CONSULTING AND COLLECTION AGREEMENT
This Consulting and Collection Agreement (the "Agreement") is entered
into effective this 7th day of October, 1999 ("Effective Date"), by and between
INPUT/OUTPUT, INC., a Delaware corporation ("Company") and Xxxxxx X. Xxxxxxxx
("Consultant").
RECITALS
Consultant has previously served as an officer of Company; and,
The parties, having terminated the employment relationship between
Consultant and Company pursuant to the terms of that certain Separation
Agreement and General Release which became effective on August 31, 1999 (the
"Separation Agreement"), now wish to engage Consultant to serve as a consultant
to Company commencing as of the Effective Date hereof upon and subject to the
terms and conditions set forth in this Agreement.
AGREEMENT
NOW THEREFORE, for and in consideration of the mutual benefits to be
derived and the representations, conditions and promises that follow, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound, Company and Consultant agree as
follows:
1. DEFINITIONS. The following terms shall have the meanings ascribed to
them below, the following definitions to be equally applicable to both the
singular and plural form of the terms:
1.1. "Affiliate" shall mean when used with reference to a
specified Person (defined below): (i) any Person that directly or
indirectly through one or more intermediaries controls or is
controlled by or is under common control with the specified Person;
and (ii) any Person that is an officer of, partner in, or serves in a
similar capacity to, the specified Person or of which the specified
Person serves in a similar capacity; and (iii) any Person owning or
controlling ten percent (10%) or more of the outstanding voting
securities of such other entity; and (iv) any member of the immediate
family of the specified Person or any legal representative or trustee
for the benefit of such member.
1.2. "Person" shall mean an individual, partnership,
corporation, trust or other entity.
1.3. "Term" shall mean the term of this Agreement, commencing
on September 01, 1999 and continuing for the lesser of one (1) year;
or, Consultant has ceased to demonstrate reasonable diligence in
collection efforts, unless earlier terminated pursuant to Section 6
hereof.
2. ENGAGEMENT. Notwithstanding any provision contained herein to the
contrary, this Agreement is subject to the execution, delivery and effectiveness
of the Separation Agreement and its terms and conditions. Company shall appoint
and engage the Consultant as consultant and advisor as of the Effective Date
hereof with respect to the matters specified in, subject to the terms and
conditions of, and
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for the compensation provided in, this Agreement. The Consultant accepts this
appointment and engagement effective as of such date as a consultant and
advisor to Company, subject to the terms and conditions of this Agreement.
3. DUTIES OF CONSULTANT.
3.1. During the Term, the Consultant will pursue collections
for designated accounts (see attached list) as a Director of the
Company. The presumption is that the Consultant shall make three or
four trips to CIS to conduct the business.
3.2. Consultant will assist in transitioning sales activity
for CIS market to those designated as responsible, assist the Company
in clarifying any open issues and strategies with respect to Russian
business, and shall perform such other duties as may be reasonably
requested by the Company upon reasonable advance notice to the
Consultant by the Company.
3.3. The Consultant will report directly to the Chief
Financial Officer of Company, or his designee, on all collection
efforts. Any negotiated alterations to the existing contractual terms
of the Notes or receivables must be approved by the Company's Chief
Financial Officer. The Company will provide the assistance of Xxxxx
Xxxxxxxxx as reasonably requested for collection purposes. Unless
otherwise agreed, Consultant's undertakings shall be only of a type,
nature and dignity consistent with the duties of the Consultant in the
service of Company as described herein.
3.4. The Consultant agrees that he will truthfully and
accurately make, maintain and preserve all records and reports that
Company may, from time to time, request or require in connection with
his consulting services hereunder, and will account for all money,
records or other property belonging to Company of which he may have
custody and will pay over and deliver the same promptly whenever and
however he may be directed to do so.
3.5. The Consultant agrees that he will serve the Company to
the best of his ability, projecting a positive and professional image
on behalf of Company and its Affiliates.
4. NON-DISCLOSURE. Consultant acknowledges, understands and agrees that he
will be furnished confidential information concerning the business of Company
and its subsidiaries, including information relating to its customers and to the
design, construction and operation of Company's products and services
("Confidential Information"). Consultant further acknowledges that all
Confidential Information, whether developed by Consultant, Company, their
Affiliates or other Persons while carrying out the terms and provisions of this
Agreement (or previously developed by Consultant, Company, their Affiliates or
other Persons, either during the term of Consultant's employment with Company or
its Affiliates, or prior thereto), shall be the exclusive and confidential
property of Company or its Affiliates, as the case may be, and shall be
regarded, treated and protected as such. Consultant shall not use, in any way,
or disclose any of the Confidential Information, directly or indirectly, or
permit any other person, firm or entity to avail himself or itself of the
benefit or use of the Confidential Information, or any aspect thereof, either
during the term of his employment with Company hereunder or otherwise, or at any
time thereafter, except as may be necessary to perform his obligations with
respect to his consulting services hereunder.
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4.1. All files, records, documents, information, data and
similar items and documentation relating to the business of Company
and its subsidiaries and that of Company's and its subsidiaries'
customers, whether prepared by Consultant or otherwise coming into his
possession, shall remain the exclusive property of Company and its
subsidiaries, as the case may be, and Consultant agrees to return all
such files, records, documents, information, data and similar items
and documentation to Company immediately upon the termination of this
Agreement for any reason.
4.2. The parties hereto stipulate that as between them, the
Confidential Information is important, material and confidential, and
gravely affects the effective and successful conduct of the business
of Company and its subsidiaries and their goodwill, and that Company
would suffer irreparable injury if this information were divulged to
any Person in competition with Company or any of its subsidiaries.
Consultant agrees to disclose, fully and promptly, and only to
Company, all ideas, methods, plans, improvements or patentable
inventions of any kind, which are (i) made or discovered, in whole or
in part, by Consultant during the performance of Consultant's job
duties, (ii) the result of any aid, support or assistance by Company
or its subsidiaries, or (iii) created during his work time with
Company or its subsidiaries.
4.3. The obligations of Consultant set forth in this Section 4
are continuous and shall survive the termination, for any reason
whatsoever, of this Agreement.
4.4. When used or referred to in this Agreement, Confidential
Information shall not include information which is in the public
domain or information generally known in the oil and gas exploration
and production services industry or the seismic detection, data
acquisition, or information processing or interpretation equipment
industries.
5. COVENANT NOT TO SOLICIT. Consultant acknowledges that the Company's
employees are valuable to the Company's business and that information regarding
the Company's employees, including without limitation information as to their
background, training and compensation, is Confidential Information. Consultant
agrees that for a period of twelve (12) months from the Effective Date of this
Agreement (whether or not this Agreement is terminated sooner than the 12 month
period), he will not directly or indirectly solicit or otherwise induce or
encourage any person in the employment of the Company or any consultant to the
Company to terminate such employment or consulting arrangement or to accept
employment or enter into any consulting agreement with anyone other than the
Company.
6. EARLY TERMINATION. Notwithstanding any other provision of this
Agreement, at any time during the Term, Consultant's engagement hereunder shall
terminate upon his death or Disability, or by Company upon Consultant's material
breach or material violation of any of his agreements contained herein or in the
Separation Agreement. As used herein, "Disability" shall mean a physical or
mental impairment that renders Consultant unable to perform the essential
functions of his position with or without reasonable accommodation. Notification
of failure to demonstrate reasonable diligence in collection efforts shall be
given Consultant in writing and Consultant shall have 45 days to cure issue.
7. INJUNCTIVE RELIEF. Because of the unique nature of the Confidential
Information, Consultant acknowledges, understands and agrees that Company will
suffer immediate and irreparable harm if Consultant fails to comply with any of
his obligations under Sections 4 and 5 of this Agreement, and that monetary
damages will be inadequate to compensate Company for such breach. Accordingly,
Consultant
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agrees that Company shall, in addition to any other remedies available to
them at law or in equity, be entitled to temporary, preliminary, and
permanent injunctive relief to enforce the terms of Sections 4 and 5 without
the necessity of proving inadequacy of legal remedies or irreparable harm.
8. COMPENSATION. Subject to the terms and conditions hereof, in
consideration of the consulting services to be rendered by Consultant to Company
hereunder, and in consideration of the covenants of Consultant set forth in
Sections 4 and 5 herein,
8.1. Company and Consultant agree that compensation for
collection efforts from Companies listed on Attachment I, is earned by
commissions on any and all collections (interest, notes receivable and
accounts receivable - except as noted) during the effective term of
this Agreement, based on the following schedule:
AREA COMMISSION
---- ----------
CIS Group (Interest & Notes Receivable only) 4.4%
South America Group 3.0%
Uzbekistan Group 2.0%
8.2. Payments for collected amounts received within the term of
this Agreement, will be paid monthly based on prior month receipts net
of third-party expense.
8.3. Consulting Services not incurred with consultant's
collection trips, associated with consultant's Board responsibilities,
or provided as incidental accommodations (less than one hour of work)
will be billed and compensated if authorized by an officer of the
Company. For each day worked away from home at the request of the
Company, a rate of $750.00 per day will be paid, with pro-rata hourly
billing for work done by phone from a location chosen by Consultant.
8.4. Reasonable expenses for travel, meals, and other business
purposes will be paid by the Company up to $25,000.00 for the term of
this Agreement. Expenses beyond this amount will require prior
approval of an officer of the Company. Expenses must be reported on
standard Company Expense Report forms and submitted to the Chief
Financial Officer.
8.5. Consultant will have use of Company AT&T Calling Card
during the term of this Agreement.
9. INDEPENDENT CONTRACTOR. While serving as Consultant, the Consultant
shall at all times be an independent contractor rather than a co-venturer,
agent, employee or representative of Company or its Affiliates. It is understood
and agreed that Contractor shall pay all taxes, licenses, and fees levied or
assessed on Contractor in connection with or incident to the performance of this
Agreement by any governmental agency, including, without limitation,
unemployment compensation insurance, old age benefits, social security, or any
other taxes upon wages of Contractor, its agents, employees, and
representatives. Contractor agrees to require the same agreements of its
subcontractors and to be liable for any breach of any such agreements by any of
its subcontractors. Contractor agrees to reimburse Company on demand for all
such taxes or governmental charges, state or federal, which the Company may be
required or deem it necessary to pay on account of employees of the Contractor
or its subcontractors. Contractor agrees to furnish the Company with the
information required to enable it to
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make the necessary reports and pay such taxes or charges. If statutorily
required, the Company is authorized to deduct all sums required to be paid
for such taxes and governmental charges from any amounts that may be or
become due to Contractor.
10. GOVERNING LAW. This Agreement shall be governed by the internal laws
(without giving effect to principles of conflict of laws) of the State of Texas
and the internal laws (without giving effect to principles of conflict of laws)
of the United States of America.
11. NOTICE. Any notice provided or permitted to be given under this
Agreement must be in writing, but may be served by deposit in the mail,
addressed to the party to be notified, postage prepaid, and registered or
certified, with a return receipt requested. Notice given by registered mail
shall be deemed delivered and effective on the date of delivery shown on the
return receipt. 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. For purposes of notice the addresses of the parties
shall be as follows:
If to Company:
Input/Output, Inc.
00000 X. Xxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attn: Chief Executive Officer
If to Consultant:
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Each party may change its address for notice by giving written notice of such
address to the other party.
12. ENTIRE AGREEMENT. Except as specifically contemplated under Section 2
hereof, this Agreement, which incorporates all prior understandings relating to
its subject matter, contains the entire agreement of the parties with respect to
its subject matter and shall not be modified except by written instrument
executed by each party.
13. 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.
14. 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 this subject
matter, that contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as it if did not contain
the particular provision or provisions held to be invalid, the rights and
obligations of the parties shall be construed and enforced accordingly, and this
Agreement shall remain in full force and effect.
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15. 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
provisions hereof. Whenever the context requires, the gender of all words used
in this Agreement shall include the masculine, feminine, and neuter, and the
number of all words shall include the singular and the plural. In the event of a
conflict among this Agreement and any Exhibit, this Agreement shall control.
16. 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.
17. SUCCESSORS AND ASSIGNS. Except as otherwise provided, this Agreement
shall apply to, and shall be binding upon, the parties hereto, their respective
successors and assigns, and all persons claiming by, through or under any of
these persons. This Agreement is personal to Consultant and cannot be assigned
or delegated by Consultant.
18. CUMULATIVE RIGHTS. The rights and remedies provided by this Agreement
are cumulative, and the use of any right or remedy by any party 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.
19. NO THIRD PARTY BENEFICIARY. Except as expressly provided pursuant to
Section 8 hereof concerning payments to Consultant's estate, heirs or
descendants, any agreement to pay an amount or any assumption of liability
herein contained, express or implied, shall be only for the benefit of the
undersigned parties and their permitted 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, except
as otherwise expressly contemplated herein, no one shall be deemed to be a third
party beneficiary of this Agreement.
20. DRAFTING PARTY. This Agreement expresses the mutual intent of the
parties to this Agreement. Accordingly, regardless of the party preparing any
document, the rule of construction against the drafting party shall have no
application to this Agreement.
21. RELIANCE. All covenants, agreements, representations and warranties
made in this Agreement shall be conclusively considered to have been relied upon
by the parties in entering into this Agreement.
22. DISPUTE RESOLUTION. Subject to Company `s right to seek legal or
equitable relief in court as provided in Section 7 of this Agreement, any
dispute, controversy or claim arising out of or in relation to or connection to
this Agreement, including without limitation any dispute as to the construction,
validity, interpretation, enforceability or breach of this Agreement, shall be
exclusively and finally settled by arbitration, and either party may submit such
dispute, controversy or claim, including a claim for indemnification under this
Section 22, to arbitration.
22.1. ARBITRATORS. The arbitration shall be heard and
determined by one arbitrator, who shall be impartial and who shall be
selected by mutual agreement of the parties; PROVIDED, however, that if
the dispute involves more than $ 25,000, then the arbitration shall be
heard and determined by three (3) arbitrators. If three (3) arbitrators
are necessary as provided above, then
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(i) each side shall appoint an arbitrator of its choice within thirty
(30) days of the submission of a notice of arbitration and (ii) the
party-appointed arbitrators shall in turn appoint a presiding
arbitrator of the tribunal within thirty (30) days following the
appointment of the last party-appointed arbitrator. If (x) the parties
cannot agree on the sole arbitrator, (y) one party refuses to appoint
its party-appointed arbitrator within said thirty (30) day period or
(z) the party-appointed arbitrators cannot reach agreement on a
presiding arbitrator of the tribunal, then the appointing authority
for the implementation of such procedure shall be the Senior United
States District Judge for the Southern District of Texas, who shall
appoint an independent arbitrator who does not have any financial
interest in the dispute, controversy or claim. If the Senior United
States District Judge for the Southern District of Texas refuses or
fails to act as the appointing authority within ninety (90) days after
being requested to do so, then the appointing authority shall be the
Chief Executive Officer of the American Arbitration Association, who
shall appoint an independent arbitrator who does not have any
financial interest in the dispute, controversy or claim. All decisions
and awards by the arbitration tribunal shall be made by majority vote.
22.2. PROCEEDINGS. Unless otherwise expressly agreed in
writing by the parties to the arbitration proceedings:
i. The arbitration proceedings shall be held in Houston,
Texas, or Stafford, Texas, at a site chosen by mutual agreement of the
parties, or if the parties cannot reach agreement on a location within
thirty (30) days of the appointment of the last arbitrator, then at a
site chosen by the arbitrators;
ii. The arbitrators shall be and remain at all times wholly
independent and impartial;
iii. The arbitration proceedings shall be conducted in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as amended from time to time;
iv. Any procedural issues not determined under the arbitral
rules selected pursuant to item (iii) above shall be determined by the
law of the place of arbitration, other than those laws which would
refer the matter to another jurisdiction;
v. The costs of the arbitration proceedings (including
attorneys' fees and costs) shall be borne in the manner determined by
the arbitrators;
vi. The decision of the arbitrators shall be reduced to
writing; final and binding without the right of appeal; the sole and
exclusive remedy regarding any claims, counterclaims, issues or
accounting presented to the arbitrators; made and promptly paid in
United States dollars free of any deduction or offset; and any costs or
fees incident to enforcing the award shall, to the maximum extent
permitted by law, be charged against the party resisting such
enforcement;
vii. The award shall include interest from the date of any
breach or violation of this Agreement, as determined by the arbitral
award, and from the date of the award until paid in full, at 6% per
annum; and
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viii. Judgment upon the award may be entered in any court
having jurisdiction over the person or the assets of the party owing
the judgment or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may
be.
23. ACKNOWLEDGMENT OF PARTIES. Each party acknowledges that he or she or it has
voluntarily and knowingly entered into an agreement to arbitration under this
Section by executing this Agreement.
EXECUTED effective as of the date written above.
COMPANY:
INPUT/OUTPUT, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and Chief Financial
Officer
CONSULTANT:
/s/ XXXXXX X. XXXXXXXX
------------------------------------------
Xxxxxx X. Xxxxxxxx
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ATTACHMENT I
CONSULTING AND COLLECTION AGREEMENT
LIST OF CUSTOMER ACCOUNTS
CIS GROUP
Azimut
Bashneftgeofizika
Centrgeo/Spetzgerfizika
CGE
Dank
Geotex
Hantymansiyskgeofisika
LARGE
Petroaliance
Samaraneftgeofisika
Sevmorneftgeofisika
Sibneftegeofizika
Tatneftgeofisika
Tyumengeofisika
Ukrazarub/Enerforgeofisika
Ukrzarubizhnaftagaz
Yeniseygeofizika
UZBEKISTAN GROUP
Uzbekneftagaz
SOUTH AMERICAN GROUP
GAPS
Suelopetrol
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