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ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement ("Agreement") is entered into as
of ____________________, 1997 by and between Seitel, Inc., a Delaware
corporation ("Seitel"), and Eagle Geophysical, Inc., a Delaware corporation
("Eagle").
RECITALS
Prior to execution of this Agreement, Eagle was a wholly-owned
subsidiary of Seitel. Eagle has undertaken a series of transactions, including
the issuance of new shares in consideration for the acquisition of Energy
Research International and the issuance of new shares for cash in an initial
public offering (the "IPO"), consummated on the date hereof, and Seitel has
sold in such IPO a portion of the shares of Eagle that it owned, as a result of
which Eagle is no longer a wholly-owned subsidiary of Seitel.
During the period when Eagle was a wholly-owned subsidiary of Seitel,
Eagle relied on Seitel for the provision of certain administrative services
relating to Eagle's onshore seismic data acquisition business, which
administrative services Eagle intends in the future to provide for itself.
However, in order to provide for an orderly transition from Seitel providing
such administrative services to Eagle providing such services, and to allow
Eagle a reasonable time in which to assemble its own staff to provide such
services, Seitel has agreed to make available to Eagle for a transition period
of up to 90 days those administrative services formerly provided to Eagle with
respect to Eagle's onshore seismic data acquisition business, all pursuant to
the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual agreements
contained herein, the parties hereby agree as follows:
Section 1. Defined Terms. The following terms will have the following
meanings when used in this Agreement:
"Accountant" means the certified public accounting firm most recently
retained by Seitel to audit its financial statements.
"Associate" means with respect to Seitel, any shareholder, director,
officer or employee of Seitel or any attorney, accountant, representative or
agent retained by Seitel.
"Expenses" means any reasonable and necessary out-of-pocket expenses
incurred in connection with the provision of the Services,
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including any taxes or other governmental impositions attributable to the
provision of the Services (other than income or other similar taxes assessed on
the Fees), but not including any general or administrative overhead expense of
Seitel.
"Fees" means the fees payable to Seitel pursuant to Section 3 hereof.
"Force Majeure Event" means (a) a fire, flood, explosion, riot,
rebellion, revolution, labor trouble (whether or not due to the fault of such
Party), requirements or acts of any government authority or agency or
subdivision thereof, loss of source of supplies or other inability to obtain
materials or suppliers, or (b) any other cause, whether similar or dissimilar
to the foregoing, beyond the reasonable control of the Parties hereto.
"Loss" means any and all claims, liabilities, obligations, losses,
deficiencies and damages or judgments of any kind or nature whatsoever arising
from, asserted against, or associated with the furnishing or failure to furnish
the Services, regardless of by whom asserted and regardless of whether or not
any such loss is known or unknown, fixed or contingent or asserted or
unasserted.
"Eagle Account" means a bank account established in the name of Eagle.
"Party" means either of Seitel or Eagle.
"Services" means the services described in the schedule attached as
Exhibit A to this Agreement or any other service provided by Seitel to Eagle at
the request of Eagle; provided that Seitel shall not be obligated to provide
any services to Eagle other than those set forth on Exhibit A.
Section 2. Services. Seitel will provide the Services described on
Exhibit A to Eagle. Such services will only be provided with respect to
Eagle's onshore seismic data acquisition business. Seitel may, in its sole
discretion, provide other Services to Eagle upon request by Eagle. The
Services will be of the type and at the level provided by Seitel to Eagle
before the IPO.
Section 3. Fees and Expenses. (a) Eagle will pay Seitel Fees for the
Services provided by Seitel to Eagle hereunder equal to Seitel's cost of
providing such Services, as reasonably determined by Seitel. Such Fees will
include an allocation of Seitel's general and administrative overhead expense
relating to such Services. Seitel may, but shall not be obligated to,
determine such cost using the same methods employed by Seitel to allocate costs
to Eagle for such Services prior to the IPO.
(b) Eagle will reimburse Seitel for Expenses incurred by Seitel in
connection with the provision of the Services. Seitel will not have any
obligation to advance funds on behalf of Eagle.
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(c) Seitel will invoice Eagle for the Fees and the Expenses at
intervals determined by Seitel from time to time. All invoices will be due and
payable within five calendar days after the date of the invoice, and may be
paid by Seitel on behalf of Eagle pursuant to the authority granted in Section
7 hereof.
(d) Eagle may dispute any Fee or Expense by notifying Seitel of the
dispute within 30 calendar days of the receipt of the related invoice. If
either Party determines that the dispute cannot be resolved by the Parties, the
dispute will be submitted to the Accountant. The Accountant will make such
investigation of the Fees and Expenses as it deems necessary and will finally
determine the amount of the Fees and Expenses. The fees and expenses of the
Accountant will be paid by Eagle unless the finally determined Fees and
Expenses are less than 90% of the disputed amount.
Section 4. Information and Records.
(a) Eagle will make available to Seitel on a timely basis all
information which is reasonably necessary for Seitel to provide the Services.
(b) Seitel will maintain records with respect to the Services which
are substantially similar to those maintained with respect to similar Services
provided for its own account, and will provide those records to Eagle upon
termination of this Agreement.
Section 5. Liability. (a) Seitel makes no express or implied warranty
with respect to the Services.
(b) Seitel will be liable to Eagle for any Loss suffered by Eagle as
a result of acts or omissions of Seitel or its Associates in connection with
the Services provided only if and to the extent that (i) the acts or omissions
constitute gross negligence or willful misconduct or (ii) the acts or omissions
would be covered by Seitel's insurance coverage under crime, fidelity or
fiduciary insurance (if any). In any event, except to the extent covered by
Seitel's crime, fidelity or fiduciary insurance, (i) any claim for damages from
Seitel in connection with a Service provided will be limited to the amount of
fees charged with respect to the Service, and (ii) Seitel will not be liable to
Eagle for any incidental or consequential damages, lost profits or
opportunities, or exemplary or punitive damages.
Section 6. Indemnity. Except as provided in Section 5(b), Eagle will
indemnify Seitel and its Associates and hold Seitel and its Associates harmless
from any and all Losses arising from, asserted against or associated with the
provision of Services by Seitel to Eagle.
Section 7. Authority. (a) In providing the Services, Seitel may take
such actions, make such decisions and exercise such judgment on behalf of Eagle
as Seitel has taken, made or exercised in providing the same or similar
services on behalf of Eagle prior
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to the IPO.
(b) Prior to taking action on behalf of Eagle, Seitel will use
reasonable efforts to consult with appropriate officers or employees of Eagle
(i) in those circumstances under which Seitel would have consulted officers or
employees of Eagle prior to the IPO, and (ii) in any other circumstances
required under such reasonable rules and procedures as Eagle may adopt, from
time to time, after prior consultation with Seitel.
Section 8. Force Majeure. Seitel will not be liable to Eagle for any
failure to comply with this Agreement caused, directly or indirectly, by a
Force Majeure Event.
Section 9. Term. (a) This Agreement, and Seitel's obligation to provide
Services hereunder, shall expire 90 days after the date hereof.
(b) Eagle may terminate this agreement prior to expiration on 5 days
prior written notice to Seitel.
(c) Eagle's and Seitel's obligations pursuant to Sections 3, 5 and 6
of this Agreement will survive expiration and termination of the Agreement.
Section 10. Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by a
Party pursuant to this Agreement will be in writing and will be (i) personally
delivered, (ii) mailed by first class, registered or certified mail, return
receipt requested, postage prepaid, (iii) sent by an internationally recognized
express delivery service or (iv) transmitted by facsimile, address as follows:
(a) if to Eagle:
Eagle Geophysical, Inc.
00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxxx
Facsimile Number (000) 000-0000
(b) if to Seitel:
Seitel, Inc.
00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Facsimile Number (000) 000-0000
Each Party may designate by notice in writing a new address or facsimile
number to which any notice may be given, served or sent. Each notice will be
deemed sufficiently given, served, sent or received when it is delivered to the
addressee, with an affidavit
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of personal delivery, the return receipt, the delivery receipt or when delivery
is refused by the addressee. Each notice or other communication sent by
facsimile will be deemed sufficiently given only if a copy of the notice or
communication is immediately sent by one of the methods specified in (i), (ii)
or (iii) above.
Section 11. Miscellaneous. (a) This Agreement sets forth the entire
agreement of the Parties with respect to the Services and supersedes all
previous agreements, understandings or negotiations with respect to the
Services.
(b) The rights and obligations set forth in this Agreement may be
amended, modified or supplemented only by a writing signed by each Party.
(c) A Party may waive a right under this Agreement only by a written
waiver signed by the Party. No failure to exercise or delay in exercising a
right under this Agreement will constitute a waiver of that right.
(d) If any provision of this Agreement is found invalid, illegal or
unenforceable, the provision will be ineffective only to the extent of the
invalidity, illegality or unenforceability, and the other provisions of this
Agreement will remain in full force and effect.
(e) A party may not assign its rights, and a Party may not delegate
its obligations, under this Agreement unless it first obtains the written
consent of all other Parties, provided, however, that Seitel may assign its
rights and delegate its obligations to any wholly-owned subsidiary of Seitel
without Eagle's consent. Any Party, in its discretion, may withhold consent to
any such assignment or delegation.
(f) Except as permitted under Subsection (e), this Agreement will not
inure to the benefit of any Person other than the Parties.
(g) This Agreement will be governed by and construed and enforced in
accordance with the internal laws of the State of Texas.
(h) This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed on their behalf as of the date first above written.
SEITEL, INC.
By:
-------------------------
Name:
Title:
EAGLE GEOPHYSICAL, INC.
By:
-------------------------
Name:
Title:
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EXHIBIT A
SERVICES
A. Accounting:
1. Establish/convert from consolidated general ledger to separate
company general ledger on Seitel's current accounting system.
(Seitel may outsource this service or hire temporary staff to
perform this service at Eagle's cost, subject to Eagle's prior
consent. If such consent is requested by Seitel but not given by
Eagle, Seitel will not be required to perform this service.)
2. Maintain a general ledger.
3. Furnish general bank account checks and reconcile general bank
account.
4. Process vendor invoices and employee expense reports approved by
Eagle for payment.
5. Input accounts receivable in accordance with instructions from
Eagle personnel; post cash receipts; provide A/R aging as
requested (not more often than once per week).
6. Maintain fixed asset records (acquisition-disposal-depreciation
schedules).
7. Provide project profit and cost accounting statements.
8. Provide quarterly financial information for use by Eagle
personnel in preparing quarterly financial statements: percentage
completion of projects to determine revenue and costs to be
recognized; commission accruals; bonus calculations; trial
balance; and financial statements of Eagle Geophysical Onshore,
Inc.
B. Payroll:
1. Maintain employee data base and input payroll information into
ADP system.
2. Distribute payroll checks.
C. Tax:
1. Prepare and file all state and federal income and sale/use tax
returns with a due date during the Term.
D. Benefits:
1. Administer 401(k) Plan.
2. Administer health and medical benefits plans.
