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TERMS

1.               Buyer represents and warrants that Buyer has had many opportunities to inspect and examine the sample of the products as fully as Buyer desires, and that Buyer has examined the sample and found no defects therein. Lashem makes no representations or warranties other than that the products to be delivered under this contract will be within commercially reasonable tolerances of the sample inspected and accepted. Buyer represents and warrants that the reproduction by Lashem of any model, logo, or design of any kind, which has been provided by Buyer to Lashem, will not infringe upon the patent, copyright, trademark, or intellectual property rights of a third party.

2.               EXCEPT AS SPECIFICALLY PROVIDED IN PARAGRAPH 1 OF THIS AGREEMENT, Lashem MAKES NO WARRANTIES EITHER EXPRESS OR IMPLIED AS TO ANY MATTER WHATSOEVER, INCLUDING WARRANTIES AS TO MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

3.               Delivery shall be F.O.B Lashem’ shipping dock. Partial deliveries are permitted. Lashem may deliver the products before the scheduled delivery date. Risk of loss passes to Buyer upon tender of delivery. All risk of injury to or loss of products shall be on Buyer. Buyer accepts full responsibility for any risk of harm to the units resulting from any and all causes after products leave Lashem’ warehouse including, but not limited to, damages resulting from extreme temperatures, incompatible liquids, transportation, shipping, storage, and filling.

4. Unless Buyer rejects, and notifies Lashem within calendar 10 days from date of delivery of the products or any portion thereof that Buyer will not take over the products or the portion thereof received by the Buyer; or if Buyer uses or does any act inconsistent with Lashem’ rights in the products, Buyer will be held to have taken over such products. If Lashem does not receive of rejection within 10 calendar days from date of delivery of the products or any portion thereof then ability to reject for not being in conformance with the sample is waived.

5.               Buyer affirms that if Lashem builds any mod(s) pursuant to Buyer’s specifications or otherwise Lashem owns any and all rights to such molds. If Lashem does not create the mold but uses mold(s) given to Lashem by Buyer, then Buyer hereby represents and warrants that Lashem is the owner of the mold(s) and that Lashem has the unqualified right to use such mold(s).

6.               Buyer herby agrees to indemnify Lashem and shall hold harmless Lashem, any officer, director, employee or agent thereof (each of the foregoing being hereinafter referred to individually as “Indemnified Party”) for all liability to third parties, and all reasonable expenses incurred by Lashem, including but not limited to court costs and reasonable attorneys’ fees incurred, arising from or in connection with any third party claim against Lashem for alleged non-permitted and/or unauthorized use of any mold(s), logo or design, given by Buyer to Lashem, or claim of trade secret, patent, copyright, or other infringement by virtue of Lashem’ use of any intellectual property delivered or maintained by Buyer. Buyer’s obligation to indemnify and Indemnified Party will survive the expiration or termination of this agreement by either party for any reason.

7.               Lashem shall not be liable for any delay in its performance under this agreement or be obligated to perform any obligation where it is unable to do so or doing so would be commercially impracticable or impossible, or subject to a substantial impediment. “Substantial impediment” is defined for purposes of this agreement, to include any act of God or public enemies; strike; lockout or other labor disturbance; declared or undeclared war; blockade or embargo; riot, sabotage, insurrection or civil disturbance; explosion; epidemic; landslide; lightning; earthquake; fire; loss of power or gas; storm or other severe weather condition; flood; washout; breakdown; or failure of major equipment, including shutdowns for scheduled maintenance or inventory control; delay or failure of usual sources of transportation; order, restraint or prohibition of governmental authority having jurisdiction over the products to be produced by Lashem under this agreement, the parties, their agents, officers, directors or employees, or subcontractors; and failure, due to any of the foregoing, by any of Lashem’ subcontractors, suppliers or parties supplying labor, material or other items necessary for Lashem’ performance under this agreement. Lashem shall have such additional time within which to perform its obligations as may be reasonably necessary under the circumstances. Lashem, in response to an impediment, may deliver to Buyer such quantity of products as Lashem may determine in this sole and absolute discretion and Buyer shall be obligated to compensate Lashem upon delivery for whatever portion of the products are delivered.

8.               IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOSS OF PROFIT. Lashem’ LIABILITY ARISING UNDER THESE CONDITIONS FOR THE MANUFACTURE, SALE, DELIVERY RESALE, REPAIR, REPLACEMENT, USE OF ANY PRODUCTS PURCHASED UNDER THESE CONDITIONS (OR FAILURE TO DO ANY OF THE FOREGOING) (INCLUDING LIABILITY ARISING FROM BREACH OF CONTRACT OR FROM TORT, WHETHER OR NOT Lashem HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LIABILITY), IN NO CASE SHALL EXCEED THE TOTAL AMOUNT OF THE PRODUCTS PAID FOR HEREUNDER AND INVOLVED IN THE CLAIMED BREACH, TORT (INCLUDING NEGLIGENCE, STRICT LIABILITY, AND MISREPRESENTATION) OR NON-PERFORMANCE THEREOF. HOWEVER, THE PROVISIONS OF THIS SECTION 8 SHALL NOT APPLY IN ANY WAY TO THE BUYER’S OBLIGATION TO INDEMNIFY ANY INDEMNIFIED PARTY.

9.               Any claims involving quantity, quality, delivery, and Lashem’ liability shall in no event exceed the purchase price. If Lashem cannot replace the products and repair is not commercially practicable or cannot be made, Lashem will refund the purchase price. No products will be accepted for return without Lashem’ written consent. All orders subject to 10% over or under run. Above specifications are based on commercially acceptable tolerances.

10. This agreement shall be deemed to be made in Asuza, California, and shall be construed under the laws of the State of California. Any litigation arising by reason of this agreement shall be filed in the County of Los Angeles, State of California. If any legal action or other proceeding is brought for the enforcement or interpretation of this agreement or because of an alleged dispute, breach, default, or misrepresentation in connection with any of this agreement, the successful or prevailing party shall be entitled to the recovery of its reasonable attorney’s fees and other cost incurred, in addition to any other relief to which it may be entitled.

11. The terms of this agreement shall be incorporated into and supersede all inconsistent terms of any and all prior contracts, purchase orders, and invoices regarding the samples delivered with this agreement. No supplementation or modification of this agreement shall be binding, unless executed in writing by both the parties to be bound thereby.

1361 Mountain View Circle, ASUZA, CA 91702 - 800-710.0915 - Fax 626-334.1233 www.lashem.com