1. Formation of Contract – Orders for services (“Services”) to be provided by FourQuest Energy Inc. (“FourQuest Energy or FQE”) to its customers (each a “Customer”) shall be governed by the following general terms and conditions (“GTCs”) and any additional terms and conditions agreed to in writing by an authorized representative of FourQuest Energy (collectively the “Agreement”). These GTCs shall become binding on Customer upon the earliest of: (i) Customer’s written acceptance of these GTCs; (ii) FourQuest Energy commencing performance of the Services; and (iii) the shipment of any equipment to be used by FourQuest in performing the Services.
2. Standard of Operations – All work or services rendered or performed by FQE shall be done with due diligence in a good and workmanlike manner, using skilled, competent and experienced workmen and supervisors, and in accordance with good oilfield servicing practices.
(a) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE TERMS OF THIS PARAGRAPH APPLY TO ANY SERVICES AND TO ANY EQUIPMENT RENTED OR LEASED WITH OR WITHOUT AN OPERATOR. FQE uses its best efforts to ensure that all service personnel furnished are competent and equipment is in good condition. FQE personnel will perform the work requested; however, because of the nature of the work to be accomplished and unpredictable conditions, the results of such services cannot be and are not guaranteed. FQE warrants the services provided hereunder for a period of thirty (30) days. NO WARRANTY IS GIVEN WITH RESPECT TO ENGINEERING AND TECHNICAL INFORMATION FURNISHED BY FQE OR WITH RESPECT TO THE RESULTS OF THE SERVICES PROVIDED BY FQE. FQE MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE DESIGN, OPERATION, OR QUALITY OF THE MATERIAL OR WORKMANSHIP OF RENTAL EQUIPMENT USED TO SUPPLY THE SERVICES PROVIDED TO CUSTOMER HEREUNDER, AND FQE MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY PARTICULAR PURPOSE OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER.
(b) FQE shall have no responsibility for any materials furnished and/or specified-by Customer.
(c) With regard to materials or equipment furnished by third party vendors and/or suppliers, FQE’s liability therefore shall be limited to the assignment of such third-party vendor’s and/or supplier’s warranty to Customer, provided such warranties are assignable.
(d) FQE agrees to maintain equipment in good operating condition at all times and shall use all reasonable means to protect Customer’s property and equipment.
(e) Notwithstanding anything to the contrary contained herein, except to the extent FQE’s equipment is lost or damaged as a result of the sole negligence of FQE, Customer agrees to defend, indemnify and hold FQE harmless from the loss of or damage to FQE’s tools or equipment related to downhole operations. Customer will replace such tools/equipment or reimburse FQE with the current replacement cost new. Should Customer decide to replace lost or damaged tools/equipment, the replaced items should be new and purchased or obtained from a reputable manufacturer and should meet all original equipment manufacturer’s specifications. Customer agrees to reimburse FQE for the cost of repair to such tools and equipment that are damaged other than from normal wear-and-tear during the rental period. However, before any major repairs are made to damaged equipment, approval for such repairs must be secured from an authorized representative of Customer. Customer shall not be responsible if FQE’s tools/equipment is damaged as a result of FQE’s negligent acts and/or omissions.
3. Time of Performance – FourQuest Energy will make reasonable efforts to deliver the Services within the time specified, but cannot guarantee to do so and shall not be liable for any loss or damage caused by delay regardless of the cause.
4. Force Majeure – FourQuest Energy shall not be liable for any delay or non-performance due to any cause beyond FourQuest Energy’s reasonable and direct control, including but not limited to governmental regulation or delay, landowner interference, strikes or other work stoppage or slow down, weather, floods, war, insurrection, riots, blockade and acts of God (“Force Majeure”). If performance is delayed or prevented by Force Majeure for more than ninety (90) days, either party may terminate this Agreement by written notice to the other party. Nothing in this provision shall relieve Customer from paying the costs of that portion of the Services performed by FourQuest Energy prior to the date of termination. Notwithstanding the foregoing, in the event that Customer declares a Force Majeure occurrence, FQE shall be compensated at the standard daily rate for the equipment and personnel which are standing idle as a consequence of the Force Majeure occurrence until Customer either terminates the contract or work resumes.
5. Permits – All necessary permits and licenses for the performance of the Services and the import and delivery of the equipment to be used by FourQuest Energy shall be the responsibility of Customer.
6. Transportation – Customer shall be solely responsible for and shall arrange for the safe access by FourQuest Energy to and from Customer’s property or any other property on which Customer may request Services from FourQuest Energy.
7. Work Site Conditions – Customer is solely responsible for the complete care, custody and control of the site (the “Site”) on which Services will be performed. Customer warrants that the site shall be in a good state of repair and in proper condition to permit the Services to be performed.
8. Health Safety and Environment (“HSE”) – Customer shall inform FourQuest Energy of Customer’s HSE requirements and shall make written HSE instructions available at all work sites and FourQuest Energy shall comply with same. Customer shall be responsible for the conduct of any required emergency drills and for ensuring that adequate means for emergency evacuation are in place pursuant to all applicable health and safety legislation.
9. Authorization – If Customer is not the owner or not the sole owner of the Site or the property on which the Services will be performed, Customer represents and warrants that it is the authorized and operating entity, or is the duly authorized agent of each of the owners of the Site or such property with full power to act for such owners with respect to all decisions and instructions made or given in respect of the Services to be supplied by FourQuest Energy pursuant hereto. Customer shall indemnify and shall protect, defend and hold harmless FourQuest Energy and its affiliates and their officers, directors, employees, representatives, agents, FQEs and subcontractors from and against all liabilities, losses or damages, claims, demands, causes of action, suits, proceedings, costs and expenses (including legal fees and disbursements on a solicitor and client basis) (“Claims and Losses”) (of every nature and kind whatsoever, without limit, arising from the provision by FourQuest Energy of Services on property if such Claims and Losses are made or incurred because Customer was not the authorized agent of each of the owners of the Site or did not have power to act for such owners.
10. Payment Terms – Customer shall pay FourQuest Energy in accordance with FourQuest Energy’s cost estimate and schedule of rates, which can be made available upon request. Prices are subject to change without notice. Terms of payment of charges are net cash in Canadian States Dollars within thirty (30) days from the date invoices are rendered. Any amount unpaid at the end of said thirty (30) days is subject to interest at 2% per month. If unpaid amounts are collected through legal proceedings or by a collection agent, Customer shall pay reasonable costs including solicitor and client fees and disbursements associated with such collection procedures.
11. Taxes – All charges for fees for any Services to be provided or performed hereunder by FourQuest Energy are exclusive of all assessments, fees, goods and services or value added taxes, provincial sales taxes, excise taxes, customs duties and charges imposed by any governmental authority upon or incidental to the performance of the Services, other than taxes assessed or measured by income or profit of a party (collectively “Taxes”). Customer shall pay or reimburse FourQuest Energy for any and all Taxes.
12. Confidentiality – Each party shall maintain all data and information obtained from the other party as well as information concerning the results of the Services in strict confidence, subject only to disclosure required by law and legal process unless such data, information and results are in the public domain. Notwithstanding the foregoing, FourQuest Energy shall be entitled to describe the Services and the project by title, scope, type and size and state the name of Customer in FourQuest Energy’s qualifications and its promotional materials.
13. Maintenance of Site Condition and Environment – During performance of the Services and until completion thereof, FourQuest Energy will ensure that the site is kept clean and in good repair. FourQuest shall pay and be responsible for control, disposal and/or removal of any liquid or non-liquid pollutant or waste materials, crude oil, natural gas, motor oils, lubricants, motor fuel, pipe dope, paints, solvents, whosesoever found, that is or has been accidentally discharged, leaked or spilled from its equipment being used to provide the Services. FourQuest Energy shall have no other liability in respect of spills, contamination or pollution occurring or arising during performance of the Services and Customer shall assume all liability for and defend, indemnify and hold harmless FourQuest Energy from any Claims and Losses arising out of such spills, contamination or pollution.
14. Indemnity Obligations
14.1 Definitions. The following terms shall have the designated definitions.
(a) Customer Group includes, individually or in any combination, Customer, its affiliates, contractors (other than FQE) and entities for whom Customer is performing services and each of their respective directors, officers agents, representatives, employees and invitees.
(b) FourQuest Energy Group includes, individually or in any combination, FQE, and its affiliates and contractors, and each of their respective directors, officers, agents, representatives, employees and invitees.
(c) Defend – the obligation of the indemnitor (i) to defend the indemnitees at its sole expense, or at the indemnitees’ election (ii) to reimburse the indemnitees for the indemnitees’ reasonable expenses incurred in defending themselves. Notwithstanding the indemnitee’s election of option (i) above, the indemnitee shall be entitled to participate in its defense at its sole cost.
(d) Losses – claims, demands, causes of action, losses, judgments, liabilities, indemnity obligations, costs, damages or expenses of any kind and character (including attorney’s fees and other legal expenses).
14.2 FourQuest Energy. FQE shall release, defend, indemnify, and hold harmless Customer Group from and against any and all Losses arising out of bodily injury or death or property damage or loss (including patent or license infringement resulting from the use of the Contractor Group’s property) suffered by the Contractor Group in connection with services performed, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE (IN ANY AMOUNT), STRICT LIABILITY OR OTHER FAULT OF ANY MEMBER OF CUSTOMER GROUP, THE UNSEAWORTHINESS OR UNAIRWORTHINESS OF ANY VESSEL OR CRAFT, OR A PREEXISTING CONDITION.
14.3 Customer. Customer shall release, defend, indemnify, and hold harmless FourQuest Energy Group from and against all Losses arising out of bodily injury or death or property damage or loss (including patent or license infringement resulting from the use of the Customer Group’s property) suffered by any of the Customer Group in connection with services performed, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE (IN ANY AMOUNT), STRICT LIABILITY OR OTHER FAULT OF ANY MEMBER OF FOURQUEST ENERGY GROUP.
14.4 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, CUSTOMER HEREBY AGREES TO ASSUME THE ENTIRE RESPONSIBILITY AND LIABILITY FOR, AND AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD FOURQUEST ENERGY GROUP HARMLESS FROM AND AGAINST ALL CLAIMS, LIABILITIES, DAMAGES AND EXPENSES (INCLUDING WITHOUT LIMITATION ATTORNEYS’ FEES, COURT COSTS, EXPERT WITNESS FEES AND ANY OTHER COST OF DEFENSE) FOR AND ARISING OUT OF THE FOLLOWING SPECIFIED TYPES OF CLAIMS, LOSSES OR EVENTS:
1. LOSS OR LIABILITY FOR DAMAGES OR AN EXPENSE ARISING FROM PROPERTY INJURY THAT RESULTS FROM RESERVOIR OR UNDERGROUND DAMAGE, INCLUDING LOSS OF OIL, GAS, OTHER MINERAL SUBSTANCE, OR WATER FROM A PIPELINE OR FROM THE WELLBORE ITSELF; OR
2. LOSS OR LIABILITY FOR DAMAGES OR ANY EXPENSE ARISING FROM COST OF CONTROL REALTED TO A BLOWOUT FROM A WILD WELL OR PIPELINE, UNDERGROUND OR ABOVE THE SURFACE.
THIS OBLIGATION TO INDEMNIFY, DEFEND AND RELEASE APPLIES REGARDLESS OF WHETHER OR NOT THE CLAIM OR LOSS IS OCCASIONED BY OR RESULTS FROM THE ACTUAL OR ALLEGED NEGLIGENCE OF CONTRACTOR OR ANY OTHER PERSON, OR ENTITY, IN WHOLE OR IN PART, WHETHER SOLE, JOINT, ACTIVE OR PASSIVE, EXCEPT TO THE EXTENT THE CLAIM OR LOSS IS DUE TO CONTRACTOR’S SOLE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
14.5 NOTWITHSTANDING THE FOREGOING, CUSTOMER SHALL HAVE SOLE RESPONSIBILITY AND LIABILITY FOR THE CONTROL AND REMOVAL OF AND SHALL HOLD FOURQUEST ENERGY GROUP HARMLESS FROM PROPERTY LOSS OR DAMAGE, FINES AND/OR PENALTIES FROM SUCH POLLUTION OR CONTAMINATION THAT RESULTS FROM SPILLS, INCLUDING BUT NOT LIMITED TO FUELS, LUBRICANT, MOTOR OILS, PIPEDOPE, PAINTS, SOLVENTS, METALLIC OBJECTS AND GARBAGE IN CUSTOMER’S POSSESSION AND CONTROL, REGARDLESS OF OWNERSHIP, REGARDLESS OF WHETHER OR NOT OCCASIONED BY OR RESULTING FROM THE NEGLIGENCE, STRICT LIABILITY, BREACH OF WARRANTY OR OTHER FAULT OF FQE, IN WHOLE OR IN PART, WHETHER SOLE, JOINT, ACTIVE OR PASSIVE. THE INITIATION OF CLEAN-UP OPERATIONS INCLUDING CONTROL, RESPONSE AND REMOVAL, BY EITHER PARTY SHALL NOT BE AN ADMISSION OF ASSUMPTION OF LIABILITY BY THE INITIATING PARTY OR PARTIES.
14.6 During the term of this Contract, FQE and its subcontractors or their officers, directors and employees may have
occasion to be upon or about property, platforms, vessels, equipment or other premises belonging to or under the control of or in the possession of or under contract to Customer while performing services for another Customer or while in transit between a vessel and another location. In such event, FQE’s and Customer’s indemnification rights and obligations under this Contract shall apply to the same extent as if FQE had been employed at the request of or for the benefit or account of Customer.
14.7 In no event shall FQE’s liability under any work or purchase order exceed the value of such work or purchase order.
15. Indirect and Consequential Damages – FourQuest Energy and Customer agree that neither party shall be liable to the other party for lost profits, loss of production, business interruption losses or any indirect or consequential damages, special damages, or punitive damages arising from the performance of or failure to perform such party’s obligations under this Agreement, or from any other cause, whether arising in negligence, tort, statute, equity, contract, common law, or any other cause of action or legal theory.
16. Insurance – FourQuest Energy and Customer represent and warrant, each to the other, that the indemnities provided in this Agreement are fully covered by appropriate insurance or voluntarily self-insured and upon the request of a party, the other will provide a copy of its insurance policy in that regard.
17. Cancellation – Customer may terminate an order for the Services hereunder at any time prior to completion of the Services. Upon such termination, Customer shall pay FourQuest Energy for the costs of that portion of the Services performed up to the date of termination and FourQuest Energy’s demobilization costs or charges.
18. Dispute Resolution – Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules (“Rules”), which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be Calgary, Alberta. The language of the arbitration shall be English.
19. Assignment – Neither party shall be permitted to assign any of its rights or obligations under this Agreement in whole or in part, except with the express written consent of the other party, which consent shall not be unreasonably withheld.
20. Severability – All paragraphs, sentences and words used herein are separable and the invalidity or unenforceability of any such part hereof shall not affect the validity or enforceability of any other part.
21. Amendments and Waiver – No amendment or modification of this Agreement shall be deemed valid unless in writing and signed by both parties. A waiver of any breach of or failure to enforce any of the terms and conditions of this Agreement in a particular instance or instances shall not constitute a subsequent waiver thereof or preclude subsequent enforcement thereof.
22. Survival – The provisions respecting liability and indemnification shall survive termination of this Agreement.
23. Governing Law – Notwithstanding that the Goods may be delivered or the Services may be performed outside of the State of Texas, the parties acknowledge and agree that these terms and conditions shall be governed and construed in accordance with the laws of the State of Texas and the federal laws of the United States applicable therein, without regard to any conflict of laws principle that could require the application of any other law, and each party irrevocably agrees to the jurisdiction of the courts of the Texas and all courts of appeal therefrom.
24. Entire Agreement – This Agreement constitutes the entire agreement between the parties. There are no other terms, obligations, covenants, representations, statements or conditions applicable to the agreement between the parties. Any new, different, or conflicting terms and conditions, provided before or after these GTCs and on either party’s standard forms or otherwise, are expressly rejected and shall not apply to this Agreement unless such new, different or conflicting terms and conditions are in writing and expressly agreed to and signed by both parties.
