Products Sale Agreement – Terms and Conditions

NOTE: THIS AGREEMENT CONTAINS PROVISIONS WHICH INDEMNIFY AND/OR RELEASE THE INDEMNIFIED AND/OR RELEASED PARTY FROM THE CONSEQUENCES OF ITS OWN NEGLIGENCE AND OTHER LEGAL FAULT.

Orders for the supply or sale of products (“Products”) or services (“Services”) to be provided by IMPACT FLUID SOLUTIONS, or its operating divisions, or its direct or indirect wholly-owned subsidiaries (in each case as applicable referred to herein as “IFS”) to its customers (each a “CUSTOMER”) are subject to acceptance by IFS, and any orders so accepted to be governed by the terms and conditions stated herein and any additional terms proposed or agreed to in writing by an authorized representative of IFS (these terms and conditions and any such additional terms collectively referred to herein as the “Agreement”). 

Any additions to or modifications of these terms and conditions, or any terms and conditions contained in CUSTOMER’s order inconsistent herewith, shall not bind IFS unless accepted in writing by an authorized representative of IFS.

1. PAYMENT TERMS.

Unless alternate payment terms are specified or approved by the IFS, all charges, including applicable packing and transportation costs, billed by IFS are payable within thirty (30) days of the date of invoice. 

At IFS’s option, interest may be charged at the rate of eight percent (8%) per annum unless such rate contravenes local law in which case the interest charged will be the maximum allowed by law. 

Operating production or well conditions which prevent satisfactory operation of Services or Products do not relieve CUSTOMER of its payment responsibility.

2. CANCELLATION.

Products:  

IFS retain the sole right to accept or reject the cancellation of Orders for Products once an Order has been placed with it. 

Orders for Products that are subject to cancellation after acceptance of such cancellation by IFS will be subject to a restocking charge of at least twenty-five percent (25%), plus any actual packing and transportation costs. 

Products specially produced to CUSTOMER specifications, or orders for substantial quantities manufactured specially for CUSTOMER, may only be canceled subject to either (i) payment of a cancellation fee by CUSTOMER as may be set by IFS, or (ii) a return credit against future purchases, to be determined solely by IFS.  Credit for unused Products will be issued for the quantity returned at the original purchase price, less restocking or cancellation charges, provided the returned Products are in reusable condition.  No credit will be given for shipping charges incurred by CUSTOMER.  In no event will credit be allowed for Products returned without prior written authorization by IFS. 

Services: 

In the event CUSTOMER cancels an order for, CUSTOMER shall be liable for all costs incurred by IFS in the mobilization/demobilization related thereto, and any other reasonable costs incurred by IFS incident to such cancellation. 

3. THIRD-PARTY CHARGES, TAXES.

CUSTOMER shall pay all third-party charges, in compliance with IFS’ current price list, and any sales, use, rental or other taxes that may be applicable to transactions hereunder. 

CUSTOMER shall pay all applicable customs, excise, import and other duties unless otherwise agreed to in writing by an authorized representative of IFS.  CUSTOMER shall provide necessary import licenses and extensions thereof.

4. RISK OF LOSS AND TITLE.

For Products sold within the United States of America and with a delivery location within the United States of America, title and risk of loss shall pass to CUSTOMER as soon as the Products depart IFS’s point of origin. 

For Product sales with a delivery point outside the United States of America, unless otherwise agreed to in writing between IFS and CUSTOMER, INCOTERM “CPT” shall apply with the following exception:  TITLE AND RISK OF LOSS REMAIN WITH IFS UNTIL THE PRODUCTS REACH THE PORT OF ENTRY. 

5. LIABILITIES, RELEASES AND INDEMNIFICATION.

A. In this Agreement, “Claims” shall mean all claims, demands, causes of action, liabilities, damages, judgments, fines, penalties, awards, losses, costs, expenses (including, without limitation, attorneys’ fees and costs of litigation) of any kind or character arising out of, or related to, the performance of or subject matter of this Agreement (including, without limitation, real or personal property loss, damage or destruction, personal or bodily injury, illness, sickness, disease or death, loss of services or wages, or loss of consortium or society). 

B. Subject to the terms and conditions set forth herein, IFS shall release, indemnify, defend and hold CUSTOMER, its parent, subsidiary and affiliated or related companies, and the officers, directors, employees, consultants and agents of all of the foregoing (referred to in this Agreement as “CUSTOMER INDEMNITEES”) harmless from and against any and all Claims asserted by or in favor of any member of IFS INDEMNITEES (as defined in paragraph C. below) or IFS INDEMNITEES’ subcontractors at any tier or their employees, agents, or invitees.

C. CUSTOMER shall release, indemnify, defend and hold IFS, its parent, subsidiary and affiliated or related companies, and the officers, directors, employees, consultants and agents of all of the foregoing (referred to in this Agreement as “IFS INDEMNITEES”) harmless from and against any and all Claims asserted by or in favor of any member of CUSTOMER INDEMNITEES or CUSTOMER INDEMNITEES’ contractors at any their (except IFS INDEMNITEES or IFS INDEMNITEES’ subcontractors) or their employees, agents or invitees.|

D. All risks associated with loss of or damage to property of IFS INDEMNITEES or IFS INDEMNITEES’ subcontractors while in the custody and control of CUSTOMER or during transportation arranged by or controlled by CUSTOMER shall be borne by CUSTOMER.

E. Notwithstanding anything contained in this Agreement to the contrary, CUSTOMER, to the maximum extent permitted under applicable law, shall release, indemnify, defend and hold IFS INDEMNITEES and IFS INDEMNITEES’ subcontractors harmless from and against all Claims asserted by or in favor of any person or party, including IFS INDEMNITEES, CUSTOMER INDEMNITEES or any other person or party, resulting from: 

(i) loss of or damage to any well or hole (including but not limited to the costs of re-drill),
(ii) blowout, fire, explosion, cratering or any uncontrolled well condition (including but not limited to the costs to control a wild well and the removal of debris),
(iii) damage to any reservoir, geological formation or underground strata or the loss of oil, water or gas there from,
(iv) the use of IFS INDEMNITEES’ or IFS INDEMNITEES’ subcontractors’ radioactive tools or any contamination resulting there from (including but not limited to retrieval or containment or clean-up),
(v) pollution or contamination of any kind (other than surface spillage of fuels, lubricants, rig sewage or garbage, to the extent attributable to the negligence of IFS INDEMNITEES) including but not limited to the cost of control, removal and clean-up or
(vi) damage to, or escape of any substance from, any pipeline, vessel or storage facility.

F. Neither party shall be liable to the other for any indirect, special, punitive, exemplary or consequential damages or losses (whether foreseeable or not at the date of this Agreement), including without limitation damages for lost production, lost revenue, lost product, lost profit, lost business or lost business opportunities. 

G. THE EXCLUSIONS OF LIABILITY, RELEASE AND INDEMNITIES SET FORTH IN PARAGRAPHS B. THROUGH F. OF THIS ARTICLE 5. SHALL APPLY TO ANY CLAIM(S), LOSSES OR DAMAGES WITHOUT REGARD TO THE CAUSE(S) THEREOF INCLUDING BUT NOT LIMITED TO PRE-EXISTING CONDITIONS, WHETHER SUCH CONDITIONS BE PATENT OR LATENT, THE UNSEAWORTHINESS OF ANY VESSEL OR VESSELS, IMPERFECTION OF MATERIAL, DEFECT OR FAILURE OF PRODUCTS OR EQUIPMENT, BREACH OF REPRSENTATION OR WARRANTY (EXPRESS OR IMPLIED), ULTRAHAZARDOUS ACTIVITY, STRICT LIABILITY, TORT, BREACH OF CONTRACT, BREACH OF DUTY (STATUTORY OR OTHERWISE), BREACH OF ANY SAFETY REQUIREMENT OR REGULATION, OR THE NEGLIGENCE OR OTHER LEGAL FAULT OR RESPONSIBILITY OF ANY PERSON (INCLUDING THE INDEMNIFIED OR RELEASED PARTY), WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, ACTIVE OR PASSIVE.

H. REDRESS UNDER THE INDEMNITY PROVISIONS SET FORTH IN THIS ARTICLE 5. SHALL BE THE EXCLUSIVE REMEDY(-IES) AVAILABLE TO THE PARTIES HERETO FOR THE MATTERS, CLAIMS, DAMAGES AND LOSSES COVERED BY SUCH PROVISIONS.

 

6. CUSTOMER WARRANTY/BINDING AUTHORITY.

If CUSTOMER is not the sole owner of the mineral interests, the well or the field, CUSTOMER’s request for Services or Products shall constitute CUSTOMER’s warranty that CUSTOMER is the duly constituted agent of each and every owner and has full authority to represent the interests of the same with respect to all decisions taken throughout the provision of any Services or Products hereunder. 

CUSTOMER will defend, release, indemnify and hold IFS INDEMNITEES harmless from and against all Claims resulting from the allegation by any person that CUSTOMER misrepresented or lacked sufficient authority to represent such person as warranted by CUSTOMER in this Article. 

7. ACCESS TO WELL AND STORAGE.

 With respect to onshore and offshore operations, CUSTOMER shall provide at its expense adequate means of transportation required for Products and IFS personnel to gain access to or return from a well site, and shall obtain at CUSTOMER’s sole cost and expense all permits, license and other authorization required by IFS to enter upon work areas for the purposes contemplated.  When necessary to repair roads or bridges, or to provide transportation to move Products or IFS personnel, such shall be arranged and paid for by CUSTOMER. 

 

8. WARRANTY.

A. Services: 
IFS warrants that the Services to be provided by IFS pursuant to this Agreement shall conform to the material aspects or the specifications set forth in the relevant scope of work document agreed to in writing by IFS and CUSTOMER.  In the event that the Services fail to conform to such specifications, IFS shall re-perform that part of the non-conforming Services, provided IFS is notified there by CUSTOMER prior to IFS’ departure from the work site.

B. Commodity Fluid Products:  
IFS warrants that the Products (other than Specialty Fluid Products, including FLC 2000®, and LCP 2000®) to be provided by IFS pursuant to this Agreement shall conform to IFS’s then published specifications or the specifications agreed to in writing by IFS and CUSTOMER.  If any of the Products fail to conform to such specifications upon inspection by IFS, IFS, at its option, shall replace the non-conforming Products with the type originally furnished or issue credit to the CUSTOMER, provided IFS is notified thereof in writing within thirty (30) days after delivery of the particular Products.

C. Specialty Chemical Products, Including FLC 2000® and LCP 2000®: 
IFS warrants that the specialty chemical products to be provided by IFS pursuant to this Agreement shall, upon its departure from IFS’s point of origin, conform to the published physical and chemical specifications established by IFS for each such product.  If any of the specialty chemical products fail to conform to such specifications, IFS, at its option, shall replace the non-conforming specialty chemical products with the type originally furnished or issue credit to the CUSTOMER, provided IFS is notified thereof in writing within thirty (30) days after the specialty chemical products depart IFS’ point of origin.

D. Specialty Products: 
In the event IFS is to provide Products to CUSTOMER based upon CUSTOMER’s specific request that IFS develop, manufacture, test or put to use Products that are intended to satisfy a unique need identified by CUSTOMER and are not “standard” Products of IFS (“Specialty Products”), CUSTOMER hereby recognizes and agrees that the Specialty products being provided do not, necessarily, have or contain the same or similar characteristics as IFS’ “standard” Products, including, but not limited to, a historical performance against which future performance can be measured.  In developing, manufacturing, testing and putting to use any Specialty Products, IFS will be relying upon information and specifications provided by CUSTOMER relating to the unique needs to CUSTOMER.  As such, IFS shall have no responsibility for the design, manufacture or engineering of any such Specialty Products, or for any CUSTOMER-furnished materials, information and specifications.  If any of the Specialty Products fail to meet the specifications provided by CUSTOMER upon inspection by IFS, IFS shall, at its option, repair or replace the non-conforming Specialty Products with (i) the type originally furnished to CUSTOMER, or (ii) substituted Products having IFS’ “standard” specifications and qualifications.

E. Limitation on Warranty 
IFS’ warranty obligations hereunder shall not apply if the non-conformity was caused by (i) CUSTOMER’s failure to properly store or maintain the Products, (ii) abnormal well conditions, abrasive materials, corrosion due to aggressive fluids or incorrect specifications provided by CUSTOMER, (iii) unauthorized alteration or repair of the Products by CUSTOMER, (iv) the Products are lost or damaged while on CUSTOMER’s site due to CUSTOMER’s or any third party’s negligence, vandalism or force majeure (including, but not limited to, lightening), or (v) use or handling of the Products  by CUSTOMER in a manner inconsistent with IFS’ recommendations.  Further, IFS’ warranty obligations under this Article 9 shall terminate if (i) CUSTOMER fails to perform its obligations under this or any other Agreement between the parties, or (ii) CUSTOMER fails to pay any charges due IFS. 

All non-conforming Products shall be delivered to the service facility designated by IFS.  All transportation charges related to the repair or replacement of non-conforming Products shall be borne by CUSTOMER.  With regard to materials or equipment furnished by third party vendors and/or suppliers, IFS’ liability therefore shall be limited to the assignment of such third party vendor’s or supplier’s warranty to CUSTOMER, to the extent such warranties are assignable.

Interpretations, research, analysis, recommendations, advice or interpretational data (“Interpretations and/or Recommendations”) furnished by IFS hereunder are opinions based upon inferences from measurements, empirical relationships and assumptions, and industry practice, which inferences, assumptions and practices are not infallible, and with respect to which professional geologists, engineers, drilling consultants, and analysts may differ.  Accordingly, IFS does not warrant the accuracy, correctness, or completeness of any such Interpretations and/or Recommendations, or that CUSTOMER’s reliance or any third party’s reliance on such Interpretations and/or Recommendations will accomplish any particular results.  CUSTOMER assumes full responsibility for the use of such Interpretations and/or Recommendations and for all decisions based thereon (including without limitation decisions based on any oil and gas evaluations, production forecasts and reserve estimates, furnished by IFS to CUSTOMER hereunder), and CUSTOMER hereby agrees to release, defend and indemnify IFS from any Claims arising out of the use of such Interpretations and/or Recommendations 

THIS ARTICLE 9 SETS FORTH CUSTOMERS’ SOLE REMEDY AND IFS’ ONLY OBLIGATION WITH REGARD TO NON-CONFORMING SERVICES, EQUIPMENT OR PRODUCTS.  EXCEPT AS IS OTHERWISE EXPRESSLY PROVIDED PURSUANT TO THE PROVISIONS OF THIS ARTICLE 9, IFS MAKES NO WARRANTY OR GUARANTEE OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING NO IMPLIED WARRANTY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, REGARDING ANY SERVICES PERFORMED OR EQUIPMENT OR PRODUCTS SUPPLIED BY IFS HEREUNDER.

 

9. CHANGE OF DESIGN.

IFS expressly reserve the right to change or modify the design of any of its Products without obligation to furnish or install such changes or modifications on Products previously or subsequently sold.

10. PATENTS.

IFS warrants that the use or sale of  Products hereunder will not infringe patents of others by reason of the use or sale of such Products per se, and hereby agrees to hold CUSTOMER harmless against judgment for damages for infringement of any such patent, provided that CUSTOMER shall promptly notify IFS in writing upon receipt of any claim for infringement, or upon the filing of any such suit for infringement, whichever first occurs, and shall afford IFS full opportunity, at IFS’ option and expense, to answer such claim or threat of suit, assume the control of the defense of such suit, and settle or compromise same in any way IFS sees fit. 

IFS does not warrant that such  Products: (a) will not infringe any such patent when not of IFS’ manufacture, or specially made, in whole or in part, to the CUSTOMER’s design specifications; or (b) if used or sold in combination with other materials or apparatus or used in the practice of processes, will not, as a result of such combination or use, infringe any such patent, and IFS shall not be liable and does not indemnify CUSTOMER for damages or losses of any nature whatsoever resulting from actual or alleged patent infringement arising pursuant to (a) and (b) above.  THIS PARAGRAPH STATES THE ENTIRE RESPONSIBILITY OF IFS CONCERNING PATENT INFRINGEMENT. 

 

11. CONFIDENTIALITY.

Each party shall maintain all data and information obtained from the other party in strict confidence, subject only to disclosure required by law or legal process. 

In the event that IFS owns copyrights to, patents to, or has filed patent application on, any technology related to the Services, Products or patents to, or has filed patent applications on, any technology related to the Services or Products furnished by IFS hereunder, and if IFS makes any improvements on such technology, then such improvements shall not fall within the confidentiality obligations included herein, and IFS shall own all such improvements, including drawings, specifications, calculations and other documents. 

The design, construction, application and operation of IFS’ Services and Products embody proprietary and confidential information. CUSTOMER shall maintain this information in strict confidence and shall not disclose it to others, subject only to disclosure required by law or legal process.

12. LIENS, ATTACHMENTS AND ENCUMBRANCES.

 Should CUSTOMER commit a material breach of any terms and conditions of this Agreement, become bankrupt, insolvent, go into receivership or should any creditor or other person attach or levy Customer’s property or equipment, IFS shall immediately have the right, without notice and without liability for trespass or damages, to retake and remove any of its Products wherever it may be found. CUSTOMER shall release, defend, indemnify and hold IFS Indemnities harmless from any and al liens and encumbrances against Products or Equipment furnished hereunder and shall return same promptly to IFS free of any liens or encumbrances.

 

13. FORCE MAJEURE.

If either party is unable by reason of Force Majeure to carry out any of its obligations under this Agreement, other than obligations to pay money, then on such party giving notice and particulars in writing to the other party within a reasonable time after the occurrence of the cause relied upon, such obligations shall be suspended.  “Force Majeure” shall include acts of God, laws and regulations, government action, war, civil disturbances, strikes and labor problems, delays of vendors or carriers, lightening, fire, flood, washout, storm, breakage or accident to equipment or machinery, shortage of raw materials, and any other causes that are not reasonably within the control of the party so affected. 

 

14. INDEPENDENT CONTRACTOR.

 It is expressly understood that IFS is an independent contractor, and that neither IFS nor its principals, partners, employees or subcontractors are servants, agents or employees of CUSTOMER. 

In all cases where IFS’ employees (defined to include IFS’ and its subcontractors’ direct, borrowed, special, or statutory employees) are covered by the Louisiana Workers’ Compensation Act, La. R.S. 23:102 et seq., IFS and CUSTOMER agree that all Services and Products provided by IFS and IFS’ employees pursuant to this Agreement are an integral part of and are essential to the ability of CUSTOMER to generate CUSTOMER’S goods, products, and services for the propose of La. R.S. 12:106(A)(1).  Further, IFS and CUSTOMER agree that CUSTOMER is the statutory employer of IFS’ employees for purposes of La. R.S. 23:1061(A)(3).

 

15. LAWS AND REGULATIONS.

IFS and CUSTOMER agree to be subject to all laws, rules, regulations and decrees of any governmental or regulatory body having jurisdiction over the Services or Products to be provided by IFS or the work site or that may otherwise be applicable to IFS’ or CUSTOMER’S performance under this Agreement.

 

16. GOVERNING LAW.

 NOTWITHSTANDING ARTICLE 16:

THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, EXCLUDING CONFLICTS OF LAW AND CHOICE OF LAW PRINCIPLES.

 

17. MEDIATION/ARBITRATION.

A. The parties will attempt to resolve any dispute, controversy, or claim (a “Dispute”) between or among them arising out of this Agreement from Services or Products provided, or to be provided, by IFS in a spirit of cooperation.  Accordingly, the parties agree to engage in good faith negotiations to reach a rapid and equitable solution.  If the parties are unable to resolve a dispute through direct negotiation, the Dispute shall be referred to and determined by binding arbitration, as the sole and exclusive remedy of the parties as to the Dispute, conducted in accordance with the American Arbitration Association (“AAA”) arbitration rules for commercial disputes, as in effect on the date hereof (the “Rules”), which are deemed to be incorporated by reference, and the Federal Arbitration Act (Title 9 of the United States Code), except that in the event of any conflict between those Rules and the arbitration provisions set forth below, the provisions set forth below shall govern and control.

B. The arbitral tribunal (the “Tribunal) shall use the substantive laws of the STATE OF TEXAS, excluding conflicts laws and choice of law principles, in construing and interpreting this Agreement, and direct the Tribunal to respect the parties’ selection of the law governing the interpretation of this Agreement.

C. The Tribunal shall be composed of three arbitrators, with each party appointing one arbitrator, and the two arbitrators so appointed appointing the third arbitrator who shall act as Chairman of the Tribunal.  Should any arbitrator fail to be appointed, as aforesaid, then such arbitrator shall be appointed by the AAA in accordance with the Rules.  Should a vacancy in the Tribunal arise because any arbitrator dies, resigns, refuses to act, or becomes incapable of performing his function, the vacancy shall be filled by the method by which that arbitrator was originally appointed.  The language of the arbitration, the submission of all writings, the decision of the Tribunal, and the reasons supporting such decision, shall be in English.  The arbitration shall be in Houston, Texas, and the proceedings shall be conducted and concluded as soon as reasonably practicable, based upon the schedule established by the Tribunal, but in any event the decision of the Tribunal shall be rendered within one hundred twenty (120) days following the selection of the Chairman of the Tribunal.

D. Any decision of the Tribunal shall be made by the majority of the arbitrators comprising the Tribunal.  No award shall be made for punitive special, exemplary, indirect or consequential damages to loses, including loss of profits or loss of business opportunity.  Any monetary award shall be made in U.S. Dollars, free of any tax or other deduction.  The decision of the tribunal pursuant hereto shall be final and binding upon the parties and shall be enforceable in accordance with The New York Convention of the Recognition and Enforcement of Foreign Arbitral Awards (1958).

E. It is the desire of the parties that any Dispute is resolved quickly and at the lowest possible cost, and the Tribunal shall act in a manner consistent with these intentions, including limiting discovery to only that which is absolutely necessary to enable the Tribunal to render a fair decision which reflects the parties’ intent set forth in this Agreement.

 

18. ASSIGNMENT. 

IFS shall have the right to assign this Agreement to any of its subsidiaries, affiliated or related companies without the consent of CUSTOMER.

 

19. GENERAL.

Failure of CUSTOMER or IFS to enforce any of the terms and conditions of this Agreement shall not prevent a subsequent enforcement of such terms and conditions or be deemed a waiver of any subsequent breach. 

Should any provision of this Agreement, or a portion thereof, be unenforceable or in conflict with governing country, state, province, or local laws, then the validity of the remaining provisions, and portions thereof, shall not be affected by such unenforceability or conflict, and this Agreement shall be construed as if such provisions, or portion thereof, were not contained herein. 

This Agreement contains all representations of the parties and supersedes all prior oral or written agreements or representations.  CUSTOMER acknowledges that it has not relied on any representations other than those contained in this Agreement.  This Agreement shall not be varied, supplemented, qualified, or interpreted by any prior course of dealing between the parties or by any usage of trade and may only be amended by an agreement executed by both parties.