TERMS AND CONDITIONS OF SALES AND SUPPLY

1. INTERPRETATION
For the purposes of these Terms and Conditions of Sale and Supply (these “Conditions”) the following terms shall have the following meanings:
“Buyer” – the person, firm or company which places an order for purchase of Products and/or Services as identified in any such order or Quotation as the case may be.
“Conditions” – these terms and conditions of sale and supply provided by the Supplier.
“Contract” – the agreement between Supplier and Buyer arising as a result of Buyer’s submission of an order for Supplier’s Products and Supplier’s written acceptance and/or, in the case of Services, an agreement between such parties for the provision of Services by Supplier, as initiated by a Quotation. Such Contract shall be deemed to incorporate and be governed by these Conditions.
“Denied Party” – defined below.
“Products” – goods as agreed to be supplied by Supplier to Buyer under any Contract including, Software if any.
“Quotation” – a document provided by Supplier describing Products and/or Services offered to Buyer, subject to these Conditions.
“Services” – means any services which Supplier has agreed to provide using reasonable care and skill under any Quotation or Contract, as applicable.
“Software” – defined below.
“Supplier” – Spectral Evolution Inc.

2. BASIS OF SALE
THESE CONDITIONS SHALL TAKE PRECEDENCE OVER ANY TERMS AND CONDITIONS WHICH APPEAR IN BUYER’S ORDER OR IN ANY DOCUMENTS INCORPORATED BY REFERENCE IN BUYER’S ORDER. No term or condition of Buyer’s order additional to or different from these Conditions shall become part of any Contract unless explicitly agreed to in writing by Supplier. Retention by Buyer of any Products delivered by Supplier, receipt by Buyer of any Services performed by Supplier or payment by Buyer of any invoice rendered hereunder, shall be conclusively deemed acceptance of these Conditions. Supplier’s failure to object to any provision contained in any communication from Buyer shall not be construed as a waiver of these Conditions nor as an acceptance of any such provision.

3. QUOTATIONS
Prices, specifications and delivery date referenced in Supplier’s Quotations are for information only and shall not be binding on Supplier until all technical requirements have been agreed and Supplier has accepted Buyer’s order and provided an order acknowledgement to buyer. Quotations terminate if Buyer does not place an order with Supplier within any express period indicated by Supplier or after 90 days, whichever comes first.

4. ORDERS
By submitting an order to Supplier, Buyer agrees to be subject to these Conditions in their entirety. No order, whether or not submitted in response to a quotation by Supplier, shall be binding upon Supplier until accepted in writing by Supplier.

5. PRICES AND TAXES
The prices for Products and Services will be as set out in the Quotation or as otherwise agreed between the parties in writing. As and when applicable to the Products sold and/or Services supplied under any Contract, prices do not include taxes, transport charges, insurance and export and/or import charges or duties, including without limitation sales, value added tax, use or excise taxes, which taxes and other charges may, in Supplier’s discretion, be added by Supplier to the price or billed separately and which taxes and other charges shall be paid by Buyer unless Buyer provides Supplier with any necessary tax exemption certificate. Buyer shall pay for taxes, transport charges, insurance, export/import charges and duties unless agreed otherwise in writing.

6. SHIPMENT AND DELIVERY
6.1 Unless otherwise agreed by both parties in writing, Supplier shall arrange for delivery of Products EXW (Ex Works) at Supplier’s facility as agreed between the parties. Any dates quoted or agreed for delivery of Products or provision of Services are approximate only and Supplier shall not be liable for any delay howsoever caused and time is not of the essence.

6.2 Supplier reserves the right to make delivery of Products and provision of Services by instalments and to issue a separate invoice in respect of each instalment. When delivery is to be by instalments or Supplier exercises its right to deliver by instalments or if there is delay in the delivery of any one or more instalments for whatever reason, Buyer shall not be entitled to treat the Contract as a whole as repudiated.

7. RISK AND PASSING OF TITLE
Title to, and risk of loss and damage to the Products shall pass to Buyer on delivery in accordance with Section 6 unless agreed otherwise by the parties in writing. For EXW deliveries, the title of the goods shall be transferred to Buyer when the goods are complete and packed for shipment. Any claims for loss, damage or misdelivery shall be filed with the carrier and notified to Supplier within 5 days of Buyer becoming aware of such
loss, damage or misdelivery.

8. SERVICES
8.1 Supplier shall provide Services in accordance with these Conditions and the terms of the relevant Contract.

8.2 Buyer shall, upon Supplier’s reasonable request and otherwise as required, provide Supplier with all necessary information and materials to enable Supplier to provide Services in accordance with the terms of any relevant contract. Buyer will be responsible for the completeness and accuracy of all such information and materials provided, and will ensure that it is and remains entitled to provide the same to Supplier for use in connection with provision of the Services.

9. TERMS OF PAYMENT
9.1 Invoices are due and payable prior to shipment. Failure to make any payment due shall constitute a material breach.

9.2 Each shipment shall be considered a separate and independent transaction, and payment therefore shall be made accordingly. If shipments are delayed at the request of the Buyer, payments shall become due on the date when Supplier is prepared to make shipment. Products held for Buyer shall be at the risk and expense of the Buyer. Buyer grants Supplier a purchase money security interest in all Products until such time as full purchase price is paid.

9.3 If, in the judgement of Supplier, the financial condition of the Buyer at any time does not justify continuation of production or shipment on the terms of payment originally specified, Supplier may require full or partial payment in advance; and, in the event of the bankruptcy or insolvency of the Buyer or in the event any proceeding is brought by or against the Buyer under the bankruptcy or insolvency laws, or in the event of a cancellation by the Buyer, Supplier shall be entitled to cancel any order then outstanding and shall receive reimbursement for its
cancellation charges which include but are not limited to all costs, direct or indirect, for labor, materials, tools, overhead and profit to which Supplier would be entitled had the contract not been cancelled.

9.4 If as a result of nonpayment, Supplier deems it necessary to employ third party legal or collection assistance, the Buyer is responsible for all third party charges in addition to outstanding monies owed to Supplier.

9.5 The Buyer shall have no right to delay the manufacture or shipment of the Products without prior written consent of Supplier. In the event that such delay is agreed to in writing by Supplier at the request of the Buyer, the Buyer shall at that time make payments to Supplier for (1) materials purchased to complete the applicable Contract plus (2) the percentage of completion multiplied by the full purchase price under the applicable Contract less the cost of materials purchased. In the event that the delay extends beyond ninety (90) days from the date of the order, and there is a price increase, Buyer agrees to pay such increased price for Products shipped thereafter.

10. PRODUCTS
10.1 Supplier may modify specifications provided the modifications do not adversely affect the performance of the Products. In addition, Supplier may furnish suitable substitutes for materials used.

10.2 All descriptions, illustrations and any other information relating to the Products contained in Supplier’s catalogues, brochures, price lists, advertising material and any sales or other particulars or literature are made by way of general description, are approximate only and for the general guidance and information of Buyer. They shall not constitute warranties or representations by Supplier nor shall they form part of any Contract.

11. EXCUSABLE DELAY
Supplier shall not be liable for delays in delivery or failure to manufacture or deliver due to acts of God, acts of the Buyer, acts of civil or military authority, priorities, fires, strikes, floods, epidemics, war, riot, delays in transportation or car shortages, or other causes beyond Supplier’s reasonable control including, but not limited to, obtaining necessary labor, material, components, or manufacturing facilities.

12. TOOLING AND TOOLS
12.1 The terms “Tooling” and “Tools” shall include all items such as molds, dies, forms, jigs, mandrels, fixtures and other special equipment, except machinery, which are required to produce the Products.

12.2 Tooling charges are quoted as a partial charge of the total tooling cost for tool usage and setup. All tools shall remain the property of Supplier. Buyer will be responsible for (a) costs resulting from alterations of tools requested by Buyer or alterations necessary to complete the order and (b) costs for additional tools or tooling incurred when Buyer requires faster delivery and/or greater volume of units than that for which the original tools were designed.

13. PATENTS
If the Products are to be produced according to Buyer’s specifications, Buyer warrants that the sale and/or use of such Products will not infringe any United States or foreign patents, and agrees to indemnify Supplier against and hold Supplier harmless from any expense, loss, cost, damage or liability which may be incurred on account of infringement or alleged infringement of patent rights with respect to such items and to defend, at its own expense, any action or claim in which such infringement is alleged. Buyer agrees to use instrument for research use only and not in any therapeutic or diagnostic procedures.

14.PACKAGING:
Supplier will provide commercial packaging adequate, under normal conditions, to protect the Products in shipment and to identify the contents. Should Buyer request any special packaging, it will be done at Buyer’s expense.

15. DESIGNS, SPECIFICATIONS, MATERIAL FURNISHED BY BUYER:
Supplier assumes no responsibility for the performance of Products manufactured to Buyer’s design or specifications, nor for defects in raw material, parts, or subassemblies furnished by the Buyer or its agents.

16. LIMITED WARRANTY
16.1 Supplier warrants that all Products will be delivered free from defects in material and workmanship under normal use for a period of (twelve) 12 months from dispatch. Supplier makes no other warranties, express or implied, and specifically NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

16.2 Supplier does not warrant that operation of the Software (defined in Section 18) will be uninterrupted or error free or that all program errors will be corrected.

16.3 Warranty does not include any consumables such as filaments, lamps, fuses or other parts, which fail as a result of normal usage.

16.4 Buyer shall be responsible for determining that the Product is suitable for Buyer’s use and that such use complies with any applicable law.

16.5 Provided that Buyer notifies Supplier in writing of any claimed defect in the Product immediately upon discovery and any such Product is returned at Buyer’s risk to Supplier, transportation charges prepaid, within the warranty period in accordance with Section 16.1 and upon examination Supplier determines to its satisfaction, after a reasonable period to inspect such Products, that such Product is defective in material or workmanship, Supplier shall, at its option, repair or replace the Products, shipment to Buyer prepaid.

16.5 Supplier shall have a reasonable time to make such repairs or to replace such Product. Any repair or replacement of Products shall not extend the period of warranty. The warranty is limited to a period in accordance with Section 16.1, without regard to whether any claimed defects were discoverable or latent on delivery.

16.6 Supplier shall not be liable for any breach of the warranty or payment of damages in respect of Products supplied if:
(i) Buyer makes further use of such Products after giving the notice required in Section 16.1;
(ii) the defect or failure arises from Buyer’s own fault;
(iii) the defect arises from any drawing, design or specification supplied by Buyer or from other materials or other property supplied by Buyer or from any parts or items that have not been completely manufactured by Supplier;
(iv) the defect arises other than out of manufacture, including without limitation improper installation, misuse by Buyer or a third party, neglect or accident;
(v) the defect arises out of the use of the Products in conjunction with products or materials not reasonably contemplated by Supplier;
(vi) the failure or defect results from Buyer’s unauthorized addition to or modification of, or failure to comply with Supplier’s written instructions relating to, the Products or Services; and
(vii) the failure or defect arises out of any breach by Buyer of its obligations to provide information to Supplier under these Conditions or any Contract.

16.7 If Buyer fails to pay when due any portion of any payment due from Buyer to Supplier under a Contract or otherwise, all warranties and remedies granted under this Section may, at Supplier’s option, be terminated.

16.8 The foregoing warranties are exclusive and exclude all other warranties, terms and conditions, express or implied by statute or otherwise, to the extent permitted by law, including without limitation warranties of quality or fitness for a particular purpose. Supplier’s sole and exclusive liability, and Buyer’s sole and exclusive remedy for breach of the warranties in this Section 16 shall be as set forth in Section 16.5.

17. LIABILITY
17.1 Nothing in these Conditions or any Contract shall exclude or limit Supplier’s liability for fraud or death or personal injury caused by its negligence or any other liability to the extent that the same may not be excluded or limited as a matter of law.

17.2 Subject to Section 17.1, in relation to Products, Supplier’s maximum aggregate liability under or arising out of any Contract, whether arising in contract, tort (including negligence) or otherwise, shall in no event exceed 100% of the total amount payable by Buyer in respect of Products under the applicable Contract.

17.3 Subject to Section 17.1, Supplier shall be under no liability to Buyer for any loss of profit, loss of income, loss of use, loss of business, loss of revenue, loss of goodwill, or for any indirect or consequential loss or damage of any kind, in each case, howsoever arising, whether such loss or damage was foreseeable or in the contemplation of the parties and whether arising in tort (including negligence), contract or otherwise.

17.4 Any claim arising out of or in connection with a Contract must be commenced against Supplier within one year from the date upon which Buyer became aware of or should have become aware of Supplier’s infringement of Buyer’s rights, unless otherwise specified under applicable law.

18. SOFTWARE
Supplier shall at all times have and retain title and full ownership of all software, firmware, programming routines, and documentation relating to such software supplied by Supplier for use with the Products, and of all copies made by Buyer or the end user of the Products (collectively “Software”). A non-exclusive, non-transferable and non-sublicensable license to use such Software will be granted to the end user solely for use with the Products.

19. INTELLECTUAL PROPERTY RIGHTS
19.1 Nothing in these Conditions or any Contract shall have the effect of granting or transferring to, or vesting in, Buyer any intellectual property rights in or to any Products and/or Services.

19.2 Buyer acknowledges and agrees that all property, copyright and other intellectual property rights in any work or tangible deliverable item arising from or created, produced or developed by Supplier under or in the course of provision of any Services (the “Works”), wherever in the world enforceable, including without limitations all right title and interest in and to the Services and all documents, data, drawings, specifications, articles, sketches, drawings, reports, inventions, improvements, modifications, discoveries, tools, scripts and other items relating thereto shall immediately upon creation or performance vest in and shall be and remain the sole and exclusive property of Supplier and Buyer shall acquire no right, title or interest in or to the same except as expressly stated in these Conditions.

19.3 The Supplier grants to the Buyer a non-exclusive, non-transferable and non-sublicensable licence to use such of the Works as are necessary, and to the extent necessary, for the end user to obtain and utilize the intended benefit of the Services.

19.4 This Section 19 shall be subject to the limits of liability in Sections 17.2.

20. CANCELLATION, RESCHEDULING AND TERMINATION
20.1 Orders for Products accepted by Supplier may be cancelled or rescheduled by Buyer only with the written consent of Supplier (which consent Supplier may withhold for any reason) and Buyer shall indemnify Supplier against the cost of all labor and materials used in connection with the order so cancelled or varied and against all loss, damage cost, charges and expenses suffered or incurred by Supplier as a result of that cancellation or variation.

20.2 Termination of any Contract in accordance with these Conditions shall not affect the accrued rights or liabilities of the parties at the date of termination.

21. INSOLVENCY OF BUYER
If: (i) Buyer becomes insolvent, has a receiver, administrative receiver, administrator or manager appointed of the whole or any part of its assets or business, makes any composition or arrangement with its creditors, takes or suffers any similar action in consequence of debt or an order or resolution is made for its dissolution or liquidation (other than for the purpose of solvent amalgamation or reconstruction) or carries out or undergoes any analogous act or proceedings under an applicable foreign law; or (ii) Buyer ceases, or threatens to cease to carry on business then, without prejudice to any other right or remedy available to Supplier, Supplier may treat any Contract as repudiated and/or withhold any further supply of Products and/or Services without any liability to Buyer and, if any Products and/or Services have been supplied but not paid for, the price or fees shall become immediately due and payable notwithstanding any previous agreement or arrangement to the contrary.

22. TRADE CONTROLS
22.1 Buyer understands that where Supplier’s obligations under the Contract to supply any Products or Services are subject to governmental export control laws and regulations, the performance of this Contract and Buyer’s use or export of any Products delivered by Supplier shall be conditional upon the grant of all necessary permits or licenses. Buyer shall provide all information and documentation, including end user certification, not in Supplier’s possession and required by the relevant application procedure to enable Supplier to make the necessary applications for permits or licenses required for deliveries to Buyer. Supplier shall be relieved from its obligations to Buyer to supply any Products or Services to the extent that applications for permits or licenses for the same are refused by a relevant governmental authority. To the fullest extent permitted by law, Buyer shall have no right to claim compensation for damages, loss of business or otherwise arising from such a refusal or Contract termination.

22.2 Buyer confirms that neither it nor any of its affiliates, officers, directors, or employees is (i) a person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, U.S. Department of Treasury (“OFAC”), (ii) owned or controlled by, or a department, agency or instrumentality of, or is otherwise controlled by or acting on behalf of, directly or indirectly, any such person; (iii) a department, agency, or instrumentality of the government of a country subject to comprehensive U.S. economic
sanctions administered by OFAC; (iv) appears on the U.S. Department of Commerce Entity List or Unverified List; or (v) is otherwise subject to sanctions by the United States (a “Denied Party”).

22.3 Buyer shall not, directly or indirectly, sell, provide access to, export, re-export, transfer, divert, loan, lease, consign, tranship (including stop in port), transport, or otherwise dispose of any Supplier’s Product, material, Software (including source code) or technology to, via, or for: (i) any entity known to be headquartered in, or owned or controlled by a national of, any country or region subject to comprehensive sanctions at any time, including but not limited to Belarus, Cuba, Iran, North Korea, Syria, Russia, and the Crimea, Donetsk, and Luhansk regions of Ukraine; (ii) any other Denied Party; or (iii) for any activity or end-use restricted by U.S. or other applicable laws without first obtaining all required government authorizations.

22.4 Supplier shall have the right, at its option, to suspend performance under or terminate any Contract if: (i) applicable comprehensive sanctions are imposed; (ii) the Buyer is designated as or determined to be a denied or restricted party under applicable law; (iii) where the Supplier’s obligations under these Conditions or any Contract to supply items or Services are subject to governmental export control laws and regulations, the performance of any Contract and Buyer’s use or export of any item delivered by Supplier shall be conditional upon the grant of all
necessary permits or licenses; or (iv) where any other law, regulation, rule, or order applicable to the Supplier prohibits performance at any point in the contract.

23. COMPLIANCE WITH LAWS
23.1 Buyer shall comply with the laws, rules, and regulations of the United States, its country of operation, and all other laws, rules, and regulations of any other jurisdiction which is or may be applicable to any Contract, including but not limited to the U.S. Foreign Corrupt Practices Act and the Travel Act, the U.K. Bribery Act, legislation implementing the United Nations Convention Against Corruption and the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions, and any related anti-money laundering legislation.

23.2 If Supplier has a good faith reason to believe that Buyer or any of its directors, officers, or employees has made or caused to be made or received any improper payment in connection with its business activities or that some other breach of sections 22 or 23 has occurred or may occur, Supplier has the right to terminate the Contract immediately by so notifying Buyer in writing.

24. GENERAL
24.1 These Conditions and any Contract shall be governed by the laws of the Commonwealth of Massachusetts, USA. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to these Conditions. The parties shall agree to settle any claims or disputes arising out of or in connection with these Conditions or any Contract by amicable negotiations. If no settlement can be reached through negotiations within sixty (60) days after either party has served written notice to the other requesting such negotiations, then the dispute shall be submitted to the exclusive jurisdiction of state or federal courts in Massachusetts.

24.2 Failure by Supplier to exercise or enforce any rights hereunder shall not be deemed to be a waiver of any such right.

24.3 If any Conditions are found to be invalid, this shall not affect the rest of the Conditions or any Contract, which shall remain in full force and effect.

23.4 Buyer may not assign, transfer, novate or otherwise dispose of all or any of its rights or obligations, in whole or in part without the written consent of Supplier.

24.5 These Conditions and the applicable Contract constitute the entire agreement and supersede any prior agreement, understanding, representations or arrangements between the parties with respect to its subject matter.

24.6 Variation to any Contract must be in writing and signed by the parties.

24.7 All notices given under these Conditions shall be sent to the address of the other party set forth in the Quotation or Contract. Notice shall be regarded as properly given if sent in writing and shall be deemed to have been served on the next working day from delivery if sent by email or fax, and on the day of receipt if sent by express courier or by registered mail.