NOTICE: PLEASE READ CAREFULLY. THIS DOCUMENT CONTAINS WARRANTY AND INDEMNITY LANGUAGE. Now, therefore, in consideration of the mutual promises, covenants and agreements hereinafter set forth, Company and Contractor (hereinafter referred to individually as “Party” or collectively as “Parties”) agree to the following:
1. Master Service Agreements: In the event the Parties have executed a valid Master Service Agreement, the terms of such Master Service Agreement shall control and supersede any terms contained herein.
a. “Claim” means any and all claims, demands, causes of action of any kind or character, liabilities, losses, liens, encumbrances, damages (including without limitation, special, indirect, punitive and consequential), judgments, administrative decisions, settlements, fines, penalties, awards, interests, expenses (including, without limitation, attorney fees) and costs (including, where appropriate, costs of control, containment, clean-up, removal, and disposal), arising out of or in connection with any Work, without limitation by reason of any insurance, to the maximum extent permitted by applicable law in each and every case, and specifically including any of the above that arise in whole or in part due to a defense, indemnity, and/or release agreement.
b. “Negligence or other Legal Fault” means pre-existing conditions, whether such conditions be patent or latent, the unseaworthiness of any vessel or vessels, breach of warranty (express or implied), breach of contract, strict liability, or the negligence or fault of any person, party, or entity, and irrespective of whether any indemnitee hereunder may be alleged or proven to have been negligent (regardless of whether such negligence is active, passive, sole, joint, concurrent, comparative, contributing, etc.) or otherwise legally liable (with or without fault and including strictly liable or breach of any warranty), but excluding gross negligence and willful or intentional misconduct.
c. “Company” means the Party requesting services from Contractor and for whom Contractor agrees to provide its services.
d. “Company Group” means Company and any of its parent, subsidiary or affiliate corporations, and any of its joint ventures, partners, co-owners, lessors, lessees, co-lessors, or co-lessees, the respective officers, directors, agents, servants, invitees, employees, contractors and subcontractors of any tier (other than Contractor or Contractor’s subcontractors) as well as the heirs, representatives, successors or assigns of any member of Company Group.
e. “Contractor” means Cudd Pressure Control, Inc. or Cudd Pumping Services, Inc. as applicable
f. “Contractor Group” means Contractor and any of its parent, subsidiary or affiliate corporations, any of its joint ventures, partners, lessors, lessees, co-owners, co-lessors, or co-lessees and the respective officers, directors, agents, servants, invitees, employees, contractors and subcontractors of any tier, of each as well as the heirs, representatives, successors or assigns of any member of Contractor Group.
g. “Well Control Event” means fire, blowout, cratering, seepage or any other uncontrolled flow of oil, gas, water, or other fluids from a well.
h. "Well Specialist Team" shall mean one (or more) well control specialists designated by Contractor to supervise and coordinate Well Control Events.
i. “Work” includes the services performed by Contractor pursuant hereto, and any related goods, equipment, or materials supplied incident to such services.
3. Customer Authority: Company represents and warrants that it is the owner or operator of the well on which the Work is to be performed or that it is the authorized agent of all owners for the purpose of hiring Contractor’s services and executing this Agreement; and Company agrees to release, defend, and indemnify Contractor from all Claims arising from Company’s lack of such authority.
4. Custody and Control: Company acknowledges and agrees that above-surface and subsurface conditions in and about the well or work-site may be hazardous to persons and property; that such conditions are within the exclusive knowledge and control of Company; and that Contractor is not responsible for, has not created, and assumes no responsibility for such conditions. Company shall be responsible for providing Contractor with the necessary information regarding the condition of the wellbore and the formation, all suspected, anticipated and known hazards, the specific location of the well relative to other subterranean structures such as pipelines or other wells, and the specific surface coordinates for the well. Company shall at all times maintain custody and control of the locations where Work is being performed. Upon completion of the Work, Contractor will clean up its work area and place any excess or unused material at the points or places designated by Company.
5. Independent Contractor: Nothing contained in this Agreement shall be construed to constitute Contractor as a partner, employee or agent of Company or any other party for whom Company is working, nor shall either Party have any authority to bind the other in any respect. The Parties agree that Contractor is an independent contractor. Company may direct the results to be accomplished, but shall not direct or control the manner in which the details of the Work are performed.
6. Amount of Time of Payment: Compensation for Work shall be as agreed between Company and Contractor, in the absence of such agreement Company shall compensate Contractor according to the rates set forth in Contractor’s price book in effect at the time services are rendered. Price Book rates do not include sales, VAT, or use taxes, some transportation charges, drayage, demurrage, import duties, transfer fees, or documentation charges, all of which shall be paid by CUSTOMER in addition to the Price Book rate. Delivery of goods and equipment shall be FOB Contractor’s facility unless transportation is provided using a Contractor owned vehicle. A 15% service fee will be added to all third party transportation charges billed through Contractor. Prices are subject to change with notice. Invoices shall be paid Net 30 days to the address indicated on the Invoice. For past due invoices, Contractor may revoke all previously offered discounts. Invoices not paid within thirty (30) days of the date of such invoice shall bear interest at the highest rate allowed by law or 1.5% per month at Contractor's option. Additionally, Company agrees to pay collection costs and attorney fees equal to 25% of the unpaid account balance remaining as of the 31st day from the date of invoice. Each invoice creates an independent payment obligation and is not subject to any setoff, defense, demand, or Claim Company may have against Contractor, or any third party.
7. Warranty: All Work contemplated by this Agreement shall be timely performed by Contractor in a good and workmanlike manner in accordance with the schedule agreed by the Parties. Where no specific schedule is provided, the Work shall be performed in a timely manner. Contractor is not a manufacturer of goods and warrants only title to any products, supplies, or materials supplied incident to the Work. Title (and risk of loss) to products, supplies, and materials shall pass to Company upon the earlier of delivery to Company or arrival at the work site. Contractor shall provide personnel, materials, tools, supplies, and supervision necessary for performance of the Work, including personal protective equipment for Contractor’s employees. Contractor specifically disclaims all other warranties, express or implied, including any warranties of merchantability and fitness for a particular purpose. Contractor Group may provide predictions or recommendations as to well conditions, research analysis, data interpretation, strategies for completing the work, services to be performed, or any other topic arising from or related to the Work, however, because of the common existence of uncertain and variable well conditions and the necessity of relying on information and supporting services furnished by others, Contractor is unable to guarantee the effectiveness or accuracy of any such recommendations or predictions. Recommendations and predictions are provided to Company solely as opinions and Contractor makes no warranty, express or implied, as to the accuracy or appropriateness thereof, except that such recommendations or opinions shall be made in good faith. Company shall be solely responsible for all decisions based upon predictions or recommendations provided by Contractor Group and shall release, defend, and indemnify Contractor for any and all Claims arising from Company’s use of or reliance on the predictions or recommendations of Contractor Group regardless of the Negligence or other Legal Fault of any member of Contractor Group.
8. Insurance: The Parties each shall purchase and maintain in full force and effect, at all times during the term of this contract, policies providing the types and at least the amounts of insurance as specified below. The insurance and indemnity obligations in this Agreement shall be separate and the insurance obligation shall not be construed to limit the indemnity obligation nor shall the indemnity obligation be construed to limit the insurance obligation. The Parties agree to support each of their mutual indemnity obligations with insurance coverage (or qualified self-insurance).
a. Commercial General Liability (CGL) Insurance, with limits of $1,000,000 per occurrence for bodily injury and property damage combined single limits, including, without limitation, Contractual Liability Coverage for the indemnities below, and Sudden and Accidental Pollution Coverage;
b. Umbrella coverage with limits of $10,000,000 per occurrence and covering all occurrences insured under the CGL policy above. Company and Contractor shall each name the other as an Additional Insured on the insurance policies required herein, but only to the extent of the liabilities assumed herein.
9. Allocation of Risk and Indemnity
a. Contractor Group’s Personnel and Property: Subject to subsections 9(c)-(f) and Section 10 below, Contractor agrees to protect, defend, indemnify and hold harmless Company Group from and against all Claims arising in connection herewith in favor of any member of Contractor Group on account of bodily injury, illness or death to persons, or any damage to or loss of property regardless of the Negligence or other Legal Fault of any member of Company Group.
b. Company Group’s Personnel and Property: Subject to subsections 9(e) - (f) and Section 10 below, Company agrees to protect, defend, indemnify and hold harmless Contractor Group from and against all Claims, arising in connection herewith in favor of any member of Company Group on account of bodily injury, illness or death to persons, or any damage to or loss of property regardless of the Negligence or other Legal Fault of any member of Contractor Group.
c. Special Risks to Contractor’s Equipment: Company agrees to repair or replace any equipment which is: (i) lost or damaged (other than via ordinary wear and tear) while being used in the well below the surface of the land or sea, (ii) damaged due to abnormal abrasion, corrosion, or deterioration resulting from exposure to wellbore conditions (including, without limitation, well fluids or effluents, drilling fluids), (iii) lost or damaged during marine transportation arranged or paid for by Company, (iv) lost or damaged for whatever reason when equipment is rented to Company as bare equipment without a Contractor crew, or (v) lost or damaged during services to control a wild well. Company's responsibility for such loss or damage shall apply regardless of the Negligence or other Legal Fault of Contractor. Although some degree of wear and tear will occur under normal operating conditions, in the absence of bad faith, and unless otherwise agreed in writing, Contractor’s determination of normal and customary usage and normal wear and tear shall be binding and conclusive. Where damaged equipment cannot be repaired or the costs of repair exceed the replacement value of the equipment, Company agrees to pay Contractor the full replacement cost of such equipment. Company may replace the equipment in-kind if Contractor approves the offered replacement.
d. Catastrophic Risks: Contractor Group shall not be liable for and Company agrees to protect, defend, indemnify, and hold harmless Contractor and its subcontractors from and against any and all Claims for personal injury, illness, death, and property (whether real or personal, owned or leased) loss or damage, excluding that suffered by any employee of Contractor or its subcontractors, incident to or resulting from (i) a release of radioactivity caused, in whole or in part, by conditions or events below the surface of the land or sea, (ii) performance of services to control a wild well, including without limitation, the costs of controlling a wild well, (iii) reservoir or underground damage, including without limitation, the well bore and the costs of oil, gas, water, and other mineral substances, and (iv) subsurface trespass or any action in the nature thereof, regardless of the Negligence or other Legal Fault of any member of Contractor Group.
e. Pollution and Contamination: Company shall be liable for, and hereby releases Contractor Group from all liability for, and shall protect, defend, indemnify, and hold Contractor Group harmless from and against any and all Claims for pollution or contamination caused by leaks, spills, or other discharges of pollutants or contaminants: (1) originating from, at, or below the surface of the land or the sea (including without limitation, those which may result from a pipeline, storage facility, fire, blowout, cratering, seepage, drilling fluids, oil emulsion, fish recovery materials, or contaminated cuttings) and (2) originating above the surface of the land or sea from equipment or materials owned, leased, or controlled by Company Group regardless of the Negligence or other Legal Fault of any member of Contractor Group. Contractor shall be liable for, and hereby releases Company Group from all liability for, and shall protect, defend, indemnify, and hold Company Group harmless from and against any and all Claims for pollution or contamination caused by leaks, spills, or other discharges originating from Contractor’s equipment above the surface of the land or sea (including without limitation, those which may result from fuels, lubricants, motor oils, paints, solvents, garbage, chemicals, and other pollutants but excluding produced fluids, drilling/completion fluids and contaminated cuttings) regardless of the Negligence or other Legal Fault of any member of Company Group.
f. Limitation on Damages: Neither Party shall be liable to the other for special, indirect, punitive, or consequential damages resulting from or arising out of this Agreement, including without limitation, loss of profits or business interruptions, however the same may be caused. Under no circumstances shall Contractor’s liability for Claims arising out of or relating services performed for any well exceed the aggregate sums due or paid to Contractor for its services performed on that well.
10. Emergency Services: Notwithstanding any provision of this Agreement to the contrary, in the event Contractor is dispatched to respond to a Well Control Event, Company shall be liable for, and hereby releases Contractor Group from all liability for, and shall protect, defend, indemnify, and hold Contractor Group harmless from and against any and all Claims for personal injury, illness, death, or loss or damage to property of any third party caused by or connected with the Well Control Event regardless of the Negligence or other Legal Fault of any member of Contractor Group. Contractor personnel shall not be required to render services or remain in any location if, in the sole opinion of the Well Specialist Team, the conditions at such location render it unsafe. Furthermore, Contractor’s refusal to render services or remain on location pursuant to an unsafe condition shall not be deemed a breach of this Agreement. Where Contractor dispatches equipment or personnel to a Well Control Event for any portion of a day, Company shall pay the full day rates for the equipment and services dispatched.
11. Fishing: Company shall be solely responsible for conducting fishing operations as required or desirable. Contractor may consult with Company regarding fishing operations for Contractor’s tools which are lost or stuck in the well, but all decisions shall be made at Company’s sole discretion. Contractor shall not be liable for any Claims arising from or connected with fishing operations regardless of the Negligence of other Legal Fault of any member of Contractor Group.
12. Security: In addition to any available statutory liens, Company grants an express lien upon Company's interest in the hydrocarbons and the proceeds from the sale of hydrocarbons produced from the well or wells to which Contractor furnished Work to the extent necessary to secure sums due hereunder.
13. Force Majeure: Neither Party shall be liable to the other for delays caused by any matter or event beyond that Party’s reasonable control, including without limitation, strikes, fires, accidents, the unavailability of materials or equipment, economic or financial conditions, floods, civil unrest, acts of God, or acts of any governmental authority or agency. In the event that such causes render either Party unable, wholly or in part, to carry out its obligation under this contract, such Party shall give notice to the other in writing stating the cause or causes thereof. Thereafter, the obligations of the Parties shall be suspended during the continuance of the Force Majeure condition.
14. Non-Solicitation: Company shall not, either while Work is being performed, or for a period of one year after completion solicit Contractor employees or otherwise induce or attempt to induce Contractor’s employees to terminate their employment with Contractor.
15. Governing Law: This Agreement shall be governed by and interpreted in accordance with the laws of the State of Texas excluding any conflicts of law principals that would direct the application of the laws of any other state.
16. Entire Agreement: This Agreement or any Master Service Agreement (if applicable) contains the entire agreement of the Parties with respect to the subject matter hereof, and may not be amended except by a writing signed by the Party against whom enforcement is sought. Except as provided in Section 1 above, the terms in this Agreement shall supersede any contrary terms in a Job order, service order, work order, delivery ticket, pricing proposal or similar document except to the extent such terms specify the Work to be performed and/or the price to be paid for the Work. All other terms in such documents shall be void and unenforceable.
17. Miscellaneous: Contractor may subcontract or assign any portion of this Agreement to a subsidiary or affiliate upon written notice to Company. Company may not assign any rights or obligations under this Agreement without the written consent of a Vice President or Business Unit Manager of Contractor. In the event that any provision or portion of this Agreement is determined to be unenforceable or void, then the Parties hereto agree that the remainder of the Agreement shall be construed, interpreted, and enforceable to the maximum extent permitted by law. Headings contained in this Agreement are for convenience only and shall not be used to aid interpretation.