GLOBAL TERMS AND CONDITIONS OF PURCHASE (For Purchases of Products and/or Services or Rental of Non-operated Equipment)

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1 ` GLOBAL TERMS AND CONDITIONS OF PURCHASE (For Purchases of Products and/or Services or Rental of Non-operated Equipment) THESE TERMS AND CONDITIONS OF PURCHASE CONTAINS RELEASE AND INDEMNITY OBLIGATIONS. THESE TERMS AND CONDITIONS ARE NOT INTENDED TO COVER THE PERFORMANCE OF SERVICES AT ANY WELL SITE, DRILLING OR OTHER FIELD LOCATION. PLEASE READ THESE TERMS AND CONDITIONS CAREFULLY. Definitions. In addition to terms defined elsewhere in these Terms and Conditions of Purchase ( Terms and Conditions ), the following terms shall have the following meanings, unless the context otherwise requires: Affiliate or Affiliates means any Person directly or indirectly controlled by, controlling, or under common control with either Party, including any of the foregoing which becomes an Affiliate after the date of an Order. Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Applicable Law means those laws (common or statutory), rules, regulations, codes, administrative and judicial orders and directives, rulings, interpretations, permit conditions and restrictions or similar requirements or actions of any federal, state, provincial, or local government, or any agency or executive or administrative body of any of the foregoing, in each case that govern or pertain, as of the date of the applicable Order, to (i) the Parties respective obligations under these Terms and Conditions or any Order; (ii) Supplier s performance and/or Weatherford s use of Work; and/or (iii) the health, safety and welfare of individuals working at or visiting any Work Site. Claim(s) means all claims, demands, damages, losses, liabilities (including contractual liabilities), liens, encumbrances, government imposed fines and/or penalties, causes of action of any kind or character (including those for property damage, environmental damage, personal injury or death), obligations, costs, judgments, interest and awards (including those requiring the payment of reasonable attorneys fees and costs of litigation), whether under judicial proceedings, administrative proceedings or otherwise, arising out of, or in any way relating to these Terms and Conditions or Supplier s performance of Work under any Order, and expressly includes any claims that may be brought by (or losses suffered by) spouses, heirs, survivors, legal representatives, successors or assigns. Client means the Weatherford customer or client (which may be identified in an Order) for whose benefit the Work covered by an Order will or may be performed, as well as any successors, transferees or assignees of the Client or the Client Contract. Client Contract means any contract or agreement between Weatherford and its Client which covers or includes all or any portion of the Work to be performed by Supplier under an Order. Consequential Damages means and includes (i) any and all indirect, incidental, special, punitive, exemplary, or consequential damages or losses of any nature whatsoever (whether or not foreseeable), and (ii) damages or losses, whether direct or indirect, for lost product or production, lost profit or revenue, loss of data, reservoir loss or damage, lost business, loss of or inability to use property and equipment, losses from business interruptions, losses resulting from failure to meet other contractual commitments or deadlines, or losses from downtime of rigs, vessels or facilities. Dollars or $ means United States dollars, unless a different currency is stated in the Order. Force Majeure Event means any act or event that renders it wholly or partially impossible for the affected Party to perform its obligations under these Terms and Conditions or any Order or delays such affected Party s ability to do so, when such act or event (i) is beyond the reasonable control of the affected Party, (ii) is not due to the fault or negligence of the affected Party, and (iii) could not have been avoided by the affected Party by the exercise of reasonable diligence. Indemnify or Indemnification means to release, indemnify, defend and hold harmless. Order(s) means the written purchase orders issued by Weatherford for the performance of Work. Person or Persons means any legal or governmental entity and any natural person. Price(s) means the amounts to be paid by Weatherford to Supplier for Products and/or Services, as established in the Order with respect thereto, subject in each case to the provisions of Section 3 of these Terms and Conditions. Product(s) means Specialty Products and/or Supplier Products. Rental Equipment means any non-supplier operated tool(s), equipment, machinery or other device(s) leased or rented to Weatherford and includes any training provided by Supplier with respect to the installation, use and/or operation thereof, as specified in an Order. Service(s) means the services furnished by Supplier to Weatherford pursuant to an Order. The term Services does not include Products or Rental Equipment. Specialty Product(s) means any Product(s) manufactured, fabricated or assembled by Supplier in accordance with proprietary Weatherford designs, Specifications or processes, which Supplier shall supply exclusively to Weatherford. Terms and Conditions of Purchase (Global ) Page 1

2 Specifications means, with respect to Specialty Products, the current version of any manufacturing drawings, diagrams, templates, schemata, and blueprints for the Specialty Products supplied by Weatherford with an Order. With respect to Supplier Products, Specifications means the version of Supplier s standard manufacturing drawings, diagrams, templates, schemata, and blueprints for the Supplier Products existing as of the date of the Order. With respect to Services, Specifications means any specific instructions and/or other requirements expressly identified by Weatherford to Supplier in the Order with respect to the performance of those Services. With respect to Rental Equipment, Specifications means Supplier s published specifications for and descriptions of the Rental Equipment (and/or those of the Rental Equipment s manufacturer) and any Rental Equipment requirements expressly identified by Weatherford in the Order with respect thereto. Standard Industry Practice means the exercise of that degree of skill, diligence, prudence, foresight and practice which would reasonably and ordinarily be expected from a skilled and experienced Person engaged in the same type of undertaking and providing the same type of manufacturing, supply or services under the same or similar circumstances as Supplier under the terms of and Order and these Terms and Conditions. Supplier means any Person from whom Weatherford requests Work pursuant to an Order. Supplier s Designated Facility means the Supplier plant, location or facility, designated in the Order, at which Products purchased by Weatherford will be manufactured, fabricated and stored until shipment. Supplier Group means, individually or in any combination, Supplier, its Affiliates, and each of their respective officers, directors, employees, subcontractors (of any tier), contractors, consultants, vendors, licensees, agents, representatives, invitees, heirs, successors and/or assigns. Supplier Product(s) means any Product(s) manufactured, fabricated or assembled by Supplier in accordance with its own designs, Specification or processes, which Supplier may sell to Weatherford, as well as to Third Parties. Third Party means any Person other than Supplier Group or Weatherford Group. Weatherford means Weatherford International plc and each of its Affiliates from time-to-time ordering the Work from Supplier and identified as Weatherford in the Order pertaining thereto. Weatherford Facility means the Weatherford facility or location specified in an Order to which Products are to be shipped and/or at which Supplier will perform Services. Weatherford Group means, individually or in any combination, Weatherford, its Affiliates, and each of their respective officers, directors, employees, contractors, subcontractors (other than members of Supplier Group), agents, Clients, invitees, heirs, successors and/or assigns. Work means Products sold, Services rendered, and/or Rental Equipment provided by Supplier to Weatherford pursuant to an Order. As a result, terms such as perform Work, performance of the Work or Work performed shall mean and include Supplier s manufacture, assembly, sale and delivery of Products, Supplier s performance of Services and/or Supplier s furnishing of Rental Equipment. Work Site means the facility, site or location specified in an Order to which Supplier will deliver Products or Rental Equipment and/or at which Supplier will perform Services (if other than the Weatherford Facility), but does not mean or include any Client well site, drilling, or other field location. General Terms. As used in these Terms and Conditions, unless expressly stated otherwise, references to including means including, without limitation or including, but not limited to ; and/or means either or both ; and a party or Party mean Weatherford or the Supplier and the parties or Parties mean Weatherford and the Supplier. 1. ORDERS; ACCEPTANCE AND CANCELLATION OF ORDERS GENERAL TERMS AND CONDITIONS 1.1 Orders. Supplier shall perform Work for Weatherford as requested and specified in Orders. Unless the Parties have entered into a separate written master services agreement, supply agreement, or other contract which governs the Work, these Terms and Conditions shall control and govern all transactions between the Parties with respect to Work performed by Supplier, whether or not these Terms and Conditions are referred to in the Order. No other, additional or different terms and conditions in any written or oral communication with respect to a transaction for Work (including the terms and conditions in a Supplier bid, quote, proposal, order acknowledgement, or similar document) shall vary or amend these Terms and Conditions. In the event of a conflict between the provisions of these Terms and Conditions and the terms in any Order, the provisions of these Terms and Conditions shall control, unless the Order (i) makes specific reference and identification (by Section and/or subsection number) to the provision(s) of these Terms and Conditions to be modified, (ii) explicitly states the intention of the Parties to effect the modification thereof, and (ii) is executed on behalf of each Party by an authorized officer of the Party. Such modifications shall be effective for that Order only, and no agreement to modify the provisions of these Terms and Conditions with respect to any particular Order shall have the effect of varying or amending those terms and conditions with respect to any other or subsequent Order. Each Order shall constitute a separate agreement between the Parties. Only the Weatherford legal entity for which Supplier performs Work under an Order shall have any responsibility with respect thereto or any liability to Supplier for amounts due it for the performance thereof. 1.2 Change Orders. Weatherford may, prior to or during the performance of Work under any Order, request a change in the scope and/or scheduling of the Work or make changes or additions to the quantity, Specifications, instructions, methods of shipment or packaging, or place of delivery of the Products to be provided under the Order. Requests for such changes shall be given in the form of a written change order ( Change Order ) whenever possible, but may be given orally to Supplier when time is of the essence or conditions demand an immediate response. Upon Supplier s receipt of a Change Order, it shall promptly execute and return same to Weatherford, unless Supplier reasonably determines that the requested changes will cause an increase (or decrease) in the cost of or time required to perform the Work, in which case the Parties shall negotiate in good faith the terms to be included therein. Any claim by Supplier for an adjustment to the price of (or the time required for the performance of) the Work must be asserted by Supplier, in writing, within ten (10) days after its receipt of Weatherford s Change Order or is waived. Each Change Order shall reference the original Order and shall specify (i) the changes in the scope or timing of the Work to be provided under the affected Order, and (ii) the adjustment (if any) to be made to the fees and other amounts due Supplier in connection therewith, and shall be executed on behalf of each Party by an authorized officer. Terms and Conditions of Purchase (Global ) Page 2

3 Upon its receipt of an oral request from Weatherford to change the scope and/or scheduling of Work under any Order, Supplier shall proceed with same and the changes shall be documented in a mutually acceptable Change Order (as specified above) within ten (10) days of Suppliers receipt of the oral request, failing which Supplier shall not be required to continue with any requested changes to the Work, and may suspend the Work unless and until an appropriate Change Order has been executed by the Parties. 1.3 Cancellation of Orders. Weatherford may cancel any Order, in whole or in part, prior to Supplier s acceptance, or prior to Supplier s performance of any Work thereunder. Weatherford may cancel any Order, in whole or in part, for cause, if Supplier fails to (i) comply with the provisions of these Terms and Conditions; (ii) comply with the express terms of, and any instructions in, the accepted Order (including Supplier s failure timely to perform the Work covered thereby), or (iii) provide adequate assurances of future performance, if requested by Weatherford to do so. Weatherford may also cancel any Order, in whole or in part, for cause if Supplier becomes insolvent, files or has filed against it a proceeding in bankruptcy, or has its business or assets placed in the hands of a receiver, trustee or other assignee, or undergoes or becomes subject to any action or proceeding analogous to any of the foregoing. If an Order for Services and/or Products is cancelled by Weatherford for cause, Weatherford shall pay Supplier for all Services properly performed and conforming Products delivered by Supplier prior to the date of cancellation, but Supplier shall: (i) (ii) (iii) (iv) be liable to Weatherford for, and shall upon demand pay or reimburse Weatherford for (or Weatherford may offset and deduct from amounts due Supplier) (A) penalties or damages incurred by or assessed against Weatherford under the terms of any Client Contract ( Client Contract Penalties ) due to a delay in the performance of Work covered by the cancelled Order; and (B) all costs incurred by Weatherford, in excess of the sums it would have paid Supplier therefore, to have the Work covered by the cancelled Order completed by Weatherford or a Third Party; upon Weatherford s request, transfer title to, and deliver to Weatherford, as and when specified, any completed, but undelivered, or partially completed Products (and any parts, components or raw materials purchased by Supplier for the manufacture or fabrication thereof); upon Weatherford s request, assign to Weatherford any supply agreement(s) and/or subcontract(s) with respect to any parts, components or raw materials to have been used by Supplier in the manufacture or fabrication of Products or the performance of Services; and upon Weatherford s request, furnish to Weatherford any tools, designs, drawings, processes, plans, and technical information necessary to complete any Work covered by the cancelled Order, granting to Weatherford a royalty-free, non-exclusive, license to use and permit others to use same in order to complete the Work covered by the cancelled Order. Weatherford may cancel any Order, in whole or in part, for convenience after its acceptance by Supplier. (i) (ii) With respect to the cancellation for convenience of an Order for Supplier Products, no payment shall be due to Supplier if cancellation occurs prior to Supplier s delivery of the Supplier Products. If cancellation occurs after Supplier s partial delivery of such Products, Supplier shall be paid a mutually agreed upon cancellation charge, not to exceed ten percent (10%) of the Price of the Supplier Products delivered prior to cancellation (which shall be returned to Supplier at Weatherford s expense). With respect to the cancellation for convenience of Orders for Specialty Products, Supplier shall be paid a mutually agreed upon cancellation charge reflecting (A) the Price of the Specialty Products delivered prior to the date of cancellation, and (B) Supplier s actual, documented cost to secure any specialty parts, components or raw materials for such Specialty Products, which Supplier shall deliver to Weatherford, at Weatherford s expense, upon Weatherford s payment therefore. (iii) With respect to the cancellation for convenience of Orders for Services, if cancellation occurs after Supplier s partial performance of the Services, Supplier shall be paid for all Services properly performed prior to the date of cancellation, and a mutually agreed upon cancellation charge, not to exceed ten percent (10%) of the Price of the cancelled Service. (iv) With respect to the cancellation for convenience of Orders for Rental Equipment, Supplier shall be paid all rentals due with respect thereto for periods prior to the return thereof to Supplier and reimbursed for the reasonable third party costs (if any) incurred to repair any damages to the Rental Equipment caused by Weatherford s use thereof (normal wear and tear excepted), not to exceed the fair market value of the Rental Equipment. (e) In no event shall Weatherford be liable to Supplier for any Consequential Damages arising from or relating to any cancelled Order. Upon cancellation of an Order, Supplier shall immediately cease to use any of Weatherford s Confidential Information or Intellectual Property (as defined below) and shall immediately return the same to Weatherford. 1.4 Client Contracts. Supplier acknowledges that Weatherford may be subject to the terms of a Client Contract which covers or includes all or any portion of the Work to be performed by Supplier under an Order. Supplier further acknowledges that the terms and provisions of such Client Contract may obligate Weatherford to require Supplier to abide by, or perform the Work in accordance with, certain terms and provisions of the Client Contract ( Flowdown Provisions ). To the extent there is a conflict between these Terms and Conditions and any of the terms and provisions in a Client Contract ( Conflicting Terms ), or the Flowdown Provisions in the Client Contract would impose upon Supplier any obligations or responsibilities which materially modify, vary from, or add to those undertaken and assumed by Supplier under these Terms and Conditions, the terms of the Client Contract shall control over those in these Terms and Conditions, provided Weatherford has notified Supplier thereof and either (i) included the Conflicting Terms and/or Flowdown Provisions in the Order applicable to the Work, or (ii) provided Supplier with a copy of the relevant provisions of the Client Contract by which Supplier is to be bound. If Weatherford should fail to provide Supplier notice of the Conflicting Terms and/or Flowdown Provisions, then the terms of these Terms and Conditions shall prevail over those in the Client Contract. 1.5 Access to Weatherford Facilities; QHSSE. Supplier represents and warrants that all Services performed hereunder and under any Order shall be performed and conducted in accordance with the requirements of all applicable governmental safety regulations, precautions, and procedures. Supplier also agrees that when/if it performs Work at a Weatherford Facility, it shall abide by and perform that Work in accordance with the Terms and Conditions of Purchase (Global ) Page 3

4 requirements of any health, safety and environmental rules, policies or procedures specific to the Weatherford Facility and Weatherford s Global Safety Policy, a copy of which will be made available to Supplier upon request. Should the performance of Services at any Weatherford Facility require specific training or instruction with respect to the health, safety and environmental rules, policies or procedures applicable thereto, Supplier s employees shall participate therein, at Supplier s expense, prior to performing Services at the Weatherford Facility. Any breach of these safety covenants by Supplier shall be grounds for immediate termination of any pending Order(s) by Weatherford, without penalty or liability, and, notwithstanding any other indemnity provision in these Terms and Conditions to the contrary, Supplier shall Indemnify Weatherford Group from any and all Claims arising or resulting from Supplier s failure to comply with the provisions of this Section. Weatherford reserves the right to exclude, remove, or expel from any Weatherford Facility the employees, agents or representatives of any member of Supplier Group at any time and for any reason. 1.6 Access to Client Work Sites. From time to time, an Order may require that Supplier deliver Products a Client s Work Site(s), as specified in the Order. In such instances, Weatherford shall communicate to Supplier its Client s requirements for sub-contractor access to Client s Work Site and Supplier shall comply with all such requirements at its own expense. At a minimum, Supplier shall at all times comply with the requirements for access to a Weatherford Facility. Supplier assumes all risk for access to a Client Work Site. 1.7 Subcontractors. Supplier shall not subcontract or otherwise delegate any portion of the Work to a Third Party without the prior written consent of Weatherford. Supplier shall ensure that any Work performed by its subcontractors is performed in accordance with the requirements of these Terms and Conditions and the Order applicable thereto, and Supplier shall be and remain responsible for all Work performed by (and acts and defaults of) its subcontractors of any tier. Supplier will ensure that any subcontract relating to the Work allows for the assignment thereof to Weatherford or its Client, without the need for the consent of Supplier or its subcontractor. 2. PRODUCT IDENTIFICATION, PACKAGING AND DELIVERY; PRODUCT FORECASTS AND MINIMUM STOCKING LEVELS 2.1 Product Identification. Upon Weatherford s request, all Products (and any components therein) will be stamped or marked by Supplier prior to delivery to include marks or identification as requested by Weatherford and specified in the Order(s) applicable thereto (the Weatherford Marks ). Except with respect to Supplier Products, Supplier shall not affix any other marks or identifications to any Product without the express written consent of Weatherford, and no other marks shall be placed on any Specialty Products so as to obscure, deface or confuse the Weatherford Marks. Supplier s right to use Weatherford Marks shall be limited to the marking of Products. Supplier shall fully Indemnity Weatherford against any Claims arising from or relating to Supplier s unauthorized use of Weatherford Marks. 2.2 Packaging, Shipping and Supporting Documents. All Products shall be packaged, crated, and secured for shipment by Supplier in accordance with guidelines and instructions furnished by Weatherford and in a manner suitable for transportation from the Supplier Designated Facility to the Weatherford Facility or Work Site specified in the Order so that the Products reach the delivery destination in an undamaged condition. Unless otherwise specified in the Order, the Prices for the Products shall be inclusive of packaging and shipping. A packaging slip or note referencing Weatherford s Order must accompany each Product delivery. Supplier shall provide Weatherford such information, certifications, material safety data sheets, certificates of origin and/or similar documentation regarding any Product (or the components used by Supplier in the manufacture and assembly thereof) as Weatherford or its Client may reasonably request or Applicable Law may require. 2.3 Product Delivery, Delivery Dates and Late Delivery Penalties. Unless otherwise specified in the Order therefore, all Products shall be delivered by Supplier FCA Supplier s Designated Facility (Incoterms 2010). Weatherford shall specify in each Order for Products the date(s) by which it requires delivery thereof. When accepting an Order, Supplier shall either (i) confirm the delivery date(s) specified in the Order, or (ii) request an alternative delivery date(s), which Weatherford may accept or reject, in its sole discretion. If Supplier fails to timely notify Weatherford of a need to defer delivery beyond the date(s) specified in the Order, it shall be deemed to have accepted the delivery date(s) specified therein and shall be liable, as provided below, for any late delivery of Products. The delivery date(s) specified in the Order, or, if applicable, the alternative delivery date(s) established by the Parties, is hereinafter referred to as the Firm Delivery Date. In no event shall Weatherford be required to accept delivery of any Products prior to or after the delivery date specified in its Order. All Products must be delivered by the Firm Delivery Date. Subject only to delivery delays caused by a Force Majeure Event, Supplier shall be liable for any Client Contract Penalties incurred by or assessed against Weatherford as a result of late delivery of the Products. For Product deliveries delayed more than seven (7) calendar days after the Firm Delivery Date, Supplier shall be liable for a late delivery fee equal to one percent (1%) of the invoice value of the delayed Product(s) for each seven (7) days (or portion thereof) that delivery is delayed, up to a maximum late delivery fee equal to ten percent (10%) of the invoice value of the delayed Product(s). Weatherford shall be entitled to deduct from the amounts otherwise due Supplier for any late delivered Products the amount(s) of any Client Contract Penalties and/or late delivery fees. Notwithstanding the foregoing, Weatherford may cancel any Order (or part thereof) with respect to Product(s) not delivered within thirty (30) days of the Firm Delivery Date. 2.4 Storage costs. Supplier shall assume all costs and risk of loss associated with storing Products at Supplier s Designated Facility. 2.5 Pre-delivery Testing and Inspection. Prior to the delivery thereof, Supplier, at its sole expense, shall carefully inspect and test the Products, in accordance with its own quality control procedures and any written processes or procedures furnished by Weatherford, for their compliance with the terms and requirements of these Terms and Conditions and the Order applicable thereto. Upon request, Supplier shall also provide to Weatherford a copy of Supplier s Product test sheets (if any) for all Products delivered. Upon request, Supplier shall permit representatives of Weatherford to participate in or witness any pre-delivery inspection or testing of the Products, and to audit and inspect Supplier s manufacturing process and Supplier s Designated Facility where Products are manufactured, assembled, or stored. If, as a result of any pre-delivery inspection or testing of the Products as described above, Weatherford determines that any Products do not comply with the terms and requirements of these Terms and Conditions or the Order applicable thereto, or are unlikely on the completion of manufacture or assembly to comply therewith, Weatherford shall so inform Supplier, and Supplier shall have the right and obligation to take such steps as may be necessary to correct or remedy the non-compliance. No pre-delivery inspection of Products by Weatherford shall constitute an acceptance thereof or relieve Supplier of its Product delivery or warranty obligations hereunder. 2.6 Post Delivery Testing and Inspection. Weatherford and/or the Client to whom Products are delivered ( Receiving Client ) shall have the right, but not Terms and Conditions of Purchase (Global ) Page 4

5 the obligation, to inspect same after delivery for their conformity to the requirements of these Terms and Conditions and the Order applicable thereto. If, as a result of such a post-delivery inspection, Weatherford or the Receiving Client determines that any of the Products are non-conforming, Weatherford or the Receiving Client shall have the right to reject such Products, notifying Supplier thereof in writing, and Supplier shall in such case have the right and obligation to take such steps as may be necessary to ensure compliance of the Products with the terms and requirements of these Terms and Conditions and the Order applicable thereto. If requested by Supplier, Weatherford will return the rejected Products to the Supplier Designated Facility from which they were shipped, at Supplier s expense. Weatherford shall have no obligation to pay Supplier for any properly rejected Products. Weatherford will reasonably cooperate with Supplier, at Supplier s expense, in any independent Third Party inspection Supplier determines to arrange if Supplier disputes the non-conformity of any Products. No failure of Weatherford (or, if applicable, the Receiving Client) to inspect and reject after delivery any non-conforming Product shall be deemed an acceptance thereof, and all Supplier Product warranties shall continue to apply. 2.7 Access to Supplier s Facility. Supplier shall not allow any non-essential personnel or Third Party to enter the areas of Supplier s Designated Facility where Specialty Products or components therefore are being manufactured or stored. 3. PRICING OF WORK; TAXES; DEPOSITS; AUDIT 3.1 Prices. The Price(s) payable by Weatherford for all Work performed by Supplier under any Order shall be those prices specified in the Order. Unless otherwise specified in the Order, once Prices are established in an Order, those Prices shall remain fixed for all Work performed under that Order. Unless otherwise specified in the Order, all cost related to Supplier s performance of Services will be included in the Price thereof, including: (i) transportation of Supplier s personnel or the personnel of its subcontractors (of any tier) to and from the site where the Services are performed; (ii) costs of lodging and meals for Supplier s personnel or the personnel of its subcontractors (of any tier) performing the Services; (iii) loading, unloading, removing, or waste removal related to tools and equipment used by Supplier in performing the Services; (iv) costs of securing Supplier s tools and equipment against theft or vandalism at the site where the Services are performed; and (v) costs of ensuring that the site where the Services are performed is broom clean at completion of the Services. 3.2 Preferred Pricing. Supplier warrants and agrees that the Prices it charges Weatherford for Supplier Products and/or Services will be no higher than the prices charged to other customers for contemporaneous sales of products and/or services similar to those covered by the Order, in the same or substantially similar volumes, and under substantially similar terms and conditions, and that it will extent to Weatherford the same discounts and rebates it makes available to its other customers. 3.3 Invoicing and Payment. Unless otherwise specified in an Order with respect thereto: Supplier shall invoice Weatherford for all Work performed under an Order within thirty (30) days of its performance of the Work. Weatherford shall not be obligated to pay any invoice received by Weatherford more than one 120 days after completion of the Work covered thereby. Subject to Supplier s obligations and Weatherford s rights under these Terms and Conditions, Weatherford shall pay the Price(s) and amounts stated in each invoice submitted by Supplier within one hundred twenty (120) days of Weatherford s receipt of a properly documented invoice. All invoices shall include supporting documentation for all costs for which Supplier seeks reimbursement (in the form of copies of the original invoice or receipt therefore). Supplier shall not mark up any third party costs for which it seeks reimbursement. Costs shall be reimbursed only if they were (i) included in the Order, (ii) approved in advance by Weatherford, or (iii) incurred in accordance with Weatherford polices applicable thereto. In the event Weatherford disputes an invoice or part thereof, it shall notify Supplier thereof, specifying the invoice date and number, the amount of the disputed items or charges, and the Products, Services or Rental Equipment involved, and may withhold payment of the disputed invoice until the parties have resolved the disputed amount(s), which the Parties shall work in good faith resolve as promptly as possible. Upon resolution of the dispute amount(s), Supplier shall promptly issue a corrected invoice or credit memo. If either Party discovers that Weatherford has overpaid amounts due Supplier, then upon such overpayment becoming known, Supplier shall, at Weatherford s option, either (i) immediately issue a credit to Weatherford, which credit may be applied by and utilized by any member of Weatherford Group against future invoices owing to Supplier or any Supplier Affiliate, or (ii) immediately issue a refund to Weatherford. To the extent any credit has not been applied or utilized within sixty (60) days from the date of such overpayment becoming known, Supplier shall immediately refund such remaining credit amount to Weatherford. 3.4 Taxes and Duties. Weatherford and Supplier are responsible for all taxes imposed upon their respective businesses, including taxes imposed upon their respective income, personnel or property and each Party shall Indemnify the other from any liability with respect thereto. Unless otherwise stated in the Order, the Prices and rates quoted by Supplier (and other charges payable by Weatherford) do not include taxes and duties. If not included in the Price, such taxes and duties shall be shown as a separate line item on the Order and on all invoices submitted by Supplier, and shall be for Weatherford s account, provided same (i) do not exceed the amount(s) thereof specified in the Order, and (ii) are supported by adequate documentation of their payment by Supplier. The term taxes and duties shall mean all fees or charges imposed, assessed or levied by any governmental department, agency, or other taxing authority and shall include property taxes, sales and use taxes, value added taxes, goods and services taxes and excise taxes or other charges of a similar nature, customs or other duties, harbor and port dues, demurrage, wharfage, pilotage, stevedoring, customs agent fees and other such charges and fees. Supplier agrees that Weatherford shall have the sole and exclusive right to make claims for the recovery of any duty, tax, surcharge, and/or fee drawbacks available under applicable U.S. customs laws and regulations and any other applicable customs and excise tax laws and regulations ( Drawback Rights ) with respect to Products sold to Weatherford under Orders submitted under these Terms and Conditions. Supplier hereby expressly disclaims any and all Drawback Rights associated with Products it sells to Weatherford, and agrees that it has not and will not assign to any third party such Drawback Rights. Supplier shall, upon request, provide to Weatherford copies of all documents required by U.S. customs laws and regulations or other customs and excise tax laws and regulations to support the filing of drawback claims associated with Product purchases made by Weatherford. Supplier shall maintain (and retain for the applicable retention period) all documents required by U.S. customs laws and regulations or other applicable customs and excise tax laws and regulations to support such drawback claims. Terms and Conditions of Purchase (Global ) Page 5

6 The provisions of this Section 3.4 shall continue after termination or cancellation of an Order. 3.5 Deposits and Security Interest. In the event Weatherford provides an advance payment or posts a deposit for or with respect to any Products it orders ( Deposits ), Supplier shall hold such Deposits for the sole and exclusive benefit of Weatherford and apply same towards (i) the Price of the Product(s) covered by the Order and/or (ii) the purchase of materials and/or component parts to be used in the manufacture and assembly of such Products, at Weatherford s election. In any event, all Deposit funds advanced by Weatherford to Supplier shall be credited to any amounts owed by Weatherford to Supplier, including invoices from Supplier to Weatherford for Work performed by Supplier. Supplier shall separate and clearly mark any materials and/or components purchased with Deposit funds as belonging to Weatherford and shall clearly document that such items are in Supplier s possession for Weatherford. Any unused or unapplied Deposit funds remaining in Supplier s possession upon the completion or termination of an Order shall be promptly returned to Weatherford, unless Supplier is otherwise instructed, in writing, by Weatherford. 3.6 Audit. Supplier shall maintain during the course of the Work performed under any Order, and shall retain for two (2) years after completion thereof (and for so long thereafter as any dispute shall exist between the Parties with respect to any Work performed by Supplier or the amount(s) paid or payable therefore), complete and accurate records of Work performed and expenditures incurred by Supplier and charged to Weatherford in connection with such Order in such manner and detail as to permit verification of all charges made to Weatherford and Supplier s compliance with the provisions of Section 3.2 above. With not less than thirty (30) days prior written notice to Supplier, Weatherford shall have the right to audit such records, at Supplier s offices, at any reasonable time(s) for a period of two (2) years from the date such amounts were charged to Weatherford. The foregoing rights of audit shall not apply to any Supplier information or records which are privileged, proprietary or trade secret, other Supplier client information, any information or record subject to an obligation of confidentiality by Supplier, or any other record not necessary to verify amounts paid to Supplier pursuant to these Terms and Conditions or any Orders issued hereunder. If as a result of an audit conducted by Weatherford it is determined that any amount previously paid to Supplier was an overcharge on Supplier s part, the amount of such overcharge shall, at Weatherford s option, either be (i) credited back to Weatherford, for application against any amounts due Supplier, or (ii) refunded to Weatherford within thirty (30) days after the audit is settled. If the audit reveals overcharges that exceed, in the aggregate, ten percent (10%) of the total amounts invoiced for Work during the audited period, Supplier shall reimburse Weatherford, on demand, for the reasonable costs and expenses incurred by Weatherford in conducting the audit. 4. PERFORMANCE AND QUALITY OF THE WORK; WARRANTIES 4.1 General Supplier Obligations and Responsibilities. In entering into an Order, Weatherford is relying upon Supplier s expertise to manufacture the Products and/or render the Services, and the Supplier covenants and warrants to Weatherford that in the performance of all Work, Supplier shall, unless otherwise specified in an Order with respect thereto: (e) (f) furnish, place in service and maintain, at its sole cost and expense, all tools, equipment, materials and supplies (including all consumables) necessary to perform all Work covered by the Order; provide, at its cost, all personnel and supervision required for the performance of the Work. Once assigned to perform Services under an Order, Supplier s designated personnel shall not be changed or substituted without Weatherford s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed. Although in the performance of any Services for Weatherford Supplier shall be deemed to be an independent contractor, with the sole authority and right to direct and control the details of the performance of the Services, Weatherford being interested only in the results obtained, Supplier s personnel at a Work Site shall be required to comply with the reasonable instructions of Weatherford s on-site representative and/or Weatherford s Client. In the event Weatherford, based on reasonable, non-discriminatory, grounds or at the request of Weatherford s Client, requires the replacement or substitution of any of Supplier s Work Site personnel, Supplier shall as soon as reasonably possible comply with such request and will replace or substitute the personnel, without cost or liability to Weatherford or the Client; pay all wages earned by its employees (together with all taxes, withholdings and contributions relating thereto) and all sums due to subcontractors of Supplier (if any) engaged in the performance of the Work. Supplier shall not cause any liens to be filed by its subcontractors upon any property of Weatherford or its Client(s). In the event any lien shall be filed, Supplier shall promptly remove such lien or post a bond against such lien. Supplier shall Indemnify Weatherford and/or its Client(s) against and for any liens filed against Weatherford or Weatherford s Client property by any subcontractor engaged by Supplier, and any Claims relating thereto, including all costs associated with the removal, defense and/or satisfaction of such lien; exercise due diligence in the care, use and salvage of any materials furnished by Weatherford or its Client for the performance of the Work; leave the Work Site in essentially the same condition as when entered, except for changes necessary and unavoidable in the performance of the Work; and promptly notify Weatherford of any Work Site condition or situation which Supplier is not equipped to remedy or which may result in damage to property owned by Weatherford, Weatherford s Client, or any Third Parties. 4.2 Product Warranties. Supplier warrants and represents that all Products supplied by it shall: be new (unless specified in the Order with respect thereto) and conform in all respects to the Specifications; meet or exceed the current American Petroleum Institute standards applicable to the Products, if any, and such other manufacturing or quality control standards as may be specified by Weatherford in the Order therefore; be merchantable and fit for their intended purpose; be and remain free from defects in design, materials and workmanship for a period of eighteen (18) months from the date of delivery; Terms and Conditions of Purchase (Global ) Page 6

7 (e) (f) be free and clear of any and all liens, restrictions, reservations, security interest, encumbrances and claims of Third Parties; and comply in all respects with Supplier s quality management system, Standard Industry Practice, and all Applicable Laws. 4.3 Remedies for Breach of Product Warranties. Supplier shall, at its sole cost and expense, repair or replace any Products not conforming to the Product warranties specified in Section 4.2 above or, at Weatherford s option, issue to Weatherford a refund for the full amount paid for the non-conforming Products (including any shipping, reimbursed costs, or taxes and duties); provided Weatherford has notified Supplier of the non-conformity within the warranty period specified above. Supplier s responsibility to repair or replace non-conforming Products shall include any ancillary costs or expenses relating thereto, including costs of removing and returning the non-conforming Products and the subsequent shipping and installation of replacement Products. All replacement Products shall be warranted to the same extent, and for the same eighteen (18) month period, as the Products they replace. 4.4 Service Warranties. Supplier warrants and represents that all Services shall: be performed in a safe, good and workmanlike manner, with reasonable diligence, using skilled, competent, knowledgeable and experienced workmen and supervisors; be performed in accordance with the Specifications and requirements of the Order applicable thereto; and be performed in accordance with Standard Industry Practice and the requirements of all Applicable Laws. 4.5 Remedies for Breach of Service Warranties. Supplier shall, at its sole cost and expense, promptly reperform any Services (or portion thereof) not conforming to the Service warranties specified in Section 4.4 above ( Nonconforming Services ); provided Weatherford has notified Supplier of the nonconformity within ninety (90) days of the date of the completion of the Services with respect to which the warranty claim is made. Supplier s reperformance of Nonconforming Services shall be the sole and exclusive obligations and responsibilities of Supplier with respect to Nonconforming Services, unless Weatherford determines, in its sole discretion, that Supplier s reperformance cannot or will not provide a commercially viable remedy, in which case Supplier shall, at Weatherford s option, either refund or credit in full the Price paid by Weatherford for the Nonconforming Services. If Supplier cannot or does not promptly reperform the Nonconforming Services, Weatherford may reperform same itself or contract with a Third Party for the performance thereof, and all costs and expenses relating thereto shall be for the account of Supplier and reimbursed to Weatherford upon demand. Supplier shall also be liable for, and shall upon demand reimburse Weatherford for, any Client Contract Penalties suffered or incurred by Weatherford as a result of Supplier s performance of Nonconforming Services. 4.6 Rental Equipment Warranties. Supplier warrants and represents that all Rental Equipment will be fully tested and inspected prior to its delivery, and shall, at the time of its delivery: be merchantable and fit for its intended purpose, and conform to the Specifications therefore; be clean and in proper operating and good working condition (including all required safety shields, guards and devices); and be accompanied by all operating guides, manuals and instructions necessary for the operation and maintenance thereof, if requested by Weatherford. 4.7 Remedies for Breach of Rental Equipment Warranties. Supplier shall, at its sole cost and expense, promptly repair or replace with equipment of like or comparable quality and capacity any Rental Equipment not conforming to the Rental Equipment warranties specified in Section 4.6 above, or which fails or becomes inoperable during the rental period. If the Rental Equipment fails or becomes inoperable as a result of Weatherford s negligent or improper use thereof, Weatherford will pay or reimburse Supplier for the lesser of (i) the reasonable cost of repairing same, or (ii) the cost of replacing same with equipment of like age, capacity and condition. All rental payments shall be waived by Supplier during any time period that the Rental Equipment fails to meet the warranties in section 4.6 above, operate properly, or is otherwise inoperable through no fault of Weatherford. 5. CONFIDENTIAL INFORMATION 5.1 Weatherford Confidential Information. Supplier acknowledges and agrees that any data or information furnished or disclosed to Supplier or its Affiliate(s) by (or obtained from) Weatherford Group that describes, pertains or relates to the Work or the performance thereof (including any information with respect to any Weatherford tools, equipment, processes or technologies for or in conjunction with which Products are supplied or Services are performed), as well as data and information pertaining to its Product purchase volumes, order patterns, delivery destinations (and relative volumes of Product delivered to and/or maintained in inventory at those destinations) and methods and details of Product shipment, packaging, and labeling (collectively Confidential Information ), shall be deemed confidential and proprietary to Weatherford. Without limiting the generality of the foregoing, Weatherford Confidential Information shall mean and include all information regarding, detailing or describing any Client Contract (including information with respect to the Work performed for any Client, the date(s) upon which the Work was performed, or the Work Site(s) at which the Work was performed). 5.2 Non-disclosure. Subject to the exceptions set forth in Section 5.3 below, Supplier agrees that throughout its performance under an Order, and for a period of five (5) years thereafter (unless the information furnished or disclosed by Weatherford is expressly identified as trade secret, in which case the obligation to maintain the confidentiality thereof shall continue for so long as the Confidential Information Supplier receives is not generally known to, and not readily ascertainable by proper means by, other Persons who could obtain economic value from its disclosure or use: it shall maintain and safeguard the confidentiality of all Weatherford Confidential Information received by it from Weatherford Group, handling and treating same with at least the same degree of care (and affording it the same protections) that Supplier observes and provides for its own confidential, proprietary and trade secret information, and in all events with at least a reasonable standard of care; it shall share Weatherford Confidential Information internally only with those of its employees who need to know same for the purposes of performing the Work, all of whom shall be advised of and must agree to be bound by the confidentiality provisions of these Terms and Conditions; it shall not, without the written consent of Weatherford, use, copy or duplicate by any means, in whole or in part, any Weatherford Confidential Terms and Conditions of Purchase (Global ) Page 7