Terms and Conditions of the Purchase Order

GENERAL TERMS AND CONDITIONS

1.

BID.- This Purchase Order (The Order) and the annexes mentioned in
its initial page, if available, contain a proposal from the Buyer
identified at the initial page of this Order (the Buyer) addressed to
the Vendor identified at the initial page of this Order (the Vendor) to
buy the goods listed at the initial page of this Order (collectively the
Goods). This proposal is conditioned to the acceptance on the
Vendors part of each one of the terms and conditions of this Order;
any stipulation printed or contained otherwise in any
acknowledgment of receipt or acceptance of this Order which may not
be coherent with or additional to the terms and conditions established
in this document, shall be considered a counter proposal which shall
not be binding to the Buyer unless explicitly accepted in writing by
the Buyer.
2. ACCEPTANCE; WHOLE CONTRACT.- In general, the Vendor shall
accept this purchase proposal delivering the Buyer immediate written
notification of the acceptance of this Order. The Buyer and the
Vendor agree that if the Vendor does not give the Buyer a written
notification of acceptance within a five-day (5) term starting from the
date in which the Vendor received this proposal and if the Vendor
does not object this purchase proposal or any of the specific
suggested modifications in writing made to any term/s of this Order
within the same period of five (5) days, it will be understood that the
Vendor has accepted this purchase order, and the terms and
conditions herEby contained shall be applied in whole and shall be
finding to the Buyer and the Vendor. The acceptance of this Order
shall happen when the Buyer receives the written notification of
acceptance from the Vendor, or when the Vendor delivers the first
Good as per the instructions of the Buyer, or when the five-day (5)
term is over, whichever occurs first. This Order (including any annex
mentioned in the initial page), once accepted as previously described
shall turn to be a whole agreement between the Buyer and the
Vendor (each one called Party) in relation to the subject of this
Order, and replaces and substitutes any discussion, negotiation and
previous agreement, being this verbal or written, express or implicit,
related to this same subject.
3. REFORMS AND MODIFICATIONS.- Before the Vendor accepts this
Order, the Buyer can add, eliminate or modify any term or condition
of this Order; however, this shall be done in writing or verbally with
an immediate written confirmation. Once the Vendor has accepted
this Order, any addition, elimination or modification of the terms and
conditions of this Order, including but not limited to, verbal
modifications supported by a new compensation, shall only be
effective after it has been done in writing and signed by the Buyer
and the Vendor. If the Vendor must modify any specification to any
Good, the Vendor shall notify the Buyer in writing of such modification
and the justifications for such; this modification shall not be part of
this Order unless and until it is accepted in writing by the Buyer.
4. PRICE.- Subject to what is stipulated in this clause, the prices referred
to in the initial page of this Order are fixed and unchanging. The
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5.

6.

7.

8.

Buyer shall receive the benefit of any general price reduction from
the Buyer happening before the delivery. For each Good purchased
under the current Order, the Buyer shall pay de Vendor the last price
quoted before the acceptance of the Vendor. If the Vendor, before it
acceptance, does not quote a price for such Good, the Vendor shall
immediately notify such price to the Buyer and the Buyer shall have
fifteen (15) days starting from the date of price notification, to accept
or reject the price. If this price is rejected in relation to any Good, this
Order shall automatically terminate only in relation to such Good and
such Goods being at that moment in possession of the Buyer shall be
returned to the Vendor, at the sole risk and cost of the Vendor.
QUANTITY.- The Buyer shall be obliged to purchase and accept only
the amount of Goods, not defective or damaged described in the
initial page of this Order, conforming the specifications established in
this document; any Good received in excess from such quantity or
substituted by the Vendor shall be returned to the Vendor, a the cost
and risk of the Vendor. If a Force Majeure event decreases the
available amount of Goods, the Vendor shall deliver to the Buyer at
least the amount of Goods available that the Buyer must have
received performing a fair and equitable distribution with other clients
of the Vendor with which it have signed contracts.
PRODUCTS GUARANTEE.- the Vendor declares and guarantees that
all the sold Goods under this document are new and free of defects in
its materials and manufacturing, different to those due to the Buyers
design, and that they are conforming the specifications established in
this Order. If the Vendor specifically designs or manufactures any
Good for the Buyer, the Vendor also declares and guarantees that
such Good is suitable for the intended purpose. The Vendor
additionally declares and guarantees that the sale of the Goods
established in this document do not constitute a violation of trade
marks, or patents or a violation of commercial secrets or other
intellectual property rights.
SOURCES IN CASE OF GUARANTEE.- If any Good does not comply with
the specifications determined for such Good or if such Good, within
the term of one (1) year counted from its installation, of eighteen (18)
months starting from the delivery date, or during any guarantee
period applicable to such Good, whichever is longer, results defective,
the Vendor shall repair or replace such Good at risk and cost of the
Vendor, provided the Buyer gives the Vendor notification of such
defect. The defective parts shall be repaired or replaced by the
Vendor in the facilities of the Buyer or at the place in which such Party
is located, or shall be returned to the facilities of the Vendor, or from
an authorized repair center, as per the Vendors choice, at its cost
and risk. The Vendor shall, during a period of two (2) years after the
date of delivery of Goods, keep all the documents related with quality
of the materials used in the Goods or for the execution of the jobs
required under this Order and shall, previous notification, allow the
Buyer to access such documents to inspect and copy them. All the
guarantees shall operate for the benefit of, and shall be executed by,
the Buyer.
PACKING.- The Vendor shall correctly pack each Good sold under the
present Order in order to ensure the adequate protection against
damages during transportation to the destination location of the
Goods. Each Good and its packing shall be duly labeled as indicated
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in this Order, and the Buyer shall not recognize additional charges for
packing, wrapping, shipping or its costs, unless expressly stated
otherwise in this document.
9. HAZARDOUS MATERIALS.- The Vendor is responsible to deliver the
Buyer and the Buyers representative who receives the Goods, the
documents with information about safety and other documents
required for materials qualified as hazardous under the Applicable
Laws (as per defined afterwards). The Vendor is responsible to comply
with the Applicable Law related to packing, labeling and delivery of
hazardous materials for its delivery at the destination place and
agreed to relief, defend and indemnify the Buyer, and its respective
directors, executives, employees, agents and representatives
(collectively Group of the Buyer) from and against, and keep each
one of them free from any claim, demand, cause of action, damage,
loss, costs, expenses and responsibilities of all kind and nature
(including, but not limited to, claims for indemnities under other
contracts, reasonable lawyer fees and legal costs) (collectively
Claims and Losses) derived from, or related with, the omission from
the Vendor to comply with the above mentioned responsibilities.
10.DELIVERY AND INSPECTION.- The Vendor shall provide the Buyer or
its assigned agents with any information related with this Order and
shall submit the Buyer and its agent the access to the facilities of the
Vendor in order for the Buyer to verify the progress of the work and
inspect the used materials. At the completion of each Good, the
Buyer shall have the right to carry out an inspection of the Good at
the facilities of the Vendor, regardless of whether the price of such
Good has been paid or not. If any work hereby contemplates has
been subcontracted, The Vendor agrees to obtain the consent of the
subcontractor to allow the Buyer to access the facilities of the
subcontractor in order to witness the progress of the work and inspect
the materials used; neither the inspection performed by the Buyer nor
the performance of such inspection, will relief the Vendor of its
obligations under this current Order. Any Goods not fully complying
with the specifications hereby contained or delivered differently as
required, or substituted by the Goods hereby described, or not
delivered in containers complying with the Buyers specifications (or,
when such specifications are labeled in duly recognized containers),
or which supposedly violate any Applicable Law, shall be rejected by
the Buyer and returned or seized, respectively under the risk and cost
of the Vendor.
11.DELIVERY AND TRANSPORTATION.- Unless established otherwise in
the initial page of this Order, the Goods shall be delivered over the
FOB to the address Deliver to and until the date established in the
initial page of this Order, or if not specified, within a reasonable
period. The business management of the Buyer is subject to obtain
as soon as possible the Goods hereby described; therefore, if a
delivery date has been stipulated in the initial date of this Order, the
term shall be the core for the execution of this Order. The Vendor
shall not deliver the Goods in a transportation mean different from
that stipulated by the freight forwarder of the Buyer detailed in this
document or by its agent. In case of delivery delays, the Buyer shall
request the Vendor to deliver the Goods by the fastest mean and the
Vendor shall pay the transportation cost part exceeding those costs of
the regularly used mean, as well any additional cost incurred by the
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Buyer due to delay. The Vendor shall, in all cases, deliver the Buyer
the express receipt of the consignment letter signed by the bearer in
order to credit the transportation and this receipt or consignment
letter shall be attached to the invoice original issued by the Vendor.
The Forwarder shall stop the purchase and report the Buyer if the
specifications do not correspond to what is indicated in the purchase
order.
12.TITLE.- The Vendor declares and guarantees to have the right and the
authority to sell the Goods hereby stipulated and, once the Buyer
pays the total price hereby detailed, the Buyer will acquire the official
title over such Goods, free from any grievance, claim or any type of
limitation, including, without restriction, to claims from third parties
due to patent violation, registered brand rights, author rights or other
intellectual property rights. Unless otherwise hereby expressed, the
title over the Goods acquired under this document shall be
transferred from the Vendor to the buyer when the Vendor transfers
the possession of the Good to the Buyer or its agent in the placed
established in the address Deliver to detailed in the first page of
this Order. If the Vender agrees to transport the Goods, the title shall
be transferred when the Goods are effectively delivered to the Buyer
or its Agent. The Vendor shall bear all the risk over the loss of Goods
until the title is transferred to the Buyer.
13.DEVOLUTION.- if by any reason the Buyer decides not to use all or
part of the Goods purchased under this Order, the Buyer could return
to the Vendor, at the Buyers costs, all the new non-used Goods that
the Vendor could normally have in stock.
14.INSTALLATION.- Unless otherwise specified, the Buyer, at its own
cost, shall be responsible for the installation of the Goods acquired
under the present document. When necessary, the Vendor shall
make available to the Buyer, being this free or through a mutually
agreed tariff by the Parties, one or more people, as per reasonably
required to help with the installation. Such person (s) shall not be
agent(s) or employees of the Buyer and the Vendor shall exclusively
be responsible for its actions or omissions.
15.INVOICING AND PAYMENT.- The prices agreed between the Parties for
the execution of this Order are reasonable regarding the object of the
Order and include all the necessary costs for the compliance with the
Order. All invoices and supporting documents of the Vendor shall
clearly state (i) the total value of the invoice for the purchases made;
(ii) the total amount of all the payments previously made under this
Order; and (iii) the number of this Order, the number of A.F.P. and/or
the account number stated in the initial page of this Order. The
Vendor shall invoice the Buyer attaching the supporting documents, if
applicable, and shall deliver the invoice to the address stated in
Invoice to in the first page of this Order, to the attention of Account
Payable, within ten (10) calendar days after the delivery, at the
Buyers satisfaction, of the Goods referred in this Order. If the Buyer
does not have any objections to the amount invoiced, the Buyer shall
pay the Vendor through the Interbank Payment System of the Central
Bank of Ecuador (SPI), through Letter of Credit or through any other
system agreed by the parties, the total amount of each invoice within
the next thirty (30) calendar days after the reception of the respective
invoice. If the Buyer objects any amount of the invoice, the Buyer
shall notify the Vendor about such objections and the Vendor shall
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give the Buyer (i) a new invoice with the non-objected amount; (ii)
justification about the objected amounts; and(iii) a new invoice with
the objected amounts. The objected amounts shall remain without
payment until being justified at the Buyers satisfaction. The Buyer
shall pay the Vendor the amounts accepted appearing in the new
invoice indicated before within the time period mentioned before of
thirty (30) calendar days or within five (5) labor days after having
received the new invoice, if such thirty-day term (30) has expired.
Once the Buyer has verified and accepted, at full satisfaction, the
respective justification related to the amount objected, the Buyer
shall pay the Vendor the amounts justified within the thirty (30)
calendar day term mentioned or within five (5) working days after
having received the justification, if such 30-day term has expired. All
the payments related to this Order shall be performed in exclusive
favor of the Vendor, in Dollars of the United States of America or in
the currency agreed, applying if convenient the official exchange rate
of the Central Bank of Ecuador and complying with the applicable
laws related to taxes, foreign currency and bank control. No payment
made by the Buyer under this Order shall neither be made in cash or
through instruments drawn to the bearer nor shall there be any
payment by the Buyer to any person or entity different from the
Vendor. For payments done through bank transfer, the Vendor shall
provide the Buyer the necessary information to make such payment,
including the name, location of the finance institution and the name
and number of the bank account. The payments expressly stated in
this Order shall be the only payments to which the Vendor is entitled
under this Order. The Vendor shall not incur in any trip,
entertainment expense or other miscellaneous expenses on behalf of
the Buyer without its previous written consent, and the Vendor shall
keep detailed registers of all such expenses. The forwarder can stop
the purchase if the specifications do not correspond to that indicated
in the purchase order.
16.TAXES.- The Vendor shall be the only responsible for the
determination, declaration and due payment (including, if applicable,
for the case of the Buyer have retained any payment under this
Order) of any and all tax grieved by any nation, estate, province,
canton or other jurisdiction or tax authority in connection or relation
with this Order, including, without limitation, to the compensation
paid to the Vendor under this document. The invoice shall detail,
separate from the price of the Goods, all the current taxes on the date
of the sale and the price stipulated in the first page of this Order
including all the taxes. The Vender agrees to relieve, protect and
indemnify the Buyers Group from and against, and keep each and
every one free from Claims or Losses derived or related to these
taxes.
17.AUDIT.- the Buyer, at its cost and previous notification to the Vendor
shall have the right to perform periodical audits of the books and
registers of the Vendor, related with this Order. The Vendor agreed to
keep such book, registers and information during at least two (2)
years starting from the date of delivery of the Goods and shall made
available to the Buyer such Books, registers and information and
allow its inspection and reproduction.
18.INDEMNIFICATION: Except when expressly stipulated otherwise in this
document, at the Buyers request, the Vendor agrees to relieve,
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protect and indemnify the Buyers Group from and against, and keep
each one of them free from all Claims and Losses in concept of
disease, death or body injuries of any kind or damage to or loss to
any property derived from or related with (a) the execution of this
Order by the Vendor, its affiliate companies, its subcontractors and
supplier (at any level), and its respective directors, functionaries,
employees, agents and representatives (the Vendor Group), or (b)
from any defect on materials or manufacture in any sold Good or
service executed under this Order; in each case, regardless if they
were caused by, or if its occurrence was due to negligence, severe
negligence, objective responsibility, willful misconduct or other fault
from any party indemnified or a pre-existing cause, unless these were
exclusively caused by the active negligence of the Buyer, in which
case the Buyer shall relieve, protect and indemnify the Buyers Group
from and against, and keep each one of them free from all Claims or
Losses thereby caused.
19.PATENTS.- The Vendor shall relieve, protect, and indemnify the Buyer
s group and keep each one of them free from any Claims and Losses
related with or the results of violations or supposed violations to
patents, commercial secrets, know-how, author rights (both by-laws
and non by-laws), and other intellectual property rights covering the
goods and other goods, property, methods or processes used by any
member of the Vendor Group in the execution of this Order. If the
Buyer is unable to use any Good due to any of the causes mentioned
before, the Vendor, at the Buyers request, shall immediately ensure
the termination of such incapability, replace the Good with other not
causing such inconvenience or remove the Good causing such, at risk
and cost of the Vendor, and shall reimburse the Buyer all the amounts
paid in relation with the Good causing such impairment.
20.TERMINATION FOR CONVENIENCE.- The Buyer reserves the right to
end this Order, or any part of it, due to any reason at any moment,
through notification to the Vendor. At the reception of such
notification, the Vendor shall protect all the property under it
possession, in which the Buyer shall have interest, shall terminate all
work or commitments made under or in conformity with this Order as
soon as possible, and shall provide the Buyer a written proof of such
termination being carried with due opportunity. The Buyer shall pay
the Vendor the percentage of the price corresponding to the work
percentage performed and that of the Goods accepted previous to the
notification of the termination deducting any amount previously paid,
plus any direct cost reasonably required, at the Buyers criteria, as a
consequence of the termination. The Vendor shall neither be paid for
any work performed or for Goods provided after having received the
termination notification, nor for costs incurred by supplier or
subcontractor of the Vendor that the Vendor could have reasonably
avoided, or for any amount non-expressly mentioned in this clause,
including without limitation, lost profits. The Vendor shall, if so
instructed by the Buyer, deliver the Buyer the materials for which the
Buyer has already paid.
21.TERMINATION DUE TO NON-COMPLIANCE.- Each one of the following
events shall be considered as a vendor non-compliance for purposes
of this clause: (a) the start of any procedure of insolvency or
bankruptcy against the Vendor or the nomination of an assignee in
benefit of its creditors; (b) the negative or failure of the Vendor to
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deliver the goods or execute the services in conformity with the

chronogram specified, or within a reasonable time if it was not
specifically stipulated; (c) the lack of progress risking the execution of
this Order as per its terms; or (d) the non-compliance of any other
stipulation to this Order. For the case the Vendor has not remediated
any non-compliance within a ten-day (10) period starting from the
notification made by the Buyer, or within a longer period authorized
in writing by the Buyer, the Buyer can give a written notification to
the Vendor finishing this Order or any part of it. Additionally, if the
Vendor violates or non-complies any the Applicable Law, the Buyer
shall have the right to terminate this Order, through written
notification to the Vendor and such termination shall be immediately
made effective at the reception of such notification. For the case of
termination due to non-compliance, the Buyer shall not be
responsible to pay the Vendor any value at all, except the price for
any partial delivery of the Goods received and accepted by the Buyer,
and the Vendor shall be responsible against the Buyer for all and any
damage originated as a cause of the non-compliance causing the
termination.
22.CONFIDENTIALITY.- Any information provided by the Vendor regarding
any Good specially designed or manufactured by the Buyer and all
the information provided by the Buyer under this Order shall be
property of the Buyer. The Vendor could disclose the information
property of the Buyer to a third party only with previous written
consent of the Buyer, except and provided it is required through a
valid order by a competent judge or by the applicable Laws. At the
request of the Buyer, the Vendor shall all such information without
retaining any copy of it. The Vendor, on its part, agrees that the
Buyer has the right to reveal or provide information about the
existence and the terms of the present Order as well an any data or
information related to the execution of this Order, the object of it, any
agreement or arrangement and any payment related to this Order, to
any Control Organism of Ecuador and Entity of the Government (as
per defined so forth) of any country, having the right according to the
law to access to such data or information.
23.FORCE MAJEURE.- Neither the Buyer not the Vendor shall be
responsible for any delay in or impossibility to comply with its
obligations under this Order, if such delay or impossibility is derived
from an Act of God or Force Majeure. It shall be understood as force
majeure or Act of God, de definition in Art. 30 of the Civil Code. The
Vendor shall immediately notify the Buyer if an Act of God or Force
Majeure Event occurs and if the execution of this Order is delayed for
more than thirty (30) days the Buyer can terminate this Order with no
responsibility whatsoever, except the obligation to pay for the Goods
previously delivered by the Vendor and accepted by the Buyer.
24.COMPLIANCE WITH LAWS, REGULATIONS AND ORDERS.- The Vendor
agrees that the Goods subject of this document shall be produced and
supplied complying with all the laws, rules, regulations, orders,
ordinances and standards of any nation, estate, province, canton or
other jurisdiction applicable to this Order and the compliance of the
obligations of the Parties under this Order, including without
limitation, the following Ecuadorian laws: Labor code, Internal Tax
Regime Law, Social Security Law, Customs Organic Law, Consumer
Defense Organic Law. (Collectively the Applicable Laws).
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25.APPLICABLE LAW AND SOLUTION OF CONTROVERSIES.- For all

purposes derived from this Purchase order, the PARTIES fix as its
domicile the city of Quito, Metropolitan District excluding any other.
For the case of controversies appearing in the celebration, execution,
development, termination or liquidation of this Purchase Order, the
PARTIES shall procure to solve them directly. If there are
controversies in the payment of invoices, the payment of noncontroversial values can proceed. If there is no direct agreement
between the PARTIES, the controversy can be submitted to mediation
as an alternate solution of controversies. The mediation shall be
made in the Mediation Center of the General Estate Attorney at Law
and shall be subject to the Arbitration and Mediation Law Code and to
the Regulation of the previously mentioned center. If an agreement is
not reached, the controversy shall be processed before the
competent Judges and Trials of the Quito Canton. Alternatively, with
the previous favorable decision of the General Estate Attorney at Law,
as per article 190 of the Constitution of the Republic, the PARTIES
could agree to submit its controversies before an Arbitration Tribunal,
as per the Mediation and Arbitration Law. In this case, the PARTIES
shall waive to the ordinary jurisdiction and shall be obliged to abide
by the decision made at the Arbitration Tribunal.
26.CESSION.- Any cession, total or partial, or this Order by the Vendor
shall be null without the previous written consent of the Buyer.
27.WAIVE.- The waive of one Party to any right under this Order shall not
mean the permanent waive to such right or the waive to any other
right.
28.CONFLICT.- In case of conflict between any stipulation appearing in
the first page of this Order and/or any stipulation of these Terms and
Conditions of the Purchase Order, such conflict shall be solved
prioritizing the stipulations of the document found first in the
following list: (a) first page of the Order; (ii) these Terms and
Conditions of the Purchase Order; and (iii) any annex to this Order.
29.CONFLICT OF INTERESTS.- The Vendor or any member of the Vendor
Group shall NOT directly or indirectly offer any payment, loan or
service, entertainment, invitations, meals, transportation expenses,
trips and gifts to any functionary or employee of the Buyer. In case of
contravening the instructions mentioned before, the Vendor shall be
subject to immediate termination of the present Order and to respond
for the damages and losses derived from this act. This is not
applicable to the articles that are generally distributed for advertising
purposes, propaganda or business promotion, or to food or transport
expenses which eventually arise within regular commercial relations.
Likewise, neither the Buyer nor any member of its group shall directly
or indirectly receive any payment, loan, service, luxury entertainment
or travel gift of not nominal value by the Vendor. The non-compliance
of this disposition shall be cause of termination of its job
notwithstanding the return of such gifts, which value the company
involved shall transfer to the Ministry of Energy and Mines as per Art.
80 de Hydrocarbons Law. The Vendor declares, guarantees and
agrees that neither the Vendor nor any of the member of the Vendor
Group or any person or entity acting in their behalf: (i) has violated or
non-complied, or will violate or will non-comply with the Applicable
Laws; (ii) without limit of previous number (i), shall act or shall stop
any action if such action or omission violates or non-complies with the
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Applicable Laws. The Vender agrees that if any declaration,

guarantee or agreement stipulated in this clause shall deem to turn
inexact or if there is a change in the control of the Vendor involving a
Functionary or Business Related, shall immediately notify in writing
the Buyer and shall explain all the relevant circumstances
surrounding such inaccuracy or control change, including the identity
of the new owners. At the reception of such notification, the Buyer
could immediately terminate this Order and any other agreements or
arrangements with the Vendor, without any responsibility, if such
change in the control or inaccuracy causes or has a reasonable
possibility to cause the violation of any Applicable Law or after the
determination by the Buyer that such termination complies with the
Buyers best interests provided, previous such termination, the Buyer
at its sole election offer the Vendor an opportunity and reasonable
term to explain the control change or the change in the
circumstances derived from such inaccuracy.
30.PROHIBITION TO ACT ON BEHALF OF THE CONTRACTOR.- Under no
circumstance shall the Vendor be authorized or has the capacity to
act on behalf of the Contractor, unless expressly indicate in the Order
herein.
31.SURVIVAL OF OBLIGATIONS: The Buyer rights established in this
document are not exclusive but additional to any other right available
to the Buyer as per the law or the equity. The rights and obligations
of the Parties under clauses 6, 7, 9, 12, 13, 15, 16, 17, 18, 19, 20, 21,
22, 25 and 29 shall be continuous and shall prevail after the
termination or expiration of this Order by any cause.
32.SUBSCRIPTION IN DUPLICATE.- Each Party can sign one identical
duplicate copy of this Order with the same effect as if the Parties
have signed the same document. One copy of this Order, signed by
one Party and delivered to the other Party by facsimile or by e-mail
pre-approved shall have the same effect as if being an original of this
Order; containing the original signature of such first Party being sent
to the other Party.
SIGNATURE AND STAMP OF THE SUPPLIER
NAME:
I.D. NUMBER:
DATE: