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SECTION 1:
THE CONTRACT The Contract shall be
comprised of the following terms, together with such terms and conditions
as are set forth in Seller's written proposal or quotation (the
"Quotation"), including any documents, drawings or specifications
incorporated therein by reference, and any additional or different
terms proposed in Buyer's purchase order (the "Purchase Order")
that are accepted by Seller in writing, which together shall constitute
the entire agreement between the parties, provided, however, that
preprinted terms on Buyer's purchase order or invoice shall not
apply and Seller gives notice of objection to such terms. An offer
by Seller in its Quotation that does not stipulate an acceptance
date is not binding. This Contract shall be deemed to have been
entered into upon written acknowledgment of the Purchase Order by
an officer or authorized representative of Seller, which may not
be modified, supplemented, or waived except in a writing executed
by an authorized representative of the party to be bound.
SECTION 2: PRICE The price quoted in the Quotation
shall be the Purchase Price unless otherwise agreed in the Purchase
Order. The Purchase Price for equipment shall include packing for
shipment. Field Services shall be provided at Seller's standard
rates. All other costs, including packing for storage, freight,
insurance, taxes, customs duties and import/export fees, or any
other item not specified in the Contract, shall be paid by Buyer
unless separately stated in the Quotation and included in the price
quoted. Any sales, use, or other taxes and duties imposed on the
transaction or the equipment supplied shall be paid or reimbursed
by Buyer.
SECTION 3: PAYMENT TERMS Payment shall be due
within 30 days of the date of Seller's invoice in U.S. funds unless
otherwise agreed. If Buyer does not observe the agreed dates of
payment, Buyer shall pay interest to Seller on overdue amounts at
a rate that is the higher of: 9% per annum or a rate 5% in excess
of the rate borne from time to time by new issues of six-month United
States Treasury bills. Seller shall be entitled to issue its invoice
for the Purchase Price for equipment upon the earlier of shipment,
or notice to Buyer that Seller is ready to ship, and for services,
upon completion. If the Purchase Price exceeds $250,000 USD, Buyer
shall pay the Purchase Price in progress payments as follows: 15%
upon delivery of general arrangement drawings, 35% after notice
to Buyer of delivery to Seller of major castings, 20% after notice
that machining is complete, and 30% upon notice that Seller is ready
to ship.
SECTION 4: ACCEPTANCE AND INSPECTION All equipment
shall be finally inspected and accepted by Buyer within 14 days
after delivery or such other period of time as is agreed in the
Purchase Order. Buyer shall make all claims (including claims for
shortages), excepting only those provided for under the warranty
clause contained herein, in writing within such 14 day period or
they are waived. Services shall be accepted upon completion. Buyer
shall not revoke its acceptance. Buyer may reject the equipment
only for defects that substantially impair its value, and Buyer's
remedy for lesser defects shall be in accordance with Section 10,
Warranty. If tests are made by Buyer to demonstrate the ability
of the equipment to operate under the contract conditions and to
fulfill the warranties in Section 10, Buyer is to make all preparations
and incur all expenses incidental to such tests. Seller will have
the right of representation at such tests at its expense, and the
right to technically direct the operation of the equipment during
such tests, including requiring a preliminary run for adjustments.
SECTION 5: TITLE AND RISK OF LOSS Full risk of
loss (including transportation delays and losses) shall pass to
Buyer upon delivery, regardless of whether title has passed to Buyer,
transport is arranged or supervised by Seller, or start-up is carried
out under the direction or supervision of Seller. Delivery shall
be ex works, INCOTERMS 2000. Loss or destruction of the equipment
or injury or damage to the equipment that occurs while the risk
of such loss or damage is borne by Buyer does not relieve Buyer
of its obligation to pay Seller for the equipment.
SECTION 6: PATENT OR TRADEMARK INFORMATION If
the equipment sold hereunder is to be prepared or manufactured according
to Buyer's specifications, Buyer shall indemnify Seller and hold
it harmless from any claims or liability for patent or trademark
infringement on account of the sale of such goods.
SECTION 7: CHANGES Buyer may request, in writing,
changes in the design, drawings, specifications, shipping instructions,
and shipment schedules of the equipment. As promptly as practicable
after receipt of such request, Seller will advise Buyer what amendments
to the Contract, if any, may be necessitated by such requested changes,
including but not limited to amendment of the Purchase Price, specifications,
shipment schedule, or date of delivery. Any changes agreed upon
by the parties shall be evidenced by a Change Order signed by both
parties.
SECTION 8: CANCELLATION OR TERMINATION Buyer shall
have the right to cancel the Contract upon 15 days' prior written
notice to Seller, and Seller shall stop its performance upon the
receipt of such notice except as otherwise agreed with Buyer. If
Buyer cancels the Contract, it shall pay: (a) the agreed unit price
for equipment or components completed and delivered, (b) additional
material and labor costs incurred, and for engineering services
supplied by Seller with respect to the canceled items, which shall
be charged to Buyer at Seller's rates in effect at the time of cancellation,
but which shall not exceed the contract price for such items, and
(c) such other costs and expenses, including cancellation charges
under subcontracts, as Seller may incur in connection with such
cancellation or termination.
SECTION 9: DELIVERY AND DELAYS Seller shall use
its best efforts to meet quoted delivery dates, which are estimated
based on conditions known at the time of quotation. Seller shall
not be liable for any nonperformance, loss, damage, or delay due
to war, riots, fire, flood, strikes or other labor difficulty, governmental
actions, acts of God, acts of the Buyer or its customer, delays
in transportation, inability to obtain necessary labor or materials
from usual sources, or other causes beyond the reasonable control
of Seller. In the event of delay in performance due to any such
cause, the date of delivery or time for completion will be extended
to reflect the length of time lost by reason of such delay. Seller
shall not be liable for any loss or damage to Buyer resulting from
any delay in delivery.
SECTION 10: WARRANTY Seller warrants that the
equipment or services supplied will be free from defects in material,
and workmanship for a period of 12 months from the date of initial
operation of the equipment, or 18 months from the date of shipment,
whichever shall first occur. In the case of spare or replacement
parts manufactured by Seller, the warranty period shall be for a
period of six months from shipment. Repairs shall be warranted for
12 months or, if the repair is performed under this warranty, for
the remainder of the original warranty period, whichever is less.
Buyer shall report any claimed defect in writing to Seller immediately
upon discovery and in any event, within the warranty period. Seller
shall, at its sole option, repair the equipment or furnish replacement
equipment or parts thereof, at the original delivery point. Seller
shall not be liable for costs of removal, reinstallation, or gaining
access. If Buyer or others repair, replace, or adjust equipment
or parts without Seller's prior written approval, Seller is relieved
of any further obligation to Buyer under this section with respect
to such equipment or parts. The repair or replacement of the equipment
or spare or replacement parts by Seller under this section shall
constitute Seller's sole obligation and Buyer's sole and exclusive
remedy for all claims of defects. SELLER MAKES NO OTHER WARRANTY
OR REPRESENTATION OF ANY KIND WITH RESPECT TO THE EQUIPMENT OR SERVICES
OTHER THAN AS SPECIFIED IN THIS SECTION 10. ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY
DISCLAIMED. For purposes of this Section, the equipment warranted
shall not include equipment, parts, and work not manufactured or
performed by Seller. With respect to such equipment, parts, or work,
Seller's only obligation shall be to assign to Buyer any warranty
provided to Seller by the manufacturer or supplier providing such
equipment, parts or work. No equipment furnished by Seller shall
be deemed to be defective by reason of normal wear and tear, failure
to resist erosive or corrosive action of any fluid or gas, Buyer's
failure to properly store, install, operate or maintain the equipment
in accordance with good industry practices or specific recommendations
of Seller, or Buyer's failure to provide complete and accurate information
to Seller concerning the operational application of the equipment.
SECTION 11: TECHNICAL DOCUMENTS Technical documents
furnished by Seller to Buyer, such as drawings, descriptions, designs
and the like, shall be deemed provided to Buyer on a confidential
basis, shall remain Seller's exclusive property, shall not be provided
in any way to third parties, and shall only be used by Buyer for
purposes of installation, operation and maintenance. Technical documents
submitted in connection with a Quotation that does not result in
a Purchase Order shall be returned to Seller upon request.
SECTION 12: LIMITATION OF LIABILITY Seller shall
in no event be liable for any consequential, incidental, indirect,
special or punitive damages arising out of the Contract, or out
of any breach of any of its obligations hereunder, or out of any
defect in, or failure of, or malfunction of the equipment, including
but not limited to, claims based upon loss of use, lost profits
or revenue, interest, lost goodwill, work stoppage, impairment of
other equipment, environmental damage, nuclear incident, loss by
reason of shutdown or nonoperation, increased expenses of operation,
cost of purchase of replacement power or claims of Buyer or customers
of Buyer for service interruption whether or not such loss or damage
is based on contract, tort (including negligence and strict liability)
or otherwise. Seller's maximum liability under this Contract shall
not exceed the Purchase Order amount of the equipment or portion
thereof upon which such liability is based. All such liability shall
terminate expiration of the warranty period, if not sooner terminated.
SECTION 13: THIS COMPANY IS AN EQUAL OPPORTUNITY
EMPLOYER This agreement incorporates by reference applicable provisions
and requirements of Executive Order 11246 and FAR Section 52.222-26
(covering race, color, religion, sex and national origin); the Vietnam
Era Veterans Readjustment Assistance Act of 1974 and FAR Section
52.222-35 (covering special disabled and Vietnam era veterans);
and the Rehabilitation Act of 1973 and FAR Section 52.222-36 (covering
handicapped individuals). By acceptance of this agreement Buyer
certifies that it does not and will not maintain any facilities
in a segregated manner, or permit its employees to perform their
services at any location under its control where segregated facilities
are maintained, and further that appropriate physical facilities
are maintained for both sexes. Buyer agrees that it will obtain
a similar certificate prior to award of any nonexempt lower-tier
subcontracts.
SECTION 14: LAW AND ARBITRATION The Contract shall
be governed by the law of the State of Texas. Any disputes arising
out of this Contract shall be resolved by informal mediation in
any manner that the parties may agree within 45 days of written
request for mediation by one party to the other. Any dispute that
cannot be resolved through mediation shall be resolved by binding
arbitration conducted in English in Houston, Texas under the Commercial
Rules of the American Arbitration Association except as otherwise
provided in this Section. The arbitration shall be conducted by
three arbitrators chosen in accordance with said Rules. The arbitrators
are not entitled to award damages in excess of compensatory damages.
Judgment upon the award may be entered in any court having jurisdiction.
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