1. ACCEPTANCE. By requesting Contractor’s services, equipment, or products under a field service contract or field service ticket, purchase order, work order, quotation, bid, proposal or other similar document (the “Contract”) that incorporates by reference these General Terms and Conditions or to which these General Terms and Conditions are attached or printed on the reverse, the Client accepts and agrees to be bound by these General Terms and Conditions. These General Terms and Conditions form part of the Contract, and Contractor’s Services and Products under the Contract will be provided subject to and in accordance with these General Terms and Conditions. Similarly, all documents containing pricing, commercial, technical, logistics and safety details associated with the Services and Products offered and provided to the Client by Contractor in connection with this Contract also form part of the Contract.
2. DEFINITIONS. In these General Terms and Conditions, the following terms have the following meanings:
2.1 “Claims” means all losses, liabilities and claims of any kind, including all costs and expenses (including legal costs and disbursements on a full indemnity basis) related in any way to those losses, liabilities and claims;
2.2 “Client” means the person, firm or other entity to which equipment or services are supplied or provided under the Contract;
2.3 “Client Group” means (a) the Client and its parent companies, subsidiaries, other affiliates, and other contractors (different than Contractor); and (b) each of the officers, directors, and employees of the entities listed in (a);
2.4 “Contractor” means Cold Bore Technology, a British Columbia corporation. It also includes Contractor’s subsidiaries and other affiliates.
2.5 “Contractor Group” means (a) Contractor and its parent companies, subsidiaries and other affiliates, and (b) each of the officers, directors, and employees of the entities listed in (a);
2.6 “Parties” means the Client and Contractor and “Party” refers to either of them.
2.7 “Products” means any products or equipment sold or otherwise provided by Contractor under the Contract (including tools, supplies and materials);
2.8 “Rentals” shall mean Client’s hiring of Products and/or equipment for a period of time; and,
2.9 “Services”-means the work and services provided by Contractor under the Contract; and
3. PAYMENT TERMS. Payment for Services and Products must be made by cash in advance unless Contractor has approved the Client's credit prior to the sale of Products or provision of Services. If the Client’s credit has been approved in advance, the total invoice amount is due 30 days from the date of the invoice. In either case, the Client agrees to pay interest on past due balances at the lesser of 1.5% per month (18% annually) or the maximum rate allowed by applicable law. If the Client's account becomes overdue, Contractor has the right to revoke any previously applied discounts, and the full invoice price will be immediately due and owing and subject to collection. If Contractor takes any steps to collect any amounts that are overdue, the Client agrees to pay to Contractor, in addition to the overdue amount (including interest), the full cost of collecting these overdue amounts, including legal costs and disbursements on a full indemnity basis. Should Client dispute a portion of an invoice, Client shall notify Contractor in writing of the disputed charges and the reasons for disputing same within fifteen (15) days of receiving the invoice, and will pay without delay the undisputed portion, while the disputed portion will be paid promptly after the dispute is resolved.
4. TAXES. Client agrees to pay all taxes, duties, tariffs or other charges (other than income taxes) imposed by any government, governmental agency or similar authority with respect to any charges made by Contractor in connection with the delivery by Contractor of any Services or Products under the Contract. Prices quoted by Contractor do not include GST, HST, sales, goods and services or similar taxes and these taxes, where applicable, shall be added to the quoted prices and invoiced accordingly.
5. INDEPENDENT CONTRACTOR. In providing any Services or Products under the Contract, it is the understanding and intention of the Parties that Contractor is an independent contractor of the Client at all times, and in no circumstances will Contractor or anyone employed by Contractor be considered the agent, representative, employee or servant of the Client. Any communications by Client or its employees shall be given only to Contractor’s designated superintendent or other person in charge for Contractor.
6. OBLIGATIONS OF THE CLIENT.
6.1 Well or Facility Conditions; Notification of Hazardous Conditions. As Client has or will have custody and control of the well or facility and superior knowledge of the conditions in and surrounding it, Client will provide Contractor with the information required to enable Contractor to provide its Products and Services safely and efficiently. Contractor’s equipment used in the performance of the Services is designed to operate under normal oilfield conditions and this equipment may be seriously damaged by hazardous or unusual conditions. Likewise, the Products are designed to operate under certain circumstances and conditions, and their capabilities are specified in the relevant technical specifications documents. If hazardous or unusual conditions exist, including those in the wellbore, Client must notify Contractor in advance and the Parties will make the necessary additional contractual arrangements for servicing such wells or facilities and providing appropriate Products. The Parties hereby agree that the Fluids in the drilling rig’s tanks, piping, valves and pumps and materials in the bore hole and reserve pit, or frac tanks where there is not a reserve pit are not in Contractor’s possession or control and Contractor is not responsible for the same. Notwithstanding anything contained in these General Terms and Conditions to the contrary, Client shall RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS Contractor Group from and against any and all Claims arising out of, related to, or in connection with Client’s obligations as set forth in this Section.
6.2 Substances and Samples. Client agrees to bear sole responsibility and liability for the safe and lawful handling, management, transportation and disposal of all substances and fluids, used or unused, waste or by-products of any kind including radioactive tracer material, cuttings or carvings and other hazardous wastes and other Products used in, consumed during, or resulting from the provision of Products or Services under the Contract by Contractor (“Substances”), even where the Substances are created, utilized or provided by Contractor. Client also understands and agrees that these Substances are the sole property of Client, even where these Substances and Samples are created, utilized or provided by Contractor, and that Client remains responsible for the cleanup and decontamination of any Contractor’s equipment used in the performance of the Services. In no event shall Contractor be considered to be the generator of Substances or Samples irrespective of any handling transportation, treatment or disposal thereof provided by Contractor. Contractor shall not be responsible for signing of manifests or for the storage, transportation or disposal of Substances and Samples. Furthermore, Client agrees to: (i). WAIVE any Claim (including any civil or criminal claim or action under environmental or other legislation) that it, or any person claiming through it, may have against the Contractor Group related in any way to the use, generation, handling, management, transportation and disposal of Substances and Samples; (ii). RELEASE the Contractor Group from any Claim (including any civil or criminal claim or action under environmental or other legislation) that it, or any person claiming through it, may have against the Contractor Group related in any way to the use, generation, handling, management, transportation and disposal of Substances and Samples; (iii). INDEMNIFY AND DEFEND the Contractor Group against any Claim (including any civil or criminal claim or action under environmental or other legislation) that any person may have or may bring against Contractor related in any way to the use, generation, handling, management, transportation and disposal of substances and Samples.
6.3 Transport and Storage. Client shall arrange and pay for the use and the repair of roadbeds and access ways, and the use of vehicles, vessels, aircraft or other special means of transportation for Contractor Group’s equipment and/or personnel, if needed to gain access to or from a well site or facility. At the well site or facility, Client shall provide Contractor Group with proper storage space in compliance with all applicable safety requirements and consistent with good industry practice. In addition, Client shall be responsible for the return, at its expense, of offshore or other stationary auxiliary units to the points of origin or to other mutually agreed locations in the condition the units were delivered to Client, ordinary wear and tear excepted.
6.4 Licenses and Consents. Client represents and warrants that, as of the date of this Agreement, no consent, approval or authorization of, or designation, declaration or filing with, any government or other authority, which has not been made or obtained by Client prior to the date hereof, is required in connection with the valid execution, performance and delivery of this Agreement. Alternatively, if any such action is required, Client shall be responsible, at its own expense, for all licenses or consents of any government or other authority that shall be required for the purposes of this Agreement. Client shall produce evidence to Contractor upon request of such licenses or consents. Any additional expenses or charges incurred by Contractor resulting from any failure on the part of Client to perform its obligations under this paragraph shall be for Client’s account.
6.5 Stored Products or Property. In the event that Client goods are stored at Contractor’s facility for service or for any other reason, Client shall arrange for removal of such goods at Client’s expense within sixty (60) days (the “Removal Period”) following Contractor’s notice to Client that such goods are ready for shipment. Any storage beyond the Removal Period shall be for Client’s account at a rate determined from time to time by Contractor in its sole discretion. Unless otherwise agreed in writing by Contractor after the Removal Period (in addition to all other rights of Contractor), Contractor at its sole option and at any time may (i) ship such goods to Client at Client’s expense; or (ii) sell such goods and apply the proceeds to Contractor’s storage charges and any expenses of sale. Client releases and shall release, indemnify and hold Contractor harmless from any claim, liability or obligation arising, directly or indirectly, from the storage, removal, return, sale, transfer or disposal of such goods notwithstanding the negligence, fault or strict liability of Contractor.
7. WARRANTY FOR PRODUCTS AND SERVICES.
7.1 Services. Contractor agrees to perform all Services in a good and workmanlike manner and in accordance with good oilfield practices. Contractor will exercise diligence to provide correct log, test and other data and safe transport of all log, test and other data. If Client believes that Contractor has materially failed to perform the Services that Contractor has agreed to provide under the Contract, Client must, within 24 hours from the time that Client becomes aware of the material failure, inform Contractor with notice providing details of the material failure. If this notice is provided by Client, and if the material failure is a result of circumstances or reasons that are solely within the control of Contractor, Contractor's sole liability and Client's exclusive remedy in any cause of action for breach of the foregoing warranties for services arising out of Contractor's Services provided hereunder are expressly limited to, at its sole discretion:
(a). re-perform, within 7 days of receiving notice from Client, the Services that it materially failed to perform; or
(b). provide a refund of the cost of that portion of the Services that it materially failed to perform.
Client agrees and acknowledges that Contractor’s obligations in respect of services that it has failed to perform as agreed under the Contract are limited to those described above in 7.1(a) and 7.1(b), and then only if (1) Client has given notice as described above; and (2) if the failure to perform is material and as a result of circumstances or reasons that are solely within the control of Contractor. Client also agrees and acknowledges that if it fails to give notice as required, Contractor will have no obligation whatever in respect of Services that it has failed to perform as agreed under the Contract.
Contractor may provide Client with Contractor’s interpretation of logs, tests or other data. Contractor may also provide Client with Contractor’s recommendation regarding Services or Products required. Client understands and acknowledges that these interpretations and recommendations are mere opinions, based upon the judgment and experience of the person providing the interpretation or recommendation. Client understands and acknowledges that if it chooses to rely upon these interpretations and opinions, it does so at its own risk. Client also understands and acknowledges that in offering interpretations and recommendations, Contractor makes no warranty whatever with respect to the accuracy or completeness of any log, test or other data, the design, engineering, performance, or effectiveness of Products, materials, rentals or supplies used, the accuracy or completeness of the interpretation or recommendation, and shall not be responsible for Client’s use of said interpretations and recommendations.
Contractor will not be responsible for accidental or intentional interception of or tampering with data by others, or for any other damage to or loss of data. Contractor does not guarantee the safe storage or the length of time of storage of any digital tapes, optical logs or prints, or other similar products or materials.
Contractor will not be responsible for any failure in Services as a result of inaccurate or incomplete information, data or records provided by Client.
7.2 Products. Contractor agrees that Products supplied by it will be of the quality and specifications represented to Client by Contractor. Contractor reserves the right, at its sole discretion, to use new, used or refurbished parts in the assembly of its Products. Contractor warrants all its Products to be free of defects in material and workmanship for a period of 12 months from the date of installation or the date of delivery to Client Ex Works Contractor facility set forth in the quotation or other document as agreed to by Contractor, whichever occurs first, provided that with respect to Contractor completions systems Products, such Products shall comply with the 12 months warranty described above from the date of delivery of such Products to Client.
The Products warranty described above does not apply to:7.3 Rentals. Contractor agrees that rentals hereunder are warranted to be free from defects in materials and workmanship. In the event that defects in materials or workmanship appear, Client’s remedy shall be exclusively limited, in the sole discretion of Contractor, to either (i) the replacement of affected rentals; or (ii) proportionate rebate of the rental price of the defective rentals; provided, Contractor is notified in writing within the rental period.
7.4 Third Party Warranties. For Work supplied by Contractor's subcontractors, vendors, or suppliers, Contractor shall assign third party warranties, if any, to Client, to the extent such warranties are assignable.
7.5 Client Substituted Work. In no event shall Contractor be liable for the cost of substitute products, services or rentals obtained by Client from others to cover any Services and/or Products which is defective or otherwise not in compliance with the applicable Contract.
7.6 Express Warranty Only. The warranties set out in this Section 7 are in lieu of all other warranties, whether oral, written, express, implied or statutory. Implied warranties of fitness for a particular purpose and merchantability shall not apply. Contractor's warranty obligations and Client’s remedies under such warranty obligations (except as to title) are solely and exclusively as stated herein. Further, Client shall be RESPONSIBLE FOR and agrees to RELEASE, PROTECT, DEFEND, INDEMNIFY and HOLD HARMLESS Contractor group from and against any and all warranty claims (direct or indirect) that are not based on, or exceed the limitations of, the express warranties set forth in this Section 7.
8. TITLE AND RISK OF LOSS.
8.1 Unless otherwise stated in the relevant Order, Title to and risk of loss for Products sold pass to Client Ex Works Contractor facility set forth in the quotation or other document as agreed to by Contractor. Client agrees that title to and risk of loss for Products will still pass to and remain with Client Ex Works Contractor applicable facility, even if Contractor agrees to store the Products at a Contractor location for a later delivery at Client’s request. Client will pay or reimburse Contractor for all freight, preparation, and in-transit insurance costs from the Contractor facility to the location at which delivery to Client occurs.
8.2 Contractor retains a registrable security interest in the Products to the extent of any unpaid balance of the purchase price, and Contractor may use all reasonable efforts to retain or obtain possession of such Products or to perfect its security interest until the unpaid balance has been received and accepted by Contractor. The time, place or manner of payment by Client will not in any way limit Contractor's rights in and to the Products until payment has been received in full.
8.3 Notwithstanding the provisions of this Section 8, Contractor shall have no liability of any kind for loss or damage of Products after 15 days from the date Contractor has notified to Client that such Products are ready at the agreed place of delivery, even if such loss of damage has been caused by the fault or negligence of the Contractor. Contractor’s only obligation after the 15-day period shall be the delivery to Client of the Products in a “as is basis”, which will also be considered as the original condition of such Products for the provision of any Warranty. Any Warranty period will start the day after the 15-day period as well as Contractor’s right to pursue payment for the Products, including storage (at the rate per day specified by Contractor at the time it notifies Client that such Products are ready) and any other costs incurred by Contractor in relation therewith.
9. INDEMNITIES.
9.1 Personnel.
(a). Contractor assumes all liability for; and agrees to release, defend and indemnify Client Group and its insurers against, all Claims arising out of or in connection with personal injury, illness or death of any member of Contractor Group or its subcontractors, and which arise out of or are in connection with the Contract or the Services, regardless of the cause.
(b). Client assumes all liability for, and agrees to release, defend and indemnify Contractor Group and its insurers against, all Claims arising out of or in connection with personal injury, illness or death of any member of Client Group or its contractors (other than Contractor) and subcontractors, and which arise out of or are in connection with the Contract or the Services, regardless of the cause.
9.2 Property.
Client assumes all liability for, and agrees to release, defend and indemnify Contractor Group and its insurers from and against, all Claims arising out of or in connection with:
(a) loss of and/or damage to the Client Group’s or its contractors' (other than Contractor) or subcontractors' property, equipment, rentals, materials or products (including recovery, repair and replacement expenses), regardless of the cause; and
(b) loss of and/or damage to Contractor Group’s or its subcontractors property, equipment, materials or products, whether rented, leased, owned or otherwise obtained by Contractor (including recovery, repair and replacement expenses), regardless of the cause, which occurs:
(1) While being rented and/or leased from Contractor Group;
(2) While in the well bore, or inside the casing or riser below the rotary table or drill floor, or while in the casing or riser otherwise connected to the well bore; orv
(3) While in transit or being moved on any form of transportation owned or furnished by Client; or
(4) While being used by or while under the custody or control of any person other than a Contractor employee, whether in an emergency or otherwise; or
(5) As a result of inferior integrity of or an improperly maintained lease road, private access road or work site; or
(6) While located at the well site or facility when Contractor personnel are not present; or
(7) As a result of a subsurface occurrence including, but not limited to uncontrolled well conditions, abrasive or corrosive elements in the well, fire, cratering or explosion, wild well or blowout.
In the event of a claim by Contractor under this paragraph (b), the Client shall exert its best efforts to recover lost property, equipment, materials and products for Contractor at Client's sole risk and expense. If property, equipment, materials and products are not recoverable, Client shall reimburse Contractor for the loss of the property, equipment, materials and products, it being understood that all lost or damaged items will be valued at their respective landed new replacement cost, unless a specific value for reimbursement to Contractor has been agreed beforehand in the Contract documents. Contractor shall charge the relevant amounts to Client in invoices to be paid in accordance with section 3 above. With respect to paragraphs (b)(1) and (b)(2) above, rental charges on the equipment lost or damaged shall continue to be paid by Client up to and including the date on which Contractor receives notice in writing of the loss or damage. Contractor shall retain title to all damaged or lost property, equipment, materials or products and no title or other interest in damaged or lost property, equipment, materials or products shall accrue to Client in each instance.
(c) Client shall promptly return to Contractor damaged and/or lost equipment subsequently recovered, without opening or inspecting such equipment.
9.3 Special Indemnity.
Notwithstanding anything to the contrary in these General Terms and Conditions, the Client agrees to defend and indemnify Contractor Group and Contractor Group’s insurers from and against all Claims brought by or on behalf of any member of Client Group, Contractor Group or any Third Party, and arising out of or in connection with the Contract for property damage, personal injury or death, or loss of any kind, regardless of the cause, and resulting from:
(a). blow-out, cratering, wild well or work performed to control a wild well;
(b). pollution, contamination, or radiation damage, whether caused by Client’s failure to properly handle, transport or dispose of any Substances as required by Sections 6.2, 6.3 and 6.4 or otherwise, including containment, clean-up and remediation of the pollutant and contamination, whether or not legally required;
(c). reservoir or underground damage (including loss of oil, gas, other mineral substances or water or the well bore itself) or surface damage arising from subsurface or subsea damage or resulting from fracturing services;
(d). costs to control a wild well, underground or above the surface, including any redrilling or reworking and related clean up costs;
(e). damage to property owned by, in the possession of, or leased by Client, or by the well or facility owner if different from Client (the term “owner” includes working and royalty interest owners or the owner of any drilling rig, platform or other structure at the well site or facility);
(f). subsurface trespass; or
(g). catastrophic facility failure, including fire and explosion, and the costs to control, remediate or rebuild same.
(h) resulting from the use, transportation, storage or disposal of Chemicals, including but not limited to drilling, workover or completion fluids and including chemicals and samples as defined in Section 6.2.
9.4 Surface Pollution. Subject to Sections 9.1, 9.2, and 9.3, Contractor's liability for pollution hereunder is expressly limited to pollution or contamination occurring above the surface of the land or water, having never been introduced into the well, originating from Contractor's equipment or vessel(s), under Contractor's sole control and resulting from Contractor's sole negligence.
9.5 Application of Indemnities. The assumption of liability and indemnities in paragraph 9.1, 9.2, 9.3 and 9.4 above shall apply to any loss, damage, claim, expense, injury, illness or death without regard to:
(a). the cause, including unseaworthiness, strict liability, inherently dangerous activity, breach of express or implied warranty, imperfection of material, defect or failure of equipment, defect, ruin or other condition of premises (including any conditions that pre-exist the execution of the Contract); or
(b). The negligence or other fault, whether sole, joint, concurrent, active, passive or gross, of the indemnified party or its contractors or subcontractors or its or their employees, agents or invitees.
9.6 Anti-Indemnity and Insurance Savings Clause. If any defense, indemnity or insurance provision contained in these General Terms and Conditions conflicts with, is prohibited by or violates public policy under any federal, provincial, territorial or other law determined to be applicable to a particular situation arising from or involving any Services or Products under the Contract, the Parties understand and agree that the conflicting, prohibited, or violating provision will be deemed to be automatically amended in that situation to the extent necessary to conform with, not be prohibited by and avoid violating public policy under that applicable law. No other provisions of this Agreement shall be amended or affected thereby. The Parties agree that the exculpatory, indemnification and hold harmless provisions herein shall be modified or altered only insofar as required by a jurisdiction purporting to limit such provisions, it being the intention of both Parties to enforce to the fullest extent all terms and conditions herein agreed to.
10. NO INCIDENTAL OR CONSEQUENTIAL DAMAGES. The Parties expressly agree that Contractor and the members of the Contractor Group will not be liable under any circumstances to the Client and the members of the Client Group for any punitive, incidental, consequential, indirect or special damages, including any loss of profits or business interruption or loss of use, loss of production or loss of rig time. This exclusion of liability applies whether the liability is based in contract, tort (including negligence and strict liability), law, equity, statute or otherwise.
11. LIMITATION OF LIABILITY TO SERVICE OR PRODUCT VALUE IN CONTRACT. Contractor’s liability, however arising from or in connection with the Contract shall not in any circumstances exceed the price paid or payable under the Contract for the Services or Products specifically giving rise to that liability. This limitation of liability applies whether the liability is based in contract, tort (including negligence and strict liability), law, equity, statute or otherwise.
12. INSURANCE. Each Party, in its role as an indemnifying party, must support the respective indemnity obligations it assumes under the Contract, by obtaining at its own cost, adequate insurance for the benefit of the other party with contractual indemnity provisions or endorsements. To the extent of a Party’s assumed liability, that Party’s insurance must waive subrogation against the indemnified Contractor Group or Client Group, as applicable, and their respective insurers, and must name such indemnified group (Contractor Group or Client Group, as applicable) as additional insured(s) and loss payee(s). This coverage of the indemnifying party must be primary to that carried by the indemnified group (Contractor Group or Client Group, as applicable). The Client may not self-insure without the prior written consent of Contractor.
13. EMPLOYEE SOLICITATION. Except with the prior written consent of Contractor, the Client shall not directly, indirectly or through a third party solicit, recruit or induce any Contractor employee, consultant or representative to terminate his or her employment or other relationship with Contractor in order to become an employee, consultant or representative of the Client until at least one (1) year has elapsed from the time that the Client receives the final invoice for the Services or Products provided under the Contract.
14. INTELLECTUAL PROPERTY. Contractor owns all rights to the proprietary intellectual property embodied in its services and products or which are created in the course of providing such services or products to Client. Contractor does not transfer any ownership rights in such intellectual property to Client. Contractor will be liable for intellectual property infringement claims arising out of Client’s normal use of Contractor’s products and services but will not be liable for infringement that arises: (i) out of Client’s use of Contractor products or services in combination with products or services not provided by Contractor; (ii) where Contractor products or services have been specially modified, designed and/or manufactured to meet Client's specifications; (iii) out of unauthorized additions or modifications to Contractor products or services; or (iv) where Client's use of Contractor products or services do not correspond to Contractor published standards or specifications.
15. EXPORT LAW COMPLIANCE. Client is advised that the Products sold under this Agreement are subject to the U.S. Export Administration Regulations and the Export and Import Permits Act (Canada), and diversion contrary to such laws and regulations is prohibited. Client agrees not to directly or indirectly export, import, or transmit the Work to any country or end user, or for any end use, that is prohibited by any applicable U.S. or Canadian law or regulation (including without limitation, to those countries, from time to time, subject to embargo by the U.S. or Canadian governments). Additionally, Client agrees not to directly or indirectly export, import, transmit, or use the Products contrary to the laws or regulations of any other governmental entity that has jurisdiction over such export, import, transmission, or use. Client represents that none of the Canadian Government, the United States Bureau of Industry and Security nor any other governmental agency has suspended, revoked, or denied Client’s export privileges. Client agrees not to use or transfer the Work for any end use relating to nuclear, chemical, or biological weapons, or missile technology, unless authorized by the U.S. or Canadian government by regulation or specific written license.
16. MICELLANEOUS
16.1 Contractor shall not be liable for any delay or non-performance of its obligations under the Contract due to governmental regulation, labour disputes, hostile action, weather, fire, acts of God or any other causes beyond the reasonable control of Contractor.
16.2 All notices and inquiries pertaining to this Agreement shall be in writing and shall be delivered either personally to the designated representative of the Party being notified or sent by electronic mail (e-mail), postal mail, or courier service to the address designated by the recipient Party.
16.3 Any disputes arising under or in relation to the Contract shall be determined by binding arbitration pursuant to the Arbitration Act (Alberta), as amended. The arbitration will be conducted in Calgary, Alberta. Any judgment upon the award rendered by the arbitrator will be final and conclusive and may not be appealed by either Party.
16.4 The Contract shall be governed by the laws of the Province of Alberta, Canada.
Client hereby acknowledges and declares that this General Terms and Conditions have been read and understood and that they form a part of the Contract. By accepting or signing this or any of the documents attached hereto the signatory confirms that he or she is authorized by the Client to execute the Contract and bind the Client to the Contract.