Standard Terms of Purchase

1.  DEFINITIONS: “Buyer” means ESAM, Inc “Seller” means the party

identified on the face of an order. Products” means all

articles, materials, products, work or services to be furnished

pursuant to an order. Seller will not make any modification to

the Products, raw materials used to make Products, or the

specifications without prior written consent from Buyer.

2.  ACCEPTANCE: An “order” is an offer to purchase and

when accepted by Seller becomes the exclusive agreement

between the parties relating to Products. Any of the

following shall constitute Seller’s unqualified acceptance of

an order: (i) written acknowledgement; (ii) furnishing of any

Products pursuant to an order; (iii) acceptance of any

payment for Products; or (iv) commencement of

performance pursuant to an order. Seller shall issue written

acknowledgments within 5 business days of order receipt.

Notwithstanding the foregoing, an order shall not operate as

a rejection of any offer by Seller (but merely of the terms

and conditions contained within such offer) unless such

offer contains variances in the description, quantity, price or

delivery schedule of the Products. No terms stated by Seller

in accepting or acknowledging an order shall be binding

upon Buyer if inconsistent with or in addition to the terms

stated herein unless accepted in writing by Buyer.

3.  PRICE:  If no price is stated herein, the price charged

Buyer for the Products shall be the lowest of (i) the price

last quoted by Seller or last paid by Buyer to Seller, or (ii)

Seller’s lowest price charged any customer for the Products,

regardless of any special terms or conditions.

4.  INSPECTION:   All Products shall be received subject

to Buyer’s right of inspection & rejection. Defective

Products or Products not in strict conformance with an order

or Buyer’s or Seller’s description or specifications, will be

held for receipt of instructions, at Seller’s risk, and if Seller

so directs, will be returned, at Seller’s expense. If Buyer

does not receive such written instructions within 45 days of

Buyer’s request therefore, Buyer may, without liability to

Seller, dispose of the goods, as it deems appropriate, at its

sole discretion. Buyer may, by written notice to Seller, and

in addition to other remedies provided by law, require

replacement or correction of rejected Products. Payment for

goods on an order prior to inspection shall not constitute

acceptance thereof or a waiver of a breach of warranty and is

without prejudice to any claim(s) of Buyer. Seller shall

inspect all Products prior to shipment to ensure conformance

with all requirements of an order.

5.  PACKING AND SHIPPING:  All items shall be

packaged, marked and otherwise prepared in accordance

with good commercial practices & Buyer’s instructions, if

any. Each package must be numbered & labeled with

Buyer’s order number, stock number (if applicable),

contents, & weight. An itemized packing list shall be

included in each shipment & the package containing the

packing list must be clearly marked as such. Each packing

list shall bear the Buyer’s order number & an accurate

description of the Products and quantities in the shipment.

Products shipped in excess of Buyer’s order may be returned

at Seller’s expense. Buyer will not be responsible for any

Products furnished without a written order.

6.  DELIVERY:   Delivery of goods shall be F.O.B. Buyer’s

location and shall not be complete until goods have actually

been received and accepted by Buyer. Notwithstanding any

agreement to pay freight, the risk of loss or damage in

transit shall be upon the Seller.

7.  TAXES:   Seller shall pay any federal, state, local or foreign taxes or other

governmental charges upon the production, transportation or

sale of the goods supplied hereunder. Unless otherwise

stated, the prices do not include sales or use taxes applicable

to the goods. All such taxes and charges shall be shown

separately on Seller’s invoice.

8.  WARRANTY:  Seller warrants that all Products, for the

later of a period of 15 months from the date Buyer receives the

Product or 12 months from the date the Product becomes usable

by the end user, shall: (i) be of good quality & workmanship and

free from defects, latent or patent, in material or workmanship,

(ii) conform in all respects to the Specifications, performance

standards, drawings, samples or descriptions of Seller and Buyer,

(iii) be free of any claim of any third party; and (iv) be

manufactured in accordance with generally accepted good

manufacturing (including, but not limited to cGMP, if applicable)

and quality practices. These warranties are in addition to all other

express warranties and legal rights. No remedy available to

Buyer for the breach of any warranties shall be limited except to

the extent and in the manner expressly agreed upon by Buyer in

an executed document. Buyer’s approval of any sample or

acceptance of any Products shall not relieve Seller from

responsibility to deliver Products and to perform services

conforming, in all respects, to the sample. These warranties shall

not be deemed waived either by reason of Buyer’s acceptance of

Products or by payment for them and shall survive delivery. In

the event of a breach of warranty, Buyer may return such

Products, at Seller’s expense, for correction, replacement or

credit as Buyer may direct. This warranty shall apply to

replacement Products & parts. Seller shall effectuate corrections

or replacements within 10 days of receipt of Products.


keep secret & confidential all confidential, proprietary or

non-public information of Buyer and the existence, terms

and conditions of an order (“confidential information”). In

addition, the Seller agrees to (i) disclose the confidential

information only to its employees who need to know for

purposes of fulfilling an order, and (ii) use the confidential

information only for the purpose of fulfilling an order. It is

understood that no license (expressed or implied) is hereby

granted by the Buyer under any confidential information.


THE ESSENCE. If, for any reason, at any time, Seller

shall refuse or be unable, or should reasonably anticipate

being unable to deliver any part or all of the Products in

accordance with the terms hereof, Seller shall notify Buyer

of such refusal or inability at the earliest possible time and

by the most practical means under the circumstances. Such

notification shall not be deemed to operate as a release of

Seller from its obligations under an order. Buyer shall have

the right to replace, modify and/or cancel any delayed open

orders without any liability to Seller. In the event of such a

replacement or modification, Seller shall pay to Buyer (or

at Buyer’s option, it may offset such amount from any

amount owed to Seller) promptly upon demand, an amount

equal to the cost of such replacement or modification, less

the amount which would have been payable to Seller for an

equal quantity and quality of Products, plus any amount

incurred by Buyer to effectuate such replacement or

modification. Such amount is agreed to be damages for

Seller’s non- performance and shall not, in any event, be

construed to be a penalty. Price increases or extensions of

time for delivery shall not be binding upon Seller unless

evidenced by a change order issued by its authorized


11.  INTELLECTUAL PROPERTY: Seller hereby grants

a perpetual, paid-up license relating to any Software or

other embodiment of intellectual property embedded in the

Products, as necessary for Buyer’s purchase, use,

maintenance and/or sale of Products.  Seller expressly

warrants that all copyrightable works of original authorship

(including but not limited to computer programs, technical

specifications, documentation and manuals), ideas, inventions

(whether patentable, patented or not), know-how, processes,

compilations of information, trademarks and other intellectual

property (collectively, “Deliverables”) shall be original to Seller

and shall not incorporate any intellectual property (including

copyright, patent, trade secret, mask work, or trademark rights)

of any third party.  All Deliverables that are created in the

course of performing any order (separately or as part of any

Products), and all intellectual property rights in Deliverables,

are owned by Buyer and not by Seller. Seller agrees that all

works of original authorship created by Seller in connection

with each order are “works made for hire” as that term is used in

connection with the U.S. Copyright Act. To the extent that, by

operation of law, Seller owns any intellectual property rights in

the Deliverables, Seller hereby assigns to Purchaser all rights,

title and interest, including copyrights and patent rights, in such



shall defend, indemnify, and hold harmless Buyer, its

officers, employees, agents, representatives, customers or

affiliates (“Buyer’s Affiliates”) from any claim, suit, loss,

cost, damage, expense (including, without limitation, the

costs and expense incurred in defending suits or actions

alleging liability) to any person of whatsoever nature of any

kind arising out of, as a result of, or in connection with (i)

Seller’s performance of an order; (ii) omissions or

negligence of Seller or its officers, employees, agents,

representatives, affiliates or subcontractors; (iii) the

Products; or (iv) a claim for infringement of rights in, to or

under patents, trade marks, copyrights or other IP rights by

the manufacture, design, use, maintenance, support or sale

of any Products. Without in any way limiting the foregoing,

Seller and any person or entity performing work for or on

behalf of Seller under an order shall maintain public

liability and property damage insurance covering Seller’s

obligations hereunder and the Products and shall maintain,

in accordance with applicable law, workers’ compensation

insurance covering all employees performing work with

respect to an order. This provision shall survive expiration

or termination of an order.

13.  TERMINATION: Buyer shall have the right, without

any liability or costs to Seller, to cancel any unshipped

portion of an order (i) a portion of which is not in strict

conformance with an order or Buyer’s or Seller’s

description or specifications, (ii) in the event Seller has breached

an order, any warranty or its obligations to Buyer, (iii) in the event

that Buyer’s business is interrupted because of strikes, labor

disturbances, riot, fire or Acts of God or any other cause beyond

the control of Buyer or (iv) if the Seller makes an assignment for

the benefit of creditors, a receiver or trustee is appointed with

respect to the Seller’s business, the Seller is adjudicated insolvent

or if the Seller files or there is filed against Seller a petition for

bankruptcy or other relief under the Bankruptcy Code or any

successor statute. Buyer shall have the right to cancel any

unshipped portion of an order, in whole or in part, at any time, for

a reason other than that set forth above, in which event Buyer shall

be liable to Seller for the actual amount of Seller’s costs reasonably

incurred in contemplation of performance of the canceled portion,

less any amount saved by Seller as a result of such cancellation

and less any amounts which could have reasonably been mitigated

by Seller. Seller is cautioned not to ship, fabricate or build

inventories of raw or finished stock at a rate faster than is required

to meet delivery requirements of an order.

14.  COMPLIANCE WITH LAW: Seller warrants that the

Products, including all packaging thereof, shipped pursuant to an

order shall have been produced in compliance with and meet the

minimum standards of all applicable federal, state and local laws,

regulations, rules, guides, ordinances and/or standards (“Laws”).

Upon request by Buyer, Seller shall furnish Buyer with a

certificate of compliance with any Laws. Seller acknowledges that

Products provided under this Agreement may be subject to U.S. and

applicable foreign export laws and regulations and will perform its

obligations under this Agreement in a manner consistent with the

requirements of all applicable U.S. and foreign laws and regulations, the

Foreign Corrupt Practices Act and Anti-boycott laws.  Specifically,

Seller agrees that the shipment or provision of Products, and any related

technical data or information, will not violate U.S. export laws or

regulations or the import laws and regulations of applicable foreign

states.  Seller will be responsible for obtaining, recording, filing and

maintaining all export and import documentation including all licenses

and permits, as well as for the payment of associated fees.  Seller shall

appropriately label containers of all Products which are known to

constitute a health, poison, fire, environmental, safety or explosion

hazard and shall provide Buyer any and all material required for

Buyer to comply with all laws, regulations, rules, guides,

ordinances and/or standards, including, without limitation,

Material Safety Data Sheets.

15.  EQUAL OPPORTUNITY: The Equal Opportunity clause in

Section 202 of Executive Order (E.O.) 11246, as amended, Section

503 of the Rehabilitation Act of 1973 (Handicap) and the Vietnam

Era Veterans Readjustment Assistance Act of 1974 (38 U.S.C.

2012), and the implementing rules and regulations in Title 41,

GFR, Part 60 are incorporated herein by reference unless an order

is exempted by rules, regulations, or orders of the U.S. Secretary

of Labor issued pursuant to Section 204 of E.O. 11246 or

provisions of any superseding E.O. As used in said clause,

“Contractor” means Seller. Seller agrees to provide Buyer with an

executed EEO Certificate indicating Seller’s compliance or exempt

status, annually upon request of Buyer.

16.  ASSIGNMENT:   Seller agrees that Seller will neither assign

its rights nor delegate its obligations under an order without the

prior written consent of Buyer. Any attempted assignment violates

this paragraph shall be VOID AB INITIO.

17. GOVERNING LAW: Irrespective of the place of performance

of an order, an order shall be interpreted in accordance with the

laws of the State of Oregon, without reference to choice

of law provisions. Each party hereby irrevocably consents to the

exclusive jurisdiction of the state & federal courts located in the

county & state of Buyer’s location, in any action arising out of or

relating to this Agreement and waives any other venue to which it

may be entitled by domicile or otherwise.


REMEDIES: Performance of an order must be strictly in

accordance with its stated terms & conditions & no change,

modification, revision or waiver shall be binding unless executed

by Buyer. No waiver of or failure to perform any or all of these

terms/conditions shall constitute a waiver of or an excuse for nonperformance

as to any other part of this or any other order. No

remedy herein provided shall be deemed exclusive of any other

remedy allowed by law or in equity. Under no circumstances

shall Buyer be obligated for consequential damages, loss of

revenue or profit, or any amount in excess of the total amount

stated on the face of any order. Seller shall bear all expenses,

including reasonable attorneys’ fees, Buyer incurs to enforce its

rights under an order.

19. BUYER’S PROPERTY:  All tooling, dies, parts, schedules,

and Specifications and all reproductions thereof, any other

property furnished to Seller by Buyer or paid for by Buyer, shall be

(i) the property of Buyer, (ii) clearly identified as Buyer’s property

by Seller, (iii) subject to removal at any time upon Buyer’s

demand, and (iv) used only in filling orders from Buyer or its

nominee.  Seller assumes all liability for loss of, and damage to,

such property and Seller shall, unless otherwise directed in writing

by Buyer, insure at Seller’s expense such property in an amount

equal to the replacement cost thereof with loss payable to Buyer.