SFC Energy, Inc - Standard Terms and Conditions of Sale

Stand: Date: 10/10/2011

1. Applicable Contract Provisions

These standard Terms and Conditions of Sale, together with any other documents which SFC Energy, Inc. (“SFC”) has executed and which are specifically referenced as part of the contract with Buyer (excepting Buyer Purchase Orders, which are not part of the agreement between SFC and Buyer as discussed below) shall constitute the entire agreement between SFC and Buyer regarding the purchase of goods from SFC (the “Products”) and supersede all other agreements and understandings, whether written or oral, between the parties with respect to the purchase of the Products. SFC’s acceptance of any offer by Buyer is expressly made conditional upon Buyer’s assent to these Terms and Conditions of Sale, and none of Buyer’s additional or different terms (such as, for example, Buyer Purchase Orders) shall apply and are hereby expressly rejected. Acceptance of SFC’s offer to sell is expressly limited to acceptance of these Terms and Conditions of Sale, and no other terms or conditions shall apply unless expressly agreed to by SFC in writing. No terms and conditions on the Buyer’s Purchase Orders shall form a portion of the agreement between SFC and Buyer and all such terms and conditions are hereby expressly rejected, notwithstanding the fact that the Purchase Order may be signed by SFC.

2. Purchase Price and Terms of Payment

a. Price

The price for standard Products shall be the price agreed upon between SFC and Buyer in written form in effect on SFC’s price list as of the date of delivery requested by Buyer. Typographical errors in stated product prices are subject to correction. The price for custom Products shall be the price set forth in SFC’s proposal or quotation delivered to Buyer. The prices set forth in the proposal or quotation shall be in effect only for the time period or for the quantity of Products set forth in the proposal or quotation. Quotations are valid for thirty (30) days unless otherwise stated in the quotation or otherwise agreed to in writing by SFC. All prices, including prices for Products subject to a purchase order submitted by Buyer and accepted by SFC but not yet delivered, shall be subject to change if any raw material costs relating to the manufacture of the Products increases due to any event beyond the reasonable control of SFC.

b. Payment Terms

Payment terms shall be on a C.O.D. or pre-pay basis unless and until such time as SFC has extended credit to Buyer as set forth in a separate writing. Such credit terms shall be as set forth in the written credit agreement, including any limitations on Buyer’s credit limit. If Buyer fails to make any payment when due, SFC shall have the right to return Buyer to a C.O.D. or pre-pay basis for any purchase orders not yet completed at the time of such non-payment. Discounts apply to material only (freight & tooling not included).

c. Shipping, Insurance and Taxes

All prices are quoted: (i) ExWorks (Origin) Seller’s location if the location of requested delivery is in the United States, or (ii) FCA (as such term is defined in Incoterms 2000, published by the International Chamber of Commerce) Seller’s location if the location of requested delivery is outside of the United States. Except as otherwise required by applicable law, Buyer agrees to pay any federal, state or local sales or use tax or value-added tax, which may be imposed upon the Products, ordered by Buyer from SFC.

d. Buyer’s Financial Condition; Insecurity

If, in SFC’s sole judgment, Buyer’s financial condition or any other circumstance causes SFC to be insecure with respect to Buyer’s performance of any obligation under any purchase order for the Products, SFC may (without liability to Buyer for such actions) accelerate and demand immediate payment of any amounts owed SFC, cancel the purchase order or suspend performance.

e. Late Payment Fee/Collection Costs

Any amounts not paid when due will be subject to a late payment fee computed daily at a rate equal to the lesser of one and a half percent (1.5%) per month or the highest rate permissible under applicable state usury or open account law. In addition, Buyer shall be liable to SFC for all costs incurred by SFC in its collection of any amounts owed by Buyer which are not paid when due, including collection agencies’ and attorneys' fees and expenses, regardless whether an actual lawsuit is commenced.

3. Shipment and Delivery Terms

a. Shipment

Seller will package the Products for domestic or international shipment, as the case may be, in accordance with standard commercial practices. SFC shall use FEDEX transportation as the carrier, unless otherwise agreed to in writing. The carrier shall be deemed to be the agent of Buyer and Buyer shall make all claims with respect to damage in transit against the responsible carrier and shall bear all risk of loss or damage after SFC delivers the product to the carrier, as set out below.

b. Fuel Shipment

SFC may choose in its sole discretion other carriers than FEDEX for delivery of Fuel from other locations than Maryland.

c. Title to Products, Risk of Loss

All risk of loss concerning the Products shall pass to Buyer upon delivery to a common carrier, or to any private carrier designated by Buyer, for shipment to Buyer. Buyer’s rejection of any Products shall not shift such risk until the Products are returned to SFC, freight prepaid, pursuant to SFC’s written authorization. Title to the Products shall pass on to Buyer only upon receipt of full payment at SFC INC.

d. Delivery Schedule

SFC shall review its material availability, process capabilities and production capacity within 72 hours of receiving a purchase order. SFC will communicate the reasonably practicable ship date to Buyer and confirm such date via its order acknowledgment. Such delivery dates are estimates only based on prevailing conditions as of the date thereof, and SFC’s failure to meet the same shall not be deemed a breach of any purchase order or other agreement with Buyer.

e. Force Majeure

SFC shall not be liable to Buyer for any delay or failure of delivery or of any other performance issue caused in whole or in part by any circumstance beyond SFC’s reasonable control, including, without limitation, acts of God, flood, fire, acts of any government or any agency or subdivision thereof, acts of terrorism, civil disturbance, crime, or shortage of or inability to secure labor, fuel, energy, raw materials, supplies or machinery at reasonable prices or from regular sources. SFC shall have the right to allocate Products between its various customers during a period of shortages without incurring any liability whatsoever to Buyer for delays or incomplete deliveries in connection therewith.

f. Inspection and Acceptance

Buyer shall inspect all Products upon arrival and shall notify SFC in writing within ten (10) calendar days after receipt of any shortages, nonconformance with the purchase order or any other failures to conform to this Agreement which are reasonably discoverable upon arrival. Any shortages and other discoverable non-conformance or other failures of performance under this Agreement not reported within such ten (10) day period shall be forever waived by Buyer.

g. Cancellation or Modification of Order

A purchase order cannot be cancelled or modified after Buyer’s acceptance of SFC’s delivery of product to the carrier or after the Products become work in process, whichever occurs first, provided that Buyer shall be fully responsible for all damages incurred by SFC due to such cancellation or modification.

h. Return of Products

Buyer may not return any Products without specific prior written authorization from an authorized representative of SFC and the issuance of a Return Material Authorization (RMA) number. In the case of a return made at the convenience of Buyer, Buyer shall pay all freight costs incurred in returning the Product to SFC’s facility and a restocking fee equal to fifteen percent (15%) of the invoice price of the returned Product. Only standard Products of SFC will be subject for return and all returned Product must be received by SFC in saleable condition. All risk of loss and damage during shipment for any Product being returned shall be that of Buyer.

4. Limitations of Warranties, Disclaimer of Warranties

a. Sole and Exclusive Limited Warranty

SFC warrants to Buyer that the Products sold under this Agreement shall conform to the written specifications created or approved by SFC at the time and point of delivery. The exclusive remedy for Buyer as to breach of such warranty shall be, at SFC's option, to either (i) replace the defective Product at no cost to Buyer or (ii) refund the purchase price of the defective Product paid by Buyer. Buyer shall promptly notify SFC in writing of any alleged breaches of this warranty. Buyer shall not return to SFC any alleged defective Product, or take any credits against its Product invoices for such alleged defective Product, without the prior written authorization of SFC. The Buyer loses any possible claims when, for example (by way of illustration and not by way of limitation,) (i.) operating instructions and warnings delivered with the products are not followed by the Customer or its customer; or (ii.) the product delivered is handled or stored improperly; or (iii.) the Customer uses SFC’s product together with other components, substances or materials in a way that is contrary to the documentation from SFC; or (iv.) the Customer or unauthorised third party has tampered with the goods delivered or undertaken changes to them.

b. Disclaimer of Warranty

EXCEPT AS EXPRESSLY PROVIDED IN SECTION 4(a) ABOVE, SFC MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS, WHETHER AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE, OR ANY OTHER MATTER, ANY AND ALL OF SUCH WARRANTIES HEREBY BEING FULLY AND EXPRESSLY DISCLAIMED BY SFC. No employee or representative of SFC shall have any authority to bind SFC to any warranty or representation, except as expressly stated herein. Buyer shall be exclusively responsible for any warranty, representation or refund policy which Buyer or its employees, agents or representatives may make to its customers regarding the Products and Buyer agrees not to make any such warranties beyond the limits of the 4(a) warranty above.

5. Default; Non Waiver

In the event of any default by Buyer, SFC may, in addition to any and all other remedies provided by law, proceed in any one or more of the following ways: (a) suspend in transit any shipment of products to Buyer; (b) decline to make further shipments; (c) postpone any further performance under any agreement with Buyer until such default is corrected; (d) immediately cancel any open purchase order or other agreement with Buyer; (e) declare all amounts owed by Buyer under any purchase order or any other agreement with Buyer to be due and payable immediately; or (f) exercise all rights of a secured party, Buyer hereby expressly granting to SFC a security interest in any Buyer-ordered product for such purpose. If SFC elects to repossess any Product, Buyer shall permit SFC, with or without legal process, to enter all premises where the Products are located to remove or take possession of the same. Ten (10) calendar days advance notice of any intended disposition of repossessed Products shall be deemed reasonable.



7. General Provisions

a. Payment of Undisputed Invoices

Buyer will pay invoices rendered by SFC covering Products not in dispute regardless of disputes relating to other invoices. Buyer waives the right to assert offsets or counter claims with respect to such invoices.

b. Assignment/Binding Nature


c. Modification and Waiver

No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in writing signed by an officer of Buyer and an officer of SFC (except that Buyer Purchase Orders may not, even if signed by Buyer and SFC, alter any term or provision hereof, all terms and conditions on such Purchase Order being void and of no force or effect.) Any mutually agreed to waiver must be in writing signed by officers of Buyer and SFC, such writing not being a Buyer Purchase Order, and shall be limited to the circumstance or event specifically referenced in the written waiver document and shall not be deemed a waiver of any other term of this Agreement or of the same circumstance or event upon any recurrence thereof. The failure of SFC to enforce any provision contained herein at any time shall not be construed to be a waiver of such provision nor of the right of SFC thereafter to enforce such provision.

d. Severability

If any provision hereof is held to be unenforceable by final order of any court of competent jurisdiction, such provision shall be severed from the applicable purchase order(s) and shall not affect the interpretation or enforceability of the remaining provisions hereof.

e. Notices

All notices required or permitted to be given hereunder shall be in writing in the English language and shall be deemed to have been duly delivered (i) when received, if hand delivered, (ii) the next business day after placement with a reputable express delivery service for delivery during the morning of the following business day, or (iii) three (3) days after deposit in the U.S. mails for delivery by certified or registered mail, return receipt requested, postage prepaid and addressed to the appropriate party at the addresses set forth on the first page hereof. However, if the notice is being sent to or from a party located outside of the United States of America, such notices shall be deemed to be duly delivered (i) when received, if hand delivered, (ii) three (3) business days after placement with a reputable international express delivery service for immediate delivery or (iii) ten (10) days after deposit in the mails for registered, airmail delivery, return receipt requested, postage prepaid and addressed to the appropriate party at the addresses provided on the purchase order. All notices to SFC shall be delivered to the attention of the President. Addresses may be changed by giving written notice to the other party pursuant to the terms hereof, but any such change shall not be effective until actually received.

f. Applicable Law and Jurisdiction

This Agreement shall be interpreted and governed by the laws of the State of Georgia, USA, without application of or reference to its conflict of law provisions. The U. N. Convention on Contracts for the International Sale of Goods shall not apply to any purchase orders submitted by Buyer. Any and all disputes relating to the purchase of the Products by Buyer, the interpretation, execution, or enforcement of these Standard Terms and Conditions of Sale and related purchase orders arising from the dealings between Buyer and Seller, or among Buyer, Seller and/or customers of the Products or other third parties relating to the Products, shall be dealt with under the exclusive jurisdiction and venue of the state and federal courts located in the State of Maryland, USA, to the exclusion of all other courts. Each party expressly agrees to submit to the jurisdiction of such courts.