Exhibit 10.1

[Translation]

CONTRACT

 

1. GENERAL CONDITIONS:

 

1.1 This material supply contract is in accordance with decree 2745/98 of
August 24, 1998 and ruled by the Materials Supply Conditions (CFM)—2005 revised
on November 2, 2011, complemented by the notes of this Contract.

 

1.2 All stages of this supply – contract critical analysis, fabrication,
delivery and technical assistance – must be performed in accordance with Norm
ISO 9001.

 

1.3 Petrobras will deem the contract as accepted by the supplier whenever such,
within a term of 10 (ten) days of the availability date of this contract by
Petrobras, does not communicate in writing disagreement with its clauses.

 

1.4 The below listed documents are an integral part of this Contract: PROPOSAL
#PPH-1123 Rev. SR: Quotation request CFC8.002/11; Circular letters and annexes;
Minutes and e-mails regarding the negotiation; Sheet “TYPE OF INSPECTION_GLOBAL
2011_2S-01-2012 REV l.xls”; Sheet “Contract summary 4S0036880S”.

 

1.5 Upon eventual discrepancies between the supplier proposal conditions and the
“CFM-200S revision 2 of Nov/2011,” the conditions of “CFM-2D0S revised on Nov
2/2011” prevail.

 

1.6 All of the documents (letters, e-mails, fax, collection bills, invoices
etc.) must contain the contract/order numbers(ZRCT)/item/purchase order.
Petrobras may use, at its own discretion, second or third parties with whom it
maintains confidentiality to carry out technical analysis of the project and
fabrication, verified, audit, etc, as to what regards projects and contracts.

 

1.7 Upon the material presenting divergence in relation to the “Order,”
specification, damage, absence, excess and documentation, Petrobras will notify
the supplier and will make available such materials for removal.

 

1.8 We inform there will be no entry authorization at Petrobras installations
for materials whose CLM’s are not annexed to the collection bills, as specified
in the Purchase Orders. Thus the deliveries that do not meet the above-referred
conditions must be returned to the original installations, for adequacy of the
delivery conditions to contractual demands. Transportation costs, for return as
well as the new shipment, are an exclusive responsibility of the goods’
supplier. This clause does not apply to items released by inspection.

 

1.9 Petrobras reserves the right to halt invoice payments, whose materials are
object of non-compliance in relation to the description of the material or
clauses of the respective “Order.”

 

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1.10 Upon spare parts supplies, the supplier will be responsible for same, with
the respective PN (part number).

 

1.11 All spare parts referred in this Contract refer to the spare parts of
installation.

 

1.12 All materials/equipment must be guaranteed against raw-material and
fabrication defect for a period of 12 (twelve) months of operation or 18
(eighteen) months after supply, prevailing the event that happens first. Defects
or project tasks, fabrication, inputs and labor, must be corrected according to
item 10 of the CFM 2005, free of burden to Petrobras.

 

1.13 All expenses resulting from the supply or installation of new parts or
accessories under Guarantee (according to item 10 of the CFM 2005), inclusive
the transport to the delivery location, when necessary, will be incurred by the
supplier.

 

1.14 The term of this contract will be of 1,440 days, with permission for
extension for an equal term agreed-upon.

 

1.15 Effective purchase commitment: 80% (eighty percent) of the total contract
value.

 

1.16 The manufacturing capacity of this contract is based on the statement
omitted by the contractor dated July 15, 2011, rectified by e-mail of
March 29, 2012, and is an integral part of this Contract.

 

1.17 The subsea wellhead systems (SCPS) object of this contract are described as
follows:

 

  (a) 16 3/4” x 15’ x 10 Ksi including tools = 50 SCPS (of items 20 to 610)

 

  (b) 16 3/4” x l6 5/8” x l0 Ksi including tools = 20 SCPS (of items 620 to
1740)

 

  (c) 16 3/4” x l6 5/8” x l5 Ksi including tools = 16 SCPS (of items 1750 to
2580)

 

  (d) 18 3/4” x l6 5/8 x 20 x l0 Ksi including tools = 50 SCPS (of items 2590 to
3500)

 

  (e) 18 3/4” x l8 5/8” x 20-x Ksi including tools = 53 SCPS (of items 3510 to
5020)

 

  (f) 18 3/4” x l8 5/8” x 22” x 15 Ksi Full Bore including tools = 40 SCPS (of
items 5030 to 6760)

 

2. IDENTIFICATION OF VOLUMES FOR THE CONTRACT

 

2.1 The supplier must provide the material packaged and identified, indicating
the following on the package:

—Order number:

—Addressee of the material:

 

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—Product name:

 

3. TECHNICAL DOCUMENTATION FOR THE CONTRACT

 

3.1 The terms for presentation of the project drawings for approval by Petrobras
are those reported in Sheet “Contract summary 4600368806” annexed to this
contract, counted as of the order issuance date. The items of this contract that
will require presentation of the project drawings for Petrobras approval are
identified in this document, which also identifies the items for which such
drawing presentation will be necessary. All project drawings, whether presented
or not for Petrobras approval, will be inserted into the manual of the
respective wellhead system.

 

3.2 The technical documents’ approval term or presentation of the comments by
Petrobras/designer will be 30 (thirty) straight days as of the reception date.

 

3.3 In the event the technical documents are released with comments, the
supplier must revise such and re-present them within the maximum term of 30 days
after presentation of the comments.

 

  3.3.1 The drawings must be approved by Petrobras, limited to a maximum of
three presentations (AO) by the contractor.

 

3.4 The technical documentation in accordance with the requirements in the KM
must be directly forwarded to the E&P-CPM/CMP-SPO/SP/CAEI’, and with which the
technical aspects involved are regarded. Copy of the forwarding document must be
sent to the contract manager: PETROBRAS/EKP-SERV/US-CONT/CKP/CKXC Name: Ricardo
Bethlem Monteiro E-MAIL: ricardo.bethlem@petrobras.com.br TELEPHONE:
(21) 2144-1044

 

4. TAXES

 

4.1 The information on taxes inserted in this CONTRACT originate from the
supplier’s statements, assuming total responsibility for such, inclusive for
eventual burdens resulting from the stated information.

 

4.2 PETROBRAS/E&P-SERV/US-CONT/CMP/CMIC is not responsible for delay in invoice
payments, in the event of errors in information regarding rates, by the
supplier. Upon changes in legislation granting incentives with retroactive date,
the supplier must return to Petrobras such amounts paid, regarding IPI, ICMS,
PIS/PASEP, COFINS or any others, as called for in legislation, allowing discount
of credits that must be returned, at the prices of the items of this order
includes PIS/COFINS at a rate of 9.25%.

 

5. CONTRACT SCHEDULE

 

5.1 In up to 30 days after the issuance date of the contract, the supplier must
present to the contract manager the below listed documentation for approval:

 

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  (a) letter presenting the manager/leader of the contract, indicating those
responsible for coordination of the engagement area.

 

  (b) The order execution schedule (“benchmark schedule”), containing the main
events of supply, such as project, input procurement, fabrication stages,
inspection, transport plan, etc, for analysis and eventual comments by
Petrobras. Any later alterations must be presented immediately, in the manner of
revision, in compliance with the same previous procedure.

 

  (c) “S” curve of physical advance for supply in accordance with the
above-referred schedule, where the line of orders must contemplate the
realization percentage or of abscissas of months regarding the contractual term.

 

6 RESTATEMENT

 

6.1 The equipment supply prices will be readjusted in accordance with the
following formula, with its application being suspended for a period of 1 (one)
year as of the base date or shorter period, in the event legislation authorizes
reduction of such period:

 

  6.1.1 The prices must be quoted in R$ and restatement will be in accordance
with the calculation formula set out below, following a period of 12 months in
relation to the base date:

Restatement factor = {[(ABDIB/ABDIB) x 0,45] + [(col 30/col 30”) x 0,25 + VPI)
whereas; VPI = VPOFF—VCHRE + VMPI vpoff i 0,12 x d/d» x kppi/ppi”] x 0,8 *
[crospi/crdspi0] x 0,21] vchre = 0,10 X d/d» X [[ppi/ppi») X 0,60—
(crdspi/crdspi”) x 0,4)] vmpi = 0,06 x d/d” x [cruspi/crdspi”) whereas: vpoff =
variation of prices for pack-offs and sealing elements procured overseas. vchre
= variation of prices for casing hangers with special threads procured overseas.
vmpi = variation of prices for imported inputs. abdib = mechanical machinery
with burdens, regarding the event date. abdib = mechanical machinery with
burdens, regarding the base-date. col. 30 = series 1006823 – basic metallurgy of
fgv, regarding the event date. col. 30a = series 1006823 – basic metallurgy of
fgv, regarding the base-date d = PTAX BAcen dollar rate, regarding the event
date. d = PTAX BAcen dollar rate, regarding the base-date. ppl = MO index of
industry for mining and oil equipment In the USA, regarding the event date. ppl
= MO index of industry for mining and oil equipment in the USA, regarding the
base-date.—ppi: producer price index for mining and oil & gas field machinery
manufacturing”—code: pcu33313-33313 (source: Bureau of Labor Statistics, quote:
www.bls.gov/ppl/lldata) cruspi = steel price index, regarding the event date.
cruspi” = steel price index, regarding the base-date.

 

7. INVOICING/PAYMENT

 

7.1 All provisions for shipping and transport of the materials of this contract
are full responsibility of the supplier.

 

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7.2 The supplier is responsible for the follow-up of invoice payments within the
agreed terms. Upon identification of outstanding payments, the supplier must
contact the contract manager via fax or e-mail.

 

7.3 For payment processing purposes all such documents listed below must be
annexed to the invoices:

7.4 (a) in the event of shipment for industrialization, sale for future delivery
or additional invoices, deliver letter with the first copy of the invoice.

 

  (b) Additional invoices corresponding to amounts already paid against receipt
(upon anticipation), evidencing of compliance of the event to which final
payment is conditioned (technical documentation, manuals, etc.), if applicable.

 

7.5 The following documents must be presented to the contract manager for
purposes of payment regarding anticipation:

—anticipation collection documents;

—copy of event realization evidence document to which payment is conditioned.

 

7.6 Payment of the anticipation will only be carried out 30 (thirty) days after
presentation of the collection documents.

 

7.7 The anticipation collection document must be presented to the payment entity
at Petrobras, indicated in the purchase order together with copy of the event
realization evidence document to which payment is conditioned.

 

7.8 Collection bills, invoices, receipts or event compliance evidencing
documents must indicate the purchase order number, corresponding items or bank
data and must refer to a single order, under penalty of return or recount of the
payment term. The supplier must forward the invoices or receipts directly to the
address set out below, which must compulsorily indicate the following: Bank
name; agency name and code; payment venue; current account number; Address for
forwarding of payment documentation: Petróleo Brasileiro
S/A.—E&P-SERV/US-CONT/CMP Av. Chile,330—19» andar—centro cep: 20.031-170—Rio de
Janeiro—RJ—Brazil

 

7.9 We inform that, for ICMS collection purposes, the invoices must be issued as
follows: In the “recipient” field of the invoice, the below listed Petrobras
entity: Petróleo Brasileiro S.A.—Petrobras Rod. Amaral Peixoto, 11.000—cep
27925-290—Imboassica—Macaé/RJ CGC: 33.000.167/1055-58 ie: 80.933.460 Material
delivery site: PETROBRAS/E*P-SERV/US-TA/ARM-reception: Rod. Amaral Peixoto,
11.000—cep 27925-290—Imboassica—Macaé/RJ CGC: 33.000.167/1055-58 ie: 80,933.360

 

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7.10 For payment purposes, Petrobras will consider such bank data reported in
the invoice, even if same are in disagreement with the information set out in
our records. The supplier is fully responsible for referred information.

 

7.11 The absence of any documents requested or omission of those specified, will
impede continuation of the payment process, and Petrobras may at its own
opinion, return all the documentation for new presentation, with new start of
the stipulated payment term.

 

7.12 No financial compensation is due by Petrobras for the payment term.

 

8 PAYMENT CONDITION

 

  (a) 20% (twenty percent) of the items installment value, free of taxes, of the
Purchase Order regarding this Contract will be paid 30 (thirty) days after
correct presentation of the invoice documentation with confirmation of approval
by the contract manager regarding compliance with the following events set out
below: -Evidence of procurement of all materials set-out below regarding
referred SCPS:

 

  1) Consumables:—Forged Body

 

  2) Linings:—Rod lining;—Casing forging.

 

  3) Imported items:—CVU, CVE

 

  4) Test base:—Structure (pod pipes or plates >= 2” thickness)

 

  (b) 10% (ten percent) of the item’s installment value, free of taxes, of the
Purchase Order regarding this Contract will be paid 30 (thirty) days after
correct presentation of the invoicing documentation with confirmation of
approval by the contract manager, regarding compliance with the following events
set out below:—Evidence of reception of the inputs referred in item “(o)”,
regarding referred SCPS.

 

  (c) Contractual balance (70% remaining) of the delivered material value will
be paid 30 (thirty) days after correct presentation of the collection
documentation, entailed to delivery of such material, inclusive all technical
documentation required.

 

8.1 The supplier’s payment order will be presented to Petrobras in writing and
must be accompanied by an invoice or receipt describing, as applicable, events
complied with, goods delivered or services performed or through lading documents
in accordance with Part 14 of the Materials Supply Conditions after compliance
with the remaining obligations established in the contract/ZRCT order.

 

8.2 Release of the payment in the conditions referred in points a) and b) of
this item 8 are conditioned to registration of this contract and its Respective
orders by the contractor, in the PROGREDIR program.

 

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8.3 Upon evidencing contractor delays in excess of 180 days for goods set out in
the orders regarding this contract Petrobras may, at its own opinion, recover
such anticipations paid to the contractor, without prejudice of the other
contractual clauses.

 

9. LOCAL CONTENT CERTIFICATE

 

9.1 Local content (LC) minimum to be met by supplier (Contractor) for one
contract-year; -50% of the LC per SCPS, for purchase orders issued during the
first contract-year; -60% of the LC per SCPS, for purchase orders issued during
the second contract-year; -70% of the LC per SCPS, for purchase orders issued
during the third contract-year; -70% of the LC per SCPS, for purchase orders
issued during the fourth contract-year;

 

9.2 The supplier must deliver the local content certificates to Petrobras with
records of local content percentage of goods delivered in each invoice. The
certificate validity must be in compliance with resolution 36 from ANP of
11.13.2007.

 

9.3 The supplier bears a maximum term of 60 (sixty) straight days after delivery
of referred good for presentation of the Local Content Certificate to
Petrobras’s contract manager.

 

9.4 The supplier is responsible for contracting a certification society
accredited by ANP. Identification of the accredited certification societies must
be carried out at ANP’s site at: (vniw.anp.gov.br).

 

9.5 The method set out in Annex III of Resolution ANP 35 of 11/13/07 must be
adopted for measurement and evidencing of the Local content percentage reported
to Petrobras through the certificate.

 

9.6 The goods supplier will provide the local content certification for its
products through the certification societies accredited by ANP and will make
available to referred societies all the information needed for gauging and
evidencing of the local content, if needed, at ANP.

 

9.7 The supplier will be solely responsible for the veracity and reliability of
such information presented to Petrobras, ANP and the certification societies
accredited by ANP that were contracted to establish the local content level
regarding the supplied good.

 

9.8 Upon Petrobras being assessed by ANP for non-compliance with the local
content commitment, once the percentage of local content set out in the Local
Content Certificates delivered by the supplier (Contractor) being not true or
incorrect due to faulty information rendered by the supplier (contractor), the
certification societies, Petrobras or ANP, the supplier (contractor) will be
solely responsible for payment, to Petrobras, of the difference amount between
the local content percentage of the good (service performance) effectively
calculated and the faulty percentage reported in such certificate delivered by
the supplier (contractor) to Petrobras.

 

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9.9 There will be withholding of 3% of the item purchase order regarding
delivery of the local content certificate.

 

  9.9.1 The term of 30 days for payment of the withholding starts as of approval
of the withholding release by the contract manager.

 

9.10 Assessment for non-compliance with the Contracted Minimum Percentage:

 

  9.10.1 Upon the percentage of local content not realized (NR%) being below 55%
of the minimum local content value to be met by the supplier (contractor), the
penalty (M%) will be of 60% on the value of local content not realized,
according to the following formula: If 0 < NR(%) < 55% M(%) = 50(%)

 

  9.10.2 Upon the percentage of local content not realized (NR%) being equal or
in excess of 55% of the minimum local content value to be met by the supplier
(contractor) the penalty will be increscent starting at 50% and reaching 100% of
the minimum local content value to be met by the supplier (contractor), in the
event the percentage of local content not realized is 100%, according to the
following formula: If NR(%) >= 55% M(%) =1,113 NR(%) -14,285

 

  9.10.3 Collection will be through collection bill to be discounted from any
supplier (contractor) invoice at Petrobras.

 

10 PENALTY AND CANCELLATION

 

10.1 Upon non-compliance with the delivery term the supplier is subject to
assessment of such fine called for in clauses 15.1 to 15.7 of the “CFM—Material
Supply Conditions 2005 revision 2 of November 2011”, in the amount of 0.10% (ten
percentage one hundredths) daily, of the price of such material object of
non-compliance, limited to 10% (ten percent) of the total order value regarding
the Contract. 10.2. In addition to the fine, negative points will be recorded at
the SGF (Suppliers Management System) which may imply restrictions to future
consultation.

 

10.3 The penalty will be incident of the installment of the outstanding item.

 

11 CONTRACT CANCELLATION OR ORDER WITH REFERENCE TO THE CONTRACT (ORDER ZRCT).

 

11.1 Petrobras may, without prejudice to the other contractual penalties,
rescind the contract or ZRCT Order according to the reasons foreseen in
CFM/2005.

 

11.2 Upon cancellation for reasons attributable to the supplier, same will be
subject to fine assessment as called for in item15.5 of the CFM. 11.3. The
cancellation fine will be assessed on the contract or ZRCT Order total value,
represented by 0.10% (ten percentage one hundredths) daily. The period to be
considered upon calculation of the fine amount will be such comprised between
the Contract or ZRCT Order issuance date and formalization of the rescission
(CANCELLATION).”

 

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12 DELIVERY CONDITIONS

 

12.1 Delivery in installments regarding materials procured regarding this
contract will be allowed as long as authorized by the contract manager.

 

12.2 Anticipated delivery regarding materials procured in the Orders regarding
this contract will be allowed as long as authorized by the contract manager.

 

12.3 Delivery of the materials will be from Monday through Friday from 7 am to 8
pm.

 

13 DELIVERY TERM

 

13.1 Terms count as of the date Petrobras makes available the Order regarding
the contract for delivery.—New items: 14 months (consumables) = 420 days and 17
months (tools) = 510 days: The new items delivery term will only count as of
final approval of the project by Petrobras. The project manager must review the
original delivery dates for procurement orders so that the revised delivery
dates reflect the above-referred terms, counted as of the date of final approval
for each item. Upon contractor non-compliance with the agreed-upon terms for
presentation of the projects the exceeded days will be discounted from the
delivery terms of the items (minutes of the meeting on 09/30/2011). Items
already previously supplied: 10 months (consumables) = 300 days and 12 months
(tools) = 360 days; There will be no need of presenting drawing for technical
approval from Petrobras as to what regards these items. Items in inconel: 20
months = 600 days.

 

13.2 Detailing of the terms per items are listed in sheet “contract summary
4600368806” annexed to this contract. Such terms must be listed upon issuance of
the procurement orders.

 

14 CONTRACT INSPECTION

 

14.1 The inspection called for the materials procured for this contract will be
in accordance with the following and must be performed in accordance with the
minimum fabrication inspection activities chart, and according to the type of
inspection defined in the sheet annexed to this contract.

 

14.2 INSPECTION “B” (for new items not previously supplied) – According to the
items of sheet “TYPE OF INSPECTION_GL0BAL 2011_26-01-2012 REV l.xls” annexed to
this contract. 14.2.1. Application of INSPECTION “B” for new test bases
(changes) or 1st supply.

 

14.3 INSPECTION “A” (for items already previously supplied) – Items ordered or
already supplied previously in accordance with the items of sheet “TYPE OF
INSPECTION GLOBAL 20U_26-01-2012 REV l.xls” annexed to this contract.

 

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14.4 Inspection “L” (Released from inspection – for test bases already
previously supplied) – Items ordered or already supplied previously, in
compliance with the items of sheet “TYPE OF INSPECTION_GLOBAL 20ll_26-01-2012
REV l.xls” annexed to this contract.

 

14.5 To identify the items not supplied previously (new) or for those already
supplied, there will be consideration of the information contained in sheet –
TYPE OF INSPECTION_GLOBAL 2011_26-01-2012 REV l.xls” annexed to this contract.

 

14.6 Supplier correspondence requesting the inspection must be forwarded
directly to the inspection entity designated in the order with copy to the
contract manager.

 

14.7 The inspection will be responsibility of: PETRÓLEO BRASILEIRO
S/A—MATERIAIS/CDBS/IF av. ALMIRANTE BARROSO, 81 27º ANDAR RIO DE JANEIRO—CEP:
20030-003 TEL: (21) 3229-1899—FAX: (21) 3229-1837 E-MAIL:
inspecaomateriois@petrobras.com.br

 

14.8 The supplier must forward to the inspection entity or inspection company
appointed in the order, with copy to the contract manager, of the Inspection and
Tests Plan (PIT—Standard) for approval (inspection type—B”) within a term of up
to 30 (thirty) straight days after issuance of the final set/good for
fabrication, the inspection entity or inspection company will bear the same term
to issue a pronouncement. The supplier must make available for consultation or
forward, when requested by the inspection entity, all technical documentation
set out in the referred Inspection and Tests Plan (PIT).

 

14.9 The supplier must inform to the inspection entity or to the inspection
company designated, with copy to the contract manager, with minimum anticipation
of 05 (five) business days, according to item 7.2 of the CFM PETROBRAS/2005,
that the material is available for inspection.

 

14.10 For suppliers with fabrication installations overseas, the communication
must be to the inspection entity with copy to the contact manager, with minimum
anticipation of 10 (ten) business days according to item 7.2.1 of the CFM
PETROBRAS/2005, that the material is available for inspection.

 

14.11 Start of the inspection must be within 5 (five) business days according to
item 7.2 of the CFM PETROBRAS/2005 or upon overseas supplier 10 (ten) business
days according to item 7.2.1 of the CFM PETROBRAS/2005 counted as of the date in
which the material is available for inspection.

 

14.12 Upon the supplier being a retailer or distributor the inspection must be
performed by an independent inspection entity contracted by same and previously
accepted by Petrobras for execution for the services directly at the original
manufacturer of the material according to item 7.2.2 of the CFM PETROERAS/2005.
The national inspectors must be qualified at ENGINEERING/SL/SEQUI in Fabrication
Inspection and international inspectors must be qualified by entities nationally
acknowledged in the country where the material is fabricated in accordance with
the requirements of norm EN 45013 (in this case, previous approval from
Petrobras is required).

 

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14.13 Petrobras, through the inspection entity designated to follow-up on the
process may formally request from the retailer or distributor presentation of
the inspection and tests plan (PIT) and/or test procedures defined in the
contact to designate the events to be performed by the contracted inspection
company according to item 7.2.2.1 of the CFM PETROBRAS/2005.

 

14.14 The inspection site must be informed upon the summons, containing the full
address of the manufacturer and/or supplier, telephone, fax and e-mail. The
manufacturer’s contact person name and must be provided jointly with contact
means (telephones, e-mail, etc).

 

14.15 The inspection may be performed at the supplier’s installations. The
inspector must receive, free of charge for Petrobras, all technical assistance
needed including access to contractual documentation, including drawings,
production data and records, certificates and quality reports, according to item
7.3 of the CFM PETROBRAS/2005.

 

14.16 The material must be accompanied of the Material release Communication and
CLK, containing at least the material certificates, quality records and reports
issued. Copies of referred documents must be forwarded to the requesting entity.
DELIVERED MATERIAL IS SUBJECT TO RECEPTION INSPECTION BY PETROBRAS.

 

  14.16.1 The data book must be delivered in up to 30 (thirty) straight days
counted as of reception of the equipment/tools.

 

14.17 Upon any item inspected or subjected to test not meeting the Material
Requirements, Applicable Norms, or Contractual Inspection Requirements Petrobras
may reject same and the supplier must replace such rejected item or carry out
all changes needed to meet referred demands, free of charge to Petrobras, with
the item once again being subjected to inspection and test according to item 7.5
of the CFM PETROBRAS/2005.

 

14.18 Upon partial or total rejection of the material of this order there will
be issuance of the Material Rejection Communication (CRM) by the inspection
entity or inspection company designated in the order. Upon need of new
inspection as a result of previous CRM issuance the supplier will compensate
Petrobras for such inspector attendance costs for its representatives at its
installations, including eventual shuttle and accommodation costs according to
item 7.3.2 of the CFM PETROBRAS/2005.

 

15 CONTRACT ADDRESSES

INVOICE PRESENTATION AND PAYMENT LOCATION PETROBRAS S.A.
PETROBRAS/E&P-SERV-US-CONT/CMP/CMIC AVENIDA REPÚBLICA DO CHILE, 330 – 19º ANDAR
CENTRO—RIO DE JANEIRO—RJ CEP: 20.031-170

 

16 CONTRACTUAL ALTERATION

 

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16.1 Petrobras/designer comments that the supplier deems to imply changes in the
order scope, resulting in extension of the supply term and/or price increases
must be notified to Petrobras. Thus the manufacturer must forward to the
Contract manager two copies of the “Contractual Changes Order—P.A.C.” within a
maximum term of 30 (thirty) straight days, after the request for scope
alteration.

 

16.2 Incorporation of the comments may only be carried out by the supplier after
approval from the contract manager, which will take place within a maximum term
of 30 (thirty) straight days after presentation of the “P.A.C.”. The comments
not communicated within the established term of 30 (thirty) straight days may
not, under any circumstance, be object of future claim by the supplier for
increase of the term and/or price.

 

17 PACKAGING

 

17.1 The product must arrived duly packaged/preserved so as to ensure the
characteristics of same, foreseeing storage for 12 months indoors, although in
aggressive atmosphere.

 

18 OVERALL NOTES

 

18.1 The contractor is obligated to not use, in all activities related to
execution of this instrument, child labor, according to the terms of incise
xxxiii of article 7 of the Republic’s Constitution, as well as demand that
referred action is adopted in contacts entered into with the suppliers of their
inputs and/or service performers, under penalty of contract rescission.

 

18.2 The contractor is obligated, whenever requested by Petrobras, to issue a
written statement that it is compliant or in compliance with such demand
contained in the previous item.

 

18.3 Item 010 of this contract refers only to the quantity of total of systems
to be supplied. Diligence By: UPK2 Restatement; Materials with restatement TOTAL
CONTRACT VALUE—2.002.873.797,32 (TWO BILLION TWO MILLION EIGHT HUNDRED SEVENTY
THREE THOUSAND SEVEN HUNDRED NINETY SEVEN REAIS AND THIRTY TWO CENTS)

 

PETRÓLEO BRASILEIRO S.A. By:   /s/ Eduardo Antonio de Souza Name:   Eduardo
Antonio de Souza By:   /s/ Felipe Fernandes Moreno Name:   Felipe Fernandes
Moreno

 

12

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DRIL-QUIP, DO BRASIL LTDA By:   /s/ Corbiniano Fonseca Neto Name:   Corbiniano
Fonseca Neto

 

13

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[Translation]

PETRÓLEO BRASILEIRO S.A.

PETROBRAS

CONDITIONS OF MATERIAL SUPPLY

CFM

PETROBRAS

CFM—2005

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SUMMARY

 

Part 1—PURPOSE     1    Part 2—DEFINITIONS     1    Part 3—USE OF DOCUMENTS AND
CONTRACTUAL INFORMATION     2    Part 4—INDUSTRIAL PROPERTY RIGHTS     2    Part
5—SUPPLIER’S OBLIGATIONS AND LIABILITIES     3    Part 6—PETROBRAS’ OBLIGATIONS
AND LIABILITIES     5    Part 7—INSPECTIONS     5    Part 8—PACKING FOR
TRANSPORTATION     7    Part 9—DELIVERY     7    Part 10—PROPERTY’S GUARANTEE  
  10    Part 11—CONTRACTUAL AMENDMENTS     11    Part 12—ASSIGNMENT     11   
Part 13—TERMS     12    Part 14—PAYMENTS     12    Part 15—PENALTIES     16   
Part 16—TERMINATION OF THE CONTRACT     17    Part 17—HEALTH, SAFETY AND
ENVIRONMENT – HSE     19    Part 18—CORPORATE LIABILITY     20    Part
19—PREVAILING LANGUAGE     20    Part 20—APPLICABLE LAW AND JURISDICTION     20
   ANNEX I BILL OF LADING FORM     21    ANNEX II INTERNATIONAL BILL OF LADING
FORM     23   

 

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Part 1—PURPOSE

1.1 To set forth the conditions that regulate the supply of Properties and
Services Related to Petrobras.

1.2 Whenever necessary, the CONTRACT may contain clauses different from those
Conditions, provided that it is previously defined in the instrument of notice.

1.2.1 Whenever there is a divergence between a contractual clause and its
annexes, the CONTRACT shall prevail.

Part 2—DEFINITIONS

2.1 For simplifying purposes, the following definitions shall be adopted in
these Conditions and all other contractual documents:

2.1.1 Petrobras means the company of the PETROLEO BRASILEIRO S.A. group
purchasing the Property and Services related to this CONTRACT.

2.1.2 Requesting Unit means the Petrobras’ Unit that requested the purchase of
the Property.

2.1.3 Receiving Unit means the Petrobras’ Unit that shall receive the purchased
Property.

2.1.4 SUPPLIER means the company that shall directly supply to Petrobras the
Property and the Related Service in accordance with the CONTRACT.

2.1.5 CONTRACT means the instrument of agreement entered into between PETROBRAS
and the SUPPLIER, including all the documents and respective annexes attached
thereto or therein mentioned.

2.1.6 Property means every system, equipment or any material that the SUPPLIER
is committed to deliver to Petrobras in accordance with the CONTRACT.

2.1.7 Related Service means the supplementary service to the Property supply,
such as: installation, packing, technical assistance, training and/or any other
SUPPLIER’S obligation in accordance with the CONTRACT.

2.1.8 Inspecting Body means Petrobras’ Unit or a company contracted by it in
order to perform the manufacturing inspection and to follow the Property’s
acceptance tests, as well as the Related Services, in accordance with the
CONTRACT.

 

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2.1.9 Inspector means the physical person or the corporate body appointed by
Petrobras to perform the manufacturing inspection and to follow the Property’s
acceptance tests, as well as the related services in accordance with the
CONTRACT.

2.1.10 Contractual Amount means the amount to be paid to the SUPPLIER in
accordance with the CONTRACT for total compliance with its contractual
obligations.

2.1.11 Contract Manager means the person appointed by Petrobras to perform the
activities of follow up of the Parties’ contractual obligations.

2.1.12 Purchasing Unit means the Petrobras Unit that executes the purchase
order.

2.2 For purposes of this CONTRACT, terms that determine the delivery condition
and other commercial terms used to describe the parties’ obligations shall have
the meanings ascribed to them in the version in force on the date of proposal or
submission of the International Rules for the Interpretation of Commercial Terms
published by the International Chamber of Commerce of Paris, normally known as
“INCOTERMS”.

Part 3—USE OF DOCUMENTS AND CONTRACTUAL INFORMATION

3.1 SUPPLIER may not, without the previous written consent of Petrobras,
disclose any specification, plant, drawing, sample or information furnished by
Petrobras or on its behalf that appears in the CONTRACT to any person or entity
that is not committed with the execution of the contractual scope.

3.2 SUPPLIER must not, without the previous consent of Petrobras, make use of
any document or information mentioned in item 3.1 for any purpose other than
those related to the CONTRACT’s execution.

3.3 Documents mentioned in item 3.1, except for the proper CONTRACT Instrument,
shall remain Petrobras’ property and, if so requested, must be returned (with
all copies) upon the termination of the contractual obligations.

Part 4—INDUSTRIAL PROPERTY RIGHTS

4.1 Payment of royalties concerning trademarks and patents licensed from third
parties are the exclusive SUPPLIER’S property, unless when the industrial
drawings are in writing supplied by Petrobras.

4.2 SUPPLIER shall release Petrobras and shall have the sole liability for an
eventual eviction resulting from third parties’ claims by virtue of violation of
the patent, trademarks or industrial drawing property rights as a consequence of
the Property utilization, except in the event that the Property is supplied in
writing in accordance with the specifications developed and/or supplied by
Petrobras.

 

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Part 5—SUPPLIER’S OBLIGATIONS AND LIABILITIES

5.1 SUPPLIER commits itself to:

5.1.1 Supply and deliver the Property and to execute the Related Service that is
the CONTRACT’S object in the form, within the term and quality that are
stipulated herein and in its annexes.

5.1.2 Assume within the limitations provided in the CONTRACT full liability for
the actions and omissions of its employees, suppliers, and persons directly or
indirectly employed by them. No CONTRACT provision shall create a contractual
relationship between any subcontractor or subsupplier and Petrobras.

5.1.3 SUPPLIER commits itself to pay to Petrobras the amount that is imposed to
it by virtue of eventual subsidiary or joint eviction sentenced by the Judiciary
or by the administrative competent courts in relation to the default of labor,
social security, tax and fund (FGTS) obligations with respect to SUPPLIER’S
employees.

5.1.3.1 Such amount shall be accrued by all the expenses incurred such as legal
fees, attorney’s fees and extrajudicial costs, among others.

5.1.4 SUPPLIER commits itself to not employ in all the activities related to
this CONTRACT execution infantile labor under the terms of Item XXXIII of
article 7 of the Constitution of the Republic, as well as to require that the
mentioned measure is adopted by the contracts entered into by the suppliers of
the industrial consumption materials and/or service suppliers, under the penalty
of CONTRACT termination.

5.1.4.1 SUPPLIER commits itself, whenever requested by Petrobras, to issue a
written statement that it has complied or is complying with the requirement
provided in the above mentioned item.

5.1.5 SUPPLIER shall carry out its manufacturing obligations strictly observing
the health, safety and labor medicine standards being liable for the violations
committed. It shall provide, at its own cost, and keep under perfect use
individual protection equipment.

5.1.6 SUPPLIER shall submit, whenever requested by Petrobras, the documentation
supporting compliance with its labor, social security and tax obligations
including the FGTS (Employment Security Fund) deposits.

 

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5.1.7 Keep Petrobras informed in accordance with its convenience of all the
details of the supply that is this CONTRACT’S object and to prepare specific
reports, when requested.

5.1.8 Appear, whenever it is requested, in the locations previously agreed upon
between Petrobras and the SUPPLIER through its representatives duly qualified
and accredited for examinations and explanations of any problem related to
supply.

5.1.9 Provide reports on the development of the different phases of Property
manufacture when provided in the CONTRACT.

5.1.10 Facilitate the action of the contract management and of the inspection
through representatives accredited by Petrobras providing the necessary
resources for its execution whenever provided in the CONTRACT.

5.1.11 Repair, at its own cost, any divergence and provide the re-work or the
replacement of any PROPERTY not accepted by the Inspector based upon the
CONTRACT terms and its annexes.

5.1.12 SUPPLIER’S liability for damages shall be limited to direct damages
according to the Brazilian Civil Code and applicable legislation, excluding the
loss of profits and consequential damages, and direct damages are limited to
100% (one hundred percent) of the adjusted contractual amount, unless otherwise
provided in the CONTRACT.

5.1.12.1 Petrobras shall be entitled to the right of recourse against the
SUPPLIER in the event that Petrobras is bound to repair an eventual damage
caused by the SUPPLIER to third parties under the terms of the sole Paragraph of
article 927 of the Civil Code, not applying in this case the limit provided in
item 5.1.12, unless otherwise provided in the CONTRACT.

5.1.12.2 Without prejudice to what is provided in item 5.1.12, SUPPLIER shall be
liable for the costs of additional services necessary to repair, re-work or
replace the Property resulting from its fault or willful misconduct in executing
the CONTRACT, and the inspection of follow-up by Petrobras does not exclude or
reduce this liability, taking into account the provision of item 10.3.1.

5.1.13 Supply products in conformity with the requirements specified in the
CONTRACT irrespective of the approval of documents and manufacturing inspection
are held by Petrobras or by a company contracted for this purpose. In the event
that products supplied are non-conforming, the immediate replacement of the same
shall be arranged, and SUPPLIER shall be liable for all the costs related
thereto.

 

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5.1.14 When the Property has been manufactured using raw material supplied by
Petrobras, SUPPLIER shall submit the accounting relating to the application of
the raw material as defined in the CONTRACT.

5.1.14.1 The rendering of accounts shall be accompanied by a list of bills of
sale relating to the raw material that was received and the finished product
indicating the respective dates, weight and quantity of material per bill of
sale.

5.1.14.2 Any and all remaining raw material supplied by Petrobras shall be made
available for it.

Part 6—PETROBRAS’ OBLIGATIONS AND LIABILITIES

6.1 Petrobras commits itself to:

6.1.1 Make the payments established as defined in the CONTRACT.

6.1.2 Provide, within the term defined in sub-item 7.2, the Property inspection
at SUPPLIER’S factory when provided in the CONTRACT, as well as all the releases
for the shipment.

6.1.3 Provide the necessary import documentation, as well as the payment of port
fees, customs cost and tax obligations in Brazil in the case of a Property
directly acquired by Petrobras abroad.

6.1.4 Cooperate with the SUPPLIER to the extent possible and without assuming
any charges, whenever so requested, in the study and interpretation of the
technical documents.

6.1.5 Notify the SUPPLIER in the event of application of eventual penalties or
other sanctions provided in the CONTRACT or by Law.

6.1.5.1 Relating to the events of fine due to delay of delivery provided in the
CONTRACT there shall not be a previous notice.

Part 7—INSPECTIONS

7.1 The Inspection Requirements required by Petrobras shall be defined in the
instrument of notice or in another corresponding document in which a submission
of a supply proposal is requested.

 

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7.2 SUPPLIER shall inform the Inspecting Body indicated in the CONTRACT at least
5 (five) business days in advance the date from which the Property shall be
available to be inspected. The beginning of the inspection shall occur up to 5
(five) business days after this date. If Petrobras is not able to perform the
inspection, the Inspecting Body shall inform the SUPPLIER of a new date and
other contractual conditions shall remain in force.

7.2.1 If the SUPPLIER’S facilities are located abroad, the communication upon
the Inspecting Body shall be made at least 10 (ten) business days in advance.

7.2.2 When SUPPLIER is a Reseller or a Distributor, the inspection shall be
performed by an independent inspection company, contracted by it and previously
accepted by Petrobras in order to perform the services directly at the original
manufacturer of the material.

7.2.2.1 Petrobras, through the Inspecting Body appointed for the process
follow-up, may formally request the Reseller or Distributor to submit a quality
plan and/or test procedures defined in the CONTRACT in order to specify the
events to be performed by the contracted inspection company.

7.3 Inspections may be held at the SUPPLIER’S facilities or at the facilities of
its subsupplier(s), at the place of delivery or the final destination of the
Property. When performed at the SUPPLIER’S or its subsupplier(s) facilities, the
inspector shall be provided with all of the technical assistance necessary
without any cost to Petrobras, including the access to the contractual
documentation, drawings, production data and registration/certificates/quality
reports.

7.3.1 When there is a continuous presence of an Inspector at the SUPPLIER’S
facilities it must provide a proper place for his stay within its installations
taking into account SUPPLIER’S internal regulations.

7.3.2 If the inspection is not performed due to SUPPLIER’S exclusive
responsibility, or if a new inspection is necessary by virtue of Property’s
rejection in a previous inspection, it shall reimburse Petrobras the costs
relating to the Inspector, or his representatives, presence in its installations
including the eventual costs of displacement and lodging.

7.4 In order to perform any and all inspection phases, SUPPLIER shall submit to
Inspector the drawings and documents certified by Petrobras pursuant to which
the Property is being manufactured and, depending on the contractual conditions,
the documents and drawings must be previously approved by Petrobras or by a
company that is contracted for that purpose.

 

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7.5 If any Property that is inspected or submitted to a test does not meet the
Material Requirements, Applicable Rules or Contractual Inspection Requirements,
Petrobras is entitled to reject it and SUPPLIER must replace the rejected
Property or perform any and all modifications necessary in order to meet such
requirements without any additional cost to Petrobras and the article must be
once more submitted to inspection or test.

7.6 No Property submitted to inspection may be remitted without the release in
writing of the Inspector, being the SUPPLIER subject to payment of all costs
resulting from this decision.

7.7 Petrobras’ right to inspect and, when necessary, reject the Property after
its arrival at final destination, shall in no way be limited to or put aside by
virtue of inspection, testing, and acceptance of the Property by Petrobras or
its representatives, before the shipment.

7.7.1 The Property that is released at the SUPPLIER’S facilities shall be
subject to verification by the Requesting Unit on the moment of its reception.

Part 8—PACKING FOR TRANSPORTATION

8.1 SUPPLIER is responsible for Property packing and/or conditioning that shall
be adequate to the kind of transportation defined in the CONTRACT and meet the
requirements of the specific legislation for cargo transportation especially
relating to health, safety and environment.

8.2 The volumes shall be marked with permanent ink and shall contain the
following words: Petrobras; acronym of the Addressee Unit; address of the
Addressee Unit; number and item(s) of the material purchase order (PCM) and of
the CONTRACT, as well as receive a proper visual signalization adequate to the
kind of material to be transported (example: FRAGILE, DANGEROUS, RADIOACTIVE,
etc).

Part 9—DELIVERY

9.1 The Property delivery must be performed by the SUPPLIER in accordance with
the CONTRACT and advanced deliveries are not allowed, unless defined in the
CONTRACT or upon written authorization by Petrobras to be previously requested
by the SUPPLIER.

9.1.1 Advanced delivery is the delivery that is made more than 15 (fifteen)
consecutive days before the contractual date of delivery.

 

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9.2 The Property under a CONTRACT or one of its items shall be object of a sole
delivery or of delivery in installments as established in said document.

9.2.1 When the delivery in installments is provided for in the CONTRACT or
further requested by Petrobras, the provisions hereunder shall apply to each
delivered installment. When the delivery, due to transportation convenience, is
to be made in installments, it shall be considered delivered on the date
relating to the last installment.

9.3 The document that makes the Property of a CONTRACT available for
transportation is:

9.3.1 In the events of delivery FCA-SUPPLIER and CIP-CARRIER: The Bill of Lading
(AE), which model is attached hereto as ANNEX I and that may be replaced by any
other document issued by the SUPPLIER that characterizes the availability of the
Property and informs all the data necessary for transportation by Petrobras.

9.3.2 In the events of delivery FCA-SHIPMENT AIRPORT and FOB-SHIPMENT PORT: The
International Bill of Lading (AEI), which model is attached hereto as ANNEX II
and that may be replaced by any other document issued by the SUPPLIER that
characterizes the availability of the Property and informs all the data
necessary for transportation by Petrobras.

9.3.3 In the event of delivery EX-WORKS: The Bill of Lading (AE) or the
International Bill of Lading, the models of which are attached hereto
respectively in ANNEX I and II and that may be replaced by any other document
issued by the SUPPLIER that characterizes the availability of the Property and
informs all the data necessary for transportation by Petrobras.

9.3.4 If the Property, due to SUPPLIER’S liability, may not be shipped on the
date indicated to Petrobras, SUPPLIER shall bear all cost resulting from the
idle displacement of the carrying vehicle or the unreasonable shipment delay.

9.3.5 SUPPLIER shall deliver to Petrobras Unit in charge of the CONTRACT
management the AE or the AEI duly filled in, when applicable, by a counterpart
of the documents below:

 

  a) Communication of Material Release (CLM) or material acceptance report (for
a Property acquired abroad) for the Property subject to inspection;

 

  b) Certificate of the classifying society for the Property subject to naval
classification;

 

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  c) Emergency card or “Material Safety Data Sheet” (for the Property acquired
abroad), if the Property is a controlled product (dangerous chemical product,
explosive, radioactive, etc.).

 

  d) Requirements/Special Instructions for lashing, protection, transportation,
unloading and storage of the Property, whenever necessary.

9.3.6 The Property withdrawal shall be provided by Petrobras, if it is
accompanied by the documents mentioned in

sub-item 9.3.5.

9.4 In the event that transportation is a SUPPLIER’S obligation, it shall ship
the material with a counterpart of the documents mentioned in sub-item 9.3.5, if
applicable, as well as require that the addressee registers in the bill of sale
or in other document that certifies the effective delivery of the Property, its
name, enrollment, office, company’s name and date of reception of the Property.

In the event of a foreign SUPPLIER it may only ship the Property with a written
authorization to be previously requested to the Contract Manager.

9.5 The SUPPLIER’S liability shall cease when the Property is delivered in
accordance with the INCOTERMS definitions in force, as defined in the respective
CONTRACT.

9.6 The effective delivery date of the Property shall be the date defined below,
in accordance with the delivery condition established in the CONTRACT:

 

  a) EX WORKS: date of document protocol that informs the Property availability
(Bill of Lading – AE or International Bill of Lading – AEI) or of any other
document issued by the SUPPLIER that characterizes the Property availability,
forwarded to the person in charge of the CONTRACT management or the date
estimated for the readiness of the Property mentioned in AE or in AEI,
prevailing whichever is the later.

 

  b) FCA-SUPPLIER: date of Bill of Lading protocol (AE) or of any other document
issued by the SUPPLIER that characterizes the Property availability, forwarded
to the person in charge of the CONTRACT management or the date estimated for the
readiness of the Property mentioned in AE, whichever is later.

 

  c) FCA-SHIPMENT AIRPORT and FOB-SHIPMENT PORT: date of International Bill of
Lading protocol (AEI) or of any other document issued by the SUPPLIER that
characterizes the Property availability, forwarded to the person in charge of
the CONTRACT management or the date estimated for the readiness of the Property
mentioned in AEI, whichever is later.

 

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  d) CPT- DESTINATION AIRPORT: date of issuance of the “AIR WAYBILL – AWB”.

 

  e) CFR-DESTINATION PORT: date of issuance of the “BILL OF LADING”.

 

  f) CIP-Petrobras and CIP-THIRD PARTIES: date of issuance of the bill of
transportation supplied by the Carrier.

 

  g) CIP-CARRIER: date of issuance of the bill of transportation supplied by the
Carrier indicated by Petrobras.

 

  h) DDU (designated location) – the date of Property delivered at the location
defined in the CONTRACT, registered in legible form in the bill of sale by the
person who received the Property, who in addition to the date must register (in
a legible form) in the same bill of sale his name, enrollment, the office,
company’s name and the date of Property reception.

 

  i) DDP (designated location)—the date of Property delivered at the location
defined in the CONTRACT, registered in legible form in the bill of sale by the
person who received the Property, who in addition to the date must register (in
a legible form) in the same bill of sale his name, enrollment, the office,
company’s name and the date of Property reception.

Part 10—PROPERTY’S GUARANTEE

10.1 SUPPLIER shall guarantee the quality of the Property for a period of 12
(twelve) months after the date on which Property begins to operate or 18
(eighteen) months from the date of delivery, whichever occurs first, unless
another period of time is established in the CONTRACT.

10.1.1 The guarantee period shall be interrupted on the date of notice of
divergence by Petrobras, and shall resume when the Property is under perfect
conditions of use.

10.2 The guarantee comprises the recovery or replacement, at the SUPPLIER’S
costs, including transportation from the location where the Property was
delivered up to the SUPPLIER’S facilities of any component or equipment that
present a divergence of characteristics or any design errors and manufacturing
defects.

 

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10.3 If, during the guarantee period, any defects or divergences in Property’s
characteristics are verified, Petrobras shall communicate this fact in writing
to SUPPLIER agreeing upon the period of time to correct the defects and delete
the divergences.

10.3.1 When the SUPPLIER is not able to correct the defects, Petrobras may
perform the necessary repairs directly or through third parties, at the
SUPPLIER’S cost, and upon its previous authorization.

Part 11—CONTRACTUAL AMENDMENTS

11.1 Petrobras may, at any time upon written agreement with the SUPPLIER,
perform amendments to the CONTRACT scope in one or more of following
circumstances:

 

  a) alteration of the quantity of any item;

 

  b) alteration of the project, specification or of the requirement of
manufacturing inspection;

 

  c) alteration of the delivery condition;

 

  d) alteration of delivery location;

 

  e) alteration of the Related Service;

 

  f) extinction of alteration of taxes or charges incident on the contracted
prices.

11.2 If any of these modifications causes a change in any of the unitary
contracted prices or in the delivery schedule, SUPPLIER shall, within 30
(thirty) days upon the receipt of the modification request, submit to the
CONTRACT manager the respective revisions for evaluation and approval.

11.2.1 Any and all modification of the supply scope may only be executed upon
analysis and agreement between SUPPLIER and Petrobras.

11.2.2 Approval by Petrobras shall provide that SUPPLIER effects the
modifications defined, and the CONTRACT shall be amended incorporating the
respective modifications.

Part 12—ASSIGNMENT

12.1 SUPPLIER may not assign, in whole or in part, the CONTRACT, unless upon
previous and written authorization from Petrobras.

12.2 SUPPLIER may not assign nor pledge, at any title, in whole or in part, the
credits of whatever nature, resulting or arising from the CONTRACT, unless upon
previous and written authorization from Petrobras. The authorization shall
obligatorily state that Petrobras assigns to the assignee all the exceptions
that it is entitled to, expressly mentioning that payments to assignee are
subject to the compliance by the assignor of all its contractual obligations.

 

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Part 13—TERMS

13.1 The delivery terms shall be counted in consecutive days from the date
defined in the CONTRACT.

13.2 The eventual delays from subcontractors or subsuppliers shall be the
exclusive responsibility of the SUPPLIER.

13.3 SUPPLIER may request for analysis by Petrobras extension of the delivery
term, due to force majeure, acts of God, or fair reasons.

13.4 Notwithstanding the contractual terms adjusted, the legal effects of the
CONTRACT shall continue for up to 180 (one hundred and eighty) days after its
termination date.

Part 14—PAYMENTS

14.1 The Property and the Related Service acquired shall be paid by Petrobras
upon their delivery, whether total or partial, 30 (thirty) consecutive days from
the date of the protocol of delivery of the collecting documentations at the
locations indicated in the CONTRACT.

14.1.1 Payments to suppliers shall preferably be made through the payment of
securities by means of collection registered with banks that perform the
electronic issuance of securities using the CNAB-240 standard (Febaban). The
payments made through DOC shall be paid in D + 1. When the payment is not made
by means of a Bank Form, 1 (one) day will be added to the term.

14.2 Payments shall be made based upon the contractual events pursuant to the
system established in the CONTRACT.

14.3 In the event of postponement provided in the CONTRACT, SUPPLIER shall
request confirmation from the Contract Manager of compliance with the
corresponding contractual event and the issuance of the respective supporting
document.

14.3.1 Payments of amounts concerning advancements shall be made upon the
receipt submission that must obligatorily state Petrobras and SUPPLIER’S CNPJ
and a legible copy of the supporting document mentioned in item 14.3.

14.3.2 When the CONTRACT sets forth advancement installments, the payment of the
amount relating to the property delivery shall only be made upon the submission
of evidence to Petrobras that the bills of sale corresponding to the advancement
payments already made have been issued.

 

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14.4 The bills of sale, invoices, bill and invoices, and receipts shall always
indicate the numbers of the CONTRACT purchase process and its corresponding
items.

14.4.1 Each collecting document must correspond to a sole and exclusive
CONTRACT.

14.5 The invoice, bill of sale, bill or receipt must obligatorily mention the
SUPPLIER’S bank data, the bank number, the branch and the current bank account
and the name of the drawee if it is not the supplier itself.

14.6 The following documents shall be submitted for the qualification to payment
at the location defined in the CONTRACT:

 

DOCUMENTATION    DELIVERY CONDITION

FOR

PAYMENT

QUALIFICATION

  

EX

Works

  

FCA

Supplier

    

CIP

Carrier

    

CIP

Petrobras

  

CIP

Third

Parties

  

DDP

Addressee

Invoice / Bill of Sale or Invoice-Bill.

   X      X         X       X    X    X

Receipted Invoice or other document issued by Petrobras attesting the effective
delivery of the Property.

           X       X    X    X

Bill of Lading (AE) with the Protocol of its receipt by Petrobras, or other
document that characterizes the availability of the Property for transportation.

   X      X         X            

 

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Evidence of Delivery of the Property to the Carrier.

   X      X         X         X         X         X   

Communication of Material Release (CLM), when the Property is subject to
inspection.

   X      X         X         X         X         X   

In the events of sub-item 14.3.2, a counterpart of the supplementary Bills of
Sale corresponding to amounts already paid upon receipt, if not included in the
delivery invoice.

   X      X         X         X         X         X   

Supporting Document of the compliance with the requirements bound to payment of
the event of the Property delivery (delivery of technical documentation,
manuals, etc) to be obtained with the Petrobras Unit in charge of the CONTRACT
management.

   X      X         X         X         X         X   

 

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14.6.1 In the delivery condition CIP-CARRIER, CIP-Petrobras or CIP-THIRD
PARTIES, SUPPLIER may submit the collection documentation even if incomplete and
within up to 10 (ten) consecutive days from this date submit the copy of the
invoice or of other document issued by Petrobras and that attests the effective
Property delivery. If this does not occur, the payment shall only be made 20
(twenty) consecutive days after the submission of said document.

14.6.2 In the event that the Requesting Unit and the Purchasing Unit are the
same, the material delivery followed by the Bill of Sale will be enough for
processing the payment.

14.7 The non-compliance with the requirements above mentioned shall imply the
return of the collecting documentation within 5 (five) business days from the
date of receipt and new counting for the payment term when it is submitted
again, and in no way shall be paid any additional amount as a financial
compensation.

14.8 CONTRACTS that provide for a price adjustment shall be entitled thereto,
taking into consideration the Adjustment and Payment Conditions of Petrobras –
CRP defined in the instrument of notice and in the CONTRACT.

PROPERTY ACQUIRED IN EXTERNAL MARKET.

14.9 For the Property payment, SUPPLIER shall provide a copy of following
documents:

 

  a) COMMERCIAL INVOICE describing the Property, quantities, unitary price and
total amount, as well as the original certificate, if applicable;

 

  b) B/L — BILL OF LADING or AWB-AIRWAY BILL and annexes;

 

  c) material acceptance report, when the Property is subject to inspection;

 

  d) evidence of compliance with the event to which final payment is subject
(technical documentation, manuals, etc.) to be obtained with Petrobras, as the
case may be;

 

  e) When issuing the invoice it must be stated “sold to and shipped to”
specified in the CONTRACT.

14.9.1 In the event of a Property acquired from a foreign SUPPLIER with
international freight of its responsibility, this shall be paid in accordance
with the amounts stated in the B/L or AWB limited to the CONTRACT amount.

14.10 Petrobras may perform debts of any amounts due to be directly reimbursed
in any invoice pending payment to SUPPLIER, giving notice thereof.

 

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Part 15—PENALTIES

15.1 Except for the provisions in Part 16, TERMINATION OF THE CONTRACT, whenever
it is set forth in the CONTRACT, the default fine due to default of a
contractual clause by the SUPPLIER, CONTRACT termination and delay in the
Property delivery shall be 0.10% (ten hundredth percent) per day on the Property
amount that is the object of default, termination or delay.

15.1.1 The Property and Related Service amount on which the fine is incurred
shall always be its respective adjusted price, and if applicable, accrued by the
incident charges, such as: taxes, freights and rates.

15.1.2 In the event of default of contractual clause and delay in Property
delivery, the total fine amount shall be limited to 10% (ten percent) of the
total CONTRACT amount, adjusted as the case may be, accrued by the incident
charges, such as: taxes, freights, and rates, etc., excluding the loss of
profits and indirect costs, as established in the Brazilian legislation in
force.

15.1.3 In the event of contract termination, the fine amount shall be limited to
the total CONTRACT amount, adjusted as the case may be, excluding the incident
taxes.

15.2 For the purposes of fine application, the Property that is supplied and
does not comply with the CONTRACT provisions shall be considered non-delivered.

15.3 The amount of the fine applied shall be deducted from the respective
Property invoice or from any other invoice that is under payment process to the
SUPPLIER by Petrobras, which shall inform this decision.

15.4 The date of effective Property delivery for the purposes of fine
application is as defined in sub-item 9.6.

15.5 In the event of CONTRACT termination due to reasons inherent to SUPPLIER,
as described in sub-item 16.1, the period to be considered in the calculation of
the fine amount shall be that comprised between the date of CONTRACT execution
and the formalization of the termination.

15.6 Any SUPPLIER’S delay without being duly excused by Petrobras in the
execution of its obligations shall cause the application of any of the following
sanctions, besides those provided by law:

 

  a) execution of eventual contractual performance guarantees;

 

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  b) fine application;

 

  c) CONTRACT termination due to default, and fine application;

 

  d) registration sanctions.

15.7 If SUPPLIER incurs delay when correcting defects and eliminating the
divergences verified in the characteristics of the Property, it will be subject
to the suspension, cancellation, withdrawal from the registry penalties or
impossibility to contract with Petrobras.

Part 16—TERMINATION OF THE CONTRACT

16.1 Petrobras may, without prejudice of other contractual penalties, upon
previous 30 (thirty) days notice to SUPPLIER terminate the CONTRACT, in whole or
in part, in following circumstances:

16.1.1 The non-compliance or the irregular compliance with the contractual
clauses, specifications, projects or terms.

16.1.2 The slowness to comply with the CONTRACT leading Petrobras to evidence
the impossibility to complete the supply of the Property or Related Service,
within the stipulated terms.

16.1.3 Unreasonable delay to begin the Property or Related Service supply.

16.1.4 Property or Related Service supply stoppage without reasonable cause and
notice to Petrobras.

16.1.5 Total or partial subcontracting of the CONTRACT’S object, the SUPPLIER’S
association with another, the assignment or transfer, in whole or in part, as
well as the merger, split-off or incorporation, except if allowed in the bidding
and in the CONTRACT.

16.1.6 The non-compliance with the regular determinations of Petrobras’
representative appointed to manage the CONTRACT’S execution, as well as those of
his chiefs.

16.1.7 The repeated commitment of faults in the CONTRACT’S execution, duly
annotated in proper registration.

16.1.8 Adjudication of bankruptcy.

16.1.9 Winding up of the company.

16.1.10 Amendment of the articles of association or the modification of the
company’s objects or structure that prejudices the CONTRACT’S execution.

 

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16.1.11 The occurrence of acts of God or force majeure events, regularly proven,
that hinder the CONTRACT’S execution.

16.2 In the event that Petrobras terminates part of the CONTRACT, SUPPLIER shall
continue to execute the non-terminated part of the same.

16.3 Petrobras may, at any time, terminate the CONTRACT upon written notice to
SUPPLIER, without any compensation, if SUPPLIER is adjudicated bankrupt, wound
up, or otherwise becomes insolvent, without prejudice to any other right, action
or recourse that might have resulted or that may result to Petrobras’ benefit.

16.4 CONTRACT may further be cancelled by Petrobras for its convenience, upon
previous notice given at least 30 (thirty) days in advance. In this case,
SUPPLIER shall be paid, upon evidence of, the amount corresponding to the part
already executed of the order, including the project, and the amount of material
specifically dedicated to Petrobras, which order may not be cancelled by the
SUPPLIER, which amounts correspond to the respective original prices, accrued by
the adjustments due on the date of termination. The materials and projects that
are paid by Petrobras shall become its property.

16.5 CONTRACT may further be terminated upon following conditions:

16.5.1 Reasons of public interest, high relevance and wide knowledge, duly
justified and determined by Petrobras and drawn up in the proceedings to which
the CONTRACT refers.

16.5.2 Suspension of its execution by written order from Petrobras, for a period
of time exceeding 120 (one hundred and twenty) days, except in the case of
public calamity, serious disturbance of the internal order or war.

16.5.3 Delay exceeding 90 (ninety) days for the payments due by Petrobras
resulting from supply or any installment of the supply already received or
executed, except in cases of public calamity, serious disturbance of the
internal order or war, the contractor being entitled to suspend the compliance
with its obligations until the situation is regularized.

16.6 The CONTRACT may be terminated if the suppression by Petrobras of part of
the contracted object causes a modification of the initial amount beyond the
amount permitted by law.

 

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Part 17—HEALTH, SAFETY AND ENVIRONMENT – HSE

17.1 SUPPLIER is liable for the acts of its employees and their consequences
resulting from the inobservance of any laws, rules or regulations of Industrial
Safety, Occupational Health, and Environmental Protection in force in the
country.

17.2 During the CONTRACT execution, SUPPLIER may not allege that it is not aware
of the Rules and Regulations of Industrial Safety, Occupational Health and
Environmental Protection in force on the date of the proposal submission even if
they are not attached hereto once this information is available for consultation
in each operational segment of the Company.

17.3 SUPPLIER must perform its activities in a preventive manner protecting
people and Environment, taking into account and restating following sub-items:

17.3.1 SUPPLIER is responsible for, and bound to supply free of cost, the EPI to
all of its employees and in accordance with the provisions established in the
Regulating Norm n° 6 of the Ministry of Labor and Employment – MTE. The
selection and technical specification of the EPI must be defined by the SUPPLIER
by virtue of the evaluation of risks pertaining to the services performed, which
must be efficient and able to guarantee the preservation of the employees’
health from the risks of the working environment in which they are developed and
levels to which they may be exposed. All EPI must have the stamp of the number
of the Certificate of Approval (CA) attached thereto.

17.3.2 SUPPLIER is in charge of preparing and complying with the Program of
Prevention of Environmental Risks (PPRA), Program of Medical Control of the
Occupational Health (PCMSO) pursuant to NR-9 of its personnel and of the
personnel of its subcontractor(s).

17.3.3 SUPPLIER, if in charge of handling and transportation of dangerous
material, whether directly or by means of third parties, must assure that the
legal requirements and regulations applicable shall be complied with. It is
hereby outlined the need to comply with the Decree 96.044 of May 18, 1988 and
its regulation published in the Federal Official Gazette (DOU) of May 19, 1988,
and Directive n° 204/MT of May 26, 1997 issued by the Ministry of
Transportation, and Decree 4.097 of January 23, 2002.

17.3.4 The vehicles used by the SUPPLIER may only transit within the internal
areas of Petrobras since they abide by the National Traffic Code. In operational
segments, SUPPLIER must abide by the instructions provided in the Petrobras
Emergency Control Plan.

 

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Part 18—CORPORATE LIABILITY

18.1 To assure and demonstrate through objective evidences at any time when
requested by Petrobras, the commitment to meet the premises provided in a
process of Corporate Liability Management, based upon Norm SA 8000.

18.2 To comply with the applicable legislation, as well as respect the
international instruments mentioned in the CONTRACT. If any non-compliance is
verified, to adopt measures aimed at prompt correction.

18.3 To continuously improve the conditions of the working place so that they
are even safer and healthier, not allowing situations of serious and imminent
danger or that may cause damage to human health and to the environment.

18.4 To furnish all necessary information to those involved in the supply chain
of the contracted products, allowing the handling and use of the same in a safe
manner during its life cycle.

18.5 Not allow the practice of infantile labor, forced work or disciplinary
measures such as physical, mental, psychological, hierarchic coercion, oral
abuse and other non-ethical duress.

18.6 To assure the non-existence of any kind of discrimination (race, social
class, nationality, color, religious, sex, sexual orientation, association to
unions, political party, etc.).

18.7 To act so that its subsuppliers, partners, and subcontractors commit
themselves to comply with the requirements of Norm SA 8000.

18.8 To assure the documented publication for all of its employees of the
corporate liability policy adopted by the Company.

Part 19—PREVAILING LANGUAGE

19.1 The CONTRACT shall be expressed in Portuguese language, and an English
version may be adopted for the purposes of its execution. In any event, the
Portuguese text shall prevail, and this language must be used in all the
documentation resulting from the CONTRACT that may be issued by the parties,
except for the technical specifications that may be in English.

Part 20—APPLICABLE LAW AND JURISDICTION

20.1 The construction and application of the CONTRACT terms shall be in
accordance with the Brazilian laws and the court of the head office of the Unit
that has executed the purchase shall have jurisdiction and competence on any
controversy resulting from the CONTRACT, including the execution of any
arbitration, constituting the elected jurisdiction, which shall prevail over any
other, even if a more privileged one.

 

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PETRÓLEO BRASILEIRO S.A. – PETROBRAS.

CONDITIONS OF MATERIAL SUPPLY (CFM 2005).

Form of Bill of Lading – AE

ANNEX I

SUPPLIER’S STATIONERY (4 COUNTERPARTS)

TO:

PETRÓLEO BRASILEIRO S.A. – PETROBRAS.

(Address of the Purchasing Body mentioned in the Contract)

- Provisional—Definitive

Bill of Lading N°             Date:             

Ref.: PCM-            AFM/AEM—            

AEM—            

- FCA-SUPPLIER—CIP-CARRIER.

We inform you that the material purchased under the referenced document is ready
for shipment, and must be taken on         /        /        from the following
address:                     , City:                     , State:
                    , Contact Person:                     , Telephone:
                    , Fax:             .

SUPPLY DETAILS

1 – Amount: R$                    , including IPI.

2 – Description of the Material:                     

3 – Material inspected and approved on         /        /            - CLM N°
                    .

4 – Items supplied and quantities:             

5 – Total gross weight:             (kg) and net weight:             (kg).

6 – Total number of packages:                     Numbered from
                    to                     .

7 –             Boxes;             Crates;             Not Bound;
            Bound.

 

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8 – Material/Load (dimensions in mm and weight in kg, per package):

 

                    Packages measuring:

                       Packages measuring:                        Packages
measuring:

Length:                     

  Length:                       Length:                     

Width:                     

  Width:                        Width:                     

Height:                     

  Height:                        Height:                     

Gross weight per package:             

  Gross weight per package:                Gross weight per package:
            

Allows overlapping of            

packages

 

Allows overlapping of                     

packages

 

Allows overlapping of             

packages

9 – Additional recommendations to Carrier (shipment time, capacity/day, previous
notice for shipment schedule, requirements/special instructions for load
lashing/protection, transportation, unloading, storage, etc.):
                    

NOTE: Item 3 only refers to material subject to inspection. Attach copy of the
Communication of Material Release without which its removal may not be provided.

Yours Truly,

                                                         (Signature of the
supplier’s authorized representative).

 

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PETRÓLEO BRASILEIRO S.A. – PETROBRAS.

CONDITIONS OF MATERIAL SUPPLY (CFM 2005).

ANNEX II

SUPPLIER’S STATIONERY (2 COUNTERPARTS)

TO:

PETRÓLEO BRASILEIRO S.A.—PETROBRAS.

(Address of the Purchasing Body mentioned in the Contract)

International Bill of Lading N°             

Date:             

Ref.: PCM-             AFM             

AEM —            

 

1 — IDENTIFICATION OF THE MATERIALS/LOAD:

 

ITEM AFM/AEM        QUANTITY              

SHORT

DESCRIPTION

       

TAX

CLASSIFICATION

        AMOUNT                                                                  
                                                                 

 

2 — ESTIMATE DATE FOR LOAD READINESS:     /     /     

 

3 — LOAD (DIMENSIONS IN MM AND WEIGHT IN KG, PER PACKAGE):

 

                    Packages measuring:

                      Packages measuring:                       Packages
measuring:

Length:             

  Length:                Length:             

Width:             

  Width:                Width:             

Height:             

  Height:                Height:             

Gross weight per package:             

  Gross weight per package:            Gross weight per package:         

Allows overlapping of             

packages

 

Allows overlapping of             

packages

  Allows overlapping of              packages

 

4 — TRANSPORTATION:

Condition of the AFM delivery:

Destination Port/Airport:

 

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5 — SUPPLIER:

Corporate Name:

Address:

Contact Person:

Telephone Number:

Fax Number:

 

6 — SUPPLIER’S REPRESENTATIVE:

Corporate Name:

Contact Person:

Telephone Number:

Fax Number:

Yours Truly,

                                         (Signature of the supplier’s authorized
representative).

 

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