Terms & Conditions

1.1 GOVERNANCE OF PROPOSALS

1.1.1 If there is any conflict between this Proposal, if accepted, and earlier versions of orders or proposals, this Proposal will govern.

1.1.2 Notwithstanding Section 1.1.1, if there is a separate written master service agreement, master supply agreement, or similar governing agreement previously executed between LSI and Customer that is then in force and by its terms applies to the work described in this Proposal, the terms of such governing agreement shall control over these Terms and Conditions to the extent of any conflict, and these Terms and Conditions shall be null and void solely to the extent of that conflict. In all other respects, including as to any matter not addressed in such governing agreement, these Terms and Conditions shall remain in full force and effect.

1.2 PAYMENT

1.2.1 For Time and Material contracts, Customer shall make monthly payments to LSI based on actual time, materials, out of pocket expense and sales tax, if applicable. Hourly rates shall be as per LSI’s standard rate sheet at the time work is performed or as otherwise agreed between the Parties.

1.2.2 For Lump Sum or Fixed Price contracts, Customer shall make milestone payments to LSI as listed in the Pricing Section of this proposal. If no milestone payments are listed, Customer shall pay 40% on order; 40% delivery of the Equipment; 20% on final completion by LSI.

1.2.3 For Service Calls, Customer will be billed four hours minimum for all Service Calls. Service Call hourly rates shall be as per LSI’s standard rate sheet at the time of the Service Call.

1.2.4 Federal, state, or local taxes, fees, or permits are not included. Customer shall pay sales tax unless LSI is furnished with a valid exemption certificate or direct pay permit.

1.2.5 Payment is due 30 days from invoice date.

1.2.6 If invoices are not paid within 45 days of the invoice date, Customer shall pay LSI interest from the due date on the unpaid balance calculated using an interest rate equal to the lesser of the maximum interest rate allowable under law or 1.5% per month of the unpaid balance. LSI shall be entitled to compensation for all costs of collection of invoices unpaid 45 days from invoice date, including but not limited to interest, attorney fees, filing fees, etc.

1.2.7 Prices provided in this Proposal are subject to change to the prices in effect at the time of delivery. LSI reserves the right to change the price, without notice, prior to delivery of the affected Deliverable(s). LSI also reserves the right to make any corrections to prices quoted due to clerical errors or errors of omission.

1.2.8 In addition to any other remedy available to it, LSI may suspend performance of any Services, and withhold shipment or delivery of any Equipment, upon five (5) business days’ written notice to Customer of any invoice unpaid more than 15 days past due, until such invoice(s) are paid in full. Suspension under this Section shall not constitute a breach or termination of this Proposal by LSI, and any Customer-requested schedule shall be extended by a period equal to the duration of the suspension plus a reasonable remobilization period.

1.2.9 Pricing for third-party hardware, software licenses, and materials is based on manufacturer and supplier pricing in effect as of the date of this Proposal. If a manufacturer or supplier increases its pricing, or if lead times require LSI to source substitute components at a higher cost, prior to LSI’s procurement of the affected item(s), LSI may pass through such increase to Customer as an adjustment to the Proposal price upon written notice.

1.2.10 For Time and Material engineering, design, or programming work, Customer shall pay LSI a mobilization retainer, in an amount specified in the Pricing Section (or, if not specified, equal to 25% of the estimated Services fee), prior to LSI commencing work. The retainer shall be credited against the final invoice(s) issued for the Services.

1.3 DEFINITIONS

1.3.1 LSI – Logical Systems, LLC

1.3.2 Customer – The Customer named in a Proposal.

1.3.3 Equipment – The hardware or software (including any manufacturing system controls integration) described in the body of this Proposal.

1.3.4 Deliverables – The Services performed and Equipment provided by LSI as described in the body of this Proposal.

1.3.5 Services – The Services performed by LSI as described in the body of this Proposal.

1.4 VALIDITY OF PROPOSAL

1.4.1 Unless otherwise specified in the Pricing Section, this Proposal is valid for 15 days, or as may be extended in writing by LSI.

1.5 SALE AND DELIVERY

1.5.1 FCA Destination, unless otherwise specified in this Proposal. Customer to pay all freight and insurance charges from Origin point, and all demurrage, rigging and unloading charges at destination point per INCOTERMS 2010. If LSI arranges for shipping, Customer shall be responsible for the charges on a prepay and add basis unless the Proposal already includes shipping in its Fixed Price cost.

1.6 WARRANTY

1.6.1 LSI warrants all LSI Deliverables to be free from defects in materials and workmanship for a period of twelve (12) months from shipment, or in the case of Services from first use, provided that in no event shall the warranty period for Services extend beyond twelve (12) months from the date of shipment of the associated Equipment, regardless of when first use occurs. THIS WARRANTY EXTENDS ONLY TO THE CUSTOMER, AND IN NO EVENT SHALL LSI BE LIABLE FOR PROPERTY DAMAGE OR BODILY INJURY SUSTAINED BY A PERSON DESIGNATED BY THE LAW OF ANY JURISDICTION AS A THIRD PARTY BENEFICIARY OF THIS WARRANTY OR ANY OTHER WARRANTY HELD TO SURVIVE LSI’S DISCLAIMER.

1.6.2 Replacement parts or reperformed Services provided under the terms of this warranty are warranted for the remainder of the warranty period applicable to the Deliverables, as if such parts or Services were original components of the Deliverables.

1.6.3 With respect to Equipment or components of Equipment manufactured by others, LSI will undertake to obtain for Customer the full benefits of the manufacturer’s warranties, BUT IN NO EVENT SHALL CUSTOMER OR ANY OTHER PERSON HAVE ANY REMEDY AGAINST LSI FOR BREACH OF MANUFACTURER’S WARRANTY. A defect in a part shall not condemn the whole machine or system. THE WARRANTY DESCRIBED IN THIS PARAGRAPH SHALL BE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

1.6.4 The Warranty period terminates immediately upon modification, adjustment, or repair of any LSI Deliverables – including any electrical, mechanical, or software/controls modification, or any change to programmable logic controller (PLC), human-machine interface (HMI), or SCADA programming – by Customer or any third party not authorized in advance in writing without LSI’s express written authorization signed by an executive officer of the company.

1.6.5 LSI may rely on information furnished by Customer in pricing and performing its work and Customer warrants that it has the right to disclose and allow LSI to use any information Customer discloses.

1.6.6 LSI’s warranty does not extend to, and LSI is not responsible for, any failure or nonconformity caused by: (a) electrical supply, grounding, or environmental conditions at Customer’s site that were not installed or specified by LSI; (b) operation of the Equipment outside the ratings, environment, or NEMA/IP rating for which it was designed; or (c) integration of the Equipment with third-party systems, networks, or controls not supplied or approved in writing by LSI.

1.7 EXCLUSIVE REMEDY

1.7.1 Upon written notification received by LSI within the above stated warranty period of any failure to conform to the above warranty, upon return prepaid to LSI of any nonconforming part or component of a Deliverable, and upon inspection by LSI to verify said nonconformity, LSI shall repair or replace said original part or component without charge to Customer. LSI shall ship the repaired or replaced part to Customer at Customer’s expense. Cost for removal and/or installation of repaired or replaced parts or components supplied under the above warranty shall be at the Customer’s expense.

1.7.2 Correction of nonconformities, in the manner and for the period of time provided above, shall constitute fulfillment of all liabilities of LSI to Customer or any other person whether based upon contract, tort (including negligence), strict liability or otherwise.

1.7.3 THE REMEDIES SET FORTH HEREIN ARE EXCLUSIVE, WITHOUT REGARD TO WHETHER ANY DEFECT WAS DISCOVERABLE OR LATENT AT THE TIME OF DELIVERY OF THE EQUIPMENT TO CUSTOMER. The essential purpose of this exclusive remedy shall be to provide Customer with repair or replacement of parts or components that prove to be defective within the period and under the conditions previously set forth. This exclusive remedy shall not have failed of its essential purpose (as that term is used in the Uniform Commercial Code) provided LSI remains willing to repair or replace defective parts or components within a commercially reasonable time after it obtains actual knowledge of the existence of a particular defect.

1.8 CORROSION EXCLUSION

1.8.1 LSI specifically excludes corrosion of stainless steel or other metals normally used in the fabrication of the Equipment or Deliverables from its warranty. LSI is not liable for loss or damage to corrosion from exposure to aggressive liquids or atmospheres. Nor shall LSI be held liable for Customer’s failure to properly clean or care for this Equipment or Deliverables.

1.9 LIMITATIONS OF LIABILITY

1.9.1 IN NO EVENT SHALL LSI OR CUSTOMER BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES NOR SHALL LSI OR CUSTOMER BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFIT, LOSS BY REASON OF PLANT SHUTDOWN, NON-OPERATION OR INCREASED EXPENSE OF OPERATION, LOSS OF PRODUCT OR MATERIALS, WITH RESPECT TO THIS PROPOSAL OR ANYTHING DONE IN CONNECTION THEREWITH (INCLUDING, WITHOUT LIMITATION, SERVICES PROVIDED PURSUANT TO THIS AGREEMENT), WHETHER BASED UPON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE. LSI’s liability to Customer hereunder, if any, shall in no event exceed the total fees actually paid to LSI for engineering, design, programming, fabrication labor, and installation Services under this Proposal, expressly excluding amounts attributable to pass-through equipment, materials, freight, and third-party software or hardware costs.

1.10 INDEMNITY

1.10.1 LSI assumes no indemnity obligation toward the Customer.

1.10.2 Customer shall defend, indemnify, and hold harmless LSI, its officers, employees, and agents from and against any and all claims, damages, losses, and expenses (including reasonable attorney fees) arising out of or resulting from: (a) pre-existing site conditions; (b) Customer-supplied equipment, materials, or information; or (c) the acts or omissions of Customer, its employees, or its other contractors, except to the extent caused by LSI’s gross negligence or willful misconduct.

1.10.3 Customer shall defend, indemnify, and hold harmless LSI from and against any claim that a design, specification, drawing, or other information furnished by Customer infringes a third party’s intellectual property rights.

1.11 INSTALLATION

1.11.1 Unless otherwise specifically agreed by LSI, Customer assumes full responsibility for the installation and start-up of the Equipment and for any loss, damage or injury of whatever nature to persons or property.

1.11.2 Customer is solely responsible for site safety, including compliance with all applicable OSHA and other safety regulations, obtaining required permits, coordinating lockout/tagout with LSI personnel, and disclosing to LSI any known hazardous materials or conditions at the site prior to LSI’s arrival. LSI is responsible only for the safe conduct of its own personnel while on site.

1.11.3 If installation is delayed or extended due to site conditions, site readiness, or other causes not attributable to LSI, any stand-by time incurred by LSI’s personnel will be billed to Customer on a T&M basis as described in Section 1.19.3.

1.12 ACCELERATION

1.12.1 If the terms of payment for the Equipment and/or Deliverables allow for installment payments, Customer agrees that LSI, at its discretion, may accelerate and make due and payable all remaining installments if (a) Customer shall fail to make one or more installments when due, or (b) any of the events constituting cause for automatic cancellation under the CANCELLATION paragraph below shall have occurred before or after delivery of the Equipment and/or Deliverables.

1.13 FORCE MAJEURE

1.13.1 No liability shall result from delays in shipment or performance caused by circumstances beyond the control of LSI, including but not limited to, Acts of God, fire, flood, war, riots, accidents, strikes, plant shutdown, rules and regulations of local, state and Federal governmental agencies, material or labor unavailability, epidemics or pandemics, cyberattacks or ransomware affecting LSI or its suppliers, supply chain disruptions, or component or semiconductor shortages, or any causes beyond the reasonable control of LSI.

1.14 ACCEPTANCE

1.14.1 These terms and conditions shall become binding upon the first occurrence of any of the following: 1) LSI comes on site with Customer’s permission to begin the work, 2) Customer pays an invoice submitted by LSI for the work and payment is accepted by LSI, 3) Customer furnishes LSI with information necessary to perform the work and LSI begins the work, or 4) Customer issues a purchase order referencing the scope of work as set forth herein.

1.14.2 A definite and reasonable expression of acceptance or a written confirmation of this Proposal which is sent within a reasonable time operates as an acceptance even though the Customer’s expression of acceptance or written confirmation of this Proposal states terms additional to or different from those offered or agreed upon herein, even if acceptance is expressly made conditional on assent to the additional or different terms.

1.14.3 Any contrary terms or additional terms set forth in purchase orders or requests for proposals are specifically objected to and no actions taken by LSI shall be deemed acceptance of contrary or additional terms.

1.14.4 Conduct by both LSI and Customer which recognizes the existence of a contract is sufficient to establish a contract although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of LSI and Customer agree, together with any supplementary terms incorporated under any other provisions of the UCC as adopted in Tennessee.

1.14.5 LSI expressly objects to any contrary or additional terms in any acceptance, and it is agreed between the parties that these Terms and Conditions are a notification of such objection if provided to Customer, the later to occur of before or within 15 business days of (i) LSI coming on site with Customer’s permission to begin work, (ii) Customer providing LSI with a purchase order for work, (iii) Customer furnishing LSI with information necessary to perform the work and LSI beginning the work, or (iv) any other conduct by both parties which recognizes the intent to form a contract. In such a case, these Terms and Conditions shall be binding on the parties.

1.14.6 These terms may be amended only by written agreement executed by an authorized officer of LSI.

1.15 CANCELLATION

1.15.1 LSI may cancel work before shipment if Customer refuses to authorize shipment within thirty (30) days after notice that the Equipment is ready or fails to make any payment or execute any documents required prior to shipment.

1.15.2 If Customer fails to perform any of its obligations under this Agreement, LSI shall have the right to immediately terminate this Agreement and/or any work then being performed by LSI without further obligation by written notice. Upon receipt of such notice, Customer shall have a reasonable time, not to exceed thirty (30) days, to cure such default; if the default is not curable, this Agreement shall terminate immediately upon receipt of notice by Customer.

1.15.3 Upon termination by LSI for Customer’s default, any amounts owed for Deliverables provided through the date of termination, plus reasonable costs of such termination and any damages incurred by LSI therefrom, shall become immediately due and payable by Customer.

1.15.4 The work may, at the sole discretion of LSI, be canceled if Customer has become insolvent or bankrupt or admits in writing its inability to pay its debts as they mature, or if proceedings are commenced by or against Customer in any jurisdiction under a provision or chapter of any bankruptcy act, or if Customer suffers the appointment of a receiver or trustee or makes an assignment for the benefit of creditors.

1.15.5 Customer may not cancel except upon payment of a cancellation fee, plus LSI’s non-recoverable costs (including incidental and consequential damages) attributable to the specific Deliverables associated with the cancellation, plus a restocking charge to be determined by LSI. The cancellation fee shall equal: (i) twenty percent (20%) of the total price of the Proposal if cancellation occurs before LSI has issued approved-for-fabrication drawings or begun engineering; (ii) fifty percent (50%) of the total price of the Proposal if cancellation occurs after design release, drawing approval, or commencement of procurement; or (iii) one hundred percent (100%) of the total price of the Proposal if cancellation occurs after fabrication, programming, or procurement of long-lead materials has been completed.

1.16 ARBITRATION

1.16.1 Any controversy of claim arising out of or relating to this Proposal shall be determined by arbitration in accordance with the rules of the American Arbitration Association (“AAA”). With regard to hearing locale, hearing locale shall be in Memphis, Tennessee. The arbitration shall be conducted by a single arbitrator which shall be mutually agreed between the parties or, in the case that the parties are unable to reach agreement, the AAA case manager shall administratively appoint an arbitrator. Arbitration shall be in the English language.

1.16.2 The prevailing party in any arbitration or other proceeding to enforce or interpret this Proposal shall be entitled to recover its reasonable attorney fees, arbitrator/administrative fees, and costs from the non-prevailing party.

1.17 MODIFICATION OR WAIVER OF PROVISION

1.17.1 The scope of work and these terms and conditions cannot be modified except by agreement in writing signed by an authorized officer of LSI. A waiver or repeated waiver by LSI of any provision or the breach of any provision shall not constitute a further waiver of such provision or breach.

1.18 MERGER CLAUSE

1.18.1 This Proposal including all appendices, constitutes the final written expression of the terms of this Proposal and is a complete and exclusive statement of those terms, and any and all representations, promises, warranties or statements made by LSI or its employees or agents that differ in any way from the terms of this written Proposal shall be given no force of effect.

1.19 OTHER CHARGES

1.19.1 A processing charge shall be payable by Customer to LSI for each change order or equipment drawing change requested by Customer after LSI has received the approved drawings. The processing charge shall be added to the material and labor cost associated with each such change order. A processing charge shall be payable by Customer to LSI for “Prepay and Add” shipping charges. No change order work shall commence until Customer has provided written authorization (email sufficient) of the associated price and schedule impact. Any Customer-directed change affecting approved drawings, scope, or programming shall automatically extend the project schedule by a reasonable period as determined by LSI.

1.19.2 A charge for storage shall be payable by the Customer if the Customer requests shipment deferral beyond the date of completion. Deferral of shipment will not defer invoicing or payment terms of the order.

1.19.3 Additional professional services, start-up support, and training not included within the scope of this Proposal shall be provided on a T&M basis per LSI’s standard rates at the time work is performed. Any stand-by time that is not the fault of the LSI, incurred by LSI’s employees at the Customer’s site will be billed on a T&M basis.

1.19.4 Pricing data is based upon all work being performed in a forty-hour week. Any overtime required by Customer will be billed per LSI’s standard T&M rate sheet, which is incorporated by reference to this agreement.

1.19.5 All costs incurred for performance bonds shall be borne by the Customer.

1.19.6 All costs incurred for CE or UL approval shall be borne by the Customer.

1.19.7 LSI will reasonably attempt to manage travel costs to the estimate provided, however any travel costs that exceed T&M estimates provided will be invoiced at LSI’s cost.

1.19.8 Customer shall not, directly or indirectly, solicit or recruit for employment or hire, or make a recommendation or referral, or otherwise knowingly assist or facilitate the solicitation or recruitment of any LSI employee (whether or not such employee performs Services for Customer), for employment by Customer or any other entity with a relationship to Customer. In the event of a breach of this Section, the Customer shall pay to LSI a recruiting fee equal to four months of base billing to be calculated on LSI’s then current rate sheet. The terms of this Section shall survive the expiration or termination of any Proposal between Customer and LSI for a period of 24 months from the last contact between Customer and LSI. Notwithstanding the foregoing, an LSI employee’s response to a general advertisement for employment shall not be considered a breach of this Section. This provision may only be waived by a written waiver signed by an officer of LSI.

1.20 INTELLECTUAL PROPERTY

1.20.1 All designs, drawings, specifications, engineering work product, panel layouts, programs, source code, and other deliverables created by LSI in connection with this Proposal (“LSI Work Product”) are and shall remain the sole and exclusive property of LSI, whether or not specifically identified as confidential or proprietary. Upon payment in full, Customer is granted a limited, non-exclusive, non-transferable license to use the LSI Work Product solely to operate and maintain the Equipment delivered under this Proposal.

1.20.2 Customer shall not reproduce, modify, reverse engineer, or use the LSI Work Product to construct, service, or replicate similar equipment or systems, or engage any third party to do so, without LSI’s prior written consent.

1.20.3 LSI retains the right to reuse and repurpose its general methods, know-how, templates, and non-customer-specific programming logic or code libraries developed in connection with this Proposal on other projects for other customers.

1.20.4 Any third-party software (including PLC, HMI, or SCADA platforms) furnished as part of the Deliverables is licensed directly from the applicable manufacturer or licensor. LSI makes no warranty with respect to such software beyond passing through the manufacturer’s or licensor’s warranty, and Customer is responsible for all license fees, renewals, and support costs associated with such software following delivery.

1.21 GOVERNING LAW

1.21.1 This Proposal and any dispute arising out of or relating to it shall be governed by the laws of the State of Tennessee, without regard to its conflict of laws principles.

1.22 CONFIDENTIALITY

1.22.1 The pricing, proposal content, methodologies, and designs provided by LSI are confidential and proprietary to LSI. Customer shall not disclose such information to any competitor of LSI or use it to solicit competing bids without LSI’s prior written consent.

1.23 NO DAMAGES FOR DELAY

1.23.1 In the event of delay caused by Customer, its other contractors, or site conditions, LSI’s sole remedy shall be an extension of the project schedule and recovery of stand-by costs as provided in Section 1.19.3; LSI shall not be liable for consequential or delay-related damages. Similarly, Customer’s sole remedy for delay caused by LSI shall be a reasonable schedule extension, and Customer waives any claim for consequential or delay-related damages against LSI.

1.1 GOVERNANCE OF PROPOSALS

1.1.1 If there is any conflict between this Proposal, if accepted, and earlier versions of orders or proposals, this Proposal will govern.

1.1.2 Notwithstanding Section 1.1.1, if there is a separate written master service agreement, master supply agreement, or similar governing agreement previously executed between LSI and Customer that is then in force and by its terms applies to the work described in this Proposal, the terms of such governing agreement shall control over these Terms and Conditions to the extent of any conflict, and these Terms and Conditions shall be null and void solely to the extent of that conflict. In all other respects, including as to any matter not addressed in such governing agreement, these Terms and Conditions shall remain in full force and effect.

1.2 PAYMENT

1.2.1 For Time and Material contracts, Customer shall make monthly payments to LSI based on actual time, materials, out of pocket expense and sales tax, if applicable. Hourly rates shall be as per LSI’s standard rate sheet at the time work is performed or as otherwise agreed between the Parties.

1.2.2 For Lump Sum or Fixed Price contracts, Customer shall make milestone payments to LSI as listed in the Pricing Section of this proposal. If no milestone payments are listed, Customer shall pay 40% on order; 40% delivery of the Equipment; 20% on final completion by LSI.

1.2.3 For Service Calls, Customer will be billed four hours minimum for all Service Calls. Service Call hourly rates shall be as per LSI’s standard rate sheet at the time of the Service Call.

1.2.4 Federal, provincial, or municipal taxes, fees, or permits are not included. Customer shall pay all applicable Goods and Services Tax (GST), Harmonized Sales Tax (HST), Provincial Sales Tax (PST), or Quebec Sales Tax (QST), as applicable, unless LSI is furnished with a valid tax exemption certificate, direct pay permit, or registration number recognized by the applicable federal or provincial taxing authority.

1.2.5 Payment is due 30 days from invoice date.

1.2.6 If invoices are not paid within 45 days of the invoice date, Customer shall pay LSI interest from the due date on the unpaid balance calculated using an interest rate equal to the lesser of the maximum interest rate allowable under law (including, without limitation, the criminal rate of interest under section 347 of the Criminal Code (Canada)) or 1.5% per month of the unpaid balance. LSI shall be entitled to compensation for all costs of collection of invoices unpaid 45 days from invoice date, including but not limited to interest, attorney fees, filing fees, etc.

1.2.7 Prices provided in this Proposal are subject to change to the prices in effect at the time of delivery. LSI reserves the right to change the price, without notice, prior to delivery of the affected Deliverable(s). LSI also reserves the right to make any corrections to prices quoted due to clerical errors or errors of omission.

1.2.8 In addition to any other remedy available to it, LSI may suspend performance of any Services, and withhold shipment or delivery of any Equipment, upon five (5) business days’ written notice to Customer of any invoice unpaid more than 15 days past due, until such invoice(s) are paid in full. Suspension under this Section shall not constitute a breach or termination of this Proposal by LSI, and any Customer-requested schedule shall be extended by a period equal to the duration of the suspension plus a reasonable remobilization period.

1.2.9 Pricing for third-party hardware, software licenses, and materials is based on manufacturer and supplier pricing in effect as of the date of this Proposal. If a manufacturer or supplier increases its pricing, or if lead times require LSI to source substitute components at a higher cost, prior to LSI’s procurement of the affected item(s), LSI may pass through such increase to Customer as an adjustment to the Proposal price upon written notice.

1.2.10 For Time and Material engineering, design, or programming work, Customer shall pay LSI a mobilization retainer, in an amount specified in the Pricing Section (or, if not specified, equal to 25% of the estimated Services fee), prior to LSI commencing work. The retainer shall be credited against the final invoice(s) issued for the Services.

1.2.11 Unless otherwise specified in the Pricing Section, all prices, invoices, and payments under this Proposal are stated and payable in Canadian dollars (CAD).

1.3 DEFINITIONS

1.3.1 LSI – LSI Control Systems Integration Canada ULC

1.3.2 Customer – The Customer named in a Proposal.

1.3.3 Equipment – The hardware or software (including any manufacturing system controls integration) described in the body of this Proposal.

1.3.4 Deliverables – The Services performed and Equipment provided by LSI as described in the body of this Proposal.

1.3.5 Services – The Services performed by LSI as described in the body of this Proposal.

1.4 VALIDITY OF PROPOSAL

1.4.1 Unless otherwise specified in the Pricing Section, this Proposal is valid for 15 days, or as may be extended in writing by LSI.

1.5 SALE AND DELIVERY

1.5.1 FCA Destination, unless otherwise specified in this Proposal. Customer to pay all freight and insurance charges from Origin point, and all demurrage, rigging and unloading charges at destination point per INCOTERMS 2020. If LSI arranges for shipping, Customer shall be responsible for the charges on a prepay and add basis unless the Proposal already includes shipping in its Fixed Price cost.

1.5.2 For Equipment or materials shipped from outside Canada, Customer is responsible for all customs duties, tariffs, brokerage fees, and taxes on importation, and for compliance with all Canada Border Services Agency (CBSA) and other import requirements, unless otherwise agreed in writing. LSI is not responsible for delays caused by customs clearance.

1.6 WARRANTY

1.6.1 LSI warrants all LSI Deliverables to be free from defects in materials and workmanship for a period of twelve (12) months from shipment, or in the case of Services from first use, provided that in no event shall the warranty period for Services extend beyond twelve (12) months from the date of shipment of the associated Equipment, regardless of when first use occurs. THIS WARRANTY EXTENDS ONLY TO THE CUSTOMER, AND IN NO EVENT SHALL LSI BE LIABLE FOR PROPERTY DAMAGE OR BODILY INJURY SUSTAINED BY A PERSON DESIGNATED BY THE LAW OF ANY JURISDICTION AS A THIRD PARTY BENEFICIARY OF THIS WARRANTY OR ANY OTHER WARRANTY HELD TO SURVIVE LSI’S DISCLAIMER.

1.6.2 Replacement parts or reperformed Services provided under the terms of this warranty are warranted for the remainder of the warranty period applicable to the Deliverables, as if such parts or Services were original components of the Deliverables.

1.6.3 With respect to Equipment or components of Equipment manufactured by others, LSI will undertake to obtain for Customer the full benefits of the manufacturer’s warranties, BUT IN NO EVENT SHALL CUSTOMER OR ANY OTHER PERSON HAVE ANY REMEDY AGAINST LSI FOR BREACH OF MANUFACTURER’S WARRANTY. A defect in a part shall not condemn the whole machine or system. THE WARRANTY DESCRIBED IN THIS PARAGRAPH SHALL BE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

1.6.4 The Warranty period terminates immediately upon modification, adjustment, or repair of any LSI Deliverables – including any electrical, mechanical, or software/controls modification, or any change to programmable logic controller (PLC), human-machine interface (HMI), or SCADA programming – by Customer or any third party not authorized in advance in writing without LSI’s express written authorization signed by an executive officer of the company.

1.6.5 LSI may rely on information furnished by Customer in pricing and performing its work and Customer warrants that it has the right to disclose and allow LSI to use any information Customer discloses.

1.6.6 LSI’s warranty does not extend to, and LSI is not responsible for, any failure or nonconformity caused by: (a) electrical supply, grounding, or environmental conditions at Customer’s site that were not installed or specified by LSI; (b) operation of the Equipment outside the ratings, environment, or NEMA/IP rating for which it was designed; or (c) integration of the Equipment with third-party systems, networks, or controls not supplied or approved in writing by LSI.

1.7 EXCLUSIVE REMEDY

1.7.1 Upon written notification received by LSI within the above stated warranty period of any failure to conform to the above warranty, upon return prepaid to LSI of any nonconforming part or component of a Deliverable, and upon inspection by LSI to verify said nonconformity, LSI shall repair or replace said original part or component without charge to Customer. LSI shall ship the repaired or replaced part to Customer at Customer’s expense. Cost for removal and/or installation of repaired or replaced parts or components supplied under the above warranty shall be at the Customer’s expense.

1.7.2 Correction of nonconformities, in the manner and for the period of time provided above, shall constitute fulfillment of all liabilities of LSI to Customer or any other person whether based upon contract, tort (including negligence), strict liability or otherwise.

1.7.3 THE REMEDIES SET FORTH HEREIN ARE EXCLUSIVE, WITHOUT REGARD TO WHETHER ANY DEFECT WAS DISCOVERABLE OR LATENT AT THE TIME OF DELIVERY OF THE EQUIPMENT TO CUSTOMER. The essential purpose of this exclusive remedy shall be to provide Customer with repair or replacement of parts or components that prove to be defective within the period and under the conditions previously set forth. This exclusive remedy shall not have failed of its essential purpose (as that term is used in the Uniform Commercial Code) provided LSI remains willing to repair or replace defective parts or components within a commercially reasonable time after it obtains actual knowledge of the existence of a particular defect.

1.8 CORROSION EXCLUSION

1.8.1 LSI specifically excludes corrosion of stainless steel or other metals normally used in the fabrication of the Equipment or Deliverables from its warranty. LSI is not liable for loss or damage to corrosion from exposure to aggressive liquids or atmospheres. Nor shall LSI be held liable for Customer’s failure to properly clean or care for this Equipment or Deliverables.

1.9 LIMITATIONS OF LIABILITY

1.9.1 IN NO EVENT SHALL LSI OR CUSTOMER BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES NOR SHALL LSI OR CUSTOMER BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFIT, LOSS BY REASON OF PLANT SHUTDOWN, NON-OPERATION OR INCREASED EXPENSE OF OPERATION, LOSS OF PRODUCT OR MATERIALS, WITH RESPECT TO THIS PROPOSAL OR ANYTHING DONE IN CONNECTION THEREWITH (INCLUDING, WITHOUT LIMITATION, SERVICES PROVIDED PURSUANT TO THIS AGREEMENT), WHETHER BASED UPON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE. LSI’s liability to Customer hereunder, if any, shall in no event exceed the total fees actually paid to LSI for engineering, design, programming, fabrication labor, and installation Services under this Proposal, expressly excluding amounts attributable to pass-through equipment, materials, freight, and third-party software or hardware costs.

1.10 INDEMNITY

1.10.1 LSI assumes no indemnity obligation toward the Customer.

1.10.2 Customer shall defend, indemnify, and hold harmless LSI, its officers, employees, and agents from and against any and all claims, damages, losses, and expenses (including reasonable attorney fees) arising out of or resulting from: (a) pre-existing site conditions; (b) Customer-supplied equipment, materials, or information; or (c) the acts or omissions of Customer, its employees, or its other contractors, except to the extent caused by LSI’s gross negligence or willful misconduct.

1.10.3 Customer shall defend, indemnify, and hold harmless LSI from and against any claim that a design, specification, drawing, or other information furnished by Customer infringes a third party’s intellectual property rights.

1.11 INSTALLATION

1.11.1 Unless otherwise specifically agreed by LSI, Customer assumes full responsibility for the installation and start-up of the Equipment and for any loss, damage or injury of whatever nature to persons or property.

1.11.2 Customer is solely responsible for site safety, including compliance with all applicable federal and provincial occupational health and safety legislation (e.g., the Occupational Health and Safety Act (Ontario) or other applicable provincial/territorial OHS statute), obtaining required permits, coordinating lockout/tagout with LSI personnel, and disclosing to LSI any known hazardous materials or conditions at the site prior to LSI’s arrival. LSI is responsible only for the safe conduct of its own personnel while on site.

1.11.3 If installation is delayed or extended due to site conditions, site readiness, or other causes not attributable to LSI, any stand-by time incurred by LSI’s personnel will be billed to Customer on a T&M basis as described in Section 1.19.3.

1.12 ACCELERATION

1.12.1 If the terms of payment for the Equipment and/or Deliverables allow for installment payments, Customer agrees that LSI, at its discretion, may accelerate and make due and payable all remaining installments if (a) Customer shall fail to make one or more installments when due, or (b) any of the events constituting cause for automatic cancellation under the CANCELLATION paragraph below shall have occurred before or after delivery of the Equipment and/or Deliverables.

1.13 FORCE MAJEURE

1.13.1 No liability shall result from delays in shipment or performance caused by circumstances beyond the control of LSI, including but not limited to, Acts of God, fire, flood, war, riots, accidents, strikes, plant shutdown, rules and regulations of local, state and Federal governmental agencies, material or labor unavailability, epidemics or pandemics, cyberattacks or ransomware affecting LSI or its suppliers, supply chain disruptions, or component or semiconductor shortages, or any causes beyond the reasonable control of LSI.

1.14 ACCEPTANCE

1.14.1 These terms and conditions shall become binding upon the first occurrence of any of the following: 1) LSI comes on site with Customer’s permission to begin the work, 2) Customer pays an invoice submitted by LSI for the work and payment is accepted by LSI, 3) Customer furnishes LSI with information necessary to perform the work and LSI begins the work, or 4) Customer issues a purchase order referencing the scope of work as set forth herein.

1.14.2 A definite and reasonable expression of acceptance or a written confirmation of this Proposal which is sent within a reasonable time operates as an acceptance even though the Customer’s expression of acceptance or written confirmation of this Proposal states terms additional to or different from those offered or agreed upon herein, even if acceptance is expressly made conditional on assent to the additional or different terms.

1.14.3 Any contrary terms or additional terms set forth in purchase orders or requests for proposals are specifically objected to and no actions taken by LSI shall be deemed acceptance of contrary or additional terms.

1.14.4 Conduct by both LSI and Customer which recognizes the existence of a contract is sufficient to establish a contract although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of LSI and Customer agree, together with any supplementary terms incorporated under the Sale of Goods Act of the applicable Canadian province or territory (or, in the Province of Québec, the Civil Code of Québec) governing this Proposal.

1.14.5 LSI expressly objects to any contrary or additional terms in any acceptance, and it is agreed between the parties that these Terms and Conditions are a notification of such objection if provided to Customer, the later to occur of before or within 15 business days of (i) LSI coming on site with Customer’s permission to begin work, (ii) Customer providing LSI with a purchase order for work, (iii) Customer furnishing LSI with information necessary to perform the work and LSI beginning the work, or (iv) any other conduct by both parties which recognizes the intent to form a contract. In such a case, these Terms and Conditions shall be binding on the parties.

1.14.6 These terms may be amended only by written agreement executed by an authorized officer of LSI.

1.15 CANCELLATION

1.15.1 LSI may cancel work before shipment if Customer refuses to authorize shipment within thirty (30) days after notice that the Equipment is ready or fails to make any payment or execute any documents required prior to shipment.

1.15.2 If Customer fails to perform any of its obligations under this Agreement, LSI shall have the right to immediately terminate this Agreement and/or any work then being performed by LSI without further obligation by written notice. Upon receipt of such notice, Customer shall have a reasonable time, not to exceed thirty (30) days, to cure such default; if the default is not curable, this Agreement shall terminate immediately upon receipt of notice by Customer.

1.15.3 Upon termination by LSI for Customer’s default, any amounts owed for Deliverables provided through the date of termination, plus reasonable costs of such termination and any damages incurred by LSI therefrom, shall become immediately due and payable by Customer.

1.15.4 The work may, at the sole discretion of LSI, be canceled if Customer has become insolvent or bankrupt or admits in writing its inability to pay its debts as they mature, or if proceedings are commenced by or against Customer in any jurisdiction under a provision or chapter of any bankruptcy act, or if Customer suffers the appointment of a receiver or trustee or makes an assignment for the benefit of creditors.

1.15.5 Customer may not cancel except upon payment of a cancellation fee, plus LSI’s non-recoverable costs (including incidental and consequential damages) attributable to the specific Deliverables associated with the cancellation, plus a restocking charge to be determined by LSI. The cancellation fee shall equal: (i) twenty percent (20%) of the total price of the Proposal if cancellation occurs before LSI has issued approved-for-fabrication drawings or begun engineering; (ii) fifty percent (50%) of the total price of the Proposal if cancellation occurs after design release, drawing approval, or commencement of procurement; or (iii) one hundred percent (100%) of the total price of the Proposal if cancellation occurs after fabrication, programming, or procurement of long-lead materials has been completed.

1.16 ARBITRATION

1.16.1 Any controversy of claim arising out of or relating to this Proposal shall be determined by arbitration in accordance with the rules of the ADR Institute of Canada, Inc. (“ADRIC”). With regard to hearing locale, hearing locale shall be in Toronto, Ontario. The arbitration shall be conducted by a single arbitrator which shall be mutually agreed between the parties or, in the case that the parties are unable to reach agreement, the ADRIC case manager shall administratively appoint an arbitrator. Arbitration shall be in the English language, or in French if agreed by the parties or required by applicable law.

1.16.2 The prevailing party in any arbitration or other proceeding to enforce or interpret this Proposal shall be entitled to recover its reasonable attorney fees, arbitrator/administrative fees, and costs from the non-prevailing party.

1.17 MODIFICATION OR WAIVER OF PROVISION

1.17.1 The scope of work and these terms and conditions cannot be modified except by agreement in writing signed by an authorized officer of LSI. A waiver or repeated waiver by LSI of any provision or the breach of any provision shall not constitute a further waiver of such provision or breach.

1.18 MERGER CLAUSE

1.18.1 This Proposal including all appendices, constitutes the final written expression of the terms of this Proposal and is a complete and exclusive statement of those terms, and any and all representations, promises, warranties or statements made by LSI or its employees or agents that differ in any way from the terms of this written Proposal shall be given no force of effect.

1.19 OTHER CHARGES

1.19.1 A processing charge shall be payable by Customer to LSI for each change order or equipment drawing change requested by Customer after LSI has received the approved drawings. The processing charge shall be added to the material and labor cost associated with each such change order. A processing charge shall be payable by Customer to LSI for “Prepay and Add” shipping charges. No change order work shall commence until Customer has provided written authorization (email sufficient) of the associated price and schedule impact. Any Customer-directed change affecting approved drawings, scope, or programming shall automatically extend the project schedule by a reasonable period as determined by LSI.

1.19.2 A charge for storage shall be payable by the Customer if the Customer requests shipment deferral beyond the date of completion. Deferral of shipment will not defer invoicing or payment terms of the order.

1.19.3 Additional professional services, start-up support, and training not included within the scope of this Proposal shall be provided on a T&M basis per LSI’s standard rates at the time work is performed. Any stand-by time that is not the fault of the LSI, incurred by LSI’s employees at the Customer’s site will be billed on a T&M basis.

1.19.4 Pricing data is based upon all work being performed in a forty-hour week. Any overtime required by Customer will be billed per LSI’s standard T&M rate sheet, which is incorporated by reference to this agreement.

1.19.5 All costs incurred for performance bonds shall be borne by the Customer.

1.19.6 All costs incurred for CSA, CE or UL approval shall be borne by the Customer.

1.19.7 LSI will reasonably attempt to manage travel costs to the estimate provided, however any travel costs that exceed T&M estimates provided will be invoiced at LSI’s cost.

1.19.8 Customer shall not, directly or indirectly, solicit or recruit for employment or hire, or make a recommendation or referral, or otherwise knowingly assist or facilitate the solicitation or recruitment of any LSI employee (whether or not such employee performs Services for Customer), for employment by Customer or any other entity with a relationship to Customer. In the event of a breach of this Section, the Customer shall pay to LSI a recruiting fee equal to four months of base billing to be calculated on LSI’s then current rate sheet. The terms of this Section shall survive the expiration or termination of any Proposal between Customer and LSI for a period of 24 months from the last contact between Customer and LSI. Notwithstanding the foregoing, an LSI employee’s response to a general advertisement for employment shall not be considered a breach of this Section. This provision may only be waived by a written waiver signed by an officer of LSI.

1.20 INTELLECTUAL PROPERTY

1.20.1 All designs, drawings, specifications, engineering work product, panel layouts, programs, source code, and other deliverables created by LSI in connection with this Proposal (“LSI Work Product”) are and shall remain the sole and exclusive property of LSI, whether or not specifically identified as confidential or proprietary. Upon payment in full, Customer is granted a limited, non-exclusive, non-transferable license to use the LSI Work Product solely to operate and maintain the Equipment delivered under this Proposal.

1.20.2 Customer shall not reproduce, modify, reverse engineer, or use the LSI Work Product to construct, service, or replicate similar equipment or systems, or engage any third party to do so, without LSI’s prior written consent.

1.20.3 LSI retains the right to reuse and repurpose its general methods, know-how, templates, and non-customer-specific programming logic or code libraries developed in connection with this Proposal on other projects for other customers.

1.20.4 Any third-party software (including PLC, HMI, or SCADA platforms) furnished as part of the Deliverables is licensed directly from the applicable manufacturer or licensor. LSI makes no warranty with respect to such software beyond passing through the manufacturer’s or licensor’s warranty, and Customer is responsible for all license fees, renewals, and support costs associated with such software following delivery.

1.21 GOVERNING LAW

1.21.1 This Proposal and any dispute arising out of or relating to it shall be governed by the laws of the Province of Ontario, Canada, without regard to its conflict of laws principles.

1.21.2 The parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Proposal.

1.22 CONFIDENTIALITY

1.22.1 The pricing, proposal content, methodologies, and designs provided by LSI are confidential and proprietary to LSI. Customer shall not disclose such information to any competitor of LSI or use it to solicit competing bids without LSI’s prior written consent.

1.23 NO DAMAGES FOR DELAY

1.23.1 In the event of delay caused by Customer, its other contractors, or site conditions, LSI’s sole remedy shall be an extension of the project schedule and recovery of stand-by costs as provided in Section 1.19.3; LSI shall not be liable for consequential or delay-related damages. Similarly, Customer’s sole remedy for delay caused by LSI shall be a reasonable schedule extension, and Customer waives any claim for consequential or delay-related damages against LSI.

1.24 LANGUAGE

1.24.1 The parties confirm their express wish that this Proposal and all related documents be drawn up in English. Les parties reconnaissent avoir expressément exigé que la présente proposition et tous les documents connexes soient rédigés en anglais.