INDEPENDENT CONTRACTOR MASTER SERVICE AGREEMENT This Agreement is entered into as of the ( Effective Date ), between, a ( Enter State ) corporation ("the Company") and ("the Contractor") and may be referred to collectively in this Agreement as the Parties or individually as a Party. The Parties desire to enter into an agreement setting forth the terms and conditions under which Contractor will provide certain specified services to Company. For and in consideration of the mutual covenants and agreements set out in this Agreement, the Parties agree as follows: 1. Services. Company agrees to retain the services of Contractor, and Contractor agrees to perform services in connection with certain aspects of the Company s business and set forth in Exhibit B entitled Service Order attached hereto and made a part hereof for all purposes. 2. Independent Contractor. It is expressly understood that Contractor is an independent contractor and that Contractor, Contractor s principals, partners, employees, and subcontractors are not employees of Company. Contractor will be responsible for determining his/her own work schedule, provided, however, Contractor agrees to perform the Services required hereunder in such a manner which will allow Contractor to meet any reasonable time deadlines required by Company. Contractor shall be responsible for the supervision and control of Contractor s employees and for determining the manner in which the Services are performed, including without limitation, the hours of labor of and the method of payment to Contractor s employees. Contractor represents that he/she possesses the technical and professional training and experience necessary to perform the Services. In addition, Contractor s employees and agents have been trained to follow all laws, rules, regulations and safety precautions applicable to performing the Services. Contractor shall furnish, at its own expense, all necessary machinery, equipment, tools, transportation and whatever else is necessary in the performance of the Services. Upon completion of the Services, Contractor will remove its materials and equipment from the work location and leave the premises in a good, clean and safe condition. Neither Party has any authority to legally bind the other Party in any respect. 3. Performance of Services. (a) Contractor agrees to commence the performance of the Services at such time as directed by Company and set forth in Exhibit B, and will continue to perform such Services diligently and without delay. The Services shall be performed by Contractor in a good, safe and workmanlike manner to completion and shall conform to the industry standards applicable to the type of the Services provided. Contractor guarantees and warrants that the Services completed by Contractor shall conform to the specifications given to Contractor by Company. Contractor acknowledges that Company will rely upon the agreements and warranties given by Contractor in this paragraph. Contractor agrees that it will not knowingly permit any employee of Company to own an interest in Contractor or to derive any economic benefit with respect to the Services performed by Contractor hereunder. 1
(b) Contractor agrees to abide by all laws, rules and regulations, whether federal, state or local which now or in the future may be applicable to the Services and/or the geographic area where the Services are to be performed and to remedy any violation by Contractor of such laws, rules and regulations within a reasonable time and to pay and discharge all charges, penalties and fines imposed or levied upon Company as a result of such violation or violations, specifically including any such fines, levies or penalties assessed as a result of any federal, state or local governmental or private health, safety and/or environmental act. (c) Contractor agrees to pay and discharge all valid taxes (including, without limitation, sales and use taxes), lien claims, charges or other impositions arising out of, in connection with or resulting from the Services (except for lien claims resulting from unpaid Services), and to comply with all payroll tax laws, old age pension laws, equal employment opportunity laws and unemployment laws, including payment of all contributions legally due or payable as a result of any governmental or private pension or profit sharing plans with reference to Contractor s employees engaged in the performance of any of the Services required hereunder. If, upon the completion by Contractor of any particular project, Company shall have cause to believe that there are unsatisfied claims for labor, materials or injuries to third persons or property, it may request, and Contractor shall furnish, proof or affidavit satisfactory to Company that such claims are satisfied or discharged. The amount due as herein provided shall be paid by Company to Contractor, subject, however, to the right of Company to withhold payments as a result of Contractor s failure to perform its obligations set forth in this Agreement. 4. Term. This Agreement shall commence on the Effective Date and shall continue AT WILL unless sooner terminated pursuant to the provisions of this Agreement. 5. Compensation. For the Services rendered by Contractor to Company, Company agrees to pay Contractor during the term of this Agreement in accordance with the Schedule of Rates listed on Exhibit B attached hereto and made a part hereof for all purposes. Company shall pay Contractor s undisputed invoices for fees and expenses within thirty (30) days of Company s receipt of such invoice. Contractor shall submit invoices for fees and expenses no more frequently than on a semi monthly basis for each project. Payments shall be made to Contractor on a semi monthly basis at the address provided on such invoices. Fees may be offset by any amounts due and owing by Contractor to Company whether such amounts arise out of this Agreement or unrelated transactions between the Parties. To the extent the Contractor is a sole proprietorship or a disregarded entity for federal income tax purposes, it is intended that the service fees paid hereunder shall constitute earnings from selfemployment income. Company will not withhold from such service fees from any amounts for U.S. federal income tax or employee contributions under the U.S. Federal Insurance Contributions ( FICA ) or make employer FICA contributions with respect thereto. To the extent Contractor is a sole proprietorship or disregarded entity for federal income tax purposes, Contractor shall be solely responsible for the reporting, estimation and payment of all income taxes, fees and other contributions on or attributable to self employment income arising from the fees payable hereunder. 2
6. Expenses. Contractor shall, on presenting Company with documentation reasonably acceptable to Company, be reimbursed by Company for all reasonable expenses, including transportation, meals, lodging, long distance phone calls, and related miscellaneous expenses incurred by Contractor in connection with the performance of the Services provided by Contractor pursuant to this Agreement; provided, however, all travel with travel related expenses of Contractor must be authorized by Company in advance of the expenses being incurred by Contractor. All invoices for expense reimbursements must be supported by appropriate receipts and documentation. Company reserves the right to audit all charges made by Contractor s books and records in connection with the fees and expenses Contractor has invoiced to Company under this Agreement. 7. Insurance. (a) As an independent contractor, Contractor shall not participate in any group health, accident and life insurance plans, or any pension or other benefit plan sponsored by Company. To the extent Contractor might be deemed to be eligible to participate in any such plans, Contractor hereby waives any and all rights to assert a claim therefore. It is intended, understood, and agreed that Contractor is responsible for his/her own unemployment insurance, life insurance, workers compensation insurance, health insurance, vehicle and liability insurance, Contractor shall obtain and maintain throughout the term of this Agreement the types and limits of insurance coverage specified in Exhibit A attached here to and made a part hereof for all purposes. 8. Exclusive Services. Contractor agrees that he will not, during the Term, do any work, perform any Services, or serve as a contractor for a third party whose activities would, in the reasonable judgment of Company, create a conflict of interest with the business interest of the Company. Notwithstanding anything contained in this Section 8 to the contrary, it is acknowledged by the Parties that Contractor presently has other business interests and clients not related to the business of Company and Contractor may continue to pursue and service such other interests and clients during the term hereof. 3
9. Confidentiality. (a) In the course of Contractor providing Services required hereunder, the Company or its affiliates, directors, officers, employees, agents or controlling person (collectively, "Representatives") may provide the Contractor with certain information related to the Company's products, Services, research, development, marketing and selling, business plans, budgets and unpublished financial statements, licenses, software programs, prices and costs, suppliers, customer lists and customers, and other information regarding Company s business activities, including without limitation, information pertaining to reservoir evaluations, production reports, lists of mineral owners, lists of working interest owners, marketing strategies and arrangements, exploration plans and strategies and financing plans, a substantial portion of which will be non public, confidential and /or proprietary in nature. All such information, whether written or oral and whether furnished before or after the date hereof, together with all documents and other materials prepared by Contractor which are based on or contain or otherwise related to such information are collectively referred to as the "Company Information." The term "person" shall be broadly interpreted to include, without limitation, any governmental entity, corporation, partnership, company or individual. The Contractor agrees to (i) use the Company Information only for the purpose of performing the Services; (ii) hold all Company Information in strict confidence and use all reasonable care to maintain the confidentiality of all Company Information and (iii) not disclose Company Information to any person; provided, however, that the foregoing obligations regarding confidentiality shall not apply to any Company Information that (i) is or becomes generally available to or known by the public other than as a result of a disclosure made by the Contractor; (ii) is or was disclosed to the Contractor on a non confidential basis from a source other than the Company (or its predecessors) provided that the Contractor is not aware that such source is or was then bound by a confidentiality agreement with the Company or otherwise prohibited from transmitting the information to the Contractor; or (iii) Contractor is required to disclose the information by judicial process Further, Contractor assigns to the Company any rights Contractor may have or acquire in any Company Information and recognizes that all Company Information shall be the sole property of the Company and its assigns and that the Company and its assigns shall be the sole owner of all patent rights, copyrights, trade secret rights, and all other intellectual property rights. (b) The Contractor acknowledges that the Company could not be made whole by monetary damages of a breach of this Section 9. Accordingly, the Company, in addition to any other remedy to which it may be entitled by law or in equity, shall be entitled to seek an injunction to remedy and prevent breaches of this Agreement, and to an order compelling specific performance of this Agreement. The Contractor acknowledges and agrees that the Company derives economic value from the Company Information not being known by other persons who can obtain economic value from its disclosure or use and that any disclosure or unauthorized use of the Company Information could cause irreparable harm and loss to the Company. 4
(c) During the term of this Agreement and for thirty six (36) months thereafter, Contractor shall not disclose such information to any person, firm or association or other entity for any reason or purpose whatsoever, unless provided for in Section 9(a) of this Agreement. The agreements set forth in this Section 9 shall survive the termination of this Agreement. 10. Ownership of Intellectual Property. Any work of authorship created in conjunction with the services rendered by Contractor as provided for under this Agreement will be deemed a "commissioned work" and "work made for hire" to the greatest extent permitted by law and Company will be the sole owner of the work product resulting from such services referenced herein and/or any work products derived therefrom. To the extent that the services rendered are not properly characterized as "work made for hire," then Contractor hereby irrevocably assigns to Company all right, title and interest in and to the work product referenced herein (including, but not limited to, the copyright therein), and any and all ideas and information embodied therein, in perpetuity and throughout the world. 11. Assignment. Contractor acknowledges and agrees this Agreement may not be assigned by Contractor without the prior written consent of Company, to be determined in Company s sole discretion. 12. Termination. This Agreement may be terminated prior to the end of the Term as follows: (a) By the Parties upon the mutual written consent of both Parties; (b) By Company if Contractor (i) breaches any covenant, term, or condition contained in this Agreement, (ii) commits an act of theft, fraud, or dishonesty against Company, (iii) fails or refuses to perform the Services to be provided by Contractor pursuant to this Agreement; or (iv) files for bankruptcy protection from its creditors. (c) By Contractor if Company breaches any covenant, term, or condition of this Agreement; (d) Upon the death of Contractor (applicable only when Contractor is a sole proprietorship or the sole owner of the company); or (e) By either party upon prior written notice. If this Agreement is terminated pursuant to this Section 12, Company shall pay Contractor for the hours/days worked to the date of such termination. 13. Records. For a period of twenty four (24) months after the completion of the Services by Contractor, Contractor agrees to retain, and to cause its subcontractors to retain, all pertinent books, payrolls, and records relating to Services performed hereunder and representatives and auditors of Company shall have access at all reasonable times to review, audit, and inspect (and make copies of) any and all books, payrolls, and records maintained or in the possession of Contractor and any of its subcontractors relating to any of the Services performed hereunder. 5
14. Reports: The Contractor shall submit weekly reports in accordance with the ordinary standard of care, which shall include the Services accomplished, a summary of the charges to date and other reasonable items requested by the Company. 15. Indemnity and Waiver of Consequential Damages. (a) Contractor agrees to defend, indemnify and hold Company and Company s officers, directors, agents, representatives, employees and contractors (other than Contractor) harmless from and against any and all loss, claim, demand, fine, penalty, liability or cause of action of every kind and character, on account of bodily injury to, illness or death of any employee, agent, representative, contractor or subcontractor of Company, and for damage to Company s property which is caused by, arises out of, in connection with, incident to or results directly or indirectly from the negligence, gross negligence or willful misconduct of Contractor in performing the Services under this Agreement. (b) Company agrees to defend, indemnify and hold Contractor and Contractor s officers, directors, agents, representatives, employees harmless from and against any and all loss, claim, demand, fine, penalty, liability or cause of action of every kind and character, on account of bodily injury to, illness or death of any employee, agent, representative of Contractor, and for damage to Contractor s property which is caused by the negligence, gross negligence or willful misconduct of Company or its employees in connection with Contractor s performance of the Services under this Agreement. (c) The Parties hereby agree that neither Party shall be liable to the other Party for special or consequential damages in connection with this Agreement regardless of the negligence of any Party hereto. 16. Arbitration. The parties agree to cooperate with each other in an attempt to resolve any dispute, controversy, or claim (a Dispute ) arising out of or in connection with this Agreement. If the parties are not able to resolve the Dispute, they agree to submit the Dispute to mediation to be conducted in accordance with the American Arbitration Association ( AAA ) mediation rules for commercial disputes. If the parties are not able to resolve the dispute by means of mediation, the parties hereby agree the Dispute shall be referred to and determined by binding arbitration, as the sole and exclusive remedy of the parties as to the Dispute, conducted in accordance with the AAA arbitration rules for commercial disputes. The arbitrator (the Arbitrator ) shall use the substantive laws of Texas, excluding conflicts laws and choice of law principles, in construing and interpreting this Agreement. The Arbitrator shall be selected by agreement of the parties. In the event the parties cannot agree each party shall select one arbitrator, and the two arbitrators so selected shall select a third arbitrator who shall act as Arbitrator. The arbitration shall be in Houston, Texas, and the proceedings shall be conducted and concluded as soon as reasonably practicable, based upon the schedule established by the Arbitrator. The Arbitrator shall issue a written award, signed by the Arbitrator and setting forth the findings of fact and conclusions of law. No award shall be made for punitive, special, exemplary, or consequential damages, including loss of profits or loss of business opportunity. The decision of the Arbitrator pursuant hereto shall be final and binding upon parties. Judgment upon the award rendered 6
by the Arbitrator pursuant hereto may be entered in, and enforced by, any court within the jurisdiction where the party against whom enforcement is sought has property. Each party shall share the expense of the Arbitrator and other expenses incurred by the Arbitrator, unless the Arbitrator shall determine that fairness requires that such fees and expenses be allocated among the parties in a different manner, including without limitation, requiring the losing party to pay all such expenses. Each party shall bear its own expenses, including expenses of its counsel. It is the desire of the parties that any Dispute is resolved quickly and at the lowest possible cost, and the Arbitrator shall act in a manner consistent with these intentions, including limiting discovery to only that which is absolutely necessary to enable the Arbitrator to render a fair decision which reflects the parties intent set forth in this Agreement. The parties hereby agree that this Section 16 shall not preclude, limit or otherwise restrict a party from seeking immediate equitable relief against the other party in connection with this Agreement, including without limitation, a restraining order or an injunction, when the facts, circumstances and/or possible damages warrant such action. 17. Miscellaneous. 17.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Company and Contractor agree that in the event of a dispute arising between the Parties, the Parties agree to subject themselves to the jurisdiction and venue of the District Courts of Harris County, Texas. 17.2 Modifications. No provision of this Agreement may be changed or modified, except by written agreement signed by the Parties. 17.3 Entire Agreement. This Agreement contains the entire understanding of the Parties in connection with its subject matter and supersedes all previous verbal or written agreements. 17.4 Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be considered to have been given if sent by certified mail to: Contractor at: Contractor Name Street Address, City, County, State, Zip Code Email: Company at: Company Attn: Risk Mgt Dept. Risk Manager Name Street Address, City, County, State, Zip Code Email: 7
17.5 Invalidity. If any of the provisions of this Agreement shall be held invalid, that invalidity shall not affect any other provisions which can be given effect without the invalid provisions. To this end, the provisions of this Agreement are intended to be and shall be deemed severable. 17.6 Descriptive Headings. The descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of its provisions. 17.7 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns. 17.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. This Agreement has been executed as of the Effective Date stated above. Company Name: Signed By: Date: Name / Title Contractor: Signed By: Date: Name / Title 8
EXHIBIT A ALL DEFINED TERMS USED HEREIN SHALL HAVE THE SAME MEANING AS IN THE INDEPENDENT CONTRACTOR AGREEMENT AND THIS EXHIBIT IS INCORPORATED THEREIN. CONTRACTOR INSURANCE REQUIREMENTS Without modifying the indemnity obligations and liabilities of Contractor, or its insurers, Contractor shall at all times during the term of this Agreement further comply with the following: 1. Contractor shall carry insurance of the types and in the minimum amounts as set forth below provided that all insurance obtained shall (a) be of an occurrence policy form or appropriate claims made type policy form should an occurrence form be not be available with from a standard lines insurer ; (b)an ACORD 25 Certificate of Insurance will be issued and forward directly to the Company by the insurers authorized representation or appointed agent/agency naming the Company as the Certificate Holder with a cancellation notice in accordance with the cancellation provisions defined within the policy and/or ACORD 25 (c) name Company (as defined in the Agreement) AS ADDITIONAL INSUREDS TO THE EXTENT OF CONTRACTOR S LIABILITIES Insurers will allow, except as to the Workers Compensation Insurance as set forth below; (d) be primary to and without contribution from any insurance policies or self insurance maintained by Company; (e) WAIVE ALL RIGHTS OF SUBROGATION AGAINST THE PARTIES NAMED IN (c) ABOVE; (f) be with an insurance company approved to do business in the state and adjacent federal waters where the Work is to be performed and/or contracted which has a Best s Insurance rating of not less than A. Contractor, on behalf of itself and its employees, agents, officers, directors, servants, subcontractors and related entities, expressly acknowledges the hazardous nature of working around and in oil and gas operations, and further assumes all other risk inherent in working in such environment. 2. Contractor further agrees to carry Commercial Liability Insurance including bodily injury and property damage, AS REQUIRED LIABILITY INSURANCE AS DEFINED HEREIN BY THIS AGREEMENT. Coverages will be immediately secured and continuously maintained with limits of liability of not less than for those coverage(s) specified by x as indicated within the check boxes shown below: General Liability Contractual Liability General Aggregate $2,000,000 General Aggregate: $2,000,000 Each Occurrence $1,000,000 Each Occurrence $1,000,000 Personal Injury $1,000,000 Products /Complete $1,000,000 9
Operations Workers Compensation Check To Include USL&H Admiralty Act/F.E.L.A Fire Legal Liability Check To Include $100,000 Part One: All or Other States Endorsement Part Two: Covers Damage Of Property Rented From Others Standard Workers Comp. Employers Liability: Bodily Injury By Accident Each Accident $ 1,000,000 Bodily Injury By Disease Each Employee $ 1,000,000 Bodily Injury By Disease Policy Limit $ 1,000,000 Medical Payments $ 1,000 Limited No Fault Coverage That Does Not Require Proof Of Negligence By Insured Professional Liability Commercial Automobile Liability General Aggregate $2,000,000 Combined $ 1,000,000 Single Liability Split Limit Liability Bodily Injury /Property Damage Each Occurrence $1,000,000 Uninsured / Underinsured Motorist Personal Injury $1,000,000 Personal BI $ 250,000 PD $ 500,000 $ Same As Select Liability Limit(s) Indicated Above. $ 2,500 Injury Protection 10
Products /Complete Operations Fire Legal Liability Covers Damage To Property Rented From Others Medical Payments Limited No Fault Coverage That Does Not Require Proof Of Negligence By Insured $1,000,000 Hire/ Non Owner Auto Endorsement $100,000 $ 1,000 Commercial Umbrella Liability $ Same As Select Liability Limit(s) Indicated Above. $ 2,000,000 3. Certificate of Insurance. Prior to work commencing under a specific Purchase Order entered into under this Agreement, Contractor shall provide Company certificates of insurance for itself and each of its subcontractors signed by an authorized insurer s representative evidencing the coverages, limits, endorsements and extensions required herein. Notwithstanding Contractor s obligation to provide, and Company s right to receive, proof of insurance in compliance with this Exhibit, any failure of Company to require, or to insist that Contractor comply with its obligations to provide, proof of insurance prior to the commencement of any Work, or at any other time, shall not operate as a waiver of Contractor s obligations to provide insurance. Company s acceptance of a certificate with less than the required amounts shall not be deemed a waiver of the foregoing requirements. Please forward Certificates of Insurance to: Company Name / Dept. / Street Address City / State / Zip Attn: Name Tel. Fax Email: 6. If Contractor elects to self insure for any of the above liabilities, it may self insure only if it shall first qualify as a self insurer under applicable state and/or federal laws and regulations and obtain Company consent to such as to any one or more of the risks as to which coverage is required herein; evidence of such consent must be in writing and approved by authorized officer of the Company. 11
EXHIBIT B THIS SERVICE ORDER hereby incorporates by specific reference the terms and conditions of an Independent Contractor Agreement dated day of Month, 20, made between Company Name : and Contractor Name: (the Agreement ). Terms and expressions used herein bear the meanings assigned to them in the Agreement, except where the context otherwise requires. A reference to any Section herein is to a section of the Agreement. In the case of any conflict between the provisions hereof and the provisions of the Agreement, the provisions of the Agreement shall prevail. Date of Service Order: Service(s) (Section 1) and Specification (Section 3): SERVICE ORDER Individual(s) Who Will Perform Services: Contractor Name: Schedule of Rates or Other Compensation (Section 5): $ Company s Obligations to Reimburse Expenses (Section 6): Company shall reimburse all pre approved reasonable travel and business expenses incurred by Contractor in connection with the performance of the Services pursuant to the Agreement in accordance with Company s travel and business expense policy applicable to its employees. Signed for and on behalf of COMPANY By: Name: Title: Signed for and on behalf of CONTRACTOR By: Name: Title: 12