APPLICATION SYSTEM PURCHASE AGREEMENT

APPLICATION SYSTEM PURCHASE AGREEMENT

      This Application System Purchase Agreement (“Agreement”), is entered into this _28___day of __September
_______
, 2009, by and between SCBluwood, Inc., a California corporation, with its principal place of business located at 2604-B El Camino Real, Carlsbad, CA 92008 (SELLER), and EcoBlu Products, Inc., a Nevada Corporation, whose principal address is 909 West Vista Way, Vista, CA 92083 (BUYER) with respect to the following facts.

      WHEREAS, Buyer desires to purchase from Seller and Seller desires to sell to Buyer that certain application equipment system consisting of the equipment and components described in the Application System Description attached hereto as Exhibit A (the “Application System” or sometimes the “System”) plus installation and training services to be provided by Seller; and

WHEREAS, the Application System has been designed by SCBluwood and approved by BluwoodUSA Solutions, Inc., (“BluwoodUSA”) for use in connection with BluwoodUSA’s Licensed Technology for the factory application of BluwoodUSA’s Licensed Products to Covered Structure Wood Components and Derivative Products (as such terms are defined in that certain Sublicense, Purchase, Distribution & Services Agreement entered into by Buyer referred to as the “Sublicense Agreement”).

      NOW THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Application System Purchase and Sale Agreement. Seller agrees to sell and Buyer agrees to purchase the Application System described in Exhibit A , attached hereto and the Installation and Training Services described below for the prices and subject to the terms and conditions set forth in this Agreement.

Seller will perform all system set up, configuration, and certification testing services reasonably necessary for Buyer to place the Application System in service for its intended purpose. Seller shall provide all necessary tools, equipment, labor and supervision to complete the proper installation, configuration and certification testing of the Application System in a commercially timely manner. The date Seller completes the installation and certifies the Application System for use by Buyer shall be referred to as the “Certification Date”.

2.2 Buyer’s Installation Obligations . Buyer agrees that prior to the delivery of the Application System at Buyer’s Installation Site, Buyer will perform or cause to be performed all actions necessary to prepare the Installation Site for installation of the System in accordance with Seller’s written Application System Installation Requirements (“Installation Requirements”) to be provided to Buyer upon acceptance of Buyers’ order hereunder. The Installation Requirements relate to matters such as minimum available floor space under roof, adjacent materials handling floor space, electrical power, wiring and outlet location requirements, water source availability and location, ventilation, etc. Buyer will confirm the completion of all Site preparations to Seller prior to Seller’s scheduled arrival to perform Installation Services hereunder. In the event of Buyer’s failure to fully perform such preparations, Buyer shall be responsible to reimburse Seller for all additional costs and expenses reasonably incurred buy Seller resulting from delays or necessary remedial work performed by Seller as a result of such failure, including but not limited to the cost of any additional labor, supplies, and personnel travel related expenses.

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2.3 Training Services. Commencing on the Certification Date or such other date as may be mutually agreed, Seller will provide 8 hours of training and instruction to Seller’s designated employees at the Installation Site regarding the use of the Application System and BluwoodUSA Licensed Technology for the application of BluwoodUSA Licensed Products to Covered Structure Wood Components and Derivative Products (as such terms are defined in the Sublicense Agreement). The topics to be covered in the training will include, but are not limited to: (i) the proper handling, mixing, and pre-treatment preparation of Licensed Products; (ii) Application System setup, configuration, coating processes, procedures and techniques, and periodic System maintenance; (iii) materials handling safety and disposal; and (iv) BluwoodUSA Quality Standards procedures and compliance requirements (hereinafter referred to as the “Training Services).

Application System shall be $ “See Breakdown Exhibit A”. The price includes suitable packaging but does not include freight and applicable sales, use or excise taxes all of which Buyer shall be responsible to pay.

      3.1.1 Payment Terms : Buyer shall pay to Seller the purchase price, plus freight and applicable taxes as follows: (a) a deposit of 30% of the purchase price to be paid upon execution of this Agreement; (b) 50% of the purchase price will be due upon notice by Seller that the System is ready for shipment and must be received by Seller prior to shipment; and (c) the balance of 20% of the purchase price will be due within ten (10) days following the Certification Date as described above.

      3.1.2 Shipping, Title and Risk of Loss. The Application System shall be shipped by Seller by ground, FOB Buyer’s Installation Site. Title to and risk of loss for the System shall pass to Buyer upon arrival of same at Buyer’s designated Installation Site provided, however, that Buyer shall grant to Seller a present and continuing security interest in the Application System until Seller has been paid in full pursuant to the terms hereof. Buyer shall promptly execute and deliver such documentation as may be requested by Seller to perfect Seller's security interest under the Uniform Commercial Code or any other relevant statute, law, or regulation. Buyer will not cause or permit any other security interest, lien, encumbrance or claim to attach to the system which shall have priority over or be ahead of Seller's security interest, as described herein, and Buyer authorizes Seller to make any public filings necessary to perfect or maintain its security interest under the Uniform Commercial Code, or any other relevant statue, law, or regulation. Until Seller has received full payment of the purchase price, Seller shall have all rights and remedies of a Seller and secured party as established or permitted upon agreement by the Uniform Commercial Code, in addition to all other rights as established herein