VictoryEnergy

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Terms and Conditions of Sale

DEFINITIONS
Where the context permits, the following words shall have the meanings indicated:
“Buyer” means the person, partnership, company, or corporation procuring the Products from the Company.
“Company” means Victory Energy Operations, LLC, a Delaware Corporation, or the subsidiaries and affiliates.
“Products” means all goods, materials, chattels, equipment, and machinery to be provided pursuant to this Order.
“Order” means Buyer’s purchase order or contract and documents and data referenced therein.

TERMS AND CONDITIONS
THE ORDER IS EXPRESSLY LIMITED TO ACCEPTANCE UPON THE TERMS AND CONDITIONS CONTAINED HEREIN.
A. PAYMENT
The Order is subject to progress billing in accordance with payment terms as stated therein.  Company may invoice for payment, upon verifiable completion of the milestones for the amounts specified therein.  In the absence of any payment terms, payment terms as stated within Company’s proposal shall apply.  The payment terms are Net 30 days from date of invoice.  Late payment(s) beyond the terms as stated within the Order or in the absence of the Order as stated herein shall extend the delivery of the Products as determined by the Company.
B. PAST DUE ACCOUNTS
A finance charge of the lesser of 1.5% per month (18% APR) or the highest rate permitted by law will be assessed on all past due accounts. The parties intend to comply with all relevant usury laws.  Should the finance charge paid exceed the legal limit, any excess will be deemed a payment of principal. An invoice is past due if the net amount is not paid within 30 days from date of invoice.  Interest charged on a past due invoice will be assessed from the date on which that invoice was due. The above charges will be billed on the date that the invoice becomes 30 days past due, and on each monthly period thereafter.
C. BREACH
In the event of failure of Buyer to make any payment to the Company when due, the Company shall be entitled, at its sole option, to; extend the shipment of the Products in proportion to the date payment is received by the Company or suspend shipment of any or all goods to such defaulting Buyer, whether or not the contract covering said goods has been accepted by the Company; cancel any contracts then outstanding for the sale of goods to such defaulting Buyer; and to the extent permitted by law receive all expenses incurred by it in the collection of said payment, including reasonable attorneys’ fees.
D. PRICES
Prices quoted by the company herein are firm for 30 days from the date of the quotation and are subject to adjustment as stated in the Company’s quotation.  After 30 days from the date of the quotation, all quoted prices are subject to change by the Company without prior notice to Buyer.  
E. CANCELLATION
This Order may be canceled by Buyer only upon (1) written notice to the Company subsequently accepted in writing by the Company and (2) payment to the Company of cancellation charges as determined by the Company to include overhead and profit.
F. TAXES AND CHARGES
Taxes are not included within the Order price unless expressly stated therein.
G. FREIGHT
Unless otherwise stated within Buyer’s Order, Company shall deliver the Products Ex-Works (EXW) Company’s manufacturing facility with loading allowed onto Buyers trailers.  Should Company be responsible for freight DDP jobsite, the following provisions shall apply:
Truck Shipments
All truck shipments are subject to route survey and permit approval and changes in routing required by government authorities.  All of the foregoing may require price and schedule adjustments.  Off loading of the boiler components is the responsibility of the Buyer, four (4) hours of free time for off loading of boiler components has been provided.  Additional time is subject to demurrage.
Rail Shipments
Rail shipments will be delivered to the nearest rail siding that the carrier can and will deliver and are subject to route survey and permit approval and changes in routing required by government authorities.  All of the foregoing may require price and schedule adjustments.  Buyer is responsible for off loading of the boiler components after delivery.  Upon delivery Buyer will be granted two (2) free days to allow for off loading of the boiler components.  Additional time is subject to demurrage at the prevailing rates.  Heavy duty rail car shipments are subject to demurrage and detention costs. 
H. SHIPPING DATES
The Products will be shipped in accordance with the shipping date(s) as stated within Order.  In the absence of such information the Products will be shipped in accordance with the dates specified within the Company’s proposal.  If delivery of the Products is delayed by Buyer, payment shall be made to Company upon completion of the Products or readiness to ship.
I. TRANSPORTATION RISK
Buyer assumes all risks of loss or damage upon the Company’s delivery of the Products in accordance Article G.
J. DELAYS IN DELIVERY
The Company shall not be liable for any delay or failure in the delivery or shipment of the Products, or for any damages suffered by reason thereof, in the event that such delay or failure is, or such damages are, directly or indirectly due to either accident in manufacture or otherwise, fire, flood, riot, war, embargo, labor stoppages, inadequate transportation facilities, shortage of materials or supplies, delay or default on the part of its vendors, regulation by any governmental authority, or any cause or causes beyond its control.
K. STORAGE
If shipment is delayed due to any cause within Buyer’s control, the Products may be placed in storage by the Company for Buyer’s account and risk, and regular charges therefore and expenses in connection therewith shall be paid by Buyer.  If, in the sole opinion of the Company, it is unable to obtain or continue such storage, Buyer will, on request, provide or arrange for suitable storage facilities and assume all cost and risk in connection therewith.
L. CLAIMS
The Company shall not be liable to Buyer for loss or damages to Products after of delivery.  Shortages or damage of Products must be brought to the attention of the carrier at the time of delivery and stated in writing on the delivery papers in Order to initiate a claim.
M. WARRANTIES
The Company warrants the Products to be free from defects in workmanship and material, under normal use and service the earlier of, 12 months from initial operation of the Products or 18 months from the date of shipment (the “Warranty Period”).  No warranty of any kind, express or implied, is extended by the Company.  This warranty does not cover the effects of normal wear, tear or deterioration of the Products; damages caused by improper treatment of feedwater and or/conditioning of boiler water, or the effects of abrasion, erosion, or corrosion; the effects of improper storage or erection; or abuse of the Products or operation or maintenance not in accordance with Company’s operating instructions.  If at any time prior to expiration of the Warranty Period, Buyer or Owner shall discover any defect or other failure of the Products, to conform to the Warranties, Company, upon written notice from Buyer, given within a reasonable time after discovery, shall correct the defect or nonconformity or replace the defective Product to comply with the Order requirements. Notwithstanding the foregoing, the Company’s obligation to correct or replace any defect or nonconformity shall only occur during the Warranty Period and no such corrections or replacements shall occur upon expiration of the Warranty Period.  Any defects or nonconformities not corrected or replaced during the Warranty Period shall be deemed accepted by Buyer.  Further, if the Company has not received prior written notification, then the Company shall not be responsible for any repairs, parts, equipment supplied by others unless the same was specifically ordered by the Company.  Any substitution of parts not provided by the Company or not authorized by the Company or modification, tampering, or manipulation of Company’s product shall void any and all Warranties.   Alteration of any parts without express written permission of the Company for a purpose other than that intended shall void any and all Warranties.  The warranty shall not be effective unless the Buyer has fully paid for the Products.
N. THERMAL PERFORMANCE
Performance tests shall be run within sixty (60) days of the date of initial operation of the Products not to exceed three (3) months from delivery of the Products or shall be deemed satisfied.  Satisfactory completion of performance tests satisfies Company’s obligation with respect to Product operation, and Company’s sole obligation is restricted to the material and workmanship warranty as stated within these terms.  Tests shall be conducted in accordance with the applicable ASME test code including measurement uncertainties for the equipment.
O. BACKCHARGES
In the event the Products furnished by the Company under this Order are found to be defective as to workmanship or materials in accordance with Paragraph M. Warranties, or not to be in conformance with the Order documents, Buyer will take reasonable measures to discover such noncompliance as quickly as practical and provide written notice to Company.  Company shall be allowed to correct the defect or nonconformity in accordance with the provisions of Paragraph M, Warranties but only to the extent such corrections are made during the Warranty Period.  
The accepted procedure for dealing with the resolution of field problems under Paragraph M. Warranties is as follows:
1) Buyer will provide written notice to Company of specific problem(s) and deficiencies before any corrective action is taken.
2) Company will initiate reasonable action to remedy the nonconformity.
3) In a timely manner, which is mutually agreeable to Buyer and Company, Company will either undertake the corrective work or Company  will authorize Buyer in writing to proceed with the rework at an agreed upon cost.
Final acceptance by Company of Buyer’s invoices, pursuant to paragraph 3) above, for corrective work performed by Buyer will be contingent upon proper documentation such as accurate time records, material invoices, etc.
P. CHANGES
This Order shall not be changed or otherwise modified except upon the prior written authorization of a duly authorized representative of Buyer and the Company.  Notwithstanding the foregoing, Buyer may, at any time, in writing, make changes within the general scope of the Order.  
Q. ASSIGNMENT
Any assignment of the rights accruing hereunder shall be void without the prior written consent of the Company.
R. WAIVER
The Company’s waiver of any breach by Buyer of any of the provisions of the Order shall not constitute a waiver of any other breach of the same or any other provision.  The Company’s rights and remedies under any provision of the Order shall be in addition to and not in substitution of any other rights and remedies available to the Company under applicable law.
S. GOVERNING LAW AND ARBITRATION
This Order is to be interpreted in accordance with, and its administration and performance governed by, the laws of the State of Oklahoma.  The parties hereto agree that Tulsa County, Oklahoma, shall be the exclusive forum for any cause of action filed in any court of law or equity arising out of the execution of or performance under this Order.  Notwithstanding the foregoing, in the event Buyer is located outside the United States of America and purchases Products pursuant to the terms hereof for use outside the United States of America, any dispute between such Buyer and the Company respecting the Products shall be finally resolved by arbitration in the English language in Tulsa, Oklahoma, Tulsa County, U.S.A. in accordance with the rules then obtaining of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.
T. SEVERABILITY
In the event that any provision contained herein is held to be invalid or unlawful, such provisions shall be severable from the remaining provisions of these terms and conditions shall remain in full force and effect.
U. CONFIDENTIAL AND PROPRIETARY INFORMATION
Buyer shall keep confidential any technical, process or information derived from drawings, specifications and other data furnished by the Company in connection with this Order and shall not divulge, directly or indirectly, such information for the benefit of any other party without obtaining Company’s prior written consent and shall maintain as secret such information except as otherwise provided herein.  
V. LIMIT OF LIABILITY
Company shall not be liable for any special, indirect, incidental or consequential damages or lost profit, whether arising under warranty, contract, negligence, strict liability, indemnification, or any other cause or combination of causes whatsoever.  Company’s liability for personal injury will be $1,000,000 and the limits for property damages will be $1,000,000. with an overall aggregate of $2,000,000.  All other liabilities will be limited to the Purchase Order value.  These limitations shall prevail over any conflicting or inconsistent provisions stated elsewhere.
W. INDEMNIFICATION
Buyer shall at all times indemnify, defend Company and their respective affiliates, employees, officers, directors, and agents harmless from and against any and all costs, liabilities, losses and expenses resulting from and against all claims for personal injury, property damage, wrongful death or other damages, losses, and expenses, including attorney’s fees arising out of, or resulting from, performance of the work or any services on behalf of the Buyer, whether commenced pursuant to this Order.   It is expressly understood and agreed that this obligation to completely indemnify, defend and hold harmless shall apply and be enforceable for all claims without regard to whether or not Buyer is claimed to be negligent or otherwise liable for any such damages, losses and expenses.
X. INDEPENDENT CONTRACTORS
Neither the Order nor any other  agreement made pursuant to or otherwise in connection with the Order shall be deemed to create or constitute a relationship of principle and agent, partnership, joint venture or business organization of any kind or nature whatsoever between Buyer and Company.

Y. SECURITY INTEREST IN THE PRODUCTS
To secure Buyer’s obligation in connection with this Order, Buyer hereby grants Company a continuing lien on and first priority purchase money security interest in all of Buyer’s right, title, and interest in and to the Products purchased under this Order (the “Collateral”) and any proceeds thereof.  Company’s security interest in the Collateral shall terminate upon full payment of the purchase price including any subsequent change orders and related charges.  If Buyer fails to pay amounts owed under the Order or otherwise breaches its obligations to Company hereunder, Company shall be entitled to foreclose on the Collateral and shall have all remedies available to secured parties under the Uniform Commercial Code in the State in which the Collateral is located.  Buyer authorizes Company to file in the appropriate records a financing statement and any continuation statement, as Company deems appropriate to perfect Company’s security interest in the Collateral, and to notify Buyer’s creditors of Company’s security interest.