Terms of Purchase, Canada

A. CONTROLLING DOCUMENTS, THE CONTRACT. These Standard Terms are incorporated and made part of the Contract consisting of: (a) the Contract document (if any); (b) purchase order or equipment purchase contract (collectively referred to as the "PO") generated by Weyerhaeuser Company Limited or Weyerhaeuser Saskatchewan Ltd. (collectively referred to as "Weyerhaeuser") (if any); (c) these Standard Terms; and (d) any other attachments or specifications identified in the Contract document or PO. Provisions of and attachments to the Contract document or PO will control over these Standard Terms to the extent of any clear conflicts between or among them. Supplier's quotation or proposal is made a part of this Contract only to the extent of specifying the nature and description of the Products/Services. Unless all parties specifically agree in writing, conflicting terms and conditions in any document generated by Supplier will be disregarded in favor of this Contract. This Contract can only be amended by a writing signed by both parties.

B. AVAILABILITY. Supplier represents that it can timely provide the Products/Services in commercially reasonable quantities as specified by Weyerhaeuser.

C. CHANGES. Weyerhaeuser may, by written change order, request changes in specifications or drawings of, or increase or decrease the quantities of, Products and/or Services originally ordered. If any such changes require changes to design, fabrication methods, alters the amount due or delivery schedules, then Supplier must immediately notify Weyerhaeuser in writing, so that Weyerhaeuser can decide whether to proceed with the requested change and also so that Weyerhaeuser and Supplier can mutually agree on revised costs and performance schedules.

D. PRICING & SALES TAXES. The price for the Products and/or Services will, unless otherwise expressly stated, be in Canadian currency, exclude all taxes, duties, broker's fees and freight of any kind which either party may be required to pay with respect to the sale of the Products and/or Services, but shall include all charges for packing and loading. Any taxes, freight and duty shall be shown as separate items on invoices. Payments shall be made in accordance with the applicable provisions of the PO. If Supplier provides lower prices to any of its other customers buying equivalent or lesser quantities of Products/Services it will notify Weyerhaeuser, lower the prices under this Contract to the lowest prices charged such other customers, and issue a refund or credit for the difference between prices previously charged Weyerhaeuser and lowest prices charged such other customers.

E. PAYMENT TERMS; AUDIT RIGHTS. Weyerhaeuser's obligation to pay invoices is conditioned on receipt of conforming Products or Services. Unless provided in the Contract or PO document, upon receipt of conforming Products/Services, Weyerhaeuser will pay within 30 days of receipt of a correct and accurate invoice. Supplier will maintain records and accounting procedures sufficient to support invoices consistent with the process control requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Supplier's records pertaining to the performance of this Contract may be subject, after reasonable notice and during normal business hours, to inspection and audit by Weyerhaeuser. Supplier will preserve and make available such records for two years from later of the conclusion of the term or the final payment on a Contract or PO.

F. INSPECTION & DRAWINGS. Weyerhaeuser will be given a reasonable opportunity to inspect Products and work completed for physical damage, visible defect, packaging integrity problems, and shortage. Weyerhaeuser will have 120 days from the time any latent or hidden defects in Products or Services are brought to Weyerhaeuser's attention to notify Supplier of such defect. If Products or Services do not conform to the Specifications, or are otherwise defective, Weyerhaeuser will notify Supplier and offer Supplier a reasonable opportunity to remedy (not to exceed 5 business days). Alternatively, Weyerhaeuser may, at its sole election, return non-conforming Product to Supplier at Supplier's expense, and receive either a credit or refund of purchase price. If Weyerhaeuser elects to return the Product, it will not waive any other remedies that may be available at law or at equity. Weyerhaeuser's review of drawings does not constitute approval and will not relieve Supplier of responsibility for compliance with all specifications, laws, codes or regulations as applicable in performing this Contract.

G. RIGHT TO REMEDY. If the Supplier does not timely modify, adjust, repair or replace defective or inadequate Services or Products within 5 days written notice of such defect/inadequacy, or if any emergency exists rendering it impossible or impractical for Weyerhaeuser to have the Services performed by the Supplier, then Weyerhaeuser, after notice to the Supplier, may at its option and without prejudice to any other rights or remedies which may be available to it, make or cause to be made such modification, adjustment, repair or replacement, in which case the Supplier will reimburse Weyerhaeuser for its actual costs or, at Weyerhaeuser's option, Weyerhaeuser can offset the cost from any amounts owing to Supplier.

H. TITLE, RISK OF LOSS, SHIPPING, PLASTIC. Unless specified in the Contract or PO document, title to any Products sold under this Contract, and risk of loss, will pass to Weyerhaeuser when shipments are accepted by Weyerhaeuser at the specified delivery point (FCA Destination). Supplier will suitably pack, mark and ship materials in accordance with Weyerhaeuser's instructions and in accordance with governing laws, and, if so instructed by Weyerhaeuser, will meet the transportation requirements of common carriers to secure the lowest transportation costs. Supplier is obligated to ship all its components for Products to pulp or paper mills without plastic or styrofoam packaging. Any exceptions must be requested by Supplier and agreed upon by Weyerhaeuser in writing in advance of shipment(s) being made.

I. QUALITY & WARRANTY.

1. Warranty. Supplier represents, warrants and covenants that, for a period of no less than (i) twelve (12) months from the date upon which the Products are put into use or the Services are finished being performed, or from the date when the Performance Guarantees have been achieved, or (ii) eighteen (18) months from the last main delivery of Products, whichever occurs later (the "Warranty Period"), that (A) Products will be (i) consistent with or greater than prevailing industry standards of quality, (ii) appropriate for any specified application, and (iii) free from defects in design, material and workmanship; and (B) Services will be (i) professionally and competently performed in a manner consistent with or greater than prevailing industry standards of quality; (ii) appropriate for any specified application, and (iii) free from defects.

2. Performance Guarantee Clarification. For the purpose of determining whether Products or Services are defective or deficient (resulting from faulty design, material and/or workmanship), Performance Guarantees are not achieved until the defect or deficiency is remedied and the equipment or Products are performing within all specifications for continued periods of time.

3. Safety and Regulatory Requirements. The Products and Services supplied by Supplier shall meet all Federal and Provincial safety and workers compensation requirements. Any electrical panels, controls, or devices supplied with the equipment must display a CSA or other approved independent testing lab label to meet applicable Federal, Provincial and local laws. Product design DBA ratings must also be provided. The noise level emitted by the equipment while in operation must be below or equal to 85 dB at 1 meter.

4. Replacement of Products. If Products do not comply with the warranty set forth in Section I.1, above or any defect develops under normal or proper operation as per Supplier's instructions, during the Warranty Period, Supplier will provide, at its sole expense, technical expertise and the parts, materials and equipment, and labor, including freight and "in/out" costs, necessary to remedy any defect or nonconformity by promptly removing, repairing, correcting or replacing and reinstalling any defective or nonconforming part or component.

5. Rework of Services. If the Services do not comply with the warranty set forth in Section I.1, above, during the Warranty Period, Supplier will re-perform the Services, without cost of any kind to Weyerhaeuser.

6. Technical Support. During the Warranty Period, Supplier will provide all warranty service and telephone support, including after-hour technical support, at its own cost. Supplier will maintain a 24-hour technical support hotline to address equipment breakdowns and safety incidents. During the useful life of the Products, reasonable telephone support during normal business hours is included in the purchase price.

J. REPRESENTATIONS. Supplier represents and warrants that: (a) it has full power and authority to enter into this Contract and perform its obligations; (b) this Contract is the legal, valid, and binding obligation of the Supplier, enforceable against the Supplier in accordance with its terms; (c) the signing and delivery of this Contract by the Supplier and the performance by the Supplier of all of the Supplier's obligations under this Contract will not: (x) breach any Contract to which the Supplier is a party, or give any person the right to accelerate any obligation of the Supplier; (y) violate any law, judgment, or order to which the Supplier is subject; or (z) require the consent, authorization, or approval of any person, including but not limited to any governmental body; and (d) it has good and marketable title to Products delivered to Weyerhaeuser and that Products will be free from all liens and encumbrances; (e) the Products and Services do not infringe any patent, copyright, trademark, trade dress or other intellectual property right of any third party; (f) if Services are provided, Supplier has assured that the employee or contractor providing Services is adequately skilled and experienced; and (g) there is no past, threatened, pending or proposed future litigation, dispute, or claim that might prevent Supplier from fulfilling its obligations under this Contract.

K. MUTUAL INDEMNITY. Each party agrees to defend and indemnify the other, and its respective affiliates, agents, employees, officers, directors, successors, and assigns, against any and all third-party claims such as damages, fines, penalties, costs, liabilities, losses or expenses (including but not limited to sums paid in settlement of claims, legal fees, consultant fees, and expert fees) (collectively, "Claims") arising from: (a) a breach of representations or warranties made in the Contract; (b) bodily injury and property damage directly arising out of and resulting from the failure of the Products/Services to meet the Specifications as provided in the Contract; and (c) a party's own negligence or misconduct. A party seeking indemnification will promptly notify the other of such claim. Neither party will be liable to the other for consequential or indirect damages, including loss of profits or loss of revenue; provided, however, that nothing contained herein shall in any way exclude or limit: (a) a parties liability for any and all damages arising out of that party's intentional acts or omissions; (b) liability for any and all direct damages which may fairly and reasonably be considered naturally from a breach; or (c) the operation of any warranty of Supplier as may be provided in this Contract or in a PO. Any limitation of Supplier's obligation hereunder, either by provisions of Supplier's delivery slips or other instruments, shall be void.

L. INTELLECTUAL PROPERTY. Supplier will indemnify and hold harmless Weyerhaeuser, its affiliates, agents, employees, officers, directors, successors, and assigns, (collectively, "Weyerhaeuser Indemnified Parties") from any Claims arising out of any charge that the manufacture or sale of any Products or Services, or the use thereof, by a Weyerhaeuser Indemnified Party or its customers constitutes an infringement of any patent, copyright, trade secret, trademark, service mark, or other intellectual property right of any third party; provided, that this indemnity will not apply to Products for which a Weyerhaeuser Indemnified Party provided and controlled the detailed design. If because of infringement claims by a Weyerhaeuser Indemnified Party's use of Products or Services provided by Supplier is enjoined, Supplier will, at its own expense, either procure for the Weyerhaeuser Indemnified Party the right to continue using the Products or Services or, after consulting with Weyerhaeuser, replace or modify the Products or Services with substantially similar and functionally equivalent non-infringing Products or Services.

M. DISPUTE RESOLUTION AND APPLICABLE LAW. If disputes arise under this Contract, the parties will first attempt to settle them through good-faith negotiations under this process: (a) the initiating party will present a written explanation of the nature of the grievance and remedy requested; (b) within 10 business days after receiving such a statement, the other will respond by granting the requested remedy, counter-proposing a different remedy, or explaining why the grievance does not justify any remedy; (c) if the matter is not settled within 10 days after the response is received, either party may request nonbinding mediation before an impartial, mutually acceptable mediator, with each party paying half the mediator's fees and the mediator choosing the mediation venue. Unless otherwise agreed, the mediator must have at least 5 years of experience mediating commercial disputes. Only if the parties are unable to reach a settlement through this mediation process may suit be filed. The interpretation of this Contract and any rights of all parties hereunder will be governed by the laws of the province where the sale of the Products and/or Services takes place (the "Province"). Any proceedings taken by Weyerhaeuser may be taken in the Province and Supplier agrees to the jurisdiction of the Courts of the Province, without limiting the generality of the foregoing: (a) neither the PO nor any provision hereof will be construed in derogation of any person's right of lien or declaration of trust under the laws of the Province; or in derogation, in any manner, from the full force and effect of any construction or builders' lien legislation of the Province or of any law of similar effect outside the Province to which either party may be subject; and (b) the price payable under the PO will not in any way, exceed the price permitted to be charged under the laws or regulations of the Province or of Canada, or of any other jurisdiction to which either party may be subject, notwithstanding any contrary indications. All available remedies are cumulative and may be exercised singularly or concurrently.

N. SUCCESSORS, ASSIGNS, SUBCONTRACTORS AND SECURITY INTERESTS. Supplier cannot assign the responsibilities of this Contract without written consent. Supplier will not, without prior written consent of Weyerhaeuser, add or change any subsupplier, subcontractor or place of origin of the Products and/or Services. The parties are fully responsible for the conduct of any contractors, consultants or other agents they may hire to assist them in performing this Contract. Supplier covenants that it will not register or amend a financing statement naming Weyerhaeuser as the debtor or any other form of notice in the applicable Personal Property Registry without either a signed security agreement or other written approval from Weyerhaeuser in advance. The collateral description will be specific and accurate. If the description includes an item that is not collateral or does not describe the collateral with sufficient precision to allow a reasonable person to readily identify the collateral, then the Supplier will immediately on demand by Weyerhaeuser amend or discharge the registration to reflect the terms of the Contract Documents.

O. COMPLIANCE. Supplier will inform itself of and will comply with all federal and provincial laws, codes, regulations, ordinances, permits and orders that are applicable to performing this Contract.

P. HAZARDOUS MATERIALS; MSDS. If applicable, Supplier will provide each Site with all appropriate Material Safety Data Sheets ("MSDS") at the time of delivery of each shipment of Products/Services which requires such compliance, and any updates of the same. If Supplier uses chemicals, PCBs or any potentially hazardous materials (collectively, "Materials"), Supplier assumes responsibility and will indemnify, defend and hold harmless the Weyerhaeuser Indemnified Parties from and against any and all Claims arising out of Supplier's use (including the unloading, discharge, storage, handling, or disposal of any chemical or container therefore) of such Materials and for Supplier's noncompliance with any related laws or regulations.

Q. ON PREMISES SAFETY; DRUG & ALCOHOL POLICY. If Supplier provides Services on Weyerhaeuser's premises, Supplier acknowledges that those premises are used for operational or industrial applications and maintained only to standards required for such use. Supplier will become familiar with the safety rules at such premises to avoid injury to person or property. It is Supplier's responsibility to provide, at its own expense, all necessary and adequate personal protective equipment (PPE) for its employees/subcontractors ("Supplier's Personnel"). However, in the event that Supplier's Personnel uses Weyerhaeuser-provided PPE, Supplier will indemnify and hold the Weyerhaeuser Indemnified Parties harmless against any and all claims for loss, damages, liability, or other expenses of any nature, character, and kind related to or caused by the use or misuse of such PPE. Upon completion of Services, Supplier will remove all excess materials, equipment and rubbish and leave premises in a clean condition. Supplier shall not bring, or permit to be brought, anywhere on or near the Site, any spirituous or intoxicating liquors, any drugs, the possession, use or distribution of which is prohibited by law.

R. CONFIDENTIALITY. All information (both technical and business) disclosed by either party to the other, including but not limited to volumes and pricing of Products and/or Services sold under this Contract, will be held in strict confidence and not communicated to any other party, except as required by law or auditors, and as needed by contractors in performing this Contract; provided that such contractor agree to be bound to a nondisclosure agreement no less stringent than the obligations in this section. For five years from the date of disclosure, the receiving party will exercise the same degree of care as it exercises for its own information of similar nature, but not less than reasonable care, to (a) prevent disclosure of information received from the other party, and (b) not use the other party's information for any purpose other than as needed to perform the Contract. However, these non-disclosure and non-use provisions do not apply after and to the extent such information: (i) is or becomes generally available to the public through no act or failure to act by the receiving party; (ii) was already in the receiving party's possession at the time of its disclosure as shown by the receiving party's prior written records; (iii) is subsequently disclosed to the receiving party on a nonconfidential basis by a third party without violating any obligation of secrecy relating to the information disclosed; or (iv) is subsequently developed independently by an employee or agent of the receiving party who did not have access to the information. Neither party will use the name of the other in publicity releases, referrals, advertising, or similar activity without the prior written consent of the other.

S. INSURANCE. Supplier shall insure the Products and/or Services for all risks until it has been received at the point of delivery. If Supplier works on Weyerhaeuser facilities, prior to commencing work or Services Supplier will obtain and maintain for the entire duration of this Contract the following minimum insurance coverages (Weyerhaeuser may require higher limits for a particular PO or supplier category) on its operations under this Contract: (a) Commercial General Liability (occurrence form), covering bodily injury and property damage liability, contractual liability, products and completed operations liability; and, if performing construction or repair services, including broad form property damage liability (BFPD); with minimum limits of $1,000,000 per occurrence, $1,000,000 products and completed operations aggregate, and $1,000,000 general aggregate; (b) Comprehensive Automobile Liability (if applicable) covering owned, leased or scheduled vehicles with minimum limits of $1,000,000 per person and $1,000,000 per accident for bodily injury and $1,000,000 property damage or combined single limit of $1,000,000; and (c) Workers' Compensation in accordance with the regulations of the Province where Weyerhaeuser's facility is located.

If any work or Services is performed on Weyerhaeuser facilities, Weyerhaeuser will be designated as an Additional Insured to the CGL evidenced by copy of the endorsement or policy form attached to the Certificate of Insurance. If providing Services on Weyerhaeuser facilities, the Additional Insured endorsement will be applicable to Supplier's "operations" for Weyerhaeuser. The above required liability limits can be provided by any combination of primary and umbrella/excess insurance policies. Supplier will provide Weyerhaeuser with a Certificate of Insurance and endorsements or policy forms evidencing compliance with the above requirements prior to commencing any work on Weyerhaeuser facilities. Supplier will require its insurance carrier(s) to give Weyerhaeuser at least 30 days written notice prior to cancellation of coverage. Supplier and its subcontractors will cause their insurance companies to waive rights of subrogation against Weyerhaeuser and its affiliates. Supplier acknowledges that this waiver was mutually negotiated. Insurance companies providing coverage for Supplier and its subcontractors will have an A.M. Best's rating of no less than B+ VII. All insurance or self-insurance of Weyerhaeuser and its affiliates will be excess of any insurance provided by Supplier or subcontractors. Supplier will ensure that its subcontractors (that will be on Weyerhaeuser facilities) have insurance coverage and endorsements consistent with the above.

T. FORCE MAJEURE. Supplier acknowledges that time is of the essence in its performance. However, neither party will be liable to the other for damages for failure to carry out this Contract in whole or in part when the failure is due to strikes, lockouts, fires, floods, earthquakes, or other natural disasters, freight embargoes, governmental or administrative prohibitions, riots, and acts of public enemies or terrorists. If either party is affected by any such event, shipments already in route will be accepted and paid for. A party affected by such an event will immediately notify the other, describing the event and estimating its duration. The parties will cooperate in good faith to mitigate the effects of the event. Regardless, if Supplier is unable to timely honor the Contract, Weyerhaeuser will be entitled to seek Products and Services from another vendor without penalty and those Products and Services will count towards any volume requirements that Weyerhaeuser has committed to purchase. Alternatively, at its sole election, Weyerhaeuser may terminate this Contract. Unless excused per this Section T, if Weyerhaeuser must acquire Products/Services from another supplier on an emergency basis because Supplier is unable to timely perform on the agreed schedule, Supplier will reimburse Weyerhaeuser for all commercially reasonable additional costs and expenses incurred to obtain the Products/Services.

U. RIGHT TO TERMINATE. If the project or program for which Products and/or Services are ordered is cancelled, substantially modified, or delayed, Weyerhaeuser may modify or terminate the applicable PO by written notice as to all or any part of the Products and/or Services not delivered prior to receipt by Supplier of the notice. As to Products and/or Services which are standard manufactured items, Weyerhaeuser's only obligation shall be to pay for Products and/or Services delivered to Weyerhaeuser prior to receipt of the notice of termination. As to Products and/or Services specially manufactured for Weyerhaeuser, Supplier will stop all work on receipt of notice of termination, unless otherwise directed by Weyerhaeuser. Upon such termination, Weyerhaeuser will pay reasonable costs incurred by Supplier directly connected with the PO, including costs and cancellation charges actually incurred by Supplier under subcontracts. Such payment shall not exceed the total price of the order, and shall be reduced by any deposits, refunds or salvage values available to Supplier. Upon such payment, title to Products and/or Services shall pass to Weyerhaeuser.

V. DEFAULT. A party will be in default under this Contract if it: (a) fails to cure a breach within 10 business days of receipt of written notice of breach; or (b) becomes unable to make payments as they become due under this Contract, is adjudicated bankrupt, becomes insolvent, or if a receiver is appointed for it, and fails to provide security satisfactory to the other party to guarantee all sums then owed to the other party and likely to become owed if this Contract is not terminated. In addition to any other available remedies, the non-defaulting party may immediately terminate this Contract without liability by written notice to the defaulting party. Any such termination will not affect rights or obligations accrued or owed prior to the effective date of the termination notice. Weyerhaeuser's failure to require strict performance in any instance will not constitute a waiver of that term.

W. NOTICES. Supplier and Weyerhaeuser agree that all notices, requests, demands and other communications required by the Contract will be delivered in writing to the Supplier or Weyerhaeuser Representative (or the replacement Representative designated by notice) as set forth in on the first page of the Contract or PO document.

X. NO AGENCY RELATIONSHIP. This Contract does not create an agency relationship between the parties and does not establish a joint venture or partnership between the parties. Neither party has the authority to bind the other party or represent to any person that the party is an agent of the other party.

Y. CONTRACT INTERPRETATION. The parties to this Contract represent that they have negotiated and understand its provisions and agree that no presumptions should be made against the drafter. This Contract will be binding on the parties and their respective heirs, personal representatives, successors, and permitted assigns, and will inure to their benefit. If a provision of this Contract is determined to be unenforceable in any respect, the enforceability of the provision in any other respect and of the remaining provisions of this Contract will not be impaired. This Contract contains the entire understanding of the parties regarding the subject matter of this Contract and supersedes all prior and contemporaneous negotiations and agreements, whether written or oral, between the parties with respect to the subject matter of this Contract.. No waiver will be binding on Weyerhaeuser unless it is in writing and signed by the party making the waiver. Weyerhaeuser's waiver of a breach of a provision of this Contract will not be a waiver of any other provision or a waiver of a subsequent breach of the same provision.

Z. FACSIMILE SIGNATURES. A facsimile of a signature shall have the same force and effect as an original signature.

AA. WITHHOLDING. If a PO includes the requirements of Supplier to provide installation supervision, start-up, training, performance testing or any other services and if Supplier is a non-resident of Canada, then Weyerhaeuser is required to deduct a fifteen percent (15 percent) withholding under Regulation 105 of the Income Tax Act (Canada) from each payment for such services and to remit such amount(s) withheld to the Canada Revenue Agency. Weyerhaeuser will before the end of February of the year following the year of payment, forward to Supplier certificate T4A-NR summarizing the amounts withheld. Weyerhaeuser is not required to withhold on the reimbursement of receipted travel expenses, the purchase of equipment, or for services Supplier renders in Suppliers' country of residence, therefore, these charges must be separately detailed on invoices.

Copyright © 2002 Weyerhaeuser Company. All rights reserved. Weyerhaeuser Company, PO Box 9777, Federal Way, WA 98063-9777, USA.