The
      name and signature of the person responsible for approval by the
      supplier.

            


    

     

    
      
        	
                 

              	
                2.2   
      A
      table of contents listing the sections and their page numbers, if any, in
      the quality plan.

                 

                2.3   
      A
      process diagram (if required by Hydro-Québec’s quality officer); that is,
      a graphic representation of the development, monitoring and measurement
      activities, also including Hydro-Québec’s hold
      points.

                 

                Note:           An
      example of a “CQ-Ps-07/IN01” quality plan is available from Hydro-Québec’s
      quality officer upon
  request.

              


      

    

     

    
      	
              3.0  

            	
              ACTIVITIES
      COVERED IN QUALITY PLAN

               

              The
      quality plan shall include the following activities:

              (If
      some activities do not apply, this must be explained in the quality
      plan.)

               
      

            


    

     

    
      	
              3.1  

            	
              Review
      of the product requirements (contract
review).

            


    

     

    
      	
              3.2  

            	
              Design
      and development

               

              The
      design and development activities shall include, without limitation, the
      following:

            


    

     

    
      	
              3.2.1  

            	
              Design
      and development planning (stages and responsibility for design and
      development)

            


    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    
      	
              3.2.2  

            	
              Design
      and development inputs (Hydro-Québec order requirements, Hydro-Québec
      specifications, standards)

            


    

     

    
      	
              3.2.3  

            	
              Design
      and development outputs (approval of drawings, data sheets, calculation
      notes)

            


    

     

    
      	
              3.2.4  

            	
              Design
      and development review (internally and/or with the
  client)

            


    

     

    
      	
              3.2.5  

            	
              Verification
      of design and development (conformity of drawings, calculation notes,
      testing reports compared to inputs)

            


    

     

    
      	
              3.2.6  

            	
              Validation
      of design and development (installation tests, operating
      instructions)

            


    

     

    
      	
              3.2.7  

            	
              Control
      of design and development modifications (quality notification, technical
      modification request (“TMR” or
“DMT”))

            


    

     

    
      	
              3.3  

            	
              Purchasing

            


    

     

    
      	
              3.3.1  

            	
              Principal
      suppliers and subcontractors

               

              For
      each principal product or service purchased or subcontracted, the quality
      plan shall mention (or cite in a
  schedule):

            


    

     

    
      	
              -  

            	
              The
      description of the principal products and services purchased and
      subcontracted.

            


    

     

    
      	
              -  

            	
              The
      names and contact information for the suppliers and
      subcontractors.

            


    

     

    
      	
              -  

            	
              The
      quality requirements sought (including the subcontractors’ quality
      plans).

            


    

     

    
      	
              3.3.2  

            	
              Purchasing
      documents

               

              The
      supplier’s purchasing documents shall include all the requirements
      stipulated in the contract documents.  Hydro-Québec or its
      representative may visit the premises of the supplier and its
      subcontractors at any time to verify that the contract requirements are
      being met.

            


    

     

    
      	
              3.4  

            	
              Client’s
      property (products supplied by the client, if
  any).

            


    

     

    
      	
              3.5  

            	
              All
      relevant development, monitoring and measurement
      operations.  Including the hold points previously identified by
      Hydro-Québec in its request for proposals documents and
      specifications.  Hydro-Québec’s representative may, when
      reviewing the quality plan, ask for the inclusion of additional hold
      points and specify the advance notice required for carrying out the
      procedures.

            


    

     

    
      	
              3.6  

            	
              The
      tests, pre-delivery installation tests and testing programs (where
      required, including the sequence, procedures and test circuit
      diagrams).

            


    

     

    
      	
              3.7  

            	
              The
      identification and traceability (where applicable, an identification and
      recording method to ensure the product can be
  traced)

            


    

     

    
      	
              3.8  

            	
              Preservation
      of the product (packaging and handling: Hydro-Québec requirements SN-1.1
      or other, if specified).

            


    

     

    
      	
              3.9  

            	
              Record
      control (review and closure of quality
record).

            


    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    
      	
              3.10  

            	
              Issuance
      of decision to utilize (DU).  Hold
  point.

            


    

     

    
      	
              4.0  

            	
              CONTENT
      OF QUALITY PLAN

            


    

     

    
      	
              4.1  

            	
              Development,
      monitoring and measurement activities.  (Include or refer to the
      activities of subcontractors, where applicable)

               

              For
      each development, monitoring and measurement activity, the quality plan
      shall include the following
information:

            


    

     

    
      	
              -  

            	
              The
      activity and its reference number.

            


    

     

    
      	
              -  

            	
              The
      reference documents (procedures, drawings, data sheets, technical
      documents reviewed by
Hydro-Québec).

            


    

     

    
      	
              -  

            	
              The
      characteristics to be controlled.

            


    

     

    
      	
              -  

            	
              The
      acceptance criteria.

            


    

     

    
      	
              -  

            	
              The
      monitoring and measurement
frequency.

            


    

     

    
      	
              -  

            	
              The
      title of the person in charge of the
activity.

            


    

     

    
      	
              -  

            	
              The
      expected quality records.

            


    

     

    
      
        	 	
                In
      addition, the quality plan shall cover the
    following:

              


      

    

    
       

    

    
      	
              4.2  

            	
              The
      special skills of the personnel (welders, inspectors) where
      applicable.

            


    

     

    
      	
              4.3  

            	
              The
      validation of the production processes and service preparation processes,
      if any.  (Special processes: processes where the characteristics
      of the product in the finished product cannot be fully
      verified.  For instance, welding, plating, heat treatment,
      non-destructive tests).

            


    

     

    
      	
              4.4  

            	
              Control
      of the monitoring and measurement instruments (measuring and testing
      equipment).

            


    

     

    
      	
              4.5  

            	
              Control
      of non-conforming products (non-conformity of supplier and Quality
      Notification).

            


    

     

    
      	
              4.6  

            	
              Mention
      all requirements of the quality plan that do not
  apply.

            


    

     

    10.           DECISION
TO UTILIZE (F11)

     

    The
supplier shall obtain a decision to utilize from Hydro-Québec’s quality officer
before any product is delivered.

     

    If you do
not know the quality officer’s name, please contact:

     

    Pierre
Guyon

    Head,
Electrical Apparatus

    Phone:  (514)
840-3000 ext. 4915

    Fax:  (514)
840-4320

    


    11.           POST-D.U.
DELIVERY AUTHORIZATION

     

    Further
to the issuance of a D.U. (decision to utilize) the supplier may ship the
equipment directly if the receiving point is a store or a Hydro-Québec material
distribution centre (“MDC” or “CDM”).  For any other delivery point,
the supplier must have authorization from the person who signed the order,
otherwise receipt may be refused and the equipment may be returned to the
shipper, at its expense.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    12.           DELIVERY
PERIOD

     

    The
delivery period shall be between twelve (12) and fifteen (15) weeks from
issuance of the order, depending on the listings.

     

    The
supplier may deliver transformers from the time the order is issued until the
end of the contractual delivery period (ongoing delivery).

     

    Any
delivery which is late due to a non-conformity or which is the subject of a
“Quality Notification” shall be covered by the supplier.

     

    13.           LATE
DELIVERY

     

    If the
supplier expects a delivery to be late, it shall immediately notify the person
who signed the order.

     

    14.           COMPLIANCE
WITH QUANTITIES

     

    The
quantities delivered shall be identical to those indicated in the order. There
shall be no changes without the prior approval of the person who signed the
order.

     

    15.           DELIVERY
PERFORMANCE

     

    Every
quarter, the supplier’s delivery performance shall be measured based on the
quantities per article code delivered on time.  Any breach of
performance shall be subject to a penalty in accordance with section 16 “Penalty
for Late Delivery”, which may even include withdrawal of the article
code.  In addition, the supplier’s performance may be used as a
criterion for awarding any future contracts.  Within 15 days of
receipt of the delivery performance report, the supplier shall validate the
results transmitted and notify Hydro-Québec of any discrepancies.

     

    Calculation
of actual delivery period:

     

    Starting
point for delivery period calculation: the date the order is issued. This date
is recorded in Hydro-Québec’s SAP system and cannot be altered.  The
order is sent to the supplier the same day by fax or e-mail.  The
supplier is responsible for notifying the person who signed the order if there
is a delay.

     

    End point
for delivery period calculation: the date of physical receipt of the equipment
recorded in the SAP system.

     

    16.           PENALTY
FOR LATE DELIVERY

     

    If the
supplier fails to meet the later of the date of delivery to the F.O.B. point
determined on the order and the contractual delivery period, Hydro-Québec will
calculate a penalty as contractual damages without the necessity to provide
proof in an amount equal to [XX]%, but in no event exceeding [XX]%, of the price
(excluding shipping costs, GST, QST where applicable) to the F.O.B. point
indicated on the order for each undelivered unit for each week or partial week
delivery is late between the contractual date and the effective date of delivery
of the said unit to the F.O.B. point.

     

    If the
supplier wishes to have the penalty waived because it was delayed for reasons
beyond its control, it shall submit a written request to the contract
administrator.  Hydro-Québec shall notify the supplier in writing
within ten (10) days of its acceptance or refusal of the request.

     

    Penalties
shall be compiled quarterly with the delivery performance report. Penalties
shall be paid to Hydro-Québec once a year.

     

    17.           DELIVERY
ON PALLETS

     

    The
equipment shall be delivered on pallets open on four (4) sides, built and sized
for the equipment they will support.  They shall be manufactured of
hardwood and the equipment shall be packaged in accordance with standards (use
of metal straps is prohibited) but not exceeding the exterior dimensions of the
pallet.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    Shipments
that do not meet these criteria will be returned at the supplier’s
expense.

     

    18.           DELIVERY
BY TRUCK

     

    Equipment
shall only be delivered on OPEN trucks.

     

    19.           DELIVERY
ADDRESS

     

    Deliveries
shall be made to the following addresses:

     

    CDM
St-Hyacinthe

    7300
Avenue Choquette

    St-Hyacinthe,
Quebec

    J2S
8S7

    


    CDM
Quebec

    2600 Rue
Decelles

    Quebec
City, Quebec

    G2C
1R1

    


    The exact
addresses shall appear on each order under contract.

     

    20.           INDEXING
CLAUSE

     

    For
purposes of this contract, the basic unit price for each item shall be subject
to an upward or downward adjustment based on the following formula for orders in
each of the eight (8) quarters corresponding to the contract term commencing as
of April 1, 2006:

     

    [XX]

     

    Notes:

     

    For
purposes of calculating the indexing factor, the months of November 2005,
October 2005 and December 2005 shall respectively be deemed as the month of
opening and the months preceding and following the opening of the
tenders.

     

    If, when
the orders are issued, the indexes required to calculate the price have not been
published, the successful tenderer may issue an initial invoice based on the
prices in force in the previous period.

     

    The
calculations shall be made as of the initial publication of the last index
required for each calculation; the revisions already made to the indexes for the
prior months shall be taken into account, but the subsequent revisions of the
indexes shall not be taken into account.

     

    The
exchange rate used for a given month shall correspond to the monthly average of
the noon rates for US$ expressed in CA$.

     

    Indexing
calculations shall be made to at least four decimal points.

     

    21.           ENERGY
LOSS VALUES

     

    The
economic value of energy losses during the contract term shall be:

     

    [XX]

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    22.           PENALTY
ON SURPLUS EFFECTIVE AVERAGE LOSSES

     

    Where,
for a given item, the average effective losses referred to above exceed the
specified losses, the amount of the penalty shall be calculated as
follows:

     

    [XX]

     

    23.           QUEBEC
CONTENT

     

    Validation of contractual
Quebec content

     

    If an
award is made that includes contractual Quebec content, Hydro-Québec shall
proceed to validate same and it shall be determined by
Hydro-Québec.  This shall include, in particular, an audit of the
manufacturing process used by the successful tenderer and its subcontractors,
the provenance of the materials and services and the successful tenderer’s
actual outlays.  As the Quebec content aspects are gradually attained,
the successful tenderer shall be granted the percentages associated with these
aspects.  For that purpose, Hydro-Québec may require interim
reports.  At the end of the production phase, the successful tenderer
shall submit a final report on the Quebec content reached.

     

    The
successful tenderer shall keep accounting records consistent with generally
accepted accounting principles for all such outlays invoiced.  The
successful tenderer shall retain all supporting documentation regarding Quebec
content until final payment.

     

    On
forty-eight (48) hours’ notice, the successful tenderer shall allow Hydro-Québec
access to all its accounting documentation relating to Quebec content and to
copy and take excerpts of same.

     

    Penalty for failure to meet
contractual Quebec content

     

    If the
successful tenderer fails to meet the contractual Quebec content percentage, a
penalty calculated on the contract price, excluding GST and QST, for the product
for which the contractual Quebec content has not been met shall be determined
based on the following formula:

     

    [XX]

     

    24.           INVOICING
OF TAXES

     

    On each
invoice, the goods and services tax (G.S.T.) and Quebec sales tax (Q.S.T.) at
the legal rates in force shall be indicated separately.

     

    The
registration number for G.S.T. purposes and the registration number for Q.S.T.
purposes shall also appear on each invoice.

     

    If the
successful tenderer fails to comply with these requirements, Hydro-Québec may
refuse the invoice and return it for correction or rectification.

     

    25.           GUARANTEE

     

    
      Not
Used

    

     

    26.           PAYMENT

     

    
      Not
used

    

     

    27.           SUPPLY
SECURITY

     

    Whenever
delivery is compromised in the short or medium term (raw materials supply
problem, strike, lockout, calamity, earthquake, etc.) the supplier shall forward
the contingency plan it plans to follow to the contract administrator within ten
(10) days of the occurrence of the problem.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    To offset
any risk of a shortage and further to the sending of the contingency plan
explaining why the supplier can no longer accept orders, Hydro-Québec reserves
the right in such instance to obtain its supplies elsewhere during such period
as may be necessary pending resumption of normal deliveries by the
supplier.

     

    The
supplier may not claim to have sustained a loss of profits or claim compensation
or an extension of its contract on the pretext that Hydro-Québec did not order a
minimum volume of its needs.

     

    28.           CONTRACT
ADMINISTRATION

     

    Marc
Desautels

    Advisor –
Contract Management

    Supply
Agreements

    Strategic
Goods

    Procurement
Branch, 7th Floor

    855
Ste-Catherine St. East,

    Montreal,
Quebec  H2L 4P5

    


    Phone:  (514)
840-3000 ext. 6765

    Fax:  (514)
840-3322

    Email:
Desautels.Marc@hydro.qc.ca

    
 

    29.           CONTRACT
DOCUMENTS

     

    This
contract is consistent with our request for proposals no. 11954845 dated October
24, 2005, your tender no. 6100098418 dated November 23, 2005, our correspondence
dated January 10 and 31, 2006 and March 9, 2006 and your correspondence dated
December 21, 2005, January 12, 2006, February 7 and 24, 2006 and March 1 and 23,
2006.

    


    
      
        
           


        

        
          23

          
            

          

        

         

      

    

     

    A           REQUEST FOR AMENDMENT – MASTER
AGREEMENT OR ORDER

    
      Supply Agreement - Strategic Goods and
Information Technologies

    

    
      
        

      



    
      	
              SUPPLIER:

            	
              Pioneer
      Transformers Ltd.

              612
      Chemin Bernard, P.O. Box 272

              Granby
      QC

              J2G
      8E5

            	
              DATE:  2008/03/04

            


    

    
 

     

    
      	
              Amendment

              No.

              1

            	
              Contract
      No.

              4600010831

            	
              Order
      No.

            	
              Hydro-Québec
      Official

              Marc
      Desautels

            	
              Tel:
      514-840-3000 ext. 6765

              Fax:
      514-840-3322

            


    

    A
– CURRENT AMENDMENT

    
      	
              Extension
      of the master agreement, under the same business conditions, for a further
      period of 24 months, namely from April 1, 2008 to March 31,
      2010.

               

               

               

               

               

               

               

               

               

               

               

               

               

               

            


    

    B-
SUPPLIER

    
      	
              [x]

               

               

               

               

              [  ]

               

              [  ]

               

            	
              We
      agree to perform the requested amendment on the same terms and conditions
      as the above-mentioned contract, it being agreed that this request does
      not constitute a firm undertaking by Hydro-Québec and that the mere
      authorization to proceed in “C”, approved by the Hydro-Québec contract
      official, will allow the supplier to proceed.

               

              Delivery
      date:                                                                (signed)                                           25-3-08 

              Signature                                       Date

              We
      refuse to perform the requested
      change                                                                                                         

              Signature                                       Date

              Not
      applicable

            


    

    C-
AUTHORIZATION TO PROCEED

    
      	
              You
      are authorized to proceed with this change immediately

               

                                                                                                                                                                              
      

              H.Q.
      Official                                                      Signature                                           Issue
      date

            


    

    c.c.
Supplier, Quality Assurance (CQ)

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
 

    
      
        
          	
                  HYDRO
      QUÉBEC

                	
                  Contract

                


        

        


         

      

    

     

     

    2