HPI GENERAL TERMS AND CONDITIONS

The “items” to which these General Terms and Conditions refer are the items supplied or sold by High Pressure Integrity, Inc. (“HPI”) to the purchaser thereof (“Buyer”).  These items are sold only under the following General Terms and Conditions:

When Buyer chooses to purchase HPI equipment and/or employ the services of HPI personnel, it is expressly understood and accepted by Buyer that HPI personnel are only authorized to provide counsel regarding the specifications and possible uses of HPI equipment; HPI and HPI personnel are not authorized and shall not be called upon by the Buyer or Buyer’s authorized representatives to exercise any operational authority or suffer any accountability relative to the operational running of HPI equipment and/or consequences of the uses of HPI equipment, and these aforementioned conditions apply to each and every HPI/Buyer transaction and supercede any other HPI/Buyer agreements regarding authorization and accountability of HPI and its representatives.

1.             Price.

(a)           All prices are expressed in United States dollars net FOB New Orleans, Louisiana, and unless otherwise agreed in writing by HPI, are subject to change without notice and are at the rates in effect at the time of order placement.  Quotations will be given on request for items not shown on HPI’s Price List.  Any quotation will remain in effect only for the period of validity specified therein or, if no such period is stated, for thirty (30) days from the date the quotation is given. 

(b)           All prices are exclusive of costs of transportation and insurance and federal, state and local use, sales property (ad valorem) and similar taxes and license fees, import duties and the like.  Buyer agrees, by purchase of an item, to pay such costs, taxes, fees and duties, and where appropriate, report the same.  When applicable, such costs, taxes, fees, and duties will appear as separate items on HPI’s invoice.

2.             Payment

(a)           Payment for all items is net cash United States funds on delivery or shipment except that a Buyer with an established credit account currently approved by HPI shall pay net cash within thirty (30) days following invoice date.  Partial shipments will be invoiced as made.  All invoices are payable in New Orleans, LA.

(b)           Interest from due date until payment at the maximum rate allowable by law but in any event not more than eighteen percent (18%) per annum will be charged on invoices unpaid sixty (60) days after due date.  If unpaid amounts are collected through legal proceedings or an attorney, Buyer shall pay reasonable attorneys’ fees and court costs.  HPI shall never be entitled to receive, collect or apply as interest any amount in excess of the highest non-usurious rate of interest permitted by applicable law (the “Maximum Rate”).  In the event that HPI ever receives, collects or applies as interest any amount in excess of the Maximum Rate, the amount which would be excessive interest shall be deemed to be a partial payment on the amount Buyer owes to HPI, or if Buyer does not owe any amount to HPI, any remaining excess shall be paid to the Buyer, and in such event, HPI shall not be subject to any penalties provided by any law for contracting for, charging, taking, reserving or receiving interest in excess of the Maximum rate.

3.             Delivery Dates and Excusable Delays.

All shipment and/or delivery dates are subject to HPI’s availability schedule.  HPI will make every reasonable effort to meet any delivery date(s) quoted: however, HPI will not be liable for its failure to meet any quoted delivery date(s) or for any delay in performance due to any unforeseen circumstances or any causes beyond HPI’s control including, without prejudice to the foregoing generality, strike, lockout, riot, war, fire, acts of God, accident, failure or breakdown of parts necessary for completions, subcontractor, supplier, Buyer caused delays, inability to obtain labor, materials or manufacturing facilities, or compliance with any law, regulation or order, whether valid or invalid, of any governmental body or instrumentality thereof.  Performance shall be deemed suspended during and extended for such time as any such circumstances or causes delay its execution.  Whenever such circumstances or causes have been remedied, HPI will make and Buyer shall accept performance hereunder.  No penalty clause of any kind shall be effective.  As used herein, performance shall include, without limitation, fabrication, assembly shipment, delivery and warranty repair or replacement, as applicable.

4.             Packing.  All items shall be packed, if appropriate, for shipping and storage in accordance with standard commercial practices.

5.             Shipment

a)             All prices are net FOB New Orleans, LA.  Buyer will pay all rigging, draying and transportation charges.

b)             Normally HPI will ship in accordance with Buyer’s shipping instructions.  In the absence of shipping instructions or if HPI considers Buyer’s shipping instructions unsuitable, HPI reserves the right to ship by the most appropriate method.

6.             Passage of Title.  Title to items sold and risk of loss and damage shall pass to Buyer upon delivery by HPI to common carrier for shipment to Buyer, or to buyer directly, as the case may be.

7.             Changes, Cancellations and Returns

a)             HPI reserves the right to change designs, materials and specifications, and to discontinue items without any notice or liability to buyer.

b)             If buyer issues a change order or cancels an order, Buyer shall be liable to pay to HPI the whole cost and loss incurred by HPI resulting from such change or cancellation, as such is determined by HPI, which shall include all costs, direct or indirect, plus a pro rata proportion of normal profit.

c)             No credit shall be given for any item returned unless returned with the prior approval of an authorized representative of HPI authorizing the return.  Only officers of HPI or their assigned designees are authorized to approve returned items.  Risk of loss or damage in respect of any item returned with HPI’s authorization will remain with Buyer until redelivered and signed for at HPI.  A charge of not less than fifteen percent (15%) or such larger amount as deemed reasonable and customary by HPI under the circumstances, with a minimum of $10.00 per item, will be assessed as a re-stocking fee on all items returned to pay the costs associated with re-inspection, repacking, restocking, credit arrangements, handling, etc.  HPI shall not be responsible for holding or accounting for any items returned without priority authorization by HPI and/or unaccompanied by the required written declaration.  If freight and other transportation costs are not prepaid on any returned item, the cost thereof will be deducted from the credit issued.  No credit will be given on any non-standard item manufactured at the request or to the individual specifications of Buyer.

8.             Other Manufacturer’s Equipment.  If any items sold to the buyer by HPI contain any parts or materials obtained by HPI from any other party, these parts or materials are sold to Buyer AS IS.  AS TO ANY SUCH PARTS OR MATERIALS, HPI EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.   BUYER’S REMEDY FOR ANY FAILURE OR DEFECT IN SUCH PARTS OR MATERIALS IS LIMITED TO REPAIR OR REPLACEMENT AS PROVIDED IN PARAGRAPH 12 BELOW.  FURTHER, WITH RESPECT TO SUCH PARTS OR MATERIALS, HPI DISCLAIMS LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES. 

9.             Use and Acceptance of Item.  Buyer warrants, by purchase of an item, that Buyer is familiar with the item and its proper use.  Before using any item, Buyer shall give the item reasonable and prudent examination and/or tests to determine the suitability of the item for Buyer’s intended use.  Buyer shall be deemed to have accepted any item on the Buyer’s use of the item, or in any event, no later than thirty (30) days after the first to occur of the date of shipment or delivery unless, before that time, HPI received written notice of any defect or nonconformity from Buyer.

10.         Assistance to Customer.  At Buyer’s request, HPI may make HPI employees available to Buyer to train Buyer to operate items supplied by HPI or to perform other actions as agreed between Buyer and HPI.  If HPI does make HPI employees available to Buyer, it is only on the conditions that the employees shall be under the direction and control of Buyer.  Buyer shall supply all necessary equipment and supplies for the proper performance of the services performed by the employee(s), and HPI shall have no liability whatever to Buyer for the employees during the time that the employees are under Buyer’s direction and control.  In addition, Buyer agrees that it will be responsible to HPI for any acts or occurrences or omissions of the employees, and agrees to the terms and conditions of paragraph 13 below with respect to the acts of such employees.

11.         Repair of Items.  Any repair to any item supplied by HPI to Buyer affected at Buyer’s request outside normal working hours (8:00am to 5:00pm, Monday thru Friday) shall be charged by HPI at double the labor rate otherwise chargeable.

12.         Limited Warranty and Remedy

A)            HPI not liable for incidental, consequential, or specific damages.  UNDER NO CIRCUMSTANCES WILL HPI BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES WITH RESPECT TO ANY GOODS OR SERVICES PROVIDED BY HPI TO BUYER OR ANY THIRD PARTIES.

B)            Buyer’s remedies are limited to repair and replacement.  Buyer’s remedies for any and all breaches of any nature, including without limitation breaches of contract and warranty, are limited to the remedies of repair and replacement as specifically stated in this agreement.  The remedies provided herein are the exclusive remedies of Buyer for failure to HPI to meet its warranty obligations, whether claims of Buyer are based on contract, in tort or otherwise, and upon expiration of the applicable warranty period all obligations of HPI for breach of warranty will terminate.

C)            Disclaimer of warranties not expressly stated.  THE WARRANTIES SET FORTH HEREIN ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES WHETHER STATUTORY, EXPRESS OR IMPLIED.  HPI EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.

D)            Limited Warranty.  HPI warrants each item sold by it to Buyer (excluding any part or parts which are components to the item and are subject to Paragraph 8 above concerning parts supplied by others) to be free from defects in materials and workmanship if, and only if, all of the following conditions are met:

1)      The item claimed to be defective has been exposed only to normal storage, use and service, has been reasonably maintained, has not been subjected to misuse, negligent use, or accident which caused the item to suffer a defect, and has not been repaired or altered except by an authorized representative of HPI.

2)      The item claimed to be defective has been returned at Buyer’s expense to HPI’s plant at New Orleans, LA (or to such other location as HPI may designate), within ten (10) days after Buyer first discovers the alleged defect;

3)      The alleged defect in the item is actually caused by a defect in materials or workmanship originally supplied by HPI as opposed to materials or workmanship originally supplied by others; and

4)      The item is not one that is expendable in normal use, which has been expended, in normal use.

5)      This warranty shall be in effect until 6 months after sale to purchaser, except: a) Subsurface electronic equipment is warranted only   until 90 days after date of sale to purchaser, b) Scintillation detectors are warranted only to be in working order upon delivery to purchaser, and c) No subsurface electronic equipment is warranted against damage occurring when used in a down hole drilling environment such as MWD or LWD operations.

6)      No subsurface electronic equipment will be warranted that has been modified or repaired by someone other than HPI’s approved representative.  Equipment that has had its serial number or temperature indicator altered, defaced, or removed will not be warranted.

e)             Limited remedies available under warranty.  HPI’s liability under the limited warranty described above shall be limited to the repair or replacement of the items sold hereunder.  HPI will repair or replace the item at no cost to Buyer, but the decision as to whether to repair or replace will be solely that of HPI’s.  In addition, Buyer shall pay or reimburse HPI for the cost of wear and tear to each item arising from normal use and service, or at HPI’s option, Buyer shall refund an equitable proportion of the purchase price.  Repairs or replacement items are only warranted for the remaining unexpired portion of the warranty period.

f)               Notice of claims required. All claims under the warranty set out in this agreement must be made promptly after the alleged defect occurs and must be received by HPI within the warranty period.  The claim must include the item’s description, part number, serial number (if any), date of shipment or delivery and a full description of the circumstances giving rise to the claim.  Any item returned under claim of defect shall be sent prepaid by appropriate transportation.  Buyer is responsible for all damage or loss resulting from improper packing or handling, and for any loss or damage occurring during the transmission of the item to HPI.  If any item is returned and is found not to be defective, HPI will notify Buyer and, at Buyer’s option, will return the item to Buyer at Buyer’s expense.  Further, in this event, Buyer will reimburse HPI for all costs incurred in testing and examining the item.

13.         Safe Operations. Buyer agrees that when their personnel or agents use tools and/or explosives while preparing or using HPI equipment that their personnel/agents will comply with all applicable county, state, and federal requirements (or equivalent authorities) and that all related operations must comply with the safety requirements of the operating company, the on-site operating authority and all involved service companies. The buyer further agrees that their personnel/agents who handle explosives will be qualified in accordance with all applicable county, state, and federal requirements (or equivalent authorities).

14.         Hold Harmless Terms.  Hold Harmless Terms.  Buyer agrees to hold harmless and unconditionally indemnify HPI, its employees, officers, agents, affiliates and subsidiaries, against and for all liability, cost, expenses, claims and damages which HPI may at any time suffer or sustain or become liable for by any reason of any accidents, damages, or injuries either to persons or property or both, of Buyer, or any third parties, or to the property of HPI or any persons or firms affiliated with HPI, in any manner, arising from or related to the use of any item sold hereunder, including, but not limited to any negligent act or omission of HPI, its officers, agents, employees, affiliates, or subsidiaries , or any negligent acts or omissions of parties supplying items or equipment used by HPI in manufacturing any item or product sold to Buyer.  In addition to the above, Buyer agrees that HPI, its officers, employees, agents, affiliates and subsidiaries, will not be liable under any indemnity theories, whether common law, statutory, contractual or otherwise, to Buyer; instead, Buyer agrees to indemnify and hold harmless HPI for all claims, liability, costs, expenses and damages asserted under all legal theories, including, without limitation, negligence, product defect and strict liability in tort.

15.         Miscellaneous

a)             All of these General Terms and Conditions including Buyer’s agreement to hold HPI harmless and indemnify HPI shall also apply in favor of all employees, agents affiliates, and subsidiaries of HPI. 

b)             Order confirmation by HPI of any item to be supplied by HPI shall constitute HPI’s offer to sell the item in accordance with the terms, provisions and conditions of this Agreement.  Buyer’s acceptance of HPI’s offer shall be limited to the terms, provisions and conditions of this Agreement.  Any proposed acceptance by Buyer under terms, provisions or conditions that vary from, conflict with, or modify the terms, provisions and conditions of this Agreement shall not be effective.  Neither HPI’s commencement of performance under this Agreement nor delivery of any item shall be construed as or deemed to be acceptance by HPI of any term, provision or condition that varies from, conflicts with, or modifies the terms, provisions and conditions contained in this Agreement.

c)             This Agreement constitutes the entire understanding and agreement of HPI and the Buyer with respect to the sale of the item or items described in this Agreement, and contains all of the covenants and agreements of HPI and Buyer with respect thereto.  Acceptance of the item by Buyer will evidence Buyer’s acknowledgement that no representations, inducements, promises or agreements, oral or written, have been made by HPI or anyone acting on behalf of HPI, which are not contained herein, and any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement are of no force or effect.  This agreement may not be altered, changed or amended except by an instrument in writing signed by HPI officer and Buyers approved representative.

d)             Failure by HPI to enforce any or all of these General Terms and Conditions in any case or cases shall not constitute a waiver of or preclude subsequent enforcement of any or all of such General Terms and Conditions.

e)             Any attempted or purported assignment or transfer of any of the rights, duties or obligations herein contained shall render such attempted or purported assignment or transfer null and void, provided that HPI may perform and fulfill all or any of its obligations hereunder by or through any subsidiary and affiliate (f) If any provision of these terms and conditions is capable of more than one construction, the provision shall be interpreted in the manner in which will render it valid.  If any provision is determined to be void, the determination shall not affect any other provision and all other provisions not construed to be void shall remain in full force and effect. 

16.         Arbitration.  ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR WITH REGARD TO ITS INTERPRETATION OR BREACH, SHALL BE SETTLED BY BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION.  Unless otherwise required by applicable law, the parties hereto agree to arbitrate their differences in New Orleans, Louisiana.  The parties further agree that all claims of any type by either party, including defenses and counterclaims, shall be included in the arbitration.  Either party may send written notice to (a) the other party, and (b) any Regional Office of the American Arbitration Association invoking the binding arbitration provisions in this paragraph.  The parties further consent to the jurisdiction of one of the state district courts sitting in New Orleans, Louisiana, or the United States District Court for the Southern District of Louisiana, New Orleans Division, to enforce the provisions of this paragraph and/or to confirm any award rendered by the arbitrator.

17.         Limited Statue of Limitations.  AS PERMITTED BY Louisiana Bus. & Com. Code Ann §2.725, THE STATUE OF LIMITATIONS FOR ANY BREACHES OF CONTRACT AND WARRANTY IS AGREED TO BE ONE YEAR FROM THE DATE THE CAUSE OF ACTION ACCRUES. 

18.     Choice of Law.  ANY AGREEMENT OR TRANSACTION TO WHICH THESE GENERAL TERMS AND CONDITIONS APPLY SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF LOUISIANA.  ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR WITH REGARD TO TIS INTERPREATION OR BEACH SHALL BE GOVERNED BY ANY CONSTRUED, INTEPRETED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA, INCLUDING BUT NOT LIMITED TO, LOUISIANA SUBSTANTIVE AND PROCEDURAL LAW AND THE LOUISIANA VERSION OF THE UNIFORM COMMERCIAL CODE.  NO DOCTRINE OF CHOICE OF LAW SHALL BE USED TO APPLY THE LAWS OF ANY OTHER STATE, NATION, OR JURISDICTION.

HPI, HIP & PSP are protected trademarks of High Pressure Integrity, Inc.

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