Cimarron Energy Inc.
and its Affiliates:

Flare Industries, Inc. d/b/a Aereon
and
HY-BON Engineering Co., Inc.

CIMARRON ENERGY INC, AND/OR ITS AFFILIATES (“CIMARRON”) SHALL SUPPLY EQUIPMENT, AND ANY RELATED SERVICES, TO CUSTOMER ONLY IN ACCORDANCE WITH THESE TERMS AND CONDITIONS. THESE TERMS AND CONDITIONS SHALL BECOME EFFECTIVE AT THE EARLIER OF: (I) CIMARRON PROVIDING A QUOTE OR PROPOSAL TO CUSTOMER CONTAINING A QUOTATION NUMBER; (II) CUSTOMER SUBMITTING A PURCHASE ORDER FOR GOODS, OR (III) CUSTOMER ACCEPTING CIMARRON’S QUOTE OR PROPOSAL. ANY PURPOSED ACCEPTANCE UNDER TERMS THAT VARY FROM, CONFLICT WITH, OR MODIFY THESE TERMS AND CONDITIONS SHALL NOT BE EFFECTIVE. CIMARRON RECOGNIZES THAT CUSTOMER MAY, FOR OPERATING CONVENIENCE, DESIRE TO UTILIZE ITS OWN FORMS IN CONNECTION WITH AN ORDER, AND IN SUCH CASE, ANY TERMS, CONDITION OR PROVISION IN SUCH FORM THAT MODIFIES, CONFLICTS WITH OR IS ADDED TO THESE TERMS AND CONDITIONS SHALL BE DEEMED WAIVED BY CUSTOMER UNLESS SPECIFICALLY AGREED TO IN WRITING BY AN OFFICER OF CIMARRON. NOTWITHSTANDING THE ABOVE, IF CIMARRON AND CUSTOMER HAVE PREVIOUSLY ENTERED INTO A MASTER AGREEMENT, SUCH MASTER AGREEMENT WILL BE READ IN CONJUNCTION WITH THESE TERMS AND CONDITIONS; THE MASTER AGREEMENT TERMS SHALL TAKE PRECEDENCE IN ANY CONFLICT WITH, OR VARIANCE FROM, THESE TERMS AND CONDITIONS.

1) Payment Terms: Payment terms for Equipment (defined as the products or goods being rented by Customer) are net 30, with 30 days payment due in advance of rental period. Standby charges are 50% of operating rate. Standby is calculated as a per-day charge when the product is at a Cimarron facility between the contracted production date and actual pickup date by the Customer. Customer shall provide any specific billing instructions to Cimarron no later than 15 days prior to invoicing without exception. Should Customer require Cimarron to submit field tickets or sales invoices for approval prior to invoicing, Customer shall approve or deny within three (3) business days of presentation, or the same shall be deemed approved. Any disputes to Cimarron’s invoice shall be made in writing within ten (10) days of receipt. Disputes do not affect payment terms for non-disputed amount, and payment of disputed amount shall be due no later than five (5) business days upon resolution. Payment shall be in U.S. Dollars without offset, back charge, retention or withholding. Interest from the invoice due date until payment, at eighteen percent (18%) per annum (or such lesser amount as is the maximum legal rate) will be charged by Cimarron on all amounts past due. Cimarron may demobilize the Equipment and immediately suspend all Services for past-due accounts. Customer shall remain liable for all fees per the Equipment Rental Agreement plus interest and any collection fees, attorney fees, or court costs incurred by Cimarron in connection with collection on Customer’s account.

2) Taxes: Prices do not include sales taxes, use taxes, value-added taxes, excise taxes, tariffs, duties, and import fees (“Taxes”). To the extent that the above items (“Equipment”) are to be charged Taxes, these amounts will be added to the invoice, unless Customer provides Cimarron with a tax-exempt certificate or other sufficient documentation at least two days in advance of invoicing.

3) Shipment: Unless otherwise noted the Equipment pricing and terms of sale are Ex Works Equipment Location, on or about the specified shipment date. Delivery to the carrier shall constitute delivery to the Customer for all purposes. Customer shall pay all costs of insurance and freight. Freight pricing is quoted based on current rates and is subject to change in freight cost to Cimarron; in this case, a 15-day notice will be issued prior to any price adjustment along with a new quotation issued to customer. The shipment date specified is based on anticipated shop loading at the time of this proposal and is subject to confirmation at the time this proposal is accepted by Customer. In the event that all or any part of the Equipment will be shipped out of the continental limits of the United States of America by Cimarron, (i) all fees and expenses relating to the export shipment, (ii) taxes, tariffs, fees and expenses relating to importation into the country of destination, and (iii) all necessary applications, licenses, authorizations and documentation shall be the sole responsibility of Customer. Cimarron shall prepare consular documents according to the Customer’s instructions but shall have no liability resulting from any incorrect information furnished by the Customer.

4) Title and Risk of Loss: Risk of loss for damage to goods or rental units shall pass to Customer upon Notice of Readiness (which shall mean a communication from Cimarron to Customer that the Equipment is ready for possession). The Equipment is, and shall remain, the sole property of Cimarron and title, rights, and all interest shall remain with Cimarron, but Customer shall bear risk of loss during rental period. The Equipment may not be moved from Customer’s location without the prior written consent of Cimarron.

5) Cancellations / Returns: If Customer cancels an order, Customer shall be liable for payment for the entire initial rental term. Upon the expiration of the rental term, Customer will continue to be charged the monthly rate, and be liable for payment, until the equipment is returned to Cimarron. Rates will be prorated for partial months upon return at the conclusion of the rental period. Customer shall pay a fee equal to $10/day of rental period on all Products or Equipment returned to pay for the costs of inspection, repacking, handling, refurbishment and accounting. Customer shall prepay all freight and other transportation costs on any returned product. Customer shall be liable for any damage to Equipment exceeding that of ordinary wear and tear.

6) Delays: The shipment date and price specified in this proposal are subject to adjustment for any delay resulting from: (i) Customer’s failure to place its order to rent the Equipment within thirty (30) days after this proposal; (ii) Customer’s failure to supply Cimarron with any Customer supplied components, data, shipping instructions, approved drawings or change orders as required; (iii) any changes in the specifications made at Customer’s requests; or (iv) Customer’s convenience. In the event of any such delay, the shipment date will be automatically extended for a period equal to the duration of the delay. Customer shall pay Cimarron any additional costs incurred by Cimarron because of the delay and a reasonable rate for storage of the Equipment during such delay.

7) Another Manufacturer’s Equipment. If any products rented to Customer by Cimarron include units or materials obtained by Cimarron from any third party, these units or materials are rented to Customer AS IS. Cimarron has no responsibility or liability whatsoever for such products, parts, or materials.

8) Assistance to Customer. At Customer’s request, Cimarron may make Cimarron employees or contractors available to Customer to train Customer to operate Products or Equipment supplied by Cimarron, or to perform other actions as agreed in writing between Customer and Cimarron. Rates for such training and/or Services by Cimarron employees or contractors shall be agreed to by the parties in writing. If Cimarron provides training and/or Services, it is only on the following conditions: (i) Cimarron employees shall be under the sole supervision of Customer while on Customer’s site; (ii) Customer shall supply all necessary equipment and supplies for the proper performance of the training or Services performed by Cimarron’s employees; and (iii) Cimarron shall have no liability whatsoever to Customer for the Cimarron employees during any time that they are under Customer’s supervision. The indemnity provisions of Section 9 shall apply in such circumstances.

9) Indemnification.

A. CUSTOMER AGREES TO PROTECT, INDEMNIFY, HOLD HARMLESS AND DEFEND CIMARRON FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, JUDGMENTS, LOSSES, LIABILITIES AND DAMAGES TO REAL OR PERSONAL PROPERTY, OR INJURY TO OR DEATH OF CUSTOMER, ITS EMPLOYEES, AGENTS AND INVITEES AND ITS COWORKERS, PARTNERS, CO-VENTURERS, CONTRACTORS AND SUBCONTRACTORS (OTHER THAN CIMARRON) OR THIRD PARTIES AT CUSTOMER’S LOCATION ARISING IN ANY MANNER, DIRECTLY OR INDIRECTLY, (I) OUT OF OR IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT, (II) THE FAILURE TO COMPLY WITH ANY PROVISIONS OF THIS AGREEMENT, OR (III) THE USE OF PRODUCTS OR RENTAL EQUIPMENT UNDER THIS AGREEMENT, REGARDLESS OF CAUSE OR FAULT, INCLUDING THE SOLE, CONCURRENT OR CONTRIBUTING FAULT OR NEGLIGENCE OF CIMARRON. B. LIABILITY FOR ENVIRONMENTAL MATTERS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, CUSTOMER SHALL RELEASE, DEFEND, INDEMNIFY AND HOLD CIMARRON HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS (INCLUDING WITHOUT LIMITATION, COSTS TO RESPOND TO, CONTAIN, ASSESS, CLEAN-UP, REMOVE, REMEDIATE AND DISPOSE OF ANY POLLUTION) RESULTING FROM ANY HAZARDOUS SUBSTANCE, HAZARDOUS MATERIAL, OIL AND CONSTITUENTS THEREOF, HAZARDOUS WASTE, OR CONTAMINATION OF ANY KIND, OR FOR DAMAGE TO OR OTHER HARM TO THE ENVIRONMENT OR FOR DAMAGE TO OR LOSS OF OTHER NATURAL RESOURCES, ARISING FROM POLLUTION AND/OR CONTAMINATION EMANATING FROM CUSTOMER’S PROPERTY, WHICH ARISES OUT OF OR IS INCIDENTAL TO CUSTOMER’S OPERATION OF RENTAL EQUIPMENT, BUT EXCLUDING SURFACE SPILLAGE OF FUELS OR CHEMICALS DIRECTLY EMANATING FROM THE EQUIPMENT DURING NORMAL OPERATING RANGE AND SPECIFICATIONS. C. LIABILITY FOR UNDERGROUND PROPERTY MATTERS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, CUSTOMER SHALL RELEASE, DEFEND, INDEMNIFY AND HOLD CIMARRON HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS RELATED TO ANY INJURY TO, DESTRUCTION OF, OR LOSS OF OR IMPAIRMENT OF, ANY PROPERTY RIGHT IN OR TO THE OIL, GAS, OR OTHER MINERAL SUBSTANCE OR WATER, OR TO ANY LOSS OR DAMAGE TO ANY FORMATION, STRATA OR RESERVOIR BENEATH THE SURFACE OF THE SITE GROUND OR SEABED. D. LIABILITY FOR CIMARRON’S EQUIPMENT. CUSTOMER SHALL BE FULLY LIABLE TO CIMARRON FOR DAMAGE TO, OR LOSS OF, ANY OF THE RENTAL EQUIPMENT THAT IS CAUSED BY OR AS A RESULT OF (I) ANY WELL CONDITIONS THAT ARE OUTSIDE THE NORMAL OPERATING CONDITIONS AND SPECIFICATIONS SET FORTH IN THE APPLICABLE SERVICES CONTRACT OR (II) THE NEGLIGENCE OR WILLFUL MISCONDUCT OF CUSTOMER OR ITS EMPLOYEES, AGENTS OR CONTRACTORS. CUSTOMER FURTHER AGREES TO REPAIR, REPLACE, OR ADEQUATELY COMPENSATE CIMARRON FOR ANY OF ITS RENTED EQUIPMENT THAT IS LOST OR DAMAGES FOR ANY REASON (OTHER THAN DAMAGE FROM ORDINARY WEAR AND TEAR WITHIN NORMAL OPERATING CONDITIONS AND SPECIFICATIONS) DURING THE RENTAL TERM. CUSTOMER’S RESPONSIBILITY FOR SUCH LOSS OR DAMAGE SHALL APPLY EVEN IF THE LOSS OR DAMAGE IS DUE IN PART TO STRICT LIABILITY OR THE JOINT, COMPARATIVE, OR CONCURRENT NEGLIGENCE OF CIMARRON. IN DISCHARGING ITS OBLIGATION UNDER THIS PARAGRAPH, CUSTOMER SHALL RECEIVE CREDIT FOR ANY PROCEEDS RECEIVED BY CIMARRON FROM CUSTOMER’S INSURANCE.

12) Consequential Damages: Notwithstanding any other provision of the Agreement, in no event shall Cimarron be responsible or liable to Customer for loss of profits or special, indirect, incidental or consequential damages arising out of, attributable to or based on the Agreement.

13) Assignment. Customer may not assign this agreement. Cimarron may assign or create a security interest in its interest and/or rights under the Equipment Rental Agreement in connection with financing in the ordinary course of its business operations. In the event of any permitted assignment of this Agreement by either Party, the designated assignee shall assume, in writing, the rights and obligations of the assigning Party under this Agreement; provided that the assigning Party shall not be released from any of its liabilities or obligations arising under this Agreement prior to such assignment.

14) Waiver: Any waiver by either party of a breach of any provision of the Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of the Agreement. The failure of a party to insist upon strict adherence to any terms of the Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of the Agreement.

15) Force Majeure: Cimarron shall not be liable for any failure or delays which are due, occasioned or caused by reason of acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemies, wars and warlike action, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, arrests and restraints of rulers and people, civil disturbances, explosions, acute and unusual labor or material or equipment shortages, or and any other causes not within the control of the party claiming a suspension. In the event of such delay, the date of delivery shall be extended for a length of time equal to the period of such delay.

16) Intellectual Property Rights of Cimarron. Under no circumstances shall the rental of any Product hereunder transfer ownership of any intellectual property rights from Cimarron to Customer, regardless of whether Cimarron has designed, configured, engineered or manufactured any Product or delivered any Service specifically to Customer’s specifications. Customer expressly acknowledges that any design, engineering, technical work, or other intellectual property of any kind developed by Cimarron in connection with meeting any Order from Customer or supplying any Product, Equipment or Service to Customer shall constitute Cimarron’s proprietary data and shall be solely Cimarron’s intellectual property, and Customer shall have no ownership or license rights with respect to any such intellectual property except as may be agreed by Cimarron in writing.

17) Confidentiality. All data, designs, specifications, and other information, revealed or disclosed in any form or matter to Customer by Cimarron, including but not limited to any detail or feature of any Product or part thereof, supplied to, or produced or created by, Cimarron in connection with the provision of Rental Equipment or Services to Customer hereunder (collectively defined as “Information”) will be held in strict confidence by Customer; provided however that this confidentiality obligations hall not apply to any Information given freely by Cimarron to prospective customers. All such non-public Information will be treated and protected by Customer as strictly confidential and will not be disclosed to any third party without the prior written consent of Cimarron and may be disclosed within Customer’s organization only on a need to know basis. Customer acknowledges that Cimarron’s confidential Information has proprietary value to Cimarron that devices, in part, from the fact that such confidential Information is confidential and therefore not available to Customer’s competitors. The foregoing obligations shall not apply to any Information that (i) is publicly known or becomes publicly known through no fault of or disclosure by Customer; (ii) is given to Customer by someone other Cimarron as a matter of right and without restriction of disclosure; (iii) was known to the Customer prior to the acceptance of these Terms and Conditions; or, (iv) is legally compelled to be disclosed.

18) Governing Law: This Agreement will be governed by and construed in accordance with the laws of the State of Texas, without giving effect to any choice of law or conflict provision or rule (whether of such State or any other jurisdiction) that would cause the laws of any other jurisdiction to be applied.

19) Limited Statute of Limitations. TO THE EXTENT PERMITTED BY LAW, THE STATUTE OF LIMITATIONS FOR ANY BREACH OF CONTRACT RELATIVE TO THE RENTAL OF ANY PRODUCT OR THE DELIVERY OF ANY SERVICES HEREUNDER SHALL BE ONE YEAR FROM THE DATE THE CAUSE OF ACTION ACCRUES.

20) Entire Agreement. Except to the extent amended by an instrument in writing signed by Cimarron and Customer, these Terms and Conditions constitute the entire agreement of Cimarron an Customer with respect to the Product or Service and contain all the covenants and agreements of Cimarron and Customer with respect thereto. These Terms and Conditions prevail over and expressly exclude any of Customer's terms and conditions contained within other documents or forms. Any additional or different terms proposed by Customer are hereby objected to and rejected. Customer issuance of a purchase order or AFE (approval for expenditure number) referencing the quotation number in this agreement shall mean that the Customer agrees to be bound by these terms and conditions.

21) Services to be Rendered. The Customer will be responsible at all times for the operation of the rented Equipment. Cimarron will perform monthly preventive maintenance and repairs that fall within the warranty provisions contained herein. Cimarron is not responsible for damage to, or repairs resulting from, Equipment that has been operated outside of normal operating conditions and specifications. Cimarron is also not responsible for damage to, or costs arising from, repairs or alterations that Customer makes, or commissions a third party to make, to Rental Equipment.

22) Customer Responsibilities: Customer agrees as follows:

• Operating Conditions: As specified in the applicable Equipment Rental Agreement, equipment specifications sheet, equipment specifications flyer, operating limits or restrictions denoted on the rental unit or Services Agreement. • Customer will provide at the Site either (i) adequate dry, sweet fuel gas with no particulates or solids, to be approved by Cimarron, or (ii) electrical power for the prime mover (as the case may be) in accordance with the requirements below or in the equipment documentation whichever is less:   • Hydrogen Sulfide: Less than 10 ppm • Pressure: Minimum of 50 psig • Electrical Power Quality: As provided at the Site 460-volt 3 phase 60 Hertz • Consumables: Oil, lube, filters, antifreeze/coolant, spark plugs, etc. a. In the event that the Hydrogen Sulfide content of the natural gas at the inlet of the Equipment exceeds 10 ppm, or the Hydrogen Sulfide content of the fuel gas exceeds 10 ppm, then Customer will provide an individual trained in CPR and H2S safety for purposes of emergency rescue (a "Rescue Person"), which Rescue Person will be equipped with appropriate equipment (e.g., rescue air pack, a personal monitor); and a copy of training certifications of such Rescue Person for review upon request; and an emergency response plan to be implemented in the event of an accidental hydrogen sulfide release. Exceptions to this provision must be approved by Cimarron and specifically included in an accompanying Proposal or Agreement. b. Customer will not damage, obscure, change or remove any insignia, serial number or lettering of the Equipment or nameplates. c. Customer shall provide Cimarron with authorized ingress and egress to and from the Site and agrees to maintain the Site in such a condition that will allow free access at all times (24 hours a day, seven days a week) so that Cimarron can provide (i) the Services at the Site, (ii) supervise the connection of the Equipment, and (iii) inspect and maintain the Equipment. Customer acknowledges that it has superior knowledge of the Site and access routes to the Site, and consequently Customer agrees to advise Cimarron of any conditions or obstructions which Cimarron might encounter while en route to or on Site. If Cimarron is required to use any transportation equipment other than a four-wheel drive vehicle at the Site, Customer shall furnish the same on a reasonably prompt basis, at its expense and without cost to Cimarron. d. Only qualified Cimarron personnel may make modifications or changes to the Equipment (including emissions related adjustments) to maintain safe operation at the Customer’s location (“Site”). Customer shall report to Cimarron any stoppage or malfunction of the Equipment (including any leaks of oil or coolant from the Equipment or any abnormal or unsafe operations of the Equipment). If such malfunction presents an unsafe condition (including potential environmental harm) or if there is an emergency at the Site, Customer shall turn off the Equipment and take reasonable efforts to contain or minimize any leaks from the Equipment. e. Customer shall provide to Cimarron prompt notice of any change in (i) the operating conditions, (ii) the inlet fluid or gas quality specification provided by Customer for the Site, or (iii) the fuel gas or electric power quality (as applicable) specified above. Upon Cimarron’s receipt of any notice of any change in such specifications, Cimarron will review the impact of such change and reserves the right to revise the Services and/or pricing to compensate for such change. If Cimarron determines that a revision to the Services and/or pricing is necessary because of such change, Cimarron will advise Customer of the required changes to the Services and/or related fees. Customer will be solely responsible for damage caused to the rental unit if the maximum parameters are exceeded with or without notice to Cimarron. f. Customer shall furnish the following:   i. Site preparation (subject to Cimarron’s approval), including suitable sand or gravel pad or concrete base for the Equipment, fencing and other equipment, as required. ii. Fluid or gas prior to the inlet of the Equipment that is free from solids, particulates and contaminates. iii. All permits or testing (e.g., construction permits, air permits, water permits, discharge permits and environmental permits, emission testing), licenses, registrations, notices, studies and approvals associated with the Services and operation of the Equipment in accordance with all applicable laws. iv. Prior to initiation of the Services, the connection of the Equipment to Customer's equipment, including connection of valves and piping to suction and discharge flanges, and fuel gas inlet(s) or electric power of skidded pump(s) and, subject to supervision or installation by qualified Cimarron personnel. v. At the termination or expiration of this Contract, the disconnection of the Equipment from Customer's well site, electrical and fuel gas inlets and other connections to Customer's facilities, subject to supervision or disconnection by qualified Cimarron personnel. vi. Properly functioning waste discharge system for the Equipment and removal / disposal of spent filters and fluids in accordance with applicable law and applicable environmental licenses and permits. vii. Daily observation, operation and routine daily adjustments required for normal operation. viii. Excess maintenance or repairs due to Customer's negligence, abusive use or misuse, operating outside design conditions, solids and/or sour gas in the gas stream over 10 PPM, non-mechanical problems where the Equipment only needs re-starting, or lack of pressure to start the Equipment. Prior to the Equipment leaving the location listed in the Services Agreement or Equipment Rental Agreement, if practical, Cimarron will inspect and perform repairs to the Equipment to bring it to industry standards. If the Equipment is not inspected at the site it will be shop or field inspected, and repairs performed to bring it to industry standards. Customer will be invoiced for any costs to refurbish and/or repair the Equipment at T&M rates.

23) Warranties. Customer acknowledges and agrees that the remedies of repair to, or replacement of, Equipment shall be the sole and exclusive remedies available to Customer, regardless of whether Customer’s claim arises in contract or warranty. The decision as to whether to repair or replace the Equipment will be solely that of Cimarron and is governed by the terms herein.

a. Disclaimer of Warranties Not Expressly Stated. The remedies provided herein are the exclusive remedies of Customer for failure of Cimarron to meets its obligations, whether claims of Customer are based in contract, tort, or otherwise, and upon expiration of the applicable rental period, all warranty obligations of Cimarron will terminate. The warranties set forth herein are exclusive and are in lieu of all other warranties whether statutory, express or implied. Cimarron expressly disclaims all warranties of merchantability, fitness for a particular purpose, and warranties arising from course of dealing, usage or trade. b. Limited Product Warranty; Exceptions. Notwithstanding anything to the contrary, Cimarron warrants each Product supplied by it to Customer (excluding any units or materials that are obtained from third parties) to be free from material defects in material and workmanship if, and only if, all of the following conditions are met: (i) The product claimed to be defective has been exposed only to normal storage, use, and service and has been used in conditions and temperatures within Cimarron’s product specifications, (ii) has been reasonably maintained, has not been subjected to any misuse, negligent use, or accident that caused the product to suffer a defect, and has not been repaired or altered except by Cimarron; (iii) Cimarron has been notified of the alleged defect in writing within ten (10) days of discovery; (iv) the alleged defect in the product is actually caused by Cimarron through a defect in materials or workmanship, (v) and neither the product nor any relevant component thereof is one that is expendable in normal use, and has been expended in normal use. c. The above warranty is Customer’s sole remedy and shall remain in effect throughout the Rental Agreement term. Cimarron is not required to issue Customer credit or additional remedies unless the Parties agree in writing. d. Limited Service Warranty: Cimarron warrants that any Service provided hereunder shall be in conformance with the specifications set forth in the relevant scope of work document agreed to in writing by Cimarron and Customer. If the Services do not so confirm, Customer’s sole remedy shall be for Cimarron to re-perform that part of the non-conforming Services, if Cimarron is notified by Customer prior to Cimarron’s departure from the work site.