TERMS OF SALE | FORM TOS-1

In the event that Method Innovation Partners Inc. (“METHOD”) agrees to manufacture Goods for a certain company or individual (the “Customer”), and a contract (the “Sales Agreement”) is signed by METHOD and the Customer, the following terms of sale govern and form part of the Sales Agreement and constitute the whole agreement between METHOD and the Customer, and there are no additional terms, conditions, or warranties, written or oral, expressed or implied, by or between the parties of any kind whatsoever except as set forth herein.

1. This Agreement is governed by the laws of the Province of British Columbia as it may be from time to time.

2. The obligations of METHOD to the Customer are strictly and exclusively confined to these Terms of Sale. Save and except only as may be endorsed on the Sales Agreement signed by METHOD and the Customer, METHOD makes or gives no representations and/or warranties that the goods forming the subject matter of the Agreement (the “Goods”) are of merchantable quality, fit for any purpose, whether conveyed to METHOD by the Customer or otherwise, or in compliance with any description or sample. Without limiting the generality of the foregoing or the terms above, the Customer expressly waives any and all statutory terms and/or conditions referred to in sections 17-19, inclusive of the Sale of Goods Act of British Columbia.

3. Unless alternate arrangements are made with METHOD and endorsed on the Sales Agreement, the following terms of payment will apply to any and all amounts payable by the Customer to METHOD under or pursuant to this Agreement:

(a) METHOD will not bear any freight charges relating to delivery of the Goods. At the option of the Customer, any and all freight charges relating to shipment of the Goods will be paid by the Customer to METHOD in advance of shipment; or the Goods will be shipped to the Customer collect. If no preference is indicated by the Customer and endorsed on the Sales Agreement, the Goods will be shipped collect;

(b) METHOD will determine its estimated costs of tooling, if any, of the Goods and advise the Customer of same. Such estimated costs will be payable by the Customer to METHOD before any work on the Goods is commenced. In the event an order for Goods is cancelled by the Customer, all of METHOD’s actual costs incurred to that point, including costs of design, will be retained by METHOD from the advance payment on account of same as liquidated damages. Any balance remaining after such deduction will be returned by METHOD to the Customer. In the event fabrication of the Goods is completed and the Goods are delivered to the Customer, any excess amount paid by the Customer to METHOD on account of estimated tooling costs will be applied to the total amount payable by the Customer to METHOD for the Goods pursuant to this Agreement;

(c) Unless special credit arrangements are made between METHOD and the Customer and endorsed on the Sales Agreement, any and all amounts payable for the Goods over and above the estimated tooling costs referred to in Paragraph 3(b) above are payable by the Customer to METHOD on delivery of the Goods by METHOD to the Customer or to any carrier for delivery to the Customer, whichever occurs first;

(d) Notwithstanding any of the foregoing, and subject only to whatever special credit arrangements might be made to the contrary between METHOD and the Customer as endorsed on the Sales Agreement, if for any reason any amount remains owing by the Customer to METHOD, interest will accrue on such amount from the time such amount was due until it is paid at a rate equal to two percent above the prime rate of interest charged by the main Vancouver branch of the Royal Bank of Canada.

4. Subject only to whatever special arrangements might be made between METHOD and the Customer and endorsed on the Sales Agreement, for the purposes of sections 23 and 25 of the Sale of Goods Act, the Sale of Goods on Condition Act, and the Personal Property Security Act of British Columbia as each of them may exist and/or apply from time to time, it is expressly agreed between METHOD and the Customer as follows;

(a) Where special credit arrangements have been made between METHOD and the Customer and endorsed on the Sales Agreement, notwithstanding any delivery of the Goods to the Customer pursuant to this Agreement, no property in the Goods will pass to the Customer until any and all amounts owing by the Customer to METHOD, whether on account of the price, interest, or otherwise, have been paid in full to METHOD. In addition to whatever rights METHOD may have pursuant to the Sale of Goods on Condition Act, from time to time, until the time of such payment in full, METHOD will have a security interest in the Goods as defined in the Personal Property Security Act, the Customer will have an interest in the Goods as contemplated by section 12 of that Act, and the making of this Agreement will be the giving of value pursuant to that Act. This Agreement is expressly agreed to be a security agreement as defined in the Personal Property Security Act. In order to secure its interest in the Goods while any such amount remains unpaid, METHOD is entitled to register this Agreement together with the Sales Agreement and any and all additional and/or collateral documents that may be required for such purpose in such registry or registries as may seem to be appropriate, and the Customer will provide METHOD with any and all such additional and/or collateral documents as may be required from the Customer for that purpose;

(b) Where special credit arrangements have been made between METHOD and the Customer and endorsed on the Sales Agreement, the entire amount owing to METHOD by the Customer, whether on account of the price, interest, or otherwise, will immediately become due and payable by the Customer to METHOD in the event of any default by the Customer in making any payment required pursuant to such special credit arrangements;

(c) Irrespective of the time of delivery of the Goods or the passage of title in same pursuant to the Agreement, the Goods will be at the exclusive risk of the customer from the time fabrication of the Goods is completed and the Goods are ready for delivery.

5. Notwithstanding any delivery date specified in the Sales Agreement, METHOD will not be liable in any manner or in any amount for delivery of the Goods after such delivery date if such late delivery arises from any matter beyond the direct control of METHOD. Without limiting the generality of the foregoing, it is expressly agreed that METHOD will not be liable for any delay in delivery caused by any one or more of the following:

(a) Late provision by the Customer of any specifications, materials, or specialized tooling as may be required for the fabrication of the Goods;

(b) Late provision by METHOD Suppliers of any specifications, materials, or specialized tooling as may be required for the fabrication of the Goods;

(c) Machinery breakdown, tooling/mold failure, material failure;

(d) Late or slow delivery by any carrier used to ship the Goods to the Customer.

6. It is expressly agreed that any carrier used for the shipment of the Goods to the Customer will be the agent of the Customer and that METHOD will not be liable for any loss and/or damage of or to the Goods arising from the actions of any such carrier. Delivery by METHOD of the Goods to such carrier for shipment to the Customer will constitute full and final delivery of the Goods by METHOD to the Customer.

7. The customer is solely responsible for placing and maintaining its own insurance in respect of the Goods from and after the time fabrication of the Goods is completed and the Goods are ready for delivery, and METHOD will not be liable for any loss and/or damage of or to the Goods after fabrication has been completed and the Goods are ready for delivery.

8. METHOD is not and will not be liable to the Customer or any third party for any loss, damage, or injury of any kind whatsoever relating to and/or arising from any use of the Goods, whether METHOD was or ought to have been aware of any such use or possible use either by the Customer or any other person.

9. If for any reason any Goods remain unclaimed by the Customer for a period of 14 days after METHOD has advised the Customer that the Goods are ready for delivery, then at METHOD’s sole and exclusive option:

(a) The Goods may be stored by METHOD as agent for the Customer, with any and all such storage charges being payable by the Customer before release of the Goods to the Customer, in addition to any and all other Amounts that may remain payable to METHOD under Paragraph 3 and/or 4 above; or

(b) the Goods may be destroyed, resold, or put to whatever other use METHOD may wish, and any and all property the Customer may have had in the Goods will determine and revert to METHOD, and any and all amounts paid by the Customer to METHOD to that time will be retained by METHOD for its own and exclusive benefit.

10. The Customer expressly waives any and all rights otherwise accruing to the Customer pursuant to section 58(3) of the Personal Property Security Act. For the purpose of s.22 of the Sale of Goods on Condition Act of British Columbia, the Customer expressly agrees that, where that Act applies, and where the Customer is a corporation, the Customer waives any and all rights otherwise accruing to the Customer pursuant to sections 19, 20, 21, 23, and/or 24 of that Act.

11. Subject only to whatever special arrangements might be made between METHOD and the customer and endorsed on the Sales Agreement, any and all design and/or tooling performed, made, or otherwise generated by METHOD in the course of performing services and/or making Goods pursuant to this Agreement is and will at all times remain the exclusive property of METHOD. No duplication and/or use of any kind or by any means of any such design, tooling, or any part thereof will be made by the Customer or anyone else acting for or on the Customer’s behalf and/or with the Customer’s knowledge and permission without the prior express written consent of METHOD. THIS PARAGRAPH DOES NOT APPLY IF AN AMOUNT FOR THE REMOVAL OF TOOLING HAS BEEN INSERTED ON THE SALES AGREEMENT.

12. By endorsing the Sales Agreement Contract, the Customer accepts and agrees to all of the foregoing.