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EXHIBIT 10
EXCLUSIVE EQUIPMENT LEASE AGREEMENT
This Exclusive Equipment Lease Agreement (the "Agreement") is entered into on
this 16th day of December, 1999 (the "Effective Date") between Mitcham
Industries, Inc., a Texas corporation ("Mitcham"), and ▇▇▇▇▇▇, ▇.▇., a
corporation organized under the laws of France ("SERCEL"), which parties agree
as follows:
1. INTRODUCTION. SERCEL and certain of its affiliates design, manufacture and
market fully-configured seismic data acquisition systems (the "SERCEL Systems"),
the components thereof and equipment related thereto, including station units
that are sometimes called "channel boxes." At the present time, SERCEL and
certain of its affiliates manufacture equipment as described on SCHEDULE 1
(collectively the "Products"). Mitcham provides full service leasing services to
customers in the oil and gas industry, including the leasing of new and used
channel boxes to customers who have SERCEL Systems. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged for
all purposes, Mitcham and SERCEL agree to the terms set forth herein. Should
Sercel become involved in the deep water marine, OBC, or both products segments
further discussions will be held with Mitcham regarding the role Mitcham might
play with respect to these segments. This agreement, in no way represents any
agreement regarding products in these market segments.
2. EXCLUSIVE AUTHORIZED THIRD PARTY LESSOR. Mitcham hereby represents to SERCEL
that Mitcham has the necessary skills, experience, personnel, facilities and
equipment to effectively perform its responsibilities as the exclusive leasing
representative for SERCEL as described in the Agreement. In reliance upon that
representation, SERCEL hereby appoints Mitcham as the exclusive representative
for SERCEL to lease the Products throughout the world (the "Territory").
Notwithstanding the foregoing, Mitcham's appointment pursuant hereto shall not
include financing leases or other leases of duration of greater than one year.
During the term of this Agreement, Mitcham will actively promote and solicit the
leasing of the Products. During the term of the Agreement, in the event that a
third party makes inquiry of SERCEL as to the possibility of leasing any of the
Products anywhere in the Territory, then and upon each inquiry, SERCEL shall
contact Mitcham (by phone, fax or letter) and explain in reasonable detail the
identity of the third party and the terms, if any, that have been discussed with
regard to such Lease (as defined below) and Mitcham shall promptly contact such
third party and negotiate the terms of the proposed Lease. Except as set forth
in Section 4 below, during the term of this Agreement, SERCEL shall not
recommend or suggest any competitor of Mitcham or any other third party as a
source from which any of the Products may be leased in the Territory.
Notwithstanding any provisions to the contrary contained herein, SERCEL shall
not be obligated to refer its affiliates to Mitcham, and SERCEL shall be
permitted to directly lease to its customers or affiliates.
3. PURCHASE OF PRODUCTS FROM SERCEL. Subject to the other provisions of this
Agreement, Mitcham agrees that it will purchase from SERCEL, and SERCEL agrees
that it will sell to Mitcham, the Products necessary to meet Mitcham's
obligations under each Lease as provided herein. The terms and conditions of
purchases by Mitcham of the Products hereunder shall be governed by SERCEL'S
standard terms and conditions, a copy of which
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is attached hereto as SCHEDULE 3(a); provided, however, that in the event of any
conflict between the terms of such terms hereof, the terms of the Agreement
shall prevail. SERCEL may update SCHEDULE 3(a) from time to time after written
notice to Mitcham. SERCEL shall sell to Mitcham such of the Products as Mitcham
shall order (an "Order") valued after giving effect to the discount(s) set forth
on SCHEDULE 3(b) Mitcham shall receive the discounts set forth on SCHEDULE 3(b)
attached hereto with regard to the Products ordered by Mitcham in each Order.
The actual amount of the Minimum Purchase Requirement (as defined below) and
each Order for the Products by Mitcham after the Effective Date of this
Agreement shall satisfy a portion of the Aggregate Purchase Requirement.
4. EXCEPTIONS TO LEASE IN CERTAIN INSTANCES. Mitcham shall have discretion to
accept or reject any third party referred by SERCEL for Leasing, as a result of
(i) possessing an insufficient amount of the Products for Lease to such third
party (provided, however, the continued failure of Mitcham to maintain a
sufficient amount of products to satisfy demand could be evidence that Mitcham
is not actively promoting the leasing of Products, as required hereunder unless
caused by the failure of SERCEL to deliver Products to Mitcham), (ii) reasonably
apparent credit risk or any other reasonable business-related factor, or (iii)
inability to reach agreement on the terms of such Lease. Notwithstanding the
previous sentence, Mitcham shall use its reasonable good faith efforts to
service every third party referred by SERCEL for Leasing. Mitcham shall be
deemed to have rejected such a third party as a result of inability to agree on
the terms within five business days of such third party's first contact with
Mitcham with regard to such proposed Lease. If SERCEL Leases to such third
party, then SERCEL shall have the right to continue to lease to such third party
after the term of the initial Lease between them shall terminate; provided,
however, that if (x) the Lease between such a third party and SERCEL shall
terminate, (y) the Leased Product is returned to SERCEL, and (z) such third
party shall later make an inquiry concerning Leasing of the Products, SERCEL
shall again follow the procedure set forth in Section 2 above.
5. PRICING. In no event shall either SERCEL or Mitcham have any right to require
that either of them charge any specific price or follow any pricing guidelines
or establish or require any other specific or general term with regard to the
Leasing of any of the Products, or the provision of any other good or service by
either of them. Notwithstanding the foregoing, Mitcham shall use its reasonable
best efforts to have a reasonable quantity of the Products available for lease
at prices which Mitcham believes reflects the supply of and demand for the
Products. If the pricing practices of Mitcham become a significant factor in the
market penetration of Sercel products, in the opinion of Sercel as generated by
feedback from customers, and Mitcham refuses, after good will discussions with
Sercel regarding the prices of the equipment, to negotiate a reasonable change
in pricing, Sercel will have the right to cancel the exclusivity of this
agreement and to seek another non-exclusive leasing agent.
6. PURCHASE REQUIREMENTS. Subject to the terms hereof, in the event that Mitcham
does not purchase Products from SERCEL under the Agreement in an amount that
satisfies both the Aggregate Purchase Requirement and the Minimum Purchase
Requirement, at SERCEL'S option this Agreement may be terminated on 10 days
written notice and Mitcham shall not be obligated to purchase any Products or
Systems (as defined below) in
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addition to those it purchased before its failure to satisfy the relevant
purchase requirement. For purposes hereof, the term "Aggregate Purchase
Requirement" shall mean Products purchased by Mitcham from SERCEL during the
period from the Effective Date through December 31, 2002 with such Products
representing in aggregate six 408UL recording systems with a minimum of 600
channels per system. For purposes hereof, the term "Minimum Purchase
Requirement" shall mean Products purchased by Mitcham from SERCEL for six
consecutive periods with a commitment to purchase one 408UL system with a
minimum of 600 channels each period. The first period in which Mitcham shall be
required to satisfy the Minimum Purchase Requirement shall be from the Effective
date through June 30, 2000. Subsequent periods shall be spaced at intervals of
six months each and shall end on December 31, 2000; June 30, 2001; December 31,
2001; June 30, 2002; and December 31, 2002. It is agreed, herein, by Sercel that
after the purchase of two complete systems with a minimum total number of
channels of 600 channels each within the first year of the agreement that if
Mitcham, for good business reasons, cannot support the purchase of the
additional four central units required over the subsequent two years, a purchase
of additional channels amounting to an equivalent expenditure on Mitcham's part
will be accepted as in compliance with the agreement. Notwithstanding anything
herein to the contrary, in the event that a Minimum Purchase Requirement is not
satisfied by Mitcham in any period ending before June 30, 2001, this Agreement
shall not be terminated by SERCEL on account of such failure to satisfy unless
the amount of such shortfall, plus the Minimum Purchase Requirement, for the
subsequent period, is not purchased by Mitcham in the subsequent period. For
purposes hereof, Products purchased by Mitcham shall include Products ordered by
Mitcham regardless of when such Products are delivered so long as such Products
are ordered before 90 days of the end of a period and paid for in accordance
with the terms and conditions set forth in SCHEDULE 3(a).
7. PROVISION OF CERTAIN GOODS AND SERVICES BY ▇▇▇▇▇▇ - ▇▇▇▇▇▇ hereby agrees that
Mitcham shall have the right to send a reasonable number of its employees and
representatives of its customers who Lease the Products from Mitcham to such
technical, training, operations and maintenance classes as SERCEL provides to
SERCEL customers who lease or purchase the Products from SERCEL, at no tuition
charge to Mitcham. SERCEL will have no responsibility for travel, lodging, food
or incidental expenses of the Mitcham attendees. SERCEL hereby agrees to send to
Mitcham such quantities of all manuals and selling information, marketing
brochures and literature regarding the Products (other than proprietary
information) as SERCEL develops and as Mitcham shall reasonably request in
connection with its Leasing activities, at no charge to Mitcham. Sercel agrees
to supply up to three (3) TMS units to be used for the testing and repair of
408UL units to Mitcham at Houston cost.
8. WARRANTY AND SERVICE
8.1 SERCEL warrants to Mitcham all of the new Products sold by SERCEL
to Mitcham as per SERCEL'S standard warranty terms.
8.2 The warranty period shall begin from and after the date of
installation of the Products, but only on the condition that such installation
is made within 180 days from the date such Product is received by Mitcham.
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8.3 SERCEL makes no warranties or representations whatsoever with
respect to any non-SERCEL products, however, any warranty information from the
manufacturers of the non-SERCEL products shall be passed on to Mitcham.
8.4 The standard SERCEL warranty is given expressly and in Lieu of all
other express or implied warranties, including a warranty of merchantability or
fitness and in no event shall SERCEL be liable for consequential damages
resulting from the use of any of the Products.
8.5 In no event shall Mitcham have any authority whatsoever, express or
implied, to make warranties other than those provided for herein without prior
written permission from the SERCEL.
9. SCHEDULE MAINTENANCE OF LEASED EQUIPMENT : REPAIRS. Mitcham and SERCEL
acknowledge that third party lessees of the Products from Mitcham may return
such Leased Products directly to SERCEL after the termination of such Leases. In
such event, SERCEL shall perform its standard maintenance check of such Products
and inform Mitcham of any necessary repairs. Mitcham shall pay the greater of
(i) $35 for each of the Products checked by SERCEL; or (ii) $1000 for such
maintenance check (regardless of the number of Products checked), as well as the
cost of any repair to such Products by SERCEL, and any reasonable and ordinary
freight and storage charges incurred by SERCEL with regard to such Products.
Mitcham shall be entitled to receive 15% discount on the repair of Products but
not the maintenance checks. Following such maintenance check and needed repairs,
SERCEL shall ship such Products to Mitcham at Mitcham's expense to a location
designated by Mitcham.
10. RIGHT TO USE NAME. Mitcham shall have the right during the Term of this
Agreement to (i) identify itself as the exclusive third party lessor of the
Products, (ii) use all SERCEL trademarks and tradenames related to the Products
that Mitcham Leases to third parties in advertisements and sales and promotional
materials; provided, however, that Mitcham shall obtain the prior written
approval of SERCEL to any such advertisements and sales and promotional
materials. No rights to manufacture are granted by this Agreement. All such
SERCEL trademarks and tradenames related to the Products are and shall remain
the sole and exclusive property of SERCEL, and Mitcham shall have no rights
therein other than as specifically set forth in this Agreement.
11. RELATIONSHIP OF THE PARTIES. Neither Mitcham nor SERCEL shall have (i) any
liability for Leases or sales of any of the Products by the other, or (ii) any
authority to control, act for or obligate the other in any way, except as set
forth herein. This agreement shall not be construed as creating an agency,
partnership or joint venture between Mitcham and SERCEL. Neither Mitcham nor
SERCEL (or any of their employees or representatives) shall be construed as an
agent, consultant or employee of the other for any purpose. Mitcham shall not
have the authority to bind SERCEL in any respect, it being intended that Mitcham
shall act as an independent contractor and not as an agent, with the
understanding that SERCEL shall not be responsible for any obligations and/or
liabilities incurred by Mitcham in connection with its business activities.
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12. TERM OF AGREEMENT. Unless sooner terminated in accordance with the
provisions hereof, this Agreement shall be effective from the Effective Date
through December 31, 2002 (the "Term").
13. NO EFFECT ON RIGHT TO SELL. This Agreement shall not be construed to have
any effect on SERCEL'S rights to sell (as opposed to Lease) its products and
services to any party. This Agreement shall not be construed to have any effect
on Mitcham's rights to sell any products and services to any party.
14. INDEMNITY. SERCEL and Mitcham hereby agree to the following indemnification
obligations:
(a) Mitcham shall indemnify and hold harmless SERCEL, its directors,
officers, employees and affiliates (hereinafter the "SERCEL Indemnities")
against any and all liability, loss, damages, fines, penalties, costs and
expenses (including, without limitation, court costs and reasonable attorneys
fees) incurred by any of the SERCEL Indemnitees as a result of any breach or
violation by Mitcham or others acting on its behalf of any obligation, covenant,
representation or warranty of Mitcham set forth in this Agreement.
(b) SERCEL shall indemnify and hold harmless Mitcham, its directors,
officers, employees and affiliates (hereinafter the "Mitcham Indemnities")
against any and all liability, loss, damages, fines, penalties, costs and
expenses (including, without limitation, court costs and reasonable attorneys
fees) incurred by any of the Mitcham Indemnitees (i) as a result of any breach
or violation by SERCEL or others acting on its behalf of any obligation,
covenant, representation or warranty of SERCEL set forth in this Agreement, (ii)
for infringement of any claimed patent rights relating to the Products, or (iii)
that arise out of or are based upon losses, claims, damages or liabilities
resulting from design, manufacture, and/or operation of any Products, from the
failure of any such Products to satisfy any warranties (whether expressed or
implied, if any), or from any defect in the Products.
(c) Either party seeking indemnification hereunder shall notify the
other party in writing of any legal action commenced against SERCEL Indemnitees
or the Mitcham Indemnitees, as the case may be, as soon as practicable. The
indemnity obligations of Mitcham and SERCEL shall survive the expiration or
termination of the Agreement.
15. GENERAL.
(a) The addresses of Mitcham and SERCEL for purposes of giving any
notice or other communication under this Agreement are as set forth below. Any
such notice or communication shall be in writing and signed by an officer or
authorized representative of Mitcham or SERCEL, as applicable. Any such notice
or communication shall be deemed to have been given (i) immediately upon
physical delivery to the addressee. And (ii) three days after such notice or
communication has been deposited in the United States mail, addressed as set
forth below, first-class postage prepaid, certified mail, return receipt
requested.
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Mitcham: Mitcham Industries, Inc
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
SERCEL: SERCEL Incorporated
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Notice may be served in any other manner, including telex, telecopy, telegram,
etc., but shall be deemed delivered and effective as of the time of actual
delivery.
(b) Mitcham and SERCEL represent and warrant to each other that the
execution, delivery and performance of this Agreement have been authorized by
all necessary corporate action, and that this Agreement is a valid and binding
obligation of each of them, respectively. Mitcham and SERCEL represent and
warrant to each other that, to the best of their knowledge, neither the
execution and delivery of nor the performance of this Agreement will conflict
with or result in a breach of any (i) law or of any regulation, order, writ,
injunction, or decree of any court or government authority of any country or
state in which this Agreement is to be performed, or (ii) any agreement to which
they are a party.
(c) This agreement represents the entire agreement between Mitcham and
SERCEL with regard to the subject matter hereof, and may not be amended,
modified or terminated except by a written document signed by duly authorized
officers of Mitcham and SERCEL.
(d) This Agreement may not be assigned by either party hereto; except
that Mitcham may assign its rights under this Agreement to any entity that
acquires its operations (a "Sale"). However, in the event of a Sale, Mitcham
shall have the option upon 90 days written notice to terminate this Agreement.
In addition, in the event ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. is no longer employed by Mitcham
in a senior management capacity or is considered by Sercel to be not
sufficiently and actively involved in the performance of this contract, SERCEL
shall have the option upon 90 days written notice to terminate this Agreement.
This Agreement shall bind and be enforceable against the parties hereto and
their respective successors and permitted assigns. Notwithstanding such
assignment, Mitcham shall continue to be liable for all obligations of Mitcham
set forth in this Agreement.
16. COMPLIANCE WITH LAWS. In all of its activities pursuant to this Agreement,
Mitcham and SERCEL shall comply with all laws, decrees, statutes, rules,
regulations, codes and ordinances of any jurisdiction which may be applicable to
such activities, including without limitation, laws imposing registration and
disclosure requirements on Mitcham; provided, however, insignificant violations
of any of the foregoing that have no more than a de minimis effect on Mitcham or
SERCEL shall not be a violation of this Agreement. In leasing the Products
hereunder, Mitcham shall act at all times in a manner demonstrating a
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high level of integrity and ethical standards. Without limiting the scope of its
general obligations set forth above this section, Mitcham hereby represents and
warrants to SERCEL in connection with its activities performed with regard to
the Products in the past (if any), and hereby covenants and agrees with SERCEL
in connection with its activities to be performed in connection with the
Products in the future, that Mitcham and any person or firm acting in
association with or on behalf of Mitcham:
o has not offered, paid, given, promised to pay or give, or
authorized the payment or gift of, and
o will not offer, pay, promise to pay or give, or authorize the
payment or gift of, any money or thing of value to:
o any "Foreign Official" as defined in the United States Foreign
Corrupt Practices Act (Pub. L. No. 95-213, 94 Stat. 1494),
together with all amendments to that Act which are effective
during the term hereof (the "FCPA");
o any political party or party official, or any candidate for
political office; or
o any other person for the purpose of:
o influencing any act or decision of such Foreign Official,
political party, party official, or candidate in his or its
official capacity;
o inducing such Foreign Official, political party, party
official or candidate to do or omit to do an act in his
violation of his or its official duty; or
o inducing such Foreign Official, political party, party
official or candidate to use his or its influence with a
foreign government or an instrumentality of such government to
affect or influence any act or decision of such government or
instrumentality in order to assist SERCEL to obtain or retain
business with any person or to direct business to any person.
Further, Mitcham hereby represents and warrants to SERCEL that no
person having a direct or indirect financial interest in Mitcham as of the date
hereof is: (i) a Foreign Official, (ii) an official of any political party, or
(iii) a candidate for political office; provided, however, for purposes hereof,
a person shall not be deemed to have a direct or indirect financial interest in
Mitcham as a result of owning less than (5%) of the outstanding shares of common
stock of Mitcham. In connection with determining whether a person owns five
percent (5%) or more of the stock, Mitcham shall be permitted to rely upon
filings made by its shareholders under the Securities Exchange Act of 1934, as
amended, or filings made under other applicable federal securities laws. Mitcham
shall immediately notify SERCEL in the event that any person now or hereafter
having such a financial interest in Mitcham shall assume such a status.
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From time to time as requested by SERCEL, Mitcham shall, within five (5)
days after request from SERCEL, certify to SERCEL in writing that the
obligations, representations and warranties of Mitcham set forth in this Section
have not been violated. SERCEL shall not be permitted to request such
certification more often than once each calendar quarter unless it has reason to
believe a violation has occurred. Mitcham shall cooperate fully with any
investigation which may be conducted by representatives of SERCEL for the
purpose of determining whether or not Mitcham has violated any of those
obligations, representations and warranties. In the event that amendments in the
FCPA reasonably necessitate modifications to this Section 17, the parties hereto
agree to negotiate in good faith in connection therewith and enter into such
modifications.
17. MITCHAM UNDERTAKINGS.
(a) To use its reasonable best efforts to actively promote and solicit
the leasing of the Products.
(b)To participate in training programs which may be offered by SERCEL or
by others relating to the Products.
(c) To obtain approval of SERCEL prior to the commencement of any
advertising relating to the sale of the Products which advertising has
not been previously approved by SERCEL.
(d) Not knowingly to lease the Products to companies or countries that
are precluded by United States law from trading with the United State or
its residents and, to make reasonable inquiry in connection therewith,
including inserting provisions in the leases with their customers that
are reasonably intended to keep Mitcham's customers from using the
Products in the countries in which United States law prohibits the use
of the Products.
(e) To make all reasonable effort to use the agents described on
SCHEDULE 17(e) and that have been designated by SERCEL in locations
outside of the United States or Canada so as to minimize conflicts
between agents, except Mitcham shall not be obligated to use its
reasonable efforts in India since Mitcham currently has an agent in such
country. However, if conflicts arise as a result of multiple agents,
both parties will make a reasonable attempt to use the same agent.
(f) To use all reasonable best efforts to continue to maintain an
organization commensurate with the growth of Leasing of the Products.
(g) To return to SERCEL on termination of this Agreement any and all
catalogs, samples, price lists, and any other data, information and/or
supplies or materials furnished by SERCEL which are in the possession of
Mitcham or any of its employees, agents, representatives or bailees.
(h)Not to alter, hide nor secrete SERCEL'S name on any of the Products
or on any sales promotion material furnished by SERCEL.
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18. PURCHASE ORDER ACCEPTANCE AND PAYMENT.
18.1 All sales of the Products are subject to SERCEL'S standard
conditions of sale, however, SERCEL reserves the right to, at any time,
change, alter or amend these conditions by giving prior written notice
to Mitcham.
18.2 Mitcham shall confirm with SERCEL all relevant delivery
information prior to submission of a purchase order for any of the
Products.
18.3 SERCEL shall have the right to reject, in whole or in part, any
Purchase Order from Mitcham, to refuse in whole or part, to consent to
any cancellation requested by Mitcham, and to reject in whole or part,
any and all returns of the Products or to refuse to grant refunds or
allowances on such returns, based upon reasonable grounds.
18.4 All sales by SERCEL to Mitcham shall be payable in U.S. dollars on
an open 30 day account, said account period to be determined from the
date of shipment from SERCEL.
18.5 SERCEL reserves the right to modify, alter or amend any of the
payment terms contained herein in order to meet requirements of a
specific transaction, however, any such deviation from the provisions of
this Agreement shall not be construed as a permanent modification,
alteration or amendment of the payment terms nor shall the same be used
to establish a precedent for future transactions.
19. CONFIDENTIAL INFORMATION. Mitcham agrees that it will maintain in strict
confidence, and not disclose to any other person or firm except with the prior
written permission of an authorized officer of SERCEL, any and all information
received from SERCEL or prepared by Mitcham for SERCEL regarding prices,
customer lists, business plans, strategies, forecasts, studies, reports and any
other information which may be considered confidential or proprietary by SERCEL
and which is not publicly available. The confidentiality obligation of Mitcham
under this Section 19 shall survive the expiration or termination of this
Agreement. In the event that Mitcham receives a request to disclose all or any
part of the confidential information under terms of a subpoena or order issued
by a court or by a governmental body, Mitcham agrees (i) to notify SERCEL
immediately of the existence, terms, and circumstances surrounding such request,
(ii) to consult with SERCEL on the advisability of taking legally available
steps to resist or narrow such request, and (iii) if disclosure of such
information is required to prevent Mitcham from being held in contempt or
subject to other penalty, to furnish only such portion of the information as, in
the written opinion of counsel reasonably satisfactory to SERCEL, it is legally
compelled to disclose and to exercise its best efforts to obtain an order or
other reliable assurance that confidential treatment will be accorded to the
disclosed information. The provisions of this Section are mandatory, Mitcham
hereby acknowledges that the provisions of the Agreement may be specifically
performed and enforced, and Mitcham consents and agrees that it may be
restrained, enjoined or otherwise prevented from divulging any such confidential
information if at any time SERCEL reasonably fears that such event may occur.
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20. FORCE MAJEURE. All transactions under this Agreement and all purchase orders
accepted hereunder are subject to modification or cancellation in the event of
strikes, labor disputes, lock-outs, accidents, fires, delays in manufacturing or
in transportation or delivery of materials, floods severe weather or other acts
of God, embargoes, governmental actions, or any other cause beyond the
reasonable control of the party concerned, whether similar to or different from
the causes above enumerated; and including any special, indirect, incidental, or
consequential damages arising from SERCEL'S delay in delivery or failure to
deliver as a result of any such cause. In the event of a scarcity of any of the
Products for whatever cause, SERCEL will make a reasonable effort to allocate
its available supply on the basis of past orders or otherwise as it sees fit,
regardless of the time of receipt or acceptance of orders or the quantity of
orders on hand.
21. SECURITY INTERESTS. Until full payment of the purchase price for the
Products, SERCEL hereby retains, and Mitcham hereby grants to SERCEL, a purchase
money security interest in all of the Products sold to Mitcham on account.
Mitcham consents to actions by SERCEL that are appropriate to perfect SERCEL'S
purchase money security interest and agrees to execute such financing statements
as are reasonably requested by SERCEL in connection with the foregoing.
22. TERMINATION. This Agreement may be terminated at any time:
(a) by the mutual agreement of the parties; or
(b) by either party upon giving a notice of termination to the other
party in the event the other party fails to perform, observe or comply
with any of the obligations or undertakings of such other party which
are contained in this Agreement, and such failure has not been cured
within fifteen (15) days after the terminating party has given a written
notice specifying such failure to the other party.
Notwithstanding the above, SERCEL shall be entitled to immediately
terminate this Agreement effective upon the giving of notice to Mitcham in the
event that: (i) SERCEL has reasonable cause to believe that Mitcham or others
acting in association with or on the behalf of Mitcham have committed, or intend
to commit, a violation of the FCPA; (ii) Mitcham refuses or is unable to make
the certification described in Section 16; (iii) Mitcham ceases doing business
as a going concern, makes an assignment for the benefit of creditors, admits in
writing its inability to pay its debts as they become due or such fact is
determined by judicial proceedings, files a voluntary petition in bankruptcy, is
adjusted a bankrupt or an insolvent entity, files a petition seeking for itself
any reorganization, rearrangement, composition, readjustment, liquidation,
dissolution, or similar arrangement under any present or future statute, law or
regulation, or files an answer admitting the material allegations of a petition
filed against it in any such proceedings, consents to or acquiesces in the
appointment of a trustee, receiver, or liquidator of, all or any substantial
part of its assets or properties, or if it or the holders of its common stock
shall take any action contemplating its dissolution or liquidation. In such
event, SERCEL shall have no further liability to Mitcham under this Agreement.
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23. ARBITRATION. All disputes involving this Agreement shall be submitted to an
arbitrator appointed by, and operating under, the rules of the Judicial
Arbitration and Mediation Service (J.A.M.S.). The choice of the individual
arbitrator shall be upon mutual agreement of SERCEL and Mitcham, and the parties
agree to negotiate in good faith in connection with the selection of the
individual arbitrator. The written decision of the arbitrator shall be final and
binding upon all parties, and shall be convertible to a court judgement in the
State of Texas. The arbitration shall take place in the State of Texas. The
prevailing party as determined by the arbitrator shall be entitled to receive
reasonable costs and reasonable attorney's fees from the non-prevailing party in
addition to any other relief granted. No demand for arbitration shall be made
after the date when institution of a legal or equitable proceeding based upon
the claim or dispute would be barred by the applicable statute of limitations of
the State of Texas. All demands for arbitration shall be made in accordance with
Section 16 and shall be deemed made as of the sooner of actual receipt or the
date the demand is placed in the United States Mail. Any party shall be entitled
to file a lawsuit to specifically enforce the parties' agreement to arbitrate
and for the purpose of obtaining injunctive relief to enforce this Agreement.
24. APPLICABLE LAW. This Agreement shall be governed by the laws of the United
States of America and the State of Texas. Mitcham hereby irrevocably consents to
be subject to the personal jurisdiction of any United States, state or local
court sitting in ▇▇▇▇▇▇ County, Texas, U.S.A. in connection with any action to
determine any dispute arising under this Agreement or to enforce the provisions
hereof. Venue for all suits and actions out of or in connection with this
Agreement shall be proper only in the state and federal courts sitting in ▇▇▇▇▇▇
County, Texas. Each party hereto hereby irrevocably consents to the assertion of
personal jurisdiction by such courts over such party for the limited purposes of
a suit arising in connection with this Agreement, but neither such party waives
requirement for service of process in the manner prescribed by law. The
foregoing shall not be deemed to negate the provisions of Section 23 above
requiring arbitration by the parties in connection herewith.
25. EXPORT CONTROL LAWS. All shipments made by SERCEL to Mitcham or third
parties shall at all times be subject to the export control laws and regulations
of the United States of America, as such laws shall be amended from time to
time. Mitcham agrees that it shall not assist in the disposition of US origin
SERCEL Products, by way of transshipment, re-export, diversion or otherwise,
except as said laws and regulations may expressly permit.
26. COMMERCIAL REPRESENTATION AGREEMENT. At the signing of this agreement there
is in force a Commercial Representation Agreement (the "Representation
Agreement") pursuant to which Mitcham (or its affiliate) agrees to purchase the
Products (typically components and not entire systems) from SERCEL and to act as
agent for the sale of SERCEL Products to a customer pursuant to the
Representation Agreement in the territory of Canada. Accordingly, in any
situation in which a proposed customer within Canada comes to Mitcham for the
Products, Mitcham agrees that it will make a good faith determination as to
whether the customer wants to lease SERCEL Products with possible option to buy
at a later date (which contract should properly come under this Agreement) or
actually buy the SERCEL Products using some special financing which might
involve leasing (which contract should properly come under the Representation
Agreement). Mitcham acknowledges that only customers that purchase the Products
from SERCEL are entitled to
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the benefit of SERCEL'S warranty, while customers that purchase SERCEL Products
from Mitcham (or its affiliate) following the lease of the Products will not
receive a warranty from SERCEL; however, SERCEL agrees to consider the granting
of a warranty to lease/purchase customers on a case by case basis.
27. STANDARD OF BUSINESS CONDUCT. Mitcham agrees not to pay any commissions,
fees or grant any rebates to any employee or officer of any proposed customer or
its affiliates or favor employees or officers of such proposed customer with
gifts or entertainment of significant costs or value or enter into any business
arrangements with employees or officers of any such proposed customer, other
than as a representative of that proposed customer, without the proposed
customer's prior written approval.
28. WAIVER. The failure of a party to insist upon strict performance of any
provision of this Agreement shall not constitute a waiver of, or estoppel
against asserting, the right to require performance in the future. A waiver or
estoppel in any one instance shall not constitute a waiver or estoppel with
respect to a later breach.
29. SEVERABILITY. If any of the terms and conditions of this Agreement are held
by any court of competent jurisdiction to contravene, or to be invalid under,
the laws of any political body having jurisdiction over the subject matter
hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed by reforming the
particular offending provision or provisions held to be invalid so that it or
they are valid and enforceable while remaining as faithful as possible to the
original intent of the provision or provisions, the rights and obligations of
the parties shall be construed and enforced accordingly, and this Agreement
shall remain in full force and effect.
30. CONSTRUCTION. The headings in this Agreement are inserted for convenience
and identification only and are not intended to describe, interpret, define, or
limit the scope, extent, or intent of this Agreement or any other provision
hereof. Whenever the context requires, the gender of all words used in this
Agreement shall include masculine, feminine, and neuter, and the number of all
words shall include the singular and the plural.
31. COUNTERPART EXECUTION. This Agreement may be executed in any number of
counterparts with the same effect as if all the parties had signed the same
document. All counterparts shall be construed together and shall constitute one
and the same instrument.
32. CUMULATIVE RIGHTS. The rights and remedies provided by this Agreement are
cumulative, and the use of any right or remedy by any part shall not preclude or
waive its right to use any or all other remedies. These rights and remedies are
given in addition to any other rights a party may have by law, statute, in
equity or otherwise.
33. RELIANCE. All factual recitals, covenants, agreements, representations and
warranties made herein shall be deemed to have been relied on by the parties in
entering into this Agreement.
34. NO THIRD PARTY BENEFICIARY. Any Agreement herein contained, express or
implied, shall be only for the benefit of the undersigned parties and their
permitted
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successors and assigns, and such agreements and assumption shall not
inure to the benefit of the obligees of any other party, whomsoever, it being
the intention of the undersigned that no one shall be deemed to be a third party
beneficiary of this Agreement.
35. DRAFTING PARTY. This Agreement expresses the mutual intent of the parties to
this Agreement. Accordingly, regardless of the preparing party, the rule of
construction against the drafting party shall have no application to this
Agreement.
36. TIME IS OF THE ESSENCE. Time is of the essence with respect to all
provisions of this Agreement.
37. INCORPORATION OF SCHEDULES. All schedules attached to this Agreement are
incorporated into this Agreement as fully as if stated within the body of this
Agreement.
IN WITNESS WHEREOF, This Agreement has been executed on behalf of the parties by
their duly authorized representative as of the date first written above.
SERCEL:
▇▇▇▇▇▇ ▇.▇.
By: /s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, Chief Executive Officer
MITCHAM:
MITCHAM INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇., President
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