These Terms and Conditions, together with the quotation agreed to by the Parties, (collectively, this “Agreement”) constitute a legally binding contract between Hephae Energy Technology Corp (Hephae) and the Client (collectively, the “Parties”). This Agreement, together with any documents incorporated by reference herein, constitutes the complete and exclusive understanding and agreement of the Parties and supersedes all prior negotiations, proposals, and agreements, whether written or oral, including but not limited to any purchase order or terms and conditions submitted by Client (whether or not accepted by Hephae), regarding the subject matter hereof.

THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS, RELEASES OF LIABILITY AND ALLOCATIONS OF RISK. IF HEPHAE ENERGY TECHNOLOGY CORP RENTS ANY TOOL OR PROVIDES ANY SERVICES TO CLIENT, CLIENT AGREES TO BE BOUND BY ALL OF THESE PROVISIONS WITH RESPECT TO THOSE TOOLS AND SERVICES.

1. Provision of Services and Rental of Tools.

Hephae agrees to perform all services (“Services”) and to rent all tools and other equipment identified and agreed to by Client on the attached quotation. All Services and Tools shall be provided by Hephae, subject to these Terms and Conditions. By receiving Services or renting Tools from Hephae, Client agrees to be bound by these Terms and Conditions.

2. Invoicing and Payment Terms

All rental charges, service charges and prepaid transportation and cartage are net and are payable on or before thirty (30) days from the date of the invoice.  Interest will be charged at the maximum rate allowed by law after sixty (60) days following the date of the invoice.  In the event of suit to collect rental or other charges, Client agrees to pay reasonable attorney’s fees and court costs.

3. Taxes.

Client shall pay or reimburse Hephae for, to the extent allowed by applicable laws and regulations, all sales taxes or other taxes (other than Hephae’s income taxes) imposed by any government, governmental unit or similar authority with respect to the charges made or payments received by Hephae in connection with the Work.

4. Independent Contractor

Hephae Energy Technology Corp shall at all times be deemed to be an independent contractor. Nothing contained in this Agreement shall be construed as creating the relation of employer and employee, agent, or joint-venture between Hephae Energy Technology Corp, or its employees, and Client.

5. Obligations of Client

Client shall ensure that it will have an agent or representative present at the Job Site to advise Hephae on the well specifications necessary to carry out the Services including, without limiting the generality of the foregoing, pressures, depths and materials.

Client acknowledges and agrees that at all times it shall have full care, custody and control of the location where the Services are to be performed or the Tools are to be used, including the well, the well site, and all drilling and production and related equipment present thereon (collectively, the “Job Site”).

Client shall stop any activity that Client deems unsafe until corrective measures have been taken. 

6. Warranty

Hephae warrants that it will provide all Services in a good and workmanlike manner using reasonable skill through qualified personnel in accordance with the terms of this Agreement.  However, Client acknowledges and agrees that the Services performed by Hephae are of such a nature that no certainty of result can be assured. Hephae has made a diligent effort to accurately illustrate and describe the Tools on its website and in its catalogs and other sales and marketing materials.  However, the illustrations and descriptions are for the sole purpose of identification and do not express or imply any additional warranty or that the Tools will conform to the exact illustrations or descriptions represented. 

EXCEPT AS EXPRESSLY PROVIDED HEREIN, HEPHAE GIVES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE TOOLS OR THE SERVICES. HEPHAE DISCLAIMS ALL SUCH EXPRESS OR IMPLIED WARRANTIES, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE.

7. Title and Risk of Loss

Unless otherwise agreed between the parties in an applicable Order, title to and risk of loss for Products sold, will pass to Client upon delivery to Client’s designated carrier at Hephae’s manufacturing facility. The prices of Products exclude any costs of transportation, handling, insurance or any other costs for delivery beyond Hephae’s manufacturing facility. At Client’s request, Hephae may arrange for shipment of Products to a location designated by Client, and Client will pay or reimburse Hephae for all freight, preparation, and in-transit insurance costs so incurred by Hephae.

8. Repair, Disassembly, and Modification of Tools

Client shall not, and shall take reasonable steps to ensure that third-parties under Client’s control shall not, repair, refurbish, remanufacture,  change, alter, or in any way modify any Tool or any features, functions or other aspects of any Tool, without the prior written approval of an officer of Hephae. Client agrees that it will (i) not use, display, distribute, copy, create, attempt to create, reverse engineer, disassemble, decompile or modify any Tool or any features, functions or other aspects of any Tool, or any copy, modification, or merged portion thereof, except as expressly authorized by this Agreement; and (ii) use reasonable care to protect the Tools from unauthorized use, display, copying, reverse engineering, disassembly, decompilation, modification or distribution with at least the same level of effort and security as it has in effect with to its own products and proprietary rights, which in no case shall be less than industry standards.

9. Data

Tools rented by Client pursuant to these Terms and Conditions contain sensors and other electronic components that generate or gather data during operation of the Tool. Unless purchased by Client pursuant to this section, Hephae will own and have exclusive rights to all data generated or gathered by the sensors and other electronic components contained in the Tool during the operation of the Tool, regardless of whether the information generated or gathered relates to the operation or condition of the Tool or relates to Client’s wells, reservoirs, facilities, or operations (including geological data, geophysical data, petrophysics data, logging data, depth, formation penetration, coring, testing and survey results and information on wellbore, production, reservoir, geology, and formations encountered in a well).

10. Indemnities

For the purposes of this section:

“Claims” shall mean all disputes, liability, actions, causes of action, demands, judgments, deficiencies, interest, liens, claims, damages, costs and expenses (including, but not limited to, court costs, penalties, attorney’s fees and disbursements and amounts paid in settlement) of any kind or character whatsoever, whether primary or contingent, and whether arising out of written documents or unwritten undertakings, and whether based in contract, statute, tort or some other theory of liability;

“Hephae Group” shall mean Hephae, its affiliates, subsidiaries, partners, joint owners, joint venturers, consultants, and subcontractors, and the directors, agents, representatives, employees, insurers, sub-contractors, invitees, and consultants of any of the foregoing; and

“Client Group” shall mean Client, its parent, affiliates, subsidiaries, partners, joint owners, joint venturers, consultants, and contractors (not including any member of Hephae) and the directors, agents, representatives, employees, insurers, invitees, consultants and contractors of any of the foregoing.

Hephae shall release, defend, indemnify and hold harmless Client Group from and against any and all Claims arising out of or relating to (1) any personal injury, illness or death of any member of the Hephae Group or (2) any damage to property owned by any member of the Hephae Group or used by any member of the Hephae Group in connection with providing the Services. Hephae’s defense and indemnity obligations under this section shall apply even if the damage, injury, or claim is caused in whole or in part by the sole, concurrent, active or passive negligence, gross negligence, strict liability, or statutory strict liability of Client or any member of the Client Group.

Client shall release, defend, indemnify and hold harmless the Hephae Group from and against any and all Claims arising out of or relating to (1) any personal injury, illness or death of any member of the Client Group or (2) any damage to property owned by any member of the Client Group. Client’s defense and indemnity obligations under this section shall apply even if the damage, injury, or claim is caused in whole or in part by the sole, concurrent, active or passive negligence, gross negligence, strict liability, or statutory strict liability of Hephae or any member of the Hephae Group.

Client’s liability for loss of or damage to Hephae Group’s Tools shall be as follows:

NOTE: Client’s defense and indemnity obligations under this section shall apply even if the damage, injury, or claim is caused in whole or in part by the sole, concurrent, active or passive negligence, gross negligence, strict liability, or statutory strict liability of Hephae or any member of the Hephae Group.

Notwithstanding any other provision of this Agreement to the contrary, if Hephae is using a Tool in conjunction with performing Services, then Client shall be responsible for and shall indemnify, defend, and hold harmless Hephae, from any loss of or damage to the Tool while such Tool is below the rotary table.

Notwithstanding any other provision of this Agreement to the contrary, if Hephae is not performing Services for Client, but Client is only renting a Tool from Hephae, then Client shall be responsible for and shall indemnify, defend, and hold harmless Hephae,  from any loss of or damage to the Tool, if the Tool is (a) lost in hole while being used in the well below the rotary table; (b) damaged (other than ordinary wear and tear) while in the care, custody, or control of Client, which care, custody, or control of Client shall begin once the Tool is loaded on a truck at Hephae’s facility for mobilization to the Job Site and shall end when the Tool is unloaded at Hephae’s facility; or (c) damaged due to abnormal abrasion or corrosion due to exposure to well effluents or excessive or abnormal temperatures while being used in the well below the rotary table, except to the extent that such damage or loss was caused by Hephae Group’s negligence or a defect in Hephae Group’s Tool.

If Client is obligated to indemnify Hephae under these sections, Client shall reimburse Hephae (a) the cost of repair, if the Tool can be repaired, or (b) the Lost in Hole Price of the Tool if (i) the Tool is lost in hole, (ii) the Tool is damaged beyond repair, or (iii) the cost of repairing the Tool exceeds the Lost in Hole Price. “Lost in Hole Price” shall mean the amount shown for each Tool, electronic component, or sensor on Hephae’s published LIH/DBR Cost Schedule. Client shall bear all cost of fishing for any Tool or other equipment downhole.

CLIENT AND HEPHAE AGREE THAT, NOTWITHSTANDING ANY OTHER PROVISION HEREOF TO THE CONTRARY, CLIENT SHALL BE SOLELY LIABLE FOR AND SHALL RELEASE, DEFEND, INDEMNIFY AND HOLD HEPHAE GROUP HARMLESS FOR ALL CLAIMS BY ANY PERSON OR ENTITY ARISING FROM OR RELATING TO:

DAMAGE TO OR LOSS OF ANY RESERVOIR, PRODUCTION FORMATION, WELL OR BOREHOLE, OR ANY INJURY TO, DESTRUCTION OF, OR LOSS OR IMPAIRMENT OF ANY PROPERTY RIGHT IN OR TO OIL, GAS, OR OTHER MINERALS, SUBSTANCE, OR WATER;

A BLOWOUT OR OTHER LOSS OF WELL CONTROL INCLUDING, POLLUTION (INCLUDING CONTROL, REMOVAL, OR REMEDIATION THEREOF) OR THE COST OF KILLING, CONTROLLING, REDRILLING, OR REWORKING THE WELL; AND

ANY POLLUTION, HAZARDOUS SUBSTANCES, REGULATED SUBSTANCES, RADIOACTIVE MATERIAL, ENVIRONMENTAL DAMAGE OR SIMILAR MATTER OF ANY KIND, AT, ON, UNDER, OR EMANATING FROM THE JOB SITE, INCLUDING WITHOUT LIMITATION CONTROL, REMOVAL, AND REMEDIATION THEREOF.

Client’s obligations under this section apply even if the injury, loss, damage or claim is caused in whole or in part by the sole, concurrent, active or passive negligence, gross negligence, strict liability, or statutory strict liability of Hephae or any member of the Hephae Group.

In no event shall either Party, or any of their respective parents, affiliates, subsidiaries, officers, directors, shareholders, employees, agents, contractors,  or sub-contractors, be responsible for or liable to the other Party for any consequential, incidental, indirect, exemplary, punitive, or special damages, including, without limitation, loss of profits, loss of business, indirect economic damages, loss of or inability to use property, loss of rig time, loss of hole or re-drilling expenses, damages for failure to meet deadlines, and equipment or business interruption damages or expenses, howsoever same may be caused, regardless of ownership, regardless of whether or not occasioned by or resulting from negligence, strict liability, or other fault of either Party, in whole or in part whether sole, joint, active or passive.

The Parties intend for the allocation of risks, responsibilities, losses, and liabilities contained in this section 10 (Indemnities) to supersede all other allocations of risk, responsibilities, losses and liabilities, regardless of whether such other allocations arise from or are created by contract, statute, rule, regulation, common law, or any other source.

Regardless of the Claim or the basis for the Claim, Hephae’s total liability to Client shall not exceed the total sum paid by Client to Hephae for Services and Tool rentals for the particular job or project that gave rise to the Claim.

At all times during the term of this Agreement, the Parties agree to support their mutual indemnity obligations under this Agreement by obtaining and maintaining liability insurance or self-insurance coverage with contractual indemnity endorsements and waiver of subrogation against the other Party, which each Party shall, at its own expense, maintain for the benefit of the other Party and its Group as indemnified parties. However, the liabilities of the Parties shall not in any way be limited to the amounts of insurance required herein (except to the extent expressly mandated by applicable law).

11. Employee Solicitation

Except with the prior written consent of Hephae, Client shall not directly, indirectly or through third parties solicit, recruit or induce any Hephae employee, consultant or representative to leave, terminate or otherwise end his/her association with Hephae in order to become an employee, consultant or representative of Client Group until at least one (1) year has elapsed from Client’s receipt of the final invoice for the Work.

12. Intellectual Property

Hephae owns all rights to the proprietary intellectual property embodied in its Work or which are created in the course of providing such Work to Client. Hephae does not transfer any ownership rights in such intellectual property to Client and Client shall not reverse engineer or cause any Hephae property or products to be reverse engineered without Hephae’s express written consent. Hephae will be liable for intellectual property infringement claims arising out of Client’s normal use of Hephae’s Work but will not be liable for infringement that arises: (i) out of Client’s use of Hephae Work in combination with work, products or services not provided by Hephae; (ii) where Hephae Work has been specially modified, designed and/or manufactured to meet Client’s specifications; (iii) out of unauthorized additions or modifications to Hephae Work; or (iv) where Client’s use of Hephae Work does not correspond to Hephae published standards or specifications. Any Claim for intellectual property infringement shall be brought to Hephae in writing within ten (10) calendar days of service on Client or this indemnity shall be void.

13. Force Majeure

Hephae shall not be liable for delay or non-performance due to any cause beyond the reasonable control of Hephae, including without limitation, strikes, acts of government, hostile actions, public riot, terrorism, weather, or other acts of God (referred to herein as “Force Majeure”).

Lack of finances shall not be considered a Force Majeure. Force Majeure shall not excuse any obligation for payment.

14. Confidentiality

All confidential information obtained by Hephae from Client and by Client from Hephae relating to the Services or the Tools shall be considered confidential information of the disclosing party. Such information shall be used by the receiving party only to perform this Agreement, and the receiving party shall not disclose such information to any third party other than the receiving party’s representatives, except where such disclosure is required by law.

15. Termination of Agreement

If Client terminates this agreement early, Client shall pay Hephae for all Services completed up to the time of termination and for any costs and incurred or arising in connection with such termination including, without limitation, Hephae’s demobilization costs.

16. Applicable Law; Venue; Waiver of Jury Trial.

The interpretation and performance of this Agreement and each quotation hereunder shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to any choice of law rules which may direct the application of the laws of any other jurisdiction. The state and federal courts sitting in, or presiding over, Harris County, Texas shall have exclusive jurisdiction over any lawsuit arising out of or relating to this Agreement. Each Party hereby irrevocably consents and submits to the jurisdiction of such courts, and irrevocably waives the right to object, with respect to such lawsuit, that such court does not have jurisdiction over such Party. The Parties hereby knowingly and intentionally waive the right to a jury trial on any issue or dispute arising out of or relating to this Agreement.

17. Miscellaneous

Neither Party may assign its rights or obligations hereunder without the written consent of the other Party, such consent not to be unreasonably withheld.

Failure of Client or Hephae to enforce any of the provisions of this Agreement shall not prevent subsequent enforcement of such term or condition or be deemed a waiver of any subsequent breach.

If a court determines that any provision of this Agreement is invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions shall not be affected or impaired.

Any amendment to this Agreement must be made by execution of a written document agreed to by authorized representatives of both Parties. Otherwise, no employee or agent of either Hephae or Client is empowered to alter or amend this Agreement.  No purchase order, work order, or similar document provided by Client shall in any way modify any of the provisions of this Agreement; provided, however, that if there is a master service agreement in place between Hephae and Client, the provisions of the master service agreement that contradict the provisions of this Agreement shall control.