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Credit Terms & Conditions

Mammoth | Energy

THESE TERMS AND CONDITIONS ARE THE TERMS AND CONDITIONS REFERENCED IN THE CONFIDENTIAL CREDIT APPLICATION, THE WORK ORDER AND THE FIELD TICKET AND ARE INCORPORATED THEREIN BY REFERENCE

TERMS AND CONDITIONS

 

  1. Agreement and Definitions: These Terms and Conditions (the “Terms”) apply to the furnishing of goods, wares, merchandise, supplies, and equipment of all types and descriptions (the “Equipment”) and related services (the “Services”), as described in the order or delivery ticket (each referred to as a “Work Order” or a “Field Ticket”). As used herein, (a) the term “Agreement” means collectively the confidential credit application provided by Contractor to Customer (the “Application”), these Terms, the Work Order and the Field Ticket, (b) the term “Customer” means the customer for which Contractor is providing the Services, (c) the term “Contractor” means the entity identified on the Work Order or Field Ticket as providing the Services for Customer, (d) the word “furnish” or any variation thereof includes the sale or rental of the Equipment to Customer by Contractor, (e) the term “Party” or “Parties” shall refer to Customer and Contractor, (f) the term “Contractor Group” means Contractor, its contractors and subcontractors, its affiliates, and the officers, directors, members, managers, employees, agents, consultants, servants and invitees of each of them, and (g) the term “Customer Group” means Customer, its joint venturers, partners, co-lessors, operators, non-operators, mineral or royalty owners, mineral lessors, surface owners, subsurface owner, adjoining surface or subsurface owner clients, and its and their contractors (other than Contractor) and affiliates, and the officers, directors, members, managers, employees, agents, consultants, servants and invitees of each of them. The Agreement constitutes the entire agreement of the Parties related to the furnishing of the Equipment and/or Services. The Agreement is effective upon the earlier to occur of Customer executing the Work Order or Field Ticket or the acceptance of the Equipment or Services, which acceptance shall constitute Customer’s agreement to these Terms. These Terms apply to and are incorporated by reference in, each Application, Work Order and Field Ticket.

    2. Worksite Conditions; Acceptance of Equipment:
    A: Customer acknowledges and agrees that above-surface conditions in and about the well site or worksite where the Equipment may be used or the Services provided (the “Worksite”) may be hazardous to persons and property, and that such subsurface and above-surface conditions are within the exclusive knowledge of and under the exclusive control of Customer, and that Contractor has not inspected, is not responsible for, has not created, and assumes no responsibility for such subsurface or above-surface conditions in and about the Worksite.

    B: The Parties acknowledge and agree that, upon receipt or custody of any furnished Equipment pursuant to Section A, Customer shall have exclusive control over such Equipment and shall retain exclusive and sole control over the Equipment and all parties using such Equipment until same is returned to Contractor’s facility identified in the applicable Work Order or Field Ticket and accepted by Contractor (the “Facility”). Customer acknowledges that Contractor is not the manufacturer or fabricator of any furnished Equipment. Customer shall not assign, sublease, pledge, mortgage, or encumber the Equipment or any interest therein. Customer shall not make any alteration to or modification of the Equipment, and shall not alter, deface, cover up or conceal any numbering, lettering, insignia, or labels displayed on the Equipment.

    C: Contractor represents and warrants that the Equipment shall conform to specifications set forth in the applicable Work Order or Field Ticket. Except as set forth in the preceding sentence, ALL SERVICES AND EQUIPMENT ARE PROVIDED AS-IS AND CONTRACTOR DISCLAIMS ANY AND ALL REPRESENTATIONS, WARRANTIES, COVENANTS, GUARANTEES AS TO ACCURACY, MERCHANTABILITY, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS, QUALITY OR FITNESS FOR A PARTICULAR PURPOSE AND THOSE ARISING BY STATUTE OR OTHERWISE, OR FROM A COURSE OF DEALING OR TRADE USAGE, EXPRESSED OR IMPLIED. NO ORAL STATEMENT OF ANY MEMBER OF CONTRACTOR GROUP SHALL CREATE A REPRESENTATION, WARRANTY, COVENANT, GUARANTEE AND/OR ASSURANCE. CUSTOMER’S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF WARRANTY UNDER THE AGREEMENT SHALL BE, AT THE OPTION OF CONTRACTOR, THE RE-PERFORMANCE, REPAIR OR REPLACEMENT OF THE DEFECTIVE SERVICES OR EQUIPMENT.

    D: ANY ASSISTANCE IN EQUIPMENT INSTALLATION OR TECHNICAL OR ENGINEERING INFORMATION CONCERNING EQUIPMENT OR SERVICES PROVIDED BY CONTRACTOR WILL BE ADVISORY ONLY, AT CUSTOMER’S SOLE COST AND ON AN “AS IS- WHERE IS,” BASIS. NO WARRANTY IS GIVEN WITH RESPECT TO SUCH SERVICES OR INFORMATION AND CONTRACTOR WILL NOT BE LIABLE FOR ANY LIABILITIES, LOSSES, CLAIMS, FINES, PENALTIES, DEMANDS, CAUSES OF ACTION, PROCEEDINGS, DAMAGES AND PENALTIES ARISING FROM ITS FURNISHING OR CUSTOMER’S USE OF SUCH ASSISTANCE OR INFORMATION.

3. Charges and Terms of Payment

A: Rent begins to accrue when the Equipment leaves the Facility and shall continue to accrue until the Equipment is returned to the Facility and is accepted by an authorized official of Contractor. Customer agrees to pay for the Equipment furnished and Services rendered at the rate described in the Work Order or Field Ticket (“Rent”). In addition, Customer shall be solely responsible for all sales taxes, transportation charges, drayage, demurrage, import duties, transfer fees, or documentation charges, all of which shall be paid by Customer in addition to the price set out in the Work Order or Field Ticket, and which, together with the Rent, is referred to herein as the “Charges.” Delivery of Equipment, unless otherwise provided in the Work Order or Field Ticket, is F.O.B. shipping point.

B: A ten percent (10%) service fee will be added to all transportation Charges billed through Contractor. Prices are subject to change without notice. Payment of all invoices are due within thirty (30) days after the date set forth on the applicable invoice provided by Contractor unless other arrangements have been agreed to in writing, and payable as set forth in the Work Order or Field Ticket or such other place or in such other manner as Contractor may designate in writing from time to time. Invoices are not subject to any setoff, defense, demands or claims Customer may have against Contractor or any third party, including, but not limited to, any affiliate of Contractor. The maximum legal rate of interest applicable in the state where the Equipment or Services are furnished shall accrue on all unpaid invoices commencing on the thirtieth day after the due date of the invoice or such later date as may be required by applicable law. If the invoice is not paid when due, and the account is placed in the hands of an attorney for collection, or suit is filed to collect the account, of any part thereof, Customer agrees to pay all costs related thereto (including attorneys’ fees) and ten percent (10%) of the amount due as collection costs. Notwithstanding anything to the contrary in the Agreement, in no event shall any interest or finance charges be permitted to exceed the amount of interest or finance charges permitted to be charged by law. CUSTOMER SHALL HAVE NO RIGHT OF OFFSET UNDER THE AGREEMENT, WHETHER AGAINST CONTRACTOR OR ANY AFFILIATE OF CONTRACTOR.

C: In addition to any statutory lien which may be available to secure any sums due hereunder, Customer grants an express lien upon Customer’s interest in the hydrocarbons, and the proceeds from the sale of such hydrocarbons, which may be produced from the well or wells to which Contractor furnished Services or Equipment pursuant to the Agreement, to secure sums due hereunder. The portion of any insurance proceeds payable to Customer which reimburses Customer for the loss, damage, or destruction of property furnished by Contractor are hereby assigned to Contractor.

4. Damaged or Lost Equipment

A: Customer assumes all risk of loss, destruction or damage to Equipment following delivery of the Equipment, which shall be deemed to have occurred when the Equipment leaves the Facility or is otherwise under the control (including during shipping and delivery) of Customer or any third party, and until the earlier to occur of (a) return of the Equipment to Contractor as specified in the applicable Work Order or Field Ticket and acceptance by Contractor, or (b) the date on which it is declared lost or damaged beyond repair, as reasonably determined by Contractor. Customer shall ensure no Equipment is subjected to careless or needlessly rough usage, and shall, at the Customer’s sole cost and expense, maintain and ultimately return the Equipment to the Contractor.

B: CUSTOMER WILL BE LIABLE FOR ALL LOSS OF OR DAMAGE TO THE

EQUIPMENT AND RELATED EXPENSES INCURRED, including, without limitation, as a result of any of the following circumstances: (1) loss or disappearance, (2) neglect, misuse, or abuse of the Equipment, except to the extent directly caused by Contractor, (3) theft, vandalism, malicious mischief or conversion, (4) all loss or damage to the Equipment resulting from any exposure or contamination of Equipment to any hazardous materials, including, without limitation, all costs and expenses related to the cleaning or decontamination of the Equipment, (5) all loss or damage of or to the Equipment resulting from the failure of the Customer to perform required maintenance, or (6) damages from paint overspray. A formal report must be filed with the applicable public authorities within 24 hours of all loss and damage associated with vandalism, malicious mischief, theft or conversion of the Equipment. A copy of such report must be forwarded to Contractor within 48 hours of the loss or damage.

C: In the event any Equipment is lost, misplaced, damaged beyond repair, or not returned for any reason, Charges shall continue to accrue daily on such Equipment until the date Customer gives written notice to Contractor of such event. With respect to any Equipment that is not returned to Contractor as required herein, or is otherwise damaged beyond repair, as determined by Contractor, Customer shall pay to Contractor the actual replacement cost for like new equipment, at which time Customer shall become the owner of such damaged or lost Equipment. Customer shall pay Contractor for the cost of repair of any damaged Equipment which is not damaged beyond repair, as determined by Contractor.

D: Customer shall not expose the Equipment to any hazardous material or waste. In the event the Equipment is exposed to any hazardous material or waste, Customer shall immediately (1) notify Contractor, (2) remove the Equipment from such exposure, and (3) completely clean and decontaminate the Equipment pursuant to current environmental standards and requirements and any and all applicable laws, rules or regulations. If the Equipment cannot be completely cleaned, decontaminated and otherwise discharged from all adverse effects of such exposure, Customer shall pay Contractor the actual replacement cost for like new equipment. CUSTOMER AGREES TO FULLY INDEMNIFY, DEFEND, AND HOLD CONTRACTOR GROUP HARMLESS FROM ANY AND ALL CLAIMS, ACTIONS, EXPENSES, DAMAGES, COSTS AND LIABILITIES, INCLUDING ATTORNEYS’ FEES (“CLAIMS”) ARISING FROM ANY SUCH EXPOSURE OF THE EQUIPMENT TO HAZARDOUS MATERIAL OR WASTE. THIS INDEMNIFICATION SURVIVES AND CONTINUES AFTER THE TERM OF THE AGREEMENT.

E: Customer agrees to return the Equipment in as good condition as when received, less ordinary wear incident to normal use in the hands of a competent operator, and otherwise to pay the expense of returning said Equipment to Contractor as required herein, and such obligation shall not be excused by theft, acts of God, or for any other reason whatsoever. Well conditions which prevent satisfactory operation of Equipment do not relieve Customer of responsibility for Charges for Services or Equipment furnished or the purchase price thereof or rental due thereon.

5. Default: If Customer fails to comply with any of the terms and conditions of the Agreement, or if Customer becomes insolvent, bankrupt, fails to pay its debts as they mature, or if the Equipment or any part thereof is abused, illegally used, or misused, or if Contractor deems the accrued or unbilled Charges insecure, Contractor shall have the right, without legal proceedings, to enter the premises where the Equipment is located and take possession thereof without being liable to any party therefor. Costs of retaking the Equipment shall be the sole cost of Customer; provided, however, that such retaking of the Equipment shall not deprive or otherwise limit Contractor’s remedies under the Agreement, or which are otherwise available at law or in equity.

6. Control of Operations at the Worksite: Customer shall have the sole and exclusive control over all operations, persons and Equipment at the Worksite.

7. RELEASE FROM LIABILITY; INDEMNIFICATION

 

A: Except to the extent caused by Contractor Group’s gross negligence or willful misconduct (as established by clear and convincing evidence, or the highest standard of evidence applicable in civil or criminal action, whichever carries the greatest burden of proof), Contractor Group shall not have any liability to Customer Group, or any other party, for any Claim, arising directly or indirectly out of the Equipment or Services furnished or agreed to be furnished hereunder, or arising directly or indirectly out of the rental, sale, repair, maintenance, transportation, operation, or storage of any such Equipment, and Customer agrees to indemnify and hold harmless Contractor Group from any and all such Claims, and agrees to defend same at Customer’s sole cost and expense. Contractor’s obligations set forth in this Section 7, including the release from liability set forth herein, without limitation, and shall apply to, any and all Claims for personal injury, property damage, death, special damage, consequential damages, reservoir damage, subsurface damage, surface damage, pollution, contamination, contribution and indemnity, and indemnification against Claims based in whole or in part on negligence, products liability, defective design, failure to warn, subsurface trespass, breach of express or implied warranty (excluding only the warranty made above), breach of contract, and violation of any state, federal, county, municipal, or other government statute, ordinance, act, rule, or regulation, IN EACH CASE WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE THEREOF OR THE NEGLIGENCE OR FAULT (ACTIVE OR PASSIVE) OF ANY PARTY OR PARTIES INCLUDING THE JOINT OR CONCURRENT NEGLIGENCE OF CONTRACTOR GROUP. CONTRACTOR SHALL NOT BE LIABLE TO ANY MEMBER OF CUSTOMER GROUP FOR ANY SPECIAL, INDIRECT, PUNITIVE, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE AGREEMENT INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, BUSINESS INTERRUPTIONS, OR PRODUCTION DELAYS.

8. Examination and Inspection

A: Contractor shall have access to the rented Equipment during the rental period at all reasonable times for the purpose of examination and inspection.

B: If Customer does not inspect the Equipment before it is delivered or accepted by Customer, then Customer is conclusively deemed to have accepted that the Equipment is in good condition and running order, without broken or worn out parts, and in clean condition. Customer acknowledges that it fully understands the operating instructions and warnings, and is competent and knowledgeable in the Equipment’s installation, use and maintenance. Customer agrees to communicate the Equipment’s limitations to any and all persons who may operate or use the Customer shall use the Equipment in a careful and proper manner and shall comply with all laws, ordinances and regulations relating to the possession, use or maintenance of the Equipment. Customer is solely responsible for advising any persons operating the Equipment or in the vicinity of the Equipment of all safety operating procedures and safety precautions.

9. Examination and Inspection

A: Except in the event any Equipment is sold to Customer, title to the Equipment shall at all times be and remain vested in Contractor, and nothing contained in the Agreement shall be deemed to have the effect or conferring upon the Customer any right or title whatsoever in or to the Equipment. Customer shall not incur or permit to exist any lien or other encumbrance on or with respect to the Equipment and shall indemnify, defend, and hold Contractor harmless from and against any such liens or

B: It is the intention of the Parties hereto to hereby create a lease on the Equipment described herein, and not a conditional sale. To provide solely for the eventuality that a court might hold this to be a conditional sale, Contractor hereby retains a purchase money security interest to secure payment of the sales price of the Equipment as determined by such court, and Customer grants to Contractor all rights given to a secured party under the Uniform Commercial Code in addition to Contractor’s other rights hereunder. It is the intention of the Parties that the Equipment shall be deemed personal property and that it not be deemed a fixture, even though it may be attached in some manner to realty. To provide solely for the eventuality that a court might also hold the Equipment to be a fixture, the Parties state for the purpose of complying with the legal requirements for a financing statement that collateral is or includes fixtures and the Equipment is affixed or is to be affixed to the lands described in the Work Order or Field Ticket or on any Worksite.

10. Force Majeure: Contractor shall not be liable to Customer for delays caused by any matter or event beyond the reasonable control of Contractor, including without limitation, strikes, fire, accident, unavailability of materials or equipment, economic or financial conditions, floods, civil unrest, acts of God, or any rule, regulation, statute, or ordinance of any federal, state, county, city, or any other government authority or agency.

11. Insurance: 

A: Without limiting in any way the obligations or liabilities assumed hereunder by Customer, Customer shall procure or cause to be procured and maintained at its expense, for the duration of the Agreement, and with insurance companies designated by A.M. Best rating service with a rating of A-VII or better and acceptable to Contractor, the insurance policies described in Section 11.B, below. Prior to accepting any Equipment, Customer shall require its insurer or insurance agent to supply Contractor a certificate of insurance evidencing such insurance with the required endorsements. All deductibles shall be the responsibility of Customer. Without limiting the foregoing, Customer’s insurance obligations hereunder may be satisfied in whole or in part by adequately funded self-insurance programs or self-insurance retentions, provided that such programs and retentions shall not in any way limit liabilities assumed by Customer under the Agreement.

B: Customer shall, at its sole cost and expense, maintain throughout the term of the Agreement, the following policies of insurance subject to the requirements set forth below:

  1. General liability insurance to cover liability for bodily injury and property damage with a combined single limit of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate. Customer must abide by all terms and conditions of said insurance. Customer, its agents and employees will cooperate fully with Contractor and Contractor’s insurer in any investigation, prosecution or defense of any Claim or suit arising therefrom and will do nothing to impair or invalidate insurance coverage. Contractor’s acceptance of Contractor’s Certificate(s) of Insurance will not be deemed a waiver or modification of Customer’s insurance, indemnity or any other obligation under the Agreement.
  2. Property and physical damage insurance in an amount adequate to cover any damage to the Equipment being provided under the Agreement, or in the amount of the actual replacement cost for like new equipment in the event the Equipment is lost or otherwise damaged beyond repair, as determined by Customer’s policy must expressly cover leased/rented equipment and non-owned equipment while in Customer’s care, custody and control. Customer agrees to abide by all terms and conditions of said insurance.
  3. If the Equipment provided under the Agreement includes vehicles, trailers or equipment that may be transported or used on a vehicle, automobile liability insurance with a combined single limit of One Million Dollars ($1,000,000) covering owned, non-owned and hired vehicles.
  4. Umbrella coverage in excess of the general liability insurance and automobile liability insurance coverage at a minimum of Five Million Dollars ($5,000,000).
  5. The policy limits specified above are minimum requirements and not limits of liability and shall not be construed in any way as limiting Customer’s acceptance of responsibility for financial liabilities in excess of such limits.
  6. The insurance specified in Sections 11.B.1, 11.B.2, 11.B.3 and 11.B.4, above, shall: (i) not be cancelled (for non-payment or otherwise) or materially modified before the expiration date thereof without providing thirty (30) days prior written notice to Contractor, (ii) name Contractor Group as an additional insured and loss payee, with such additional insured and loss payee endorsements providing coverage for Contractor Group with respect to liability arising out of or associated with the Agreement (including, but not limited to, liability caused or contributed to by the negligence of Customer, or the agents, employees, or officers of Customer) and Contractor’s Equipment associated with the Agreement, and (iii) be primary to and not in excess of or contributory with any other insurance available to Contractor. Customer, for itself and any member of Customer Group, waives all rights of subrogation and shall cause each insurer to waive their rights of subrogation as to Contractor Group and their respective insurers.

12. Miscellaneous

A: The Agreement contains the entire agreement between the Parties hereto, with respect to the subject matter hereof, and may not be changed or altered except by an instrument in writing signed by the Party against whom same is sought to be enforced.

B: In the event there is a conflict between the provisions of the Agreement, and any other agreement between the Parties hereto, the Agreement shall prevail. These Terms shall control over any conflicting terms in the Work Order or Field Ticket. Any reference in a Work Order or Field Ticket to a quote, proposal, or other document provided by Customer shall not be incorporated into the Work Order or Field Ticket and shall not be a part of the Agreement.

C: If any provision hereof is deemed void and unenforceable, it is the intention of the Parties that the remaining provisions be deemed severable, valid, and enforceable. The Parties agree that the indemnification provisions contained herein are to be enforced to the fullest extent permitted by applicable law.

D: Termination or cancellation of the Agreement shall not terminate or cancel Contractor’s right to pursue any remedies provided herein or at law or equity against Customer.

E: The Agreement shall not only be binding upon the Parties hereto but shall inure to and be binding upon their heirs, successors in interest, personal representatives, and permitted assigns. Neither the Agreement nor Customer’s rights under the Agreement are assignable without Contractor’s prior written consent, which consent may be withheld in Contractor’s sole discretion, and any attempted assignment shall be void and of no force or effect. Contractor may assign the Agreement without the consent of Customer.

F: Notwithstanding anything to the contrary herein, the Parties hereto are independent contractors only and are not partners, master/servant, principal/agent or involved herein as parties to any other similar legal relationship with respect to the transactions contemplated under the Agreement or otherwise, and no fiduciary, trust, or advisor relationship, nor any other relationship imposing vicarious liability shall exist between the Parties under the Agreement or otherwise at law.

G: The Agreement shall be construed under the laws of the State of Oklahoma without application of its conflicts law and jurisprudence that would require reference to the laws of other jurisdictions. Customer hereby consents to the jurisdiction and venue in the state or federal courts located in Oklahoma County, Oklahoma.

BOTH PARTIES AGREE THAT THIS STATEMENT COMPLIES WITH THE REQUIREMENT, KNOWN AS THE EXPRESS NEGLIGENCE RULE, TO EXPRESSLY STATE IN A CONSPICUOUS MANNER TO AFFORD FAIR AND ADEQUATE NOTICE THAT THE AGREEMENT HAS PROVISIONS REQUIRING ONE PARTY (THE INDEMNITOR) TO BE RESPONSIBLE FOR THE NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF ANOTHER PARTY (THE INDEMNITEE).

BOTH PARTIES REPRESENT TO EACH OTHER (1) THAT THEY HAVE CONSULTED AN ATTORNEY CONCERNING THE AGREEMENT OR, IF THEY HAVE NOT CONSULTED AN ATTORNEY, THAT THEY WERE PROVIDED THE OPPORTUNITY AND HAD THE ABILITY TO SO CONSULT, BUT MADE AN INFORMED DECISION NOT TO DO SO, AND (2) THAT THEY FULLY UNDERSTAND THEIR RIGHTS AND OBLIGATIONS UNDER THE AGREEMENT.

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