Alliance Networks Communications Inc. 502 East John Street Carson City, Nevada 89706 Hereinafter referred to as Alliance (also referred to as the Supplier) - and - TMI Transformers Inc. 7051 West Wilson Ave, Norridge, Illinois 60706 Hereinafter referred to as TMI (also referred to as the Purchaser)

 

a) "Agreement Documents" means the memorandum of agreement, Schedules "A" through "L", attached and made a part of this Agreement, and all Purchase Orders and Amending agreements issued after the execution of this Agreement with the Supplier. In the event of any conflict between terms and conditions in any Schedule or Purchase Order(s) and the terms and conditions in this Agreement, this Agreement shall prevail;

 

b) "Affiliate" Corporation means a company that may be included to provide finished goods or sub- assemblies in conjunction with goods required pursuant to this agreement;

 

d) "Business Day" means any day Monday to Friday between the hours of 0800 and 1600 (not inclusive of Alliance) designated holidays;

 

g) "Delivery Date(s)" means the date set out in each Purchase Order by which the Product described are to be delivered;

 

a) This Agreement covers the terms and conditions for the Purchase of the Supplier's Products and related Service(s) specified. Additional Product(s) and/or Services may be ordered from time to time, as mutually agreed upon, which will be subject to the terms and conditions of this Agreement.

 

b) This Agreement is nonexclusive.

 

a)

The intention is to include in this Agreement all labor and services for the design, packaging, supply and delivery of the Products. All Services shall be performed and provided in accordance with standards provided by Alliance.

 

b)

During the term of this Agreement, TMI shall be notified of any changes in the Supplier's policy or organization which could affect meeting either TMI or the Supplier's obligations outlined in this Agreement.

a)  

This Agreement does not by itself order any Product or Service.

b)  

TMI shall order Product or Service by means of a Purchase Order. Subject to the terms and conditions of this Agreement, TMI shall purchase from the Supplier and the Supplier shall sell to TMI such Product(s) as are required by TMI during the term of this Agreement.

And Product(s) shall be ordered from time to time by means of a Purchase Order to the Supplier. The Purchase Order shall specify, at minimum, the Products, Quantity, Delivery Site, Delivery Date, price, F.O.B. terms, and freight terms, as ordered by TMI, to be supplied by the Supplier. It is understood and agreed that the requirements for Product are not fixed and that the various quantities of Product purchased pursuant to this Agreement shall be those quantities for which a Purchase Order is forwarded to the Supplier.

 

a)

The prices payable by TMI for the Product(s) shall be the unit prices set out in Schedule "A". Prices shall be those in effect at the time Alliance transmits the Purchase Order electronically or verbally supplies a Purchase Order number to the Supplier. There shall be no minimum purchase requirement either for quantity or dollar volume imposed by the Supplier for any Purchase Order.

 

b)

All dollar amounts referred to in this Agreement are in US funds.

 

c)

Unit Prices include the following:

 

d)

The Supplier shall provide a certificate of origin, (if required) with each shipment. Supplier shall advise as

 

 a)

The prices to be paid by TMI for all Products and Service(s) are that prices specified in Schedule "A" - Pricing. There shall be no minimum purchase requirements either for quantity or dollar volume imposed by the Supplier for any Purchase Order.

 

 b)

The Supplier agrees to hold pricing firm for each Product in Schedule "A" during the initial twelve (12) month period or duration thereof (if agreement is less than 1 year) of this Agreement.

 

 

 

 c)

After the Product(s) has been delivered, the Supplier shall receive payment by company cheque referencing the applicable Purchase Order provided by LLC for the Product(s). Each invoice shall contain an itemized summary of the Purchase Order being billed and such other payment information as the Supplier may reasonably require.

 

 d)

Subject to verification of the invoice and in the event the entries itemized on the invoice reflect, in the reasonable opinion of TMI , the Product supplied by the Supplier, payment will be issued to meet Net 35 terms of payment;

Due performance by the Supplier of all of its obligations hereunder is a condition precedent to all payments under this Agreement.

Neither payment made to the Supplier, nor partial or complete use of the Product by TMI shall be construed as an acceptance, of any Product not in accordance with this Agreement. Acceptance of final payment by the Supplier shall constitute a waiver by it of all claims for further reimbursement except those claims previously made by the Supplier in writing and subject to dispute.

 

a)

The Supplier shall deliver the Product on the delivery date. The Supplier warrants that the Product shall be delivered to the Delivery Site on the Delivery Date provided that TMI and the Supplier have not agreed in writing to a later Delivery Date.

 

b)

The Supplier shall promptly process Purchase Order(s) issued by TMI in accordance with this Agreement. If the Delivery Date indicated on the Purchase Order is more than three (3) Business Days after the Supplier's receipt of the Purchase Order, the Supplier shall meet the Delivery Date specified. If the Delivery Date indicated on the Purchase Order is less than three (3) Business Days after the Supplier's receipt of the Purchase Order, the Supplier shall confirm the Delivery Date or advise TMI of the new Delivery Date within one (1) Business Day after the Supplier's receipt of the Purchase Order.

 

a)

All Products shall be subject to inspection by TMI after delivery to determine function and quality, TMI Purchase Order or Supplier's advertised or published specifications. Unless otherwise mutually agreed, TMI shall have a period of sixty (30) days following arrival of Product at the Delivery Site to inspect the Product for conformity and to provide the Supplier with written notice of any discrepancy or rejection. If the Product is to be installed by TMI, TMI shall have the longer of thirty (30) days following such installation or following completion of any testing period within which to complete such inspection, provided the installation shall occur not more than thirty (30) days from the actual date of delivery. Following the notification by TMI if the Supplier is unable to repair or replace Product that does not conform in whole or part within a reasonable period of time, TMI may return the Product to the Supplier, at the Supplier's risk and expense, and receive a refund of all amounts paid with respect to the returned Product. For such Product returns, TMI shall notify the Supplier and arrange for the return of the Product.

 

b)

Inspection or failure to inspect on any occasion shall not affect TMI rights under "Warranty" provisions of this Agreement or any other rights or remedies available to TMI under this Agreement.

All quotations, Purchase Orders, acknowledgements and invoices issued pursuant to this Agreement shall be subject to the provisions contained within this Agreement. The terms and conditions of this Agreement will prevail over any conflicting or inconsistent terms contained in any quotation, Purchase Order, acknowledgement or invoice.

b)  

No additional terms contained in any quotation, Purchase Order, acknowledgement or invoice shall be valid for a specific transaction, unless agreed in writing by authorized representatives from both parties.

 

The Supplier will be required to provide backup documentation for each item on the invoice.

 

 

The cost of any invoicing, invoicing documentation and transmission of these items are at the expense of the Supplier. Any credits/adjustments on the invoice from the Supplier will be in the same detail as the original invoice along with supporting documentation.

 

(a)

TMI will pay undisputed items within the terms negotiated after receipt of goods;

 

(b)

TMI will provide written notification of disputed items within fifteen (30) days of receipt of invoice;

 TMI requires that all billing disputes be resolved within sixty (30) days from the date of notification. Any disputes beyond sixty (30) days will be resolved through Dispute Resolution of this Agreement as provided for in this Agreement;

 

(d)

TMI will not be assessed late charges during Dispute Resolution.

 

a)

The Supplier shall maintain complete and accurate records of all invoices, and amounts billable to and payments made by TMI , in accordance with US GAAP (Generally Accepted Accounting Practices). The Supplier shall retain and make available upon request such records for a period of three (3) years from the date of final shipment of Product or rendering of Services covered by. this Agreement.

 

b)

When requested by TMI , the Supplier shall, for all Purchase Orders placed directly with the Supplier, provide a monthly purchase report by ordering location, listing Product and Service purchased under this Agreement, including description, part number, quantities shipped and associated list and net prices.

 

24. Representations and Warranties

 

a)

The Supplier represents and warrants:

 

(i)

that the Product is free from defective material, faulty workmanship and faulty

 

design;

 

(ii)

that the Warranty Period begins on the date of the original shipment and is in effect provided the Product is used for the purpose intended and is handled, stored, and used in accordance with Product instructions.

 

(iii)

that it has the resources, skills and ability to manufacture and/or supply the Product in accordance with this Agreement Documents.

 

b)

The warranties, conditions and indemnities provided herein are in lieu of and exclude all other liabilities, warranties, guarantees or conditions written or oral, statutory, common law, expressed or implied, including warranty or implied condition as to merchantability or fitness for a particular purpose and shall constitute the Supplier's sole obligation and liability and TMI sole remedy in contract, tort or otherwise in respect of Products and Services, except as may be set forth in Article 35 and Article 36.

 

c)

No other warranties are expressed or implied except as set forth herein. All other warranties, including warranties of merchantability and fitness for a particular purpose, are expressly excluded from the warranty.

 

d)

The Supplier warrants and guarantees the work and materials covered by this Agreement and agree to make good, at its own expense, any defect that may occur in materials or workmanship that may occur or develop or may be condemned or ordered modified by any municipal or other government inspector.

 

e)

During the Warranty Period, TMI shall promptly notify the Supplier of any claims against the warranties provided. TMI shall return the Product for replacement by the Supplier in accordance with the Warranty Replacement procedures set out in Schedule "G".

 

a)

Notwithstanding anything to the contrary contained in this Agreement, this Agreement may be terminated by TMI prior to the expiration date effective immediately upon written notice:

 

(i)

if the Supplier breaches any term, condition, or provision of this Agreement, unless the Supplier remedies such breach within one (1) Business Days written notice of such breach;

 

if the Product supplied by the Supplier does not conform to the requirements set out in paragraph 27 above.

 

(ii)

if the Supplier becomes insolvent, takes the benefit of any Act in force for insolvent persons, is adjudged a bankrupt, makes a general assignment for the ,benefit of creditors, or takes the benefit of any Act in force for insolvent persons;

 

(iii)

if the Supplier ceases to do business as a going concern;

 

(iv)

if a receiver or receiver/manager is appointed for the Supplier; or

 

(v)

if the Supplier takes the benefit of any Act in force for the winding up or liquidation of

 

corporations.

 

b)

At any time prior to the expiration of this Agreement, TMI and/or Alliance may terminate this Agreement upon sixty- (60) calendar day's written notice to the Supplier. In the event of such termination, TMI shall pay to the supplier, subject to the provisions in this Agreement relating to payment, the amount due the Supplier for Services performed and Product supplied up to the effective date of such termination.

  Termination of this Agreement by TMI/Alliance shall not deprive either party of any of its rights, remedies or actions against the each other for damages or costs. In the event of termination, except as provided elsewhere in this Agreement, Both parties shall be discharged from and have no further obligations under this Agreement.

 

a)

The Supplier and /or purchaser shall not disclose to anyone or use any information which it has acquired as a result of this Agreement concerning TMI/Alliance plans, business, objectives, customers, products, processes, work or services, or the provisions of this Agreement, without prior written consent. This restriction shall not apply if such information has become generally known without the fault of the Supplier or is rightfully obtained from a third party or is known or developed by the Supplier independent of both parties.

 

b)

The obligation in regard to confidentiality shall not restrict the Supplier/purchaser from any disclosure pursuant to any applicable law or by order of any Court or government agency provided that the Supplier/purchaser shall give such notice to both parties as may be reasonable in the circumstances.

 

a)

The Supplier shall, without limiting its obligations or liabilities under this Agreement, at its own expense, obtain and maintain in full force and effect, throughout the entire term of this Agreement, all of the following insurance coverage, in a form acceptable to TMI:

 

(i)

Comprehensive general liability insurance including products and completed operations in an amount not less than two million dollars ($2,000,000.00) inclusive per occurrence , against liability for bodily injury, personal injury, death and property damage including loss of use. Such insurance shall insure all subcontractors and anyone employed directly or indirectly by the Supplier or its subcontractors to perform a part or parts of the Services and shall include blanket contractual liability coverage; and

 

 

 

(ii)

The Supplier shall have the insurance required in full force and effect prior to execution of this Agreement and prior to the commencement of the provision of Services. 36. Notices

 

c)

The form of communication and the time at which a communication shall be deemed for  the purposes of this Agreement to have been received are:

 

(i)

personal delivery, on the Business Day of actual receipt;

 

(ii)

prepaid registered mail, on the fourth Business Day following the date of deposit  by post, or

facsimile, on receipt of answerback generated by the receiving facsimile equipment.

 

a)

Neither party shall be responsible for any failure to comply with any of the terms of this Agreement where such failure is directly or indirectly caused by or results from events of force majeure beyond the control of either party. These events shall include, but not be limited to, fire, flood, earthquake, accident, civil disturbances, war, rationing, embargoes, strikes or labor problems, acts of God, or acts of government, but lack of finances shall in no event be deemed to be a cause beyond a party's control.

 

b)

In the event that performance of this Agreement in the reasonable opinion of either party is made impossible by force majeure, then such party shall so notify the other in writing and TMI shall either terminate this Agreement, or authorize the Supplier to complete the provision of the Services with such adjustments as are required by the existence of the force majeure and are agreed upon by both parties.

 

a)

The headings contained in this Agreement are for convenience of reference only and shall not affect the interpretation or meaning of this Agreement.

 

b)

In the event of a conflict between the main body of this Agreement and any schedule hereto, the main body shall prevail. Terms defined in this Agreement shall have the same meaning in any and all schedules hereto unless there is something patently inconsistent with such meaning in the context in which the term occurs.

 

a)

In the event that a dispute arises between TMI and the Supplier as to the compensation to be paid to the Supplier or as to the interpretation, application, operation or alleged violation of this Agreement or any of the provisions contained in this Agreement Schedules, such dispute or termination shall be determined by arbitration in accordance with the following conditions:

 

(i)

The party desiring to refer a dispute for arbitration shall notify the other party in writing

 

of the details of the nature and extent of the dispute;

 

(ii)

Within three (3) Business Days of receipt of such notice, the opposite party shall, by written notice, advise the party desiring to refer the dispute to arbitration of all matters referred to in the initial notice except those for which any notified party admits responsibility and proposes to take remedial action and such party shall then take such remedial action. In the event of a failure to respond, the party failing to respond shall be deemed to dispute everything set out in the notice to arbitrate;

 

(iii)

The terms of reference for arbitration shall be those of dispute referred to in the initial notice which remains in dispute or those areas deemed to be in dispute hereunder;

 

 

 

(iv)

The parties hereto shall, within three (3) Business Days of the terms of reference pursuant to (c) above, jointly appoint a single arbitrator, provided further that if the parties cannot agree on an arbitrator then the parties or anyone of them may apply to a Judicial Authorities in the State of Nevada to have the arbitrator appointed;

 

(v)

Within thirty (30) Business Days of the appointment of the arbitrator, or such further period as may be agreed upon by the parties, the arbitrator shall resolve all matters and disputes accorded in the terms of reference;

 

(vi)

The decision of the arbitrator shall be binding and final upon TMI and the Supplier;