Warranty and Responsibility;
 
It is recognized that work or conditions in and about any well may involve hazards to life and property and obstacles to the functioning of products and the performance of services, and that such conditions are not and never have been subject to inspection or control by Select Energy Systems Inc. (herein referred to as SESI).
 
It is therefore agreed that:
 
1. TERMS OF PAYMENT – 30 days NET on approved credit. All sales are COD, if not specified otherwise. In order to be able to purchase products and services with SESI all customers must have their credit approved. If the approved credit limit is exceeded, COD will apply to further purchases until the account meets the credit limit previously established. All accounts not paid on time (at NET 30) are interest chargeable thereafter at 2% per month (24% per annum).
 
2. CANCELLATION AND RETURNS – Orders for products of special design, size or materials are not cancelable after order is confirmed at SESI.s offices. Credit will not be granted for products returned without prior written authority. No credit will be given for shipping charges incurred by the Customer.
 
3. TAXES AND OTHER CHARGES – Any tax based on or measured by the charges or collection for the sale of products or the rendering of services, import duties, documentation charges, freight charges and transfer fees shall be added to the stated price.
 
4. LIABILITIES AND INDEMNIFICATION – Subject to the exclusions herein set out, SESI will be liable to the Customer for all claims, costs and damages which the Customer may suffer, sustain, pay or incur, where directly attributable to the gross negligence or willful misconduct of SESI and in addition, SESI shall indemnify and hold harmless the Customer from all claims, actions or demands of every kind which may be brought against the Customer, arising in connection with these Terms and Conditions, but only that which may be attributable to the gross negligence or willful misconduct of SESI. The foregoing shall not apply where the Customer’s negligence and/or act or omission has contributed in any fashion to or caused such claim, cost and damage.
 
a. The Customer will be liable to SESI for all claims, costs and damages which SESI may suffer, pay or incur as a result of services provided or products sold in accordance with these Terms and Conditions, and in addition the Customer will indemnify and hold harmless SESI from all claims, actions or demands of every kind which may be brought against SESI arising from services provided or products sold hereunder. The foregoing shall not apply where such claims, actions or demands arise from the gross negligence or willful misconduct of SESI.
 
b. The entire liability of SESI including express and implied warranties, in connection with its products or services is set forth herein, and no one is authorized to waive or amend the same.
 
5. SERVICES AND CONTROL – Services by SESI in connection with the sale of its products consists only of technical advice as to make-up, inspection and operation of use.When any such services are rendered, the Customer will retain full custody, control and supervision of the work or the well and the conduct or operation thereof, and a representative of the Customer shall be present with full authority to direct operations. SESI will exert commercially reasonable efforts to render other services offered by it as requested. No guarantee or representation is made as to results and charges will be made regardless of results obtained. SESI reserves the right to remove equipment and personnel from the well at any time if, in its opinion, conditions make such action advisable.
 
6. DEFECTS – SESI warrants that products or parts thereof, sold to the Customer shall be free from defects in materials and workmanship and not that they will accomplish any particular result. No other warranty, express or implied, pursuant to The Sale of Goods Act, or otherwise, is granted by SESI or exists with respect to products or parts sold by SESI. Liability under this warranty is limited to replacement of or credit for the cost of defective equipment or parts, and does not cover well damage, injury, etc.
 
7. EXCLUSIONS – SESI shall not be liable for any direct, contingent, incidental or consequential damages or expenses of any kind or nature arising from the use of its products
or parts or from the provision by SESI of services of any kind, including, without limitation, lost profit, injury or damage to persons or property, the environment, or the loss of use or impairment of other goods.
 
8. CHANGE OF DESIGN – SESI expressly reserves the right to change or modify the design of any SESI product without obligation to furnish or install such changes or modifications on products previously or subsequently sold.
 
9. PATENT INFRINGEMENT – SESI will defend at its own cost and expense any suit charging patent infringement in the rental or use of any unaltered rented products, and will pay judgment awarded by a court against the Customer as a result of any such suit, provided the Customer is using the product in a manner prescribed by SESI and notifies SESI promptly of such suit and fully cooperates in the defense thereof with SESI.
 
10. CONFIDENTIALITY – Each party shall maintain all data and information obtained from the other party in strict confidence. The design, construction, application and operation of SESI.s services, equipment and products embody proprietary and confidential information. The Customer shall maintain this information in strict confidence and shall not disclose it to others, subject only to disclosure required by law or legal process.
 
11. RENTAL OF EQUIPMENT
a. RENTAL TIME – Rental charges commence when equipment leaves SESI service base points and continues until returned thereto. If equipment shipped by carrier to or from Customer.s location, cost of freight will be charged at SESI cost plus reasonable markup – the first day constitutes the first calendar day and each additional calendar day, or part thereof, will constitute an additional day charge.
 
b. LONG TERM RENTAL – Equipment rented in excess of 30 days will be invoiced at the end of each thirty day period until the equipment is returned or equipment to be rented for extended, indeterminate periods may be charged at a Long Term Rental Price. Long Term Rental price is equivalent to the product(s) Sales Price setout by SESI and charged without discounting accrued rental day(s) to that time. Equipment on Long Term Rental remains the property of SESI must be returned to SESI upon retrieval from the well. No further charges beyond Long Term Rental to incur to the Customer.
 
c. THIRD PART RENTAL AND RE-COMMISIONING – Notwithstanding SESI Terms and Conditions or SESI-Customer Contract, equipment supplied from an outside source is subject to the conditions, if any, established by the Outsourced Supplier. Third Party Rental Equipment will be rented to the Customer per SESI quoted price. All Third Party charged items such as, but not limited to inspections, transportation, environmental surcharge, redress, repair and replacement will be charged back to the Customer at SESI.s Third Party Invoice Cost plus a reasonable markup not to exceed 25%.
 
d. RETURN OF EQUIPMENT – Without limiting the provision of Section 4, all equipment rented to the Customer shall be returned to SESI in the same condition as delivered to the Customer, ordinary wear and tear excepted. Any damage to such equipment beyond ordinary wear and tear shall be charged to the Customer, as provided in SESI current price schedules.
 
e. LOST-IN-HOLE/DAMAGED BEYOND REPAIR . Equipment rented to Customer and lost-in-hole or damaged beyond repair shall be charged to the Customer, as provided in SESI current price schedule without discounting of accrued rental day(s) to that time. No further charges to apply. Equipment remains property of SESI and to be returned if ever retrieved.
 
12. RETURN OF EQUIPMENT . Without limiting the provision of Section 4, all equipment rented to the Customer shall be returned to SESI in the same condition as delivered to the Customer, ordinary wear and tear excepted. Any damage to such equipment beyond ordinary wear and tear shall be charged to the Customer, as provided in SESI current price schedules.
 
13. PROPERTY RETENTION . Products not sold to the Customer but in the Customer.s possession will remain the property of SESI and are not repaired or modified without SESI consent. Any equipment belonging to SESI for which any rental payments are outstanding may be repossessed without notice and, SESI may utilize such force as is necessary to obtain possession of the same.
 
14. SHIPPING DATES – All statements of date of shipment are estimated, and the shipment of any order may be delayed by causes beyond our control.
 
15. PRICES – Prices, rates or terms are subject to change without notice. Equipment manufactured by others will be’ sold or used by SESI under the terms and conditions stated herein, except where inconsistent with the manufacturer’s terms and conditions, where the latter shall prevail.
 
16. PRIVACY LEGISLATION – SESI shall ensure that all personal information collected, received, handled or processed by it under this agreement is protected by the appropriate safeguards in accordance with all applicable federal and provincial legislation relating to privacy of information, including but not limited to the Personal Information Protection and Electronic Documents Act.
 
17. GENERAL – All the preceding terms and conditions shall apply between SESI or any affiliate of SESI and any service company, operator, or other party or parties, selling, renting or using products, parts thereof, or services furnished hereunder. This Agreement contains all representations of the parties and supersedes all prior oral or written agreements or representations. This Agreement may only be amended by an agreement in writing executed by both parties.
 
18. QUOTES – Quotes are valid for 30 days unless otherwise specified.
 
19. SECURITY – Customer hereby grants to SESI a purchase money security interest in and to the goods that are sold pursuant to these Terms and Conditions. Further, Customer hereby grants to SESI a security interest in and to all of its other present and after acquired personal property and proceeds thereof, as security to all amount remaining unpaid by Customer to SESI. Customer hereby acknowledges that SESI has the right to register the purchase money security interest and the general security agreement pursuant to the Personal Property Act (Alberta) and to the extent permitted by law, waives rights to sign or receive copies of financing statements, financing change statements, verification statements or copies of other notices or filings made by SESI at any time in connection with any security interest.
 
20. SECURITY – Customer hereby acknowledges that SESI has a security interest in any and all equipment and goods leased to Customer. SESI reserves the right to register its security interest at the Personal Property Registry of Alberta and to the extent permitted by law, waives rights to sign or receive copies of financing statements, financing change statements, verification statements or copies of other notices or filings made by SESI at any time in connection with any security interest.