CM Labs Simulations Inc.

CM Labs Simulations General Terms and Conditions

General Terms & Conditions of Sale

These General Terms and Conditions of Sale (“Terms of Sale”) govern all purchases of Systems from CM Labs Simulations Inc. (hereinafter “CM Labs”) and forms an integral part of the proposal or quotation submitted to and agreed upon by Purchaser (“Proposal”) (the “Terms of Sale” and the “Proposal” are collectively referred to herein as the “Agreement”). The Agreement expresses the complete and final understanding of the parties with respect to this subject matter. No terms, conditions or amendments stated by Purchaser in any purchase order, acceptance, acknowledgment or any other form will become part of the Agreement unless expressly agreed upon in writing by CM Labs. CM Labs objects to and rejects any additional or different terms in Purchaser’s purchase order, acceptance, acknowledgment or other forms. No condition or modification of the Agreement will be effective unless expressly agreed to, in writing, by CM Labs. Failure by CM Labs to further object to provisions contained in any purchase order or any other communication from Purchaser will not be construed as a waiver or modification of the Agreement, or as an acceptance of any such proposed provisions. CM LABS SHALL NOT BE BOUND BY PURCHASER’S ADDITIONAL OR DIFFERENT TERMS.

1. DEFINITIONS

1.1. Agreement: These Terms of Sale and the Proposal.

1.2. Deficiency: Any failure or defect of the System to conform to the Specifications during the FAT and the SAT, as applicable.

1.3. Equipment: commercial off-the-shelf (COTS) equipment needed for an undertaking, manufactured by CM Labs or a third party, as set forth in the proposal.

1.4. Purchaser: The entity or individual to whom the Proposal was submitted by CM Labs, which these Terms of Sales form an integral part thereof.

1.5. Service: Efforts made by resources to accomplish specific tasks in completing a System.

1.6. Software: Vortex or any other CM Labs proprietary program embedded in the System and licensed to the Purchaser.

1.7. System: The Software and Equipment aimed to accomplish a set of specific functions as set forth in the Proposal.

1.8. Specifications: The System requirements detailed and identified in the last approved document in the order of documents listed in Section 7. The Specifications may not be amended without the written consent of CM Labs.

2. ACCEPTANCE OF CONDITIONS

2.1. The receipt and acceptance of a purchase order from Purchaser by CM Labs shall be deemed an unconditional acceptance by Purchaser of the Agreement. Any deletions from, alterations or modifications or additions to the Agreement shall not be binding unless they are in writing and consented to by both parties.

3. DELIVERY

3.1. A System sold hereunder, unless agreed otherwise, shall be delivered DDU (Incoterms 2000). Delivery dates specified in the Proposal are approximate, unless specified as binding. Delivery is dependent upon prompt receipt from Purchaser of all Specifications, final approved drawings and designs and any other details or deliverables as set forth in the Proposal, needed for the proper execution of Purchaser’s order.

4. RISK OF LOSS

4.1. A System sold hereunder shall be at Purchaser’s risk on delivery to it as specified in Section 3, and the loss or destruction of all or part of the System shall not release Purchaser from any obligations of payment hereunder. Purchaser shall properly insure the System in accordance with Section 5.

5. TITLE, PROPER CARE, LIENS & INSURANCE

5.1. So long as any sum remains owing by Purchaser to CM Labs hereunder, CM Labs is and shall remain the sole and exclusive owner of the System, and Purchaser shall exercise proper care in the possession and use of the System and shall keep same at all times in good repair. So long as any sum remains owing by Purchaser to CM Labs hereunder, Purchaser shall at all times keep the System free of all liens, hypothecs, securities, mortgages, options, taxes, charges, pledges, privileges and encumbrances.

5.2. Title to the equipment portions of the System shall only pass to Purchaser upon full payment of the purchase price of the System by Purchaser, CM Labs reserving for itself the ownership of such equipment until then (and retaining at all times all ownership in all Software part of the System). In addition, Purchaser hereby grants CM Labs a hypothec, in a principal amount equivalent to the purchase price, plus an additional hypothec representing 20 % of such amount, bearing interest at a rate of 25 % per annum, securing payment of the said purchase price on: (a) the proceeds of sale of the System or any claims payable with respect to the System, (b) all accessions thereto and all parts thereof and replacements and substitutions therefor.

5.3. Purchaser shall insure System against loss, destruction or theft for the full value of the replacement purchase price of the System, which insurance shall be in effect in accordance with the delivery method as per Section 3.

6. FORCE MAJEURE

6.1. CM Labs will not be liable for failure to perform or for delays in performance due to causes beyond its reasonable control including but not limited to acts of God, fires, strikes, labor disturbances, floods, epidemics, quarantine restrictions, war, insurrection or riot, acts of a civil or military authority, compliance with priority orders or preference ratings issued by any Government, acts of Government authorities with respect to revocation of export or re-export permits/licenses, freight embargoes, car shortages, wrecks or delays in transportation, unusually severe weather, or inability to obtain necessary labor, materials or manufacturing facilities or supplies or delays of sub-contractors (“Force Majeure”). In the event of delay in performance due to any such cause, the date of delivery or time for completion will be postponed by such length or time as may be reasonably necessary to perform.

7. ORDER OF SPECIFICATION DOCUMENTS

7.1. The documents listed below, as applicable, take precedence in the order in which they are listed:

7.1.1. the System Acceptance Test procedure and report, as same may be amended by a change order;

7.1.2. the Factory Acceptance Test procedure and report, as same may be amended by a change order;

7.1.3. the critical design review documentation, as same may be amended by a change order;

7.1.4. the preliminary design review documentation, as same may be amended by a change order;

7.1.5. the Proposal or Quotation, as same may be amended by a change order;
7.2. It is understood that upon acceptance by the Purchaser and CM Labs of each document listed above, as applicable, the immediately prior document in the list of precedence will be deemed replaced and superseded by said approved document.

7.3. For avoidance of doubt, none of the documents listed in Sections 7.1.1 through 7.1.5 (including but not limited to any change order relating thereto) will be binding upon CM Labs, unless these documents are approved in writing by CM Labs.

8. WARRANTIES

8.1. Any resale software embedded in the System and all third party hardware, equipment, instrumentation as well as any other manufactured product embedded in the System (other than Equipment manufactured by CM Labs), are warranted by their respective manufacturers (“Third Party Warranty”), and not by CM Labs (see applicable warranties in manufacturers’ terms & conditions for Purchaser’s rights). Purchaser’s sole remedy for breach of any Third Party Warranty will be against the third party offering that warranty, and not against CM Labs.

8.2. CM Labs warrants that for a period of ninety (90) days from the date of the System’s final acceptance or deemed acceptance in accordance with Section 9 that the System will perform according to its Specifications. For CM Labs manufactured Equipment integrated into the System, CM Labs warrants that for a period of twelve (12) months, from the date of the System’s final acceptance or deemed acceptance, that CM Labs manufactured Equipment will be free from defects in materials and workmanship and will perform in accordance with the Equipment’s applicable accompanying written materials. This warranty is non transferable. Upon return of the System to CM Labs’s facilities, CM Labs shall, at its option and in accordance with its warranty policies and procedures, repair or replace the System, provided CM Labs receives prompt written notification by the Purchaser of any such failure to conform.

8.3. CM Labs does not warrant that the functions contained in the System will operate in combinations which may be selected for use by Purchaser that are not in accordance with the Specifications. CM Labs does not warrant that operation of the System will be uninterrupted or that the Software is free from errors.

8.4. Travel and living expenses are not included in CM Labs’ warranty and are at Purchaser’s expense. Alternate corrective measures can be agreed upon by the Purchaser and CM Labs, and will be charged to the Purchaser at CM Labs’ standard hourly rate. After examination and testing of the returned System, if CM Labs concludes that it is not defective, Purchaser will be notified, the System returned at Purchaser’s expense, and Purchaser will be charged for examination and testing.
8.5. CM Labs will not be liable for the unavailability or obsolescence of third party hardware forming part of the System.
8.6. CM Labs does not provide a warranty with respect to expendable or consumable items or to Buyer Furnished Equipment (BFE).
8.7. Any repair or replacement made pursuant to the foregoing warranties shall be warranted for the greater of the remainder of the original warranty period or thirty (30) days.

8.8. THE LIMITED WARRANTY SET FORTH IN THIS SECTION 8 DOES NOT APPLY TO ANY DEFECTS OR DAMAGES CAUSED BY OR RESULTING FROM IMPROPER INSTALLATION, IMPROPER CARE, ALTERATION, MODIFICATION, NEGLECT, MISUSE, USAGE IN CONTRARY TO THE SPECIFICATIONS, DAMAGE IN TRANSPORTATION, ABUSE, OR ANY CAUSE OTHER THAN NORMAL USE OF THE SYSTEM. NO WARRANTY OR CLAIM IS MADE BY CM LABS REGARDING THE EFFICACY OF THE SYSTEM FOR ANY PARTICULAR APPLICATION. CM LABS SHALL NOT BE RESPONSIBLE FOR THE PURCHASER’S USE OF IMPROPER HARDWARE OR SOFTWARE OR FOR PURCHASER SUPPLIED SOFTWARE OR HARDWARE NOT INTENDED FOR USE WITH THE SYSTEM.

8.9. THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION 8 ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES OF ANY KIND, WHETHER STATUTORY, ORAL, WRITTEN, EXPRESS, IMPLIED OR LEGAL, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY, QUALITY (INCLUDING BUT NOT LIMITED TO ANY WARRANTY AGAIST LATENT DEFECTS), TITLE, OWNERSHIP, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR OR GENERAL PURPOSE, WORKMANSHIP OR ANY OTHER WARRANTIES ARISING BY LAW, STATUTE, CUSTOM, COURSE OF DEALING, USAGE OR TRADE PRACTICE, OR FROM THE PARTIES’ CONDUCT OR COMMUNICATIONS WITHONE ANOTHER, OR AS A RESULT OF THE NATURE OF THIS AGREEMENT OR IN CONFORMITY WITH USAGE, EQUITY OR LAW, OR OTHERWISE. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY CM LABS, OR ITS DEALERS, DISTRIBUTORS, AGENTS OR EMPLOYEES WILL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THE WARRANTIES GIVEN IN THIS SECTION, AND PURCHASER MAY NOT RELY ON ANY SUCH INFORMATION OR ADVICE. PURCHASER’S EXCLUSIVE REMEDIES AND CM LABS’S ONLY OBLIGATIONS ARISING OUT OF OR IN CONNECTION WITH DEFECTIVE EQUIPMENT AND/OR SYSTEM OR SERVICES OR BOTH, WHETHER BASED ON WARRANTY, CONTRACT, EXTRACONTRACTUAL LIABILITY, TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE) OR OTHERWISE, SHALL BE THOSE STATED IN THIS SECTION.

9. TESTING, ACCEPTANCE & HANDOVER OF SYSTEMS

9.1. The Factory Acceptance Test (“FAT”) is carried out before shipment of the System in accordance with the Proposal at CM Labs’ facility and is completed upon the signing of an acceptance certificate. Additional tests may be agreed upon specifically between CM Labs and Purchaser and shall be charged to Purchaser. Any Deficiency found by the parties during the FAT shall be corrected as agreed upon and as evidenced by the acceptance certificate, in accordance with Sections 9.4 and 9.5. The FAT must be completed within 15 business days after notification by CM Labs to Purchaser that the System is ready. If the commencement of the FAT is delayed by the Purchaser beyond said period, final payment shall be triggered notwithstanding that the FAT acceptance remains outstanding. Purchaser shall be responsible for storage and maintenance fees associated with the delay in starting the FAT.

9.2. Upon acceptance of the FAT, the System is shipped and upon receipt by the Purchaser of the System at Purchaser’s site, the Purchaser shall store the System as it was received and shall not, unless CM Labs has instructed otherwise in the Proposal, open or unpack the System without a representative of CM Labs being present. Within two (2) business days, the Purchaser shall notify CM Labs if the packaging is damaged in any way, if the packing slip does not match the purchase order or if, to the knowledge of the Purchaser, any items are missing from the shipment. CM Labs assumes no responsibility, and Purchaser shall hold CM Labs harmless, for Purchaser’s opening or unpacking of System, for missing items and for any damage caused therefrom.

9.3. The System Acceptance Test (“SAT”) is carried out in accordance with the Proposal, and completed upon the signing of an acceptance certificate. As far as circumstances allow, the SAT will be carried out at Purchaser’s site and shall be conducted within 30 business days from delivery. If a delay in the commencement of the SAT is caused by the Purchaser, the SAT shall be deemed to have been accepted on the 31st business day following delivery and shall trigger final payment and warranty if any.

9.4. For both the FAT and the SAT, in the event of any rejection of the acceptance certificate of the System or part thereof, the Purchaser’s representative will provide CM Labs with written notice of such rejection, including but not limited to a specific description of the alleged Deficiency. CM Labs will have ten (10) business days from its receipt of Purchaser’s notice of rejection in which to determine if the alleged Deficiency is bona fide and, if so, to cure the Deficiency within a reasonable delay.

9.5. Upon redelivery by CM Labs of the previously rejected System or part thereof, Purchaser shall have two (2) business days in which to notify CM Labs in writing of its acceptance or rejection of such System, failing which the Purchaser shall be deemed to have accepted the System and Purchaser’s representative shall acknowledge acceptance by signing the appropriate acceptance certificate.

9.6. In the event that a rejection of the System is, in the opinion of CM Labs, not based on a bona fide Deficiency, representatives of the parties will meet on an ongoing basis to negotiate a mutually agreeable compromise solution to the problem within a period of 30 days. During such negotiations, CM Labs reserves the right to redeploy any or all of its personnel until a solution is agreed upon. In the event CM Labs’ personnel are required, work will proceed on the System on the date that CM Labs personnel are available. Failure to reach a compromise within 30 days, will trigger final payment and warranty.

9.7. Use of the System in production before the System is accepted in writing by the Purchaser shall be deemed to have been accepted and trigger final payment and warranty.

9.8. In the case of a System Deficiency, Purchaser shall have no rights other than the rights outlined in this Section 9 as well as Section 7.

9.9. Upon final acceptance of the SAT, Purchaser shall make final payment as per Section 15.

10. AVAILABILITY OF PERSONNEL AND EQUIPMENT

10.1. Should any milestone of the project contracted to CM Labs, as outlined in the Proposal or as may be adapted and agreed upon by the parties during the project execution, be delayed as a result of (i) a malfunction of Purchaser’s equipment, (ii) a lack of availability of Purchaser’s personnel and/or equipment, (iii) Purchaser’s deliverables not being delivered, or (iv) the non performance of Purchaser’s deliverables, CM Labs will not be responsible for any associated delays in the specified delivery dates and Purchaser shall repay to CM Labs all costs incurred by CM Labs as a result of such delays. In addition, if said delays cause any milestone payment to be delayed beyond 30 days, payment of a minimum of 75% of said milestone payment facing delays shall be immediately triggered.

11. LIMITATION OF LIABILITY

11.1. Modifications or adjustments to Purchaser’s process or process equipment, upon the good faith recommendations of CM Labs, shall be made at Purchaser’s risk. In no event shall CM Labs be liable for conditions of Purchaser’s site.

11.2. To the fullest extent permitted by applicable law, the total maximum aggregate liability of CM Labs, its agents, directors, officers, employees, subcontractors, suppliers, for all claims, actions, judgments, expenses related to or resulting from any loss or damage arising out of performance or non-performance of its obligations in connection with the Agreement shall in no case exceed the aggregate purchase price paid by Purchaser for the System under this Agreement. Where CM Labs provides additional services that are not covered by this Agreement, the total maximum aggregate liability of CM Labs, its agents, directors, officers, employees, subcontractors, and suppliers for all claims, actions, judgment, expenses related to or resulting from any loss or damage arising out of performance or non-performance of these additional services, shall in no case exceed in the aggregate the amount paid by Purchaser to CM Labs for these additional services performed under the applicable order.

11.3. CM LABS ASSUMES NO LIABILITY EXCEPT AS EXPRESSLY PROVIDED IN THE AGREEEMNT. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT WILL CM LABS, NOR ANYONE ELSE WHO HAS BEEN INVOLVED IN THE CREATION, PRODUCTION OR DELIVERY OF THE SYSTEM, INCLUDING BUT NOT LIMITED TO CM LABS’ LICENSORS, BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, LOSS OF GAINS OR OPPORTUNITIES, LOSS OF DATA OR USE, BUSINESS INTERRUPTION, LOSS OF INFORMATION, LOSS OF REVENUE OR ANY PECUNIARY DAMAGES, INCURRED BY PURCHASER OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR TORT OR EXTRA-CONTRACTUAL LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE ABOVE LIMITATION MAY NOT APPLY IN CERTAIN JURISDICTIONS. IF THE FOREGOING LIMITATION IS NOT ENFORCEABLE AS DETERMINED BY AN ARBITRATOR OR A COURT OF COMPETENT JURISDICTION IN A FINAL NON APPEALABLE JUDGMENT OR AWARD, SECTION 11.2 AND THE OTHER LIMITATIONS SET FORTH IN SECTION 11 SHALL NEVERTHELESS REMAIN VALID.

11.4. No claim shall be asserted against CM Labs, its agents, directors, officers, employees, subcontractors, suppliers, unless the injury, loss or damage giving rise to the claim is sustained or can be established to have existed prior to the expiration of the period of warranty provided for in the Agreement and no suit or action thereon shall be instituted or maintained unless it is filed in a court of competent jurisdiction within the prescribed period after the date the cause of action accrues.

11.5. THE PROVISIONS OF THIS AGREEMENT ALLOCATE THE RISKS BETWEEN CM LABS AND PURCHASER. CM LABS’ PRICING REFLECTS THIS ALLOCATION OF RISK AND THE LIMITATION OF LIABILITY SPECIFIED HEREIN.

11.6. WARNING: In any application of the System, reliability of operation can be impaired by adverse factors, including but not limited to fluctuations in electrical power supply, computer hardware malfunctions, software fitness, development, installation errors, software and hardware compatibility problems, failure of control devices or electronic systems, unauthorized uses or misuse, or errors on the part of the Purchaser (each a, “System Failures”). Any application where a System Failure could create a risk of harm to property or persons should not be reliant solely upon one form of electronic system due to the risk of System Failure. To avoid damage, injury or death, the Purchaser must take reasonably prudent steps to protect against System Failure, including but not limited to back-up or shut down mechanisms, because each System is customized and differs from CM Labs’ testing platforms and because a Purchaser may use the System in combination with other products in a manner not evaluated or contemplated by CM Labs. The Purchaser is ultimately responsible for verifying and validating the suitability of the System to be used in the environment supported by the Specifications.

12. INTELLECTUAL PROPERTY

12.1. The intellectual property rights in the System and any modifications to it in addition to any and all work product executed or conceived further to these Terms of Sale and the Proposal are and remain the sole and exclusive property of CM Labs and CM Labs shall be the sole owner of all patents, copyrights, trademarks, trade secrets and other intellectual property rights and protections in connection therewith. To the extent CM Labs makes any modifications, enhancements, additions or revisions to any of the System or creates any system interfaces between the Software and other computer software owned by or licensed to Purchaser, such modifications, enhancements, additions, revisions or interfaces shall be included within the term “Software” as defined in the CM Labs License Agreement and subject to the rights and limitations therein.

12.2. The Purchaser shall not, directly or indirectly, infringe on any of the intellectual property rights, title and interest of CM Labs nor shall it participate in or facilitate the commission of such acts. It shall not copy or reproduce, reverse engineer, decompile, disassemble, decode or decrypt all or part of any Software related to the System. It shall not use the System in any way to design or allow the design of similar or derivative equipment. It shall vigorously respect all intellectual property rights of CM Labs.

12.3. CM Labs assumes no liability for any infringement related to third party equipment or software or a System made to Purchaser’s design or specifications or use of the System in combination with equipment or devices not made by CM Labs or from modification of the System after shipment, and Purchaser agrees to defend any suit against CM Labs for alleged infringement arising through the manufacture and sale of the System made to Purchaser’s design or specifications and to indemnify and hold CM Labs harmless from any liability arising from any such infringement.

12.4. Subject to the above, if the System is held to be infringing and the use thereof is enjoined, CM Labs shall, at its option, either: (i) procure for the Purchaser the right to use the System, (ii) modify the System so as to make it non infringing, or (iii) remove the infringing System and refund the Purchaser the depreciated value of the System. The foregoing states the Purchaser’s sole remedy for, and CM Labs’ entire liability and responsibility for, infringement of any third party’s intellectual property relating to the System. and is in lieu of any statutory or implied warranty against infringement.

13. SOFTWARE

13.1. Purchaser will receive and accept any license or sublicense that may be required by CM Labs as a condition precedent to the use and operation of the Software, and such license or sublicense (the “CM Labs Software License Agreement”) will be incorporated in the Agreement. Purchaser will perform and comply with the terms and conditions of the licenses or sublicenses from the vendors of third party software. CM Labs will have no liability under third party licenses or sublicenses, but will, at Purchaser’s request and expense, cooperate to enforce any rights of Purchaser against the vendor thereunder.

14. TECHNICAL DOCUMENTS

14.1. Technical documents, such as drawings, descriptions, illustrations and the like, and all weight data, shall serve as an approximate indication only. CM Labs reserves the right to make any alterations considered necessary.

14.2. All plans, drawings, technical specifications, documents, software microfilm, data, or proprietary information relating to the design and manufacture of the System provided hereunder (“Documentation”) shall be treated in confidence by Purchaser, who shall ensure the confidentiality thereof. The copyright and title to the Documentation is vested solely in CM Labs and the Documentation may be neither copied nor reproduced nor communicated to a third party in any way whatever nor used for manufacture of the System, or parts thereof. They may be used only for operation and maintenance of the System, under terms and conditions specified by CM Labs.

14.3. All documents submitted with tenders which do not result in an order shall be returned to CM Labs upon request.

15. PRICES & PAYMENT TERMS

15.1. Prices are valid thirty (30) days from date of the Proposal. Any prices quoted in the Proposal that are dependent on third party suppliers of CM Labs are subject to change in accordance with the pricing policies of the third party suppliers.

15.2. Prices are exclusive of applicable taxes, charges, levies, duties and import fees, all of which are payable by Purchaser. In cases where CM Labs’ price includes taxes, charges, levies, duties and import fees, in the event of any changes in any taxes, charges, levies, duties or import fees, imposed under any federal, state/provincial, municipal or local legislation or authority, after the date of submitting of CM Labs’ tender or quotation and applicable to Equipment and/or System sold hereunder, CM Labs’ sale price shall be adjusted to reflect such increases or decreases.

15.3. Price information published in catalogues, bulletins or price lists is not a definite quotation or offer to sell.

15.4. CM Labs reserves the right to adjust prices on any order for any alterations or changes authorized or made by Purchaser subsequent to acceptance of the order.

15.5. Payment shall be made direct to CM Labs’ office in accordance with the conditions stated in the invoice. Unless otherwise specified, payment shall be due net thirty (30) days from the date of sending of the relevant invoice by CM Labs. Any late payment shall bear interest from the due date thereof until paid in full, at the rate equal to the lower of one and a half percent (1.5%) per month or the highest rate of interest permitted by applicable law, calculated and due on a monthly basis.

16. CHANGES

16.1. Any changes caused or requested by Purchaser affecting the System or otherwise affecting the scope of work at each stage of documentation listed in Section 7 must be accepted by CM Labs in writing and may result in an adjustment to price, schedule, or both.

16.2. CM Labs reserves the right to make changes in design or to add any improvement on System or other goods at any time, without incurring any obligations to install same on the System or goods previously purchased.

16.3. CM Labs may, in its sole discretion, substitute products, technologies and/or software obtained from one or more third party vendors with other products, technologies or software supplied by the same or other third party vendors or manufactured by CM Labs; provided that the functionality of any such substitute products, technologies or software will be substantially similar to the functionality of the product, technologies or software for which substitution is made, as reasonably determined by CM Labs, and such substitution does not materially and adversely affect the functionality of the System. In the event of any substitution by CM Labs pursuant to this Section 16, CM Labs will not have the right to adjust any price set forth in the Agreement.

17. CANCELLATION

17.1. Should Purchaser decide to cancel, stop or suspend for a period of time, the work contracted to CM Labs, Purchaser shall pay all costs incurred by CM Labs to this point plus a reasonable profit, including but not limited to the cost of work performed by CM Labs, such costs corresponding to the total number of hours spent (by CM Labs engineering staff) on the project multiplied by CM Labs standard hourly rates, the cost of work contracted to suppliers and/or sub-contractors including but not limited to standard administration fees, as well as the cost of equipment and materials ordered from suppliers including but not limited to standard administration fees. Purchaser will also refund CM Labs any cancellation penalty billed to CM Labs by sub-contractors and/or suppliers and any cancellation penalty, if applicable, charged by CM Labs. In the event Purchaser suspends work contracted to CM Labs for a period of more than 3 months, CM Labs reserve the right to submit a change request to cover any increase in the cost of equipment or service to be delivered.

17.2. The parties confirm that in Quebec, it is their intent that CM Labs be entitled to the above in addition to the amounts contemplated by Article 2129 of the Civil Code of Quebec and notwithstanding such Article.

18. NO HIRE

18.1. Employment may not be offered by the Purchaser to any employee of CM Labs as of the date of the acceptance of the Proposal and for a period of twelve (12) months after the final acceptance of the System.

19. CREDIT & COMPETITIVE SYSTEMS

19.1. Credit. Without limiting the generality of Section 12, Purchaser shall give CM Labs designing and developing credit in accordance with the specifications of the work performed. Notwithstanding the above, CM Labs is entitled to refer to the System provided for marketing purposes and CM Labs’ Web site may include a hypertext link leading directly or in a frame to the Purchaser’s Web site home page.

19.2. Competitive Systems. Nothing in this Agreement shall be construed so as to preclude CM Labs from developing, using or marketing systems, equipment or other materials that may be competitive with that prepared for Purchaser hereunder, regardless whether such systems, equipment or other materials are similar or related to the System developed under this Agreement.

20. GENERAL

20.1. Purchaser shall not assign this Agreement or any part thereof without the prior written consent of CM Labs. CM Labs may assign and/or transfer this Agreement or any part thereof without the prior written consent of Purchaser in its discretion: (i) to an affiliate of CM Labs or (ii) in connection with a merger, amalgamation or sale of all or a substantial part of the business of CM Labs, which assignment and/or transfer shall discharge CM Labs hereunder and operate novation in favor of CM Labs.

20.2. Any order received by CM Labs is subject to credit approval and may be refused if Purchaser’s credit standing is not satisfactory to CM Labs.

20.3. The Purchaser acknowledges reading this Agreement, and having understood its terms, agrees to be bound by it.

20.4. This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Quebec, Canada.

20.5. Any and all disputes arising hereunder shall be settled by confidential, final and binding arbitration, before a sole arbitrator, mutually agreed upon by the parties according to the rules of the Commercial Arbitration and Mediation Center for the Americans (“AMCA”). Should the parties fail to agree upon an arbitrator, each shall submit their candidate to the AMCA for a decision. The proceedings shall be carried out in English and shall take place in Montreal, Quebec, Canada. The losing party shall pay the reasonable expenses of the other party, subject to any decision concerning same by the arbitrator. The decision of the arbitrator is final, and without appeal on questions of fact, questions of law or questions of mixed fact and law.. The arbitrator shall have the authority to award any damages, make any provisional or preliminary orders, including but not limited to, issuance of injunctions.

20.6. These Terms of Sale shall supersede and abrogate all previous communications, obligations, commitments or agreements, oral or written, expressed or implied, between Purchaser and CM Labs to the exception of the CM Labs Software License Agreement, in relation to this Agreement and all provisions under the United Nations Convention on the International Sale of Goods (Vienna Convention) shall be excluded.

20.7. The parties acknowledge that they have requested that these Terms of Sale and all other documents be drafted in English. Les parties reconnaissent avoir exigé que la présente convention et tout autre document soit rédigé en anglais.

20.8. If any provisions of these Terms of Sale are held to be invalid or unenforceable, the remaining provisions will remain in full force.

20.9. The waiver by either party of any default or breach of these Terms of Sale will not constitute a waiver of any other or subsequent default or breach. Except for actions for nonpayment or breach of CM Labs’ proprietary rights in the Software or the Equipment, no action, regardless of form, arising from or relating to this Agreement may be brought by either party more than two years after the cause of action has accrued.

20.10. Each and all of the covenants, terms, provisions and agreements herein contained will be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Agreement, their respective heirs, legal representatives, successors and assigns.