Document:

s1a10310ex10xxxiii_pioneer.htm

    
       

      Exhibit 10.33

    

     

    PIONEER
POWER SOLUTIONS, INC.

     

    DIRECTOR
AND OFFICER INDEMNIFICATION AGREEMENT

     

    This
Director and Officer Indemnification Agreement, dated as of December 2nd,
2009 (this “Agreement”),
is made by and between Pioneer Power Solutions, Inc., a Delaware corporation
(the “Company”),
and Jonathan Tulkoff (the “Indemnitee”).

     

    RECITALS:

     

    A.           Section
141 of the Delaware General Corporation Law provides that the business and
affairs of a corporation shall be managed by or under the direction of its board
of directors.

     

    B.           By
virtue of the managerial prerogatives vested in the directors and officers of a
Delaware corporation, directors and officers act as fiduciaries of the
corporation and its stockholders.

     

    C.           Thus,
it is critically important to the Company and its stockholders that the Company
be able to attract and retain the most capable persons reasonably available to
serve as directors and officers of the Company.

     

    D.           In
recognition of the need for corporations to be able to induce capable and
responsible persons to accept positions in corporate management, Delaware law
authorizes (and in some instances requires) corporations to indemnify their
directors and officers, and further authorizes corporations to purchase and
maintain insurance for the benefit of their directors and officers.

     

    E.           The
Delaware courts have recognized that indemnification by a corporation serves the
dual policies of (1) allowing corporate officials to resist unjustified
lawsuits, secure in the knowledge that, if vindicated, the corporation will bear
the expense of litigation, and (2) encouraging capable women and men to serve as
corporate directors and officers, secure in the knowledge that the corporation
will absorb the costs of defending their honesty and integrity.

     

    F.           The
number of lawsuits challenging the judgment and actions of directors and
officers of Delaware corporations, the costs of defending those lawsuits and the
threat to personal assets have all materially increased over the past several
years, chilling the willingness of capable women and men to undertake the
responsibilities imposed on corporate directors and officers.

     

    G.           Recent
federal legislation and rules adopted by the Securities and Exchange Commission
and the national securities exchanges have exposed such directors and officers
to new and substantially broadened civil liabilities.

     

    H.           Under
Delaware law, a director’s or officer’s right to be reimbursed for the costs of
defense of criminal actions, whether such claims are asserted under state or
federal law, does not depend upon the merits of the claims asserted against the
director or officer and is separate and distinct from any right to
indemnification the director may be able to establish.

     

    
      
        
        

      

      
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    I.           Indemnitee
is, or will be, a director and/or officer of the Company and his or her
willingness to serve in such capacity is predicated, in substantial part, upon
the Company’s willingness to indemnify him or her in accordance with the
principles reflected above, to the fullest extent permitted by the laws of the
State of Delaware, and upon the other undertakings set forth in this
Agreement.

     

    J.           Therefore,
in recognition of the need to provide Indemnitee with substantial protection
against personal liability, in order to procure Indemnitee’s continued service
as a director and/or officer of the Company and to enhance Indemnitee’s ability
to serve the Company in an effective manner, and in order to provide such
protection pursuant to express contract rights (intended to be enforceable
irrespective of, among other things, any amendment to the Company’s certificate
of incorporation or bylaws (collectively, the “Constituent
Documents”), any change in the composition of the Company’s Board of
Directors (the “Board”)
or any change-in-control or business combination transaction relating to the
Company), the Company wishes to provide in this Agreement for the
indemnification and advancement of Expenses to Indemnitee on the terms, and
subject to the conditions, set forth in this Agreement.

     

    K.           In
light of the considerations referred to in the preceding recitals, it is the
Company’s intention and desire that the provisions of this Agreement be
construed liberally, subject to their express terms, to maximize the protections
to be provided to Indemnitee hereunder.

     

    AGREEMENT:

     

    NOW,
THEREFORE, the parties hereby agree as follows:

     

    1. Certain
Definitions.  In addition to terms defined elsewhere herein,
the following terms have the following meanings when used in this Agreement with
initial capital letters:

     

    “Change in
Control” shall have occurred at such time, if any, as Incumbent Directors
cease for any reason to constitute a majority of Directors.  For
purposes of this Section 1(a), “Incumbent
Directors” means the individuals who, as of the date hereof, are
Directors of the Company and any individual becoming a Director subsequent to
the date hereof whose election, nomination for election by the Company’s
stockholders, or appointment, was approved by a vote of at least a majority of
the then Incumbent Directors (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director, without objection to such nomination); provided, however, that an
individual shall not be an Incumbent Director if such individual’s election or
appointment to the Board occurs as a result of an actual or threatened election
contest (as described in Rule 14a-12(c) of the Securities Exchange Act of 1934,
as amended) with respect to the election or removal of directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board.

     

    
      
        
        

      

      
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    “Claim”
means (i) any threatened, asserted, pending or completed claim, demand, action,
suit or proceeding, whether civil, criminal, administrative, arbitrative,
investigative or other, and whether made pursuant to federal, state or other
law; and (ii) any inquiry or investigation, whether made, instituted or
conducted by the Company or any other Person, including, without limitation, any
federal, state or other governmental entity, that Indemnitee reasonably
determines might lead to the institution of any such claim, demand, action, suit
or proceeding.  For the avoidance of doubt, the Company intends
indemnity to be provided hereunder in respect of acts or failure to act prior
to, on or after the date hereof.

     

    “Controlled
Affiliate” means any corporation, limited liability company, partnership,
joint venture, trust or other entity or enterprise, whether or not for profit,
that is directly or indirectly controlled by the Company.  For
purposes of this definition, “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of an entity or enterprise, whether
through the ownership of voting securities, through other voting rights, by
contract or otherwise; provided that direct or
indirect beneficial ownership of capital stock or other interests in an entity
or enterprise entitling the holder to cast 15% or more of the total number of
votes generally entitled to be cast in the election of directors (or persons
performing comparable functions) of such entity or enterprise shall be deemed to
constitute control for purposes of this definition.

     

    “Disinterested
Director” means a director of the Company who is not and was not a party
to the Claim in respect of which indemnification is sought by
Indemnitee.

     

    “Expenses”
means attorneys’ and experts’ fees and expenses and all other costs and expenses
paid or payable in connection with investigating, defending, being a witness in
or participating in (including on appeal), or preparing to investigate, defend,
be a witness in or participate in (including on appeal), any Claim.

     

    “Indemnifiable
Claim” means any Claim based upon, arising out of or resulting from (i)
any actual, alleged or suspected act or failure to act by Indemnitee in his or
her capacity as a director, officer, employee or agent of the Company or as a
director, officer, employee, member, manager, trustee or agent of any other
corporation, limited liability company, partnership, joint venture, trust or
other entity or enterprise, whether or not for profit, as to which Indemnitee is
or was serving at the request of the Company, (ii) any actual, alleged or
suspected act or failure to act by Indemnitee in respect of any business,
transaction, communication, filing, disclosure or other activity of the Company
or any other entity or enterprise referred to in clause (i) of this sentence, or
(iii) Indemnitee’s status as a current or former director, officer, employee or
agent of the Company or as a current or former director, officer, employee,
member, manager, trustee or agent of the Company or any other entity or
enterprise referred to in clause (i) of this sentence or any actual, alleged or
suspected act or failure to act by Indemnitee in connection with any obligation
or restriction imposed upon Indemnitee by reason of such status.  In
addition to any service at the actual request of the Company, for purposes of
this Agreement, Indemnitee shall be deemed to be serving or to have served at
the request of the Company as a director, officer, employee, member, manager,
trustee or agent of another entity or enterprise if Indemnitee is or was serving
as a director, officer, employee, member, manager, agent, trustee or other
fiduciary of such entity or enterprise and (i) such entity or enterprise is or
at the time of such service was a Controlled Affiliate, (ii) such entity or
enterprise is or at the time of such service was an employee benefit plan (or
related trust) sponsored or maintained by the Company or a Controlled Affiliate,
or (iii) the Company or a Controlled Affiliate (by action of the Board, any
committee thereof or the Company’s Chief Executive Officer (“CEO”) (other than
as the CEO him or herself)) caused or authorized Indemnitee to be nominated,
elected, appointed, designated, employed, engaged or selected to serve in such
capacity.

     

    
      
        
        

      

      
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    “Indemnifiable
Losses” means any and all Losses relating to, arising out of or resulting
from any Indemnifiable Claim; provided, however, that
Indemnifiable Losses shall not include Losses incurred by Indemnitee in respect
of any Indemnifiable Claim (or any matter or issue therein) as to which
Indemnitee shall have been adjudged liable to the Company, unless and only to
the extent that the Delaware Court of Chancery or the court in which such
Indemnifiable Claim was brought shall have determined upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnification for
such Expenses as the court shall deem proper.

     

    “Independent
Counsel” means a nationally recognized law firm, or a member of a
nationally recognized law firm, that is experienced in matters of Delaware
corporate law and neither presently is, nor in the past five years has been,
retained to represent:  (i) the Company (or any subsidiary) or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements) or (ii) any other named
(or, as to a threatened matter, reasonably likely to be named) party to the
Indemnifiable Claim giving rise to a claim for indemnification
hereunder.  Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.

     

    “Losses”
means any and all Expenses, damages, losses, liabilities, judgments, fines,
penalties (whether civil, criminal or other) and amounts paid or payable in
settlement, including, without limitation, all interest, assessments and other
charges paid or payable in connection with or in respect of any of the
foregoing.

     

    “Person”
means any individual, entity or group, within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended.

     

    “Standard of
Conduct” means the standard for conduct by Indemnitee that is a condition
precedent to indemnification of Indemnitee hereunder against Indemnifiable
Losses relating to, arising out of or resulting from an Indemnifiable
Claim.  The Standard of Conduct is (i) good faith and a reasonable
belief by Indemnitee that his action was in or not opposed to the best interests
of the Company and, with respect to any criminal action or proceeding, that
Indemnitee had no reasonable cause to believe that his conduct was unlawful, or
(ii) any other applicable standard of conduct that may hereafter be substituted
under Section 145(a) or (b) of the Delaware General Corporation Law or any
successor to such provision(s).

     

    
      
        
        

      

      
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    2. Indemnification
Obligation.  Subject only to Section 7 and to the proviso in
this Section, the Company shall indemnify, defend and hold harmless Indemnitee,
to the fullest extent permitted or required by the laws of the State of Delaware
in effect on the date hereof or as such laws may from time to time hereafter be
amended to increase the scope of such permitted indemnification, against any and
all Indemnifiable Claims and Indemnifiable Losses; provided, however, that,
except as provided in Section 5, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with (i) any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim, or (ii) the purchase and sale by Indemnitee of securities in violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended.  The
Company acknowledges that the foregoing obligation may be broader than that now
provided by applicable law and the Company’s Constituent Documents and intends
that it be interpreted consistently with this Section and the recitals to this
Agreement.

     

    3. Advancement of
Expenses. 
Indemnitee shall have the right to advancement by the Company prior to the final
disposition of any Indemnifiable Claim of any and all actual and reasonable
Expenses relating to, arising out of or resulting from any Indemnifiable Claim
paid or incurred by Indemnitee.  Without limiting the generality or
effect of any other provision hereof, Indemnitee’s right to such advancement is
not subject to the satisfaction of any Standard of Conduct.  Without
limiting the generality or effect of the foregoing, within five business days
after any request by Indemnitee that is accompanied by supporting documentation
for specific reasonable Expenses to be reimbursed or advanced, the Company
shall, in accordance with such request (but without duplication), (a) pay such
Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount
sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses;
provided that
Indemnitee shall repay, without interest, any amounts actually advanced to
Indemnitee that, at the final disposition of the Indemnifiable Claim to which
the advance related, were in excess of amounts paid or payable by Indemnitee in
respect of Expenses relating to, arising out of or resulting from such
Indemnifiable Claim.  In connection with any such payment, advancement
or reimbursement, at the request of the Company, Indemnitee shall execute and
deliver to the Company an undertaking, which need not be secured and shall be
accepted without reference to Indemnitee’s ability to repay the Expenses, by or
on behalf of the Indemnitee, to repay any amounts paid, advanced or reimbursed
by the Company in respect of Expenses relating to, arising out of or resulting
from any Indemnifiable Claim in respect of which it shall have been determined,
following the final disposition of such Indemnifiable Claim and in accordance
with Section 7, that Indemnitee is not entitled to indemnification
hereunder.

     

    4. Indemnification for
Additional Expenses.  Without limiting the
generality or effect of the foregoing, the Company shall indemnify and hold
harmless Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee for, or advance to Indemnitee, within five business days of such
request accompanied by supporting documentation for specific Expenses to be
reimbursed or advanced, any and all actual and reasonable Expenses paid or
incurred by Indemnitee in connection with any Claim made, instituted or
conducted by Indemnitee for (a) indemnification or reimbursement or advance
payment of Expenses by the Company under any provision of this Agreement, or
under any other agreement or provision of the Constituent Documents now or
hereafter in effect relating to Indemnifiable Claims, and/or (b) recovery under
any directors’ and officers’ liability insurance policies maintained by the
Company; provided,
however, if it is ultimately determined that the Indemnitee is not
entitled to such indemnification, reimbursement, advance or insurance recovery,
as the case may be, then the Indemnitee shall be obligated to repay any such
Expenses to the Company; provided further, that,
regardless in each case of whether Indemnitee ultimately is determined to be
entitled to such indemnification, reimbursement, advance or insurance recovery,
as the case may be, Indemnitee shall return, without interest, any such advance
of Expenses (or portion thereof) which remains unspent at the final disposition
of the Claim to which the advance related.

     

    
      
        
        

      

      
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    5. Partial
Indemnity.  If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of any
Indemnifiable Loss but not for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.

     

    6. Procedure for
Notification.  To obtain indemnification under this Agreement
in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall
submit to the Company a written request therefore, including a brief description
(based upon information then available to Indemnitee) of such Indemnifiable
Claim or Indemnifiable Loss.  If, at the time of the receipt of such
request, the Company has directors’ and officers’ liability insurance in effect
under which coverage for such Indemnifiable Claim or Indemnifiable Loss is
potentially available, the Company shall give prompt written notice of such
Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in
accordance with the procedures set forth in the applicable
policies.  The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
Indemnifiable Claims and Indemnifiable Losses in accordance with the terms of
such policies.  The Company shall provide to Indemnitee a copy of such
notice delivered to the applicable insurers, substantially concurrently with the
delivery thereof by the Company.  The failure by Indemnitee to timely
notify the Company of any Indemnifiable Claim or Indemnifiable Loss shall not
relieve the Company from any liability hereunder unless, and only to the extent
that, the Company did not otherwise learn of such Indemnifiable Claim or
Indemnifiable Loss and to the extent that such failure results in forfeiture by
the Company of substantial defenses, rights or insurance coverage.

     

    7.  Determination of Right
to Indemnification.

     

    To the
extent that Indemnitee shall have been successful on the merits or otherwise in
defense of any Indemnifiable Claim or any portion thereof or in defense of any
issue or matter therein, including, without limitation, dismissal without
prejudice, Indemnitee shall be indemnified against all Indemnifiable Losses
relating to, arising out of or resulting from such Indemnifiable Claim in
accordance with Section 2 and no Standard of Conduct Determination (as defined
in Section 7(b)) shall be required.

     

    To the
extent that the provisions of Section 7(a) are inapplicable to an Indemnifiable
Claim that shall have been finally disposed of, any determination of whether
Indemnitee has satisfied the applicable Standard of Conduct (a “Standard of
Conduct Determination”) shall be made as follows:  (i) if a
Change in Control shall not have occurred, or if a Change in Control shall have
occurred but Indemnitee shall have requested that the Standard of Conduct
Determination be made pursuant to this clause (i), (A) by a majority vote of the
Disinterested Directors, even if less than a quorum of the Board, (B) if such
Disinterested Directors so direct, by a majority vote of a committee of
Disinterested Directors designated by a majority vote of all Disinterested
Directors, or (C) if there are no such Disinterested Directors, or if a majority
of the Disinterested Directors so direct, by Independent Counsel in a written
opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee
shall not have requested that the Standard of Conduct Determination be made
pursuant to clause (i) above, by Independent Counsel in a written opinion
addressed to the Board, a copy of which shall be delivered to
Indemnitee.

     

    
      
        
        

      

      
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    If (i)
Indemnitee shall be entitled to indemnification hereunder against any
Indemnifiable Losses pursuant to Section 7(a), (ii) no determination of whether
Indemnitee has satisfied any applicable standard of conduct under Delaware law
is a legally required condition precedent to indemnification of Indemnitee
hereunder against any Indemnifiable Losses, or (iii) Indemnitee has been
determined or deemed pursuant to Section 7(b) to have satisfied the applicable
Standard of Conduct, then the Company shall pay to Indemnitee, within five
business days after the later of (x) the Notification Date in respect of the
Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are
related, out of which such Indemnifiable Losses arose or from which such
Indemnifiable Losses resulted, and (y) the earliest date on which the applicable
criterion specified in clause (i), (ii) or (iii) above shall have been
satisfied, an amount equal to the amount of such Indemnifiable
Losses.  Nothing herein is intended to mean or imply that the Company
is intending to use Section 145(f) of the Delaware General Corporation Law to
dispense with a requirement that Indemnitee meet the applicable Standard of
Conduct where it is otherwise required by such statute.

     

    If a
Standard of Conduct Determination is required to be, but has not been, made by
Independent Counsel pursuant to Section 7(b)(i), the Independent Counsel shall
be selected by the Board or a committee of the Board, and the Company shall give
written notice to Indemnitee advising him or her of the identity of the
Independent Counsel so selected.  If a Standard of Conduct
Determination is required to be, or to have been, made by Independent Counsel
pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected.  In either
case, Indemnitee or the Company, as applicable, may, within five business days
after receiving written notice of selection from the other, deliver to the other
a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not satisfy the criteria set forth in the definition of
“Independent Counsel” in Section 1(h), and the objection shall set forth with
particularity the factual basis of such assertion.  Absent a proper
and timely objection, the Person so selected shall act as Independent
Counsel.  If such written objection is properly and timely made and
substantiated, (i) the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit and (ii) the non-objecting party
may, at its option, select an alternative Independent Counsel and give written
notice to the other party advising such other party of the identity of the
alternative Independent Counsel so selected, in which case the provisions of the
two immediately preceding sentences and clause (i) of this sentence shall apply
to such subsequent selection and notice.  If applicable, the
provisions of clause (ii) of the immediately preceding sentence shall apply to
successive alternative selections.  If no Independent Counsel that is
permitted under the foregoing provisions of this Section 7(d) to make the
Standard of Conduct Determination shall have been selected within 30 calendar
days after the Company gives its initial notice pursuant to the first sentence
of this Section 7(d) or Indemnitee gives its initial notice pursuant to the
second sentence of this Section 7(d), as the case may be, either the Company or
Indemnitee may petition the Court of Chancery of the State of Delaware for
resolution of any objection which shall have been made by the Company or
Indemnitee to the other’s selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person or firm selected by the Court or
by such other person as the Court shall designate, and the person or firm with
respect to whom all objections are so resolved or the person or firm so
appointed will act as Independent Counsel.  In all events, the Company
shall pay all of the actual and reasonable fees and expenses of the Independent
Counsel incurred in connection with the Independent Counsel’s determination
pursuant to Section 7(b).

     

    
      
        
        

      

      
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    8. Cooperation.  Indemnitee
shall cooperate with reasonable requests of the Company in connection with any
Indemnifiable Claim and any individual or firm making such Standard of Conduct
Determination, including providing to such Person documentation or information
which is not privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to defend the
Indemnifiable Claim or make any Standard of Conduct Determination without
incurring any unreimbursed cost in connection therewith.  The Company
shall indemnify and hold harmless Indemnitee against and, if requested by
Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within
five business days of such request accompanied by supporting documentation for
specific costs and expenses to be reimbursed or advanced, any and all costs and
expenses (including attorneys’ and experts’ fees and expenses) actually and
reasonably incurred by Indemnitee in so cooperating with the Person defending
the Indemnifiable Claim or making such Standard of Conduct
Determination.

     

    9. Presumption of
Entitlement.  Notwithstanding any other provision hereof, in
making any Standard of Conduct Determination, the Person making such
determination shall presume that Indemnitee has satisfied the applicable
Standard of Conduct.

     

    10. No Other
Presumption.  For purposes of this Agreement, the termination
of any Claim by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere or its equivalent,
will not create a presumption that Indemnitee did not meet any applicable
Standard of Conduct or that indemnification hereunder is otherwise not
permitted.

     

    11. Non-Exclusivity.  The
rights of Indemnitee hereunder will be in addition to any other rights
Indemnitee may have under the Constituent Documents, or the substantive laws of
the Company’s jurisdiction of incorporation, any other contract or otherwise
(collectively, “Other Indemnity
Provisions”); provided,
however, that (a) to the extent that Indemnitee otherwise would have any
greater right to indemnification under any Other Indemnity Provision, Indemnitee
will without further action be deemed to have such greater right hereunder, and
(b) to the extent that any change is made to any Other Indemnity Provision which
permits any greater right to indemnification than that provided under this
Agreement as of the date hereof, Indemnitee will be deemed to have such greater
right hereunder.  The Company may not, without the consent of
Indemnitee, adopt any amendment to any of the Constituent Documents the effect
of which would be to deny, diminish or encumber Indemnitee’s right to
indemnification under this Agreement.

     

    
      
        
        

      

      
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    12.  Liability Insurance and
Funding.  For the duration of Indemnitee’s service as a
director and/or officer of the Company and for a reasonable period of time
thereafter, which such period shall be determined by the Company in its sole
discretion, the Company shall use commercially reasonable efforts (taking into
account the scope and amount of coverage available relative to the cost thereof)
to cause to be maintained in effect policies of directors’ and officers’
liability insurance providing coverage for directors and/or officers of the
Company, and, if applicable, that is substantially comparable in scope and
amount to that provided by the Company’s current policies of directors’ and
officers’ liability insurance.  Upon reasonable request, the Company
shall provide Indemnitee or his or her counsel with a copy of all directors’ and
officers’ liability insurance applications, binders, policies, declarations,
endorsements and other related materials.  In all policies of
directors’ and officers’ liability insurance obtained by the Company, Indemnitee
shall be named as an insured in such a manner as to provide Indemnitee the same
rights and benefits, subject to the same limitations, as are accorded to the
Company’s directors and officers most favorably insured by such
policy.  Notwithstanding the foregoing, (i) the Company may, but shall
not be required to, create a trust fund, grant a security interest or use other
means, including, without limitation, a letter of credit, to ensure the payment
of such amounts as may be necessary to satisfy its obligations to indemnify and
advance expenses pursuant to this Agreement and (ii) in renewing or seeking to
renew any insurance hereunder, the Company will not be required to expend more
than 2.0 times the premium amount of the immediately preceding policy period
(equitably adjusted if necessary to reflect differences in policy
periods).

     

    13. Subrogation.  In
the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the related rights of recovery of
Indemnitee against other Persons (other than Indemnitee’s successors), including
any entity or enterprise referred to in clause (i) of the definition of
“Indemnifiable Claim” in Section 1(f).  Indemnitee shall execute all
papers reasonably required to evidence such rights (all of Indemnitee’s
reasonable Expenses, including attorneys’ fees and charges, related thereto to
be reimbursed by or, at the option of Indemnitee, advanced by the
Company).

     

    14. No Duplication of
Payments.  The Company shall not be liable under this Agreement
to make any payment to Indemnitee in respect of any Indemnifiable Losses to the
extent Indemnitee has otherwise already actually received payment (net of
Expenses incurred in connection therewith) under any insurance policy, the
Constituent Documents and Other Indemnity Provisions or otherwise (including
from any entity or enterprise referred to in clause (i) of the definition of
“Indemnifiable Claim” in Section 1(f)) in respect of such Indemnifiable Losses
otherwise indemnifiable hereunder.

     

    15.  Defense of
Claims.  Subject to the provisions of applicable policies of
directors’ and officers’ liability insurance, if any, the Company shall be
entitled to participate in the defense of any Indemnifiable Claim or to assume
or lead the defense thereof with counsel reasonably satisfactory to the
Indemnitee; provided
that if Indemnitee determines, after consultation with counsel selected by
Indemnitee, that (a) the use of counsel chosen by the Company to represent
Indemnitee would present such counsel with an actual or potential conflict, (b)
the named parties in any such Indemnifiable Claim (including any impleaded
parties) include both the Company and Indemnitee and Indemnitee shall conclude
that there may be one or more legal defenses available to him or her that are
different from or in addition to those available to the Company, (c) any such
representation by such counsel would be precluded under the applicable standards
of professional conduct then prevailing, or (d) Indemnitee has interests in the
claim or underlying subject matter that are different from or in addition to
those of other Persons against whom the Claim has been made or might reasonably
be expected to be made, then Indemnitee shall be entitled to retain separate
counsel (but not more than one law firm plus, if applicable, local counsel in
respect of any particular Indemnifiable Claim for all indemnitees in
Indemnitee’s circumstances) at the Company’s expense.  The Company
shall not be liable to Indemnitee under this Agreement for any amounts paid in
settlement of any threatened or pending Indemnifiable Claim effected without the
Company’s prior written consent.  The Company shall not, without the
prior written consent of the Indemnitee, effect any settlement of any threatened
or pending Indemnifiable Claim which the Indemnitee is or could have been a
party unless such settlement solely involves the payment of money and includes a
complete and unconditional release of the Indemnitee from all liability on any
claims that are the subject matter of such Indemnifiable
Claim.  Neither the Company nor Indemnitee shall unreasonably withhold
its consent to any proposed settlement; provided that Indemnitee may
withhold consent to any settlement that does not provide a complete and
unconditional release of Indemnitee.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    16. Mutual
Acknowledgment. Both the Company and the
Indemnitee acknowledge that in certain instances, Federal law or applicable
public policy may prohibit the Company from indemnifying its directors and
officers under this Agreement or otherwise.  Indemnitee understands
and acknowledges that the Company may be required in the future to undertake to
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Company’s right
under public policy to indemnify Indemnitee and, in that event, the Indemnitee’s
rights and the Company’s obligations hereunder shall be subject to that
determination.

     

    17. Successors and Binding
Agreement.

     

    This
Agreement shall be binding upon and inure to the benefit of the Company and any
successor to the Company, including, without limitation, any Person acquiring
directly or indirectly all or substantially all of the business or assets of the
Company whether by purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed the “Company” for purposes of this
Agreement), but shall not otherwise be assignable or delegatable by the
Company.

     

    This
Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, heirs,
distributees, legatees and other successors.

     

    This
Agreement is personal in nature and neither of the parties hereto shall, without
the consent of the other, assign or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections 17(a) and
17(b).  Without limiting the generality or effect of the foregoing,
Indemnitee’s right to receive payments hereunder shall not be assignable,
whether by pledge, creation of a security interest or otherwise, other than by a
transfer by the Indemnitee’s will or by the laws of descent and distribution,
and, in the event of any attempted assignment or transfer contrary to this
Section 17(c), the Company shall have no liability to pay any amount so
attempted to be assigned or transferred.

     

    18. Notices.  For
all purposes of this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to be given
hereunder must be in writing and shall be deemed to have been duly given when
hand delivered or dispatched by electronic facsimile transmission (with receipt
thereof orally confirmed), or one business day after having been sent for
next-day delivery by a nationally recognized overnight courier service,
addressed to the Company (to the attention of the Secretary of the Company) and
to Indemnitee at the applicable address shown on the signature page hereto, or
to such other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes of address will be
effective only upon receipt.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    19. Governing Law. The validity,
interpretation, construction and performance of this Agreement shall be governed
by and construed in accordance with the substantive laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such
State.  The Company and Indemnitee each hereby irrevocably consent to
the jurisdiction of the Chancery Court of the State of Delaware for all purposes
in connection with any action or proceeding which arises out of or relates to
this Agreement, waive all procedural objections to suit in that jurisdiction,
including, without limitation, objections as to venue or inconvenience, agree
that service in any such action may be made by notice given in accordance with
Section 18 and also agree that any action instituted under this Agreement shall
be brought only in the Chancery Court of the State of Delaware.

     

    20.  Validity.  If
any provision of this Agreement or the application of any provision hereof to
any Person or circumstance is held invalid, unenforceable or otherwise illegal,
the remainder of this Agreement and the application of such provision to any
other Person or circumstance shall not be affected, and the provision so held to
be invalid, unenforceable or otherwise illegal shall be reformed to the extent,
and only to the extent, necessary to make it enforceable, valid or
legal.  In the event that any court or other adjudicative body shall
decline to reform any provision of this Agreement held to be invalid,
unenforceable or otherwise illegal as contemplated by the immediately preceding
sentence, the parties thereto shall take all such action as may be necessary or
appropriate to replace the provision so held to be invalid, unenforceable or
otherwise illegal with one or more alternative provisions that effectuate the
purpose and intent of the original provisions of this Agreement as fully as
possible without being invalid, unenforceable or otherwise illegal.

     

    21. Miscellaneous.  No
provision of this Agreement may be waived, modified or discharged unless such
waiver, modification or discharge is agreed to in writing signed by Indemnitee
and the Company.  No waiver by either party hereto at any time of any
breach by the other party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this Agreement.

     

    22. Certain Interpretive
Matters.  Unless the context of this Agreement otherwise
requires, (1) “it” or “its” or words of any gender include each other gender,
(2) words using the singular or plural number also include the plural or
singular number, respectively, (3) the terms “hereof,” “herein,” “hereby” and
derivative or similar words refer to this entire Agreement, (4) the terms
“Article,” “Section,” “Annex” or “Exhibit” refer to the specified Article,
Section, Annex or Exhibit of or to this Agreement, (5) the terms “include,”
“includes” and “including” will be deemed to be followed by the words “without
limitation” (whether or not so expressed), and (6) the word “or” is disjunctive
but not exclusive.  Whenever this Agreement refers to a number of
days, such number will refer to calendar days unless business days are specified
and whenever action must be taken (including the giving of notice or the
delivery of documents) under this Agreement during a certain period of time or
by a particular date that ends or occurs on a non-business day, then such period
or date will be extended until the immediately following business
day.  As used herein, “business
day” means any day other than Saturday, Sunday or a United States federal
holiday.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    23. Entire
Agreement.  This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter of this
Agreement.  Any prior agreements or understandings between the parties
hereto with respect to indemnification are hereby terminated and of no further
force or effect.  This Agreement is not the exclusive means of
securing indemnification rights of Indemnitee and is in addition to any rights
Indemnitee may have under any Constituent Documents.

     

    24.  Counterparts.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together shall constitute one and the
same agreement.

     

    [REMAINDER
OF PAGE INTENTIONALLY BLANK]

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly
authorized representative to execute this Agreement as of the date first above
written.

     

    
      
        	 	
                PIONEER
      POWER SOLUTIONS, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Nathan J. Mazurek	 
	 	 	Name:
      Nathan J. Mazurek	 
	 	 	Title:   Chief
      Executive Officer	 
	 	 	 	 
	 	INDEMNITEE:	 
	 	 	 	 
	 	/s/ Jonathan Tulkoff	 
	 	Name:  Jonathan
      Tulkoff	 

      

    

     

    
      
        
        

      

      
        13s1a10310ex10xxxiv_pioneer.htm

Exhibit 10.34

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, 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]”.

 

	Hydro	 	 
	Québec 	 	Contract
	 	Contract No.	4600017040
	Vendor No. 0A10418850	Reference Vendor Call for Bids 	No. 6100147843
	 	Call for Bids	No. 13091995
	Vendor   	Date:	01/01/2010
	Transformateurs Pioneer Ltée.  	 	 
	612 Chemin Bernard	 	 
	Granby, QC   J2J 0H6	 	 

 

	Attn.: Raymond Haddad	 
	Tel.:   (450) 378-9018   	Fax: (450) 378-0626

 

Invoices must be written in conformance with instructions given herein.

 

 

	Term of Contract:      	04/01/2010 – 03/31/2012	Destination:
	 	 	 
	Delivery Terms:    	FOB freight paid	 
	 	 	 
	Payment Terms:	Net 30 days	 
	 	 	 

For further information, call Erik Beauregard at (514) 840-3000, Ext. 6751

 

	 	/s/ Erik Beauregard
	 	Person in Charge

 

 

  

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Contract No. 4600017040

	Item No.	
Item or 

Service

	
Target 

Quantity

	
Unit of

Purchase

	Net Unit	
Price x 

Quantity

	
 

Description

	
Price

	
Canadian Dollars

 

PURPOSE:

Delivery of submersible transformers for underground distribution grid

This contract was awarded under Call for Bids No. 13091995 and is bound by said call, your bid, and any addenda and contractual correspondence listed below.

ADDENDA: Report on Bids Received, August 14, 2009 (07/03/2009)

CONTRACTUAL CORRESPONDENCE:

E-mails dated October 23, 2009, about the cost of tests and the validity of the bid

E-mails dated September 29, October 2, 8, 9, 13, 14, 15 and 20, 2009, about the appendix to the bid.

CONTRACT MANAGEMENT:

The contract manager designated herein is:

 

	Name:	Erik Beauregard
	Tel.: 	(514) 840-3000, Ext. 6751
	Fax:  	(514) 840-3322
	E-mail:	beauregard.erik@hydro.qc.ca
	Department: 	Purchasing of Strategic Items and TIC’s
	Hydro-Québec	 

 

	Address:	855 rue Ste-Catherine est
	Floor: 	7th Floor
	City:   	Montréal, Québec
	Postal Code: 	H2L 4P5

 

 

  

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Service

	
Target 

Quantity

	
Unit of

Purchase

	Net Unit	
Price x 

Quantity

	
 

Description

	
Price

	
Canadian Dollars

 

 

	00010 1002097	 ch

 

Single-phase submersible distribution transformer with regulating taps.

 

	Primary Voltage (kV)	14.4/7.2
	Secondary Voltage (V)	240/120
	Rating (kVA)	167

 

Standard No.: 1600-00/20-065.10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

	00020 1002104	 ch

 

Single-phase submersible distribution transformer with regulating taps.

 

	Primary Voltage (kV) 	14.4/7.2
	Secondary Voltage (V) 	240/120
	Rating (kVA) 	250
	 	 
	 	 

 

Standard No.: 1600-00/20-065.10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

  

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	Hydro-Québec	Contract

 

Contract No. 4600017040

	Item No.	
Item or 

Service

	
Target 

Quantity

	
Unit of

Purchase

	Net Unit	
Price x 

Quantity

	
 

Description

	
Price

	
Canadian Dollars

 

 

	00030 1002178	 ch

 

Single-phase distribution transformer with built-in protection on cover and regulating taps.

 

	Primary Voltage (kV) 	14.4/7.2
	Secondary Voltage (V)  	240/120
	Rating (kVA)  	250

 

Standard No.: 1600-00/20-065-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

	00040 1002113   	 ch

 

Single-phase submersible distribution transformer with regulating taps.

 

	Primary Voltage (kV) 	14.4/7.2
	Secondary Voltage (V)	240/120
	Rating (kVA)     	333

 

Standard No.: 1600-00/20-065-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

  

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Contract No. 4600017040

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Service

	
Target 

Quantity

	
Unit of

Purchase

	Net Unit	
Price x 

Quantity

	
 

Description

	
Price

	
Canadian Dollars

 

 

	00050 1002081  	 ch

 

Single-phase submersible distribution transformer with built-in protection in the front wall.

 

	Secondary Voltage (V)   	14.4/7.2
	Primary Voltage (kV) 	240/120
	Rating (kVA)	333

 

Standard No.: 1600-00/20-065-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

	00060 1002158	 ch

 

Single-phase submersible distribution transformer with built-in protection on the cover, for use in a bank.

 

 

	Primary Voltage (kV)    	14.4/7.2
	Secondary Voltage (V)	347
	Rating (kVA)    	250

 

Standard No.: 1600-00/20-065-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

  

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	Hydro-Québec 	Contract

 

Contract No. 4600017040

	Item No.	
Item or 

Service

	
Target 

Quantity

	
Unit of

Purchase

	Net Unit	
Price x 

Quantity

	
 

Description

	
Price

	
Canadian Dollars

 

 

	00070 1002199   	 ch

 

Single-phase submersible distribution transformer with built-in protection on the cover, for use in a bank.

 

	Primary Voltage (kV)	14.4/7.2
	Secondary Voltage (V) 	347
	Rating (kVA) 	333

 

Standard No.: 1600-00/20-065-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

	00080 1002458   	 ch

 

Single-phase residential underground distribution transformer with regulating taps and a branch breaker.

 

	Primary Voltage (kV) 	14.4/7.2
	Secondary Voltage (V) 	240/120
	Rating (kVA)	167

 

Standard No.: 1600-00/20-065-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

  

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	Hydro-Québec  	Contract

 

Contract No. 4600017040

	Item No.	
Item or 

Service

	
Target 

Quantity

	
Unit of

Purchase

	Net Unit	
Price x 

Quantity

	
 

Description

	
Price

	
Canadian Dollars

 

 

	00090 1002417  	 ch

 

Three-phase submersible distribution transformer with regulating taps.

 

	Primary Voltage (kV)	24.9/12.4
	Secondary Voltage (V)	600/347
	Rating (kVA)	300

 

Standard No.: 1600-00/20-066-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

 

	00100 1002441	 ch

 

Three-phase submersible distribution transformer with built-in protection in the front wall.

 

	Primary Voltage (kV)	24.9/12.47
	Secondary Voltage (V)  	600/347
	Rating (kVA) 	500

 

Standard No.: 1600-00/20-066-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

  

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	Hydro-Québec 	Contract

 

Contract No. 4600017040

	Item No.	
Item or 

Service

	
Target 

Quantity

	
Unit of

Purchase

	Net Unit	
Price x 

Quantity

	
 

Description

	
Price

	
Canadian Dollars

 

 

	00110 1002386     	 ch

 

Three-phase submersible distribution transformer with regulating taps.

 

	Primary Voltage (kV)  	24.9/12.4
	Secondary Voltage (V)	208/120
	Rating (kVA)  	500

 

Standard No.: 1600-00/20-066-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

 

	00120 1002394	 ch

 

Three-phase submersible distribution transformer with no regulating taps.

 

	Primary Voltage (kV)   	24.94/12.47
	Secondary Voltage (V) 	600/347
	Rating (kVA) 	500

 

Standard No.: 1600-00/20-066-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

  

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Contract No. 4600017040

	Item No.	
Item or 

Service

	
Target 

Quantity

	
Unit of

Purchase

	Net Unit	
Price x 

Quantity

	
 

Description

	
Price

	
Canadian Dollars

 

 

	 00130 1002403	 ch

 

Three-phase submersible distribution transformer with built-in protection in the front wall.

 

	Primary Voltage (kV)	24.94/12.47
	Secondary Voltage (V)     	600/347
	Rating (kVA)	1,000

 

Standard No.: 1600-00/20-066-10.3

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

 

	00140  066 	1           Lot	               0.00

     

Transformer Repair Expense

This item includes the following services:

 

	10	Lot 	0.00
	Transformer Repair Expense	 	 

 

QUALITY MANAGEMENT SYSTEM: INTERNATIONAL STANDARD ISO 9001:2000 (F1)

DECISION TO USE (F11)

REGISTRATION CERTIFICATE (F15)

QUALITY REGISTRATIONS (F21)

HYDRO-QUÉBEC’S REQUIREMENTS FOR PLANNING MANUFACTURING QUALITY (F61)

 

 

  

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	Hydro-Québec 	Contract 4600017040

 

SPECIAL CLAUSES

Table of Contents

	
1.  

	
Term of Master Contract

	
2.  

	
Contract Review and Follow-Up

	
3.  

	
Approved Status

	
4.  

	
Not applicable

	
5.  

	
Quality Management System and International Standard ISO 9001:2000 (F1)

	
6.  

	
ISO Registration Certificate (F15)

	
7.  

	
Witnessing Notices (F18)

	
8.  

	
Quality File (F21)

	
9.  

	
Hydro-Québec’s Quality Plan Requirements (F61)

	
10.  

	
Decision to Use (F11)

	
11.  

	
Delivery Authorization Subsequently to D.U.

	
12.  

	
Delivery Time

	
13.  

	
Delivery Delays

	
14.  

	
Quantity Requirement

	
15.  

	
Delivery Performance

	
16.  

	
Penalty for Delivery Delays

	
17.  

	
Delivery on Pallets

	
18.  

	
Delivery by Truck, Gondola or Flatcar

	
19.  

	
Delivery Addresses

	
20.  

	
Escalation Clause

	
21.  

	
Power Losses

	
22.  

	
Penalty for Excess Average Effective Power Loss

	
23.  

	
Quebec Content

	
24.  

	
Tax Invoicing

	
25.  

	
Warranty

	
26.  

	
Payment

	
27.  

	
Contingency Procurement

	
28.  

	
Accidental Spills

	
29.  

	
Environmental Conformity Statement

	
30.  

	
Special Design, Approval Procedure and Major Incidents

	
31.  

	
Shipping Costs

  

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	Hydro-Québec      	Contract 4600017040

 

1. TERM OF MASTER CONTRACT

 

The initial term of the master contract shall be 2 years, commencing on April 1, 2010.

Hydro-Québec hereby reserves the right to extend the master contract for an additional two (2) year term by exercising two (2) options to extend the term by twelve (12) months each.

To do so, Hydro-Québec, with no less than three (3) months’ notice prior to expiration of the master contract, shall notify vendor in writing of its intent to exercise or decline to exercise options to extend said contract.

Vendor shall indicate in writing whether Vendor agrees or declines to extend the master contract within five (5) working days of Hydro-Québec’s request to do so.

It shall be understood that an extension shall be governed by the same terms and conditions as those in effect for the master contract at the time of extension.

2.  CONTRACT REVIEW AND FOLLOW-UP

Hydro-Québec may call vendor to a meeting to review the contract prior to starting up the manufacture of the first order. All parties involved with Hydro-Québec shall attend in order to ensure mutual understanding of the requirements stipulated in the master contract.

The Hydro-Québec attendees shall be: the technical manager in charge of the product, the quality assurance manager, the inventory control manager, and the master contract manager.

Other meetings may be called at the request of either party.

3. APPROVED STATUS

In the case of approved products to be delivered under the master contract, any modification in the production of said products, such as material purchasing or the manufacturing or assembly site, etc., shall require Hydro-Québec’s prior approval, and Hydro-Québec shall assess the impact of said modifications on the approved status of said products.

Hydro-Québec’s technical manager shall determine the kinds of tests required to maintain approved status. The costs of said tests shall be at vendor’s expense.

4. NOT APPLICABLE

5. QUALITY MANAGEMENT SYSTEM AND INTERNATIONAL STANDARD ISO 9001:2000 (F1)

The designer’s, manufacturer’s and installer’s quality management systems shall be duly registered in conformance with ISO 9001:2000.

If design and development work are part of the contract, the exclusion of Article 7.3 (Design and Development) of ISO Standard 9001-2000 shall not be acceptable.

 

 

  

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	Hydro-Québec	Contract 4600017040

 

At the express request of Hydro-Québec’s representative, vendor shall send the product designer’s, manufacturer’s and installer’s quality manuals and quality management system procedures and forms to said representative.

Hydro-Québec or its representative may inspect vendor’s locations and vendor’s subcontractors’ locations at any time to ensure that contractual requirements are being met.

Any suggestions for product use, modifications or repairs that are not in conformance with contractual requirements shall be submitted to the proper Hydro-Québec representative as a quality notice or other document stipulated in the contract.

6. REGISTRATION CERTIFICATE (F15)

Vendor must hold an ISO registration certificate issued by an accredited registrar stating that the product manufacturer and designer meet the above quality system standards.

Any modification of said systems or certification occurring during the term hereof must be sent to Hydro-Québec’s quality manager.

7. WITNESSING NOTICES (F18)

Any witnessing notices from vendor related to quality control shall be effected in writing and sent to Hydro-Québec’s representative. Depending on vendor’s location, the minimum advance notice shall be:

	
o  

	
3 working days for control points in Quebec

	
o  

	
9 calendar days for [Canadian] control points other than Quebec

	
o  

	
14 calendar days for control points outside Canada

Notices shall indicate the purpose, date, witnessing site, order number, order item number, equipment to be inspected, and serial number, if any.

Hydro-Québec shall cover the travel expenses for its representative. However, if the results of the inspection or tests do not meet customer’s requirements or those stipulated in the order or if the event to be witnessed is postponed or if quality registrations are not complete or not in conformance with the quality plan or contractual requirements (documents provided to and reviewed by vendor), the expenses for retesting, repeated witnessing and waiting time shall be paid by vendor.

8. QUALITY REGISTRATIONS (F21)

Any quality registrations, documents and objective tests establishing the product’s conformance with contractual requirements shall be retained for no less than three (3) years from delivery or three (3) years from expiration of the warranty, whichever is later.

Quality registrations shall be available for review by Hydro-Québec or its representative at any time during said period, either at the vendor’s (or subcontractors’) facility or sent upon request.

 

  

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

1 Quality Plan

This clause stipulates minimum requirements for a quality plan and the procedure for submitting said plan to Hydro-Québec and managing it. A quality plan is required for each specific product or product line shown on the order.

Said quality plan shall stipulate the terms and conditions for applying the vendor’s quality management system to the performance of services hereunder.

The quality plan shall consist of two components:

	
1.  

	
An organizational component describing vendor’s management and planning for performing the services; and

	
2.  

	
An operational component describing the conducting and inspection of services to ensure that contractual requirements are met.

The design, on-site installation and start-up components, including related services, shall be provided if requested by Hydro-Québec.

Upon Hydro-Québec’s request, vendor shall provide Hydro-Québec with the manual, procedures, instructions and forms mentioned in the quality plans, including subcontractors’ quality plans.

	
1.1  

	
Submission and Acceptance of Quality Plan

Vendor may only begin services subsequently to acceptance by Hydro-Québec of vendor’s quality plan.

Vendor shall submit its quality plan to Hydro-Québec for acceptance no less than 30 days prior to beginning services hereunder.

Hydro-Québec, upon review for acceptance, reserves the right to add stopping points and monitoring points (see Paragraph 1.5 Definitions).

	
1.2  

	
Revisions of Quality Plan

Vendor shall submit any revisions to the quality plan to Hydro-Québec for acceptance and then submit the revised version before any modifications thereto may become effective.

	
1.3  

	
Organizational Component of Quality Plan

The organizational component shall include the following, if requested by the quality manager:

	
1.3.1  

	
Detailed organizational chart of all vendor and subcontractor personnel involved in performing the contract, including personnel involved in quality management;

 

 

  

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1.3.2  

	
Documents certifying the qualification of personnel involved in quality;

	
1.3.3  

	
List of phases (components) of the operational component, including the names of and contact information for vendors and subcontractors; and

	
1.3.4  

	
List of laboratories used by vendor.

	
1.4  

	
Operational Component of Quality Plan

The operational component shall cover the entirety of activities involved in conducting services, inspection and testing, and shall also cover a review of requirements for the product, purchasing, manufacturing and storage.

The operational component shall give the logical progression for conducting the services and shall name any subcontractors. Vendor’s operational component shall thus cover subcontractors’ activities that vendor has validated earlier. If vendor subcontracts part of the contract, vendor shall ensure that any subcontractors comply with contractual requirements.

Hydro-Québec, upon the acceptance review, reserves the right to add stopping points and monitoring points.

The operational component shall include:

	
1.4.1  

	
The following information:

	
o  

	
Name of vendor/manufacturer

	
o  

	
Activity number or phase, if any

	
o  

	
Revision number and date

	
o  

	
Product description

	
o  

	
Order, master contract or draft number

	
o  

	
Name and signature of person authorized by vendor to approve said information

	
1.4.2  

	
Table of contents listing items contained in the operational component that are related to this contract, if any

	
1.4.3  

	
Purpose of the operational component

	
1.4.4  

	
The following information, given in the form of tables, manufacturing flow charts, etc.:

	
1.4.4.1  

	
Sequence of manufacturing activities, including the following:

	
o  

	
Inspection of purchased items

	
o  

	
Monitoring of activities and testing

	
1.4.4.2  

	
The stopping points and monitoring points (see Definition) necessary to ensure proper monitoring, such as:

	
o  

	
Approval of procedures, methods, data sheets and drawings

	
o  

	
Checking quality documentation

	
o  

	
Obtaining Decisions to Use (DU's)

	
o  

	
Other

 

 

  

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1.4.4.3  

	
References for manufacturing procedures, testing and factory assembly

	
1.4.4.4  

	
References for work methods and instructions

	
1.4.4.5  

	
References for contractual requirements, codes and standards

	
1.4.4.6  

	
Monitoring and testing frequency and name of person responsible therefor

	
1.4.4.7  

	
Reference to quality registrations that must be retained, such as:

	
o  

	
Forms

	
o  

	
Checklists

	
o  

	
Reports

	
o  

	
As-Built Drawings

	
o  

	
Material Conformance Certificates

	
o  

	
Other

	
1.4.4.8  

	
Data to be monitored and acceptance criteria

	
1.4.4.9  

	
List of separate activities in special procedures, such as welding, plating, heat-treating and non–destructive testing

	
1.5  

	
Definitions

Control Points

Hydro-Québec Stopping Points

Points beyond which no other activity may be begun without the presence of or written authorization by a Hydro-Québec representative.

Hydro-Québec Monitoring Points

Points beyond which no other activity may be begun without notifying the Hydro-Québec representative.

Vendor shall notify Hydro-Québec in writing prior to beginning any activity beyond a control point. Said notices shall give the time, date and location where an activity following a control point is to be undertaken.

Depending on the location of a manufacturing phase involving a control point, the minimum advance notice shall be:

	
o  

	
3 working days for control points in Quebec

	
o  

	
9 calendar days for control points [in Canada] other than Quebec

	
o  

	
14 calendar days for control points outside Canada

 

 

  

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10.  DECISIONS TO USE (F11)

Vendor shall obtain a decision to use from Hydro-Québec’s quality manager prior to any product deliveries.

In order to obtain a decision to use, the manufacturing services for a product must be completed and documented. Vendor shall ensure that:

	
o  

	
The product meets all requirements.

	
o  

	
Inspections and testing have been done.

	
o  

	
Quality registrations are complete and in conformance with the quality plan and contractual requirements (documents provided to and reviewed by vendor).

	
o  

	
Quality notices or other documents required hereunder have been finalized.

	
o  

	
Packing, loading and protection are satisfactory.

If you do not know the name of the quality manager, you may contact the following person:

Gérard Beauchesne

Quality Manager

Tel. (514) 840-3000, Ext. 4307

Distribution Equipment

11. DELIVERY AUTHORIZATION SUBSEQUENTLY TO OBTAINING A  D.U.

Upon issuance of a D.U. (Decision to Use), vendor may ship equipment directly, provided the receiving point is a Hydro-Québec warehouse or depot. For all other delivery points, vendor must obtain authorization from the contract administrator as shown on the order. If not, delivery may be declined and the equipment may be returned to vendor at vendor’s expense.

12. DELIVERY TIME

Delivery time required by Hydro-Québec shall not exceed 13 weeks from issuance of an order, and this shall also apply to all registrations. Vendor may deliver transformers prior to a delivery date indicated on an order, provided such delivery is effected in the same month as that of the delivery date and is in accordance with the schedule provided by Hydro-Québec for each equipment distribution center (EDC).

Vendor shall be liable for any delivery delay arising from a non-conformity or quality notice.

13. DELIVERY DELAYS (E9)

If vendor foresees a delivery delay or partial delivery, vendor shall immediately notify the contract manager indicated on the order or the person who signed the order if none is indicated.

14. QUANTITY REQUIREMENT

Quantities delivered must match the quantities shown on the order. No modification thereof shall be acceptable without prior approval from the contract manager indicated on the order or the person who signed the order if none is indicated.

 

  

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15.  DELIVERY PERFORMANCE

Vendor’s delivery performance shall be evaluated each year as determined by quantities of each item code delivered on time. Any default shall be subject to a penalty, which may result in the cancellation of said item code. Further, vendor’s performance may be used as a criterion in the awarding of any subsequent contracts. Vendor shall confirm the results of the delivery performance report within two weeks of receipt and notify Hydro-Québec of any discrepancies.

Delivery time shall be figured from the date the order is written. Said date shall be entered in Hydro-Québec’s SAP system and cannot be changed. Orders shall be faxed to vendor the same day. Vendor shall be liable for notifying the master contract manager in the event of delay.

Delivery time shall end on the date of the physical receipt of equipment as entered in the SAP system.

16. PENALTIES FOR DELIVERY DELAYS

If vendor does not meet the delivery date at the FOB delivery point stipulated on an order, Hydro-Québec shall figure a penalty for contractual money damages at a rate of [XX]%, with no requirement to provide proof thereof, but in no case shall said penalty exceed [XX]% of the price (excluding freight, the goods and services tax and Quebec sales tax, if any) at the FOB delivery point shown on the order for each item not delivered, per week or partial week past the delivery time, from the contractual delivery date till said items are actually delivered to the FOB delivery point.

If vendor wishes to be granted a delay for reasons beyond vendor’s control, vendor shall submit a delay request, in writing, to the person who signed the order or the contract manager. If Hydro-Québec grants the request, an order modification will be issued to modify the dates in question.

Annual accrued penalties shall be provided with the delivery performance report. Penalties shall be paid to Hydro-Québec once a year.

17. DELIVERY ON PALLETS (H17)

Equipment shall be delivered on pallets open on all four sides that are dimensioned and designed appropriately for the equipment placed on them. Pallets shall be made of hardwood, and equipment shall be packed in conformance with standards (sheet-metal pallets are prohibited), and equipment may not extend beyond the outside dimensions of the pallet. Shipments that are not in conformance with these requirements will be returned at vendor’s expense.

18. DELIVERY BY TRUCK, GONDOLA OR FLATCAR (H6)

Equipment may only be shipped by truck, gondola or flatcar.

  

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19. DELIVERY ADDRESSES

Deliveries shall be made to the following addresses:

Entrepôt Rive Sud

7300, avenue Choquette

St-Hyacinthe, (Québec)

J2S 8S7

Open Monday-Thursday

Entrepôt Québec

2600, rue Decelles

Québec (Québec)

G2C 1R1

Open Monday-Thursday

The applicable addresses will be given on each order placed under the contract.

Regular deliveries of goods may be received from 8:30 till 11:30 a.m. and from 1:30 till 4:00 p.m. Warehouses are closed on holidays.

Drivers shall use the receiving docks at all times.

20. ESCALATION CLAUSE

For the purposes of the master contract, Hydro-Québec hereby agrees to a base unit price indexed to April 1, 2010, which shall be subject to revision up or down, in accordance with the following formula for orders placed in any of the next seven (7) quarters:

[XX]

 

  

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Notes:

If the indexes used to figure prices have not been published at the time invoices are written, the invoicing party may write a preliminary invoice based on prices in effect for the prior period.

Prices shall be refigured as soon as the last index needed for each calculation is published. Refigured prices shall take into account any revisions already made to indexes for prior months, but later revisions of the indexes shall not be taken into account.

Adjusted prices shall be figured to no less than five decimal places.

21. POWER LOSSES

The agreed economic value of power losses during the term hereof shall be:

 

	No-Load Losses 	 $[XX]/kW
	Losses under Load	 $[XX]/kW

 

22. PENALTY FOR EXCESS AVERAGE ACTUAL LOSSES

If average actual losses for a given item exceed the losses given above, penalties shall be figured as follows:

Monetary Value of Total Actual Losses as Metered on Tests:

 

	 No Load:  	 ____ kW x $[XX]/kW 	
 = $_________

	 	 	 +
	 Under Load: 	 ____kW x $[XX]/kW	 = $_________
	 	 	 
	 Total:  	 	 = $_________ (1)

                                               

Monetary Value of Total Allowed Losses:

 

	 No Load: 	 ____ kW x $[XX]/kW	 = $_________
	 	 	 +
	 Under Load:	 ____kW x $[XX]/kW 	 = $_________
	     	 	 
	 Total: 	 	 = $_________ (2)

 

  

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	Penalty: 	 = [XX]	 
	Where [XX]	 	 

 

No compensation shall be paid by Hydro-Québec even if the monetary value of total actual losses as metered in tests is less than total agreed losses.

23.  QUEBEC CONTENT

Verification of Contractually Agreed Quebec Content

If a Quebec content is contractually required, Hydro-Québec shall verify said content. Hydro-Québec shall draft the verification document. Verification shall expressly include inspection of the manufacturing process at both vendor’s and subcontractors’ facilities, verification of the provenance of materials and services, and an audit of vendor’s actual expenses. If a Quebec content is required, the percentage of components of Quebec provenance shall be agreed upon with vendor. To these ends, Hydro-Québec may require intermediate reports. Upon conclusion of the phase related to Quebec components, vendor shall submit a final report on said Quebec content.

Vendor shall keep records of all expenses invoiced, which shall be in conformance with generally accepted accounting principles. Vendor shall retain all supporting documentation related to said Quebec content until final payment.

Vendor, with forty-eight (48) hours’ notice, shall allow Hydro-Québec access to all accounting documents related to the Quebec content and make copies and excerpts thereof.

Penalty for not Complying with the Contractually Agreed Quebec Content

If vendor does not satisfy the contractually required percentage for a Quebec content, a penalty figured on the contractual price (excluding the goods and services tax and the Quebec sales tax) of the product whose Quebec content was not met shall be determined as follows:

[XX]

where

[XX]

[XX]

[XX]

[XX]

[XX]

 

  

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24. INVOICING TAXES

On each invoice, the goods and services tax (TPS) and the Quebec sales tax (TVQ) shall be figured at the current rate in effect by law and itemized separately.

The TPS number and the TVQ number shall also be shown on each invoice.

If vendor does not comply with said requirements, Hydro-Québec may refuse the invoice and return it for adjustment or correction.

25. WARRANTY

Notwithstanding Clause 15 of the General Terms and Conditions, vendor hereby agrees to pick up any defective transformer under warranty at a location to be advised by the equipment manager or pay shipping expenses from said location back to vendor’s plant.

26.  PAYMENT

Notwithstanding Clause 14 of the General Terms and Conditions, Hydro-Québec may agree to pay electronically (upon acceptance of products) at a discount of ____% (to be filled in and noted by vendor on the bidding form), which shall be applicable to each unit delivered.

Hydro-Québec shall determine the method of payment upon awarding the contract.

27. CONTINGENCY PROCUREMENT

In any situation in which a delivery is adversely affected in the short term or medium term (such as raw materials procurement complications, strikes, lockouts, natural disasters, earthquakes, etc.), vendor shall provide the contract manager with a contingency plan within ten (10) days of occurrence.

Hydro-Québec hereby reserves the right to procure products elsewhere for as long as necessary until vendor resumes normal deliveries.

28. ACCIDENTAL SPILLS

When making equipment deliveries on Hydro-Québec roads, vendor shall ensure that the vehicles and equipment used to do so do not leak fuel, oil or any other polluting liquids. When a leak is seen, Hydro-Québec reserves the right to turn a vehicle back at vendor’s expense.

When driving on Hydro-Québec’s property, vendor’s vehicles shall carry a kit containing the equipment necessary to clean up an accidental spill or leak for which vendor is liable.

 

 

  

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29. ENVIRONMENTAL CONFORMANCE STATEMENT

Vendor hereby agrees to provide Hydro-Québec with a signed environmental conformance statement, declaring that vendor holds any permits, certificates and authorizations necessary to conduct vendor’s activities, including the transportation of merchandise, and will comply with all obligations assumed thereunder.

30. SPECIAL DESIGN, APPROVAL PROCEDURES AND MAJOR INCIDENTS

In the event of a special design, approval procedure or major incident, Hydro-Québec may purchase equipment under this master contract by releasing a new call for bids.

31. SHIPPING COSTS

Hydro-Québec hereby reserves the right to handle the shipping of the equipment purchased hereunder itself. If Hydro-Québec elects to do so, prices shall be adjusted by deducting the shipping costs given in your bid (the section itemizing shipping costs, excluding shipping costs in your statement on the Quebec content).

 

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