1
EXHIBIT 10.3
CSA 960930
CONDITIONAL SALES AGREEMENT
THIS CONDITIONAL SALES AGREEMENT (the "Agreement") is made and entered
into by and between INPUT/OUTPUT, INC. ("I/O"), a Delaware corporation having
offices at 00000 Xxxx Xxxxxxx, Xxxxxxxx, Xxxxx 00000, and HORIZON EXPLORATION,
LTD. ("Purchaser"), having offices at 0 Xxxxxxxxx Xx., Xxxxxxxxx, Xxxx, XX00
0XX Xxxxxxx.
1. Sale of Equipment. I/O hereby agrees to sell and Purchaser
hereby agrees to purchase from I/O the goods and equipment described in
attached Schedule A (the "Equipment").
2. Sales Price. The sales price for the Equipment is US
$3,354,825 (the "Sales Price").
3. Terms of Payment. Purchaser agrees to pay the Sales Price to
I/O as follows:
(a) Down Payment. Purchaser shall make a cash down
payment of the Sales Price in the amount of $100,000 on or before August 30,
1996 and a cash down payment of $235,483 which is due and payable on or before
March 1, 1997.
(c) Payment of Principal and Interest. The remaining
unpaid balance of the Sales Price in the amount of US $3,019,342 is payable in
thirty (30) monthly installments, including principal and interest in strict
accordance with the amortization schedule attached hereto as Schedule B and
forming part of this Agreement.
(e) Prepayments. Purchaser may prepay the unpaid
principal balance, in whole or in part, without penalty. All prepayments shall
be applied to the unpaid principal balance of the Sales Price in the inverse
order of maturity.
4. Title and Insurance. Title to the Equipment shall not pass to
Purchaser, but shall remain with I/O, until Purchaser has paid the Sales Price
in full, all interest accrued thereon and all other amounts due hereunder.
Upon payment of the Sales Price in full, I/O shall deliver to Purchaser an
unconditional xxxx of sale for the Equipment. Purchaser shall keep and
maintain insurance on the Equipment against loss, damage, destruction or fire
in an amount not less than the outstanding balance of the Sales Price with an
insurance company or companies acceptable to I/O. All such policies of
insurance shall name I/O or its assignee as loss payee and named insured and
Purchaser shall provide certificates of insurance to evidence such coverage.
5. Default and Remedies.
(a) If Purchaser fails or neglects to comply with any
term or condition of this Agreement, or to make any payment provided for
herein, when due or payable, or violates any of the provisions hereof, or if
the Purchaser becomes insolvent or bankrupt or if the Purchaser makes any
material misrepresentation (hereinafter collectively and individually referred
to as a "default"), and Purchaser has not cured such event of default after 10
days written notice by I/O, I/O, at its option, may declare the entire amount
owing hereunder to I/O immediately due and payable.
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CSA 960930
(b) In the event of default by Purchaser hereunder I/O
may, without notice to Purchaser, declare all of Purchaser's rights with
respect to the Equipment under this Agreement terminated, and exercise any and
all remedies, legal or equitable that it may have against Purchaser under
applicable law, including, but not limited to, without demand first made, and
with or without legal process, immediately take possession of the Equipment,
together with all additions, equipment and accessories thereto, wherever the
same may be found, using reasonable force if necessary, and hold the same,
together with title thereto, and Purchaser hereby waives all claims for damages
due to or arising from, or connected with any such taking.
(c) If I/O takes possession of the Equipment, all of
Purchaser's rights with respect to the equipment under this Agreement shall
immediately terminate, and all payments theretofore made by Purchaser shall
belong absolutely to I/O, or its assignee. I/O and its assignee shall be
entitled to apply all such payments, as well as amounts otherwise received in
subsequent sale of the Equipment, first to the payment of all its reasonable
expenses, including attorney's fees and legal expenses, incurred in taking
possession of the Equipment, or any part thereof, for sale or other
disposition, in arranging for any such sale or other disposition, and in
actually selling same, and next toward payment of the balance due hereunder, in
such order and manner as I/O or its assignee, as applicable, may deem
advisable. I/O shall remit to Purchaser any net surplus received from a sale
of the Equipment after payment in full of the Sales Price, accrued interest and
all costs of repossession and sale. If such payments and such sales proceeds
are not sufficient to pay the amounts due hereunder, the Purchaser shall remain
fully liable for any deficiency.
(d) In addition to any other obligation of Purchaser or
remedy of I/O herein or at law, Purchaser shall reimburse I/O for all of I/O's
expenses, including legal expenses, which I/O may incur in enforcing the rights
under this Agreement.
(e) Notwithstanding anything contained herein to the
contrary, in the event the Purchaser fails to pay any monies owing hereunder,
such past due amounts shall bear interest at the rate of 1-1/2% per month.
6. Confidentiality. The terms and conditions of this Agreement
are confidential in nature and I/O and Purchaser agree that said terms will not
be disclosed to anyone outside of I/O's and Purchaser's respective
organizations.
7. Taxes. All sales, value added, use, excise and other taxes
arising from the transaction are to be paid by Purchaser. Purchaser agrees to
indemnify and hold I/O harmless from and against any liability for such sales,
use, excise, or other taxes arising from the transaction.
8. Limited Warranty. I/O hereby agrees to provide a limited
warranty on Equipment covered under this Agreement as per attached Schedule C.
9. Arbitration. In the event Purchaser is an entity formed,
incorporated or existing outside of the United States of America, I/O and
Purchaser agree that any controversy arising between the Parties shall be
submitted to arbitration using the Rules of Conciliation and
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CSA 960930
Arbitration of the International Chamber of Commerce. In the event Purchaser
is an entity formed, incorporated or existing within the United States of
America, I/O and Purchaser agree that this sale shall not be subject to
arbitration.
10. Export Restrictions. Purchaser agrees that it shall comply
with any and all laws, regulations, orders, or other restrictions of the United
States of America relating to the export and re-export of commodities and
technical data which may be imposed from time to time. Purchaser will not
export or re-export, directly or indirectly any Products or information to any
destination prohibited by such laws, regulations, orders or other restrictions
without the prior authorization of the appropriate U.S. Government authorities.
Purchaser agrees that its obligations under this section shall survive and
continue after any termination of rights under this Sales Agreement.
11. Unanticipated Advice. If, in the course of completing work
required under this agreement, Purchaser personnel should solicit advice or
information from I/O's personnel not covered by this Agreement, and then
subsequently choose to act upon this advice or information, the Purchaser
agrees to indemnify and hold I/O harmless from any and all subsequent
occurrences arising from the advice or information.
12. Location of Equipment. Purchaser agrees to use the Equipment
offshore within the territorial boundaries of North West Europe until the Sales
Price is paid in full, unless I/O otherwise agreed in writing. Purchaser
agrees to provide written notice to I/O, on the first day of each month during
which any portion of the Sales Price remains unpaid, stating the location of
the Equipment and shall from time to time, upon twenty-four hours prior notice,
advise I/O in writing of the exact location of the equipment.
13. Proprietary Rights, License and Confidentiality.
(a) Purchaser acknowledges that the Equipment contains
certain hardware components and software proprietary to I/O. I/O hereby grants
to Purchaser a non-exclusive, irrevocable license to use the software for the
purpose of operating the Equipment. The license granted hereunder is for an
undetermined period and shall survive the termination of this Agreement
provided such termination does not arise from a default by Purchaser under this
Agreement.
(b) Purchaser acknowledges that any hardware and software
proprietary to I/O are trade secrets and constitute a valuable asset of I/O.
Purchaser agrees that it shall exercise at least the same degree of care and
discretion with respect to the hardware and software as it exercises in
protecting its own confidential information; that it shall not disclose or
otherwise make available, without the prior written consent of I/O, the
hardware or software or any copies of it to any other person and that it shall
not copy or reproduce the hardware or software. Purchaser agrees that this
provision shall survive the expiration or termination of this Agreement.
(c) Purchaser further acknowledges that it shall not,
without the prior written consent of I/O, divulge any information relating to
the terms of this Agreement to any third party, except as to the extent
required by law, and shall take all reasonable action to prevent its employees
and all others, if any, involved in this Agreement from divulging such
information to
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CSA 960930
third parties. This obligation shall remain in force after the expiration or
termination of this Agreement.
14. Other Conditions:
(a) Mandatory Prepayment. The unpaid principal balance
and accrued unpaid interest on the Sales Price shall be due and payable in full
on or before the expiration of ten (10) days following a "Corporate Change." A
"Corporate Change" shall mean any of the following: (A) Purchaser sells or
otherwise disposes of all or substantially all of its assets or (B) Purchaser
issues or sells shares of its common stock (other than issuance of stock to
employees or directors as part of any employee benefit plan) and receives
proceeds from such sale of stock in an amount that is equal to $20 million or
greater.
(b) Vessel Owner Waivers. Purchaser shall at all times
provide I/O with Vessel Owner Waivers from vessel contractors for all vessels
on which the Equipment is located.
15. General.
(a) This Agreement shall be construed in accordance with
the laws of the State of Texas. All sales of goods or services hereunder will
be F.O.B. I/O's plant in Stafford, Texas, if any of the Equipment is being
shipped by I/O, and shall be deemed to have been delivered and accepted upon
execution with respect to all Equipment which is currently in possession of
Purchaser pursuant to rental agreements with I/O or another party. All terms
and conditions of this sale, including all payments, are due, performable and
payable in Stafford, Fort Bend County, Texas. This writing is intended by the
parties as a final expression of their agreement and the parties agree that
there are no understandings, agreements or representations, expressed or
implied, not specified herein, respecting the sale, and that this writing
contains the entire agreement between I/O and Purchaser.
(b) Any action or proceeding relating to or concerning
this Agreement or any breach thereof must be commenced within one (1) year
after the asserted claim or cause of action shall have occurred (whether or not
the party asserting such claim or cause of action had any knowledge or notice
thereof, and, if no action or proceeding is commenced within such one (1) year
period, the party in whose favor the claim or cause of action arises shall be
deemed to have waived the same).
(c) The invalidity in whole or in part of any of the
foregoing provisions will not affect the remainder of such provisions.
Purchaser warrants it is not a consumer and is a Merchant in the type of
equipment sole hereunder and that the goods or services represented by this
sale are purchased for commercial purposes. If allowed by applicable law,
Purchaser agrees to hold I/O harmless and agrees to indemnify I/O from all
damages resulting from suits under the Texas Deceptive Trade Practices Act
insofar as they include recovery for damages in excess of those allowed
hereunder and the Uniform Commercial Code as adopted by the State of Texas.
Purchaser hereby waives the right to all remedies provided by the Deceptive
Trade Practices/Consumer Protection Act of the Texas Business & Commerce Code,
in accordance with Section 17.42 of the Business & Commerce Code.
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CSA 960930
16. Notice Between Parties. Any notice or delivery to be given
hereunder by either party to the other may be effected by personal delivery in
writing, certified mail, postage prepaid, mailgram or telegram, and shall be
deemed communicated as of delivery, unless otherwise provided in this Agreement
in accordance with this paragraph.
to the Purchaser at:
HORIZON EXPLORATION, LTD.
0 Xxxxxxxx Xx.
Xxxxxxxxx, Xxxx XX00 0XX
Xxxxxxx
Attention: Xxxxx Xxxxxxxx
Fax: 00-0000-000-000
to the Seller at:
INPUT/OUTPUT, INC.
00000 Xxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Fax: 000-000-0000
17. Usury Laws. Any provision in this agreement or any other
document executed or delivered in connection herewith, or in any other
agreement or commitment, whether written or oral, expressed or implied, to the
contrary notwithstanding, neither I/O nor any holder or assignee hereof shall
in any event be entitled to receive or collect, nor shall or may amounts
received hereunder be credited, so that I/O or any other holder hereof shall be
paid, as interest, a sum greater than the maximum amount permitted by
applicable law to be charged to the person, partnership, firm or corporation
primarily obligated to pay under this Agreement at the time in question. If
any construction of this Agreement or any document securing this Agreement, or
any and all other papers, agreements or commitments, indicate a different right
given to I/O or any holder hereof to ask for, demand or receive any larger sum
as interest, such is a mistake in calculation or wording which this clause
shall override and control, it being the intention of the parties that this
Agreement, and all other instruments securing the payment of this Agreement or
executed or delivered in connection herewith shall in all things comply with
applicable law and proper adjustments shall automatically be made accordingly.
In the event that I/O or any holder ever receives, collects or applies as
interest, any sum in excess of the maximum rate allowed by law, if any, such
excess amount shall be applied to the reduction of the unpaid principal balance
of this Agreement, and if this Agreement is paid in full, any remaining excess
shall be paid to Purchaser. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the maximum rate allowable by
law, if any, Purchaser and I/O or any holder hereof shall, to the maximum
extent permitted under applicable law, (a) exclude voluntary prepayments and
the effects thereof, or (b) "spread" the total amount of interest throughout
the entire term of this Agreement so that the interest rate is uniform
throughout the entire term of this Agreement; provided, that if this Agreement
is paid and performed in full prior to the end of the full contemplated term
hereof, and if the interest received for the actual period of existence
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CSA 960930
thereof exceeds the maximum lawful rate, if any, I/O or any holder hereof shall
refund to Purchaser the amount of such excess or credit the amount of such
excess against the aggregate unpaid principal balance of all advances made by
the I/O or any holder under this Agreement at the time in question.
18. Entire Agreement. This Agreement constitutes the entire
agreement between I/O and Purchaser with respect to the purchase and sale of
the Equipment and no representation or statement not contained herein shall be
binding upon I/O or Purchaser as a warranty or otherwise, unless in writing and
executed by the party to be bound thereby. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Purchaser acknowledges that it has read this
Agreement, understands it, and agrees to all terms and conditions stated
herein.
HORIZON EXPLORATION, LTD. INPUT/OUTPUT, INC.
By: /s/ X. X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
Name: X.X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director Title: Senior Vice President,
Chief Financial Officer
Date: 10th February 1997 and Secretary
Date: 2/19/97
I/O hereby assigns to Global Charter Corporation all of its right, title and
interest in and to the Sales Price and any interest payable with respect
thereto under this Agreement.
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CSA 960930
GLOBAL CHARTER CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
Date: 2/19/97
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INPUT/OUTPUT INC.
CSA Number: 960930
Customer: HORIZON EXPLORATION INC
Schedule A
PART NUMBER SERIAL NUMBER DESCRIPTION
1441200001 218134 SLIP-RING ELEC/OPTIC W/JNC BOX
1441200001 218137 SLIP-RING ELEC/OPTIC W/JNC BOX
1441200001 218146 SLIP-RING ELEC/OPTIC W/JNC BOX
21037803 No Serial # KIT, SHIPBOARD SPARES, MSX
21289300 60001 MODULE STREAMER, WG-24A
21289300 60002 MODULE STREAMER, WG-24A
21289300 60004 MODULE STREAMER, WG-24A
21289300 60005 MODULE STREAMER, WG-24A
21289300 60006 MODULE STREAMER, WG-24A
21289300 60007 MODULE STREAMER, WG-24A
21289300 60009 MODULE STREAMER, WG-24A
21289300 60012 MODULE STREAMER, WG-24A
21289300 60013 MODULE STREAMER, WG-24A
21289300 60014 MODULE STREAMER, WG-24A
21289300 60015 MODULE STREAMER, WG-24A
21289300 60017 MODULE STREAMER, WG-24A
21289300 60018 MODULE STREAMER, WG-24A
21289300 60019 MODULE STREAMER, WG-24A
21289300 60021 MODULE STREAMER, WG-24A
21289300 60022 MODULE STREAMER, WG-24A
21289300 60023 MODULE STREAMER, WG-24A
21289300 60024 MODULE STREAMER, WG-24A
21289300 60025 MODULE STREAMER, WG-24A
21289300 60031 MODULE STREAMER, WG-24A
21289300 60032 MODULE STREAMER, WG-24A
21289300 60033 MODULE STREAMER, WG-24A
21289300 60035 MODULE STREAMER, WG-24A
21289300 60036 MODULE STREAMER, WG-24A
21289300 60037 MODULE STREAMER, WG-24A
21289300 60038 MODULE STREAMER, WG-24A
Page: 1
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INPUT/OUTPUT INC.
CSA Number: 960930
Customer: HORIZON EXPLORATION INC
Schedule A
PART NUMBER SERIAL NUMBER DESCRIPTION
21289300 60039 MODULE STREAMER, WG-24A
21289300 60040 MODULE STREAMER, WG-24A
21289300 60041 MODULE STREAMER, WG-24A
21289300 60043 MODULE STREAMER, WG-24A
21289300 60045 MODULE STREAMER, WG-24A
21289300 60046 MODULE STREAMER, WG-24A
21289300 60048 MODULE STREAMER, WG-24A
21289300 60049 MODULE STREAMER, WG-24A
21289300 60050 MODULE STREAMER, WG-24A
21289300 60051 MODULE STREAMER, WG-24A
21289300 60052 MODULE STREAMER, WG-24A
21289300 60053 MODULE STREAMER, WG-24A
21289300 60054 MODULE STREAMER, WG-24A
21289300 60055 MODULE CABLE HEAD, WG-24A
21295500 80025 MODULE CABLE HEAD, WG-24A
21295500 80035 MODULE CABLE HEAD, WG-24A
21295500 80039 MODULE CABLE HEAD, WG-24A
21295600 70360 MODULE CONNECTOR, WG-24A
21295600 70393 MODULE CONNECTOR, WG-24A
21295600 70398 MODULE CONNECTOR, WG-24A
21295600 70404 MODULE CONNECTOR, WG-24A
21295600 70410 MODULE CONNECTOR, WG-24A
21295600 70413 MODULE CONNECTOR, WG-24A
21295600 70414 MODULE CONNECTOR, WG-24A
21295600 70417 MODULE CONNECTOR, WG-24A
21295600 70418 MODULE CONNECTOR, WG-24A
21295600 70423 MODULE CONNECTOR, WG-24A
21295600 70428 MODULE CONNECTOR, WG-24A
21295600 70435 MODULE CONNECTOR, WG-24A
21295600 70436 MODULE CONNECTOR, WG-24A
Page: 2
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INPUT/OUTPUT INC.
CSA Number: 960930
Customer: HORIZON EXPLORATION INC
Schedule A
PART NUMBER SERIAL NUMBER DESCRIPTION
21295600 70437 MODULE CONNECTOR, WG-24A
21295600 70438 MODULE CONNECTOR, WG-24A
21295600 70443 MODULE CONNECTOR, WG-24A
21295600 70444 MODULE CONNECTOR, WG-24A
21295600 70445 MODULE CONNECTOR, WG-24A
21295600 70449 MODULE CONNECTOR, WG-24A
21295600 70450 MODULE CONNECTOR, WG-24A
21295600 70451 MODULE CONNECTOR, WG-24A
21295600 70452 MODULE CONNECTOR, WG-24A
21295600 70453 MODULE CONNECTOR, WG-24A
21295600 70455 MODULE CONNECTOR, WG-24A
21295600 70457 MODULE CONNECTOR, WG-24A
21295600 70458 MODULE CONNECTOR, WG-24A
21295600 70459 MODULE CONNECTOR, WG-24A
21295600 70460 MODULE CONNECTOR, WG-24A
21295600 70461 MODULE CONNECTOR, WG-24A
21295600 70462 MODULE CONNECTOR, WG-24A
21295600 70464 MODULE CONNECTOR, WG-24A
21295600 70469 MODULE CONNECTOR, WG-24A
21295600 70470 MODULE CONNECTOR, WG-24A
21295600 70471 MODULE CONNECTOR, WG-24A
21295600 70472 MODULE CONNECTOR, WG-24A
21295600 70478 MODULE CONNECTOR, WG-24A
21295600 70485 MODULE CONNECTOR, WG-24A
21295600 70486 MODULE CONNECTOR, WG-24A
21295600 70488 MODULE CONNECTOR, WG-24A
21295600 70489 MODULE CONNECTOR, WG-24A
21295700 90022 MODULE TERMINATOR, WG-24A
21295700 90025 MODULE TERMINATOR, WG-24A
21295700 90048 MODULE TERMINATOR, WG-24A
Page: 3
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INPUT/OUTPUT INC.
CSA Number: 960930
Customer: HORIZON EXPLORATION INC
Schedule A
PART NUMBER SERIAL NUMBER DESCRIPTION
52174 No Serial # OOKITT, MSX SHIPBOARD SYS
5750007 000-000000-0 DECABL WG-24, ELECTRICAL, 75 MET
5750007 000-000000-0 DECABL WG-24, ELECTRICAL, 75 MET
5750025 5750025-23 DECABL WG-24, OPTICAL, 75 METERS
5750025 5750025-24 DECABL WG-24, OPTICAL, 75 METERS
5750027 000-000000-0 XXXXXX XX-24, DECK/HUB BOX BYPA
5750027 000-000000-0 XXXXXX XX-24, DECK/HUB BOX BYPA
57520028 000-000000-0 ELAST MSX24, SERIES 3, HEAD
57520028 000-000000-0 ELAST MSX24, SERIES 3, HEAD
57520028 000-000000-0 ELAST MSX24, SERIES 3, HEAD
57520028 000-000000-0 ELAST MSX24, SERIES 3, HEAD
5752003 0000-000000-0 ELAST MSX24, 70 METER, HEAD
5752003 0000-000000-0 ELAST MSX24, 70 METER, HEAD
5752003 0000-000000-0 ELAST MSX24, 70 METER, HEAD
5752003 0000-000000-0 ELAST MSX24, 70 METER, HEAD
5753019 895-014790-2A LEADIN WG-24, SERIES 2, HAIRED, S
5753019 895-014790-2B LEADIN WG-24, SERIES 2, HAIRED, S
5753019 000-000000-0 LEADIN WG-24, SERIES 2, HAIRED, S
5754006-75 000-000000-0 CABASY STICK, POWER TAIL SWIVEL
5754006-75 000-000000-0 CABASY STICK, POWER TAIL SWIVEL
5801902 No serial # -1 BRACKT TOWING ASSEMBLY, 217" D
5801902 No serial # -2 BRACKT TOWING ASSEMBLY, 217" D
5804003 000-000000-0 TRANSITION, MXS, ADAPTER CBL HD
5804003 000-000000-0 TRANSITION, MXS, ADAPTER CBL HD
5804003 000-000000-0 TRANSITION, MXS, ADAPTER CBL HD
5805001 000-00000-00 ELAST MSX24A, TAIL, 85M
5805001 000-00000-00 ELAST MSX24A, TAIL, 85M
5805001 000-00000-0 ELAST MSX24A, TAIL, 85M
5805001 000-00000-0 ELAST MSX24A, TAIL, 85M
5806002 000-000000-0 ADAPTER MSX-24A, TAIL, SWIVEL, PW
Page: 4
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INPUT/OUTPUT INC.
CSA Number: 960930
Customer: HORIZON EXPLORATION INC
Schedule A
PART NUMBER SERIAL NUMBER DESCRIPTION
5806002 000-000000-0 ADAPTER MSX-24A, TAIL, SWIVEL, PW
5831002 000-000000-0 ACTIVE MSX-24A, 125M GROUP, 3R
5831002 000-000000-00 ACTIVE MSX-24A, 125M GROUP, 3R
5831002 000-000000-00 ACTIVE MSX-24A, 125M GROUP, 3R
5831002 000-000000-00 ACTIVE MSX-24A, 125M GROUP, 3R
5831002 000-000000-00 ACTIVE MSX-24A, 125M GROUP, 3R
5831002 000-000000-00 ACTIVE MSX-24A, 125M GROUP, 3R
5831002 000-000000-00 ACTIVE MSX-24A, 125M GROUP, 3R
5831002 000-000000-00 ACTIVE MSX-24A, 125M GROUP, 3R
5831002 000-000000-00 ACTIVE MSX-24A, 125M GROUP, 3R
Page: 5
