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DocuSign Envelope ID:05EFDA32-4C8F-4F23-93BC-D19E217654E0 2.5 Requirements Pertaining to Intangible Drilling Costs COMPANY may be able to claim the Intangible Drilling Cost deduction under Section 263(c) of the United States Internal Revenue Code of 1986 for SCOPE purchased under the CONTRACT. Accordingly,to substantiate those claims, it is necessary for CONTRACTOR to invoice the prices to be paid by COMPANY separated into "Material" and "Non-material" costs,with CONTRACTOR's profit and overhead allocated to each category as appropriate. (i) "Non-material" costs are those costs covering intangible items that would have no salvage value at the end of the life of a project, such as design engineering, fabrication labour, and materials and equipment handling,testing, and inspection of materials through incorporation into SCOPE, CONTRACTOR's installation labour, transportation costs for materials used in fabrication, and the completed item. (ii) "Material" costs are those costs for tangible items that ultimately have a salvage value at the end of the life of a project.This category does not include items that are consumed in the delivery of the SERVICES (e.g. welding supplies used in welding). For example, material costs would typically include the value of steel plate used in the fabrication process as well as hardware,valves, pipe,fittings, motors, etc. purchased by CONTRACTOR for incorporation into SCOPE. 2.6 Withholding (a) If CONTRACTOR is required to collect TAXES on a transaction governed by this CONTRACT, CONTRACTOR will invoice that TAX as a separate line item on the invoice. (b) CONTRACTOR will not collect any TAXES for which COMPANY furnishes to CONTRACTOR, in a timely manner, a valid and properly completed exemption certificate or valid licence for which CONTRACTOR may claim an available exemption from TAXES. COMPANY will be responsible for any TAXES, interest, and penalties if the exemption certificate, licence, or other form of proof of exemption is disallowed by the proper tax authority. If a refund opportunity arises with respect to any TAXES paid by CONTRACTOR as a result of the transactions governed by the CONTRACT, both parties will cooperate to pursue the refund to pay to the party that incurred the TAX burden. (c) If CONTRACTOR holds a valid exemption certificate, it will provide copies or further information to substantiate an entitlement to avoid the withholding,which COMPANY may then rely on to apply the exemption. 3 LIENS (a) CONTRACTOR warrants good and clear title to SCOPE supplied. (b) CONTRACTOR will not permit CONTRACTOR GROUP to place any LIENS or claim any LIENS. (c) CONTRACTOR will immediately notify COMPANY and promptly remove any LIENS by CONTRACTOR GROUP. 4 SUSPENSION Purchase Contract—GOODS and SERVICES Ver.2016a 11