MASTER GEOPHYSICAL DATA ACQUISITION AGREEMENT *
Exhibit 10.1
MASTER GEOPHYSICAL
DATA ACQUISITION AGREEMENT *
Between
XXXXXXXXX ENERGY, INC.
(“Company”)
(“Company”)
And
XXXXXX GEOPHYSICAL COMPANY
(“Contractor”)
(“Contractor”)
Dated: December 19, 2006
| * | ( This agreement includes urban area provision — Section 8.12) |
TABLE OF CONTENTS
| Clause | Page No. | |||||
1. |
Nature of Work | 3 | ||||
2. |
Supplemental Agreement | 3 | ||||
3. |
Personnel, Equipment and Supplies | 4 | ||||
4. |
Conduct of Operations | 4 | ||||
5. |
Permits | 6 | ||||
6. |
Reports | 6 | ||||
7. |
Confidentiality | 7 | ||||
8. |
Indemnity | 8 | ||||
9. |
Insurance | 11 | ||||
10. |
Compliance with Law/HSE | 12 | ||||
11. |
Company Representative | 12 | ||||
12. |
Taxes | 13 | ||||
13. |
Compensation/Contractor’s Rights | 13 | ||||
14. |
Intellectual Property | 14 | ||||
15. |
Independent Contractor | 14 | ||||
16. |
Assignment and Subcontracts | 14 | ||||
17. |
Force Majeure | 15 | ||||
18. |
Audit | 15 | ||||
19. |
Term and Renewal | 15 | ||||
20. |
Notices | 16 | ||||
21. |
Applicable Laws/Disputes | 16 | ||||
22. |
Waiver | 17 | ||||
23. |
Default | 17 | ||||
24. |
Survival of Terms | 17 | ||||
25. |
Inurement | 17 | ||||
26. |
Entire Agreement/Modification | 17 | ||||
27. |
Counterparts | 18 | ||||
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MASTER GEOPHYSICAL
DATA ACQUISITION AGREEMENT
DATA ACQUISITION AGREEMENT
This MASTER GEOPHYSICAL DATA ACQUISITION AGREEMENT (the “Master Agreement” or “Agreement”) is
entered into this 19th day of December, 2006; between XxxxXxxxx Energy, Inc., having an office
located 0000 Xxxxxxxxx Xxxxxxxxxx, Xxxxx 0000, Xxxxxxxx Xxxx, XX 00000 (hereinafter called
“Company”) and Xxxxxx Geophysical Company, a Texas corporation having offices in Midland, Texas
(hereinafter called “Contractor”). Company and Contractor may each be referred to herein as
“Party” or collectively as “Parties”.
For and in consideration of the mutual covenants and promises of the Parties herein set forth,
the Parties do hereby agree as follows:
1. NATURE OF WORK
1.1 Contractor shall conduct, for the benefit of Company, field geophysical data acquisition
surveys (the “Surveys” or the “Work”) and related services in search of subsurface geological
formations and structures favorable to the accumulation of oil, gas and mineral deposits underlying
those land areas designated, from time to time, by Company and accepted by Contractor, all in
accordance with the terms and conditions of this Agreement, and the applicable Supplemental
Agreement. Contractor, if requested by Company, shall also provide data processing and/or
interpretation services of and for the field data (the “Data”) so acquired.
1.2 Such Survey(s) shall be conducted by one or more geophysical crews, as may be agreed upon by
Contractor and Company, in such a manner and subject to the terms and conditions as set forth
herein and in the applicable Supplemental Agreement. If data processing services are requested,
such services shall be done in Contractor’s data processing service centers in Midland or Houston,
Texas.
1.3 Nothing herein shall require Company to contract with Contractor or Contractor to accept
assignments from Company to conduct Survey(s), except as may be agreed upon, from time to time, in
an appropriate Supplemental Agreement.
2. SUPPLEMENTAL AGREEMENTS
2.1 (General) Whenever Company requests, and Contractor agrees, to conduct a Survey on
behalf of Company, Contractor and Company shall enter into separate Supplemental Agreements for
each separate Survey so undertaken, which Supplemental Agreements shall be consecutively numbered
for identification and shall provide the following:
| (a) | The area(s) (state, county/parish, etc.) where the Survey(s) will be conducted (the “Area of Operations”). | ||
| (b) | The approximate commencement date, if applicable, of the Survey(s) (the “Commencement Date”). | ||
| (c) | The approximate period of time or number of miles (or square miles), if applicable, that will be required to complete the Survey(s). | ||
| (d) | The type of Survey(s) to be conducted. The equipment, instruments, personnel and other items (the “Crew”) which will be required for the Survey(s). | ||
| (e) | The parameters and other technical aspects of the Survey(s) and/or the processing of the Data acquired thereby. | ||
| (f) | The compensation to be paid Contractor for conducting the Survey(s) (the “Compensation”). | ||
| (g) | Any other matters of a business, operational or technical nature as may be agreed by the Parties. |
2.2 (Crew Availability) It is recognized that difficulties in scheduling the activities
of Contractor’s geophysical crews may result in overlap or conflicts which prevent Contractor from
providing geophysical Crews to conduct a particular Survey designated by Company at the time
desired. Contractor shall make every reasonable effort to avoid such overlaps or conflicts in
furnishing Company a geophysical Crew for any designated Survey. In the event of any such
conflict, however, Contractor shall notify Company promptly after such Survey has been
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requested by Company that Contractor will be unable to conduct the Survey pursuant to Company’s
time schedule. There shall then be, if feasible, at the election of Company, an agreed alternate
date between Company and Contractor that shall be a firm date for commencement of the Survey by
Contractor. If no such alternate date can be agreed upon, then Contractor shall thereafter have no
obligations hereunder in connection with not conducting said Survey.
2.3 (Incorporation by Reference) Each Supplemental Agreement shall be incorporated herein
by reference, and all terms and provisions of this Agreement shall apply to each Supplemental
Agreement unless, in any particular Supplemental Agreement, any of the terms and conditions hereof
are eliminated or modified for purposes of that Supplemental Agreement by specific reference to
those terms and conditions hereof to be eliminated or modified. Any Supplemental Agreement
incorporated herein and subject, thereby, to the terms and conditions hereof shall hereinafter be
referred to as “Supplemental Agreement” or “Supplement.” This Master Agreement and any applicable
Supplemental Agreements may collectively be referred to as “this Agreement.”
2.4 (Conflicting Terms) In the event of a conflict between any of the terms and
conditions of this Master Agreement and those of any Supplemental Agreement, the appropriate terms
of this Agreement shall govern and control, unless specifically provided to the contrary in any
Supplemental Agreement, as provided above, or where a provision herein states that it is subject to
or otherwise anticipates contrary terms of a Supplement. The fact that additional terms or
provisions appear in one or the other document shall not, in and of itself, create a conflict.
3. PERSONNEL, EQUIPMENT AND SUPPLIES
3.1 (General) The Contractor shall furnish, place in service and maintain, at its sole
cost and expense, for the performance of Survey(s) hereunder, the Crew more particularly described
in Supplemental Agreements annexed hereto.
3.2 (Additional/Different Personnel or Equipment) Changing operating conditions may
require the Crew personnel and equipment set forth in said Supplemental Agreements to be increased,
reduced or changed or the Area of Operations or the parameters of the Survey changed. Accordingly,
Contractor shall, when authorized by Company, furnish such auxiliary or additional personnel,
equipment, supplies and services or make such other changes as may be required in connection
therewith all as more particularly set forth and described in the Supplemental Agreements or
amendments thereto, which shall clearly set forth the additional compensation, if any, to be paid
to the Contractor as a result of such changes.
4. CONDUCT OF OPERATIONS
4.1 (Conduct of Operations by Contractor) In conducting operations hereunder, Contractor
shall use its best efforts to conduct all operations hereunder in accordance with the terms and
specifications of this Agreement (and those of the applicable Supplemental Agreement) and in
conformance with generally accepted practices of the geophysical data acquisition industry. In
particular, Contractor agrees that, in conducting operations under the terms hereof it will:
| (a) | Enter upon no lands in respect of which all necessary Land Entry Permits shall not have been first obtained, as provided in Clause 5 below. | ||
| (b) | Equip its Crew with instruments and equipment as specified in the Supplemental Agreement and maintain such equipment in good operating condition and provide its Crew with qualified and experienced personnel. | ||
| (c) | Perform all Survey(s) hereunder in an orderly, efficient and workmanlike manner in compliance with the terms of this Agreement and each Supplemental Agreement and all applicable laws, ordinances, rules and regulations for the time being in force in every state and locality wherein the Survey(s) hereunder is to be performed. | ||
| (d) | Comply fully with the provisions of all worker’s compensation legislation, ordinances, rules and regulations in force in every state wherein the Survey(s) is (are) to be performed. | ||
| (e) | Initiate all energy source units at a safe distance from water xxxxx, buildings and other structures owned by third parties for the purpose of avoiding, as far as reasonably possible and consistent with prudent geophysical operations, damage to such xxxxx, buildings and other structures. | ||
| (f) | Attempt to minimize disturbance to the surface of the land and all crops and other vegetation thereon. Liability for any subsequent requirements for erosional or pollution repair or prevention |
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| which has not been caused by the negligence or other fault of Contractor shall rest solely with Company under Clause 8.4 below, which liability shall survive the termination of this Agreement. |
4.2 (Company’s Obligations) Company agrees with Contractor that it will:
| (a) | Not require Contractor to do any matter, act or thing in the performance of the Survey(s) hereunder that is contrary to or in violation of any law, ordinance, rule or regulation governing the subject matter of this Agreement. | ||
| (b) | In the event Company is responsible, under the terms of any Supplemental Agreement, for obtaining Land Entry Permits (Clause 5 below) and/or the surveying, shot-hole drilling or other components of a Survey (whether such services will be provided by Company or other contractors of Company), cause such services to be provided in a timely and competent manner and shall be responsible, to the extent provided herein and in the Supplemental Agreement, and indemnify, save and hold Contractor harmless for all costs, losses and liabilities related thereto. | ||
| (c) | Designate, sufficiently in advance to permit orderly planning of the Survey by Contractor, each area to be surveyed and shall furnish Contractor with all land and base maps, subsurface well data and all other information that may be necessary or helpful to the conduct of the Survey(s), all of which shall be considered the property of Company to be held by Contractor confidential as provided in Clause 7 below. |
4.3 (Work Time) Normal hours and days of work, time off and holidays to be observed shall
be as provided in the applicable Supplemental Agreements hereto or as otherwise agreed by the
Parties.
4.4 (Progress of the Work) Contractor shall keep Company fully informed on a timely basis
of the progress of operations and results obtained during the course of the Work hereunder and
shall consult with Company’s Representative(s) concerning planning of the Work and the seismic data
collected. Progress reports shall be furnished by Contractor as provided in Clause 6 below.
4.5 (No Liens)
4.5.1 Contractor shall not allow any mechanic’s or materialmen’s liens or encumbrances to
become attached to any property of Company resulting from the Work performed by Contractor
hereunder; provided, however, that Contractor itself may file mechanic’s, materialman’s or other
liens as may be appropriate to secure payment by the Company to Contractor under this Agreement.
Likewise, Contractor shall be solely responsible for, and shall promptly pay, when due, all
obligations for labor and material supplied by third parties for Work to be performed hereunder and
shall indemnify and save Company harmless from and against any and all claims, liens, security
interests or other encumbrances on or against Company property on account of labor performed or
materials furnished to Contractor by its subcontractors, suppliers and vendors for such Work;
provided, however, that Contractor shall not be required to make payment of any such claim where a
bona fide dispute with regard thereto exists between Contractor and its vendors or suppliers.
Contractor shall provide Company with recordable Releases for all such claims and liens so
satisfied.
4.5.2 Company may, if it so elects, pay or discharge any such lien or encumbrance and may
thereupon deduct the amount or amount so paid by Company from any sums been due or which thereafter
shall become due to Contractor under the terms hereof; provided, however, that prior to discharging
any such lien or encumbrance, Company will consult with Contractor in order to determine whether or
not there is a bona fide dispute between Contractor and its supplier or subcontractor concerning
the claim underlying the lien or encumbrance. If such a bona fide dispute does exist, Company
shall delay discharging the affected lien or encumbrance until the matter is resolved.
4.6 (Title to Data) Except as provided elsewhere in this Agreement or in any Supplemental
Agreement, title to all Data shall pass to Company when acquired by Contractor and subject to
payment by the Company to Contractor of all of Contractor’s obligations hereunder, and Contractor
shall deliver all Data to Company retaining no copies thereof; provided, however, that Contractor
shall deliver to Company all records, maps, reports or other information which has been produced by
the work performed hereunder upon termination of this Agreement, if so required in writing by the
Company.
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4.7 (Waiver of Mineral Interest) Unless otherwise specifically provided for in this
Agreement or any Supplemental Agreement hereto, Contractor, for itself and its subcontractors and
the officers, directors and employees thereof, hereby waives any right, title or interest it may
have in, and to any discovery of, hydrocarbon or other mineral deposits which may be made by reason
for the Work performed under the terms of this Agreement.
5. PERMITS
5.1. (General) Unless Company assumes the permitting responsibility under Clause 5.3
below, Contractor shall, at Company’s request and expense, obtain such permits, licenses and
clearances (the “Land Entry Permits”). Company’s cost shall include entry fees and damage payments
as well as payments to governmental agents, their per diem, if any, needed to secure such Land
Entry Permits. Contractor will use its reasonable efforts to secure written Land Entry Permits
from the person or persons representing themselves to be owners or lessees of the areas involved.
Contractor will not enter upon lands where Land Entry Permits have not been obtained by it (or
represented by Company as having been obtained by it) unless otherwise directed, in writing with
full indemnification in favor of Contractor, at Company’s sole risk, by Company to do so.
5.2 (Permit Fees) In the event it becomes necessary to pay for permission to enter upon
any area connected with the Survey, Contractor will notify Company of such area involved and the
fees required in order to obtain the Land Entry Permits and will proceed with the consent of
Company’s Representative. Company will reimburse Contractor the cost of all such Permits unless
otherwise provided in the applicable Supplemental Agreement.
5.3 (Permits Obtained by Company) In the event Company assumes the responsibility for
obtaining or supervising the obtaining of all or some Land Entry Permits from land owners, mineral
owners, appropriate governmental agencies, lessees, tenants, and all other persons having
permissible interests in the land or its subsurface minerals, in the Area of Operations, as may be
required in connection with all such Survey(s) to be performed by Contractor under this Agreement,
either by utilizing Company personnel or those of third party contractors (whether individuals,
corporate or otherwise), Company shall have the obligations set forth in Clause 8.6 below and
Contractor shall not be responsible for any delays in its operations caused by (i) the inability of
Company to acquire any Permit on a timely basis or (ii) onerous provisions contained in such
Permits which impede or adversely affect the operations of Contractor hereunder. Contractor shall
be compensated during any such delays at the standby rate set forth in the applicable Supplement.
If Company acquires Land Entry Permits, it will provide copies thereof to Contractor sufficiently
in advance of operations in order for Contractor to properly plan its operations.
6. REPORTS
6.1 (Required Reports) During the course of the Survey(s), Contractor shall furnish
Company with such periodic production and progress reports as provided in the applicable
Supplemental Agreement or, if not so provided, as Company shall reasonably require, including
(subject to Clause 7.2 below) such reports as may be required by the various agencies of the
federal, state and local authorities where the Survey is being performed.
6.2 (Completion Report) As soon as possible upon completion of each Survey, Contractor
shall furnish Company with reports and data as follows:
| (a) | A final report consisting of a written description of the Survey(s) performed and the results thereof accompanied by maps on a base supplied by Company of all data considered necessary by Company. | ||
| (b) | All field data sheets, computation sheets, seismograph records, weathering data, and engineering data as may have been generated in the performance of the Survey(s), which reports and materials shall be permanent property of Company but accessible to Contractor for technical examination any time prior to the expiration of this Agreement. | ||
| (c) | Any other reports or data as may be provided for in the applicable Supplemental Agreement. |
Contractor shall not be required to include in reports prepared for, or information or data
supplied to Company hereunder, any data or information proprietary to Contractor, including, but
not limited to, that pertaining to its instruments, equipment, methods or expertise.
6.3 (USE OF REPORTS) THE RESULTS STATED AND THE CONCLUSIONS DRAWN FROM ALL REPORTS
FURNISHED BY CONTRACTOR TO COMPANY HEREUNDER SHALL REPRESENT THE BEST OPINION, EFFORTS AND JUDGMENT
OF THE CONTRACTOR; HOWEVER, CONTRACTOR CANNOT AND
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DOES NOT WARRANT OR GUARANTEE THE ACCURACY OR CORRECTNESS THEREOF. ANY ACTION WHICH COMPANY (OR
THOSE ASSOCIATED WITH COMPANY) MAY TAKE AS A RESULT OF OR BASED ON SUCH REPORTS AND THE DATA TO
WHICH IT REFERS SHALL BE ITS OWN RESPONSIBILITY AND CONTRACTOR SHALL NOT BE LIABLE OR RESPONSIBLE
FOR ANY LOSS, COST, DAMAGES OR EXPENSES WHATSOEVER, INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGES,
INCURRED OR SUSTAINED BY COMPANY RESULTING THEREFROM FOR WHICH COMPANY HEREBY RELEASES CONTRACTOR;
PROVIDED THAT ALL SUCH REPORTS, DATA AND INFORMATION, AS WELL AS THE BASIC DATA UPON WHICH THEY ARE
BASED, ARE ACQUIRED, COMPILED AND PREPARED, AS THE CASE MAY BE, IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT.
6.4 (Access to Data) Company shall at all times have complete access to all geophysical
records and such other data of Contractor relating to the Work and all such data and records shall,
at the conclusion of the Work, belong exclusively to Company, but shall be retained by the
Contractor pending instructions to be issued by Company with regard to the deposition thereof,
subject to the terms and conditions of clauses 5 above and 13.6 below.
7. CONFIDENTIALITY
7.1 (Confidentiality of Data) Contractor shall use its best efforts to safeguard (i)
geophysical Data acquired from the Work performed hereunder, (ii) information relating to the
location of the Surveys and the type of Work performed and (iii) information supplied by Company to
Contractor which is not otherwise proprietary to Contractor. Contractor shall not divulge to
anyone, other than Company, its designated agents or employees, any such Data or information unless
previously authorized by Company in writing. Contractor shall further use its best efforts to
cause its employees, agents and subcontractors to comply with this obligation of secrecy.
Reciprocally, Company shall observe the above secrecy obligation, insofar as it has access to and
knowledge of the equipment, instruments, programs, procedures, and the design and operation
thereof, which are proprietary to Contractor.
7.2 (Confidentiality Exceptions) The obligations of confidentiality and limited use
contained in this Agreement shall not apply to information subject to this Agreement which:
7.2.1 At the time of disclosure to the receiving Party, was in the public domain as evidenced by
written publications;
7.2.2 After disclosure to the receiving Party, became part of the public domain by written
publication through no fault of the receiving Party;
7.2.3 At the time of disclosure to the receiving Party, was already in the possession of the
receiving Party as evidenced by written records, and was not acquired directly or indirectly from
the disclosing Party;
7.2.4 After disclosure to the receiving Party, the receiving Party acquired the information from a
third party having the right to convey the same, provided the receiving Party is not obligated to
hold such information in confidence by such third party;
7.2.5 Is furnished to a third party by the disclosing Party without any restriction on the third
party’s rights to disclose such information; or
7.2.6 Is authorized in writing by the disclosing Party to be released from the confidentiality and
limited use obligations herein.
7.2.7 Is covered by Clause 7.3 below.
7.3 (Government Reporting) It is understood that it is the responsibility of Company and
Contractor to comply with applicable laws, regulations, rules, court or government agency order or
stock exchange regulation or rule regarding the making of reports and disclosures to appropriate
governmental agencies of Data and information relating to the Work and Contractor shall promptly
refer to Company for appropriate action, including the seeking, at its sole cost, such protective
action as it deems appropriate, any inquiry or request received by it from any governmental agency
respecting Data and information obtained under the terms thereof, and if Company shall
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instruct Contractor not to comply with any such inquiry or request, Company shall defend and
indemnify Contractor against any loss, damage, fine or penalty or other sanction received, incurred
or suffered by Contractor in consequence of complying with such instruction.
8. INDEMNITY
8.1 (GENERAL) IN ORDER TO ALLOCATE THE RESPECTIVE RESPONSIBILITIES OF COMPANY AND
CONTRACTOR FOR LIABILITIES ARISING OUT OF PERSONAL INJURY OR PROPERTY DAMAGE RELATED TO THE WORK,
IT IS AGREED AS BETWEEN COMPANY AND CONTRACTOR THAT CERTAIN RESPONSIBILITIES AND LIABILITIES FOR
PERSONAL INJURIES AND PROPERTY DAMAGE ARISING OUT OF THE PERFORMANCE OF THIS AGREEMENT SHOULD BE
ALLOCATED BETWEEN THEM IN ORDER TO AVOID PROTRACTED LITIGATION BETWEEN COMPANY AND CONTRACTOR,
ALONG WITH THE ASSOCIATED LEGAL EXPENSES AND SO THAT INSURANCE OR SELF-INSURANCE MAY BE ARRANGED BY
EACH PARTY AS NECESSARY TO PROTECT THEM AGAINST THESE EXPOSURES TO LOSS. THE FOLLOWING SETS OUT
THE SPECIFICS OF THE AGREEMENTS BETWEEN COMPANY AND CONTRACTOR AS TO THE ALLOCATION OF SUCH
RESPONSIBILITIES AND LIABILITIES.
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8.2 (CONTRACTORS RESPONSIBILITY) CONTRACTOR WILL PROTECT, DEFEND, INDEMNIFY AND HOLD
COMPANY, ITS OFFICERS AND DIRECTORS, HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LOSS, EXPENSE,
COSTS OR DAMAGES (INCLUDING COSTS OF DEFENSE ASSOCIATED THEREWITH) ARISING FROM ANY CAUSE
WHATSOEVER, INCLUDING THE NEGLIGENCE BUT EXCLUDING GROSS NEGLIGENCE OR INTENTIONALLY WRONGFUL
CONDUCT OF COMPANY, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, OUT OF CONTRACTOR’S WORK TO BE
PERFORMED UNDER THIS AGREEMENT.
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8.3 (COMPANY’S RESPONSIBILITY) COMPANY WILL PROTECT, DEFEND, INDEMNIFY AND HOLD
CONTRACTOR, ITS OFFICERS AND DIRECTORS, HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LOSS,
EXPENSE, COSTS OR DAMAGES (INCLUDING COSTS OF DEFENSE ASSOCIATED THEREWITH) ARISING FROM ANY CAUSE
WHATSOEVER, INCLUDING THE NEGLIGENCE BUT EXCLUDING GROSS NEGLIGENCE OR INTENTIONALLY WRONGFUL
CONDUCT OF CONTRACTOR, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, OUT OF COMPANY’S WORK TO BE
PERFORMED UNDER THIS AGREEMENT.
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8.4 (ROUTINE LAND DAMAGE) NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, COMPANY SHALL BE
SOLELY RESPONSIBLE FOR AND SHALL PROTECT, INDEMNIFY, DEFEND AND SAVE CONTRACTOR AND ITS
SUBCONTRACTORS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES, DEMANDS, CAUSES OF
ACTION, JUDGMENTS AND SETTLEMENTS (INCLUDING ASSOCIATED COSTS AND REASONABLE ATTORNEYS’ FEES)
ARISING OUT OF CLAIMED DAMAGES TO THE LAND ON WHICH CONTRACTOR HAS PERFORMED WORK, AS WELL AS THE
CROPS, TREES, GRASS AND OTHER FLORA AND FAUNA THEREON, WATER AND IRRIGATION XXXXX, HOUSES AND OTHER
STRUCTURES THEREON (COLLECTIVELY THE “LAND DAMAGES”) WHERE SUCH CLAIMED LAND DAMAGES RESULT FROM
THE NON-NEGLIGENT OPERATIONS OF CONTRACTOR OR ITS SUBCONTRACTORS IN THE PERFORMANCE OF THE WORK
SUBJECT TO THIS AGREEMENT AND THE APPLICABLE SUPPLEMENT. THE FOREGOING OBLIGATIONS OF DEFENSE AND
INDEMNITY OF COMPANY SHALL NOT, HOWEVER, BE APPLICABLE IN THE EVENT AND TO THE EXTENT ANY SUCH
CLAIMED LAND DAMAGES RESULT FROM THE NEGLIGENT
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OPERATIONS OF CONTRACTOR OR ITS SUBCONTRACTORS OR WHICH ARE OTHERWISE NOT IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT OR THE APPLICABLE SUPPLEMENT.
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8.5 (LIABILITY INSURANCE) THE INDEMNITY OBLIGATION OF THE RESPECTIVE PARTIES, AS SET
FORTH IN CLAUSES 8.2, 8.3 AND 8.4 ABOVE, SHALL BE SUPPORTED BY LIABILITY INSURANCE PROVIDED BY EACH
PARTY IN THE AMOUNT OF THE LESSER OF (I) $1,000,000 OR (II) THE MINIMUM AMOUNT REQUIRED BY
APPLICABLE LAW.
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8.6 (PERMIT LIABILITY) COMPANY SHALL PROTECT, DEFEND, INDEMNIFY AND SAVE CONTRACTOR
HARMLESS FROM AND AGAINST ANY CLAIM BY THE OWNER OR LESSEE OF LAND AND/OR OF A MINERAL INTEREST IN
LAND ON WHICH WORK IS PERFORMED HEREUNDER, WHICH CLAIM IS BASED UPON ANY THEORY THAT (I) THE
OPERATIONS OF CONTRACTOR HEREUNDER HAVE DEPRECIATED THE VALUE OF THE MINERALS UNDERLYING SUCH LAND,
(II) MINERAL TRESPASS, (III) THE WRONGFUL TAKING, CONVERSION OR DEPRIVATION OF SUBSURFACE AND/OR
MINERAL INFORMATION OR (IV) ANY SIMILAR THEORY OF RECOVERY (COLLECTIVELY “TRESPASS CLAIMS”).
HOWEVER, THE FOREGOING INDEMNIFICATION OF COMPANY SHALL NOT APPLY AND COMPANY SHALL NOT BE
RESPONSIBLE FOR ANY TRESPASS CLAIMS IN ANY CASE AND TO THE EXTENT WHERE CONTRACTOR NEGLIGENTLY
FAILS TO OBSERVE CONDITIONS OR RESTRICTIONS CONTAINED IN ANY SUCH PERMITS, PROVIDED THAT SAME HAVE
BEEN PROVIDED BY COMPANY TO CONTRACTOR SUFFICIENTLY IN ADVANCE OF OPERATIONS ACROSS THE LANDS
COVERED THEREBY.
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8.7 (TAPE RESPONSIBILITY) CONTRACTOR SHALL BE RESPONSIBLE FOR THE SAFEKEEPING OF FIELD
TAPES WHILE SUCH TAPES ARE IN THE CUSTODY OF CONTRACTOR UNTIL SUCH TIME AS CONTRACTOR DELIVERS SAID
TAPES TO A REPRESENTATIVE OF COMPANY OR PLACES THEM IN THE POSSESSION OF A CARRIER DESIGNATED BY
COMPANY (OR IF COMPANY DOES NOT SO DESIGNATE A CARRIER, ANY REPUTABLE CARRIER SELECTED BY
CONTRACTOR) FOR DELIVERY TO COMPANY OR A THIRD PARTY DESIGNATED BY COMPANY. IN THE EVENT OF LOSS
OF OR DAMAGE TO ANY TAPES FOR WHICH CONTRACTOR IS RESPONSIBLE, AS PROVIDED HEREIN, CONTRACTOR’S
SOLE AND ONLY RESPONSIBILITY TO COMPANY SHALL BE, AT THE OPTION OF COMPANY, EITHER (I) REACQUIRE
THE DATA AFFECTED BY SUCH LOSS OR DAMAGE OR TO (II) REFUND (OR GRANT CREDIT) TO COMPANY FOR ALL
COMPENSATION PAID (OR PAYABLE) TO CONTRACTOR WITH RESPECT TO SUCH DATA SO AFFECTED.
NOTWITHSTANDING THE FOREGOING, CONTRACTOR’S OBLIGATIONS HEREIN SHALL BE FULLY SATISFIED IN THE
EVENT CONTRACTOR OR COMPANY HAS DUPLICATE, UNDAMAGED COPIES OF THE AFFECTED DATA AND, IF CONTRACTOR
HAS SUCH DUPLICATE TAPE, IT PROMPTLY PROVIDES SAME TO COMPANY SUBJECT TO CLAUSE 4 ABOVE.
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8.8 (WAGES/BENEFITS) CONTRACTOR SHALL BE SOLELY LIABLE FOR THE PAYMENT OF (I) ALL WAGES
AND SALARIES EARNED BY AND PAYABLE TO ITS EMPLOYEES AS WELL AS FOR WITHHOLDING AND/OR PAYMENT OF
ALL SOCIAL SECURITY TAXES, RETIREMENT PENSIONS, BENEFITS AND ANNUITIES, NOW, OR HEREAFTER IMPOSED
BY THE GOVERNMENT OF THE U.S.A. OR BY ANY STATE OR OTHER POLITICAL SUBDIVISION THEREOF AND (II) FOR
BENEFITS WHICH ARE NOW OR HEREAFTER OFFERED BY CONTRACTOR TO ITS EMPLOYEES.
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CONTRACTOR SHALL INDEMNIFY AND SAVE COMPANY, ITS OFFICERS AND DIRECTORS, HARMLESS FROM ANY CLAIMS,
DEMANDS OR LIABILITY FOR SUCH WAGES, SALARIES OR BENEFITS, AS WELL AS FOR ANY WITHHOLDING OR SOCIAL
SECURITY TAXES, CONTRIBUTIONS OR OTHER BENEFITS RELATED THERETO.
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8.9 (HANDLING OF CLAIMS)
8.9.1 (GENERAL) IN THE EVENT EITHER PARTY HERETO LEARNS OF ANY CLAIM, LIABILITY,
DEMAND OR CAUSE OF ACTION RELATING TO THIS AGREEMENT OR THE PERFORMANCE OF IT, SAID PARTY SHALL
GIVE NOTICE THEREOF AS PROMPTLY AS POSSIBLE TO THE OTHER PARTY. IF INDEMNIFICATION IS REQUIRED BY
ANY OF THE TERMS OF THIS AGREEMENT, THE RESPONSIBLE PARTY SHALL DEFEND THE OTHER AND PAY ALL
SETTLEMENTS, JUDGMENTS, COSTS, INCLUDING REASONABLE ATTORNEYS FEES, AND OTHER EXPENSES, WHETHER
RELATED OR UNRELATED, SIMILAR OR DISSIMILAR TO THE FOREGOING, INCIDENT THERETO. EACH PARTY, IF
REQUESTED, AGREES TO COOPERATE WITH THE OTHER IN ANY SUCH DEFENSE, AND THE RESPONSIBLE PARTY SHALL
REIMBURSE THE OTHER FOR ALL REASONABLE EXPENSES INCURRED IN CONNECTION THEREWITH.
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8.9.2 (CONTROL OF DEFENSE) THE PARTY HERETO PROVIDING INDEMNITY TO THE OTHER PARTY
SHALL HAVE THE RIGHT TO CONTROL THE DEFENSE OF ANY SUCH CLAIM OR LAWSUIT WITH ATTORNEYS SELECTED BY
SUCH PARTY OR ITS INSURERS. HOWEVER, THE OTHER PARTY SHALL HAVE THE RIGHT, AT ITS SOLE EXPENSE, TO
PARTICIPATE IN THE DEFENSE OF SUCH CLAIM OR LAWSUIT WITH LEGAL COUNSEL OF ITS OWN SELECTION.
INITIAL /s/ SCJ /s/ TNT
8.10 (COMPANY’S CO-VENTURERS) IN THE EVENT COMPANY IS IN ASSOCIATION WITH, IS OPERATOR
FOR OR HAS SOME OTHER CONTRACTUAL RELATIONSHIP WITH OTHER COMPANIES, INDIVIDUALS OR OTHERS IN
CONNECTION WITH THE WORK TO BE PERFORMED HEREUNDER, THE ABOVE INDEMNIFICATIONS EXTENDED BY
CONTRACTOR TO COMPANY SHALL ALSO EXTEND TO THOSE PARTIES, AND THEIR OFFICERS, DIRECTORS AND
EMPLOYEES, TO WHICH COMPANY IS CONTRACTUALLY RELATED.
INITIAL /s/ SCJ /s/ TNT
8.11 (CONSEQUENTIAL DAMAGES) NEITHER PARTY HERETO SHALL, NOTWITHSTANDING THE FOREGOING,
BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
ARISING, IN ANY EVENT, FROM THE CONDUCT OF THE PARTIES UNDER THE TERMS HEREOF, INCLUDING WITHOUT
LIMITATION, LOSS OF REVENUE OR PROFITS. FURTHERMORE EACH PARTY HEREBY FOREVER RELEASES AND
INDEMNIFIES THE OTHER FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES, DAMAGES AND EXPENSES
ARISING THEREFROM.
INITIAL /s/ SCJ /s/ TNT
8.12 (EXTRAHAZARDOUS SERVICES) IF CONTRACTOR IS REQUESTED BY COMPANY TO PERFORM SURVEYS IN AN
URBANIZED OR ENVIRONMENTALLY SENSITIVE AREA OR UNDER OTHER EXTRAHAZARDOUS CONDITIONS, THEN COMPANY
AND CONTRACTOR SHALL AGREE
Page 10
ON AN INDEPENDENT COMPANY TO MONITOR THE PERFORMANCE OF SUCH SURVEYS. NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN, IT IS FURTHER AGREED THAT, UNLESS OTHERWISE INSTRUCTED BY COMPANY, CONTRACTOR
SHALL BE DEEMED TO BE IN FULL COMPLIANCE WITH CONTRACTOR’S OBLIGATIONS AND DUTIES HEREUNDER
REGARDING VIBRATION AND/OR DETONATION OF EXPLOSIVES OR DISCHARGES OF SHOT POINTS BY CONTRACTOR IN
THE NORMAL COURSE OF ITS OPERATIONS WHEN SUCH DETONATIONS OR DISCHARGES ARE OF NO GREATER QUANTITY
AND AT NO LESSER DISTANCE FROM THE OBJECTS AS PROVIDED FOR BY THE DIRECTION OF AN INDEPENDENT
MONITORING COMPANY MUTUALLY AGREED UPON BY COMPANY AND CONTRACTOR. TO THE EXTENT CONTRACTOR’S
PERFORMANCE CONFORMS WITH THE FOREGOING MONITORING COMPANY’S DIRECTIONS, OR COMPANY’S INSTRUCTION,
COMPANY SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD HARMLESS CONTRACTOR FROM AND AGAINST ALL THIRD
PARTY CLAIMS, LIABILITIES, LOSS, COSTS, EXPENSE DAMAGES, DEMANDS, CAUSES OF ACTION, JUDGEMENTS AND
SETTLEMENTS (INCLUDING COSTS OF DEFENSE AND ATTORNEY’S FEES ASSOCIATED THEREWITH) THAT ARISE OUT OF
OR OCCUR AS A RESULT OF SUCH SHOT POINTS/VIBRATOR STATIONS. THE INDEMNIFICATION SHALL APPLY
WHETHER OR NOT CONTRACTOR IS CLAIMED TO BE OR IS ADJUDICATED TO BE NEGLIGENT BY VIRTUE OF SO
LOCATING SUCH SHOT POINTS/VIBRATOR STATIONS.
INITIAL /s/ SCJ /s/ TNT
9. INSURANCE
9.1 (General)
The Contractor shall, at its sole cost, maintain, so long as this Agreement remains in force,
and cause its subcontractors to maintain, with one or more reputable insurance companies, the
following insurance:
9.1.1 Worker’s compensation and/or employer’s liability insurance in compliance with the laws of
all states in which Survey(s) is/are to be performed or where Contractor’s personnel are hired
covering all employees engaged by Contractor (or its subcontractors) in such Survey(s).
9.1.2 Automobile public liability insurance covering all vehicles performing Survey(s) hereunder,
with limits of One Million Dollars ($1,000,000) for one or more persons injured or killed, or
property damage incurred per occurrence, combined single limit.
9.1.3 Comprehensive public liability insurance covering all operations hereunder with limits of One
Million Dollars ($1,000,000) for one or more persons injured or killed in any one accident, and
with property damage limits of One Million Dollars ($1,000,000) per occurrence, combined single
limit.
9.1.4 If aircraft are used in the operations hereunder, Aviation Liability Insurance covering all
airplanes and helicopters, whether non-owned, chartered, or hired and furnished by Contractor (or
its subcontractors) and used in the operations hereunder in an amount of not less than One Million
Dollars ($1,000,000) per occurrence combined single limit.
9.1.5 If waterborne vessels are used in operations hereunder, hull and machinery insurance shall be
maintained in an amount at least equal to the market value of each vessel owned by Contractor and
used in operations hereunder. In the event the vessel is time-chartered by Contractor, then
Contractor shall require the owner of the vessel to procure such insurance.
9.2 (Insurance Certificates) Before any Survey(s) are commenced by Contractor hereunder,
Contractor shall furnish to Company certificates attesting the above insurance coverages to be in
force and providing that Company will be given at least ten (10) days written notice prior to
cancellation, termination or significant modification thereof.
9.3 (MISCELLANEOUS) IT IS UNDERSTOOD AND AGREED THAT CONTRACTOR’S INSURANCE COVERAGE AS
DETAILED IN THE FOREGOING SECTIONS SHALL AFFORD COMPANY PROTECTION AND COVERAGE AS A NAMED
ADDITIONAL INSURED WITH RESPECT
Page 11
TO THOSE MATTERS COVERED BY SPECIFIC INDEMNITY AGREEMENTS EXTENDED BY CONTRACTOR ELSEWHERE PROVIDED
HEREIN AND, EXCEPT FOR WORKERS COMPENSATION INSURANCE, COMPANY SHALL BE NAMED AN ADDITIONAL INSURED
PARTY UNDER SAID POLICIES BUT ONLY TO THE EXTENT OF THE LIABILITIES ASSUMED BY CONTRACTOR UNDER THE
TERMS HEREOF. ALL INSURANCE POLICIES REQUIRED BY THIS AGREEMENT TO BE MAINTAINED BY CONTRACTOR
SHALL BE ENDORSED WHEREBY CONTRACTOR’S INSURERS SHALL WAIVE THEIR RIGHTS OF SUBROGATION AGAINST
COMPANY, ENTITIES AFFILIATED WITH COMPANY AND THEIR RESPECTIVE INSURERS TO THE EXTENT OF THE
LIABILITIES ASSUMED HEREIN BY CONTRACTOR. ANY AND ALL DEDUCTIBLES OR RETENTIONS APPLICABLE TO
CONTRACTOR’S INSURANCE COVERAGES SHALL BE ASSUMED BY CONTRACTOR AT ITS SOLE EXPENSE. UNLESS
PROHIBITED OR LIMITED BY APPLICABLE LAW, INSURANCE PROVIDED BY THE PARTIES IN SUPPORT OF THEIR
RESPECTIVE INDEMNITY OBLIGATIONS SET FORTH IN CLAUSE 8 ABOVE SHALL IN NO WAY SERVE TO LIMIT EACH
SUCH PARTY’S INDEMNITY OBLIGATIONS. CONTRACTOR AND COMPANY SHALL DELIVER TO EACH OTHER RESPECTIVE
CERTIFICATES OF INSURANCE EVIDENCING INSURANCE COVERAGE REQUIRED UNDER CLAUSE 8.5 AND 9 OF THIS
AGREEMENT.
INITIAL /s/ SCJ /s/ TNT
9.4 (Subcontractors) Contractor shall require, to the extent possible, that each of its
subcontractors, if any, performing Work hereunder maintain such insurance coverages as are required
of Contractor.
10. COMPLIANCE WITH LAWS/HES
10.1 (Laws) Contractor shall comply with all applicable laws, rules and regulations, both
federal, state and local, applicable to any Survey performed by Contractor hereunder, and shall
also comply with, observe and abide by the Health, Environment and Safety standards of any
applicable governmental agency.
10.2 (Health, Environment and Safety) Contractor will perform the Survey(s) applying the
most current edition of either the IAGC Land Geophysical Operations Safety Manual or the IAGC
Marine Geophysical Operations Safety Manual, as applicable, as a minimum set of standards
supplemented by both Contractor and Company HES rules and work procedures. The more stringent of
Company’s or Contractor’s policy and standards shall apply. Company reserves the right to
intervene and consult with Contractor in development of solutions for hazards identified in
execution of the Work. Contractor will equally apply HES standards to, and enforce compliance with
all such standards, by all subcontractors of any tier, and the agents, employees or other personnel
under their control and will replace at Contractor’s expense those who fail to comply.
10.3 (Accidents) Contractor shall report all accidents to Company. In the event there is
an accident involving damage to the property or injury to the personnel of Contractor, Company or
any third party, any environmental damage or any incidents involving media attention, which arise
out of, result from, or is in any way connected with Contractor’s Work under this Agreement, all
Contractor reports shall contain factual information only and will not contain opinion, speculation
or supposition as to fault, liability or prevention. Company reserves the right to participate in
the investigation of any incident or accident resulting from the Work conducted pursuant to this
Agreement.
11. COMPANY REPRESENTATIVE
Company shall designate in writing a representative of Company (whether an employee of Company
or a third party) to whom Contractor’s Party Chief or other representative may deliver reports and
other confidential information developed from Survey(s) and from whom Contractor will receive
instructions related thereto (the “Company Representative” or “Representative”). Such
Representative shall have the right to be present during the conduct of the Survey(s). Contractor
agrees to accept instructions in connection with the operations hereunder within the scope of this
Agreement and the applicable Supplement from such Company Representative. All such instructions
given by the Company Representative to Contractor which relate to the Work shall be binding on
Company which will not be entitled to thereafter disavow same.
Page 12
12. TAXES
12.1 (Equipment) Contractor will be solely responsible for all taxes, duties, rates and
assessments that may be levied in respect of any vehicles, equipment, instruments or supplies
furnished by Contractor in the performance of any Survey performed hereunder.
12.2 (Payroll) Contractor will be solely responsible for all payroll taxes, unemployment
insurance assessments, federal and/or pension contributions and all other payroll deductions
required to be made according to law in respect of the personnel of Contractor engaged in the
performance of any of the Survey hereunder.
12.3 (Income) Contractor shall be solely responsible for any and all taxes assessed
against it by the government of the U.S.A. or any state thereof having jurisdiction, which taxes
are assessed against Contractor as a result of compensation earned by Contractor hereunder and
Contractor shall protect, indemnify, defend and save Company harmless from and against any such tax
assessments, as well as those described in Clauses 12.1 and 12.2 above.
12.4 (Sales/Use) Notwithstanding the foregoing, Contractor shall in no event be liable
for sales, value added, use, gross receipts and similar taxes and charges assessed by any
applicable government agency, as a result of any Survey conducted by Contractor under the terms of
this Agreement, even though those taxes are generally measured by revenue or income of the
Contractor, as such incidental taxes are not usually considered as “income” or “profits” taxes as
those terms are generally understood in the geophysical industry. All such sales, value added, use
and similar taxes and charges shall be for the account of Company and, if paid by Contractor, shall
be reimbursed by Company under applicable provisions hereof.
13. COMPENSATION/CONTRACTOR’S RIGHTS
13.1 (Fees) The Company agrees to pay Contractor and Contractor agrees to accept payment
for the Work to be performed hereunder at the applicable rates set forth in Supplemental
Agreements.
13.2 (Payment) Subject to contrary provision of any Supplement, the Contractor shall, on
or before the 15th day of each month, render to Company an itemized invoice showing the amount due
for services rendered, reimbursable costs and charges incurred by Contractor on behalf of Company
hereunder during the preceding calendar month, such invoice to be accompanied in each case by
supporting vouchers and receipts. Except to the extent they are contested in good faith by
Company, the Company shall, within thirty (30) days following receipt of such invoice, remit
payment of the undisputed portion of same in full in United States funds by check, bank draft or
money order (or bank/wire transfer) payable to Contractor at its offices (or bank account) set
forth in Clause 20 or in the applicable Supplemental Agreement.
13.3 (Late Payment) If Company fails to pay any properly submitted and supported invoice,
or portions thereof, of Contractor within the said thirty (30) day period, the unpaid amount
thereof shall (unless otherwise subject to bona fide dispute), at the option of Contractor, bear
interest until paid at a rate equal to the prime rate as published in the Wall Street Journal plus
two percent or such lesser maximum rate allowed by applicable law, per month until paid.
13.4 (Disputed Invoices) In the event Company has a bona fide question concerning a
Contractor invoice or a portion thereof, Company shall give notice thereof to Contractor specifying
the reasons therefor within ten (10) days after receipt of such invoice and thereafter the late
payment charges provided above shall not apply to such invoice or portion thereof in question or
dispute. The Parties shall meet in an effort to answer such questions and to resolve such disputes
as promptly as possible.
13.5 (Effect of Payment) Payment of any Contractor invoice by Company shall not prejudice
the right of Company to protest or dispute the correctness of any invoice or any portion thereof
before the expiration of the audit period (Clause 18 below) following the end of the calendar month
during which such statement was submitted. The passage of the audit period (Clause 18 below)
without protest shall conclusively establish its correctness.
13.6 (Right to Withhold Data) Contractor shall have the option, exercisable at any time,
to (i) retain possession of raw data tapes containing the geophysical data (the “Data”) acquired
under the terms of this Master Agreement or any Supplemental Agreement hereto and, (ii) regardless
of any other provision of this Master Agreement to the contrary, not be required to deliver said
Data to Company until such time as all fees and other charges owed by Company to Contractor under
the terms hereof (other than those which are subject to a bona fide question or dispute) are paid
in full.
Page 13
14. INTELLECTUAL PROPERTY
14.1 (Indemnity) The Contractor shall, at its sole cost and expense, protect, defend,
indemnify and save harmless Company from and against any and all claims, demands and liabilities
made against or incurred by Contractor and/or Company for the alleged infringement or
misappropriation by Contractor of any United States Letters Patent or patent rights held or
licensed by Contractor or others which arise out of the operations of Contractor under the terms
hereof provided that (i) in the event such claim is received by or demand made upon Company,
Company notifies Contractor in writing of the receipt of the claim or demand or the filing of such
proceeding within ten (10) days after the receipt of notice of such claim, demand or service of
process thereof, and (ii) Contractor is given complete control of the defense of such proceedings,
including the right to defend, settle and make adjustments in instruments, equipment, methods,
software or processes utilized by Contractor to perform the Work for the purpose of avoiding any
such alleged infringement or misappropriation, provided that such adjustments do not materially and
adversely affect the quality of the Data acquired pursuant hereto.
14.2 (Infringement Relief) If Contractor is prevented from performing any of its
obligations hereunder by injunction or other legal proceedings based upon any claims for alleged
infringement or misappropriation of any United States Letters Patent or patent rights, or if on
account of claims of alleged patent infringement or misappropriation, Contractor shall discontinue
its use of or change instruments, equipment, methods, software or processes contemplated in this
Agreement, Contractor shall, in every such event, be relieved from performance of its obligations
hereunder insofar as such nonperformance is the result of such alleged patent infringement or
misappropriation or any injunction or other legal proceeding. The Company shall be relieved of its
obligation or make payment hereunder in respect of any Survey(s) to the extent Contractor is unable
to perform same by reason of the alleged patent infringement or misappropriation claim.
14.3 (Rights to Intellectual Property) The Parties expressly agree that all software
programs, documents, materials and other work created, developed or performed by Contractor in the
course of performance of this Agreement, including, but not limited to, non-geophysical data,
drawings, reports, designs and working papers shall be and is the exclusive property of Contractor
which shall have all rights, title and interest therein including, but not limited to, patents,
copyrights, trade secrets and any other proprietary rights. Contractor hereby grants to Company a
perpetual, non-exclusive, non-transferable royalty-free license and right to use only for the
purposes of this Agreement any software programs, documents, materials or other work delivered to
Company by Contractor.
15. INDEPENDENT CONTRACTOR
Nothing contained in this Agreement shall be construed so as to constitute Contractor as a
general agent or employee of Company, and the exclusive management, direction and control of the
employees of Contractor and its subcontractors and the Survey(s) to be conducted under the
provisions hereof shall, subject to the right of general supervision of Company’s Representative,
always reside in Contractor, Company being interested only in the results obtained. Company’s
right to supervise shall include the right to request, for good cause shown, the removal and
replacement (at Contractor’s sole cost) of any of the personnel of Contractor or its
subcontractors. Company shall also have the right of prior approval before the transfer of any of
Contractor’s key personnel assigned to the Work.
16. ASSIGNMENT AND SUBCONTRACTS
16.1 (Subcontracts) The Contractor may subcontract to any reputable subcontractor or
subcontractors such portions of the Survey(s) to be performed hereunder as is customary and usual
in the performance of same, but Company shall in no way be held liable for payment of any monies
due to any such subcontractors. The Contractor shall, notwithstanding the subcontracting of any
Survey(s) to be performed hereunder, remain liable and responsible to Company for the proper
performance of every portion of the Survey(s) subcontracted to others.
16.2 (Assignments) Subject to Clause 16.1 above, neither Party shall assign this
Agreement in whole or in part without prior written consent of the other Party except to a company
which is affiliated to the assigning Party or where such assignment is the result of an operation
of law. An “affiliate” of a Party is defined as any company or other entity which is, either
currently or resulting from any future merger, acquisition or reorganization of the affected Party,
(i)
Page 14
owned as to at least a 51% equity interest by the affected Party, (ii) owns the affected Party as
to at least a 51% equity interest or (iii) is under common ownership (as to at least a 51%
interest) with the affected Party. As for Company, “affiliate” shall also include those third
party entities which are contractually related to Company in the exploration or development in Area
of Operations. The affected Party shall promptly notify the other Party of any such permitted
assignment.
16.3 (Right to Pledge — Optional) Contractor reserves the right to pledge its
receivables to be received under the terms hereof to the financial institution which provides
working capital financing to the Contractor. In the event Contractor so assigns its receivables,
such financial institution shall have no recourse against Company with regard thereto and
Contractor shall defend and indemnify Company for any loss resulting therefrom.
17. FORCE MAJEURE
Neither Contractor nor Company shall be responsible for failure to perform the terms of this
Agreement or any Supplemental Agreement (other than the payment of money) when performance is
hindered or prevented by strikes, lockouts, or other labor difficulty, war or acts of war, riots or
civil unrest, fire, storm, flood, earthquake, terrorism, vandalism, interference by any government
authority, inclement weather that adversely affects Data recording operations or any other cause
beyond the reasonable control of the affected Party, whether or not similar to the matters herein
enumerated (“Force Majeure”). Compensation shall be payable to Contractor for work stoppages or
delays due to Force Majeure at the applicable standby rate or such other rate, if any, as may be
set forth in the applicable Supplemental Agreement or as mutually agreed upon in writing by Company
and Contractor for up to thirty (30) days; and if stoppage for such cause persists after said
thirty (30) day period (i) compensation shall be at a rate agreed upon by Company and Contractor if
Company requests Contractor to continue to stand by to resume operations; or (ii) Company or
Contractor may forthwith terminate this Agreement or the affected Supplemental Agreement.
18. AUDIT
18.1 (Audit Right) Contractor shall maintain full and complete records concerning
invoices which are based on Contractor’s costs or other reimbursable billing basis in such manner
and detail as to permit reasonable verification of all such charges made to Company. Company shall
have the right, at its sole cost, to audit such records at any reasonable time upon written request
to Contractor for a period of one (1) year from the date such costs were incurred. Items of
Compensation stated in terms of fixed percentages or fixed lump sums shall not be subject to audit
under this clause. Any audit so conducted by Company hereunder shall be directed solely to
Contractor’s records related only to Work performed hereunder for Company and Company payments and
reimbursements related thereto and shall not encompass Contractor’s operations on behalf of any
other client. Contractor shall provide reasonable assistance and shall cooperate with Company in
order to facilitate the timely performance of any audits provided for above. No such audit shall
pertain to any intellectual/property or trade secrets of Contractor or records or periods of time
which have previously been audited by Company.
18.2 (Audit Results) Upon completion of any audit, Company shall pay Contractor any
compensation due hereunder as shown by the audit. Any amount by which the total payments made by
Company to Contractor exceeds the amount due Contractor as shown by the audit shall be promptly
refunded to Company.
19. TERM AND RENEWAL
This Master Agreement is effective from the day and year above written and will remain in
effect until either Party terminates it by giving the other thirty (30) day’s advance written or
electronically dispatched notice. However, if a Supplemental Agreement is in effect when such
notice is given, termination of the Master Agreement shall not be effective until the date of
termination of such Supplemental Agreement. This Agreement may be renewed from time to time on
such terms and subject to such conditions as the Parties may in writing agree upon.
Page 15
20. NOTICES
20.1 All notices permitted or required to be given under the terms of this Agreement shall be in
writing and shall be deemed effective upon receipt if sent by air mail, registered or certified and
return receipt requested, post prepaid, and addressed to the respective parties hereto at their
respective addresses shown below:
| Contractor | Company | |
Xxxxxx Geophysical Company |
XxxxXxxxx Energy, Inc. | |
Attention: Mr. C. Xxx Xxxxxx |
Attention: Xxxx X. Xxxxxx | |
000 X. Xxxx Xxxxxx, Xxxxx 000 |
0000 X.X. Xxxxxxxxxx, Xxxxx 0000 | |
Xxxxxxx, Xxxxx 00000 |
Xxxxxxxx Xxxx, XX 00000 |
or at such other address as shall be designated in accordance with this Notice provision. Notices
given by telex, telecopier, telefax, e-mail or other electronic means, or by commercial
courier/messenger service, shall also be effective upon receipt.
20.2 Either Party may change its address for notice purposes at any time upon giving written notice
specifying such new address and the effective date of such address change to the other Party, as
provided above.
21. APPLICABLE LAWS/DISPUTES
21.1. (Applicable Law) This Master Agreement and all Supplemental Agreements hereto shall
be interpreted and construed in accordance with the laws, both statutory and common law, of the
State of Texas, excluding only those choice-of-law provisions which would require the law of some
other jurisdiction to be applicable.
21.2 (Disputes) In the event, during the term of this Master Agreement or any
Supplemental Agreement, a dispute or controversy should arise between the Parties as to the
requirements and/or interpretation hereof or Contractor’s performance hereunder, both Parties agree
to meet and negotiate in the utmost good faith in an attempt to satisfactorily resolve the
issue(s), which is the subject of such dispute or controversy.
21.3 (Governing Rules) As between the Parties, any claims, disputes and controversies
arising under or in connection with this Master Agreement or any Supplemental Agreement which
cannot be resolved by mutual agreement shall, upon written notice by one Party to the other, be
submitted to arbitration in accordance with and subject to the Rules of Conciliation and
Arbitration of the American Arbitration Association.
21.4 (Forum of Proceedings) All arbitration hearings held pursuant to this Clause shall
be conducted in Midland, Texas or such other location agreed upon by both Parties. The decision of
the arbitration shall be (i) final and binding upon the Parties, (ii) not appealable to any court
and (iii) enforceable in any court having jurisdiction over the Party to be charged.
21.5 (Proceedings) Any dispute, controversy or claim arising out of or relating to this
Master Agreement, including without limitation, a dispute related to breach, interpretation,
termination or invalidity of this Master Agreement between Company and Contractor shall be finally
and exclusively settled by binding arbitration conducted in accordance with the Rules of the
American Arbitration Association (“AAA”) in effect as of the date of this Master Agreement. The
award of the arbitrators shall be final, binding on the Parties and not subject to appeal. The
arbitral tribunal shall not award special, indirect, consequential, exemplary or punitive damages.
The arbitral tribunal may grant interim or injunctive relief or demand specific performance.
21.6 The arbitration tribunal shall be composed of three (3) arbitrators. Each Party shall appoint
one (1) arbitrator. If, within thirty (30) days after receipt of the claimant’s notification of
the appointment of an arbitrator, the respondent has not notified the claimant in writing of the
name of the arbitrator it appoints, the claimant may request the AAA to appoint the second
arbitrator. The arbitrators thus appointed shall choose the third arbitrator who will act as the
presiding arbitrator of the tribunal. If within thirty (30) days after the appointment of the
second arbitrator, the two arbitrators have not agreed upon the choice of the presiding arbitrator,
then either Party may
Page 16
request the AAA to appoint the presiding arbitrator in the same way as a sole arbitrator would be
appointed under Article 4 of the UNCITRAL Rules.
21.7 The arbitration proceedings, including the making of the award shall take place in Midland,
Texas. The arbitration shall be administered by the AAA. The provisions of this Clause 21 shall
continue in force notwithstanding the expiration or prior termination of this Master Agreement.
The award shall be final and binding on the Parties and may be entered in any court having
jurisdiction and application may be made in such court for a judicial acceptance of the award or an
order of enforcement, as the case may be.
22. WAIVER
The rights herein given to either Party hereto may be exercised from time to time, singularly
or in combination, and the waiver of one or more of such rights shall not be deemed to be a waiver
of such rights in the future or of any one or more of the other rights which the exercising Party
may have. No waiver of any breach of a term, provision or condition of this Master Agreement or
any Supplement by one Party shall be deemed to have been made by the other Party, unless which
waiver is expressed in writing and signed by an authorized representative of such Party, and the
failure of either Party to insist upon the strict performance of any term, provision or condition
of this Agreement or any Supplemental Agreement, or to exercise any option herein given, shall not
be construed as a waiver or relinquishment in the future of the same or any other term, provision,
condition or option.
23. DEFAULT
In the event either Party hereto should, at any time during the term hereof, commit an act of
bankruptcy or assign, voluntarily or involuntarily, its assets for the benefit of its creditors or
should proceedings be commenced against or by either Party under any bankruptcy, insolvency or
similar statute or should either Party fail to comply with any material term or provision hereof
(any such action or condition being hereinafter referred to as “Default”) the other Party may
terminate this Master Agreement, or the appropriate Supplemental Agreement, at its option
exercisable at any time after thirty (30) days have elapsed after giving notice to the defaulting
Party of such Default and the defaulting Party has failed, during such period, to cure such Default
or to commence such cure to the reasonable satisfaction of the other Party.
24. SURVIVAL OF TERMS
The termination of this Agreement, or any Supplemental Agreement concluded in connection with
this Agreement, shall not release the Parties from obligations which, expressly or by their nature,
survive the termination hereof beyond such termination. In particular, and as examples and not by
way of limitation, each Party shall remain, notwithstanding the termination hereof or of any
Supplemental Agreement, bound to their respective obligations arising under Clauses 5, 7, 8, 10,
12, 13, 17, 18 and 21 above.
25. INUREMENT
Subject to Clause 16 above, this Master Agreement shall inure to the benefit of and be binding
upon the Parties hereto and their respective successors and assigns.
26. ENTIRE AGREEMENT/MODIFICATION
This Master Agreement together with each Supplemental Agreement, as written, embodies the
entire contract between the Parties hereto with respect to the subject matter hereof and supersedes
and replaces any previous agreement, oral or written, made and entered into between the Parties
hereto respecting the Survey(s) to be performed hereunder. No modification of this Master
Agreement or any Supplemental Agreement shall be valid unless in writing, referencing this Master
Agreement or the applicable Supplemental Agreement and signed by an authorized representative of
both Parties.
Page 17
27. COUNTERPARTS
This Master Agreement and any Supplemental Agreement may be executed in two (2) or more
counterpart copies, each of which shall be deemed an original and together they shall constitute
one and the same instrument. Faxed or telecopied signature pages shall be deemed an original
provided that originally signed signature pages are exchanged timely.
IN WITNESS WHEREOF, the Parties hereto have executed this Master Agreement as of the day and
year first above written.
| XXXXXXXXX ENERGY, INC. | XXXXXX GEOPHYSICAL COMPANY | |||||||||
By: |
/s/ Xxxx X. Xxxxxx |
By: | /s/ Xxxxxxx X. Xxxxxx
Title: President & CEO |
|||||||
Date: February 8, 2007 |
Date: February 7, 2007 | |||||||||
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