Hunting Energy Services Canada (Ltd) Terms and Conditions

CA-F-272 Rev1

Standard Terms and Conditions of Sale and Hire

Interpretation

1.1 In these Conditions:

“Affiliate” has the meaning ascribed thereto in the Business Corporations Act (Alberta);

“Claims” means any claim, demand, cause of action, judgement, loss, costs, expense, proceeding, penalty or liability (including, without limitation, reasonable legal fees and sums paid by way of settlement or compromise);

“Client” means the ultimate client of the Customer (if any);

“Client Group” means the Client, its Co-Venturers (if any), its other contractors of any tier, its and their respective Affiliates and its and their respective directors, officers and employees (including agency personnel), but shall not include any member of the Company Group or the Customer Group;

“Company” means Hunting Energy Services (Canada) Ltd., a corporation amalgamated under the laws of the Province of Alberta;

“Company Group” means the Company, its sub-contractors of any tier, its and their respective Affiliates and its and their respective directors, officers and employees (including agency personnel), but shall not include any member of the Customer Group or the Client Group;

“Conditions” means the standard terms and conditions of sale and hire set out in this document;

“Consequential Loss” means:

(i) consequential or indirect loss under laws of the Province of Alberta and the federal laws of Canada applicable therein; and

(ii) loss and/or deferral of production, loss of product, loss of use, loss of revenue, profit or anticipated profit (if any), in each case whether direct or indirect to the extent that these are not included in (i) and whether or not foreseeable at the start of the Contract;

“Contract” means the contract, comprising the Order and these Conditions, between the Company and the Customer for the purchase and sale of the Goods and/or Services and/or hire of the Equipment;

“Contract Price” means the price calculated in accordance with Clause 3 of the Conditions;

“Co-Venturer” means any other entity with whom the Customer or the Client, as the case may be, is or may be from time to time a party to a joint operating agreement or unitisation agreement or similar agreement relating to the operations for which the Work is being performed and the successors in interest of such Co-Venturer or the assignees of any interest of such Co-Venturer;

“Customer” means the person, company or legal entity whose Order for the Goods and/or Services and/or hire of the Equipment is accepted by the Company;

“Customer Group” means the Customer, its Co-Venturers (if any), its other contractors of any tier, its and their respective Affiliates, and its and their respective directors, officers and employees (including agency personnel) and the Client Group (if any), but shall not include any member of the Company Group;

“Equipment” means the equipment specified on the Order and which is hired by the Company to the Customer in accordance with these Conditions;

“Force Majeure” shall have the meaning given to it in Clause 12;

“Goods” means the goods specified on the Order;

“Hire Period” shall have the meaning given to it in Clause 4.2;

“Incoterms” means the international rules for the interpretation of trade terms of the International Chamber of Commerce as in force at the date when the Contract is made;

“Order” means the order issued by the Customer to the Company;

“Party” or “Parties” shall mean the Customer and/or the Company as the context may require;

“Services” means the services specified on the Order;

“Variation” means a change to the Contract or individual Order agreed by the Parties;

“Work” means all work the Company is required to carry out in accordance with the provisions of the Contract and the Order, including where applicable, the provision of the Goods and/or the provision of the Services and/or the provision of the Equipment for hire; and

“Writing” includes facsimile transmission and comparable means of communication but excludes e-mail unless expressly specified otherwise herein.

1.2 A reference in these Conditions to a provision of a statute shall be construed as a reference to that provision as amended, re-enacted or extended at the relevant time.

1.3 The headings in these Conditions are for convenience only and shall not affect their interpretation.

Quotations and Orders

2.1 Any quotation made by the Company shall remain valid for the period specified in the quotation or, if none, for thirty (30) business days. On the expiry of such period, the quotation may, unless otherwise agreed by the Company, be withdrawn. The Customer’s Order shall constitute an offer to the Company to purchase the Goods or the provision of the Services or hire the Equipment specified in the Order.

2.2 The Company shall be entitled to a reasonable amount of time to review any proposed Order and advise whether it accepts it. Orders and subsequent Variations thereof shall not be binding on the Company unless and until the Company either:

2.2.1 accepts the Order or Variation to the Order in Writing; or

2.2.2 begins performance of the Order or Variation to the Order,

and the effective date of the Order or Variation shall be the date of such acceptance or the date that performance of the Work begins, unless otherwise agreed by the Parties.

2.3 Once the Order or the Variation to the Order has been accepted, the Company will carry out the Work in accordance with the Contract.

2.4 Every quotation made by the Company, and the acceptance of any Order by Company, shall be subject to the Conditions. No representative or agent of Company has any authority to add to, amend or vary the Conditions or the Contract, except by a Variation to the Contract signed by an authorised representative of both Parties. No conditions or stipulations in or attached to the Customer’s form of order or other document, which are inconsistent with the Conditions or which purport to add to or modify them in any way, shall have any effect unless expressly and specifically accepted in Writing by the Company. The fact that the Company may have observed any such conditions or stipulations put forward by the Customer shall in no way imply that the same have been accepted by the Company as binding on it.

2.5 Any waiver on the part of the Company of any of the Conditions shall not be deemed to be a continuing waiver or to prejudice the rights of the Company hereunder.

2.6 The Company’s employees or agents are not authorised to make any representations concerning the Work unless confirmed by an authorised representative of the Company in Writing or by e-mail. In entering into the Contract the Company acknowledges that it does not rely on any such representations which are not so confirmed, and that all liability for innocent or negligent misrepresentation is hereby excluded.

2.7 Any advice or recommendation given by the Company or its employees or agents to the Customer or its employees or agents in relation to the Work, including as to the storage, application or use of the Goods and/or the Equipment which is not confirmed in Writing or by e-mail by the Company is followed or acted upon entirely at the Customer’s own risk, and the Company shall not be liable for any such advice or recommendation which is not so confirmed.

2.8 The Customer shall be responsible to the Company for ensuring the accuracy of the terms of any Order (including any applicable specification) submitted by the Customer, and for giving the Company any necessary information relating to the Work within a sufficient time to enable the Company to perform the Contract in accordance with its terms.

2.9 The Company reserves the right to make any changes in the specifications specified in the Order to conform with any applicable statutory or EC requirements or which, in the opinion of the Company, do not materially affect the quality or performance of the Goods and/or the Equipment.

2.10 No Order which has been accepted by the Company may be cancelled by the Customer unless:

2.10.1 the Company agrees to such cancellation in Writing or by e-mail; and

2.10.2 in the case of an Order for Goods, the Customer indemnifies the Company in full against any direct losses (including the cost of all labour and materials used) incurred by the Company Group as a result of, or in connection with such cancellation;

2.10.3 in the case of an Order for the hire of Equipment, the Customer pays the hire charge for the originally requested Hire Period (including the cost of all labour and materials used), or if shorter, for the period until the Company hires the Equipment to a third party.

2.11 Any typographical or clerical error or omission in any sales literature, quotation, price list, acceptance, invoice or other document or information issued by the Company shall be subject to correction by notice in Writing or by e-mail to the Customer without any liability on the part of the Company.

2.12 The Contract shall not be added to, amended or varied except by way of a Variation. Either Party has the right to propose a Variation and the Parties shall consider the impact of such Variation on the Contract and/or Order, including the Contract Price and estimated delivery date, and once agreed, the Parties shall authorise and sign a Variation. The Company is under no obligation to proceed with changes to the Work or Contract until such time as the changes have been authorised and agreed by way of a signed Variation.

Prices

3.1 The price of the Work shall be the price on the Order (“Contract Price”).

3.2 Where Equipment is supplied by way of hire, rental shall be due for the entire Hire Period and for all Equipment supplied, including back up tools.

3.3 Prices are based on costs current at the date of the quotation and the Company reserves the right to increase or decrease the Contract Price due to:

3.3.1 any change in laws or the interpretation of laws; or

3.3.2 any change in delivery dates, quantities or specifications for the Goods, Services or Equipment which is requested by the Customer or failure of the Customer to give the Company adequate or timely information or instructions;

which in either case occurs between the date of acceptance of the Order and the delivery of the Goods or the Equipment or the provision of the Services.

3.4 The Contract Price is exclusive of any applicable value added tax, which the Customer shall be additionally liable to pay to the Company.

3.5 The cost of pallets and containers is excluded from the Contract Price and will be charged to the Customer in addition to the price of Goods and/or the charge for the hire of the Equipment.

Delivery, Risk and Insurance

4.1 Unless otherwise agreed by the Company in Writing or by e-mail:

4.1.1 delivery of the Goods and Equipment will be EXW the Company’s premises in accordance with Incoterms or as otherwise specified in the Order;

4.1.2 the Customer shall return the Equipment at the end of the Hire Period to the Company’s premises at the Customer’s cost and expense; and

4.1.3 where the Company agrees to deliver the Goods or the Equipment other than at the Company’s premises, all insurance, packaging and transportation charges, import duties and all other charges, duties or costs payable in connection with the Goods or the Equipment shall be payable by the Customer and the Customer shall bear all risk of loss or damage during transportation.

4.2 The period of hire of Equipment (“Hire Period”) shall commence from delivery of the Equipment in accordance with Clause 4.1 and shall terminate when the Equipment is returned to and received by the Company at the location stipulated in the Company’s quotation or, where the Customer has notified the Company that the Equipment has been lost, the Company confirms in writing that the Contract is at an end in respect of such Equipment and the Customer has paid any damages due under Clause 7.

4.3 Any dates quoted for delivery of the Goods or the Equipment or completion of the Services are estimates only and save as set out in Clause 4.5, the Company shall not be liable for any delay in delivery of the Goods or Equipment or completion of the Services beyond the estimated delivery dates however caused. Time for delivery shall not be of the essence of the Contract. The Goods may be delivered or the Services completed by the Company in advance of the quoted delivery date upon giving reasonable notice to the Customer.

4.4 Where Goods, Equipment or Services under an Order are to be delivered in instalments or stages, each delivery or Service to be completed shall constitute a separate Order and failure by the Company to deliver any one or more of the instalments or stages in accordance with the Contract and/or Order or any claim by the Customer in respect of any one or more instalments or stages shall not entitle the Customer to treat the Contract or the Order as a whole as repudiated.

4.5 If, for any reason other than any cause (i) beyond the Company’s reasonable control or (ii) due to the Customer’s fault, the Company fails to deliver any Goods or Equipment or complete any Services (or any instalment thereof) the Company’s liability shall be limited to payment of the Contract Price for the Goods, Equipment or Services (or any instalment thereof) not delivered or completed.

4.6 Written notice of any defect in the Goods or Equipment or any incorrect quantities, which are or should reasonably have been apparent on inspection, or in the Services, must be given to the Company within ten (10) days from the date of delivery of Goods or Equipment or completion of the Services. If the Customer does not refuse delivery of Goods or does not notify the Company accordingly, the Customer shall be deemed to have accepted the Goods and/or the Services and (i) shall be bound to pay the Contract Price as if the Goods and/or Services had been delivered in accordance with the Contact and (ii) may not be entitled to later reject the Goods, Equipment and/or Services but this shall not prejudice the Customer’s rights under Clause 7.

4.7 If the Customer fails to take delivery of the Goods or Equipment or fails to give the Company adequate delivery instructions at the time stated for delivery by the Company (other than by reason of Force Majeure or the Company’s fault) then, without prejudice to any other right or remedy available to the Company, the Company shall be entitled to consider the Goods or Equipment delivered in accordance with Clause 4.1, invoice the Customer for the Goods or Equipment in accordance with Clause 8 and store the Goods or Equipment until actual delivery and charge the Customer for all reasonable costs (including insurance) of such storage.

4.8 The risk of loss or damage of any kind in the Goods or Equipment, including the risk of damage to or deterioration of the Goods or Equipment during transportation or storage, shall pass to the Customer when the Goods or Equipment are delivered in accordance with Clause 4.1 or deemed delivered under Clause 4.7. The Customer should insure accordingly.

4.9 Equipment lost in hole, damaged beyond repair, missing or withheld by client, agent, customs etc., will be invoiced to the Customer at the Lost in Hole charge specified in the quotation or, if none, at the current market price for a new, replacement item of the same Equipment and is not subject to depreciation, unless otherwise stated in the quotation.

Inspection and Testing

5.1 Goods or Equipment manufactured by the Company are inspected and tested in accordance with the Company’s standard tests before despatch from the Company’s premises and the Customer may witness such tests, subject to giving the Company reasonable notice of its intention to attend the tests. It is not a condition of the Contract that the Goods or Equipment will meet the requirements of any test (unless otherwise agreed in Writing by the Parties) other than the Company’s standard tests. If the Company agrees to carry out any additional tests requested by the Customer, such additional tests shall be performed at Customer’s cost and expense and the Parties agree to extend the delivery dates for the relevant Goods or Equipment accordingly.

5.2 Where Goods or Equipment are supplied for export, the Customer shall be responsible for arranging for inspection of the Goods or Equipment at the Company’s premises before shipment. The Company shall have no liability for any claim in respect of any defect in the Goods or Equipment which would be apparent on inspection and which is made after shipment.

Warranty and Liability for Goods, Equipment and Services

6.1 Subject to Clauses 6.3 and 11, the Company warrants that

6.1.1 the Goods will be free from defects in materials and workmanship and that they will comply with the specification in the Contract, for a period of twelve (12) months from the date of delivery;

6.1.2 the Equipment will be free from defects in materials and workmanship and that it will comply with the specification in the Contract, for the period of the hire of the Equipment; and

6.1.3 the Services will be carried out with reasonable skill and care.

The Company does not warrant that the Goods or Equipment are fit for any particular purpose or that they will accomplish any particular results, other than those outlined in the specification in the Contract. All other warranties, conditions and terms, including implied warranties relating to satisfactory quality and fitness for purpose are expressly excluded.

6.2 The Company’s only liability where the Work does not comply with the warranty outlined in Clause 6.1 is as follows:

6.2.1 in relation to Goods, at its option, either to:

(a) repair or replace the defective Goods within a reasonable time free of charge and deliver carriage paid within Canada or FOB Canada port in accordance with Incoterms, or

(b) refund the Contract Price of the defective Goods;

6.2.2 in relation to Equipment, at its option either to:

(a) repair or replace the defective Equipment within a reasonable time free of charge and deliver carriage paid within Canada or FOB Canada port in accordance with Incoterms, or

(b) refund the Contract Price of the defective Equipment for the period of hire from when the Customer notified the Company that the Equipment is defective;

6.2.3 to reperform the defective Services.

6.3 The Company’s obligation under Clause 6.2 is subject to the following conditions:

6.3.1 the Company shall be under no liability for abnormal damage (meaning damage which could not reasonably be expected) which has resulted from use of Goods or Equipment outwith good oilfield practice or for corrosion, erosion or abrasion caused by the nature of the well effluent;

6.3.2 the Company shall be under no liability in respect of any defect in the Work arising from any drawing, design or specification supplied by the Customer;

6.3.3 written notice of a breach of the warranty in Clause 6.1 must be given to the Company:

(a) prior to the expiry of the warranty period specified in Clause 6.1.1,

(b) within thirty (30) days of the Equipment becoming defective in the case of a breach of Clause 6.1.2; or

6.3.4 in relation to defective Goods or Equipment:

(a) where reasonably practicable, the defective Goods or Equipment must be returned to the Company carriage paid by the Customer so as to enable the Company to inspect and carry out tests on the defective Goods or Equipment;

(b) where the Goods or Equipment have to be repaired at any place other than at the Company’s premises the Customer shall bear the Company’s reasonable cost incurred;

6.3.5 the Goods or Equipment must not have been repaired or interfered with in any way by any person not authorised by the Company;

6.3.6 the Company shall not be liable for the costs of removal of the defective Goods or Equipment or the cost of refitting any replacement or repaired Goods or Equipment;

6.3.7 the Company shall be under no liability under this Clause 6 if the Contract Price for the Goods, Equipment or Services has not been paid by the due date for payment;

6.3.8 where Goods or parts thereof are not of the Company’s manufacture, the Company will only be liable to the Customer for defects to the extent of the Company’s warranty entitlement against the particular manufacturer or supplier and therefore the undertaking set out in Clause 6.1 shall not extend to defective Goods or parts which are manufactured by a third party;

6.3.9 where advice is given at the site of the Customer’s operations the Customer will remain in full control and supervision of the conduct of the operations and no guarantee or representation is made as to the results of implementing such advice and the Company shall not be liable for any loss arising from the advice; and

6.3.10 Goods repaired under warranty shall be warranted for a further twelve (12) months but in no event shall the Company’s warranty extent beyond eighteen (18) months from the date of acceptance of the original Goods.

Hire of Equipment

7.1 During the Hire Period the Customer shall:

7.1.1 notify the Company promptly if the Equipment is moved to any location other than the address specified in the Contract and in any event, not allow the Equipment to be transferred to any person or country prohibited under the laws of Canada, the United Kingdom or the United States of America;

7.1.2 permit an authorised representative of the Company at all reasonable times to enter upon premises or any vessel where the Equipment is located for the purposes of inspection, maintenance, repair or testing;

7.1.3 keep the Equipment in the same condition as at the commencement of the Hire Period, fair wear and tear only excepted;

7.1.4 preserve on the Equipment the Company‘s and any manufacturer’s identification number or mark or any nameplate;

7.1.5 not make any alterations, modifications or technical adjustments or perform or attempt any repairs to the Equipment;

7.1.6 arrange and maintain at its expense adequate insurance for the full replacement value of the Equipment for the full Hire Period. Such insurance shall cover all loss and damage to the Equipment and also all risks to third parties in connection therewith. The Company may at any time demand evidence that such insurance cover exists and failure to produce such evidence within forty-eight (48) hours will constitute a material breach of the Contract;

7.1.7 notify the Company immediately in writing of any loss, damage or Claims relating to the Equipment and within fourteen (14) days of demand, reimburse the Company the full cost of repair or replacement. Where the Equipment is lost, the hire charge shall continue until the full cost of replacement is received by the Company. Where the Equipment is damaged, the hire charge will continue until the fully repaired or replaced Equipment is returned to the actual possession of the Company;

7.1.8 Equipment lost in hole, damaged beyond repair, missing or withheld by client, agent, customs etc., will be invoiced to the Customer at LIH/replacement price quoted and is not subject to depreciation, unless otherwise stated.

7.1.9 not sell, assign, sub rent, charge or part with possession of the Equipment or any part thereof nor by any act or default render the Equipment liable to any distress, execution or other legal process;

7.1.10 repay the Company on demand all costs, charges and expenses incurred in any way by reason of its breach of any of these terms and conditions including but not limited to all costs, charges and expenses incurred in ascertaining the location of the Equipment; and

7.1.11 punctually pay all duties and taxes concerning the Equipment.

7.2 The Customer shall notify the Company if any maintenance, other than routine maintenance, of the Equipment is required. The Customer shall not undertake any maintenance, other than routine maintenance, without first obtaining the Company’s consent in Writing or by e-mail in respect thereof.

Payment for and Title to Goods and Equipment

8.1 The Company shall be entitled to invoice the Customer for the Contract Price on or at any time after the Company has tendered delivery of the Goods and/or completed the Services. Charges for hire of the Equipment will be levied daily, weekly, monthly or annually as specified in the Order. Terms of payment are net thirty (30) days from invoice date unless otherwise stated in the Order.

8.2 If the Customer’s account is overdue for payment, the Company may exercise its rights under Clauses 13.2 and/or 13.4 to terminate or suspend (at the Company’s option) the undelivered part of any Order and to charge interest at 2% above the base rate of Royal Bank of Canada on the amount overdue until payment in full is made, whether before or after judgement. Any such termination or suspension shall not give rise to any claims whatsoever by the Customer and shall be without prejudice to the Company’s right to recover any amount due from the Customer and the exercise of any other rights or remedies by the Company.

8.3 Notwithstanding delivery and the passing of risk in any and all Goods supplied by the Company, or any other provision of the Contract, the property in the Goods shall not pass to the Customer until the Company has received in cash or cleared funds full payment of the Contract Price of the Goods and all other Goods agreed to be sold by the Company to the Customer for which payment is then due. Equipment shall at all times remain the property of the Company and is provided on a hire basis only.

8.4 Until such time as the title in the Goods passes to the Customer, the Customer shall hold the Goods as the Company’s fiduciary agent and bailee and shall keep the Goods separate from those of the Customer and third parties and properly stored, protected and insured and identified as the Company’s property. Until that time the Customer shall be entitled to resell or use the Goods in the ordinary course of its business. The Company shall be entitled during business hours on reasonable prior written notice to enter upon any premises of the Customer or any third party where the Goods are stored to ensure that the provisions of the clause are being complied with.

8.5 Until such time as the title in the Goods passes to the Customer (and provided the Goods are still in existence and have not been resold) the Company shall be entitled at any time to require the Customer to deliver the Goods to the Company and if the Customer fails to do so forthwith to enter upon any premises of the Customer or any third party where the Goods are stored and repossess the Goods.

8.6 The Customer shall not be entitled to pledge or in any way charge by way of security for any indebtedness any of the Goods which remain property of the Company but if the Customer does so all sums due by the Customer to the Company shall (without prejudice to any other right or remedy of the Company) immediately become due and payable. The Company shall be entitled to claim a lien or attachment on the Goods or any property of the Customer in the possession of the Company until the Company has received in cash or cleared funds full payment of the Contract Price of the Goods and all other Goods agreed to be sold by the Company to the Customer for which payment is then due.

8.7 Where materials are supplied by the Customer for the Company to use in manufacturing Goods, the property in any unused off cuts of such materials shall vest in the Company.

Indemnities

9.1 The Company shall defend, indemnify and hold harmless the Customer Group from and against all Claims arising out of or in connection with the Contract in respect of:

9.1.1 loss or recovery of or damage to property of the Company Group whether owned, hired, leased or otherwise provided by the Company Group;

9.1.2 personal injury including death or disease to any person employed by the Company Group; and

9.1.3 subject to any other express provisions of the Contract, personal injury including death or disease or loss of or damage to the property of any third party to the extent that any such injury, loss or damage is caused by the negligence or breach of duty (whether statutory or otherwise) of the Company Group,

in each case regardless of cause and irrespective of the negligence and/or breach of duty (statutory or otherwise) of any member of the Customer Group.

For the purposes of this Clause 9 “third party” shall mean any party which is not a member of the Customer Group or the Company Group.

9.2 The Customer shall defend, indemnify and hold harmless the Company Group from and against all Claims arising from, out of or in connection with the Contract in respect of:

9.2.1 loss or recovery of or damage to property of the Customer Group, whether owned, hired, leased or otherwise provided by the Customer Group;

9.2.2 personal injury including death or disease to any person employed by the Customer Group; and

9.2.3 subject to any other express provisions of the Contract, personal injury including death or disease or loss of or damage to the property of any third party to the extent that such injury, loss or damage is caused by the negligence or breach of duty (whether statutory or otherwise) of the Customer Group,

in each case regardless of cause and irrespective of the negligence and/or breach of duty (statutory or otherwise) of any member of the Company Group.

9.3 For the purposes of Clause 9.2 for the Hire Period the Equipment shall be cease to be considered as Company Group property and the Customer shall be liable to the Company for any loss or damage to the Equipment in accordance with the other provisions of the Contract.

9.4 The Customer shall save, indemnify, defend and hold harmless the Company Group from all Claims arising out of or in connection with the Contract in respect of:

9.4.1 loss of or damage to any well or hole (including, without limitation, the cost of re-drill);

9.4.2 blowout, fire, explosion, cratering or any uncontrolled well condition (including, without limitation, the costs to control a wild well and the removal of debris);

9.4.3 damage to any reservoir, geological formation or underground strata or the loss of oil or gas therefrom;

9.4.4 pollution or contamination of any kind including, without limitation, the cost of control, removal and clean-up;

9.4.5 damage to, or escape of any substance from, any pipeline, vessel, or storage or production facility; or

9.4.6 notwithstanding Clause 9.1.3, loss of, or damage to, permanent third party oil and gas production facilities and pipelines and Consequential Losses arising therefrom, where such loss or damage arises from, relates to or is in connection with the performance or non-performance of the Contract;

in each case regardless of cause and irrespective of the negligence and/or breach of duty (statutory or otherwise) of any member of the Company Group.

9.5 If either Party becomes aware of any incident likely to give rise to a Claim under the above indemnities, it shall notify the other and the Parties shall co-operate fully in investigating the incident.

9.6 Notwithstanding anything within the Contract to the contrary and except to the extent of any agreed liquidated damages (including without limitation any predetermined termination fees) provided for in the Contract, the Company shall indemnify, defend and hold harmless the Customer Group from the Company Group’s own Consequential Loss arising out of or in connection with the Contract regardless of cause and irrespective of the negligence or breach of duty (statutory or otherwise) of any member of the Customer Group.

9.7 Notwithstanding anything within the Contract to the contrary and except to the extent of any agreed liquidated damages (including without limitation any predetermined termination fees) provided for in the Contract, the Customer shall indemnify, defend and hold harmless the Company Group from the Customer Group’s own Consequential Loss arising out of or in connection with the Contract regardless of cause and irrespective of the negligence or breach of duty (statutory or otherwise) of any member of the Company Group.

9.8 The indemnities given pursuant to the Contract shall be full and primary and shall apply in respect of the full liability of the indemnity for Claims notwithstanding that the indemnified party may be entitled to contribution thereto from any insurance or other person.

Indemnity in Respect of Intellectual Property Rights

10.1 If any Claim is made against the Customer that the Goods or Equipment infringe or that their use or resale infringes the patent, copyright, design, trade mark or other industrial or intellectual property rights of any other person, then unless the Claim arises from the use of any drawing, design, specification, goods or materials supplied by the Customer, the Company shall, subject to Clauses 10.2 and 11, indemnify the Customer against claims, losses, damages, costs (including legal costs), expenses and liabilities of whatsoever nature suffered or incurred by the by the Customer in connection with the Claim, or paid or agreed to be paid by the Customer in settlement of the Claim, provided that:

10.1.1 the Company is given full control of any proceedings or negotiations in connection with any such Claim;

10.1.2 the Customer shall give the Company all reasonable assistance for the purposes of any such proceedings or negotiations;

10.1.3 except pursuant to a final award, the Customer shall not pay or accept any such Claim, or compromise any such proceedings without the consent of the Company (which shall not be unreasonably withheld);

10.1.4 the Customer shall do nothing which would or might vitiate any policy of insurance or insurance cover which the Customer may have in relation to such infringement, and this indemnity shall not apply to the extent that the Customer recovers any sums under any such policy or cover (which the Customer shall use its best endeavours to do);

10.1.5 the Company shall be entitled to the benefit of, and the Customer shall accordingly account to the Company for, all damages and costs (if any) awarded in favour of the Customer which are payable by, or agreed with the consent of the Customer (which consent shall not be unreasonably withheld) to be paid by, any other party in respect of any such Claim; and

10.1.6 without prejudice to any duty of the Customer at common law, the Company shall be entitled to require the Customer to take such steps as the Company may reasonably require to mitigate or reduce any Claim for which the Company is liable to indemnify the Customer under this Clause.

10.2 Where Goods or Equipment are manufactured or supplied and/or the Services provided by the Company to a specification provided by the Customer, the Customer shall keep the Company Group indemnified against any Claim of whatsoever nature suffered or incurred by the Company Group as a result of infringement of any patent, copyright, design, registered design, trade mark or other industrial or intellectual property rights of any other person arising from manufacture or supply of such Goods, Equipment and/or Services in accordance with such specification.

10.3 Where any allegation made against either Party that the Goods or Equipment infringe or that their use or resale infringes the intellectual property rights of any other person arises from the use of the Goods or Equipment in conjunction with any other goods or equipment by the Company or from the use of any drawing, design or specification supplied by the Company, the Company shall indemnify the Customer Group against all Claims suffered or incurred by the Customer in connection with the allegation and the provisions of Clauses 10.1.1 to 10.1 6 shall apply mutatis mutandis.

Limitation of Liability

11.1 Notwithstanding anything to the contrary within the Contract, in no event shall the Company’s liability to Customer Group under the Contract exceed a limit of one million Canadian dollars (CDN$1 million) in aggregate and the Customer agrees to defend, indemnify and hold harmless the Company Group from all claims (including third party claims) above such limit irrespective of negligence of breach of duty (statutory or otherwise) of the Company Group.

Force Majeure

Neither Party shall be liable to the other Party or be deemed to be in breach of the Contract where any delay in performing or failure to perform (except for the obligation to pay sums due under the Contract) is due to any cause beyond the affected Party’s reasonable control (“Force Majeure”). For the purposes of this Clause 12, Force Majeure shall include but not be limited to acts or threats of war, sabotage, acts of terrorism, riots; civil commotions, strikes, lock-outs or other industrial action, acts of any governmental authority, including import or export regulations or embargoes, quarantine, earthquake, fires, storms and / or other natural physical disaster and/or maritime or aviation disasters. In the event of a Force Majeure, the affected Party will promptly notify the other in Writing of its nature and anticipated duration and the time for performance of the Contract shall be extended accordingly. In the event of a Force Majeure prevailing for a continuous period of fifteen (15) days or more, either Party may terminate the Contract in whole or in part, upon notice thereof to the affected Party in Writing.

Termination and Suspension

13.1 The Contract shall continue in full force and effect until such time as either Party may elect to terminate the Contract by giving the other Party at least one hundred and eighty (180) days prior written notice of its requirement to terminate the Contract. In the event that either Party terminates the Contract pursuant to the foregoing, the Contract shall remain in force and effect as to and until any outstanding Order is completed.

13.2 Either Party may terminate an Order for cause, in whole or in part, in the event of the other Party’s default or failure to comply with the major Conditions of the Contract and Order which, following notice of such default or failure from the first Party, the other Party fails within a reasonable period of time thereafter to rectify. Additionally either Party may terminate an Order for cause, in whole or in part, if the other Party becomes bankrupt or insolvent, or if its business is placed in the hands of an administrator, a receiver, assignee, or trustee, whether by voluntary act of the other Party or otherwise, or undergoes any proceeding analogous to the foregoing.

13.3 In the event of termination of an Order, the Company shall cease the performance of the Work as soon as practicable. The Company shall be entitled to payment of the Contract Price for all Goods delivered or Services completed prior to the notice of termination and any Equipment then on hire shall immediately be returned to the Company.

13.4 In the event that the Customer is in breach of its obligations to pay the Contract Price under Clause 8, then in addition to Company’s other rights elsewhere in the Contract and at law, the Company shall have the right to suspend the Work including delivery of the Goods or Equipment or completion of the Services until such time as the Contract Price has been paid in full by the Customer.

Export Terms

14.1 Where the Goods or Equipment are supplied for export from Canada, the provisions of this Clause 14 shall (subject to any special terms agreed in Writing by the Parties) apply notwithstanding any other provision of these Conditions.

14.2 The Customer shall comply with all applicable laws and regulations pertaining to the export, re-export and import of Goods and Equipment and related documentation and technical information (“Documentation”) in effect from time to time, including any conditions of any export licenses under which the Company ships Goods or Equipment and/or Documentation to Customer and for which Customer is advised by the Company. The Company reserves the right to request that the Customer complete and sign a declaration form (provided by the Company) and the Customer shall complete and sign the same without delay. Without limiting the foregoing if the Customer fails to obtain necessary import licence or quota allocation in time or fails to complete and sign a declaration form, the Company shall have the right either to postpone delivery or to cancel the Contract wholly or partially without being under any liability whatsoever to the Customer. The Customer shall be liable for any loss or expense suffered or incurred by the Company as the result of such failure.

14.3 Unless otherwise agreed in Writing between the Customer and the Company, the Goods or Equipment shall be delivered EXW the Company’s premises.

14.4 Except as stated in Clause 5, the Customer shall be responsible for arranging for testing and inspection of the Goods or Equipment at the Company’s premises before shipment. The Company shall have no liability for any claim in respect of any defect in the Goods or Equipment which would be apparent on inspection and which is made after shipment, or in respect of any damage during transit.

14.5 Payment of all amounts due to the Company shall be made by irrevocable letter of credit opened by the Customer in favour of the Company and confirmed by a bank in Canada acceptable to the Company or, if the Company has agreed in Writing or by e-mail on or before acceptance of the Order to waive this requirement, by delivery to the Company of a bill of exchange drawn on the Customer payable sixty (60) days after sight to the order of the Company at such branch of Royal Bank of Canada in Canada as may be specified in the bill of exchange.

14.6 The Customer acknowledges that the Goods and Equipment will be used by the Customer in the country designated in the applicable Order or declaration form referred to in Clause 14.2 and the Customer expressly warrants that it will not, directly or indirectly, relocate, export, re-export, or tranship the Goods or Equipment, except in compliance with applicable law.

14.7 The Company shall not be obliged to perform deliveries or other obligations under the Contract if that performance is hindered by the export laws and regulations of Canada, the United Kingdom, the United States of America or other applicable countries.

14.8 The Customer shall not use, or permit any other person to use, directly or indirectly, any Goods or Equipment or Documentation for the research, development or production of chemical, biological or nuclear weapons, or any missile programmes.

14.9 The Customer will be responsible for ensuring compliance with all local taxes and as such the Customer undertakes not to deduct any amount in relation to withholding tax or any other local taxation.

Governing Law and Jurisdiction

15.1 These Conditions and the Contract shall in all respects be construed and governed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein, excluding any conflict of law principles or rules which would impose any law or laws of another jurisdiction. The Parties hereby irrevocably attorn to the exclusive jurisdiction of the Courts of the Province of Alberta.

General

16.1 The Company is a member of the group of companies whose holding company is Hunting plc, and accordingly the Company may perform any of its obligations or exercise any of its rights hereunder by itself or through any other member of its group, provided that any act or omission of any such other member shall be deemed to be the act or omission of the Company.

16.2 Any notice required or permitted to be given by either Party to the other under these Conditions shall be in Writing addressed to that other Party at its registered office or principal place of business or such other address as may at the relevant time have been notified pursuant to this provision to the Party giving the notice.

16.3 Any failure by either Party to enforce all or any portion of these Conditions or waiver by the Company of any breach of the Contract by the Customer shall not be considered a waiver of any subsequent breach or future right to require strict performance of these Conditions.

16.4 If any provision of these Conditions is held by any competent authority to be invalid or unenforceable in whole or in part the validity of the other provisions of these Conditions and the remainder of the provision in question shall not be affected.

Assignment

17.1 Each Party has the right to assign the Contract or any part of it, including any Order, or any benefit or interest in or under it to any Co-Venturer or Affiliate without the agreement of the other Party. Additionally, either Party may assign the Contract or any part of it, including any Order, or any benefit or interest in or under it to any third party, but only with the prior agreement of the other Party which shall not be unreasonably withheld or delayed.